china trade

Top 10 Things to Know When Importing from the UK to China

China is now the UK’s eighth largest export market. In 2017, the UK sold nearly £17 billion worth of goods and services and that figure is only going to increase.

As China’s economy grows and its middle class consumer base expands, the country will be an even more important market for the UK. For companies shipping goods to China, it can be a complex process with many things to consider. Whether you’re an experienced trading partner or expanding your business, these are the top tips to consider when exporting to China.

 

  1. Research Shipping Methods – When deciding to ship goods, companies need to consider whether they will handle the logistics themselves or enlist the services of a company to do it on their behalf.

 

  1. Transport Options – Deciding on the mode of transport that you choose to ship your items will depend on several factors; what your goods are, how much time you have, what sort of budget you have and whether you need to take special requirements into consideration.

 

  1. Sea Freight Benefits – If you are looking to ship bulky items of a high weight, sea freight is one of the cheapest options for you. If you are looking for advise on what the best option of transport would be for you, a freight forward company would be the best people to talk to.

 

  1. Cost – Before you ship your goods, it is important to know upfront the cost to do this. There are lot of potential hidden costs that you may not be aware of if you are not experienced in exporting goods overseas. Surprise costs may prevent your goods from arriving at its final destination and companies can potentially lose a lot of money.

 

  1. Declaring Goods – When importing goods from overseas, all companies must declare them with HMRC. This is done by completing a C88 form.

 

  1. Customs Charges – It is important for companies to familiarise themselves with UK Duty and VAT charges when importing goods into the UK. It is their responsibility to check and pay the correct charges for their goods. Any discrepancy could lead to delays and penalty fees which could be extremely detrimental.

 

  1. Shipping Terms – To avoid confusion, it is important for companies to understand basic shipping terms when transporting goods overseas. The following terms outline of the suppliers and buyers:

 

  • FOB (Free on Board) – Where the supplier pays all the charges at the the shipment’s country of origin which effectively makes it ‘free’ for the buyer to have goods transported by ship.

 

  • EXW (Ex-Works) – Where the buyer is responsible for all charges along the journey of the shipment.

 

  • CIF (Cost, Insurance and Freight) – Where the supplier pays all costs to get the shipment to the UK. Once it is in port the shipment then becomes the Buyer’s responsibility.

 

  1. Commodity Codes – When trading with China, companies must understand and find the correct commodity code. This is a 10 digit code that is required on all imports coming from outside the European Union.

 

  1. Import Licence – Depending on what you are importing, companies may be required to hold an import licence. Companies need to be familiar on what goods are restricted or banned. There are certain import controls on goods such as food, textiles and firearms.

 

  1. Consider a Freight Forwarder – Shipping to and from China is a complex process that has many steps. A freight forwarding company will not only be able to take you through the process, they’d be able to handle all documentation and have local knowledge to ensure that your shipment gets to its final destination smoothly.

 

Why do Businesses Use Freight Forwarders?

Freight forwarders are seen as a necessary extension to many businesses. Mistakes made in shipping processes can be costly and delay goods getting to the places they need to go.

The wealth of knowledge and expertise they have on the process of importing and exporting is invaluable to companies and saves them both time and money. Even large Beneficial Cargo Owners such as Marks and Spencer work with freight forwarders in parts of their businesses. They are seen as a necessity and even regarded to some as an outsourced shipping department.

 

What Can you Expect from a Freight Forwarder?

Supreme Freight will listen to the shipping needs of your business and be able to tailor those to a logistically sound plan at every step of the way. From your budget and time requirements they will be able to recommend you the best method of transportation, whether by road, air or sea. As well as this a Freight Forwarder will be able to make recommendations on:

  • Customs Clearance– From origin to destination, forwarders should be able to deal with all customs processes. This includes handling all paperwork and fees on your company’s behalf.
  • Shipping Documentation– Forwarders should be able to deal with all shipping documentation including Bills of Lading, Certificates of Origin, letters of credit or any documents required by banks before payment is released.
  • Insurance – A reputable freight forwarder will be able to recommend insurance services that will cover a shipment for loss or damage.
  • Logistics and Supply-Chain Management – Which can include but is not limited to fulfilment, customs consultancy and contract logistics services.

If you are interested in importing goods to the UK from China, please get in touch.

 

 

 

Freight Forwarder

What Questions Should You Ask when Looking for a Freight Forwarder?

Supreme Freight assist companies in the process of transporting goods from one place to another. We use the most cost-effective methods with a suitable shipping company to ensure that every point of the journey goes smoothly.

Supreme Freight contract with several companies covering sea, air or road to transport goods on behalf of our clients. In this article we have put together some questions we feel all customers should ask when speaking with freight forwarders.

The Right Questions to Ask

With the freight forwarding Industry growing at an increasing rate, there is a lot of options for businesses to choose from. Many of these options will have varying experience levels and offer different services. It is important for companies to consider exactly what it is they want their freight forwarding company to do for them and to trust that this will be done correctly. With this in mind, it may benefit businesses to find out the following information when looking for a reputable freight forwarder:

  • Accreditation – Trustworthy firms normally belong to at least one trade association such as the British International Freight Association (BIFA). Members of BIFA trade to a collective set of trading standards that are backed by the insurance sector. Going with a company that is a member of one of these trade associations will give you peace of mind that your goods will be in the right hands.
  • Clarification of Services Offered – Different shipments require different services. It is important that you clarify with your potential freight forwarder that your goods will be transported the way that you require them to be. If you are unsure of the services that you will need it may be helpful to ask other businesses for advice. A good freight forwarder will give you a run down of the services that they offer and will be able to advise on the best course of action for your shipment.
  • Experience – Freight forwarding is a complicated and intricate business. Experience in the industry is key to ensure that everything runs smoothly. It may be even more pertinent to ask about experience if you are transporting cargo that requires additional needs such as specialist transport.
  • Shipping Process – A good freight forwarder should give you a run down of their shipping process with a clear explanation of how your shipment will reach its final destination, costs and transport plans.
  • Insurance – Checking a freight forwarder’s insurance policy is imperative. It is important to ensure that your goods will be insured for all of their journey, particularly if they are of high value.
  • Paperwork – It is important to know upfront what is expected of you and what the freight forwarder will handle in terms of paperwork, particularly with regards to customs. Mistakes with customs paperwork can lead to long and expensive delays.
  • Shipping Network – Good freight forwarding companies will have an extensive shipping network. An extensive network means good relationships with partners and demonstrates that they have local expertise in the places that you want to ship to. It is important to check that your destination is a place that they cover.

What are the Benefits of using a Freight Forwarder?

The main benefits of a freight forwarder include:

  • The transportation of goods can be a logistical nightmare especially when you are dealing with importing or exporting to countries that you have not dealt with before. Different countries have different customs regulations, shipping restrictions and fees and a mistake could not only be costly in terms of fines but could delay your shipment reaching its destination and have a dramatic impact on your business. It’s important that companies get this right first time and the only way to do that is working with somebody that has had previous experience with the logistical side. Not only will this save you a lot of time, freight forwarders provide you with the peace of mind that your shipments will arrive in the desired place, in the desired time in a method that meets your needs and is cost-effective.
  • Freight forwarders that have a lot of experience working with the same shipping companies on an international level are going to have a lot more leverage over buying costs than a company that they have never heard of using them for the first time. There is always a deal to be had and shipping companies know that if they strike a deal with a freight forwarder there’s a potential for a lot more business to come their way.
  • With the logistical side of shipping being taken care of externally, business owners have the time to focus their time and efforts on other parts of the business that require their attention. If importing and exporting goods is something that is happening quite regularly this could result in a significant increase in productivity.
  • As a company that deals with freight services all the time, freight forwarders are going to have gained a lot of contacts and experience that will be invaluable to companies with different needs. This knowledge and expertise will ensure that freight forwarders will be able to tailor their services to your specific requirements.
  • Working with a freight forwarder can open opportunities to businesses they didn’t know were possible. With extensive knowledge of the different markets internationally, it could see your business being taken to places you had only dreamed of.

Feel free to get in touch with any questions, or if you need some assistance with freight forwarding.

 

Maersk and MSC to suspend AE2 Asia-North Europe loop for the second time

Alliance partners Maersk and MSC are to “temporarily suspend” their AE2/Swan Asia-North Europe loop from the end of the month until mid-November, removing up to 20,000 teu a week from the trade.

Weakening demand and plummeting freight rates have so far obliged Asia-North Europe carriers to blank two-thirds more sailings than during the same period of last year, and now the 2M alliance is to suspend the loop for the second consecutive year.

Moreover, Maersk said it would also “balance its network to match reduced market demand for the upcoming [Chinese factory shutdown] Golden Week” and withdraw its AE7, MSC’s Condor, headhaul string in week 41, thus removing around another 17,000 teu of capacity from the market that week.

MSC said the AE2/Swan suspension would “help us to match capacity with the expected weaker demand for shipping services”, and in a customer advisory, Maersk said the  service would resume “in line with demand pickup”, suggesting that the suspension could be extended if demand on the route continued to be soft.

The 2M adopted a similar strategy last year, suspending the AE2/Swan from September to December, rather than using the blanked voyage tool favoured by the Ocean and THE alliances. It  said mothballing loops was “a better option for shippers”.

However last year rival carriers took commercial advantage of the service suspension. Indeed, one rival carrier source told The Loadstar the 2M suspension was the “best news we have had in a long time”.

This year, according to Alphaliner data, a total of 42 Asia-North Europe headhaul sailings were blanked in the first three quarters, compared with just 16  in the first nine months of 2018.

Also, at the end of last month, HMM terminated its AEX service, which it operated separately to its slot charter arrangement with the 2M. This removed some 4,800 teu of weekly capacity from the trade, albeit that the South Korean carrier replaced its ‘independent’ service with a slot charter deal with THE Alliance ahead of it joining the vessel sharing group as a full member in April next year.

Until now, the 2M partners have not voided any sailings, despite the peak season proving to be a damp squib and spot rates having slumped to $757 per teu as of last week, according to the reading of the Shanghai Containerized Freight Index (SCFI) – a startling 19% below the level of a year ago and an alarming 24% drop from early January.

The planned six-week suspension of the AE2/Swan loop will see 12 17,800-20,500 teu vessels idled.

Source: The Loadstar

MSC Gulson

MSC unveils its newest box ship MSC Gulson

MSC has revised the official capacity of its new ULCV, MSC Gulsun, by an additional 805 teu, to 23,765 teu, making it more than 2,000 teu larger than the biggest ships operated by its competitors.

The liner said the new class of vessel had “been designed with a wide range of environmental, efficiency, stability and safety matters in mind”.

The MSC Gulson, it claims, features a “remarkable approach to energy efficiency” via bow design and minimised wind resistance.

Part of a series of eleven vessels, it is one of six being built by Samsung Heavy Industries (SHI) in South Korea, with the other five constructed at compatriot Daewoo Shipbuilding & Marine Engineering, the MSC Gulsuncompleted its maiden voyage from Asia to North Europe this week.

Although the same length as the 21,413 teu OOCL Hong Kong-series of ULCVs, at 399 metres, the scrubber-fitted MSC Gulson has a beam 2.7 metres wider, at 61.5 metres, enabling an extra row of containers and making 24 rows across the weather deck.

With an optimum load of light medium and heavy boxes, the MSC Gulson would need to be stowed 13 containers high on deck to achieve the 23,765 teu intake, but this is unlikely unless the vessel is topped up with empty containers for repatriation on the backhaul Asia-North Europe service.

Moreover, the extra row across its beam will exceed the outreach capabilities at some ports on its rotation. Indeed, Alphaliner noted that at the MSC Gulson’s first call, at Bremerhaven earlier in the week, the containers to be discharged at the German port were stowed only 23 across, due to the restricted reach of the terminal’s shore cranes.

There are now around 50 ULCVs of 20,000 teu or more operated by ocean carriers, all of which are deployed on Asia-North Europe, with new deliveries expected to double that number by the end of next year. South Korean carrier HMM, which will join THE Alliance next April, has an orderbook of twelve 23,000 teu scrubber-fitted vessels and Taiwanese Evergreen has just disclosed its intention to order up to eleven 23,000 teu newbuilds.

Both carriers have, like MSC, opted for scrubbers to be fitted on the new vessels to enable the continued burning of HFO (heavy fuel oil) after IMO 2020. Depending on the premium payable for low-sulphur compliant fuel after 1 January, it has been calculated that scrubbers could potentially save container lines using the exhaust gas cleaning technology some $2m per Asia-North Europe roundtrip voyage.

Source: The Loadstar

Image from NewsVideo.SU

one belt one road

RZD expands China-Europe rail freight services with new routes

RZD have begun a new container service, with a new connection between China and Germany.

Connecting Yantai and Duisburg, the service initially will operate on a limited schedule, but RZD chief executive Vyacheslav Valentik expects it to become regular by the start of Q4.

“Our cooperation with Yantai station is developing rapidly – just a month ago we launched a service to Moscow, and today we present a transit route to Germany,” he said.

“There is no doubting its successful development… Shandong ranks third in the GDP ranking of provinces in China. It is an industrial region with a high level of production and consumption, which gives us a good chance to work out the issue of reverse loading of transit trains.”

The inaugural service arrived in the German city, after a 19-day transit, on 14 August, carrying auto parts, electrical components and household products.

The carrier said the service was available to a “wide range” of shippers, with further new routes due this month: “The service will be launched on the new route from Jinan City, Shandong Province to Budapest,” it said.

“Now, RZD Logistics has container trains from various cities of the Shandong province to Moscow, St. Petersburg, Perm, Minsk and Duisburg.”

The operator has undergone a rash of expansion in recent months, last month launching a service to ship boxes from Korea to Europe via the Trans-Siberian Railway.

The decision to run the new link followed a trial in June from South Korea’s container hub of Pusan to the Polish rail terminal at Brzeg Dolny.

“Rail delivery is faster than deepsea transport and we offer our clients in the republic of Korea the chance to assess the economical efficiency of the service,” said Mr Valentik. “And the more cargo transported by Trans-Siberian land bridge, the more affordable the service is.”

Also last month, RZD and subsidiary Far East Land Bridge rolled out a container route between Moscow and Yantai.

Sales director at RZD Olga Stepanova said: “We try to find solutions that will meet the needs of our customers. At Yantai it is convenient to consolidate cargo from all over Shandong province, one of the most industrialised in China.

“It is also successfully connected to the sea terminal, with which we also plan to group and ship to Russia and Europe from other countries in the Asia-Pacific region.”

Source: The Loadstar

red cross

Carriers to fine rogue shippers for misdeclared goods in containers

Carriers are cracking down on rogue shippers by threatening significant financial penalties for misdeclared shipments, following a series of vessel fires.

Evergreen was first out of the gates announcing fines, ranging from $4,000 to $35,000, for misdeclarations (see below), with Hapag-Lloyd and OOCL following suit.

Hapag-Lloyd, which suffered as misdeclared goods caused a high-profile fire aboard its vessel Yantian Express earlier this year, said it would impose a $15,000 fine per misdeclared box, and OOCL has announced enhanced checks and a hazardous cargo misdeclaration fee.

Hong Kong-headquartered OOCL said: “We are aware that there has been an increasing number of marine incidents being reported in 2019, many of which were suspected of being caused by potentially undeclared and/or misdeclared hazardous cargo.

“Any inconsistencies between the declared cargo in the documents and what is physically inside the container will result in a hazardous cargo misdeclaration fee.”

The fee payable will depend on the extent of any disparity, with containers potentially being pulled out of service and put on hold if penalties are applicable.

The carrier said it would also strengthen its inspection policy through additional verification prior to loading by selective or random inspections on DG and potential DG cargo.

“It is the responsibility of all stakeholders in the carriage of goods to ensure all hazardous cargo are properly declared and handled according to the IMDG regulations,” it added.

Between 5% and 10% of containership cargo is declared as dangerous goods, but the extent of misdeclaring of goods is impossible to tell.

Mr Storrs-Fox said: “A key element of the campaign is to identify levers – both sticks and carrots – that are available to improve a safety culture in the unitised supply chain, including considering unintended consequences inherent in trading arrangements or fiscal/security interventions and the possibilities presented by technological innovation.

“Penalising shippers where deficiencies are found should be applauded and government enforcement agencies are encouraged to take appropriate action under national or international regulations to deter poor practices further.”

Source: The Loadstar

low tariffs after brexit

Post-Brexit freeport ‘gateway to prosperity’ plan comes under fire

Questions continue to be raised over the announcement that the UK government intends to establish a series of freeports across the country after Brexit.

Trade secretary Liz Truss called on airports and ports to bid for the scheme, saying: “Freedoms transformed London’s Docklands in the 1980s, and Freeports will do the same for towns and cities across the UK.

Claims yesterday by prime minister Boris Johnson that the UK would become a “world leader” on the freeport scene have also been questioned by industry experts.

Drewry’s senior analyst for ports and terminals, Neil Davidson, said it made a freeport sound like a “panacea” for business.

“From what I can tell, no real, proper research has been conducted and there seems to be no idea what markets or sectors the scheme intends to target,” he said.

“Looking at it from a common sense point of view, and from the market perspective, I cannot see it working – at least not without more details.”

Up to 10 freeports are planned, with an advisory panel comprising business owners, economists, ministers and technology experts making the selections.

In the 1990s, the UK had a series of freeports operating and, while one source claimed these had “failed”, Mr Davidson was more complimentary.

“To say they failed is a bit harsh; they had a very specific purpose – for example at Tilbury the purpose was to provide a way around a quota that existed for imports of North American plywood,” he said.

“Shippers’ costs were climbing, and the freeports allowed them to import in bulk and hold and release the wood as and when needed ,without exceeding the quota.

“These freeports worked because they targeted a very specific market and had very specific needs and advantages – those announced by the government last week don’t point to any market.”

As a result, Mr Davidson said he struggled to see the upside, noting that while tax benefits were the main draw, they were also “expected” and won’t on their own make a freeport competitive.

He also pointed to the high cost of labour, land, and utilities as negatives against the UK’s attractiveness.

“Freeports thrive on being cheap to operate, so knowing which ports and the regions the UK intends to compete against is vital for any gateway bidding for this,” Mr Davidson added.

“If it’s Jebel Ali, the cost of labour there is far lower, and if the UK is targeting EU markets, Tangier is a far more cost-effective option. On top of this, if we look at the ports being put forward, some are the ones with the weakest shipping connectivity.”

The decision to pursue the freeports initiative appears driven by the UK’s new prime minister desire to stick to the latest Brexit deadline, and Ms Truss added: “We will have a truly independent trade policy after we leave the EU on 31 October 31.

“I look forward to working with the Freeports Advisory Panel to create the world’s most advanced freeport model and launch the new ports as soon as possible.”

Mayor of Tees Valley, set to bid for the scheme, Ben Houchen has championed freeports and welcomed the initiative.

“Teesport played a crucial role in this nation’s historic trading past, and is key to our great trading future,” he said. “Creating a freeport right here would turbocharge jobs and growth, bringing investment into the region and making us a global hub of enterprise and innovation.”

Source: The Loadstar

maersk halifax

Maersk Honam rebuilt and renamed after fire

Seventeen months after a devastating fire which resulted in the loss of 5 lives, Maersk is set to send the 15,282 teu boxship Maersk Honam back on active duty.

The owner decided to reuse the stern section in a new ship, to be constructed at a South Korean shipyard. The damaged bow section and the accommodations block were removed at Dubai Drydocks for scrapping. The stern section was taken from Jebel Ali to Geoje aboard a semi-submersible ship.

She retains the same IMO number, but she now carries a new name – Maersk Halifax

Source: Splash 247 / Maritime Executive

Southampton freight terminal expansion

Independent Container Line moves UK call from Liverpool to Southampton

Niche transatlantic carrier Independent Container Line (ICL) is to move its UK call from Liverpool to Southampton to improve schedule reliability.

The US-headquartered, privately-owned shipping line has been serving Liverpool for the past 20 years, calling at the Mersey port along with Antwerp in a two-port North European hub strategy.

However, ICL claims deteriorating weather conditions in the North Atlantic have delayed its fleet of 2,500-3,000 teu ships and compelled the carrier to switch its UK call to a southern port.

“Each winter is bringing more weather challenges in the North Atlantic and keeping schedule becomes more difficult. This change will allow us to get back to 100% reliability year-round, which is a core pillar of our service offering,” it said.

The weekly call at Southampton will shift to a Thursday pm arrival for a Friday am departure, with the first ICL vessel at the DP World Southampton facility the eastbound call of the geared 2,546 teu Independent Spirit on 25 July.

In the US, ICL calls at the privately-owned Penn Terminal in Chester, Pennsylvania, and at Wilmington, North Carolina.

“We have planned and coordinated various intermodal options that will allow your cargo to be picked up and delivered,” said ICL in a customer advisory, adding that its representatives would “be in touch” to ensure a “seamless transition” to Southampton.

The advisory, signed by managing partners and founders John Kirkland and Dale Ross, said the line’s UK headquarters would remain in Liverpool.

The loss of one of its oldest customers is a blow to the port of Liverpool, which in April celebrated winning a new WEC Lines service to Portugal, making the Dutch carrier its fourth liner capture this year.

They included Cosco’s slot share on subsidiary OOCL’s transatlantic service in April and the big one – the 2M’s TA4 transatlantic loop, for which Maersk and MSC agreed a permanent switch from Felixstowe in early January.

ICL’s USP has been the service speed of its ships, which are capable of 22 knots, but if the carrier is still unable to keep to advertised schedules then it probably all comes down to price. With a high unit cost, compared with its rivals, it would have struggled to be competitive at Liverpool.

According to Alphaliner data, ICL, with a capacity of 11,291 teu on its four chartered-in ships, is the world’s 70th-largest carrier.

Source: The Loadstar

container port

Bunker market not ready for IMO 2020

The bunker market is far from ready for the substantial switch in demand to low-sulphur fuel, when the IMO’s 0.5% cap comes into force on 1 January next year, according to the Marine Bunker Exchange (MABUX). 

In an article published by international shipping association BIMCO, the bunker exchange cautions that “shipowners are readybut the bunker market is not” –adding that reports from oil majors regarding the delivery of LSFO (low-sulphur fuel oil) “are concerning”. 

MABUX estimates that the global shipping fleet consumes some 5.3m barrels a day, with about 4m of these being non-compliant after the new IMO regulations kick in. 

Given that the majority of demand is expected to shift to LSFO to comply with IMO 2020, it calculates that the market for some 3m barrels will effectively “disappear overnight”. 

Moreover, the premium for LSFO remains unclear, meaning ship operators cannot properly budget for the increase in their fuel costs, or for that matter advise clients how much extra they expect them to pay. 

“The 0.5% fuel is not physically in the market right now… we have only futures with delivery time in December 2019,” said Sergey Ivanov, director at MABUX.

We do not have all the answers as to when, where and how much, making it difficult to forecast what the exact margin will be between high-sulphur fuel oil (HFO) and LSFO,” he said. 

“Right now, we see that marine gas oil trades at a premium of about $250 per ton more than HFO, but the forward curve forecast is that it may rise to about $380 per ton at the beginning of 2020,” said Mr Ivanov. 

MABUX understands, from its discussions with the main global bunker suppliers, that the first regular deliveries of the maximum 0.5% compliant fuel to bunker ports around the world is expected some time in the third quarter. 

Operators with ships that do not have scrubbers installed, which enable vessels fitted with the exhaust gas cleaning systems to continue to burn HFO, will need to start cleaning their tanks and replenishing with LSFO several weeks before the IMO 2020 regulations come into force. 

And in discussions with the oil bunker suppliers, a confusing outlook has emerged. 

One oil major surveyed by MABUX said it would be delivering LSFO to 18 ports in the world, including main hubs, and would continue to deliver HFO to 15 ports. Another said it would only be delivering LSFO to seven ports, for now. 

“This picture suggests the question of availability of very low-sulphur fuel is critical at this point. No one is sure that there will be enough LSFO in all the main ports in the world,” said Mr Ivanov. 

“In our view, shipowners are ready. Many are in a position now where they can say ‘give me compliant fuel and I will adjust my power system, I will train my crew and start using it’.

“But they need the compliant fuel and they cannot get that now. They do not currently have much choice. Many of them are ready, but the bunker market is not,” he warned.

Source: The Loadstar