USMCA implementation on July 1

The USMCA was ratified on March 13, 2020, and will go into effect on July 1, 2020. On Monday it was announced that a USMCA center would be opening in Washington, DC to assist companies with the implementation. The new agreement, which will replace the current North American Free Trade Agreement (NAFTA) with updated protections for labor, intellectual property, agriculture, and e-commerce.

The center will include experts from U.S. Customs and Border Protection along with virtual representatives from Canada and Mexico to assist public and private sector businesses with the implementation of the treaty. Officials expect the center to provide guidance, answer questions, explain issues, disseminate information and documentation, and create a single point of contact to streamline assistance.

While the new agreement does include critical modernization of labor standards, intellectual property, and pharmaceutical regulations it also covers e-commerce and digital property rights that weren’t an international issue when NAFTA was first negotiated. The automotive industry will face some strict rules regarding both labor practices and the percentage of North America parts that must be included in each vehicle; leading the industry to request an extension due to the economic impact of the Coronavirus pandemic that’s currently plaguing the country. An initial 30-day extension was granted, moving the date from June 1st to July 1st.

The USCMA will have a term of sixteen years, after which the agreement can be renewed, renegotiated, or withdrawn from but will be eligible for a review after six years. CBP expects the USCMA center to be a sufficient resource for questions and assistance on the newer parts of the agreement, as the bulk of the treaty ($1.2 billion in goods and products) will remain unchanged. If you have goods that are going to be impacted but the updated treaty, you can rest assured your Edward J. Zarach & Associates representative will have the guidance and information you need to ensure a smooth transition. We do recommend that you contact us to begin planning for the changes as soon as possible.

Mother’s Day reinvigorates florists

Social distancing has made the springtime holidays all the more important and more difficult as families remain separated for their health and safety. Because they can’t be together on Mother’s Day, many have started sending gifts and flowers to show their love. While Easter and Passover flowers were lackluster due to people concentrating on buying only essential items, cut fresh flower sales were up from $2.01 billion in 2019 to $2.10 billion in 2020 for Mother’s Day. Mother’s day is the second most popular holiday for flowers after Valentine’s Day, and third in actual dollars sold behind Valentine’s Day and Christmas holidays. One-quarter of all flowers sold per year are sold for Mother’s Day and 80% of those flowers are fresh-cut blooms.

With many states having varying degrees of shelter-in-place laws currently in effect or recently ended, florists have had to be creative with their sales. Some have turned to drive-through service while others opened just in time, though in a reduced capacity, to serve the needs of shoppers. However they’ve decided to serve the community, florists are getting a huge bump at a time it’s desperately needed. Summer is a slow time for floral sales and the wedding season has been almost non-existent this spring, leading Amsterdam to dispose of 140 million Dutch tulips that couldn’t be shipped or sold. Unlike the earlier holidays, many florists found themselves sold out of flowers before Mother’s Day.

The post-coronavirus world already looks different. As we start to determine how to re-open safely and get back to what will become our new normal, it’s encouraging to see flower sales climbing for myriad reasons. The social-distancing measures that many families are living through left few options for celebrating holidays other than sending flowers in the case of Mother’s Day. We’re starting to move on from classifying things as essential or non-essential and working out ways for all industry to ramp up based on demand and safety.

If you’re looking for someone to handle your fresh flower shipments, we at Edward J. Zarach & Associates have your covered. We’re able to handle your delicate perishable cargo in a timely and safe manner.

Andy Patti – Zarach Employee Spotlight

Andy Patti joined Edward J. Zarach & Associates in January of 2020 as the Boston Branch Manager after a career spanning over 25 years in large logistics companies.  He is proud to bring a corporate level of efficiency and expertise to a smaller company where his ideas can be heard and implemented from the top down as support and autonomy work in equal measure to ensure team success.  Beginning his career in 1992 in the Customs brokerage department with A.J. Fritz, he spent four years learning the ins and outs of logistics.  A strong foundation that carries with him to the present day.   After a brief year in Florida and working in the finance arena, he returned to Boston to resume a career in logistics spending a year with AEI before joining MSAS as the Import Operations Supervisor for eight years.  From MSAS he joined UTi to further expand his skillset in both Operations management and Sales, mentored in part by the Branch Manager who noticed Andy’s unique skills working with clients.

His career continued to progress upward with senior sales appointments including trade lane development and Global account sales roles where he was ultimately recruited by Jim Crane to join Crane Worldwide as Global Sales Manager working with multinational accounts.  After that, Andy was ready to take the next step in his career with a great opportunity to become the Branch manager with Jas Forwarding where he enjoyed over 6 years of success growing his team and branch.   Through mutual industry contacts, he met Richard Kenyon, who recruited him to join Zarach, by offering the opportunities of a large company with the atmosphere and culture of a smaller family owned business.

“When you work for larger companies, the corporate giants present a number of challenges and obstacles you need to navigate and overcome to sustain succeed.  In a smaller company there’s flexibility and direct communication from the top down that enables you to achieve goals and makes it easier to deliver outstanding service upon which our clients depend on.   We have a voice here and you can see the impact daily.    you can see where your ideas and plans are put directly into action and everyone has a stake in future growth.  That kind of support and teamwork is immeasurable.   People tend to be more motivated when they feel valued and allowed to bring innovative ideas forward to help drive the company toward meeting its goals”

The strength of a great team is well known to Andy. As a longtime coach for his son’s basketball and baseball teams he has managed and developed young players at various skill levels from recreation to elite AAU levels. Andy enjoys being a leader, mentoring others and teaching life lessons as well as the core values he instills in his players.  Those are the same values he brings to work every day.  The team building and leadership skills and positive approach in collaborating and empowering others to make major contributions and to reach assigned goals are paramount to success.  Andy’s primary goals are to develop a team first mindset, a strong work ethic and create more efficient processes to deliver the best possible experience for our valued clients.

“We can do a great job 99 out of 100 times, but when mishaps and challenges occur it’s the proactive way which we respond that our clients will remember most.  We strive for excellence, of course, but how we respond and handle difficult situations when the unexpected happens will win the client’s trust and confidence. That is why a successful foundation and dedicated team must be created and is key to long term success.  We value our client relationships and appreciate the trust and responsibility they have placed upon us.”

When Andy is not working with his Zarach team or coaching youth sports, he enjoys spending quality time with his wife of 24 years, two daughters and son.  He has learned that life balance is so important and making lasting memories with his family are the foundation for a happy life.  It is that type of vision and value system that he is bringing to fruition at Edward J. Zarach & Associates.

Richard Kenyon – Zarach Employee Spotlight

Richard Kenyon came to Edward J. Zarach & Associates in September of 2019 from a lifetime spent in logistics. Growing up in Manchester, UK Richard planned to enter the army after college, but he took a summer job at a freight forwarder and realized that he’d found his passion. Through the following years, Richard specialized in almost every aspect of operations and sales, including working in warehouses, driving trucks to collect freight, importing cargo into a non-EU United Kingdom, and sales and operations branch management. This intense level of cross training bestowed on him a breadth of knowledge that gives him a competitive edge as a leader in this industry.

“I don’t ask anyone to do anything I haven’t done or that I would not be prepared to do myself.  Doing it all was paramount to me when I was learning. As a manager, I try to identify any issues that can impede the success of our people and find a creative solution to facilitate their growth. When you have an intimate knowledge of the tasks you can better support your people. Our business is our people; they are who I invest myself into”

His people first philosophy fits well within the Edward J. Zarach & Associates structure, a work family approach with some seasoned corporate efficiency and training mixed in. Large global corporations have resources for their staff that can be lacking in a smaller, private company. At Edward J. Zarach & Associates, he can deliver those resources while ensuring each client receives the personal service that sets Zarach apart.

“Our people need to have measurable goals and engaged leadership. When you provide proper support and your staff is fulfilled at the office, your clients sense a team member’s smile and feel that level of care and they come back. This business is not a hit and run mission and isn’t about one or two shipments; it thrives on the long relationships that are built by trust, honesty, and enthusiasm. A motivated staff is why clients return year after year.”

Richard met Ed Zarach through industry events while working as General Manager of an east coast neutral consolidator and they struck up a friendship based on their team values and work ethic. Arriving in the United States with $500 in his pocket and a single suitcase, Richard first worked in Los Angeles in operations to learn about selling to a US market and the differences from sales in the UK. This attention to detail and his willingness to keep honing his skills helped him understand the market and find success in almost every logistics facet. His passion for the work is evident in his successes.

“As a kid growing up in Manchester, I had a more narrow view of the world but freight forwarding opened that up. There’s no other industry where you can meet and work alongside such diversity. As a young person I was drawn to that global community and it felt important to have a global impact on people, instead of just the local one. You can do the most good when you have the most reach.”

When he’s not at the office, Richard enjoys spending time with his wife, whom he met when she was a sales rep for Hapag Lloyd and called on his company in Los Angeles, and his twin daughters. He’s an unabashed fan of Manchester United football club and even in his time off enjoys traveling and experiencing new cultures.

White House issues Executive Order, CBP issues CSMS messages clarifying 90-day duty postponement for importers.

For the past several weeks there have been multiple, on-again, off-again stories in the news about whether or not the White House would provide relief to importers from estimated duties, taxes and fees during the COVID-19 crisis. 

Late Sunday – and quite unexpectedly given the last public statements from the Administration – the White House issued an Executive Order providing 90-day duty postponement to importers. 

At first blush, this sounds great. But the devil is in the details and in this case, it applies to a select group of entries which meet certain conditions.
 


  1. 90-day postponement is not available for entries that include ADD/CVD, Section 201, 232 or 301 trade remedy duties. 
  2. The CSMS message says this relief is for importers suffering “significant financial hardship,” one condition of which is defined as 2020 gross receipts 60% less than the comparable March and April period in 2019. While documentation must not be filed, the agency “may also conduct a review of the documentation at a future date to ensure compliance with the requirements.”
  3. This deferral applies to entries paid by single check, daily statement or Periodic Monthly Statement.
  4. Duty already paid cannot be postponed.
  5. Importers whose entries are paid on period monthly statement have until 11:59 PM ET Monday, April 20th (read: tonight) to have the payment date changed.

From the CSMS message on timing:

Estimated duties, taxes, and fees paid on single pay basis or Daily Statement may be postponed up to 90 days from the payment due date.

Example:

  • Original Due Date: April 30, 2020; 90-Day Postponement: July 29, 2020

Estimated duties and fees paid via Periodic Monthly Statement (PMS) may be postponed up to three months as defined by the 15th working day of the month.

Example:

  • Original due date: April 21, 2020; 3 month postponement: July 22, 2020
  • Original due date: May 21, 2020; 3 month postponement: August 21, 2020

The deadline to change the Periodic Monthly Statement is Monday, April 20th at 11:59 PM ET. That’s TONIGHT.

If your company is eligible and wishes for us to utilize this postponement, contact your Edward J. Zarach & Associates representative IMMEDIATELY.

Small signs point to recovery

As much as we are seeing bad news and difficult stories, there are positive signs that recovery is beginning in China and should follow across the supply-chain as more disruption is settled and cargo begins moving. For the first time since early February, China saw an increase in exports to the US beginning the second week of March. While there are still impediments to the complete recovery, repositioning efforts, air freight solutions and time can work together to keep cargo moving steadily where everyone needs it most.

After almost a month, the second week of March saw an increase in shipments by 45% according to customs information. International loaded rail saw a jump of 64%, a solid indicator that more cargo is finally moving in the US as these containers are loaded directly from ships onto trains, which is a faster economic measure of the state of US imports. While pandemic social behavior, including hoarding and store-emptying panic buying has caused a lull in supplies, there’s been a boost in domestic trucking as shippers race to get store shelves stocked to keep communities safe during “shelter-in-place” and other quarantine restrictions.

Because equipment scarcity is a big problem for ocean freight shippers, MSC has deployed MSC MIA, a 23,000 TEU vessel instead of smaller ships to pick up cargo from Asia and empty containers to be repositioned where they’re needed. Though the larger vessels can lead to increased wait times for truckers, the extra cargo will improve the shipping timeline as more containers can be filled and returned. Air freight capacity will be supplemented by passenger airlines that deploy aircraft with no passengers, only belly cargo. Belly space is a critical part of air capacity and as travel restrictions remain in place the all freight airlines can’t keep up with demand.

We’re thrilled to be reporting a light at the end of the tunnel. While we can’t predict the future, signs point to a slow, steady recovery for our industry. We at Edward J. Zarach & Associates are still working to ensure your cargo is moving the fastest and most efficient way possible. We pay close attention to how the numbers look to keep you abreast of the coming logistics issues and hopefully we can help you plan for unforeseen circumstances far enough in advance to prevent delays. If you’d like to talk about some creative solutions to your cargo concerns, reach out to your Zarach representative today for a chat. We hope it’s okay that we meet by video, just for now.

Coronavirus update

With passenger flights cancelled, borders closing and much of the country practicing social distancing, the logistics industry is in a precarious place. Equipment imbalances demand creative solutions and new ways of thinking to navigate. Here at Edward J. Zarach & Associates, our team is still hard at work both in the office, where we stringently follow the CDC guidelines and remain more than 6 feet apart, and remotely whenever possible. It is our goal to keep our team safe and your cargo secure.

Airlines have been suspending passenger flights for more than a week and this action dramatically reduces the belly cargo capacity that many shippers depend upon. Without belly capacity, air charters are soaring and capacity on all-cargo freighters is almost non-existent. This has led some airlines to use passenger planes to move all of the cargo and none of the people.

Trucking in both the US and Europe is moving steady despite border closures and quarantines to keep store shelves stocked. The restriction of travel between countries has been carefully implemented to maintain the transport ability of shippers while trying to flatten the curve of the virus as it impacts the population.

China’s recovery, signaled by their return to work and production helps ensure US supplies will remain steady. As more states enact time, place, and manner restrictions on the public in an effort to slow the spread of the virus, we’re all cautiously working as safely as possible, enabling remote options and cleanliness protocols as directed.

We understand our clients have concerns about the status of businesses and we want to reassure everyone that Edward J. Zarach & Associates will remain open and working. We’re also happy to have Skype calls or Zoom meetings if there’s something you’d like to discuss face to face but cannot meet in person. We pride ourselves on developing creative solutions to complicated cargo problems, and this is one of the most complicated problems our industry has faced. By utilizing technology and a dash of common sense, we’re able to keep working to the best of our abilities. Reach out to your representative with concerns or needs and we will do our best to accommodate them during this time.

Port of Oakland faces congestion from Coronavirus

Though throughput is increasing at the Port of Oakland, the Coronavirus and subsequent actions taken to minimize the spread are causing serious congestion on the west coast. Reductions in trade threaten to upend trade growth, a huge problem considering the “phase one” trade deal has finally been signed between the US and China. As cargo backs up, equipment becomes scarce and the effects are felt all along the supply chain.

If the blanked and voided sailings of the last few weeks are any indication, it could take a while for exports to China to start moving at a good clip. China may not have reduced its need for imports but outside demands for Chinese exports is falling due to worry about the Coronavirus and labor shortages. People who aren’t working can’t produce exports. Without exports, containers remain empty and if containers are empty, why send a ship? This creates a loop of problems from which it will take time to recover. These conditions impact the Port of Oakland by leaving cargo bound to China to sit, awaiting a ride. With fewer ships headed to Mainland China, there are fewer opportunities to send and return cargo and equipment.

Reefer containers are especially vulnerable as they must remain plugged in once tendered to the port. Some parts of China won’t accept any more reefer containers as they have no spots open for connection. Some rerouting of cargo in Asia will help keep shipments moving and work to alleviate the port congestion we have in the US. We have to remain patient and there is no better way to ensure the smoothest voyage than planning ahead for the cargo journey. By making preparations for equipment in advance we can try to mitigate any surprises.

Feel free to contact your Edward J. Zarach & Associates representative to come up with a plan to keep your cargo moving despite the delays.

Coronavirus delays

The extended Lunar New Year holiday is ending in China and as more than 150 million people head back to work the threat of the Coronavirus, now officially named COVID-19 by the WHO (World Health Organization), is still causing shipping delays and capacity issues. Though shippers, suppliers, manufacturing and transportation workers are returning, the impact on logistics has yet to be measured.

Ocean freight – With more than two dozen blanked sailings in the past two weeks, ocean carriers are working to catch back up on cargo that’s been waiting at ports and shippers since the holiday shutdown started on January 25th. We can expect shortages on equipment as traffic starts to move, especially impacting reefer containers that have been held at ports, idling to maintain their cargo. Most carriers are working to update their customers on service outages and individual messages can be found here:

Air Freight – Facing capacity issues and an ever increasing load of urgent cargo that could have gone by ocean but has been delayed, carriers are trying to move cargo, but finding that picking up or delivering to mainland China is precarious at best. Some areas like Shanghai are moving smoothly, all things considered. Other areas, in outlying provinces are having trouble as quarantine laws and health risks are keeping trucks from being able to cross through and traffic is reduced to approved trucks only. In those cases, we’re working directly with suppliers preferred companies who are able to move more freely in many cases.

With demand falling as fears rise, American Airlines has suspended flights between the US and China until late April, adjusting as necessary. Reuters has an excellent alphabetical listing of the airlines who have cancelled / reduced service to and from China that we suggest bookmarking.

We’ll continue to bring updates as they come in but urge customers to contact their suppliers for the most updated information regarding the factory hours and labor shortages.

US and France postpone sparkling wine tax until the end of 2020

Hot on the heels of a “Phase One” agreement between the US and China, President Trump and French President Macron have agreed to suspend talk of the 100% tariffs on French sparkling wine that the US Trade Representative proposed on $2.4 billion in imports from France in retribution for the French digital services tax. That tax on some wines could top 100% as many European products are already taxed at 25% in response to the WTO Airbus decision. These taxes are expected to reduce wine sales overall by 2% which would cost the economy $2 billion and 17,000 jobs, with an overall cost for the complete European tariffs costing $10 billion in lost revenue, 78,000 jobs lost.

Currently the US is France’s largest importer of wine, and consumers aren’t likely to switch brands and types in light of the tariffs, so analysts expect an across the board reduction in consumption. The French government announced the initial tariffs against US technology companies based on their annual revenue. While the taxes are on hold for now, the negotiations will continue between the US and France until an equitable solution of tariffs for digital taxes. The negotiations will not impact the current 25% tariffs on European wines that are currently being applied in response to the WTO Airbus decision.

The WTO is currently deciding a very similar case against the US and Boeing that could result in a wash between the countries instead of a tit-for-tat increasing of taxes, benefiting nobody. This extension of time between the nations to negotiate could result in shortages and disruptions of cycles as more people buy up their favored products before any possible tariffs go into effect, a phenomenon seen during the escalating US-China tariff disputes that led to a lower than average holiday shipping season.