 | Some Key Trends that will Drive Freight Transportation in 2011 |
December 29, 2010 - We enter a new year that we all hope will take us a step closer to financial recovery. Most experts believe that with continuing high unemployment levels, a depressed U.S. housing market and limitations on governments in Canada and the United States to raise their national debts to spend economic stimulus dollars, the road ahead will be slow and bumpy. This suggests that in 2011 we will likely witness a continuation of the trends that we observed in 2010.
Slow Growth
The International Monetary Fund is expecting global trade to be slower in 2011 as compared to 2101 in all regions, particularly China. This will put pressure on shippers to keep tight control over their supply chains to maintain low inventory levels.
CSA in 2011
The U.S. government's Comprehensive Safety Analysis (CSA) is expected to have a positive impact on truckload transportation in 2011. Some capacity may be removed. Fears of a capacity crunch may support carrier leverage in pricing discussions. Concerns over legal liability could reduce the number of carriers that shippers are willing to use. Small carriers and owner operators may struggle with the accompanying administrative burdens.
However, a recent Morgan Stanley report casts some doubt that CSA will be a game changer in 2011. Full implementation will likely face delays. Given state budget shortfalls, funding for more aggressive inspections may be restricted and a lack of training, resources, or uniform interpretation between states may hinder enforcement. High unemployment may dampen the political will to enforce it and CSA's inability to directly terminate drivers leaves open the potential for poor drivers to remain, particularly as pricing improves. The Morgan Stanley report concludes by saying that the improving macro outlook is likely to be a bigger factor for TL pricing in 2011 than CSA.
Shippers will adapt supply chains to take advantage of Multi Modal Options
Intermodal transportation has been on a growth curve the past number of years and this will continue. Shippers will continue to look at their supply chains, their customer ordering patterns and cycle times and then use the combination of modes that provide the best cost and service trade-off. Freight management companies can help shippers consolidate LTL loads into truckloads and ship these via intermodal service on certain long haul lanes.
More Retailers will embrace Amazon.com's Two Day Flat Rate Shipping Program
Amazon.com launched Amazon Prime, its free shipping service which guarantees delivery of products within two days for an annual fee of $79. It was a huge hit. Some analysts estimate that it may be responsible for up to 20 percent of Amazon's U.S. sales. Wal-Mart Stores, Best Buy, Target and J.C. Penny unveiled their free shipping programs for the holidays. A consortium of 20 retailers including Barnes & Noble, Sport Authority and Toys "R" Us banded together to offer their own "copycat" $79 two day shipping programs. This intitiative appears to be a "game changer" and will have a big impact on web sales and on small parcel carrier revenues.
More Free Trade Deals are Coming
President Obama is committed to increasing sales of U.S. exports. He recently teamed up with Ford CEO Alan Mulally, unions and U.S. lawmakers to close a trade deal with South Korea. The agreement allows U.S. automakers to send 25,000 cars that meet U.S. safety standards annually to South Korea, even if they do not meet Korean standards. Canada closed a free trade deal with Columbia in June. Watch for more of these deals in 2011 and beyond. Prospects for further agreements have improved with Republicans taking control of the House of Representatives and gaining six seats in the Senate and with President Obama's focus on exports.
Increased Demand for Large Container Vessels
Shippers and shipping lines are preparing for the completion of the $5.25 billion expansion of the Panama Canal (to be completed in 2014) and the recovery of global trade. Orders for "megavessels" that can carry 20,000 20 foot containers, more than double the capacity of today's most common ships, are on the rise. Global trade increased by an estimated 11.4 percent in 2010 and is expected to increase by another 7 percent in 2011. Consumer electronics and appliances are best suited to large ships since they hold more cargo and drive down the cost of transportation.
Truck Freight Rates will Rise
A combination of tightening capacity brought about by bankruptcies and industry consolidation, CSA, and driver shortages will likely bring some truck freight rate increases by mid 2011 and more in 2012.
Vessel Freight Rates will be Flat
Slower economic growth and increasing ship capacity will result in expanded vessel space allowing shipping rates to remain flat.
Better Days Ahead for LTL Carriers
The YRCW soap opera has continued for another year. This has kept the U.S. LTL industry in a form of suspended animation. While the fundamentals for the LTL sector are improving, watch for this drama to come to some conclusion in 2011. YRCW's revenues have shrunk in half, from over 10 billion to approximately $5 billion. Despite YRCW's plan to close more terminals and its request for more time from the union, something has to give. It is very difficult to shrink yourself to prosperity.
Look for a number of scenarios to play out. YRCW's rates need to go up considerably and it needs to demonstrate an ability to grow revenues. The rest of the industry also needs rate increases. If YRCW is successful, the overall industry fundamentals will improve. If it fails, it may go down and its revenues will scatter over the other industry participants, another good scenario. If the company seeks rate increases and its competitors go into attack mode, this may damage an already troubled industry.
Shippers will Focus on Leverage and Competence
Shippers will continue to seek ways to leverage their volumes to maximum advantage. Closer working relationships between Procurement and Transportation will allow for more holistic approaches to freight management. A focus on competence and bottom line will propel shippers to 3PL's and freight management companies. For shippers that can manage the freight competent more cost effectively than a 3PL, if the skills and resources are there and if greater cost savings and control can be achieved, they may bring the transportation function back in house ..
Canadian Transportation Logistics
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| Snow Halts Freight Operations in Northeast |
Cargo deliveries slowly return to normal after major blizzard
December 28, 2010 - Shippers in the Northeast were hit by service delays, but ocean, truck and air cargo operators said operations were returning to normal after a blizzard Sunday brought the region nearly to a standstill.
Bill Cronan, manager of shipper sales at the Port Authority of New York and New Jersey, said the APM and ASI terminals were open Tuesday afternoon, but Maher Terminal was closed. Port Newark Container Terminal is closed to trucks, but has resumed rail service. New York Container Terminal and Global Terminal closed Tuesday afternoon, but expect to open Wednesday with late gate hours, and will possibly open on Friday.
Cronan said most terminals had ships alongside to discharge and load cargo. He said the problem was with trucking and the condition of highways. The port authority estimated that truck volume around the Port Elizabeth area was down 95 percent.
Snow reportedly reached a depth of 30 inches at Port Elizabeth.
A Cosco container ship was at the Port of Boston when the storm hit, officials there said. It was scheduled to depart Monday, but delayed until Tuesday.
UPS spokeswoman Lynnette McIntire said the company shut down service on Monday from Maine to North Carolina, but services were returning to normal Tuesday. She said UPS Airlines flights reached their eastern destinations Monday night or early this morning. The company expects resumption of normal service by tonight or Wednesday morning.
McIntire said one international flight scheduled to arrive at Newark on Monday was diverted to the company's hub at Louisville, Ky. She noted UPS service also may be delayed in areas of Europe that had been hit by severe storms, particularly the United Kingdom, Belgium, France, Luxembourg and Germany.
Journal of Commerce
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Carriers to impose surcharges on each bill of lading |
December 29, 2010 - Denmark's Maersk Line, French carrier CMA CGM and the Danish Unifeeder Line will impose surcharges on each bill of lading from January 1 to recover costs imposed by new EU customs regulations, according to the Shipping Gazette.
Because EU customs now demands cargo information 24 hours before sailing, CMA CGM is introducing a Customs Documentation Charge of US$25 per bill of lading while Maersk Line will levy the same as a Cargo Data Declaration Fee and Unifeeder will add a EUR23 (US$30) per bill of lading too, reports London's International Freighting Weekly.
Said CMA CGM: "This regulation generates additional costs for CMA CGM, as it will have an impact on its day-to-day operation and administration. CMA CGM bears the fixed IT and administrative costs of interfacing with EU customs, either directly or through third-party providers."
Maersk Line said the charge covered "day-to-day operating and administrative costs, the cost of interfacing with customs through third-party service providers, fixed IT and admin costs of establishing interface to customs and handling amendments to the advance manifest (to be reviewed after four months)".
Said Unifeeder: "The vessel operator is responsible for lodging an entry summary declaration (ENS) for all goods discharged in an EU port, including transhipment goods and those remaining onboard. This demand will have a considerable cost impact on the feeder operator[s]."
Transport Weekly
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Japanese Trade Grows Faster in November | |
Exports increase for 12th straight month, imports for 11th; growth speeds for both
December 22, 2010 - Japan's recovery kicked into high gear in November as exports and imports not only grew but grew faster for the first time in months.
Japan's exports to the rest of the world grew for the 12th month in a row on a year-on-year basis in November, rising 9.1 percent to $65.55 billion and picking up the pace from 7.8 percent growth in October, according to preliminary figures released by the Finance Ministry on Wednesday.
After surging 45.3 percent in February, overall exports had grown at a decreasing rate for eight months in succession. November's faster growth comes amid a stronger yen and a weakening pace of global economic recovery.
Japan's imports from the rest of the world grew for the 11th consecutive month on a year-on-year basis in November, increasing 14.2 percent to $63.59 billion, faster than the previous month for the first time in three months.
Japan's trade surplus shrank for the first time in three months, narrowing 55.4 percent to $1.96 billion.
Top export commodities were steel, metal processing machinery and motors. Top imports were iron ore, audio-visual equipment and petroleum products.
Exports to the rest of Asia grew 13 percent from a year earlier. Japan's shipments to China grew 18.3 percent in November from a year earlier.
China supplanted the U.S. as Japan's biggest export market in 2009 for the first time since the end of World War II. China has been Japan's largest import source since 2002 and largest trading partner since 2007.
Despite the faster year-on-year pace of growth in Japan's overall exports, the country's shipments to the United States slowed for two months in a row. They rose at a tepid pace of 1.2 percent in November, totaling $10.48 billion. Still, it was the 11th straight monthly growth on a year-on-year basis.
Japan's imports from the U.S. increased for the first time in two months, rising 12.1 percent to $6.16 billion. Japan's imports from the U.S. had declined 9 percent in October.
As a result, Japan's trade surplus with the U.S. shrank for the first time in 11 months, narrowing 11.2 percent to $4.32 billion.
Hisane Masaki
Journal of Commerce
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Japan trade review may hit China imports | |
About 450 items stand to lose preferential status: ministry official
December 29, 2010 - (TOKYO) Japan is reviewing its trade preference policy for developing countries in a move that could revoke preferences for about 450 items imported from China, an official at the Finance Ministry said yesterday.
The review of the trade regime aimed to promote economic development, known as Generalised System of Preferences (GSP), comes as China, Japan's biggest trading partner since 2009, readies to surpass Japan as the world's second biggest economy.
It also comes as the European Union plans to start reform of its trade preference regime for developing countries, of which China is also a beneficiary, next year. Japan plans to remove goods from certain countries from its GSP list for three years if they have accounted for more than 50 per cent of total imports of the item on average for the past three years, a report on tax guidelines for the next fiscal year showed.
As a result, about 450 items imported from China, which in the year to March 2010 were worth 1.3 trillion yen (S$20.5 billion), would face tariff rises, among them plastic goods and clothing, said a Finance Ministry official dealing with tariff issues.
Japan imported US$97.8 billion worth of goods from China in 2009, data from the Japan External Trade Organisation showed.
'We are not doing things with any specific countries in mind. We have started taking these measures ... so that by removing competitive goods, other developing countries can benefit more,' said the official, who declined to be identified as he is not directly responsible for the decision.
Japan's GSP gave trade benefits for goods produced in 140 developing countries and 14 regions worth 1.6 trillion yen in the year to March 2010. Imports from China accounted for 86 per cent of that, data from the Finance Ministry showed.
A bill to change tariff-related laws must be passed in Parliament for the review to take effect.
The government is set to submit a bill in the next session of Parliament expected to start in January, the official said, although its passage is not guaranteed as the Democratic Party-led government needs support of opposition members for it to pass in a divided Parliament.
Trade data revealed last week showed that Japanese exports rose 9.1 per cent in the year to November, slightly less than economists' median forecast for a 10.0 per cent rise. Japanese imports, though, increased 14.2 per cent against an expected rise of 9.0 per cent.
The data also showed that shipments to China and the United States, the two major export destinations for Japanese goods, rose 18.3 per cent and 1.2 per cent, respectively.
The Japanese trade balance came to a surplus of 162.8 billion yen, down 55.4 per cent from a year earlier. That compared with the median estimate for a 450.0 billion yen surplus.
Reuters
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| Taichung Port overtakes Keelung in Cargo |
December 23, 2010 - Taichung Port has surpassed Keelung Port to become the nation's second largest, the Ministry of Transportation and Communications (MOTC) said.
Taichung Harbor Bureau statistics showed that the total cargo handled at that port topped 90.7 million tonnes for the first time this month, reported Taipei Times.
Kaohsiung Port, which handles about 381 million tonnes of cargo per year, is the nation's largest seaport.
Keelung Port handles about 63.5 million tonnes of cargo per year. Part of the cargo previously handled at Keelung Port is now processed at Taipei Port instead. The Taipei facility was opened in 2003.
The ministry said the total cargo handled reached 88.6 million tonnes between January and last month, registering 21 percent growth compared with same time last year. The total containers handled also grew by 13.92 percent.
Cargonews Asia
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| Turners Shipping joins BDP Global Network |
December 24, 2010 - Turners Shipping (Pty) Ltd. (Turners Shipping), one of South Africa's leading logistics solution providers, has become a partner in the BDP Global Network - an alliance of small to mid-sized logistics firms, established to challenge large multi-national logistics and transport companies by delivering higher standards of customer service.
Combined with BDP International's own extensive global coverage, the BDP Global Network gives companies engaged in international trade access to professional and personalised logistics services in more than 120 different countries.
To date, eighteen companies have joined the network from countries in Africa, the Americas, Asia Pacific, Europe and the Middle East.
Tim Frear, director of BDP Global Network Services, the administrative arm of the network, said he was honoured to have Turners Shipping as part of the team. "Turners Shipping is one of the leading players in the logistics and transport industry in South Africa," he said. "They share the same values as BDP and our other members - namely a commitment to impeccable service and an intimate customer relationship based on a keen understanding of the customers' ever-evolving needs."
Conrad Cochrane-Murray, managing director of Turners Shipping (Pty) Ltd, said, "BDP's Global Network allows us to offer our customers the reach of a multi-national firm but with the understanding and flexibility only a local firm can provide. It is a unique business model that will reduce complexity for our customers and provide access to the shared assets and geographic presence of a respected global brand in BDP International. Together, this network of carefully selected firms can effectively compete with the reach and spending power of the multi-nationals, while surpassing them in customer service."
Logistics Week
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| BDP Global Network's Premium Partner forming a new company "Ron-El Maliline Ltd" in Israel |
December 27, 2010 - A new company Ron-El Maliline Ltd. will be formed in January 1st, 2011 as a result of an agreement signed between Maliline Ltd and Ron-El Ltd regarding merging its activities on the field of the international freight forwarding and customs clearance activities.
Ron-El Maliline Ltd
7 Rival st. (Amgar House)
67778, Tel Aviv
Tel: +972 3 6391919
Fax:+972 3 6395959
This merger will unite the activities of the 2 private owned, well established and known companies. I am positive and full of confidence that the resulting product portfolio will be a great advantage for you.
Maliline Ltd will continue to operate as a privately owned company and current activity will remain the same with the same well experienced people. Contact details of Maliline (phone fax and E-mails) will remain the same.
Please kindly note as from January 1st all shipments coming to Israel need to be consigned to Ron-El Maliline Ltd. (see above mentioned details).
BDP Global Network and Ron-El Malilne Ltd.
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Comment Deadline Nears For EPA Water Discharge Rule | |
Community has until Dec. 31 to comment on changes to VGP program
December 28, 2010 - The maritime community has until Dec. 31 to comment on possible changes to an Environmental Protection Agency regulation governing the incidental discharge of water from all vessels except pleasure watercraft.
The EPA established the "vessel general permit" program in 2008 to comply with a ruling by the 9th U.S. Circuit Court of Appeals in San Francisco that vessels were to be regulated under the National Pollution Discharge Elimination System of the Clean Water Act.
Current VGPs will expire on Dec. 19, 2013. The agency is now seeking comments as it begins revising the regulation. The EPAs expect to have a proposed rule ready for public comment by the end of 2011.
A VGP covers all water discharges, including rainwater runoff from decks and engine cooling water, but the main issue is ballast water discharge, according to Doug Schneider, vice president of the World Shipping Council.
Current Coast Guard regulations adopted by the EPA say mid-ocean ballast water exchange is acceptable to prevent the spread of exotic species. On January 1, 2014, a new International Maritime Organization standard will take effect requiring onboard treatment of ballast water.
However, the Clean Water Act allows states to preempt federal standards, which could impede the adoption of a new U.S. standard. The U.S. will likely follow the IMO standard, but California requires a standard that's 1,000 times higher, and New York, 100 times higher. Schneider said that there is no technology today that can exceed the IMO standard.
Journal of Commerce
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| Indian Ports ordered to improve Hazmat Security |
December 28, 2010 - The Indian Shipping Ministry ordered all major port authorities to strictly implement new measures to improve the security and handling of hazardous materials, the ministry said. The measures, suggested by a port security expert committee, were sought after the July 14, 2010 chlorine gas leak at the Port of Mumbai.
The committee, headed by the joint secretary for ports, presented its report to the government last week. One suggested measure included a ban on handling hazardous shipments during night hours.
In its report, the committee said all hazmat import shipments should be taken from the ship's hook under "customs escort" direct to the consignee's bonded warehouse. It also said if inbound cargoes are not cleared within seven days after arrival in the dock, the concerned ship agent will be responsible for shipping such consignments back to the "country of export-origin" within seven days thereafter.
Similarly, if export consignments are not shipped within two days of carting to the port, clearing agents will account and remain liable for transportation of such cargoes back from port premises within two days. Supply Chain Asia
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| Europe ports see "toned down" 2011 |
December 22, 2010 - European ports will see a "toned down" 2011 after container volumes this year rebounded to almost 2008 levels, a report released Tuesday said.
Container imports in 2010 will total about 21.1 million TEUs, up 13.8 percent from 2009 or close to 2008 volumes, said the Global Port Tracker: North Europe Trade Outlook. It estimated 13.9 million TEUs of those imports will move through North Europe ports and 7.2 million TEUs through Mediterranean and Black Sea ports.
The report is prepared by Hackett Associates and the Bremen Institute of Shipping Economics and Logistics. Hackett also produces a similar report on U.S. ports together with the National Retail Federation.
Containerized exports from Europe are expected to total 15.8 million TEUs in 2010, an increase of 11.3 percent over 2009. (About 10.2 million TEUs will move through North Europe ports and 5.6 million TEUs through Mediterranean and Black Sea ports.)
Ben Hackett, the founder of the research firm, said the growth was aided by government stimulus packages and the re-building of inventories by retailers,
He expects a "toned down 2011" with growth in the 8 to 9 percent range for imports and 5 percent for exports "in light of the various austerity measures that have been put in place in key economies.
"Most of the growth will come in the second half of the year,"
Hackett said. "As we look forward for the next six months, we should expect to see relatively little growth month-on-month until we come out of the slack season towards the end of March. However, Germany may well be the exception to restrained growth with unemployment falling and exports rising."
American Shipper
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| Ministers want to raise profile of waterborne transport |
December 27, 2010 - During the first week of December, European Transport Ministers gathered in Brussels for the last Transport Council under the Belgian Presidency. As a follow-up to the informal Transport Council held in Antwerp in September, Ministers adopted conclusions calling for full integration of waterborne transport into the EU transport and logistics chains.
Special emphasis was made on short sea shipping and inland waterway transport. To encourage waterborne transport, the Council now formally endorsed the 'Blue Belt' concept which aims to create a European maritime transport space without barriers. Here, ships will be able to operate freely with a minimum of administrative formalities, irrespective of their flag.
The combination of technology, maritime transport monitoring capacities and best practices will allow the establishment of such an area. The concept also foresees in the development of 'Blue Lanes' in ports. These would involve ports and customs authorities granting administrative, technological or physical facilitations to ensure swift port transit of goods originating from the EU. Furthermore, the Council supported the Commission's plan to launch a pilot project, in cooperation with the member states' authorities and the European Maritime Safety Agency (EMSA), to develop the 'Blue Belt' concept further.
At the same time Transport Ministers expressed the wish to better align the 'Motorways of the Sea' concept with the emerging European multi-modal transport system so as to fully exploit the potential for synergies. This requires the strengthening of links with rail and inland waterways and the further development of ports as key modal interfaces.
The Council invited the Commission to reinforce the role of ports through the TEN-T review. Ministers also asked the Commission to present guidelines on the application of EU environmental legislation and on State aid and underlined the need to increase port efficiency.
The Council further supported the Commission's multi-dimensional action approach including elements such as alternative fuels, green technology, adequate infrastructure, funding instruments and research and innovation. These could help improve the waterborne sector's environmental performance while maintaining its competitiveness.
As regards emissions from international shipping, Ministers stressed the need for global IMO rules to avoid competitive distortions and carbon leakage. In addition, the Commission should look at ways to avoid weakening the competitive position of short sea shipping as a result of the recently agreed use of the more expensive low-sulphur bunker fuel. Transport Weekly
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| FMCSA Issues Proposed Rule on Hours-of-Service Requirements |
December 24, 2010 - The U.S. Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) today issued a regulatory proposal that would revise hours-of-service (HOS) requirements for commercial truck drivers.
"A fatigued driver has no place behind the wheel of a large commercial truck," said Transportation Secretary Ray LaHood. "We are committed to an hours-of-service rule that will help create an environment where commercial truck drivers are rested, alert and focused on safety while on the job."
The publication of this proposed rule coincides with the timeframe established in a court settlement agreement that requires FMCSA to publish a final HOS rule by July 26, 2011.
This new HOS proposal would retain the "34-hour restart" provision allowing drivers to restart the clock on their weekly 60 or 70 hours by taking at least 34 consecutive hours off-duty. However, the restart period would have to include two consecutive off-duty periods from midnight to 6:00 a.m. Drivers would be allowed to use this restart only once during a seven-day period.
Additionally the proposal would require commercial truck drivers to complete all driving within a 14-hour workday, and to complete all on-duty work-related activities within 13 hours to allow for at least a one hour break. It also leaves open for comment whether drivers should be limited to 10 or 11 hours of daily driving time, although FMCSA currently favors a 10-hour limit.
"In January, we began this rulemaking process by hosting five public listening sessions with stakeholders across the country," said FMCSA Administrator Anne S. Ferro. "This proposed rule provides another opportunity for the public to weigh in on a safety issue that impacts everyone on our roadways."
Driving hours are regulated by federal HOS rules, which are designed to prevent commercial vehicle-related crashes and fatalities by prescribing on-duty and rest periods for drivers.
Commercial truck drivers who violate this proposed rule would face civil penalties of up to $2,750 for each offense. Trucking companies that allow their drivers to violate the proposal's driving limits would face penalties of up to $11,000 for each offense.
Other key provisions include the option of extending a driver's daily shift to 16 hours twice a week to accommodate for issues such as loading and unloading at terminals or ports, and allowing drivers to count some time spent parked in their trucks toward off-duty hours.
Transport Intelligence
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Antwerp port sees increase in freight volumes in 2010 | |
December 29, 2010 - Freight volumes at the Port of Antwerp are expected to have increased by 13% year-on-year to 178 million tonnes by the end of 2010, according to latest statistic.
"The increase is mainly due to container freight, which has once more passed the 100 million-tonne mark and indeed set a new record," according to the port.
Liquid bulk was also shown to have performed well in 2010, setting an all-time record.
In contrast, conventional/breakbulk is expected to remain below the 2008 level.
"Despite this Antwerp remains the leading breakbulk port in Europe, although this position has been coming under increasing pressure lately," the port noted.
Container volume rose by 17.8% to 102,775,000 tonnes. In terms of twenty-foot equivalent units (TEUs) it was up by 16.1% to 8,483,000 TEU.
Ro/ro cargo handling also increased year-on-year by 14.8% to 3.6 million tonnes. In comparison with 2008, however, it is still down by 16.9%.
Conventional/breakbulk was shown to have increased by 6.3% to 11.1 million tonnes, but remains "far below" the level in 2008. The port noted that in comparison with 2008, the conventional/breakbulk sector is having the greatest difficulty in recovering from the recession.
The volume of bulk freight is trending up once more, up 7% on the previous year and both liquid bulk and dry bulk recorded growth figures, up 4.8% and 12.0% respectively.
Crude oil and chemicals were shown to be the absolute top performers in this segment, up 20.67% and 18% respectively.
"These figures show that Antwerp is further strengthening its position as the second-largest container port in Europe," the port said.
"And in liquid bulk too Antwerp is performing very well. These two sectors, which between them make up 80% of the total volume, will continue to form sources of growth for the port of Antwerp in future," the port concluded.
Port World
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| Congress renews very few trade benefits |
December 22, 2010 - The Congress on Wednesday approved a six-week renewal of duty-free treatment for goods from Colombia and Ecuador, but will allow similar benefits for about 130 other countries to expire.
The extension provides just enough time for flower exporters in Colombia to fill U.S. orders for the February 14 Valentine's Day holiday without being hit by tariffs.
But "the exclusion of the Generalized System of Preferences (GSP) from the package means that this important program will lapse on December 31, hurting American consumers and businesses as well as workers and farmers in many of the world's poorer countries," U.S. Trade Representative Ron Kirk said.
The fate of the Andean Trade Preferences Act and the much larger GSP program has been up in the air for weeks.
GSP provides duty-free treatment for about 4,800 goods produced in developing countries to help them create jobs.
Its pending expiration means the United States will at least temporarily begin collecting duties on those imports starting January 1.
Alabama Senator Jeff Sessions had blocked Senate action on a bill renewing both programs for 18 months because of a duty waiver Bangladesh receives for sleeping bags.
The Republican said the GSP waiver threatens to shut down a sleeping bag factory in his state.
He has pushed for a 9 percent duty on imports from Bangladesh, the same as China is required to pay.
Senators, just before adjourning for the year, worked out a compromise bill to extend the Andean trade benefits for six weeks. The House of Representatives then quickly approved the measure as one of its final acts of 2010.
The short-term fix also renews Trade Adjustment Assistance for six weeks. That program provides funding to retrain workers who have lost their job because of trade competition.
Colombia, recently hit by massive flooding that has affected about 2 million people, lobbied hard for an extension of the Andean Trade Preferences Act.
"We hope that the administration and Congress continue to open the door toward a stronger, more dynamic trade relationship, through the approval of a longer extension for ATPA, and the subsequent approval of the FTA (free trade agreement) between both countries," Colombian Ambassador Gabriel Silva said in a statement.
Supporters promised to work in early 2011 for renewal of the GSP program and a longer extension of the Andean trade benefits and U.S. worker retraining program.
Reuters
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