The Friday Report: May 17th, 2019Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry
Record High Imports Anticipated in Advance of Next Round of China Tariffs
New threats of U.S. tariffs on the remaining 325 billion dollars of goods imported from China is anticipated to cause a huge increase of imports from China this spring and summer. Goods shipped from China before 12:01 A.M. EST May 10, 2019 would not be impacted by the newest round of tariffs as long as they arrive in the United States prior to June 1st.
In 2018, manufacturers and retailers stockpiled goods in advance of pending tariffs. The increased orders increased volumes of imports at U.S. ports and resulted in logistical challenges moving goods to warehouse and distribution center locations. The record volumes experienced at West coast ports has been more effective in reducing U.S. exports to China than it has in decreasing imports from that country. The Port of Long Beach noted an uptick in the return of empty containers to Asia-186,000 in November alone, an 11% increase over that of the previous year. Contrarily, Chinese companies appear to be sourcing goods from countries other than the United States.
U.S. Department of Commerce Triggers 17.5% Tomato Tariff
In early May, a 17.5% tariff on tomatoes imported from Mexico was initiated following the termination of the 2013 Suspension Agreement on Fresh Tomatoes from Mexico by the U.S. Department of Commerce. The tariff was triggered automatically by the termination of the agreement. The tariff is applicable for fresh or chilled tomatoes that are not intended for processing, raising the cost from 21.69 cents per pound to 31 cents per pound.
The new tariff means that tomato prices are likely to increase for American consumers somewhere between 40 and 85% according to analysis by Arizona State University. The application of the new tariff is expected to reduce the amount of tomatoes in the American marketplace. Tomato prices would rise in response to the decreased supply.
Immigration Upheaval Tightens Labor in Waste and Recycling Service Market
Already a tight labor market, waste and recycling service providers are struggling to recruit, train and retain frontline employees, particularly drivers. The state of American immigration policy is also having an impact. According to industry experts, 35-40% of workers hired to work in the waste and recycling services industry over the past ten years have been immigrants. Looking forward, the industry is seeking to recruit among a diverse population and the uncertainty in federal policy is limiting prospects.
Waste Connections President Worthing Jackman recently explained to Waste Dive magazine that the lack of immigration policy is impacting the home building industry and infrastructure investment as well as workers are needed in those industries as well.