GSA Advisory Update: Temporary Measures for Pass-Through Charges on Red Sea Rerouted International Household Goods Shipments

An advisory update from the U.S. General Services Administration addresses the impacts of delays and rerouting of international household goods shipments in and around the Red Sea. Due to events affecting shipping vessels, there have been significant cost fluctuations, rerouting, and delays in the delivery of these shipments. To ensure comprehensive coverage of any necessary surcharges levied by ports and vessels, GSA authorizes ordering agencies to cover additional expenses as pass-through charges for CHAMP international ocean HHG shipments impacted by operations in and around the Red Sea, commencing on October 7, 2023, whether packed or picked up thereafter.

This authorization applies to U.S. Flag and authorized Foreign Flag shipments, including P2 and P3 service, in the Red Sea area. The advisory does not apply to unaccompanied air baggage shipments or shipments of storage. Transportation Service Providers must provide supporting documentation and receive prior agency authorization before invoicing, including identifying the surcharge separately on the invoice as “Red Sea surcharge.” The advisory will remain in effect until explicitly canceled or superseded.

The Impact: The impact of rebel attacks on vessels in the Red Sea is rippling through various sectors, including the household goods shipment industry. Uncertainty around safe routes and increased risk factors are disrupting normal shipping operations, leading to logistical challenges and cost escalations across various industries, including household goods shipment. As assignees experience changes in delivery times and additional shipping costs due to rerouting of shipments and heightened security measures, the GSA has intervened to ensure that carriers are adequately reimbursed for U.S. agency employee moves.

Corporate mobility managers with potentially impacted assignees should work with their relocation management company to conduct risk assessments and identify alternative routes and transportation options that minimize exposure to the conflict zone while still meeting relocation needs. Additionally, it is worthwhile for assignees to check with their Relocation Management Consultant to discuss and understand any new costs relative to these reroutes and delays.

Implications for Businesses and Individuals as they Adapt to Global Immigration Shifts

A recent article posted by the Worldwide ERC discusses immigration policies and their impacts on global mobility. Across the globe, perceptions of resource scarcity have prompted governments to reevaluate and refine their immigration regulations. The evolving policies, exemplified by fierce debates in the U.S. and recent changes in the UK, may impose hurdles for businesses striving to attract and retain international talent. Heightened salary requirements and limitations on dependents accompanying foreign students pose significant challenges, for example.

The tightening of immigration rules can pose substantial challenges for industries reliant on skilled foreign workers, potentially leading to talent shortages and economic disruptions. However, these challenges also present opportunities for innovation and adaptation.

The Impact: Rigorous immigration policies may limit the mobility of talent across borders, making it more challenging for companies to deploy employees on short-term assignments or transfer key personnel between global offices. This can delay businesses’ ability to leverage international expertise and resources effectively. The key lies in staying informed, engaging with immigration experts, and flexibly adapting to policy changes.

NAR’s Settlement Sparks Industry Transformation

CNN and NBC reported on The National Association of Realtors (NAR) settling lawsuits by agreeing to pay $418 million in damages and changing commission rules, pending judicial approval.  If approved, the traditional real estate commission structure would shift from being borne solely by the seller and potentially lower homebuying costs.

In years past, the buyer’s agent brokerage commissions were typically paid from the seller’s proceeds from the sale of their property, which critics argued made housing more expensive. Going forward, buyers may negotiate their agent’s fee. This change could lead to a more competitive market. Some brokerages agreed to the settlement, while some continue to fight in court.

As part of the settlement, the NAR agreed to abolish certain practices that facilitated this traditional commission model. Notably, mandating brokers to subscribe to multiple listing services, many of which are owned by NAR subsidiaries, has been eliminated. Another significant change mandates that buyers’ brokers must enter into written agreements with their clients.

The Impact: This pending settlement marks a departure from the established practice in which sellers were responsible for covering both their broker’s commission and that of the buyer’s agent.

This update is relevant to mobility leaders as it significantly impacts the real estate market, which is closely tied to mobility and relocation. Mobility leaders, like CapRelo, work with employees who are relocating and need to buy or sell homes. The changes in commission rules, such as the abolition of the traditional commission structure and the ability for buyers to negotiate their agent’s fee, could potentially change homebuying and home selling costs. This means that companies offering real estate related benefits to their relocating employees may need to adjust their relocation packages accordingly.

While Judicial approval is pending, the full impact of this settlement will continue to evolve. As mobility leaders, we will keep abreast of developments and the impact on employee mobility programs.

Global Mobility Radar

CapRelo’s Mobility Radar provides valuable insights into trends worth monitoring. This month, we have detected important global mobility updates in Africa, Brazil and the U.S.

1. According to AirInc, The Zimbabwean and Zambian currencies (ZWL, ZMW) face a decline in demand amid higher taxes and a strong preference for the U.S. dollar. Similarly, the Nigerian Naira (NGN) also continues to lose value against the USD because the government allowed its value to change more freely. Nigeria received financial support from the African Export-Import Bank to make it easier to sell oil and to boost the country’s economy. With wages in local currency and transactions in USD, there’s a rush to exchange ZWL, ZMW and NGN dollars for USD, leading to a cascading effect on the U.S. dollar’s price and making it challenging for workers to afford goods and services.
2. AP News announced, Brazil’s economy expanded by 2.9%, surpassing expectations during the initial year of President Luiz Inácio Lula da Silva’s administration. Data from the government statistics institute IBGE reveals this growth. Additionally, according to the credit rating agency Austin Ratings, Brazil’s economy has now become the ninth largest globally. This ranking is determined by preliminary gross domestic product figures, signifying Brazil’s advancement ahead of Canada and Russia
3. A blog post, written by Investopedia, mentions that new home sales declined in February, contrary to an increase in existing home sales. Despite falling slightly below economists’ expectations, the annual rate of new home sales remained higher than last year. High Interest rates have hindered homeowners from buying and selling, leading to a shortage of available homes. Economists suggest that boosting the supply of new homes could help alleviate market constraints, especially with anticipated lower mortgage rates.

Celebrating Success: CapRelo Wins 2024 HRO Baker’s Dozen – #1 Best RMC Award!

We are thrilled to announce that we have recently been awarded the HRO Baker’s Dozen #1 in Quality of Service and Best Overall Relocation Management Firm award for the third year in a row! This prestigious recognition serves as a testament to our dedication, hard work, and commitment to excellence in Relocation. We couldn’t be prouder of this achievement, which underscores our ongoing efforts to provide exceptional service and uphold the highest standards of quality. We would like to extend a big Thank You to our many supportive customers who voted for us in this industry-recognized event!