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July 2014
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According to government statistics, approximately 30% of internationally-traded wood is illegally harvested.  Led by the U.S. Department of Agriculture's Animal and Plant Health Inspection Service (APHIS) and the U.S. Fish and Wildlife Service, the Lacey Act was amended in 2008 to fight illegal logging.  Under Lacey, importers of wood products must identify the genus, species and origin of each wood component used to manufacture an imported finished product.  For example, a wooden dresser might be manufactured in China but contain a plywood core made in Denmark and a top veneer of Red Oak originally from the United States.  Your Customs broker must declare this information to CBP via Customs entry or Lacey Form 505.

It is important to note the Lacey Act does not specifically require importers to document the legality of their material at time of entry.  However, an importer could face criminal fines or confiscation if the government believes he/she should have reasonably known wood was illegal, or “tainted”, or did not demonstrate due diligence to determine legality.  It may seem unreasonable to accurately report genus and species and country of origin of all imported wood products, and suppliers are probably not trading illegal lumber, but as long as the government promotes enforcement of the Lacey Act, it is possible for innocent buyers to be target of an investigation.  With new targeting technology available to CBP under ACE, we strongly recommend a documented paper trail for all imported wood, including MDF and veneers.

The good news is that the onus is on the U.S. government.  They must prove beyond reasonable doubt that you knowingly traded illegal material in order to assess criminal penalties, or that you failed to demonstrate due diligence to press civil allegations.

For more information about the Lacey Act:

or

The Lacey Act is not the only area where importers are requested to know the source of raw materials.  Manufacturers who use tin, tungsten, tantalum or gold in their products – or production – should be able to reveal what steps they are taking to eradicate ‘conflict minerals’ - elements sourced in countries that fund terrorism, war or unethical labor practices.  Under legislation such as the Dodd-Frank Act, the use of conflict minerals is being tackled seriously by governments and corporations around the world.

PORT UPDATE AND MARKET SITUATION
Peak season started early this year due to concerns over the ILWA-PMA negotiations.   Both parties agreed to take a break from negotiations to handle other issues this week.   They will reconvene next week.  Both parties are committed to coming to a peaceful agreement without port disruption.  Space to both coasts is extremely limited. 
We strongly encourage shippers to make bookings as soon as possible.  At some ports, congestion has delayed delivery times for up to one week.  Los Angeles/Long Beach, Oakland, Chicago, New York/New Jersey, Savannah, Houston, and Nashville seem to be particularly congested.  Rail is also backed up as import volumes continue to increase.
AUGUST GRI ESTIMATES
 
While the market is booming, carriers will push for full General Rate Increase (GRI),
effective August 1.  Expected rate increases are:
 
India to US East Coast and US Gulf: $320/20’; $400/40’; $450/40’ HC

Asia to USA (regardless of routing):  $480/20’; $600/40’; $675/40’ HC
AIR FREIGHT
Expect widespread delays on air freight ex China airports in August because of Chinese military flight exercises in order to prepare for a potential mass
attack on China.  More than 300 flights at Shanghai’s two airports alone have been delayed or cancelled this week.    
Future Forwarding Company
is your partner on the first or
last mile of your shipment's journey
and every point in between

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Look for more information about trans-Atlantic services in our next newsletter
 

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