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.

 

digital age

What does Freight Logistics Mean?

Freight logistics is the overseeing and management of a cost effective operation and the delivery of goods. It combines logistics experience, human resources and knowledge to ensure the smooth journey of goods between carriers and shippers.

Freight logistic activities in their most basic form include:

  • Making contact, selecting and engaging carriers and transport companies.
  • Negotiating terms and conditions and rates for the transportation of goods.
  • Preparing the labelling and appropriate paperwork that is associated with the transportation of shipments.
  • Scheduling shipments to be picked up by carriers at desired times.
  • Planning to optimise the best mode of transport, routing and load balance.
  • Tracking the movement of shipments through the Supply Chain.
  • Working with Customs brokers to ensure compliance.
  • Ensuring the necessary insurances are in place to ensure goods are insured whilst in transit.
  • Handling freight claims.
  • Managing the receipt and payment of invoices associated with the shipment of goods.
  • Constantly looking for optimal methods to improve delivery performance, reduce time and cost and lower environmental impact.

This long list of tasks can be very much underestimated and underappreciated when it comes to freight logistics. Without a proper Freight Management Company most company operations would cease.

The Role of Freight Forwarders

A freight forwarder assists companies in the process of transporting goods from one place to another. They use the most cost-effective methods with a suitable shipping company to ensure that every point of the journey goes smoothly.

Freight forwarders contract with a number of companies covering sea, air or road to transport goods on behalf of their clients. Although some freight forwarders have their own warehouses and vehicles, they aren’t necessarily the ones to carry out the transportation. Usually, they are the experts that are able to lead on the logistics and arrangements that will enable a smooth process giving companies piece of mind that their goods will be delivered.

What Can you Expect from a Freight Forwarder?

A freight forwarder will be able to 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 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.

Communication

Logistics collaborates with several departments in an organisation, among those; operations, manufacturing and marketing. These interactions influence finance, production, engineering, marketing, transport, warehousing, purchasing and inventory management. When the responsibility of communication is passed to a reputable logistics provider, related costs are reduced as they minimise the amount of connections needed to link a variety of economic players all working towards the same goal.

Tracking Your Shipment

Freight forwarders typically use specialised software called a Transport Management Systme (TMS) to track shipments, making any freight’s journey transparent to the freight forwarder and to the company instructing them. This helps logistics management to save money, develop more efficient procedures and improve customer service.

A TMS provides important data regarding carrier performance, costs and market trends. This enables freight forwarders to constantly stay cost effective. Additionally, the TMS enables forwarders to pick up on potential delays earlier enabling them to notify customers quicker.

Warehousing and Distribution

Diligent procedures in the warehousing and distribution area of freight logistics can pay dividends within the supply chain. Many costly mistakes can be made in this area. Consistent warehousing and distribution procedures help logistics earn trust within the industry and strengthen relationships between partners.

Several value added warehousing and distribution services include:

  • Cargo Packing and Crating
  • Pick and Pack (where individual components of an order are gathered together and placed into a box.)
  • Labelling
  • Vendor Assembly and Consolidation
  • Kitting (where individual items that are related packed together into one unit)
  • Visual Inspection Services

Customs

When goods enter or leave the country, customs brokers provide documentation for the shipper to prove that the required procedures have been carried out and that the goods are cleared for shipment. This is easier said than done. Goods are warehoused whilst going through customs clearance and if procedures aren’t complied with and mistakes are made, the fees can accumulate to hundreds and thousands of pounds.

The paperwork for customs clearance can be extensive and can differ from country to country and even port to port. Without the proper attention from a licensed customs broker, errors can be made when importing or exporting freight which can cost time, money and trust.

Some of the documentation required for importing and exporting cargo are:

  • Purchase Order from Buyer
  • Sales Invoice
  • Packing List
  • Shipping Bill
  • Bill of Lading
  • Bill of Entry
  • Certificate of Origin

When shopping around for a freight forwarder, it is important to research their experience in dealing with customs brokerage. If not consider hiring a customs broker independent from your forwarder.

Insurance

According to experts, the theft of cargo is a $30 billion a year business. Alongside this there are other threats that could happen to your cargo along the way which include:

 

  • Long Voyages
  • Extensive moving of cargo
  • Handling
  • Bad weather

 

The protection of your cargo from any of this is extremely important. Some forwarders will provide a range of insurance options. Check with yours to see if there is an appropriate premium to suit your needs.

gridlock customs

Should I use a Freight Forwarder?


Supreme Freight assists 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.

At Supreme we contract with specialist companies covering sea, air or road to transport goods on behalf of their clients. We are the experts that can lead on your logistics needs and arrange a smooth process that will give you piece of mind that your goods will be delivered.


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 we have on the process of importing and exporting is invaluable to companies and saves them both time and money.


What Can you Expect from a Freight Forwarder?

As a freight forwarder we will be able to listen to the shipping needs of your business and be able to tailor those to a logistically sound plan. Tailoring a logistics plan to meet your budget and time requirements, Supreme Freight will able to recommend you the best method of transportation, whether by road, air or sea. As well as this we 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.

What are the Advantages of a Freight Forwarder?

  • 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. Along with saving you 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.
  • Supreme Freight have been supporting their clients with their logistics needs since 1986 and in doing this we have built up an excellent reputation with customers and partners alike. The relationships we have formed with are logistics partners allows us to negotiate the best rate for are clients. Using these relationships and are expert knowledge as freight forwarders we can plan and deliver in a timely and cost-effective manner every time.
  • 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, Supreme Freight have the experience that will be invaluable to our clients. 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.

When you work with Supreme Freight you will have over three decades of expertise on your side supporting you with your freight forwarding requirements. To discuss your logistics needs, contact Supreme Freight on +44 (0)23 8033 7778.

 

sea freight

What is Sea Freight Import?


If you are considering the logistics of Importing goods into the United Kingdom for your business, sea freight will naturally be an option you will consider. Sea freight is a good choice for those businesses that are looking to import a large amount of consumer goods and is most often used when importing from Far East Asia. One of the main reasons for this is because sea freight is a cost-effective option that has been a preferred method for many industries for decades.

Sea freight is the method of transporting a large quantity of goods using cargo ships. These come in the following forms:

  • Full Container Load (FCL) – In which a company fills a whole container with their own goods. Containers can be from 20 – 45 feet long.
  • Less than Container Load (LCL) – Where different companies share the same container and load their shipments into it. This would then get split once it reaches port.
  • Roll On Roll Off (RORO) – Where lorries or other vehicles are packed with shipments, drive onto the cargo ships and drive off once they have reached their destination.
  • Dry Bulk Shipping – Where materials such as metals or aggregates can be poured into the ships hold rather than being loaded into containers.

What are the Advantages of Sea Freight?

The advantages of importing using sea freight include:

  • Can be highly cost effective for businesses looking to import large quantities of goods. Sea freight has been known to be 4 – 6 times cheaper than air freight. Additionally, duty and VAT are calculated at a cheaper rate than air freight keeping the costs down
  • Supreme freight can also organise container sharing for smaller loads that can keep costs down for their clients.
  • Sea freight is a global business and is accessible from most countries around the globe.
  • Sea freight importing is much better for the environment than other methods.

What Will you Need to Pay for?

When importing into the UK, businesses not only need to consider the cost of the goods and the fee they are going to pay to the shipping company to transport them, they must also consider the duty and the taxes incurred on the goods as they pass through customs processes.

The price of these costs depends a lot on where the shipment is coming from. Currently, importing from the EU typically costs less than from outside as there normally isn’t duty to be paid. This may change as the United Kingdom goes through the process of leaving the European Union and businesses will need to consider this when pricing up their shipment.

Shipping costs depend a lot on the size of the shipment and what it is. Other costs excluding the shipping cost could include:

  • Cost of goods
  • UK import duty
  • UK VAT (There are some cases where businesses can claim this back.)

How Sea Freight Works

Arranging a shipment can generally be done using these steps:

  • Contact Supreme to discuss your logistic requirements and agree a plan.
  • The goods will be collected by the shipping company from the supplier.
  • The shipment will be transported to the port and proceed through customs.
  • Goods are loaded into an FCL or LCL container and loaded onto a cargo ship.
  • Once the shipment has arrived into the UK, the shipment is met by customs and released when duty and taxes are paid.
  • Goods are delivered to your business.

When you work with Supreme you will be working with a reputable, cost effective shipping company who will ensure that the process runs smoothly. Planning and organisation will be key as shipments can take a long time to reach their final destinations especially if delays occur. To discuss your sea freight needs or any other freight requirements contact the expert team at Supreme Freight on +44 (0)23 8033 7778.

Suez Canal

Suez Canal bans open loop scrubbers

Despite the recent introduction of  low-sulphur regulations, the Suez Canal Authority (SCA) will continue to allow ships transiting the waterway to burn heavy fuel oil (HFO) without the need for scrubbers.

Adding to the confusion for ship managers is a ban by the SCA on the discharge of wash water – used in the open-loop scrubber process – while vessels make the passage.

In effect, this means ships with scrubbers installed must switch off the exhaust gas cleaning systems during the 12-hour passage, thus releasing pollutants into the atmosphere.

In circular 8/2019 issued on Sunday, the SCA it said it puts “no restrictions on fuel oil” for ships using the canal “until ratification of MARPOL Annex V1″ by  Egypt.

The same circular also states it is “forbidden” to discharge sea water into the canal during transit “in any circumstances”.

The IMO 2020 0.5% global sulphur cap on marine fuel for ships not fitted with scrubbers came into force on 1 January, having been agreed by all member states, including Egypt. However, governments officially need to pass laws in their own countries for the regulation to become enforceable.

Around 80% of the scrubber systems installed on ships are of the open-loop type that use seawater to separate the sulphur content from the fuel before it enters the ships’ exhaust funnel.

There are a limited number of ships with closed-loop scrubbers, which keep the wash water on board for later discharge, and there is hybrid equipment that can switch between the two operations, but both are expensive to install and operate.

A number of independent studies have sought to prove that the use of open-loop scrubbers is a “safe and effective means of complying with IMO 2020”, but ship operators have struggled to get the message across. Indeed, more than 80 ports around the world have prohibited the use of open-loop scrubbers in their territorial waters.

The Clean Ship Alliance (CSA), a pro-scrubber lobby, told The Loadstarrecently it was “actively engaging” with port authorities over their concerns, but suggested the bans had been put in place after “very little hard research”, with many ports deciding to prohibit their use on the back of bans by others.

Vessels fitted with open-loop scrubbers calling at ports with ban need to switch tanks to compliant fuel before entering the jurisdiction, as is the case for the ultra-low ECAs (emission control areas) of North Europe and the US.

Source: The Loadstar

container port

Guidelines Published to help reduce Container fire risk

A container shipping group, set up to increase safety levels in the industry following a string of sometimes fatal box ship fires, has produced its first set of guidelines to help operators prevent further incidents.

The Cargo Incident Notification System (CINS) today published Safety Considerations for Ship Operators Related to Risk-Based Stowage of Dangerous Goods on Containerships, specifically in response to “a number of serious fire incidents in recent years, often caused by deficiencies in cargo declaration and cargo packing”.

A copy of the publication can be downloaded here.

CINS chairman Uffe Ernst-Frederiksen said: “Cargo-related incidents which result in fire and explosions are rooted in cargo problems. Subsequent investigations demonstrate a wide range of deficiencies relating to cargo presented for shipment.

“These deficiencies include erroneous classification and declaration, packing, segregation and securing, not complying with IMDG or not following the CTU Code and packaging not complying with IMDG. This new best-practice guidance for DG stowage is intended to help improve fire safety in our industry,” he added.

The group stressed that the guidelines “complement – but do not replace – the existing measures already developed and implemented by ship operators for the carriage of properly declared dangerous goods. Likewise, they do not replace the SOLAS and IMDG requirements for stowage and segregation – in fact, they will enhance the requirements of these regulations”.

Investigations into deadly fires on board containerships in recent years have demonstrated that there is a class of cargo which, although not classed as dangerous goods, is thought to have increased the severity of some of the fires.

“Such commodities include, but are not limited to, charcoal, wood pellets, metal scrap, borings, shavings, turnings and seed cake,” advises the publication, which also includes stowage plan strategies to mitigate the risk of this type of cargo escalating a blaze into a severe fire.

CINS was established in in 2011 and its board comprises five of the world’s largest container shipping lines – Maersk, Hapag Lloyd, MSC, CMA CGM and Evergreen – together with three advisory board members, International Group of P&I Clubs, TT Club and Exis Technologies.

Its membership comprises over 85% of the world’s container slot capacity.

Source: The Loadstar

emissions

IMO have a lack of urgency to clear up shipping

The IMO has decided on a goal-setting approach by member states to decarbonise shipping, rather than progress the proposals put forward by some members for a mandatory speed reduction on vessels.

The strategy, decided last week in London, not to opt for speed restrictions has angered the members of the Clean Shipping Coalition (CSC) who blasted the IMO for its “bureaucracy” and “lack of urgency”.

An IMO working group agreed a draft text that will be put forward to the next Marine Environment Protection Committee (MEPC) meeting in March.

The text urges member states to develop and update a voluntary national action plan, which includes an improvement in the domestic and legislative implementation of existing regulations and a commitment to develop activities to further enhance the energy efficiency of ships, along with initiating the research and the uptake of alternative low- and zero-carbon fuels.

The IMO said that during the working group sessions “a number of proposals were discussed”, including an Energy Efficiency Ship Index (EEXI), mandatory power limitations on ships, measures to optimise speed on a voyage and speed limiters.

According to the UK Chamber of Shipping,“after lengthy discussions it was clear that there was no appetite for prescriptive speed reduction regulation”.

However, the UK Chamber, which is against the implementation of speed restrictions on shipping, arguing among other things that it would require more ships to be built with ‘old’ technology to take up the slack, said there was a “positive outcome” from the meeting.

Shipping policy director Anna Ziou said: “The progress made sets the right direction of travel and is a good foundation for the IMO’s work to put the strategy into action.”

Meanwhile, the CSC said measures were “urgently needed” if the IMO’s plan, agreed in April last year to half emissions from shipping by 2050 was to be met.

Bill Hemmings, shipping director of CSC member, transport & environment, said: “Time is running short but that’s not the feeling you get inside the room. The commitment last April to agree and implement in the short-term immediate emissions reduction measures has fallen foul of procedure, bureaucracy and delay spearheaded by countries that were never really on board.”

Mr Hemmings named the key member states as the US, Saudi Arabia and Brazil that “spearheaded” the movement against mandatory speed restrictions.

And John Maggs, senior policy advisor at fellow CSC member Seas at Risk, was equally damming of the IMO’s decision not to implement vessel speed restrictions at this time.

“Ships have deployed slow-steaming over the past decade in a way that has seen dramatic reductions in emissions. The world is not blind to this,” said Mr Maggs.

He said that the speeds of ships “must initially be capped” and “then progressively lowered” and suggested that the “commitment of many at the IMO to genuinely reduce ship emissions” was absent.

Nevertheless, several shipowners and operators The Loadstar has spoken to in recent weeks argued that they were already operating their vessels at the lowest speeds recommended by engine manufacturers, in order to conserve fuel and cut voyage costs to the bone.

Indeed, one executive from a major container carrier said: “Our masters are under strict instructions not to ‘put their foot down’ unless it is a matter of safety; if we miss a berth window so be it, we have a network that can adjust to that and it is generally cheaper than burning the extra fuel.”

Source: The Loadstar

MSC

MSC tipped to overtake Maersk as the worlds biggest box carrier

MSC is on course to overtake alliance partner Maersk as the biggest ocean carrier by capacity within the next two years.

A new order for five 23,000 teu ULCVs from the South Korean Daewoo yard will take the Geneva-based carrier’s orderbook to 16 vessels, for a massive 305,352 teu, according to Alphaliner data.

A disclosure from Daewoo this week valued the order at $152m per ship, with delivery of the five by August 2021.

This will propel MSC’s fleet, including current chartered tonnage, to just under 4m teu, a capacity level Maersk has said it wants to stick at.

During the second-quarter earnings call in August, Maersk chief executive Soren Skou confirmed this, adding: “We want to remain disciplined on capacity and stick to our guidance of around 4m teu of deployed capacity because it helps us drive utilisation up and unit costs down.”

Currently the Danish carrier’s fleet stands at some 4.2m teu, however Mr Skou attributed the above-guidance figure to be due to a number of ships dry-docking for scrubber installation, obliging a higher than normal level of chartered-in tonnage.

Unlike its 2M partner, Maersk has for some time taken a bearish view on ordering, and currently has an orderbook of just 45,000 teu. It has long since ceased to be the ocean carrier operating the biggest  box ship; MSC is the current leader with its 23,765 teu scrubber-fitted MSC Gulsun, in service between Asia and North Europe.

With MSC threatening to end its long reign as the industry’s biggest carrier, Maersk’s board could be put under pressure to reconsider its capacity strategy, which in turn could lead to it identifying new acquisition targets in order to support its growth.

In contrast, MSC’s family-influenced strategy to only grow its liner business organically means it needs to be more aggressive in its markets to underpin the injection of additional capacity.

Teaming up with Maersk in the 2M alliance in January 2015 has seen stronger growth organically for MSC than its VSA partner has managed via acquisition, and there are some concerns emerging that it is lagging.

Source: The Loadstar

emissions

The UK should include aviation and shipping in net zero emission goal

The aviation and shipping sectors should formally be included in Britain’s target to cut its greenhouse gas emissions to net zero by 2050, the government’s climate advisers said on Tuesday.

Britain earlier this year became the first G7 country to set a net zero emission target although the shipping and aviation sectors were not explicitly included in the goal.

Combined the two sectors account for around 5% of global greenhouse emissions but if left unchecked this is expected to grow significantly, particularly as passenger flying numbers increase.

“Now is the time to bring the UK’s international aviation and shipping emissions formally within the UK’s net-zero target. These are real emissions, requiring a credible plan to manage them to net-zero by 2050,” Chris Stark, chief executive of the Committee on Climate Change (CCC), said in an email.

The CCC said, in a letter to Britain’s transport minister, Grant Shapps on Tuesday, emissions from aviation could be reduced by around a fifth by 2050 by using sustainable biofuels, improving fuel efficiency and limiting demand growth to at most 25% above current levels.

It said zero-carbon aviation is unlikely to be feasible by 2050 and that greenhouse gas removal methods would be needed to offset remaining emissions.

The CCC said the government said could establish a market for scalable greenhouse gas removal solutions, such as bioenergy carbon capture and storage, which sees emissions from lower carbon biofuels captured and stored to prevent them going into the atmosphere.

In the shipping sector zero carbon or near zero carbon could be feasible by 2050 the CCC said, if there is a widespread adoption of cleaner and as yet mostly so far untried fuels such as hydrogen or ammonia.

The CCC advice came as several ports, banks, oil and shipping companies on Monday launched an initiative which aims to have ships and marine fuels with zero carbon emissions on the high seas by 2030.

The International Civil Aviation Organization has committed to a target of halving net emissions by 2050, compared to 2005 levels and is working on a Carbon Offsetting and Reduction Scheme for (CORSIA) which requires most airlines to limit emissions or offset them by buying credits from environmental projects.

The CCC, which is independent of the government, is chaired by former British environment secretary John Gummer and includes business and academic experts.

Source: Reuters.com