From Washington

The House and Senate must negotiate a compromise Generalized System of Preferences (GSP) reauthorization after passing different GSP renewal provisions as part of the House-Senate conference on a China competitiveness package. The TGA-supported Coalition for GSP is seeking company/association signatures for a letter to Congressional leaders outlining GSP users’ priorities (e.g., longer length, attainable eligibility criteria). The deadline to sign is 6 p.m. EDT on Monday, May 2. Sign on here.

On April 20, TGA joined dozens of other industry groups in urging Congress to include the Ocean Shipping Reform Act (OSRA) in any final anti-China legislation. The legislation was included in the House-passed AmericaCOMPETES Act but was not included in the Senate-passed U.S. Innovation & Competitiveness Act. House and Senate conferees will begin negotiations next week in the hopes of reaching agreement on compromise legislation by summer. OSRA would require the Federal Maritime Commission (FMC) to establish/enforce rules that would help end the current shipping crisis, and prevent the next shipping crisis, by mandating minimum service requirements for carriers, as well as establishing and enforcing rules barring contract breaches and excessive and unjust detention and demurrage fees.

Last week, TGA joined dozens of other industry groups in calling for an end to the China Section 301 tariffs, especially in light of rising inflation, and urged Congress, at a minimum, to renew and improve the China Section 301 tariff exclusion process.

Last week, the full Senate approved the Senate version of the Ocean Shipping Reform Act (OSRA) by voice vote. The House also approved OSRA for a third time. The House and the Senate must now reconcile the differences between the two versions of the TGA-supported legislation, which we hope will happen quickly. On April 4, President Biden announced major steps forward in addressing the ongoing trucker shortage, claiming significant increases in new truckers and new commercial truck licenses and a dramatic increase in new trucker apprenticeship programs. On April 1, the ports of LA/Long Beach began collecting new fees of $10/TEU on all loaded import and export cargo containers hauled by drayage trucks. The stated purpose of the new fee is to support the Clean Truck Fund (CTF) to help fund and incentivize the changeover to cleaner trucks and accelerate the development of zero-emissions technology to achieve zero-emissions drayage trucking by 2035. And, on April 1, the Ports of LA/Long Beach again delayed, for the 19th week straight, the so-called “super demurrage fee” on long-standing import containers at docks until at least April 8.

The lockdowns in Shanghai have been extended with new lockdowns in Haining, a major production region in Zhejiang Province in response to new COVID outbreaks. With no trucks available because of the lockdown, the Port of Shanghai, the largest port in the world, is essentially shut down, with many carriers blanking sailings to Shanghai. TGA is also hearing about problems at the Port of Ningbo. And Shanghai’s airport remains essentially shut down.

On March 23, the Biden administration announced the renewal of 352 tariff exclusions under the China Section 301 tariffs. Among the new exclusions are 6 specific travel goods items:

• Messenger bags of polyester, each measuring not more than 50 cm by 38 cm by 11 cm, weighing not more than 2.5 kg (described in statistical reporting number 4202.12.8130);
• Backpacks with hydration system, each measuring not more than 51 cm by 28 cm by 9 cm, weighing not more than 1 kg (described in statistical reporting number 4202.92.0400);
• Backpacks with outer surface of textile materials of man-made fibers, each measuring at least 35 cm but not more than 75 cm in height, at least 19 cm but not more than 34 cm in width, and at least 5 cm but not more than 26 cm in depth (described in statistical reporting number 4202.92.3120);
• Duffel bags made predominantly of man-made fibers, each measuring not more than 98 cm by 52 cm by 17 cm, weighing not more than 7 kg, with wheels (described in statistical reporting number 4202.92.3131); and
• Duffel bags of polyester, each measuring not more than 81 cm by 39 cm by 11 cm, weighing not more than 7 kg (described in statistical reporting number 4202.92.3131).

These tariff exclusions had previously expired in August 2020. The China Section 301 tariff exclusions are retroactive to October 12, 2021 (meaning folks can apply for refunds) and extend through December 31, 2022. TGA continues to urge the Biden administration to review/end the tariffs and restart the China Section 301 tariff exclusion process.

Over the last few months, dozens of new California Proposition 65 (Prop 65) “60-day” notices have been issued alleging that brands and retailers sold totes (Notice 1), backpacks (Notice 1), duffel bags (Notice 1, Notice 2), handbags (Notice 1, Notice 2, Notice 3, Notice 4, Notice 5, Notice 6, Notice 7, Notice 8), wallets (Notice 1, Notice 2), and travel/garment cases/messenger/crossbody/carry bags (Notice 1) in California that contained di (2-ethylhexyl) phthalate (DEHP), Di-n-butyl phthalate (DBP), and diisononyl phthalate (DINP) in violation of a California law known as Proposition 65 (Prop 65). The notices serve as intent to bring lawsuits against the manufacturers that made and sold these products. Check out TGA’s member-only California Proposition 65 (Prop 65) Best Practices Guidance on the Prop 65 page on the TGA website. This member-only guidance details best practices in developing your company’s Prop 65 testing and warning label protocol, including recommendations on which warning label text to use, where to place the warning label text, and how to test for Prop 65 listed chemicals in your products. For more information on Prop 65, please contact TGA’s Nate Herman, nate@travel-goods.org, 301-775-7633.

On March 1, TGA joined 49 industry groups in urging President Biden to step in to ensure employers and longshoremen reach a new labor contract before the current contract expires on July 1. TGA warns failure to do so will make the already worsening shipping crisis a catastrophe.

On March 1, President Biden delivered a stinging rebuke to ocean carriers in his State of the Union, stating “I’m a capitalist, but capitalism without competition isn’t capitalism. It’s exploitation — and it drives up prices. When corporations don’t have to compete, their profits go up, your prices go up, and small businesses and family farmers and ranchers go under. We see it happening with ocean carriers moving goods in and out of America. During the pandemic, these foreign-owned companies raised prices by as much as 1000% and made record profits. Tonight, I’m announcing a crackdown on these companies overcharging American businesses and consumers.” On February 28, the White House detailed those actions, which include going after anti-competitive practices by ocean carriers; pushing Congress to approve the TGA-supported Ocean Shipping Reform Act; and pushing Congress to approve new bi-partisan legislation to strip anti-trust immunity for ocean carriers. While these steps are positive, TGA continues to push President Biden for more action, and immediate relief for the industry (see above).

On February 15, Federal Maritime Commission (FMC) Commissioner Rebecca Dye detailed how shippers can file complaints with the FMC. On February 11, FMC Chair Daniel Maffei accused ocean carriers of bilking shippers for unfair fees. On February 4, the FMC requested comments on a proposal on whether the FMC should flesh out further and enforce its interpretative rule against unfair detention and demurrage fees. TGA plans to submit comments in favor of the proposal. Comments are due March 17. TGA continues to push President Biden to take action to end the shipping crisis and provide immediate relief to the industry.