air freight

Air freight rates climb in March

The latest figures from Drewry’s Sea and Air Shipper Insight report show that average ‘all-in’ air freight rates across 21 major east-west trade lanes increased by 7.9% year on year in March to reach $2.84 per kg. Prices were also up on February levels when airlines achieved an average price across the trade lanes of $2.73 per kg.

Drewry said that this time last year prices remained broadly flat compared with the previous month but added that current prices were still relatively low. The major airports reporting tonnage figure surged month-on-month displays that despite relatively low airfreight rates, there has definitely been growth in the trade. Capacity continues to rise, albeit at a slower pace than last year, although utilisation has gone up along with the rise in load factors.”

Major airports have seen double-digit rises, while key carriers also reported good tonnage increases – the biggest gains from Lufthansa, up 19% year-on-year, and American and United rose 24%. Meanwhile, airlines have reported that product launches are now no longer confined to the fourth quarter and perishables are in year-round demand.

Back in February, Drewry said it expected pricing to soften through March, due to lower volumes following the Lunar New Year holiday and the easing of congestion at the US West Coast ocean ports. However, beginning in April, rates should recover as air freight demand picks back up.

There was a two cent dip in prices paid compared with February, but month-on-month declines are expected at this time of the year and the rate of decline was much slower than that of both 2015 and 2016.

The improvement in airfreight prices comes as airlines have been seeing unusually high demand for the time of the year, with some suggesting this is down to a containership capacity shortage as shipping lines are in the process of launching a series of new alliances. Underlying demand also seems to be improving, while jet fuel prices have increased by around 30% compared with a year ago.

MOL Triumph

The worlds largest container ship takes its maiden voyage

The worlds largest container ship, the MOL Triumph, set off on her maiden voyage from Xingang, China on the 10th April. With a gross tonnage of 210678, deadweight of 197500 tonnes and length and breadth of 400m x 59m it certainly does pack a punch – with the ability to carry 20,150 twenty foot containers.

MOL will sail to Dalian, Qingdao, Shanghai, Ningbo, Hong Kong, Yantian and Singapore, before it transits through the Suez Canal. It will then continue on to Tangier, Southampton, Hamburg, Rotterdam and Le Havre before calling back at at Tangier and then Jebel Ali on the return voyage to Asia.

The new 20,000 TEU-class container ships are equipped with various highly advanced energy-saving technologies. These include low friction underwater paint, high efficiency propeller and rudder, Savor Stator as a stream fin on the hull body, and an optimised fine hull form. According to MOL, these technologies can further reduce fuel consumption and CO2 emissions per container moved by about 25-30% when compared to 14,000 TEU-class containerships. Additionally, the vessel has also been designed with the retrofit option to convert to LNG, in view of the implementation of the International Maritime Organisation’s new regulation to limit emission in marine fuels, which will come into effect in 2020.

MOL will take the delivery of the second 20,000 TEU-class vessel in May 2017. Eventually there will be six 20,000 TEU-class containerships unveiled, and they will be phased in gradually on the existing trade routes of MOL.

MOL Triumph takes the title as the world’s largest containership from the 19,224 TEU MSC Oscar and her three sister ships. The four vessels were delivered to Mediterranean Shipping Company in 2015 by South Korea’s DSME. They measure 395.4 meters in length and have a beam of 59 meters.

At this time, we are anticipating the ship arriving into Southampton on roughly the 11th May, and we will keep you updated with its progress.

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.

 

cargo plane

Record losses for Air France’s KLM Cargo Division

2016 saw a record loss for the cargo division of the Air France KLM group.

The French-Dutch airline recorded a full-year operating loss of €244m, compared with a €245m loss in 2015. This was a 14% year on year decline as a result of structural industry overcapacity and a decline in traffic of 6.3% to 8.4bn revenue tonne km (RTK). Its full-freighter operating loss for the year was €28m, compared with a €42m loss in 2015. According to KLM “The group continued to restructure its cargo activity resulting in its gradual turnaround, in order to address the weak global trade and structural industry overcapacity, and to maximise its contribution to the group,”

Looking at fourth quarter results, revenues declined by 10.8% year on year to €546m and its operating loss sank to €28m from a loss of €23m during the fourth quarter of last year. Fourth quarter traffic was down 3.9% year on year to 2.2bn RTK. The average cargo load factor for the 2016 period stood at 63.2%, which was the same level as a year earlier.

From 2017, AF-KLM will be merging the reporting of its cargo business into its overall financial and passenger results to reassess its performance. Previous years have seen the company drastically decrease the size of its freighter fleet as it tries to bring down the overall heavy losses under previous calculation methods.

airfreight-offer

Free customs clearance on any air freight bookings this month!

For this month only, we would like to offer our loyal customers free customs clearance on any air freight bookings made!

We have electronic links to all UK airports. This means that our team can skilfully arrange customs clearance for your cargo. With knowledge of all customs clearance procedures, home use, CFSP, IPR, OPR and warehousing entries we can also organise BTI classification for your goods.

Our team of highly skilled experts at our office at Heathrow Airport have extensive knowledge of handling all aspects of air shipments, with daily nationwide collections and an air freight consolidation service. We are able to offer a range of direct and indirect shipment options from any airport worldwide.

Contact us now to take advantage of this great offer! Call 02380 337778 or email enquiries@supremefreight.com 

 

 

delivery drone

Drone delivery experimented by UPS

The experiment, in Lithia Florida, involved launching a drone from the top of a vehicle, delivering its package and returning by itself, all whilst the delivery driver is able to continue driving at the same time.

“This test is different than anything we’ve done with drones so far. It has implications for future deliveries, especially in rural locations where our package cars often have to travel miles to make a single delivery,” said Mark Wallace, UPS senior vice president of global engineering and sustainability.

Rural delivery routes are the most expensive to serve due to the time and vehicle expenses required to complete each delivery; hence the consideration UPS is giving to an unmanned aerial vehicle (UAV) option for last-mile type deliveries.

However, this doesn’t mean the end for drivers. According to UPS, drivers are the face of the company, so this isn’t something that will change. It will be a tool to aid them in terms of time and distance. During the test the drones route was preset, but routes could be determined by other sorts of navigation.

Amazon has also experimented with drones. In December 2015 it successfully delivered a tv streaming stick and a bag of popcorn to the garden of a customer with a large garden in Cambridgeshire. This could suggest that this is something they can offer to all their customers going forward, but that would be a premature assumption. At the moment it can only be used for customers with large gardens that live close to the depot. The drones can only fly in daylight and with good weather conditions. Amazon hopes to start expanding this service over the coming months, although it will only work on packages up to 2.6kg.