New Year brings new import/export regulations
Industry experts offer insight into the challenges impacting the import and export of cold food and beverages, discussing everything from tariffs and governmental regulations to price increases and third-party logistics.
With the New Year comes new regulations regarding the import and export of cold food and beverages. Here’s a breakdown of what the supply chain and logistics industry should prepare for now before these regulations go into effect:
Sulphur in 2020. This ruling goes into effect Jan. 1, 2020, where the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas is reduced to 0.50% mass by mass (m/m).
“This will significantly reduce the amount of sulphur oxides emanating from ships, and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts,” says Natasha Brown, media and communications officer International Maritime Organization (IMO), London. “[While] tariffs are not part of IMO remit, the new regulation may bring in new costs since the new low sulphur fuel blends are likely to be higher at least initially, but this is a cost [that] the shipping industry will absorb and ultimately pass on to consumers. Society has to bear the cost of pollution.”
Food Safety Modernization Act. Food facilities, including manufacturing, storage, warehouse and transloading, must complete a registration process with the FDA by Jan. 4, 2020.
Foreign supplier verification programs. Importers of food must certify that food from foreign suppliers meets U.S. federal regulations for food safety.
In-transit cold treatment program. USDA is considering expanding ports of entry to several ports in the south and west of the United States.
“This allows for the en route cold treatment of food shipments to kill insects and bacteria before the shipment reaches the U.S.,” says Robert Bernardo, communications manager for Port of Oakland, Oakland, Calif.
Tariff uncertainty. “Importers and exporters are unsure about the ultimate amount of tariffs they must pay on both sides of the transaction,” says Bernardo. “This just adds to market volatility because everyone is unsure about the final outcome, especially whether or not tariffs will continue to increase.”
As a result, importers and exporters have to seek out new markets, thus impacting the flow of trade.
Equipment availability. The challenge is to ensure the location of refrigerated containers where they are needed to meet import/export demand.
“Repositioning refrigerated containers comes with a cost, especially since many ocean ports are heavily reliant on either imports or exports,” adds Bernardo. “Ocean carriers and container leasing companies must continue to purchase new refrigerated containers to ensure an adequate supply. This could create challenges since ocean carriers must devote money to other capital expenses such as preparing ships for new low-sulfur fuel regulations from the IMO.”
Temperature-controlled buildings. The need for temperature-controlled facilities continues to outpace the development of new infrastructure.
“Having one building to do both refrigerated and frozen cargoes is challenging for the facility operator because you have to chamber the facilities into two different climates,” says Alberto Cabrera, director of cruise and cargo development for JAXPORT, Jacksonville, Fla. “Developers making these investments are usually not building on speculation, and the facilities are usually purpose built.”
Timely transport of cargo. The timely transport of cargo will always be a critical piece of the fresh and frozen supply chain, according to Cabrera. That’s why companies are urged to be strategic in building cold storage facilities near ports.