Containers

£40 Million Investment in Southampton

DP World have announced that Southampton, Britain’s second largest container terminal, will be benefitting from a major investment which will raise its significance as a premier international freight and logistics hub.

DP World Southampton is a part of DP World and a leading global provider of smart logistics. One of their two UK deep water ports were awarded Freeport status by the government last month. The new £40 million investment intended to improve infrastructure will provide customers with increased speed, security, reliability and flexibility. Changes to infrastructure will include:

  • Dredging and widening of the berths to ensure accommodation of the world’s largest ships. With the partnership of Associated British Ports, this project was completed before Easter and will provide flexibility for their customers with immediate effect.
  • An investment in a new class of eleven hybrid straddle carriers totalling £10million. The vehicles are used to lift containers moved by the quay cranes and then service onward forms of transport via road and rail. This new class of machines will be the most sustainable in the world consuming up to 40% less fuel than its diesel-electric counterparts.
  • Currently £3m is planned to be invested in the redevelopment of the yard for the storage and delivery of empty customer containers. This will increase capacity of the yard by 25% on completion, creating more flexibility for port users.
  • A new Border Control Post (BCP) which includes UK Border Force and Port Health inspection facilities. This will enable multiple government agencies to improve the time they are taking on cargo checks entering the country.
  • A £1.5m quay crane rail extension of 120 metres to ensure that all berths at the terminal will be serviced. In addition, other quay cranes will either be relocated or decommissioned to maximise efficiency, speed quayside loading and save time.

Ernst Schulze, Chief Executive of DP World in the UK said: “DP World Southampton is the most productive port in Britain, turns container trucks around faster than any of its competitors and at 30% also has the highest proportion of its containers moved by rail.”

“At DP World we think ahead to create smarter trade solutions and this £40m programme of investment will ensure that our Southampton terminal continues to grow as a major freight and logistics hub. Our aim is to partner in our customers’ business success and we are already seeing a surge of interest from companies which want to take advantage of the customs zone and tax benefits resulting from Southampton and London Gateway becoming Freeports.”

This investment into the port of Southampton is a welcome arrival to the logistics industry that has faced some gruelling battles with the COVID-19 pandemic and Britain totally breaking away from the European Union at the end of last year.

According to Logistics UK’s 2020 report the logistics industry made an astounding effort to deliver for the nation that year despite setbacks including HGV driver shortages, economic and financial hardship and significant disruption to operations.

Elizabeth de Jong, Logistic UK’s Director of Policy commented: “Despite facing significant operational and financial disruption since March 2020, the logistics industry has stepped up to ensure it continues to supply the nation with the goods it needs, including food supplies and PPE. The COVID-19 crisis has highlighted how critical our industry and its people are to the success of the economy; Logistics UK is proud of the way in which its member businesses, and the wider industry, have worked together to service the needs of the nation during this critical time.”

“To deal with the COVID-19 crisis, logistics businesses managed risks by scaling back operations, taking work back in-house and reducing their reliance on third party services; many also focused activity on their core fleet of vehicles to save costs.”

France roads

UK’s Road Transporters Should Be Ready for Vehicle Safety Changes in France

UK Logistics businesses are being warned to comply with new French safety regulations introduced on the 1st January or risk facing fines.

The legislation states that all vehicles weighing in excess of 3.5 tonnes driving in France must display stickers indicating driver blind spots. This extends to passenger transport and commercial vehicles. Additionally, all vehicles should be fitted with at least one indirect vision safety system, such as mirrors with a field of view that allows for no blind spots that are likely to obscure a vehicle about to overtake it. It also states that control devices must be in reach of the driver to use when the vehicle is moving.

This comes as welcome news to road safety campaigners and experts but have also issued the warning that mirrors are not sufficient to eliminate blind spots.

Emily Hardy from market leading provider Brigade Electronics UK, commented: “This legislation is a welcome change; however, it is important for operators to understand that mirrors alone do not eliminate blind spots. Therefore, they could still be fined according to the legislation’s requirements. We recommend fitting a range of vehicle safety technology such as Brigade’s DVS Safe System kits, to ensure operators comply with legislation across Europe and that drivers have full visibility of their vehicle’s surroundings.”

These kits are available in two different types; for rigid and articulated vehicles and include side cameras, ultrasonic sensors for the nearside of the vehicle and an alarm that activates when the vehicle is turning. Both kits are compliant with London’s Direct Vision Standard as well as EU law which gives drivers peace of mind when crossing the border.

Lafarge is one of the many companies to have benefitted from installing the kits to its fleet of concrete mixing trucks. With road safety being a concern for all of the construction industry, the company took progressive action to ensure the safety of their vehicles.

As well as the kits, Lafarge also installed Brigade’s bb-tek White Sound reversing alarm and Brigades Backeye 360, a camera designed to provide drivers with a 360-degree view of the vehicle.

President of Trans Route Béton, Othmane Jennane said: “With just one look, drivers have a complete surround view of the vehicle without any blind spots and the added peace of mind that pedestrians will also be warned by the white sound alarm. It provides absolute safety.”

This could potentially spell out further bad news for UK Logistics companies and driving within Europe as many changes to Customs regulations are being made as a result of Brexit.

Another challenge that firms have desperately tried to mitigate before 31st December was the sourcing of a sufficient number of customs clerks to be trained up and ready before the implementation of the new trading regime. Speaking last Autumn, Barney Weston, managing director of Oceanic Resources International warned that serious shortage was unavoidable.

On the current situation, he said: “I think most (firms) managed to get the bulk of their teams in place before the end of the year, but training and ‘filling the gaps’ continues. In most cases a Customs and Compliance Manager/ Brexit Head is in place (in firms) giving the strategic lead on how to handle the UK’s new trading relationship.”

He went on to say: “I know that in many cases training and upskilling is on-going, and there is still high demand for people to fill customs clerk positions, but it’s hard to accurately quantify this in numbers. Certainly, anyone who has ever sniffed a customs clearance in their career history is still worth their weight in gold!”

“I think the whole industry will have a clearer picture on the situation by the end of the month; so much was unknown heading into Brexit. I think that shortly people will know if they can handle demand with the current staff levels or if more will be needed.”

Air Cargo

Global Air Cargo Volumes Recover to Pre-COVID levels inside 10 Months

The global air cargo market has virtually recovered from the losses that the COVID-19 pandemic caused according to performance data for February 2021 from industry analysts CLIVE Data services and TAC index.

Chargeable weight for the last 4 weeks of the month, stood at 1% compared to February 2019 and 2% ahead of last year’s number. Niall van de Wouw, Managing Director of CLIVE data services commented the following that passenger airlines will be, “dreaming of such a recovery in passenger demand.”

CLIVE data will continue to compare first to market data to pre-pandemic numbers of 2019, to give a meaningful perspective of the industry’s performance. This is planned to occur until at least Q3 of this year. This will be produced alongside the 2020 comparison.

Capacity levels in February 2021 were -8% and -5% of 2019 and 2020 respectively. CLIVE’s load factor calculated both the volume and weight perspectives of cargo flown and capacity available was up 5% pts on February 2019 and 9% pts on February 2020. The overall dynamic load factor was the same as last months while the monthly volumes climbed 7% despite the short month of February as capacity rose 5% over January.

Van de Wouw added: “These are tricky months to compare due to the Chinese New Year and Leap Year variances, so we have to be careful in how we read the market. To give a meaningful view, it makes sense to keep an eye out to 2019 before the pandemic took hold and, on that basis, air cargo demand is now nearly at par with pre-COVID volumes despite much less capacity in the market. If we normalise for last year’s Leap Year, we can see a 2% growth in global volumes compared to February 2020 but that does not tell the tale by any measure – the apparently modest global growth number is masking what lies underneath. Volumes from China to Europe, for example, were nearly 5 times higher in the four weeks of February 2021 than in the similar weeks of 2020. This was caused by the dramatic drop in volumes because of the of the factory closures a year ago in response to the COVID outbreak. Volumes from Europe were down by -11% for the same period.”

“Demand is increasing and there are a lot of passenger planes sitting around that could start flying cargo, but I don’t think that will happen proactively. Given the high financial risks, when it comes to adding capacity, airlines are more likely to follow the market as opposed to trying to stimulate it. But if it makes sense, they will surely fly those aircraft. Air cargo has been resilient and, bit-by-bit, has clawed back the losses we saw only a few months ago. In April 2020, volumes were down -39% but are now back to the pre-COVID level. Who would have that possible inside 10 months? It’s a recovery airline passenger departments will be dreaming of.”

According to TAC index, volume, capacity and load factors continue to reflect the high price of transporting shipments via air cargo at the moment.

Robert Frei, Business Development Director at the company commented: “Volatility remains high (also intra month) and, given the much higher pricing levels than a year ago, is having a major impact. Looking at PVG-EUR, for example, if you are 10% off with your procurement today (which would be RMB 3.20) compared to 2020 levels, it would have meant a deviation of 18%. This presents a very risky environment for freight forwarders and potentially an immediate loss of their gross margins of 8-10%. So up-to-date pricing information on a weekly basis is an absolute necessity to manage these volatile periods. We also assume the spread of spot rates is likely to remain high.”

The latest data from TAC Index shows that despite the ‘mundane’ monthly pricing average there is still quite a lot of volatility in the weekly rate levels.

Data shows that the Baltic Exchange Index was +2% over January which also took Chinese New Year into account which is normally considered peak season but looking more closely at the impact on the PVG – EUR compared to previous years, TAX index observed the following:

• 2019 – overall period +8%
• 2020 – overall period -4%
• 2021 – overall period -13%

February 2021 saw the highest drop in yield compared to that of the previous years during the period around Chinese New Year. In absolute terms this compares as shown below:

• 2019 – average RMB 20 /kg
• 2020 – average RMB 17.5 /kg = – 11% to previous year
• 2021 – average RMB 31 /kg = +79% to previous year or +63% higher than 2019

TAC Index added that interesting observations have made when comparing other international routes such as HKG – EUR which stayed relatively flat in terms of pricing levels whereas the PVG counterpart increased by +7%. Meanwhile, HKG – USA went up 2%, whilst PVG – EUR went down by -1%.

Hauliers wanted

Hauliers Warned of Tougher French Customs Controls

Since the UK’s departure from the Single Market and Custom’s Union, the predicted delays on Kent motorways have thankfully been avoided.

Unfortunately, this is set to change with haulage companies being advised to brace for tighter controls at French border control which could potentially see the first significant post-Brexit border disruption. The warnings were shared during two conference calls between British Industry bodies and UK government agencies on the 7th January.

Shane Brennan, CEO of logistics body The Cold Chain Foundation told the BBC that it could take months for the new trade agreements to settle in: “Trade levels are very low. It’s growing from 10% on the 1st January to not yet 50% of the traffic flows that we would normally expect and even at those levels we are experiencing high levels of confusion, delays, businesses….. not being turned back, but being told if they come back with the same level of preparedness next time they will be turned away. So the feeling is that we are building to quite a significant potential disruption.”

Reports suggest that cross-Channel HGV traffic through the Port of Dover and Eurotunnel have been significantly low over the past week and is most likely a result of supply chains stock piling items. Despite low traffic passing through, the Department of Transport advised that only 1% of lorries arrived with the correct paperwork with a further 3% being sent to Manston for testing as drivers arrived without having the necessary negative COVID test result. The Road Haulage Association advised that one in five lorries were being turned away citing both reasons with only 2000 lorries currently crossing the border compared with normal numbers of 5000-6000. Based on these reports, it is clear that the border has not been used at its normal capacity and will be scrutinised in the preceding months as to how it copes.

Failing to Prepare

Chief Economist for the Chartered Institute of Personnel and Supply, John Glen, told BBC news that he was hearing from customs clearance agents in Dover that there was a distinct lack of preparation from businesses and their custom brokers. Whilst he expects this to change over time, he is aware that the people involved are “worried that demand will increase faster than capacity does.”

Elsewhere, the BBC have been reporting disruption at the Irish border with Andrew Kinsella, managing director of Gwynned Shipping, advising them of a backlog of 60 lorries waiting to be shipped to Dublin. He explained that many hauliers are discovering that their customers are not able to generate the special declarations that are required for their goods to cross the border.

“Whilst you don’t see queues at ports and terminals the reality is that these queues are developing elsewhere in our depot at Holyhead, in our depot at Deeside and in our depot at Newport in South Wales and lots of hauliers have depots in the proximity of ports.”

“There are a lot of issues about demarcation about who is going to arrange the export declaration with the UK revenue authorities, who’s going to arrange the import declaration, the hauliers then trying to arrange the import safety and security declaration to create an ENS number which helps you generate a PBN number so there has been a lot of everyone finding their feet.”

Trade Barriers

UK retailers expressed concerns that the new UK-EU trade deal has created trade barriers that are believed to have had a direct impact on cross-Channel and FMCG logistics. Traders now believe that they will be required to pay tax on imports and exports of specific goods including food and clothing that are not completely made in Britain. With so much confusion over paperwork regarding this, some parcel companies have made the decision to suspend their road deliveries to Europe.

The UK-EU trade deal was billed as preserving its zero tariff and zero quota access to the bloc’s single market; however, some major retailers using the UK as a distribution hub for European businesses could face possible tariffs if they re-export to the EU. This could see businesses concentrating on time-consuming workarounds or relocating hubs to the EU.

The British Retail Consortium is seeking short term resolutions for the challenge’s businesses face and is seeking dialogue from the government and the EU to mitigate the long-term challenges new tariffs will pose.

A Perfect Storm of Brexit Disruption

Scottish seafood exporters have described their situation as a, “perfect storm” of Brexit disruption with their industry on the brink of sinking. Donna Fordyce, chief executive of Seafood Scotland speaks on the subject:

“These businesses are not transporting toilet rolls or widgets. They are exporting the highest quality, perishable seafood which has a finite window to get to markets in peak condition. If the window closes these consignments go to landfill.”

According to Fordyce, the sector had already experienced difficulties as a result of COVID-19 and the French border closing at Christmas as well as “layer upon layer” of problems associated with Brexit. Without exports it is feared that fishing fleets will have little reason to go out.

“In a very short time we could see the destruction of a centuries-old market which contributes significantly to the Scottish economy,” adds Ms Fordyce.

Parcel Traffic Affected

Elsewhere DPD, the parcel delivery service has told the BBC that it has suspended its European Road Service due to the “increased burden” of customs paperwork required to be completed on shipments for the EU including the Republic of Ireland. Increased paperwork has seen 20% of parcels identified as “incorrect or incomplete data attached” causing them to be returned.

In a communication with their customers, the business has spoken of a “challenging few days” for the international operation and is planning on restarting the service pending a review on 13th January.

low tariffs after brexit

Brexit and the Logistics Industry: Infiniti Research Outlines Key Challenges

Well known market intelligence company, Infiniti Research have announced completion of an article on their website outlining what they expect the key challenges of Brexit will be on the logistics industry.

The deadline for the UK and the EU to negotiate a trade agreement is set to end on the 31st December.  With the deadline a matter of weeks away, no deal has been struck and it is looking likely that the UK will no longer have access to the single market and customs union. Due to the high amount of cross-border movement within the sector, this will undoubtedly impact the logistics industry in a significant way.  According to Infiniti, Brexit is likely to have severe consequences to even the big logistics companies. One significant example of how troublesome Brexit is set to be is through the importation of Britain’s petroleum. At present, over 25% of this commodity passes through the EU before arriving in Britain. With no access to the single market and customs union, a tariff will be applied on this product as it leaves the EU and enters the UK. The extra expense will have consequences on Britain and the EU as those extra costs trickle through the markets.

 

Brexit and the Top Challenges

Infiniti’s article outlines the following as the logistics sector’s top challenges as the UK leave the single market:

Reduced Trade

In 2019, 43% of the UK’s exports went to the EU which equated to £294 billion whilst 53% of the UK’s imports were from the EU. With the UK set to not have access to the single market, a rise in tariffs will discourage trade between the EU and these numbers will inevitably decrease. With EU trade, making up such a large percentage of the UK’s total imports and exports, this will undoubtedly make a huge dent in the country’s GDP.

Border Control

As free movement between the UK and the EU ends, tighter border controls are set to be put into place creating barriers for trade on either side. The UK government has warned of a 6-month disruption period with the worst of it being during the first 3 months. This will mostly be down to additional checks being introduced and the expectation that at the beginning drivers will not have the correct licences and shipments will not be accompanied with the correct paperwork. In an attempt to mitigate these delays as best they can, HMRC have announced there will be a period of leniency for the first 6 months where the new procedures will be simplified. The disruption to the border is already having a knock-on effect on the logistics industry. With businesses predicting delays in supply chains, they have taken to stock piling essential goods. For UK logistic companies, delays in the border will mean a decline in efficiency and potential problems with administration if the correct paperwork and customs fees are not paid.

Migration Control

Another potential problem that Infiniti has outlined will be stricter controls on migration with particular emphasis on EU workers. With freedom of movement coming to an end, citizens of EU states will no longer have the right to work in the UK and will need to apply for the necessary work visas.  This will translate to less EU workers working for UK companies. Road haulage is set to be majorly impacted by this, as the sector relies on drivers belonging to other EU countries. Additionally, drivers with UK licences will be required to apply for an international driving permit to transport goods within EU states. These permits will need to be issued for every journey that is made and they are capped in amount. This alone will significantly import the number of times UK drivers will be able to transport goods. Drivers with EU licences will be able to continue to use their licences in the UK but only for a temporary period.

Increase in Operating Costs

With no trade agreement in place with the EU, the cost to import fuel into the UK will rise which will impact on the price consumers pay at petrol stations. This along with added tariffs and duty payments that will need to be handled, managing shipments is going to become considerably more expensive than it was whilst the UK was in the single market.

 

Prepare for the Worst

Due to lack of direction from the government and the ongoing issue of the COVID-19 pandemic, logistics companies have been slow to prepare for the looming deadline of 31st December.  Businesses are being urged by experts to not, “sit on their hands and hope for the best,” and to instead do the research themselves to ensure that they know what is expected of them. Holding out for a trade deal at this late stage is wishful thinking and will be detrimental to businesses going forward. The UK government are urging companies and their affiliates to start preparing for the new legislation, understand what is required of them and to ensure that their associates are updated.

Heathrow Cargo

Why is Air Cargo seeing an increase since COVID-19?

According to CLIVE data services, air cargo volume saw a 12% increase in the last week of June compared to the last week of May. Niall van de Wouw, managing director of CLIVE, explains this increase was initially due to the urgent requirement of personal protective equipment (PPE) needed by governments in an attempt to contain COVID-19. Despite the international demand for PPE now beginning to diminish, Van de Wouw is confident that air cargo volume will continue to rise month on month.

“Our June analyses seems to suggest the first steps towards a structural market recovery. Despite the decreasing demand for PPE in June, we still see that the volumes increased over May. We are starting to see a more recognisable airfreight market following more logical economic principles and more logical rates.”

There is no denying that aviation has been one of the industries hit hardest by the COVID-19 pandemic. Government restrictions have prohibited entry for travellers causing ticket sales to plummet, reduced schedules and redundancies for airline staff. An increase in air cargo volume is a glimmer of hope in what has been a dark time.

How has COVID-19 impacted Air Cargo Volumes?

A number of sources have submitted their findings on how the global pandemic has affected air freight including; Veritas Global, Seabury and The International Air Cargo Association (TIACA). Alongside this, the International Civil Aviation Organisation (ICAO) have also done their own studies, which are updated and shared on a weekly basis. Despite the sheer number of agencies looking into this there continues to be a lack of reliable data but what does stand out is the following:

• Global air cargo capacity is down 35% from 2019
• 20% of belly cargo continues to fly
• Freighters capacity is showing signs of stabilising

Due to the current restrictions of passenger travel, airports are seeing a sharp decrease in their revenue forcing many to close. Despite full closures to passenger traffic, a share of airport and airside infrastructure must remain open to support air cargo which comes at a cost to a weakening cash supply.

How is TIACA Supporting the Industry?

TIACA believes that it is their permanent role to promote the air cargo industry. During the outbreak of the coronavirus, they have focused their efforts in reminding governments how important the role of the air cargo industry is to the global economy, international trade and in battling the devastating effects of COVID-19. The value of air cargo has been highlighted during the pandemic as without it the transportation of valuable medical, PPE and food supplies would not have been possible. As COVID-19 looks set to continue its impact on the world, so will the demand for medical supplies. It is vital that delivery services are able to keep up with this demand.

How have Cargo Operations Changed Due to Coronavirus?

Changes to cargo operations to mitigate the impact of coronavirus include:

• The use of passenger aircraft
• Expanded use of charter flights
• Changes in flexibility to certain regulations
• Introduction of new standard operating procedures
• Increased protection for staff

The implementation of these new operations and assessment of how effective they are is a time-consuming process and is changing everyday as we learn more about the novel virus. TIACA and other aviation organisations are pushing an initiative where a working document is created for a post COVID-19 recovery path. The main focus of this document is to suggest short, mid and long-term solutions to the issues caused by the pandemic so that the industry as a whole can recover.

What can the Industry do to Prevent this Impact from another Pandemic?

When industries such as aviation rely on governments from all over the world to collaborate and work cohesively, there needs to be a concerted effort to make things consistent. A standard that extends from one end of the world to the other.

It is clear that the implementation of new procedures to prepare ourselves for a future crisis are required; particularly, relating to health and safety in the workplace. Emergency plans will need to be drawn up and implemented to ensure that if another pandemic were to occur that industries would have systems in place to mitigate the effects that were able to destroy everything so quickly and in such a short space of time. This will involve analysis, risk assessments, training sessions and re-writing standard operating procedure. For aviation in particular, more consideration needs to be given to air cargo and how we can keep operations going in the face of a crisis. The air cargo industry has proved invaluable during the COVID-19 pandemic; however, more support needs to be given to be able to provide that invaluable service in the future.

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

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