De minimis, originating from Section 321 of the Tariff Act of 1930, has evolved from its humble $5 threshold (equivalent to $85-90 today) to become a cornerstone of modern e-commerce imports. While the 2015 Trade Facilitation and Trade Enforcement Act's increase to $800 grabbed headlines, U.S. Customs and Border Protection (CBP) notes that the average de minimis shipment value remains around $55-60. The real story isn't the threshold increase, but rather how the pandemic accelerated e-commerce adoption, leading to an unprecedented surge in these shipments—from hundreds of thousands just a handful of years ago to 1.4 billion in fiscal year 2023.

The implications of de minimis extend far beyond simple duty exemptions. This provision has reshaped supply chains, particularly for high-duty products like apparel and footwear, by enabling companies to fulfill orders directly from overseas warehouses or through facilities in Mexico and Canada. While this has benefited consumers through lower prices and faster delivery times, it's created significant challenges for CBP's enforcement capabilities, particularly in screening for counterfeits and illegal substances like fentanyl.

In this episode, we explore:

• The various methods of processing de minimis shipments, including Type 86 entries, manifest clearances, and the unique advantages of different transportation modes
• How the Consumer Product Safety Commission's upcoming e-filing requirements in 2025 could reshape the landscape for apparel and children's products
• The political battle between government agencies seeking stricter controls and private sector entities defending current practices
• Potential regulatory changes, including CBP's proposed $2 per package fee and the possible exclusion of "import-sensitive" products
• The evolving role of customs brokers in this changing landscape, transitioning from data entry to strategic advisors
• The impact of artificial intelligence and technology on customs processing and compliance

Guest: Tom Gould, Principal of his own consultancy, licensed customs broker, Certified Customs Specialist, and current member of the public-private COAC committee, appointed by Treasury Secretary Yellen and DHS Secretary Mayorkas in 2022.

Join us for an in-depth discussion on this crucial topic that's reshaping international trade and e-commerce.

Source Material:

US bipartisan FIGHTING for America Act aims to close de minimis loophole

White House De Minimis Fact Sheet

Blumenauer Legislation Announcement

WSJ: Trade ‘Loophole’ Used By China Should Be Closed, House Democrats Tell Biden (paywall)

CBP Trade Enforcement and Trade Facilitation Act of 2015

In this episode of Logistically Speaking, hosts Scott Case and Cameron Roberts sit down with Eric Johnson, Senior Editor of Technology at the Journal of Commerce, to discuss the current state of technology in the supply chain and logistics industry. They explore what innovations are truly transforming the sector versus those that may be more hype than substance.

Key topics covered:

• The evolution of supply chain technology and how it's impacting daily operations
• Artificial intelligence: its potential applications and limitations in logistics
• Blockchain's rise and fall in the industry - lessons learned
• Cybersecurity concerns as supply chains become more digitized
• The role of venture capital and private equity in driving tech innovation
• Challenges in developing and adopting new logistics technologies
• How regulatory requirements influence technology development
• The future of automation in supply chain processes

Whether you're a logistics professional looking to stay ahead of tech trends or a supply chain leader evaluating new solutions, this episode provides valuable insights to help separate the truly transformative innovations from the hype.

Source Material:

• Gartner Magic Quadrant: https://www.gartner.com/en/newsroom/press-releases/2024-03-20-gartner-identifies-top-trends-in-supply-chain-technology-for-2024

• DHL Logistics Trend Radar: https://www.ajot.com/news/dhl-logistics-trend-radar-7.0-unveils-emerging-ai-trends-and-sustainable-solutions

• Bypassing Airport Security Through SQL Injection: https://ian.sh/tsa

• CBP ACAS Implementation Guide: https://www.cbp.gov/sites/default/files/2024-09/ACAS%20IG%20v2.3.1_508.pdf

In this edition of Logistically Speaking, Cameron and Scott look back on the NCBFAA's GTEC Conference in Chicago held July 28 - 30, 2024, and discuss a variety of issues and topics that were covered at the event. They spent time discussing the new FMC rules, an interesting case in Georgia over demurrage and detention fees and a reminder about the importance of having the basics in place if you're an NVOCC as it relates to your FMC Qualifying Individual.

They also reacted to observations by four GTEC attendees about what topics are important right now in internationl trade:

• Duty drawback

• FMC basics

• Forced labor

• Export compliance

Thanks to Robyn Moore, Managing Consultant, Duty Drawback for Mohawk Global, Melzie Wilson of The Global Zolutions, Kellie Case, President, The Camelot Company and Kim Calicott, Export Compliance Manager, Mallory Alexander International Logistics.

If it's an election year, there are three certainties you can expect from Congress:

1. 100% of House members are focused on getting re-elected.

2. 33% of Senators are focused on getting re-elected.

3. Probably less than 10% of the country has any belief they'll do something meaningful and significant for the country, other than getting out of DC to stump for their jobs.

Increasingly, though, the two major parties are seeking to both contrast themselves to their opponents while simultaneously appearing unified on issues that are "American" (which feels like a code word for 'nationalist').

The question is with social unrest at home, two geopolitical conflicts where America is contributing money and materiel and a presidential replay coming in November, will anything of substance be passed by both chambers to become law?

If anybody knows the answer to that question, it's Peter Friedmann. Peter wears two hats; one is colloquially "Our man in DC," as he is of Counsel to the Pacific Coast Council - an organization consisting of and representing the interests of customs broker and freight forwarder associations along the US West Coast. His other is as Executive Director of the AgTC, a trade association of agricultural exporters looking for overseas market access and equitable treatment for his members from shipping companies whose commercial and financial focus feels import-centric.

Between mid-May and Election Day, both chambers will be jointly in session for thirty-nine days, with an extra five days for the House and eleven for the Senate. Oh, and that includes not working a single day in October. Nice work if you can get elected to it, huh?

For cargo owners and companies working in support of domestic and global supply chains, there are a multitude of issues being debated. From the retroactive renewal of GSP to OSRA 2.0 and a bevy of proposals encompassing China, de minimis and the EV industry, whether you're directly in the industry or a consumer affected by these proposed bills, logistically speaking, will it be a year of trade or tariffs, and what can and should we expect out of Congress in an election year?

Source Material:

• H.R. 7986 - The GSP Reform Act. https://www.congress.gov/bill/118th-congress/house-bill/7986

• H.R. 7979 - End China's De Minimis Abuse Act. https://www.congress.gov/bill/118th-congress/house-bill/7979

• H.R. 1833 - The Ocean Shipping Implementation Act of 2023. https://www.congress.gov/bill/118th-congress/house-bill/1836

• H.R. 7980 - End Chinese Dominance of Electric Vehicles in America Act of 2024. https://www.congress.gov/bill/118th-congress/house-bill/7980

• https://qz.com/biden-us-china-china-tariffs-evs-chips-electric-cars-1851474998

• https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/

Despite having recorded episode 04 talking insurance, at the time we spoke no one could have imagined that a containership would strike and destroy bridge, essentially shutting off an entier port from commerce.

Yet that is what happened when the Dali struck a support pillar of the Francis Scott Key Bridge in Baltimore, taking down the bridge and causing loss of life and billions of dollars in damage for cleanup and new bridge construction.

One week on from the accident, the the investigation process is well underway and federal agencies are working around the clock to safely and quickly re-open the port of Baltimore, the 11th largest port in the United States and the largest port of entry for automobiles, light trucks and operates strong bulk and cruise business that is inaccessible with the closure.

The first legal actions are also being filed, including by the vessel's owner to limit their liability. President Biden promised the US goverment will rebuild the bridge, and they likely will. What undergirds that claim is a complex insurance industry infrastructure that will distribute the loss across multiple entities and ensure that the government and valid claimants are paid.

We asked Philip Bilney to rejoin us - an unusual thing to do after recording once already, but he was kind enough to share his time and contribute his thoughts and insights.

If a butterfly flaps its wings in Asia, a wave crashes against the coastal United States some period of time later, or so the adage goes. Since the attack in Israel last October, besides what is transpiring inside of Gaza, all eyes have been on the Red Sea. The Houthi rebels, whose history in Yemen goes back much further than most people are aware, have made targeting shipping interests a means to gain the world's attention.

The Houthis have said that the attacks on ships and seafarers will continue until such time as there is a cease fire. Most recently, the crew of a UK-flagged vessel was forced to abandon ship after one such attack. Despite the US and other nations' response to the killing of three American servicemembers, the attacks continue. Without getting overtly political, there is a belief that these attacks are being aided by Iran using an intelligence-gathering ship situated right smack in the middle of everything and is helping the Houthis identify potential targets.

Despite an early attempt by several carriers to pass through the area, the inability of a multilateral coalition to sufficiently ensure the safety of all commercial traffic has led carriers to circumnavigate the entirety of the African coast adding both time and cost, plus re-igniting the for-a-period dormant business model of maritime piracy near the southern tip of Africa.

The first reaction of people (and businesses) is to assume that this situation and others in the reason have immediately led to surcharges and higher insurance premiums on cargo in the region. The fact of the matter is, given the way insurance works, there really isn't a bright line from one activity or change in trading conditions to an increase in premiums. It is a much more interconnected web, in fact, that could lead to increases to cargo insurance on other trade lanes, cyber insurance policies or even personal home, auto and health insurance policies, despite the seeming lack of connection between all these coverages.

Joining Cameron and Scott for this episode is Philip Bilney, a man who intimately understands insurance. The Executive Chairman of the +8Partners ecosystem of companies, Phil has spent a lifetime in the insurance industry and markets. Knowledgeable, approachable and with the ability to easily explain complex subjects while providing the necessary background and context to undergird the explanation, Phil is one of the best people to turn to for this issue.

On January 1st, drayage carriers who service the twin ports of Los Angeles and Long Beach were faced with a new requirement that, while on its face seems to be a push towards better quality of life for workers and communities around the ports, it couldn't be more misguided.

According to the Journal of Commerce: "...California’s Advanced Clean Fleet regulation requires that effective Jan. 1, all new trucks entering over-the-road and drayage fleets must be zero-emission, with all trucks in the state needing to meet that rule by 2035. Similarly, farmers will be required to begin phasing in zero-emission off-road vehicles and tractors."

Sure, you're thinking, California already has some of the most stringent tailpipe emissions requirements in the country, and you'd be right. So why aren't those standards sufficient? The truth be told, to most reasonable people, they would be enough.

However, this isn't a discussion for reasonable people. These are policies being put forth by the South Coast Air Quality Management District, or AQMD for short.

In January, rental car company Hertz is divesting itself of nearly 20,000 electric vehicles because of the idiosyncrasies a driver has when moving away from an internal combustion engine, or ICE, vehicle. If you're already an EV owner, you're used to charging, range calculations that aren't 1:1 with the range you're told you have remaining and finding available charging in high-density markets.

Consumers are willing to accept some inconveniences in their lives but like the difference between that cheap online hand mixer and a pro, high-capacity one used in commercial bakeries, the commercial stuff is expected to work better, last longer and be less prone to mechanical failures.

The California Energy Commission estimates California needs 157,000 medium- and heavy-duty chargers — 53 a day — by 2030 to meet proposed regulations like the Advanced Clean Truck and Advanced Clean Fleet rules.

The fact is, California's ports are risking their competitiveness, they're risking the number of drivers who can service the ports and at a time when the ports are seeing volumes slightly above 2019 numbers but not near the record pandemic numbers and for shippers, there's a risk of this moving to other states.

Scope 3 emissions and the greenhouse gases generated by shipping are a legitimate environmental concern. Whether Maersk looking to methanol-fueled ships or the nascent but growing number Sustainable Aviation Fuel, or SAF, refineries coming online, solutions are being developed, but not without there being significant steps backwards in productivity that are being imposed on a community.

With the help of Matt Schrap, Executive Director of the Harbor Trucking Association, Scott and Cameron are going to have a conversation that asks and answers the questions:

1. What are the California state-level regulations?

2. What are the port level regulations and policies?

3. Will it spread north to Oakland and other CA ports which saw containerized traffic during the pandemic and might still be seeing some of that business?

4. What will happen if this goes national?

5. What are 3 takeaways / action items that logistics companies, truckers and cargo owners can do to prepare their organizations or to let their voices be heard.

And most importantly, Logistically Speaking, what are cargo owners to do about the zero-emission truck requirement?