air freight

Air Freight up 5.9% in October – a strong start for Q4

The International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 5.9% in October 2017 compared to the year-earlier period. 

This was a slowdown from the 9.2% annual growth recorded in September 2017 but still exceeded the average annual growth rate of 3.2% over the past decade.

Freight capacity, measured in available freight tonne km (AFTKs), rose by 3.7% year-on-year in October. This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance.

Airlines in all regions reported an increase in total year-on-year demand in October. However, in contrast, international freight growth slowed in all regions except Africa.

Asia-Pacific airlines saw freight volumes increase by 4.4% and capacity expanded by 3.9% in October, compared to the same period last year. Demand for freight is now around 3% higher than the peak reached in the post-financial crisis rebound in 2010.

European airlines posted a 6.4% increase in freight demand in October 2017. This was a marked slowdown from the 10.6% growth in demand in September, however it was still above the five year average of 4.9%. Capacity increased 2.5%. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialised yet. Europe’s manufacturers’ export orders are growing at their fastest pace in more than seven years. Freight demand remains very healthy on transatlantic routes and is strong on routes to and from Asia – having received a boost in trade from the economic stimulus measures put in place by China.

According to the IATA, freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.

Alexandre de Juniac, IATA’s Director General and CEO said that “Demand for air freight grew by 5.9% in October.  And tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010”

global

What does the 2020 Global Sulphur emissions policy mean in practise?

In little more than 2 years shipping will have to shift to low sulphur fuel. The International Maritime Organisation (IMO) has set a global limit for sulphur in fuel oil used on board ships of 0.50% m/m (mass by mass) from 1 January 2020. This will significantly reduce the amount of sulphur oxide emanating from ships and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts. 

IMO has been working to reduce harmful impacts of shipping on the environment since the 1960s and the regulations for the Prevention of Air Pollution from Ships seek to control airborne emissions from ships (sulphur oxides (SOx), nitrogen oxides (NOx), ozone depleting substances (ODS), volatile organic compounds (VOC) and shipboard incineration) and their contribution to local and global air pollution, human health issues and environmental problems.

Under the new global cap, ships will have to use fuel oil on board with a sulphur content of no more than 0.50% m/m, against the current limit of 3.50%, which has been in effect since 1 January 2012.

The interpretation of “fuel oil used on board” includes use in main and auxiliary engines and boilers.

Exemptions are provided for situations involving the safety of the ship or saving life at sea, or if a ship or its equipment is damaged.

Another exemption allows for a ship to conduct trials for the development of ship emission reduction and control technologies and engine design programmes. This would require a special permit from the Administration(s) (flag State(s)).

Ships can meet the requirement by using low-sulphur compliant fuel oil.

An increasing number of ships are also using gas as a fuel as when ignited it leads to negligible sulphur oxide emissions. This has been recognised in the development by IMO of the International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea services.

Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before they are released into the atmosphere.

Last month, an ExxonMobil survey highlighted an ongoing sense of confusion and a lack of preparedness, with 70% of respondents saying that they do not believe that the industry is ready for the deadline, when a global limit of 0.5% sulphur will be imposed on marine fuel for vessels trading internationally.

The survey suggests that only 500 ships have been equipped with scrubbers. There has been something of a backlash against scrubber technology, most notably from Maersk and Klaveness, who have said they see the technology as being expensive and immature.

Other respondents to the ExxonMobil survey said they were concerned that shipping companies would cheat and falsify the sulphur content of their marine fuel.

what mix of fuels will be available in 2020 and at what cost for each type? Refiners have not been so forthcoming with information about what new capacity they are adding to deal with the expected rise in demand. If ship operators do switch to gasoil, they will have to compete with truck drivers and SUV owners to buy the fuel, which could drive up prices and possibly lead to shortages in supply.

Meanwhile, there will be a loophole for shipowners in 2020: vessels will be permitted to sail without compliant fuel if none is available, even if they do not have scrubbers installed.

Panos Zachariadis – Technical Director at Atlantic Bulk Carriers Management Ltd doesn’t believe that the industry is ready either.

“The industry is not ready. And by “industry” I mean mostly the fuel producers, by their own admission. That is the main problem. There were two studies submitted to IMO, one by “industry” including refiners.  Industry said there will be no fuel available by 2020 even if we started preparations and the required investments yesterday. In addition a submission by ISO cautioned about the danger of “designer” fuels.  These were simply ignored.  The majority of IMO member-states wanted favourable news headlines for various reasons (to show the EU that they take action etc). It was a “political” decision.  We have seen before what happens when facts are ignored and political decisions are taken (remember Ballast Water Treatment?)

In short I expect a mess and I’ll be very surprised if this goes smoothly and on schedule.  One possibility I see is that, come 2019, IMO will have to face reality (not enough availability of safe fuel) and re-examine the application date.  One other – unfortunate – possibility is that, since MDO cannot be available in such quantities, untested “designer” fuels will be introduced to fill the void.  Current experience with hybrid (desulfurised) fuels is not good; they are very unstable.  But a further fear is that inappropriate blends may also appear pausing a safety threat!  ISO in its submission to IMO warned that cutting heavy fuel with e.g. naptha may show acceptable flash point limit but still may be explosive!  And there will be no ISO or other quality standards for such “designer” fuels by 2020.”

It seems apparent that the information regarding the switch is causing uncertainty with regards to what the choices will be to make sure that ships are properly equipped to deal with the change. It could be a case that companies are waiting for their competitors to go first so that they can then make an informed decision on the best way to go, but with little over 2 years to go this seems a difficult strategy.  Compliance seems to be something of a grey area, but companies should by now have plans in place to make sure that as of 1st January 2020 they are ready to go.

Sources:

Hellinic Shipping News

Green 4 sea.com

Iims.org

Imo.org

digital age

Can container shipping reinvent for the digital age?

In 1967, the British Transport Docks Board (BTDB) commissioned McKinsey & Company to assess the impact of a recent development from the United States: container boxes. The first purpose built ships for them were being launched, and a few US lines were carrying these novelties on their regular service. 

McKinsey & Company predicted:

Containerised cargo is effectively becoming homogenous, like other bulk cargoes, and is subject to the same economies of scale. Economics of scale will result in this concentrated cargo being handled by a small number of large organisations. Efficient use of expensive containers will require extensive route networks under unified control to allow load balancing.”

Now that standardised containers have been introduced in the shipping industry, the rush to ‘get on the bandwagon’ will probably lead to substantial overexpansion.

If container ships follow the tanker trend, ships of more than 10,000-container capacity could be available.

Feeder services will tend to replace direct calls when the large container ships come into service.

Rotterdam is an example of a European port which is in a good position to fill a major transoceanic role.

The role of British ports may tend to become that of feeders to the Continent…. Proximity of British East Coast ports to Europe will dictate their use.

In their October 2017 report they posed the question: In 1967, containers were disrupting the shipping business, so the players had to rethink everything. Now it’s digital, big data, and the Internet of Things. Is it time to rethink everything again? 

In 1956, the first ship to transport containers, named the Ideal X, carried only 58 of them. Since then, container-ship capacity has grown 370-fold: today’s largest vessels can hold more than 20,000 TEUs. Larger vessels provide greater cost efficiencies in fuel and crews, reduce greenhouse-gas emissions per container, and enable hub-and-spoke network strategies. Moreover, as operators collaborate in alliances, putting a single large vessel instead of two small ones on a given route has its advantages.

So, how much longer will this trend toward growth in capacity continue? In the long term, three factors could limit it.

The first is that returns to scale decline with increasing size, so a move from 20,000 to 40,000 TEUs wouldn’t reduce unit costs as much as a move from 10,000 to 20,000 TEUs.

Second, the narrowness and shallowness of some of the world’s waterways impose physical constraints: for example, the Strait of Malacca (between the Malay Peninsula and the Indonesian island of Sumatra) has a minimum depth of 25 meters, the most modern channels of the Suez Canal a depth of 24 meters. The latest designs for vessels that carry 24,000 TEUs have a depth of 16 meters, which leaves scope for further growth in capacity.

Third, over the past decade, the blitz for bigger vessels has strained terminal and port operators, forcing them to invest in new cranes, dredging equipment, reinforced quay walls, and extended berths. Unloading containers from bigger ships takes longer because cranes must reach farther across vessels, thus extending berth occupancy and reducing productivity.

On balance, we do not view 20,000 TEUs as the natural end point for container ships—50,000-TEU ones are not unthinkable in the next half-century. However, progress will probably be much slower than it was in the past decade: overcapacity means that new ordering will be slower over the next five to ten years. Lower slot costs materialise only when demand fills up larger ships, which hasn’t happened recently. But if demand catches up with supply, as it may well do in the early 2020s, the logic of scale will once again drive orders for bigger and bigger ships. Nonetheless, since 40 percent of all shipyard capacity is unutilised, and it’s not conceivable that governments will allow shipyard bankruptcies on a large scale, they could find a way to prompt some level of new ordering.

The size of boxes could also increase. From the original six-foot-long Conex box the US military used in the 1950s, they have grown to 20 and now 40 feet and above. The limitation on box size is compatibility with road, rail, and other modes of transport. On US and Chinese roads, the maximum box length is 53 feet, so containers of this size are common for US domestic trade. As road networks improve and trucking becomes autonomous on major routes, we may well see containers 60 or more feet long, as well as wider and taller containers.

Wholly automated terminal and inland operations, with self-driving trucks (and perhaps even self- driving containers or “hyperloops”) transporting containers to inland distribution centres, will probably become the norm in the next couple of decades. Self-loading trucks, arriving just in time to pick up the next container without waiting or moving around unproductively at terminals, would improve the interface between ports and inland transport. Imagine a terminal with no stacks in the yard; instead, customs would pre-clear boxes digitally, and autonomous trucks would take them straight from ships and out to customers.

Advances in the use of data and analytics will bring further step changes in productivity. Shipping companies could heed the example of today’s state- of-the-art aircraft, which generate up to a terabyte of data per flight. Coupled with the introduction of more sensors, the better usage of the data that ships and containers generate would allow enhancements such as optimising voyages in real time (by taking into account weather, currents, traffic, and other external factors), smarter stowage and terminal operations, and predictive maintenance. Data could also improve the coordination of arrivals at port—a major benefit, since 48 per- cent of container ships arrive more than 12 hours behind schedule, thus wasting the carriers’ fuel and underutilising the terminal operators’ labor and quay space.

Data can create additional value for customers too. Full transparency on shipments, from one end of the value chain to the other, would be an enormous boon to carriers, forwarders, and shippers alike, giving them access to real-time information and enabling them to predict a container’s availability, arrival times, and so forth. Some ports (such as Antwerp, Hamburg, and Singapore) are already starting to share information in real time across data ecosystems, which could eventually extend throughout the whole industry. That would create a truly integrated end-to-end flow of containers and therefore make the industry more productive by reducing handovers, waiting times, and unnecessary handling.

A data-enabled shipping industry could also support its customers’ supply chains in important ways— but that will require a truly new order of performance and efficiency. The real-time visibility of all container movements, reliable forecasts, and integrated flow management will pave the way for flexible, dynamic supply chains that all but eliminate waiting times and inefficiencies. This achievement will be especially beneficial for industries (such as automotive) that have increasingly complex supply chains or for those with special needs (suchas cold chains). It will also allow smart logistics providers to differentiate themselves and earn premiums. But these opportunities won’t appeal to all customers; other sectors will demand only basic logistics services at the lowest possible cost.

By 2067, we believe shipping will have some or all of these characteristics: 

Autonomous 50,000-TEU ships will plow the seas—perhaps alongside modular, dronelike floating containers—in a world where the volume of container trade is anything from two to five times greater than it is today.

Short-haul intraregional traffic will increase as manufacturing footprints disperse more widely because of converging global incomes and the increasing use of automation and robotics. Container flows within the Far East will continue to be huge, and the secondmost significant trade lane may link that region to Africa, with a stopover in South Asia.

After multiple value-destroying cycles of overcapacity and consolidation, three or four major container-shipping companies might emerge. These businesses could be either digitally enabled independents with a strong customer orientation and innovative commercial practices or small subsidiaries of tech giants seamlessly blending the digital and physical realms. Freight forwarding as a stand- alone business will be virtually extinct, since digital interactions will have reduced the need for intermediaries to manage logistics services for multiple participants in the value chain. Across the industry, all winners will have fully digitised their customer interactions and operating systems and will be closely connected via data ecosystems.

A fully autonomous transport chain will extend from initial loading, stowage, and sailing all the way to unloading directly into autonomous trains and trucks and drone-enabled last- mile deliveries.

The needs of customers will diverge: some will expect their shippers to be fully integrated into their supply chains—and be willing to pay a premium for that—while others continue to demand sea freight at the lowest possible cost. Both sets of customers will expect transparency and reliability to be the norm, not the exception.

What therefore has to be done to move shipping and containerisation further into the digital age?

First, invest in digital, which is the main way to differentiate products, disintermediate value chains, improve customer service, raise productivity, and cut costs. The risk is that tech giants and would-be digital disruptors will move faster than incumbents and capture most of the value from customer relationships.

Second, think about consolidation: the industry’s natural end game may involve fewer, larger operators. The past few decades of explosive trade growth created an environment that could sustain many players. Now that growth has slowed, the industry must rationalise overcapacity. Although some companies and investors could be candidates to lead the next wave of consolidation, becoming a target may sometimes be better for shareholders than struggling to be the winner at any cost. McKinsey research shows that from 2000 to 2015, in a range of industries, the value from deals was nine percentage points higher for average target companies than for average acquirers.21

Third, integrate. Some next-generation innovations now on the drawing board require careful orchestration across the value chain. Carriers and terminal operators share a particularly rich agenda: bigger vessels paired with investments in infrastructure for terminals, complete transparency on ship arrivals and berthing (thanks to geospatial analytics), and larger containers. Integrated logistics providers could make today’s freight forwarders largely irrelevant by mastering the complexity and the customer interface.

Fourth, be bold. The shipping industry has been built on the vision of audacious leaders with the per- severance to sail through the storms. It now faces a wave of digital disruption. The ability to convey a sense of purpose for employees, to create optimism about the journey ahead, and to maintain a steady course will be the hallmarks of the leaders shaping the industry for the next.

McKinsey and Company’s 1967 predictions were on point, so their analysis of the next 50 years of evolvement cannot be ignored. These changes seem massive and unachievable at the moment, but that would have been the case 50 years ago as well, and the industry is unrecognisable from then.  It is exciting to watch what the next years have in store, and the advances that can be made to make sure that shipping does truly come alive during the digital age.

To view the full report please go here, where you can download the full report at the bottom of the page.

Southampton welcomes its largest container ship

Wednesday 8th November marked the maiden arrival of the Milan Maersk, the largest container ship to visit Southampton.

The Milan Maersk, which is 399m long, 58.6m wide, and can carry 20568 20′ containers, weighs a staggering 214,000 tonnes and is less than a metre shorter than the world’s longest vessel.

The vessel departed Shanghai on October 1, less than a fortnight after entering service, and called into Ningbo, Hong Kong and Yantian in China before arriving in Colombo, Sri Lanka on October 17. It then passed through the Suez Canal before stopping in Felixtowe on November 2 and across the North Sea to Rotterdam.  From Rotterdam, the ship made her way to Southampton, where it headed back to sea in the early hours of this Thursday morning towards Bremerhaven and Rotterdam before heading back to Suez and the Far East.

Milan Maersk is a new Triple-E class container ship. The Triple-E class is among the largest and most efficient fleet of container vessels in the world. In 2016 the largest container vessel calling in Southampton had a capacity for 16,000 containers. And this year we have so far welcomed MOL Triumph and MOL Trust with a capacity for 20,170 containers. Milan Maersk is one of the largest vessels of her type in the world with a capacity for 20,568 containers – that’s nearly 400 containers more than MOL Triumph.

The megaship belongs to the second generation of Maersk Line’s Triple-E class (Economy of scale, Energy efficient and Environmentally improved) and is part of a series of eleven container ships, which will be delivered by the end of 2018.

Milan Maersk’s propulsion and software system creates energy savings which aims to reduce carbon emissions per container vessel by 35 percent.

ABP Southampton Director, Alastair Welch said: ‘Milan Maersk is just the latest of these new mega ships to visit the Port of Southampton. Not only are these vessels bigger, they are much cleaner too and we are seeing more of these new generation of ships visiting across the port’s key trades. The Port of Southampton is ideally suited to welcome these megaships.’

To view a video of the arrival please click here

Source: Daily Echo

Images are courtesy of Solent Photographer Andrew Sassoli Walker

container port

August was an all time high for container ports

August’s Drewry global container port throughput index reached an all-time high of 126.8 points.

The August figure, the highest since inception of the index in January 2012, was nearly 7 points up on August 2016 (120.0 points) and more than 11 points up on the August 2015 level of around 116 points.

The global index climbed 0.5% from July’s figure of 126.2.

The month-on-month index figures for China and Europe dropped 0.5% in August – totalling 136.1 (down from 136.8) and 114.2 (down from 114.7) respectively, but show more than 5% annual increase.

All regions showed at least 5% annual growth in August 2017. However, 2016 was a weak comparison in many cases, said Drewry.

It added that Africa – with 117.4 points in August, up from 102.7 in August 2016 (107.2 in July 2017) – is showing double digit annual growth. It pointed out, however, that the sample size is small.

North America showed the highest annual change of 7.0%, with 137.7 points, up from 128.7 in August 2016.

Its monthly change of 2.8% is equal to Latin America, which jumped from 110.4 points in July 2017 to 113.5 in August.

Latin America saw the third highest annual change of 6.1%, with 107.0 points in August 2016.

The Drewry Container Port Throughput Indices are a series of volume growth/decline indices based on monthly throughput data for a sample of over 220 ports worldwide, representing over 75% of global volumes.

The Container Throughput Index of the RWI – Leibniz Institute for Economic Research and the ISL – Institute of Shipping Economics and Logistics showed a further substantial increase in September 2017 from 128.5 to 129.7 (revised figures). Compared to the beginning of 2017 it gained almost six points. A similarly strong plus was last achieved in 2010.

The index is based on data continuously collected from world container ports by ISL as part of its market monitoring. Because large parts of international merchandise trade are transported by ship, the development of port handling is a good indicator for world trade.

As many ports release information about their activities only two weeks after the end of the respective month, the RWI/ISL Container Throughput Index is a reliable early indicator for the development of international merchandise trade and hence for the activity of the global economy. Together, the 82 ports covered in the index account for about six out of ten containers handled worldwide. The flash estimate for September is based on data reported by 45 ports, accounting for close to 80% of the total index volume.

The RWI/ISL-Container Throughput Index for October 2017 will be released on 21 November 2017.

•Source ISL / Port Strategy

 

sea freight

Sea Freight – Why use us?

Have you been quoted ocean freight for your November sailings yet?

Please contact a member of our team as we have very competitive rates for this month – enquiries@supremefreight.com / 02380 337778

We handle all types of cargo including:

  • Full Container Load (FCL)
  • Less Container Load (LCL)
  • NVOCC Groupage Systems
  • Out of gauge
  • Abnormal Loads
  • Hazardous Cargos

We have long standing relationships with a global network of agents at all origin ports which means that we can offer you the best possible service.  We have over 30 years experience in the shipping industry, and we can arrange all the necessary documentation to make sure that your goods are transported as seamlessly as possible.

What are the advantages of sending your goods by sea?

It is typically the cheaper option – larger volumes mean cheaper rates.

It is good if you don’t need quick shipments and have long lead times

It’s more environmentally aware –  and reduces ecological footprint

The capacity is much higher in container ships which means much higher load volumes

There are not many limits on what can be brought in via container – all types of goods can be shipped including dangerous/hazardous/restricted goods.

It is an ideal way of transporting heavy or bulky goods, or large amounts at once

 

 

why use us air freight

Air Freight – Why use us?

When it comes to international shipping, there are many choices as to how to move goods.  The main decision to make is what kind of transport to use.  Deciding between ocean freight and air freight is an important choice. Here, we give you the reasons why its a good idea to choose air freight.  

Going by air is the most time efficient. Its the fastest shipping method which means that goods can be moved quickly and is usually the more cost effective for smaller cargo.

The routes for air freight are large and diverse.  Most destinations in the world are covered and relatively easy to get to.  Air offers reliable departure and arrival times – a large amount of flights depart daily and this means that the risk of delay is lower than that of sea freight, with container ships usually on a weekly schedule.

Supreme freight specialise in restricted and hazardous goods, and dangerous cargo by air.  These types of goods need more rigorous checks, and with air freight comes a higher level of security generally, airport safety controls are paramount meaning that the restrictions can be difficult to navigate.

We have a team of highly skilled experts at our Heathrow Airport office with a broad range of experience in handling all types of shipments. We can:

Arrange daily nationwide collections

Offer an Air Freight consolidation service

Offer Direct and indirect shipment options

Create house airway bills on your behalf

We offer very competitive rates and we can invoice in USD to avoid any high currency exchange rates.

Why not contact us and see what we can offer?

enquiries@supremefreight.com

02380 337778

about us

Are you an Import Clerk looking for a great career opportunity?

We are looking for an experienced import clerk to join our team here at our Head Office in Southampton.

The ideal candidate will have:

  • 2-3 years experience within the industry
  • A good knowledge and understanding of completing customs entries

If this sounds like you please email your CV to ashley@supremefreight.com

christmas

‘Tis the season!

Are you feeling festive yet?! Maybe not, but sea freight imports need to be organised soon to get them in time for Christmas! Time is of the essence.

We handle all types of cargo, including full container load (FCL), less container load (LCL) and NVOCC groupage shipments

Contact us as soon as possible with your needs so that we can make sure that you don’t miss out. Demand will see a massive increase at this time of year obviously – and using Father Christmas’s sleigh won’t be an option!

ridge runner

Supreme take on Ridge Runner