Ask Ahab

Issue 82

Dear Ahab:

If President Trump paused tariffs on USMCA-compliant cargo, why is it taking longer to ship my cargo in from Mexico?

– Not Just In Time

Dear Not Just In Time:

This is a good question, and it comes down to two things: Military and bureaucracy. If you remember a time before tariffs, the Trump administration touted border security as a reason for imposing import duties on Mexican goods.

When those tariffs were paused, the Mexican government deployed the national guard to the U.S.-Mexico border. What that means, in practice, is that a certain percentage of containers entering the U.S. from Mexico are subject to inspection by Mexican authorities before they even get to U.S. Customs agents. To put it bluntly, soldiers checking shipping containers for illicit cargo slows down the process.

The other part of this, as I mentioned, is bureaucracy. When you give USMCA-compliant cargo a pass on tariffs, letting noncompliant cargo slip through the cracks becomes a money loser. With that in mind, U.S. Customs has started requiring more documentation to prove USMCA compliance. Unfortunately, that thorough examination process slows down the process, even if you’re following the rules perfectly.

Dear Ahab:

I’ve seen some reporting that says the trade dispute between the U.S. and China has caused many shippers to cancel their transpacific bookings. What do these cancellations mean for those of us who need to move cargo?

– Blank You, Next

Dear Blank You, Next:

Basically, those shippers’ cancellations are going to crater the amount of cargo moving from China to the U.S., which will bring scheduled sailings to a lower amount of capacity filled. When that starts happening, we start seeing more blank sailings.

This creates a schedule reliability problem because the ship you initially book space on might cancel its voyage, causing yours and thousands of other containers full of cargo to be rescheduled on another vessel at a later date.

The only way to combat this spate of blank sailings is to work with a well-connected logistics company who has the carrier relationships and buying power needed to help you quickly get your cargo on another vessel. Working with these companies can minimize any interruption you experience, giving you a significant advantage over your competition.