candis, Author at Carson International

March 16, 2021

Canada Posts First Trade Surplus Since May 2019 As Exports Surge

January saw Canada post its first trade surplus since May 2019 as exports surged higher to start the year.

Statistics Canada is reporting that the surplus of $1.4 billion was the largest since July 2014, and compared with a revised deficit of nearly $2 billion in December. Economists on average had expected a deficit of $1.4 billion for January, according to financial data firm Refinitiv.

The trade report follows a flash estimate by Statistics Canada earlier this week that real gross domestic product rose 0.5% in January following growth of 0.1 per cent in December.

TD Bank economist Omar Abdelrahman said the strong international trade report joins a list of other indicators in suggesting a better-than-expected start to 2021 for the Canadian economy.

Total exports rose 8.1% in January to $51.2 billion, with increases in all product sections, while in real or volume terms exports increased 5.1%.

Exports of aircraft and other transportation equipment and parts rose 72.3% in January as Statistics Canada said a Canadian airline, which it did not identify, retired a large number of aircraft, resulting in their export to the United States.

Meanwhile exports of consumer goods increased 11.6% in January, helped by higher exports of gold bars to the United States, and exports of energy products rose 5.9%, helped by both higher prices and higher volumes of crude oil exports for the month.

On the other side of the equation, imports increased 0.9% in January to $49.8 billion, while in real or volume terms they gained 1%.

Imports of energy products rose 20%, while imports of electronic and electrical equipment and parts increased 2.9%.

The overall trade surplus for the month came as Canada’s trade surplus with the United States more than doubled to $6.2 billion in January, the largest surplus since September 2008. Exports to the United States rose 11.3%, while imports from the United States edged up 0.4% to $31.0 billion.

Meanwhile, Canada’s trade deficit with countries other than the United States increased to $4.8 billion in January compared with $4.5 billion in December.

(Source: Global News)

March 15, 2021

Biden Asked To Suspend Waivers to Buy American Program

More than a dozen Senate Democrats have written to the White House asking U.S. President Joe Biden to suspend waivers to the Buy American program for contracts funded by COVID-19 aid.

Firms from 60 nations can currently bid for U.S. government contracts as though they were domestic companies, the senators wrote. Before contracts are doled out for the newly passed $1.9 trillion COVID package, the White House should suspend those waivers and “commit to our trade partners to renegotiate these terms as quickly as possible.”

“[T]his crisis has demonstrated the risks of long foreign supply chains,” wrote the lawmakers, led by Brown and Tammy Baldwin (D-Wis.), referencing shortages for “crucial items like Personal Protective Equipment (PPE), ventilators, and chemical inputs for pharmaceuticals due to lack of domestic industries in those products.”

Biden has pledged to narrow exemptions to the Buy America rules and review supply chains for critical industries including PPE and pharmaceuticals, but those have not been detailed much beyond the issuance of executive orders.

(Source: Politico)

March 10, 2021

WTO Suggests Global Trade Recovery May Have Already Peaked

Although global trade fared better in 2020 than expected, the World Trade Organization estimates that the recovery has peaked, and anticipates continued challenges for the year ahead.

The WTO’s latest Goods Trade Barometer, published in late February, indicates that the decline in global trade volume last year was less pronounced than the 9.2% drop it predicted earlier, thanks to a strong performance in the third and fourth quarters.

However, its authors are more conservative with their outlook for this year —

“The outlook for merchandise trade will depend to a large extent on the evolution of the virus and the dissemination of effected vaccines.”

On the other hand, Everstream Analytics, formed this month out of the merger of supply chain risk analytics firms Resilience 360 and Riskpulse, has not found any indications of a looming downturn, according to CEO David Shillingford.

He sees good potential for further growth, suggesting much momentum is still trapped by lockdown measures caused by COVID-19.

Developments in the European Union and Brexit suggest that both the EU and the UK will be facing headwinds, whereas predictions for US trade, notably imports, remain positive. The upward momentum has not been slowed by equipment shortages, nor the escalating rates in their wake.

Some sectors have seen a shift to domestic or regional markets, such as US produce shippers pivoting from China to the domestic arena. Medical devices have also seen a stronger focus on domestic or regional markets, to some extent due to export restrictions.

“Our research shows that shippers are more likely to stay dispersed to diversify supply chain risks,” said Ms Shamal.

These preferences may be strained by protectionist moves. Last month, the International Chamber of Shipping noted that 98 countries had set up temporary export restrictions or bans in the pandemic, which are hampering global trade.

(Source: The Load Star)

March 8, 2021

Container Chaos Expected to Continue Through Q3

Shippers have been told they’ll need to wait through to the second half of the year before any semblance of normality returns to container trade flows. During TPM, the world’s top container shipping event, leading global carriers have been exploring current supply chain challenges, and potential routes out of the ongoing container crunch.

When Jeremy Nixon, CEO of Japanese carrier ONE, was asked when normal cargo flows would return to the transpacific, he said that because of all the ships alongside or at anchor in North America: “We’re actually running out of ships in Asia.”

“Frankly we’ve probably got another three to four months to work this through. Hopefully by the second half of 2021 we should see a more stabilized trade.”

Vincent Clerc, CEO Of A.P. Moller-Maersk Ocean & Logistics, said that global supply chains had never before experienced the stress tests of the past few months.

As with his liner counterparts, Clerc noted the under-investment along the coastline of North America as a critical part of today’s backed-up box crisis.

For Asia-North America west coast, almost 87% of the arrivals were late last month, according to Sea-Intelligence analysis. And when they are late, they are on average more than 10 days late.

Clerc told TPM delegates that Maersk views the current unexpected surge in consumer demand as temporary. Maersk is forecasting a return to a more normal base – similar to 2019 levels – during the course of 2021.

(Source: Splash 24/7)

March 3, 2021

Mandatory Requirement To Hold Safe Food Licence for Importation

As of March 15, 2021, food import transactions into Canada will automatically be rejected unless a valid Safe Food for Canadians (SFC) licence is entered in the Integrated Import Declaration (IID). If a transaction is rejected, the SFC licence holder may experience delays and have their related food shipment(s) held at the border until the error is addressed and the import transaction is resubmitted.

You must obtain your SFC licence to import before presenting your shipment at the border. You will not be able to obtain an SFC licence at the border. If you currently hold a licence, review your licence profile in My CFIA to ensure that your licence has been issued for the activity of “Importing” and for the food commodity or commodities you intend to import.

Please be aware that an SFC licence application or amendment request may take up to 15 business days to process, and can take longer if a pre-licence inspection is required.

For more information on food commodities, including examples of foods included in each sub-commodity, refer to Annex A of What to consider before applying for a Safe Food for Canadians licence.

For more information on transaction rejections, please refer to: Importing food into Canada with a Safe Food for Canadians licence.

March 3, 2021

Webinar: Canada-U.S. Reset on Trade

Carson International is pleased to partner with Miller Thomson LLP for another instalment in our webinar series addressing Canada/U.S. cross-border trade developments and updates.

The Biden Administration offers Canada an opportunity to reset Canada-U.S. relations in trade.

Throughout his career, President Biden has been a committed multilateralist and has relied on allies like Canada to achieve his goals internationally. This offers Canada and the U.S. an opportunity to reset their trade relationship, and prioritize issues that impact trade between the two countries.

We will discuss what this will mean for the:

Re-opening of the border
Canada-US-Mexico Free Trade Agreement (CUSMA / USMCA);
Supply Chain Management;
Application of Section 232 Tariffs by the U.S.;
Agricultural Sector;
Made in America guidelines; and
Multilateral approach to dealing with China’s Trade policy.

Panelists:

Dave Pentland, Carson International
Dan Kiselbach, Miller Thomson LLP

Webinar Details:

Canada-U.S. Reset on Trade
Thursday, March 11, 2021
Time: 11:00 a.m. – 12:00 p.m. PST

Webinar connection details will be provided by Miller Thomson before the webinar.

R.S.V.P. by March 10, 2021.

March 2, 2021

Demand For Cold Storage Increases Amid Pandemic

Whether it is COVID-19 vaccines, or fresh and frozen foods, there is a growing volume of items that need to be kept at a cool or freezing temperature — and the cold storage business is booming.

Before the pandemic, demand for cold storage facilities, driven by consumer habits that have seen a shift from shopping in brick and mortar stores to ordering online for home delivery, was on the rise. The pandemic simply accelerated that trend.

A September 2020 report from real estate services and investment management firm JLL estimated that more than 78% of the cold storage building supply at that time was built before 2000. The outdated designs used in many of those facilities do not have the space necessary for modern logistics and racking and are not as energy efficient as their newer counterparts so customers are eyeing replacement facilities.

Among newer projects, the type of facility is changing somewhat. In addition to large regional facilities, owners and developers are building microfulfillment centres. And while these smaller structures further reduce the distance between the product and the end customer, they aren’t replacing regional ones.

The latest demand for space is for the COVID-19 vaccine, which has different requirements depending on the manufacturer.

The Moderna vaccine arrives frozen between -13 degrees and 5 degrees F and must be kept at that temperature range until the expiration date. Once thawed, it can be kept for 30 days at between 36 and 46 degrees.

The Pfizer-BioNTech vaccine, however, arrives frozen at a temperature range of between -112 and -76 degrees and, if it is to remain frozen, must be stored in a facility able to maintain that range or remain for a limited time in the special shipping container. Before mixing, the vaccine can be kept for up to five days at between 36 and 46 degrees. Once mixed, the vaccine must be used within six hours, all the while kept at temperatures between 35 and 77 degrees.

New Developments

Construction started in January on what is being billed as Denver’s first speculative cold storage project, the 247,000-square-foot 76 Freeze. The multi-temperature, multi-user facility is owned by Karis Cold Storage and can store goods at temperatures between -10 degrees F and 55 degrees F.

The Houston area is experiencing a wave of speculative cold storage projects as well, according to Bisnow, including: a 304,000-square-foot facility being developed by Tippmann Innovation a 284,000-square-foot; a Scout Capital Partners conversion of an existing building into cold storage: and a 286,000-square-foot, ground-up Boomerang Interests facility. Some developers are anticipating a boom of cold storage projects supported by robust shipping activity in and out of Houston.

This month, CBRE also announced the development of a 700,000-square-foot, climate-controlled warehouse to service the sixth busiest cargo airport in the world, Ted Stevens Anchorage International Airport in Anchorage, Alaska. When complete, the building will include cold and warm storage space, quick cargo, general warehouse space, logistics services and auxiliary office space.

Despite the many projects in development, cold storage contractors are facing a range of challenges getting projects to the finish line including:

Increased competition
Labour shortages
Condensed schedules
Delivery delays

Despite challenges, cold storage construction companies are finding themselves in a favourable position. According to a 2019 report from commercial real estate and investment services firm CBRE, the market can support 100 million square feet of new construction through 2024.

(Source: Supply Chain Dive)

March 1, 2021

China’s Owners and Port Groups Urge Tempering of Sky-High Box Rates

Continued markups in container shipping rates have prompted shipowners and port associations in China to urge their members to provide shippers with a clear way forward.

The traditional Chinese New Year slack season has failed to drag down rocketing shipping costs, while consultancy Sea-Intelligence predicts the record-high prices could even last for another year. The latest weekly Shanghai Containerised Freight Index showed a sustained strengthening in the spot market. The index was up 1.8% on Friday, led by a 4.2% surge on the Shanghai-Northern Europe trade to $4,281 per teu.

The China Containerised Freight Index, a reflection of the contract market, also expanded by 0.5% during the same period.

With the pandemic continuing to spread throughout Europe, supply-chain constraints have offset the holiday-led demand decline and resulted in increases of shipping rates.

In a joint statement, government-backed China Shipowners’ Association and China Ports and Harbours Association said shipping lines should try to make up the capacity shortage by deploying general cargo ships and multi-purpose vessels on their services. At the same time, port operators should improve terminal efficiency to shorten the time at berth for ships.

The two groups also asked their members to stay away from opaque pricing and illegal charges, amid shippers’ complaints and requests for regulators’ intervention.

The CSA held a meeting with major carriers in January in an effort to stabilise freight rates.

Other suggestions this time include enhancing the communication between ports and carriers about the allocation and storage of empty containers, accelerating the circulation of the equipment via better use of digital technologies.

Based on analysis of historical China and Shanghai Containerised Freight Index data, it is forecast that the “highly elevated contract rates might actually be with us until 2022”.

The situation comes with a freight market fuelled by a pandemic-led surge in demand for containerised goods and a shortage of carrying capacity.

China’s container exports grew 9.8% year on year during the second half of 2020 to 43m teu, according to government statistics.

(Source: Lloyd’s Loading List)

February 25, 2021

Incoterms 2020

We have updated our Carson Incoterms sheet to reflect the new 2020 version that came out last year.

Incoterms are a set of 11 internationally recognized rules which define the responsibilities of sellers and buyers, specifying who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.

If you have any questions about how to use them or how they apply to your business, please feel free to reach out to our team at csr@carson.ca.

Download Incoterms 2020

February 24, 2021

Chinese Official Calls for “Joint Efforts” in China-U.S. Trade

China’s commerce minister appealed to Washington for “joint efforts” to revive trade but gave no indication Wednesday when tariff war talks might resume or whether Beijing might offer concessions.

“Co-operation is the only correct choice,” Wang Wentao said at a news conference.

President Joe Biden has yet to announce a strategy for dealing with Beijing but is widely expected to renew pressure on trade and technology complaints that prompted his predecessor, Donald Trump, to raise taxes on Chinese imports.

Washington and Beijing have raised tariffs on billions of dollars of each other’s goods, disrupting global trade. They agreed last January to postpone further penalties but most taxes already imposed stayed in place.

Beijing agreed to narrow its trade surplus with the United States by purchasing more American soybeans and other exports. It fell short of the targets set due to the pandemic, and bought about 55% of the promised goods.

China’s foreign trade situation is “severe and complicated,” Wang said. He said Beijing is launching e-commerce and other initiatives to encourage sales. One focus will be markets in its “Belt and Road Initiative” to build ports, railways and other trade-related infrastructure.

(Source: The Associated Press)