 Crippling duty on Chinese chassis upheld in final ruling |
Source |
American Shipper |
Post Date |
05/20/2021 |
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The US Department of Commerce has ruled that a 188.05 percent anti-dumping duty on Chinese-made marine and domestic chassis will remain unchanged from a preliminary determination in December, a decision that will have wide-ranging implications on any cargo owner, trucking company, and intermodal provider who deps on chassis to keep goods flowing.
In the final determination released Wednesday, the Commerce Department chastised China Intermodal Marine Containers (CIMC) for filing critical documents in the case after deadline despite requesting multiple extensions. CIMC, the largest manufacturer of chassis in the world, was found to have illegally dumped chassis to artificially lower prices, the Commerce Department determined after refusing to consider the documentation filed late.
¡°Timely filings and timely extension requests contribute to Commerce¡¯s efficient administration of the numerous cases before it and the antidumping and countervailing duty laws,¡± the agency wrote. ¡°Conversely, untimely filings and last-minute extension requests hinder the efficient conduct of our proceedings and require that Commerce devote additional time and resources to addressing such untimely filings and last-minute requests.¡±
If the International Trade Commission (ITC) finds ¡°material injury¡± to US businesses when it reviews the Commerce Department¡¯s findings next month, then a fully built CIMC chassis would cost more than $30,000 per unit, or triple the cost compared with three years ago.
After the ITC last month found there was material injury on a related countervailing duty case, two legal sources told JOC.com the ITC would almost certainly vote the same way on the anti-dumping case.
Aside from the 188.05 percent anti-dumping duty and the 39.14 percent countervailing duty, there is also a 25 percent tariff on Chinese chassis enacted under the Trump administration.
Duties will affect international, domestic intermodal
Chassis providers and trucking companies are concerned, however, about how these duties and tariffs may prolong an already congested supply chain with chassis shortages in Chicago, Dallas, Kansas City, and Memphis.
Bill Shea, CEO of US chassis provider DCLI, said orders for new chassis have slowed in 2021 and not kept with import demand.
¡°I estimate 10,000 or less marine new builds in 2021, or 2 percent,¡± he said in an email to JOC.com. ¡°In addition, approximately 10,000 marine chassis will be refurbished. These units may have come out of long-term out of service equipment (not true at DCLI), so there may be a slight incremental increase in capacity but not in fleet size.¡±
North American manufacturers, now protected through duties, have pledged to hire more workers, build more fabrication lines, and ramp up production of chassis. But they also testified in March that it may be late 2021 or early 2022 before reaching full output capacity.
Duties and tariffs will also affect domestic intermodal providers.
J.B. Hunt announced last month the purchase of 12,000 new containers to support the surging demand in Southern California for intermodal service, but the order will also require chassis underneath. The company declined to comment to JOC.com on how the duties will impact their ability to grow intermodal service, but CIMC has manufactured chassis for J.B. Hunt.
CIMC has also built chassis for intermodal provider Schneider National.
Domestic chassis manufacturers getting new orders
The Coalition of American Chassis Manufacturers, consisting of Cheetah Chassis, Hercules Enterprises, Pitts Enterprises, Pratt Industries, and Stoughton Trailers, has applauded the steps taken to date as necessary to restore fair competition and allow them to compete again in the chassis market.
The North American manufacturers have gotten an influx of orders in 2021.
The Port of Virginia this spring received a large order from Hercules Chassis, based in New Jersey, and the port authority told JOC.com that about a quarter of the new chassis due to arrive this year will come from Hercules.
The Port of Charleston ¡ª which will sp $160 million to a chassis pool in May 2022 modeled after the Port of Virginia ¡ª will dep on the North American manufacturers to deliver 13,000 chassis, although South Carolina port officials acknowledge delivering such a number might be unattainable in 12 months.
Carl Bentzel, a member of the Federal Maritime Commission, said earlier this month he was worried about China¡¯s dominance over equipment such as containers and chassis.
¡°I am concerned that this equipment is controlled by a state-owned enterprise and that we¡¯re completely reliant, and I have questions about whether or not there¡¯s been market manipulation of what is potentially a monopoly,¡± Bentzel said on a May 5 webinar hosted by the Intermodal Association
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