As a new importer or exporter in the industry, a valuable resource to consider is the US Customs and Border Protection (CBP) agency, which provides expert information and great tips. CBP recommends that you familiarize yourself with its policies and procedures before you export/import your goods. The agency has assembled many Informed Compliance Publications (ICPs) that offer guidance on a many trade-related topics. Additionally, it provides a complete directory of the various ports of entry in the US and maintains a database to research topics (by questions-and-answers) and CROSS, a directory of CBP past rulings. So take advantage of this valuable asset, to be in compliance with export/import policies and procedures!
Source: US Customs and Border Protection
The prices for airfreight between Europe and the US reached unprecedented levels during November-December 2017. This was due to the strike by ground handling agents in Frankfurt, Germany, weather delays and the business environment. Additionally, the e-commerce industry has increased demand for using airplanes to satisfy their clientele. European shipments to Kennedy airport in NY range from $5-$10 per kilo – the normal being $1-$1.30; time-sensitive cargo can exceed $20 per kilo. Customers are willing to pay more money to get their products quicker. Utilizing trucks or container ships are cheaper options, but take longer to transport goods. Industry experts anticipate that capacity will tighten further in the coming years between Asia and the US, due to China’s rising middle class.
The Iranian tanker sank in the East China Sea has generated a large oil slick, making it the worst oil ship disaster since 1991! On Jan. 6th, the tanker, Sanchi crushed into the freighter, CF Crystal and sank on Jan. 14th. Strong winds pushed it into Japan’s economic zone. Rescue efforts failed and the 32 crew members on board vanished.
The explosion and sinking occurred in the East China Sea which harvests seabeds for fish spawning and an abundant marine ecosystem that includes whales, porpoises and seabirds. Greenpeace stated that this sea area is a wintering ground for such fish as hairtail, yellow croaker, chub mackerel and blue crab. It is also a migratory pathway of many mammals like the humpback, right and gray whales. There is much concern that the sinking will likely discharge the tanker’s bunker fuel, contaminating the surrounding waters and marine eco-life.
China, along with Japan and South Korea coordinated rescue and clean-up efforts at the accident site and have successfully cleaned 225 square nautical miles. Plans are underway to clean the residual oil under water, assisted by robots. Ships, planes and remote satellite sensing equipment were used to monitor the sea surface. The area of the oil slick zone has successfully shrunk from 328 to 30 square kilometers and fishermen are now able to enter the sea with a radius of 30 nautical miles around the sinking site.
The ACI (Airports Council International) trade association for airports across the world announces Airfreight volumes steadily increasing at a rate of 5.3 percent year over year.
“Airfreight numbers will likely exceed 7 percent global growth by the end of 2017, almost double 2016’s 4 percent,” ACI said.
The Middle East and Asia-Pacific regions specifically saw growths at 1.3 % and 2.26 %, while other areas saw an overall 5% rate of growth. Europe alone achieved 7.6% growth with North America trailed very closely behind at 7.4%. A strong global recovery in industrial production and trade appear to be the keys to the reason for the rapid growth between 2016 and 2017.
However, while cargo demand remains strong, there are some indicators to show that the industry may have passed its crowning for growth. According to Alexandre de Juniac, IATA’s Director General and CEO, “Tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010.”
Tracking of the inventory-to-sales ratio in the USA appears be horizontal, which would indicate that the time period when companies have historically looked to restock inventories quickly, often times supporting the improvement in numbers displayed with air cargo may have ended.
However, the cargo business continues to benefit from a strong recurring increase in volumes showing they are expected to grow by 4.5% in 2018 (Although, this is down from the 9.3% growth of 2017). Again, the shot in the arm of volumes in 2017 was primarily the result of companies needing to restock inventories rapidly in order to meet unexpected strong demand.
Overall, the stronger economic and trade conditions, including strident rises in consumer confidence, are expected to support the demand into 2018, despite the expected decline of air freight volumes from the reduction of rapid inventory stocking.
China recently announced import tariff cuts on food and consumer products such as air conditioners, medicines, blankets, waterproof footwear, refrigerators, freezers, washing machines, electric shavers, coffee makers and toasters. Food items include: grated/powered cheeses, macadamia nuts, infant food and whisky. The tax reductions will be significant, averaging 56% and will impact a dozen US agricultural products; this will assist the US in regaining its market share, which was lost to competitors who have established free trade agreements with China. But, catching up is hard to do, since American products face higher tariff levels than their global competitors!
Severe winter weather; ELD (electronic logging device) mandate; driver and equipment shortages; and the upcoming Lunar New Year. You might ask: what do all of these things have in common? Well, all you have to do is remember the first lesson you learned in economics class to identify the common theme: Supply and Demand! When there is a plethora of demand and an extreme lack of supply, issues will indeed surface. Then if you add additional obstacles and pressures to the supply that does exist you begin to face a crisis situation. This could also be labeled as a “Perfect Storm” and that is exactly what is occurring in the US Inland/Domestics Surface Transportation Market.
We at RCL Agencies currently see this US surface transport capacity issue as one of the biggest challenges the US Supply Chain Industry will face in 2018. Not to mention, all of these factors affecting the US Surface Transport Market are going to put
major upward pressure on the pricing associated with these moves, as well. Some of you are already feeling the impact of this. In many instances, we are seeing carriers booked out up to two weeks in advance, and we don’t see this letting up anytime soon. We are also starting to see price increases in the neighborhood of 20% in some US regions.
So this might raise the question: What can we do to help lessen the impact these capacity issues may have on our business? When thinking through the best answer to this question, two prominent words come to mind: Planning and Collaboration!
To elaborate on these two words a little further and put it into context based on the scenario at hand:
- Plan internally to reexamine budgeting throughout your organization. In order to ensure that you budget for the cost associated with these higher US surface transport cost.
- Plan and collaborate with your production and supplier networks to work towards increasing your production lead times, in order to be as prepared as possible for any delays and capacity issues that may arise.
- Openly communicate with your customers about these issues and your contingency plans, in order to minimize any last minute surprises (such as delayed order deliveries).
- Collaborate with us and any of your other brokers and/or carriers to provide us/them with the most accurate projections for your freight volume needs. Providing as much advance notice as possible for your freight volumes will help you capture more successes than failures, when securing domestic/inland transport capacity.
All of these important tasks will assist your organization in becoming more flexible when it comes to moving your US surface freight. Flexibility will become one of the most important factors as capacity grows tighter.
To recap, if you are able to plan and collaborate through budgeting, increasing production and order lead time, openly communicating with your customers about the current US surface transport issues and collaborating with your US surface transportation vendors, by providing as much advance notice and analysis on your freight volume requirements, then you will be in a much more competitive position to weather this domestic/inland US surface transport capacity storm!
RCL Agencies is here to support you, so rest assured that we will continually and tirelessly do everything in our power to ensure that your loads get covered so that you can continue to focus on growing your core business. That is exactly why we define our mission as follows: To provide the most efficient, reliable, personalized supply chain solutions and information to our customers, allowing them to focus on further development and growth of their core business.
Here are just a FEW examples of why partnering with us is the right decision to help minimize the impact this capacity crunch may have on your organization:
- We always strive to be the “Shipper of Choice” for our diverse group of core domestic carriers, by providing them with year-round volumes, consistency and a partnership approach. In order for us to maintain these strong partnerships though, we must rely on the information our customers provide us in regards to their freight volume needs. So we urge you to please communicate this information to us, as soon as possible.
- We are a true multimodal supply chain service provider, so we can provide our many different types of customers with a full arsenal of options to assist them with getting their product delivered.
Hopefully, this has given you a little further insight into the current US supply chain challenges at hand, as well as provided your organization with some potential solutions to assist in working through this US domestic/inland surface transportation capacity crisis. We are here to help, so please do not hesitate to reach out to our sales team, www.oceanfreight.com , if a need arises.
Additionally, we would like to thank our current customers and international partners in advance for your continued patience and support. As we work through these capacity challenges to find the most fitting solution for moving your freight.
Containers that have been sold or are lost or stolen, or tied up in a bankruptcy case, can now be easily identified via new features in a nonprofit database, known as BoxTech, the Journal of Commerce reports.
The database was launched in July 2016 by the Bureau International des Containers (BIC) includes information on more than 30 percent of the global container fleet. One new function allows owners to indicate when containers have been sold. The This will help shippers to avoid problems stemming from the inadvertent use of a container that has changed hands or otherwise has a “special status,” such as being part of a bankruptcy.
A second new feature, called a “recovery alerts system,” enables users to create a list of containers of interest that are then searched in the database to see they are involved in a bankruptcy situation, or are lost or stolen. Users that search the database for a specific containers will be alerted if has been sold and is no longer part of a company’s fleet.
Users can also do an increased number of queries on the database, as a result of the implementation of new application programming interfaces (APIs), BIC said. These include increased automation of the process by which container owners update their information and others that enable users to search the database by rate weight, size and type, maximum ross mass and other characteristics.
Initially the BoxTech was introduced to help shippers meet the demands of the International Maritime Organization’s Safety of Life at Sea (SOLAS) regulations, which requires shippers to submit the weight of any container being shipped before it is loaded onto a vessel.
Some shipping lines like, Maersk Line and CMA-CGM are already using the new tools. Both lines have uploaded their entire global container fleets to the database and are now flagging units whenever they are sold.
South Florida drayage companies say their drivers are protesting at Port Miami container terminal , as the Journal of Commerce reports.
The boycott of Port of Miami Terminal Operating Co. (POMTOC) started late last week by independent owner-operators against slow turn times that have stuck truckers and beneficial cargo owners (BCOs) with costly penalties.
Drayage operators said that although several terminals at Miami and Port Everglades have had delays of varying severity and duration in recent months, drivers apparently targeted POMTOC because turn times had been longest there.
According to the drayage operators the turn times of three hours had been common, and in extreme cases have been as long as eight hours, which makes it impossible for drivers to complete more than one trip in a day.
The cause of the recent delays is unclear. POMTOC officials didn’t give any comments yet.
The Miami delays are generating demurrage charges for late pickup of cargo and detention charges for late return of equipment. The US Federal Maritime Commission plans to hold hearings on Jan. 16 to 17 on a shipper-led coalition’s complaint about the imposition of congestion-related fees resulting from high volume, weather, labor, or other issues beyond a BCO or trucker’s control.
Please be guided accordingly. RCL will provide more updates once available.
Strike action by the Receita Federal (customs) in Brazil has entered its fourth week and is now causing severe delays for shippers and carriers alike, according to the Journal of Commerce.
The containers at port of Santos are being delayed between five days and week, according to the Sao Paulo and Santos Ship agents Association (Sindamar) and other sources in the port city, which said that containers are missing their sailings and racking up detention and demurrage fees.
Adding to the trouble, officials in the tax analysts section of the Receita Federal have joined the strike and delays are also mounting at key border crossings, particularly along the borders with Argentina and Paraguay.
Many transshipment connections in Santos have been broken, spreading the delays well beyond Brazil.
Please be guided accordingly. RCL Agencies will provide more updates once available.