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Tougher rules for US imports on DDP put pressure on buyers and suppliers

US companies buying goods on Delivered Duty Paid (DDP) terms have been urged to examine who is responsible for their customs declarations, after US Customs and Border Protection (CBP) introduced new requirements for foreign importers of record (IORs). The interim final rule, published in the Federal Register last week takes effect on 5 January, with new conditions for foreign IORs making both formal and informal entries into the US, as well as additional verification responsibilities for licensed customs brokers. Under the rule, a foreign IOR validated under the Customs-Trade Partnership Against Terrorism (CTPAT) programme can make entries itself, or appoint a licensed customs broker that does not have to be CTPAT-validated. A foreign IOR without CTPAT must designate a broker that is both licensed and CTPAT-validated to make the entry or act as IOR. Where the foreign party is not the owner or purchaser of the goods, the designated broker must act as the importer of record. However, the rule also establishes stricter criteria for determining whether a business qualifies as a US IOR. An individual must be a US citizen or lawful permanent resident, while a company must be organised under US law, located in the country, and at least 51% of its beneficial owners must be US citizens or permanent residents who control the business, or who directly own a significant amount of unencumbered US real estate. Licensed customs brokers will have to verify a client's eligibility before declaring it to be a US IOR. They must request and review supporting records, which could include corporate documents, financial statements, and proof of citizenship or permanent residence. Verification records must then be retained for five years. The development follows CargoTrans's recent tariff webinar, which examined the risks associated with DDP arrangements, noted that in theory an overseas supplier typically arranging import clearance and paying duties and taxes, offered the US buyer a seemingly simpler route to receiving goods. But CargoTrans co-CEO Nunzio De Filippis said the new rule made that convenience harder to achieve, adding: "So that easy button that we spoke about just got harder to press." He advised buyers to establish exactly who is responsible for the import process when their overseas supplier sells on DDP terms. "You have to ask them who is the importer record, who is the customs broker, what does that arrangement look like, and does it meet the new requirements?" he said. "Welcome to the age of strengthening customs enforcement," he added. CBP explained the measures were intended to improve visibility of foreign importers, strengthen accountability, and help ensure duties are collected. The agency highlighted difficulties pursuing unpaid duties and enforcing customs requirements against foreign entities with few US assets. Brokers may request delayed compliance with the new verification requirements before 5 January, but all must be fully compliant by 6 May next year. Comments on the interim final rule are due by 5 January. For US buyers, the update means a DDP quotation alone is no guarantee that the underlying import arrangements meet the new requirements. Buyers should establish who is named as the IOR, which broker is filing the entry, and whether the relevant parties satisfy CBPconditions.

Newcastle Airport adds Border Control Post

The UK's Newcastle International Airport has added a Border Control Post to expand the range of goods that can be imported into the country through the airport. The government-approved facility has been opened by Worldwide Flight Services at the airport's freight village. The post enables products including flowers, plants, fruit and vegetables to be inspected and cleared on-site. "It is expected to help businesses reduce transit times and logistics costs by allowing goods to be cleared closer to their final destination," the airport said in a press release. The airport in the northeast of England has announced a series of investments in its cargo operations in recent years. In March, the airport said that it was moving forward with its proposed multi-million-pound AirLink development that would include provision for a cargo hub which would expand Newcastle Airport's airfreight operations. According to the airport, Airlink would serve as a base for cargo operators, freight forwarders and ground handling agents, and would be the only facility of its kind in the region. Earlier this year, Samson Aviation also expanded its ground handling equipment, enabling the airport to accommodate larger aircraft and specialist shipments, including heavy machinery and luxury vehicles. Leon McQuaid, director of aviation development at Newcastle Airport, said: "The new Border Control Post marks another important milestone in the growth of Newcastle Airport's cargo services, strengthening our position as a gateway for international trade. "We are grateful to Worldwide Flight Services for its investment in the facility, which will help businesses move goods more efficiently and provide a faster route to market while supporting economic growth and investment across North East England and beyond. "The continued investment in our cargo infrastructure reflects the growing demand for our services and we welcome discussions with cargo and aviation-related businesses looking to expand their operations through the Airport."

Calmer waters for container spot rates, but 'fragile' Middle East a threat

There was a certain sense of calm about the container spot freight rate market this week, with slight declines on both the transpacific and Asia-Europe trades as capacity constraints eased and demand remained seasonally subdued. Drewry's World Container Index (WCI) recorded a 2% week-on-week drop on its Shanghai-Rotterdam leg, to end at $3,615 per 40ft, while the Shanghai-Genoa was flat at $4,166 per 40ft, which indicated that new FAK (freight all kinds) levels, introduced by carriers on 1 November, were unable to stick. The carriers had aimed to push the Asia-North Europe spot rate up to around $4,500 per 40ft and to around $5,000 on Mediterranean shipments. A further attempt at higher FAK levels, around the same as before, is scheduled for 15 November, but modest demand and ample capacity is likely to weigh against them, European forwarders told The Loadstar. "On Asia-Europe rates, we did have initial rates for the fist half of November extended from mid-October, but these are starting to drop a little - I suppose, with the early Chinese New Year, carriers are expecting a small peak, but bookings at this stage would suggest it will not be like previous years," one said. Analysts at Linerlytica reported this week that carriers had been offering discounted rates, "ranging from $2,700 to $3,400 per 40ft on Asia-North Europe shipments". The continuing return of services to transiting Suez is also affecting market sentiment, by the expectation it will release more supply and shorten transit times, and thus drive down rates. According to Xeneta: "The return of networks to the Suez Canal releases capacity absorbed by longer diversions around the Cape of Good Hope, with 600,000 teu already released. "In October, carriers committed 467,297 teu of weekly capacity to the Red Sea - while this is 50% of the pre-crisis level of August 2023, it is roughly double the offered capacity compared with the end of August 2026." The freight rate intelligence platform added that it expected spot rates to decline some 30% over the course of 2027. "The Red Sea is pivotal to ocean container shipping in 2027 because it offers both sides of the coin," Xeneta chief analyst Peter Sand said. "If there is a full return [to Suez], freight rates could plummet. "We could also be faced with the opposite extreme if a deterioration in the security situation in the Red Sea forces carriers to revert to Cape of Good Hope diversions. This would bring chaos to ocean networks and upward pressure on rates. "The significant ramping up of Red Sea services in recent months should not distract from the fragility of the geo-political situation in the wider Middle East - it will not take much to ignite the situation again, and then the house of cards comes falling down," he added. On the transpacific trade, the WCI's Shanghai-Los Angeles route was stable, at $7,539 per 40ft, while the Shanghai-New York leg was down 3%, to $9,303 per 40ft. Forwarders on the trade reported "minor pricing adjustments", as the market has cooled since approaching pandemic-era highs last month, and with three blanked sailings scheduled for next week, compared with five this week, Drewry projected a "decline in [transpacific] rates next week". US west coast forwarder Freight Right said there had been "no widespread difficulty securing sailing space on China export lanes", with the October holiday rush having subsided. "The earlier pressure on vessel space has eased, improving booking availability from China," it added. "Rate reductions remain selective - small decreases depend on the carrier and route, indicating gradual easing rather than a broad market correction."