Newsletter [Aug 23-Aug 29]
Good Morning
A note from our CEO, Richard Roman Jr
The freight market continues moving higher, but this week’s increases are increasingly being driven by operational constraints rather than demand alone.
Trans-Pacific rates rose again as congestion across major Asian ports, equipment positioning challenges, weather disruptions, carrier capacity management, and Panama Canal restrictions continue limiting available space.
At the same time, trade policy is back in focus following a significant escalation between the United States and Canada. New U.S. tariffs have taken effect on certain Canadian products, and Canada has announced retaliatory tariffs beginning September 8.
For importers, the message remains consistent: today’s market requires flexibility. Freight capacity, equipment availability, country of origin, and tariff exposure can all materially change landed costs.
The Roundup
What moved the world this week
Customs & Trade Policy Update
U.S.–Canada Trade Dispute Escalates
The U.S.–Canada trade relationship deteriorated significantly this past week after negotiations between the two countries broke down.
The United States has implemented additional tariffs of up to 50% on certain Canadian products, effective August 22.
CBP has issued formal entry guidance covering affected Canadian merchandise.
Canada responded by announcing that it will match the new U.S. tariffs dollar-for-dollar and rate-for-rate.
Beginning September 8, Canada plans retaliatory tariffs of 15%, 25%, and 50% on approximately $27.6 billion of U.S. exports.
Affected sectors include:
Steel
Dairy
Appliances
Agricultural equipment
Pulp and paper
Electronics
The highly integrated nature of U.S.–Canada supply chains means the impact could extend beyond companies directly importing finished Canadian products.
Manufacturers relying on cross-border components, packaging, raw materials, or intermediate goods should review their exposure.
Automotive Supply Chains Face Additional Uncertainty
Automotive trade is particularly exposed.
The Administration has announced that tariffs on certain Canadian vehicles and automotive parts will increase to 50% effective January 1, unless negotiations produce a different outcome.
The issue is significant because U.S., Canadian, and Mexican automotive supply chains are deeply integrated, with components frequently crossing borders multiple times during production.
For importers and manufacturers, country-of-origin analysis and USMCA qualification will remain increasingly important as these policies develop.
Customs Compliance: CBP Tightens Importer Record Requirements
There is another important customs development this week.
CBP announced that beginning September 18, it intends to immediately void Importer of Record numbers when required Form 5106 information is found to be inaccurate or incomplete.
This reinforces the broader shift toward stronger importer verification and enforcement that CBP has been signaling throughout the year.
Importers should make sure their CBP records accurately reflect:
Legal company name
Business address
Contact information
Responsible parties
Other required importer information
An outdated importer record can create unnecessary clearance problems when cargo arrives.
CAPE Refund Update: Phase 3 Delayed
There has been an important change to the CAPE IEEPA refund timeline.
Phase 3 had been expected to launch August 20. However, CBP has postponed the deployment until further notice.
Importers should therefore not assume that entries expected to qualify under Phase 3 can currently be submitted through CAPE.
Phase 1 and Phase 2 processing continue for qualifying entries.
CBP is expected to issue additional guidance when Phase 3 functionality is ready for deployment.
Section 301 Drawback Clarification
There was also useful clarification regarding drawback.
CBP has confirmed that the HTS provisions associated with the new Section 301 forced-labor tariffs and certain Brazil Section 301 tariffs are drawback eligible.
This is different from the CAPE limitation discussed previously.
An entry associated with an active drawback claim may face CAPE eligibility limitations, but that does not mean the new Section 301 duties themselves are categorically ineligible for drawback.
Importers with significant duty exposure should review whether drawback opportunities exist within their supply chain.
Supply Chain & Logistics News
Freight Rates Continue Climbing
Trans-Pacific freight rates moved higher again this past week.
Drewry’s latest World Container Index increased 4% overall, while Shanghai-to-New York and Shanghai-to-Los Angeles rates each increased approximately 9%.
The important story is what’s driving the increase.
Current pressure includes:
Strong Trans-Pacific booking activity
Equipment and vessel capacity being out of position
Congestion across major Chinese ports
Recent typhoon-related disruption
Continued blank sailings and carrier capacity management
Panama Canal restrictions affecting East Coast and Gulf services
This combination has made securing the right equipment and vessel space increasingly challenging.
Our View
We continue to see strong demand, but the current freight market is increasingly a supply-side story.
Importers may find that a carrier technically has a sailing available but cannot provide the required equipment or allocation at the preferred origin or service.
For upcoming shipments, particularly from Asia, we recommend booking early and maintaining flexibility between carriers and routings.
China Congestion Creates Equipment & Capacity Pressure
Recent congestion across China’s major container ports has become a significant contributor to the current market.
Global container capacity caught in berthing queues recently exceeded 4 million TEUs, with significant disruption concentrated in Asia.
Typhoon-related port interruptions have added to the backlog, particularly around Shanghai and Ningbo, delaying vessel rotations and preventing containers from returning to locations where they are needed.
This helps explain why equipment shortages can appear even when the global container fleet itself has not materially decreased.
The issue is increasingly where the equipment is located—not simply how much equipment exists.
As these disruptions work through the network, equipment availability may remain inconsistent through the end of August and into September.
Panama Canal Adds Another Pressure Point
The Panama Canal is also becoming increasingly important for Asia-to-U.S. East Coast and Gulf cargo.
Lower water levels have resulted in tighter draft restrictions, reducing vessel flexibility through the canal. Several carriers have announced additional Panama Canal-related surcharges beginning in September.
Combined with elevated Asia congestion, this creates another potential constraint for East Coast-bound cargo.
We recommend importers evaluate routing options early, particularly for time-sensitive September shipments.
The Forecast
Trends, goals, and what’s on the radar at JR Global
September is shaping up to be another important month.
On freight, we are watching:
China port congestion
Equipment availability
Trans-Pacific capacity
Additional blank sailings
Panama Canal restrictions and surcharges
Upcoming China and Asian holidays
On customs and trade, we are monitoring:
U.S.–Canada negotiations
Canadian retaliatory tariffs beginning September 8
Additional Section 301 developments
New importer verification requirements
CAPE Phase 3 deployment
The current freight market is showing that available capacity on paper does not always translate into usable capacity in practice.
Equipment location, port congestion, vessel schedules, and carrier allocation are all affecting the ability to move cargo.
The Shortcut
Smart tips for smart shippers
Trans-Pacific freight rates increased again this week.
Shanghai–New York and Shanghai–Los Angeles benchmark rates rose approximately 9%.
China port congestion and equipment positioning are contributing to tighter capacity.
Panama Canal restrictions are adding pressure to East Coast and Gulf routings.
The U.S.–Canada trade dispute escalated significantly.
Canada will introduce retaliatory tariffs beginning September 8.
Certain Canadian automotive products face additional U.S. tariff exposure.
CBP is tightening Importer of Record requirements beginning September 18.
CAPE Phase 3 has been postponed until further notice.
CBP clarified that certain new Section 301 duties are eligible for drawback.
The Playlist
What the JR team is listening to this week in the office
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