Good Morning

A note from our CEO, Richard Roman Jr

This week highlights how interconnected carrier consolidation, valuation rules, and tariff authority have become.

Congress is debating whether to eliminate a 40-year-old duty valuation method. The Supreme Court is reviewing the legality of certain emergency tariffs. Meanwhile, customs bond shortfalls are hitting record levels — directly affecting cargo release.

At the same time, major structural changes in the ocean carrier landscape continue to unfold.

The Roundup

What moved the world this week

Customs & Trade Policy Update

February 20: Tariff Ruling Could Reshape Billions

Tariffs collected under the current framework have generated $124 billion this fiscal year, including $30 billion in January alone — more than 300% year-over-year growth.

The Supreme Court is reviewing whether certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were lawfully enacted. February 20 is the next potential decision date.

Why this ruling matters:

It could determine whether billions in collected duties stand
It could trigger refund claims
It could affect bond levels and collateral requirements
It could reshape executive tariff authority moving forward

In short, valuation rules are being debated in Congress while the underlying tariff authority itself is under judicial review. A single decision could influence duty strategy, bond exposure, and federal revenue simultaneously.

40-Year “First Sale” Rule Faces Elimination

Since a landmark 1988 court decision, U.S. importers have been permitted to calculate duties using the “first sale” price — typically the lower price paid to the manufacturer — rather than the higher resale price paid by the U.S. importer.

This week, Senators Sheldon Whitehouse and Bill Cassidy introduced the Last Sale Valuation Act, which would require duties to be calculated using the final sale price before importation — generally the higher U.S. buyer price.

If enacted:

Declared customs values would increase
Duty exposure would rise for multi-tier supply chains
Landed cost strategies would shift structurally

The bill is early in the legislative process but signals growing scrutiny of long-standing valuation practices.

Takeaway: Even if tariffs remain unchanged, valuation methodology itself may change — potentially increasing duty exposure across many supply chains.

Record Bond Shortfalls Reflect Tariff Pressure

As tariffs surge, so have customs bond insufficiencies.

CBP reports 27,479 bond insufficiencies in fiscal 2025, totaling nearly $3.6 billion — more than double 2019 levels.

Customs bonds are typically calculated at approximately 10% of duties paid over the prior 12 months. The challenge:

Tariffs increased rapidly
Bond amounts were based on older, lower duty levels
Importers are exceeding bond capacity

When bonds become insufficient:

Freight can be held at the port
A larger bond must be issued
Additional collateral may be required
Cargo release can be delayed days or longer

Some importers have seen bond requirements increase 200% or more.

If the Supreme Court invalidates certain tariffs, importers could seek refunds not only for duties paid, but also for collateral tied up in bonds. However, bond reductions require formal surety petitions and documentation review — reimbursement would not be immediate.

Takeaway: Bond sufficiency has become a critical operational issue. When bonds fall short, freight stalls.

Supply Chain & Logistics News

Hapag-Lloyd / ZIM Acquisition Signals Strategic Realignment

ZIM Integrated Shipping is reportedly nearing a $3.5 billion transaction involving Hapag-Lloyd and Israeli private equity firm FIMI, structured as a split operation rather than a traditional full acquisition.

Under the proposed structure:

Hapag-Lloyd would absorb most of ZIM’s international trade lanes, chartered vessels, and global commercial operations, integrating them into one of the world’s top five carriers.
A separate Israeli-controlled entity would retain Israeli-flagged vessels and strategically essential routes to preserve national emergency shipping capacity under Israel’s “Golden Share” framework.

This model allows global scaling under Hapag-Lloyd while preserving Israel’s strategic maritime interests.

What this means for shippers:

Potential network realignments
Service rotation changes
Contract allocation adjustments
Capacity reshuffling on key lanes

ZIM has not formally confirmed the transaction, but if completed, it would further consolidate global carrier capacity.

Takeaway: Carrier consolidation continues. Expect gradual integration impacts on routing, service structure, and commercial strategy.

The Forecast

Trends, goals, and what’s on the radar at JR Global

We are entering a pivotal moment.

Congress is reviewing valuation rules.
The Supreme Court is reviewing tariff authority.
Carriers are consolidating and realigning global networks.

Each of these developments individually would be significant. Together, they signal that 2026 will be a year of structural trade adjustment.

For importers, the focus should be:

Monitoring bond sufficiency
Reviewing valuation strategies
Preparing for potential refund scenarios
Evaluating carrier network shifts

This is not just about rates or capacity — it’s about long-term cost structure and compliance strategy.

The Shortcut

Smart tips for smart shippers — key takeaways from this week’s newsletter

Hapag-Lloyd/ZIM acquisition could reshape global network alignment.
Supreme Court ruling on IEEPA tariffs expected as early as February 20.
$124B in tariffs collected this fiscal year — ruling could affect billions.
Proposed legislation may eliminate the 40-year “First Sale” duty rule.
27,479 bond insufficiencies in FY2025 — $3.6B gap.
Bond shortfalls can delay freight release.
Refunds (if applicable) require proper ACE setup and formal petitions.

The Playlist

What the JR team is listening to this week in the office

Spotify Playlist

Newsletter [Feb 15-Feb 21]