Customs audits are happening more often, but companies can take steps before and during audits to reduce their impact. U.S. Customs and Border Protection (CBP) uses different types of audits to check importers' compliance. They have been doing more quick audits and surveys to gather information about imports. While these audits may seem less serious, they can still lead to full audits or penalties if not taken seriously.

Recent statistics from CBP show increased audit-related activity over the past five years. The number of audits completed slightly decreased, but revenue from importer audits, trade penalties, and damages increased significantly. This means CBP is paying more attention to import compliance, so importers should be proactive and prepare for audits.

To prepare, importers should know their import data, do regular reviews, and assess risks. This helps find and fix problems before the government gets involved. If violations are found, importers can disclose them in advance, which may reduce penalties.



During an audit, importers should take it seriously, involve experts early, and have them review the information before submitting it to CBP. This can save time and money.

For more information about CBP audits and improving import compliance click below!

A further decline is predicted in containerized import volumes in the U.S. for the second half of 2023. This is due to the lingering effects of the "bullwhip effect" on inventories and the risks to consumer spending. Importers are expected to be cautious, and there is a possibility of a significant drop of 10% to 20% below 2019 levels. Major retailers like Target are facing challenges with excess inventories and potential shifts in consumer spending patterns. Wholesalers are also dealing with excessive inventories, and China's economic troubles are impacting Asia and Europe.



The global trade recession is intensifying, and there is a decline in demand for manufacturing and trade-related goods. Another risk to consumer spending is the impending resumption of student loan repayments, which could reduce discretionary income. Overall, import volumes are likely to decline in the second half of 2023.

The drought in Panama is forcing the Panama Canal to implement stricter draft restrictions, reducing the depth for ships passing through the waterway. This is in response to one of the driest periods in Panama's history and the anticipated arrival of El Niño, which brings dry weather to Central America.

The newer locks currently require a maximum draft of 13.41 meters, which will decrease to 13.11 meters by July 19. The older locks will only accommodate ships with drafts of 11.73 meters by July 19 as well. The situation may worsen as meteorologists predict historic low water levels in Lake Gatun, which supplies the canal with water. The Panama Canal Authority will closely monitor the lake's level and make further adjustments as necessary. There is a possibility of reducing daily transits by up to 25% to conserve water.



Similar dry weather conditions affect other essential waterways, such as the Rhine River in Germany, which experienced severe draft restrictions last year.

Ports on the East and Gulf coasts, like Virginia and Savannah, have expanded their reach into the Midwest, transporting cargo to cities such as Chicago and Memphis. Additionally, there has been a shift in sourcing away from China, making routes through the Suez Canal more attractive. Over the past two decades, prolonged contract negotiations and disruptions have consistently led to cargo moving away from the West Coast, with the trend intensifying in recent years.



The West Coast's share of US imports from Asia has declined from 71% in 2013 to 56% in the first five months of 2023. In contrast, the combined share of the East and Gulf coasts has grown from 29% to 44% during the same period. This shift can be attributed to a "de-leveraging" of trade between the US and China, with many US companies seeking to reduce imports from China.

The geographic advantage of the East and Gulf Coast ports in relation to the sourcing shift to countries like India and Vietnam further supports their growth. These ports offer shorter ocean transit times and favorable land-side advantages. Unlike the West Coast, which faces space constraints, the East and Gulf Coast ports have more room for expansion. State-operated ports, such as Virginia, have greater control over operations, allowing for better service and infrastructure development.

After 13 months of negotiations, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) have reached a tentative agreement for a new labor contract for West Coast ports in the United States. The agreement, if approved, will be retroactive to July 1, 2022.



The ILWU secured a 32 percent wage increase over the six-year contract, along with a $70 million bonus for working during the pandemic. However, the deal did not address the ILWU's demands regarding manning requirements at the ports of Los Angeles and Long Beach. The ILWU may have traded stricter manning requirements for the wage increase and bonus. The ILWU's disruption tactics during negotiations have led to decreased work hours and increased reliance on other ports.