| UFLPA Update, Panama Canal Recovery, and Houthi Escalations. Your weekly All-Ways round-up of Supply Chain news. |
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| The U.S. Department of Homeland Security (DHS) has added 26 Chinese textile companies to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, effective May 17, 2024.
These entities are restricted from exporting goods to the U.S. due to their involvement in sourcing cotton from the Xinjiang Uyghur Autonomous Region (XUAR), where forced labor is prevalent. The move aims to enhance supply chain transparency and help responsible companies avoid using forced labor.
The Forced Labor Enforcement Task Force (FLETF), led by DHS, is part of the U.S. effort to eliminate forced labor from supply chains and hold the Chinese government accountable for human rights abuses against Uyghurs and other minorities in XUAR. Since the UFLPA's enactment in December 2021, 65 entities have been added to the list, spanning various sectors.
This latest addition is the largest single expansion to date. DHS emphasizes that companies must conduct due diligence to ensure their products are not tainted by forced labor.
The FLETF, which includes multiple federal agencies, will continue to review and designate entities for the UFLPA Entity List as part of ongoing enforcement efforts. This addition supports broader U.S. policies to promote worker rights and high labor standards globally.
The Entity List can be found here. |
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| The increase in water levels in the Panama Canal has raised hopes for a return to normal container shipping operations after over a year of drought-related restrictions – the Panama Canal Authority has increased the daily transit capacity from 24 to 31 ships.
However, experts caution that full recovery is still distant.
Starting June 1, an additional slot for larger Neopanamax ships will raise the daily total to 32 transits.
Additionally, draft limits for these ships will increase from 44 feet to 45 feet on June 15, approaching the normal 50 feet limit.
Despite these improvements, the drought has significantly disrupted scheduling and spot rates.
Peter Sand, Chief Analyst at Xeneta, emphasizes that the recovery will be slow and reliant on unpredictable rainfall, with long-term impacts expected. Businesses must prepare for a gradual return to normalcy rather than an immediate resolution. |
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| The Houthis threaten to extend their attacks to the Mediterranean Sea in support of Palestinians during the Israel-Hamas conflict.
Abdulmalik al-Houthi, leader of Yemen’s Iran-backed Houthi group, announced in a televised speech that all ships heading to Israeli ports will be targeted, not just those in the Red Sea region.
Al-Houthi urged countries like China, Russia, and European nations to stop transporting goods to Israeli ports and has previously targeted Israel and its allies, the U.S. and Britain.
These attacks have increased shipping and insurance costs by disrupting a major trade route between Asia and Europe, forcing shipping firms to consider longer, more expensive routes around southern Africa. |
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