one belt one road

China’s One Belt One Road Initiative – how will it affect global trade?

Since 2013 China have been advertising the One Belt One Road initiative, a scheme to join a network of roads, ports, railways and other links from East China through Southeast and South Central Asia to Europe.

This belt of land based links is paired with the Maritime Silk Road, which stretches from Australia to Zanzibar. The initiative involves developing six economic “corridors”: 1. a China-Mongolia-Russia corridor; 2. a new Eurasian “Land Bridge”; 3. a corridor from China to Central Asia and Western Asia; 4. a China-Indochina peninsula corridor; 5. a China-Pakistan economic corridor; and 6. a Bangladesh-China-India-Myanmar economic corridor.

Back in 2011, US President Barack Obama launched the Trans-Pacific Partnership (TPP) trading bloc across the Pacific region. The TPP is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States (until January 23, 2017) and Vietnam.

Now that Obama successor Donald Trump has carried out his pledge to withdraw from the TPP, the expectations are that Chinese-backed strategies like the OBOR will gain momentum. China experts say that this is a positive development, but there is scepticism over whether Beijing will follow through with the large amount of funding needed, whether big debt-financed projects bankrolled by China will benefit the recipient countries, and whether those projects will actually make sense in the long run.

China experts and economists say that the initiative makes sense and that it will accelerate as the U.S. turns more insular under Trump. “It is unfortunate that many U.S. diplomats and members of the previous administration worked for nearly a decade to push toward the TPP and now it is torn apart,” says Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong. The U.S. is turning its back on the rest of the world at a time when the world needs an open and engaged America, he says. “It is very likely and understandable that China … will try to fill those gaps with this initiative, and that is very logical — it’s something the U.S. will later deeply regret,” Kuijs says.

One of the main factors driving the OBOR effort is the slowdown in China’s own economy. With this in mind the policies are seeing a drive to create new markets for Chinese goods, political influence in the region, and security for the country’s natural resources supply chain. The initiative is part of the larger plan to shift Chinese goods to markets and to create jobs for Chinese companies. The infrastructure also means that products can get from China to Europe in days rather than weeks – a significant reduction in cost and time.

It seems that moving forward without relying on trade from the US and other larger countries, and also Great Britain post Brexit, China is moving to become even more of a global trade super power. Realising that there has been a shift in the global trade agreements in recent years means that China is reacting proactively to an ever changing market. Forecasts show that the OBOR project may take half a century or more, but ultimately is more than likely to succeed.

drone

Huge unpiloted cargo drones may eventually take to the sky!

Following on from our drone article last month, it has recently been announced that a drone the size of a Boeing 777 airliner could soon be launched by a start up firm in California.

A prototype will be tested this summer after which all being well a full scale version will be launched in 2020. It could lower the cost of shipping cargo by almost half due to eliminating the need for on board staff and maximising efficiency. The drones are designed to take off and land on water so that they don’t need to fly over populated areas. They will unload their cargo in docks rather than airports and will combine air and sea transport. It should when finalised be able to carry up to 200,000 pounds of weight.

Chris Connell, president of the global perishable goods transporter CFI, said: ‘Air cargo is all about speed at high price. Ocean freight is longer transit times at lower pricing. With certain goods – be it perishables, or goods that are looking for that middle ground – that idea of middle price for middle transit times is the sweet spot. Planes aren’t going to slow down and boats aren’t going to go faster. The drone concept adds something new. It adds to the intrigue.’

Connell says he’s used to end-to-end transit times of as much as seven days to send cargo from the West Coast to Hawaii by ship. He has the option to pay a premium to send it by air cargo for same-day arrival. But in many cases, there could be an argument for the middle ground that Natilus is aiming for, where cargo can be delivered to its destination in about three days, once loading and unloading is taken into consideration.

With the likes of Amazon and UPS testing their drones out on a much smaller scale, Natilus are hoping to bridge a gap in the current shipping market and use a resource that up until now has been out of reach. With technology expanding at a large rate, drones may be a new interesting concept, but at the moment they are just that. So called ‘old fashioned’ shipping methods will continue on as they always have, and companies will look for innovative and price effective ways of making sure that their customers still use people rather than just technology.

lorry under bridge

Lorries need to use suitable Sat Navs

According to a new study, motorists who rely on computer navigation devices do in fact “switch off” part of their brain in the process.

A University College London team took 24 volunteers on a two-hour walking tour of Soho, then asked them to “drive” a computer-simulated car through the area’s narrow streets the following day. They detected spikes of activity in two key areas of the brain, the hippocampus and prefrontal cortex, when the volunteers were forced to navigate for themselves. But where they relied on instructions from a Sat Nav, no activity above normal levels was detected.

So, how do lorry drivers fair? There are always plenty of articles in newspapers discussing how villages are under siege from giant lorries using narrow streets as a short cut, or driving the wrong way up the one way high street.

The Local Government Association (LGA) wants legislation brought in to make sure lorry drivers in England and Wales use a GPS system suitable for HGVs. It also wants councils to have the power to ensure drivers avoid routes where they exceed the weight or height limit. Commercial GPS systems designed for lorries include information on bridge heights and narrow roads. They also allow lorry drivers to enter their vehicle dimensions to ensure they are instructed to follow a suitable route. Police forces in Wales and Greater London already have the power to enforce weight and height restrictions on HGVs but councils are urging the government to roll this out across England. Some councils have been working with freight and haulage companies to ensure drivers are using the most suitable routes.

However, being unfamiliar with the area you are driving in is all too familiar for lorry drivers. Specialist Sat Navs may help to alleviate the problem but they can still misinterpret where they are going and send you somewhere that is completely incorrect and unsafe. Trying to then manoeuvre out of that predicament can be tricky at best, dangerous at worst. The bottom line is: lorry drivers need to be aware of their surroundings and rely on their instinct and driving ability rather than completely relying on a Sat Nav!

china uk

6 Top Tips for importing goods from China

In the current economic climate post Brexit, leaving the EU means that foreign relations have become more important than ever. Here are our 6 top tips for importing goods from China…

1. Ensure that the goods are permitted in your country, and that they are correctly classified. International trade is heavily regulated, and Supreme Freight can make sure that all your goods have the correct classifications, such as CFSP, IPR, OPR and warehousing entries, not forgetting BTI classification.

2. Do you need an import license? Do you need to pay VAT and Duty? This is dependent on the classification of the goods. Here at Supreme we can give expert advice to help simplify the process for you to make sure that the correct documentation is in place for your shipment.

3. Choose the right method of transportation. When importing from China the usual methods are either sea or air freight. If there are no time restraints and larger quantities, then sea freight may be preferable. If you would like your goods quicker and with higher levels of security, then air freight would be recommend. If you choose sea, then we can handle all types of cargo including full container load (FCL), less container load (LCL) and NVOCC groupie shipments. If air is your preference our team at Heathrow Airport offer a range of direct and indirect shipment services. Choice and flexibility are paramount and we work closely with both our client and supplier to design a schedule and transit time that will suit your requirements.

4. Track your cargo. Make sure you choose a forwarder who can track your goods. Our tacking page offers detailed information and insight to the status and progress of your shipment, for both sea and air freight. [link to tracking page]

5. Arrange collection of your shipment. We offer a door to door service if required which is convenient and flexible, and also offer container and cargo storage which is a crucial aspect of the supply chain.

6. Don’t forget the Chinese New Year! How can you avoid delays?! By making sure that your order is placed in plenty of time, November at the latest.

Happy importing!
进口快乐

London gateway

Big changes in shipping alliances open the door to the world for London Gateway

New London Gateway services are now available to and from the Far East in the wake of big changes in shipping alliances.

The recent changes are affecting the location and timing of many international shipments, one of the notable benefits however is that the London Gateway now has deep seas connections for the first time. The Alliance will be using London Gateway for two transatlantic loops and 2 Asia – Northern Europe.

Supreme customers looking to import their shipments to London and the surrounding area can take advantage of this.

Interested in London Gateway arrivals? Please contact our import team to discuss your requirements, we’d be happy to help.