US Ag Exporters Concerned Over Cargo Detention Penalties From Coronavirus; China Streamlining Trade Procedures for Medical Goods

As the coronavirus outbreak disrupts supply chains, U.S. agricultural exporters are unsure when normal cargo processing will resume and are concerned about penalties from ocean freight carriers, according to a Feb. 3 open letter to ocean carriers by Agriculture Transportation Coalition Executive Director Peter Friedmann.

The coronavirus is “dramatically impacting” global supply chains, Friedmann said. AgTC members “appreciate” that the carriers have extended “free time” -- exemptions from detention and demurrage penalties -- through Feb. 9, but are hoping for “further guidance” for their export cargo that has landed in China or for imports “marshalled for and awaiting export,” the letter said.

U.S. exporters have not been given a “specific end-date” for when the ban on cargo movement will be lifted, Friedmann said, but they expect it to last beyond Feb. 9. Friedmann asked carriers to extend the “free time” beyond Feb. 9 until authorities believe “normal transportation services” at the ports can resume. “While this is open-ended, our U.S. exporters need assurance they will not be charged detention (per diem) or demurrage while the supply chain remains dysfunctional due to the Coronavirus,” the letter said.

The coronavirus is also leading to delayed responses on transactions throughout companies' supply chains, according to a trade attorney with clients operating in the Chinese market. “For companies who have extensive business there, it's making it more difficult to engage with people,” the lawyer said.

Meanwhile, China’s Ministry of Commerce is trying to streamline imports of medical supplies and technology related to controlling the coronavirus outbreak as the country faces shortages of virus-fighting goods. In a Feb. 3 notice and press conference, Commerce officials said the country is opening up “international procurement channels” in search of masks, protective clothing and goggles and trying to eliminate as much red tape as possible for technology goods needed to fight the outbreak.

To help “make up for the shortage of domestic” supply, China has “organized” an “international special procurement system” for health-related goods, said Tian Yulong, chief engineer for China’s Ministry of Industry and Information Technology, according to an unofficial translation of the press conference transcript. “Many companies” have already started to import the goods through the procurement system, Tian said. China “urgently” needs medical supplies, including “protective suits,” a China Foreign Ministry spokesperson said during a Feb. 3 press conference held online.

The country has also adjusted Chinese standards to better match up with “foreign standards … so that export products that comply with [European Union], Japanese, and U.S. standards can be used in some areas of China,” Tian added. In particular, “many home appliance companies” have helped buy masks and protective clothing for Chinese medical patients, Tian said, while other supplies are being bought “online by consumers.”

Companies around the world are preparing for significant disruptions to supply chains and profit margins due to the virus, according to a Feb. 3 Reuters report. But Deputy Minister of Commerce Wang Bingnan said “many foreign trade companies are rapidly recovering production capacity” in China. Huawei and other Chinese chip makers continue to operate despite the outbreak, according to a Feb. 2 Reuters report. Wang urged the “international community” to continue doing business with China, saying that the World Health Organization “believes that letters and parcels from China are safe” and “central government departments and local governments at all levels are doing their best to export their products.” While China fights the virus, Wang said the country expects many foreign governments and “market entities” to provide “more trade convenience” for goods and services exported to China.

China will “give priority to technology import and export work” related to countering the virus, the Commerce Ministry said in the notice, and will help companies “overcome difficulties” in production and trade. To streamline trade, China will lean heavily on its “paperless process” and “maximize” the use of online trade management procedures. Importers and exporters can upload “electronic registration documents,” including contract registration applications, contract texts and “legal status certification documents,” the notice said, according to an unofficial translation. Chinese authorities will “accept the contract registration application online as much as possible,” the notice said. If traders face issues uploading the entire text of a contract because it is too “thick,” they can upload the contract’s “key information page” and complete the rest of the upload “after the epidemic is over,” China said.

Although China is in need of medical goods and supplies, the country has stopped customs procedures at some border ports, including at a portion of China-Vietnam border ports, according to a Feb. 1 report from CustomsNews, the mouthpiece for Vietnam Customs. Customs clearances are expected to stop until at least Feb. 9, the report said, adding that China has “almost no activities” at its border gates with Vietnam.

For a copy of the AgTC letter, email ITTNews@warren-news.com.