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HMRC

UK Tariff Changes announced from 1st January 2021

From 1 January 2021, the UK will apply a UK-specific tariff to imported goods.

This UK Global Tariff (UKGT) will replace the EU’s Common External Tariff, which applies until 31 December 2020.

The new tariff is tailored to the needs of the UK economy. It will support the economy by making it easier and cheaper for businesses to import goods from overseas. It is a simpler, easier to use and lower tariff regime than the EU’s Common External Tariff (EU CET) and will be in pounds (£), not euros.

The UKGT also expands tariff free trade by eliminating tariffs on a wide range of products. The UKGT ensures that 60% of trade will come into the UK tariff free on WTO terms or through existing preferential access from January 2021, and successful FTA negotiations will increase this.

This will lower costs for businesses, ensuring they can compete on fair terms with the rest of the world, as well as keeping prices down and increasing choice for consumers.

The Government is maintaining tariffs on a number of products backing UK industries such as agriculture, automotive and fishing. This will help to support businesses in every region and nation of the UK to thrive. Some tariffs are also being maintained to support imports from the world’s poorest countries that benefit from preferential access to the UK market.

The UKGT was designed following widespread engagement with businesses across the UK. As it will come into force on 1 January 2021, it’s important that businesses can familiarise themselves with the new tariff regime ahead of this date.

The Government are backing UK industry by:

Maintaining tariffs on agricultural products such as lamb, beef, and poultry.
Maintaining a 10% tariff on cars.
Maintaining tariffs for the vast majority of ceramic products.
Removing tariffs on £30 billion worth of imports entering UK supply chains. 0% tariffs on products used in UK production, including copper alloy tubes (down from 5.2%) and screws and bolts (down from 3.7%).

UK consumers will also benefit from more choice and lower costs on numerous goods thanks to zero tariffs. These include, for example:

Dishwashers (down from 2.7%).
Freezers (down from 2.5%).
Sanitary products and tampons (down from 6.3%).
Paints (down from 6.5%) and screwdrivers (down from 2.7%).
Mirrors (down from 4%).
Scissors and garden shears (down from 4.7%).
Padlocks (down from 2.7%).
Cooking products such as baking powder (down from 6.1%), yeast (down from 12%), bay leaves (down from 7%), ground thyme (down from 8.5%) and cocoa powder (down from 8%).
Christmas trees (down from 2.5%).

The Government will promote a sustainable economy by cutting tariffs on over 100 products to back renewable energy, energy efficiency, carbon capture, and the circular economy. The following are all dropping to zero tariffs:

Thermostats (down from 2.1%).
Vacuum flasks (down from 6.7%).
LED lamps (down from 3.7%).
Bike inner tubes (down from 4%).

Almost all pharmaceuticals and most medical devices (including ventilators) are tariff free in the UKGT. However, some products used to fight COVID-19 maintain a tariff. To ensure those working on the frontline can access vital equipment easily, the UK has introduced a temporary zero tariff rate on these products. This relief waives the tariff and VAT for personal protective equipment (PPE), medical devices, disinfectant and medical supplies from non-EU countries.

The UKGT will apply to all goods imported into the UK unless:

An exception applies, such as a relief or tariff suspension
The goods come from countries that are part of the Generalised Scheme of Preferences
The country you’re importing from has a trade agreement with the UK

It only shows the tariffs that will be applied to goods at the border when they’re imported into the UK.

It does not cover:

Other import duties, such as VAT
The precise details of trade remedies measures
Other restrictions on imports, such as anti-dumping, countervailing or safeguards

Goods covered by a tariff-rate quota:

Some products are covered by a tariff-rate quota. This allows a limited amount of a product to be imported at a zero or lower tariff rate.

The limit may be expressed in units of:

weight
volume
quantity
value

If this limit is exceeded, a higher tariff rate applies.

If there is a tariff-rate quota on your product, you can apply to import a limited amount at a reduced rate of customs duty.

Some tariff-rate quotas are only applicable to products imported from a specified country.

Please follow the below link to check the tariffs that will apply to goods you import from 1 January 2021.

https://www.gov.uk/check-tariffs-1-january-2021

If you need any help or support please contact us.

One Manato

$586m loss hits ONE’s parent carriers

Japanese merged carrier Ocean Network Express (ONE) recorded a net loss of $586m in its first year of operation, however it said it expected to move into the black in its second year. 

ONE, formed from the container businesses of K Line, MOL and NYK,was supposed to produce synergistic returns for its parents. Instead it has dragged down the P&L accounts of the trio, which announced annual results today.NYK, which holds a 38% equity stake in ONE, posted a massive group loss of ¥44.5bn ($400m) for the year, prompting the replacement of Tadaaki Naito as president. The company said  it resolved a change of its chairman, president and representative directors. The new president will be Hitoshi Nagasawa, currently executive vice president corporate officer.
And, like its compatriots, NYK also underestimated the cost of ending its legacy liner business. It said it suffered “higher than expected one-time costs required to terminate the container shipping business”, which included severance payments to agents and penalties incurred on returning surplus containerships to owners earlier than the charter party expiry dates.

K Line recorded a loss of ¥11bn ($99m) for the year, citing red ink incurred from its 31% stake in ONE as the primary reason.

Only MOL, which also has a 31% holding in ONE, managed to stay in the black for the year, achieving a positive result of ¥27bn ($240m), mainly attributable to good performances from its dry bulk and energy transport businesses.

But the carrier noted the business performance from ONE had resulted “in a significant deficit” from the sector.

The botched launch of ONE on 1 April last yearresulted in a significant loss of business and an estimated $400m impact on the bottom line.

Chief executive Jeremy Nixon explained to investors in November that management had “underestimated the initial launch resource requirement”, causing chaos on operations desks throughout the new organisation and obliging loyal Japanese trading house customers to book their containers with other carriers.

On the key Asia-Europe and transpacific tradelanes, it took ONE several months to regain customer confidence and thus restore load factors to acceptable levels.

For the full-year utilisation levels recovered to 87% and 88%, respectively for the Asia-US and Asia-Europe headhaul routes, having plunged below 70% in the first quarter.

Turnover in the first 12 months was $10.9bn, but ONE is seeking to improve its revenue in year two by 17% to $12.7bn and is targeting a profit of $85m.

ONE is more optimistic about growth than some of its peers and is projecting a 4% increase in demand.

“Profit is expected to gradually recover throughout H1, with improved lifting,” said ONE, adding it expected that liftings would be restored to the pre-integration levels of the three carriers during the period.

It said however that in the first three months of the calendar year, and the carrier’s Q4, trade had been “relatively weak” eastbound between Asia and the US “due in part to a backlash downturn from the earlier rush demand ahead of additional US tariffs on China”.

In regard to the Asia to Europe tradelane it said that although long-term contracts had improved, soft demand following the Chinese new year had resulted in a decline in spot rates.

ONE said that its action plan for profit improvement was to “establish an organisation that can tolerate market volatility” advancing the carrier from a period of “stabilisation” to a secondary stage of “reformation”.

The four parts of its 2019 action plan are: cargo portfolio optimisation; product rationalisation; an organisation restructure and an increase in the targeted $1bn cost saving synergies from the merger to 96% this year, from the 82% achieved in the first year.

Source: The Loadstar

Heathrow Cargo

Air Cargo figures start the year strong according to IATA

The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 8.0% in January 2018 compared to the year-earlier period. This was up from the 5.8% annual growth recorded in December 2017. 

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.2% year-on-year in January 2018.

The continued positive momentum in freight growth into 2018 reflects the fact that demand drivers for air cargo remain supportive. Global demand for manufacturing exports is buoyant and meeting this strong demand is leading to longer supply chain delivery times. Demand for air cargo may strengthen as a result, with companies seeking faster delivery times to make up for longer production times.

“With 8% growth in January, it’s been a solid start to 2018 for air cargo. That follows an exceptional year in which demand grew by 9%. We expect demand for air cargo to taper to a more normal 4.5% growth rate for 2018. But there are potential headwinds. If President Trump follows through on his promise to impose sanctions on aluminium and steel imports, there is a very real risk of a trade war. Nobody wins when protectionist measures escalate,” said Alexandre de Juniac, IATA’s Director General and CEO.

All regions reported an increase in demand in January 2018.

Asia-Pacific airlines saw demand in freight volumes grow 7.7% in January 2018 and capacity increase by 2.2%, compared to the same period in 2017. The increase largely reflects the ongoing strong demand experienced by the region’s major exporters, China and Japan which has been driven in part by a pick-up in economic activity in Europe. However, the upward-trend in seasonally-adjusted volumes has paused.

North American airlines’ freight volumes expanded 7.5% in January 2018 year-on-year, as capacity increased 4.2%. The strength of the US economy and the US dollar have improved the inbound freight market in recent years. However, this may be offset by the weakening in the dollar although the recently-agreed US tax reform bill may help to support freight volumes in the period ahead. Seasonally-adjusted volumes are broadly trending sideways.

European airlines posted a 10.5% increase in freight volumes in January 2018. Capacity increased 5.3%. The strong European performance corresponds with a very healthy demand for new export orders among the region’s manufacturers. Seasonally-adjusted volumes jumped 3% in month-on-month terms in January – the largest increase since March 2017.

Middle Eastern carriers’ freight volumes increased 4.4% year-on-year in January 2018, the slowest growth of all regions. Capacity increased 6.3%. Seasonally adjusted freight volumes continued to trend upwards during the first month of the year, however, the region’s carriers remain affected by the ongoing challenging political environment in the Middle East.

Latin American airlines experienced a growth in demand of 8.0% in January. Capacity increased 5.4%. The pick-up in demand comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.

African carriers’ saw freight demand increase by 12.9% in January 2018 compared to the same month last year. The increase was helped by very strong growth on the trade lanes to and from Asia. Freight demand jumped by 59% between Africa and Asia in 2017 following an increase in the number of direct flights between the continents, driven by ongoing foreign investment flows into Africa.

Source: IATA

air freight

Air freight volumes at their strongest year of growth since 2010

The International Air Transport Association (IATA) released full-year 2017 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs) grew by 9.0%. This was more than double the 3.6% annual growth recorded in 2016.  

Air cargo’s strong performance in 2017 was sealed by a solid result in December. Year-on-year demand growth in December increased 5.7%. This was less than half the annual growth rate seen during the middle of 2017 but still well above the five-year average of 4.7%. Freight capacity grew by 3.3% year-on-year in December.

Full-year 2017 demand for air freight grew at twice the pace of the expansion in world trade (4.3%). This outperformance was a result of strong global demand for manufacturing exports as companies moved to restock inventories quickly.

Industry-wide FTKs grew by 9.0% year-on-year in 2017 as a whole, up from 3.6% in 2016 and the strongest calendar-year of growth since 2010.  Demand grew three times faster than capacity in 2017, which drove a further recovery in the freight load factor. 2017 was also the strongest year of global goods trade growth since 2011.

“Air cargo had its strongest performance since the rebound from the global financial crisis in 2010. Demand grew by 9.0%. That outpaced the industry-wide growth in both cargo capacity and in passenger demand. We saw improvements in load factors, yields and revenues. Air cargo is still a very tough and competitive business, but the developments in 2017 were the most positive that we have seen in a very long time,” said Alexandre de Juniac, IATA’s Director General and CEO.

“The outlook for air freight in 2018 is optimistic. Consumer confidence is buoyant. And we see growing strength in international e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals. Overall the pace of growth is expected to slow from the exceptional 9.0% of this year. But we still expect a very healthy 4.5% expansion of demand in 2018. Challenges remain, including the need for industry-wide evolution to more efficient processes. That will help improve customer satisfaction and capture market share as the expectations of shippers and consumers grow ever more demanding,” said de Juniac.

Airlines in all regions reported an increase in demand in 2017.

Asia-Pacific carriers saw demand in freight volumes grow 5.6% in December 2017 compared to the same period in 2016 and capacity grow by 2.2%. This contributed to a growth in freight demand of 7.8% in 2017 compared to 2016. Capacity increased 1.3%. The strong performance of Asia-Pacific carriers in 2017 largely reflects the ongoing demand for exports from the region’s major exporters China and Japan which has been driven in part by a pick-up in economic activity in Europe and a continued solid performance from the US. This is expected to support demand into the New Year.

North American airlines saw freight demand increase by 5.4% in December 2017 year-on-year and capacity increase of 2.2%. This contributed to an annual growth in 2017 of 7.9%.  Capacity grew by 1.6% in the 2017 calendar year. The strength of the US economy and the US dollar have improved the inbound freight market in recent years. Looking towards 2018, the recently agreed US tax reform bill may help to support freight volumes in the period ahead although this may be offset by the recent weakening in the dollar.

European airlines posted a 5.0% year-on-year increase in freight demand in December and a capacity rise of 3.2%. The strong performance in December boosted cargo volumes for the 2017 calendar year by 11.8% – the largest increase of all regions with the exception of Africa. Capacity in the region increased by 5.9% in the 2017 calendar year. This is consistent with Europe’s manufacturers’ export orders growing at their fastest pace on record. This is expected to support demand into the New Year.

Middle Eastern carriers’ freight volumes increased 6.3% year-on-year in December and capacity increased 4.7%. This contributed to an annual increase in demand of 8.1% in 2017 – the third fastest growth rate of all the regions. Capacity increased 2.6%. However, having not seen the strong upward demand of other regions in the first half of 2017, Middle-Eastern carries’ share of global demand dropped for the first time in 18 years.

Latin American airlines experienced a growth in demand of 4.9% in December and a capacity increase of 11.6%. This contributed to an annual growth in freight demand of 5.7% and a capacity increase of 3.1% in 2017. This was the first increase in annual demand in two years. The pick-up in demand comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.

African carriers’ posted the fastest growth in year-on-year freight volumes, up 15.6% in December 2017 and a capacity increase of 7.9%. This contributed to an annual growth in freight demand of 24.8% in 2017 – the fastest growth rate of all regions. This is only the second time African airlines have topped the global demand growth chart since 1990. Capacity in 2017 increased 9.9%. Demand has been boosted by very strong growth in Africa-Asia trade which increased by more than 64% in the first eleven months of 2017.

IATA stated that 2017 will be remembered as the best year for growth in air cargo. With growth comes additional challenges, therefore, it is important that the industry continues to transform and embrace new technologies. As Alexandre de Juniac, IATA ‘s Director and CEO says, “2017 was the strongest year for air cargo since 2010. There are several indicators that 2018 will be a good year as well. In particular, buoyant consumer confidence, the growth of international e-commerce and the broad-based global economic upturn are cause for optimism as we head into the New Year.”

To read the full report please go here

 

calm sea

Calmer seas for world Shipping in 2018

The 2018 marine forecast for transpacific and other major shipping trade routes notes that full recovery depends on a number of political, economic and technological factors.

China is also a concern.  “I know analysts have been harping on about it for years,” said Transport Intelligence Ltd. economist David Buckby, “but I think given what the Chinese government has said following the 19th [Communist] Party congress – that it will be switching focus from meeting long-run economic growth targets to other objectives – coupled with recent comments on trying to manage down debt, there is a real chance that Chinese growth will stutter.”

Buckby said the slowdown might not occur in 2018, but it will likely happen over the next few years.

“As the linchpin of so many global supply chains, what affects China is going to impact the rest of the world. I don’t know exactly when that’s coming, but when it does, I think it will adversely impact global port volumes quite significantly.”

McKinsey & Co.’s Container Shipping: The Next 50 Years also points to warning signs about China’s retooled economic development model. It estimates that the swing away from exports of goods to a model based on consumption and services has coincided with a drop in China’s real gross domestic product to between 6% and 7% from more than 10%.

Asia, and China especially, are major containerised-shipping drivers. Asia accounted for 64% of the world’s container throughput in 2016, and McKinsey notes that China imported and exported 52 million 20-foot equivalent units (TEUs) in 2015 compared with 13 million in 2000. It also maintained that China’s dramatic growth and the resultant boom in container trade over the past three decades is unlikely to be repeated elsewhere in the world.

But John Murnane, a partner in McKinsey’s travel, transport and logistics practice, noted in an email response to Business in Vancouver that in the near term, continued growth in container-shipping demand is likely.

“The U.S. and Canada continue to grow strongly, and volumes in 2017 outpaced expectations. This is good news for all ports and terminals. We expect 2018 to continue this strong volume growth.”

Oxford Economics agrees. The U.K.-based economic research company raised its global GDP growth forecast to 3.2% in 2018 from 2.9% in 2017 based on what it sees as a continuing strong performance of the world economy and positive “omens for 2018.” Its December 4 global outlook research briefing pointed to four key reasons for that optimism: strong trade growth, low inflation, robust emerging markets and resilience to political uncertainty.

In a November brief, it also revised its world trade forecast up 0.5 percentage points to 4.2%.

Oxford Economics’ forecast for Canada predicts that exports will rise 2.9% in 2017 and 4% in 2018. It sees imports up 3.7% in 2017 and 2.4% in 2018, but Canada’s GDP growth slipping to 2.1% in 2018 from 3% in 2017.

The International Monetary Fund’s World Economic Outlook, meanwhile, projects global economic growth of 3.6% for 2017 and 3.7% in 2018.

In its 2017 nine-month financials, Hapag-Lloyd (ETR:HLAG), the world’s fifth-largest ocean container company, noted that global container-shipping volume from 2018 through to 2021 is projected to increase between 4.8% and 5.1%.

The United Nations Conference on Trade and Development’s Review of Maritime Transport 2017, meanwhile, pointed to CETA and the economic partnership agreement concluded between Japan and the EU in July as positive developments for global trade and shipping. It added that the growth of cross-border e-commerce could also drive long-term container-shipping demand.

However, it noted that a sustained recovery will require a strong commitment to “coherent and co-ordinated multilateral policies.” It also red-flagged the growing cybersecurity threats to world shipping supply chains.

While Buckby agreed that CETA will benefit port volumes, he doubted that it would significantly increase cargo through Vancouver and other Canadian ports.

“The dirty secret of many free-trade deals is that they don’t tend to have a substantial economic impact, especially if they just address tariffs, which tend to be low anyway, and don’t focus much on breaking down non-tariff barriers.”

Buckby added that port volumes would drop if NAFTA collapses.“And even if it is successfully renegotiated, supply chains still face disruption, thanks to possible changes to rules of origin.”

The newly widened Panama Canal has also opened the way for larger transpacific ships to reach East Coast ports directly. Infrastructure and operations in those ports consequently face similar pressures.

Port productivity suffers because a mega-container ship can take up to five days to unload. “Some ports are rising to the challenge and investing, but smaller ports and constrained ports risk losing some mainline services.”

Source: Hellenic Shipping News

digital age

Can container shipping reinvent for the digital age?

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

McKinsey & Company predicted:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

container port

August was an all time high for container ports

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

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

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

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

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

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

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

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

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

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

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

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

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

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

•Source ISL / Port Strategy

 

sea freight

Sea Freight – Why use us?

 

We handle all types of cargo including:

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

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

What are the advantages of sending your goods by sea?

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

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

It’s more environmentally aware –  and reduces ecological footprint

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

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

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

 

 

why use us air freight

Air Freight – Why use us?

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

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

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

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

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

Arrange daily nationwide collections

Offer an Air Freight consolidation service

Offer Direct and indirect shipment options

Create house airway bills on your behalf

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

Why not contact us and see what we can offer?

enquiries@supremefreight.com

02380 337778

golden week

ALERT: Golden week and the implications for shippers

As part of celebrations for golden week, also called National Day, a major holiday is coming up in China from Saturday 1st October for a week, officially ending on the 7th but with effects lasting until the 10th.

It has been celebrated in mainland China and Hong Kong since 2000. The holiday was implemented by the Government to encourage domestic tourism and allow families to make long distance trips. This means that businesses come to a standstill.

All businesses will be closed, cargo flights are cancelled and ports operate on basic crews. Shipping quotes will be hard to obtain as nothing moves in or out.  Vessels are usually under capacity at this time so don’t sail.

Our advice is plan ahead! Contact us as soon as possible for rates and availability to secure your shipment in time. Please also be advised that there will be a back log of orders and freight after golden week which will mean that space will be at a premium.  If a shipment is time critical it is important to be organised before next week.

You can submit an enquiry through our website, send us an email or call us on 02380 337778.

We look forward to hearing from you.