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The Deep Green Sea

The Deep Green Sea

Socially responsible shippers will have far greener shipping options as the world’s oceans go green, or greener, over the next few years. Industry leaders are racing to incorporate sustainable shipping technology into fleets to comply with regulations mandated by the International Maritime Organizations (IMO), the United Nations agency responsible for ocean shipping and clean oceans. Currently, more than 90 percent of global trade is transported by sea with the industry generating approximately 3 percent of global greenhouse gas emissions. Agency predictions show that without regulation, shipping emissions could skyrocket 50 percent to 250 percent by 2050.

Regional regulation of sulfur oxides (SOx) rolled out this past January with the adoption of MARPOL Annex VI for the prevention of air pollution from ships. Ships trading in Emission Control Areas (ECA), including Canada, the United States and northern Europe, made the costly switch from fuel with 1 percent sulfur content to 0.1 percent or less, to combat acid rain and improve air quality. The website of French shipping giant CMA CGM states the change in fuel costs more than $100 million every year, inflating expenditure.
In 2016, regulations around nitrous oxide (NOx) kick in, with carbon dioxide (CO2) regulations arriving in 2018. Water ballast management systems will also be regulated, though dates have not been set. Managing water ballast prevents disruption of marine ecosystems by non-native species such as zebra mussels, introduced to the Great Lakes from Europe’s Black Sea by ship, resulting in displacement of native species from Canada to Mexico. The IMO emissions regulations follow implementation of mandatory 2013 Energy Efficiency Design Index (EEDI) for new ships and the Ship Energy Efficiency Management Plan (SEEMP) for all ships.

Emerging Environmental Ships
Most companies have been slow steaming, traveling at 21 knots per hour versus design speed, to reduce emissions and fuel consumption. Proactive companies have been designing the sea’s most efficient slow steamers.

CMA CGM introduced the CMA CGM Kerguelen, optimized for slow steaming. One of the largest container ships in the world (larger than the Empire State Building, without antennas, according to a 2015 media release), it sails between Europe and Asia powered by an engine that reduces use of fuel by 3 percent and oil by 25 percent. Shipping customers can design shipments with low carbon footprints, using CMA CGM’s Eco-Calculator, based on departures, arrivals, freight volume, fuel consumption and vessel speed.

Other companies have turned away from diesel fuel to cleaner burning liquefied natural gas (LNG). American West Coast ship builder General Dynamics NASSCO recently launched the Issa Bella, the world’s first LNG-powered containership for TOTE, a transportation and logistics company. A second Marlin class ship will be delivered in 2016, and will sail from Florida to Puerto Rico.

NASSCO states that compared to current vessels in Puerto Rican trade, Marlin vessels reduce emissions of SOx by 97 percent, NOx by 60 percent and CO2 by 72 percent. Parker Larson, NASSCO’s director of Commercial Programs, says “LNG is an attractive solution for stringent environmental regulations.” TOTE is the first North American company to build LNG ships and convert its fleet from diesel to LNG, which companies sometimes shy away from due to lack of infrastructure. However, Larson says that with the Marlin class ships, “TOTE has proven this can be done.”

LNG technology will spread as China builds and exports LNG powered vessels, says David Wosicki, chairman of joint U.S.-Sino Hebei SMART Cryogenic Technology Co. Ltd., which custom engineers LNG solutions for global transportation companies. Wosicki says in China, “large companies are being encouraged to build the boats and refilling stations and that’s what they are doing in Tianjin. When the boats are built, the infrastructure will be covered.” Wosicki exports out of the Port of Tianjin and says “boats (were) starting to leave” just days after the massive explosion in a dangerous goods warehouse rocked areas near the port.

Demand for environmental shipping in Asia is high. Barbara Yeninas, spokeswoman for Evergreen Line, says that “environmental protection is a growing concern for cargo owners.” On Aug. 10, Evergreen Group ordered 10 2,800 TEU Class B-type vessels for intra-Asia trade. The new ships enable Evergreen to “help our customers reduce impact on the natural environment in their supply chains,” according to Yeninas. Built by CSBC Corp., the ships include many eco-technologies, including Sea-Sword Bow (SSB) technology, which reduces fuel consumption up to 10 percent, giving “the vessel good transit through waves, which pass by without breaking on the hull.” The ships also “comply with IMO standards for low sulfur fuel and NOx emissions.”

With impending regulations and global competition for sustainable solutions, it’s clear that the tide is rising for the use of green ocean shipping tech.

Seamless International Shipping

For an American company serving the wedding industry, smooth, hassle-free international shipping is just good customer service. It’s a business necessity when the company policy is 100 percent customer satisfaction, as it is at Bumblebee Linens, an online handkerchief and linen store for special occasions, and the source of experience for Steve Chou’s popular blog, My Wife Quit Her Job, which chronicles how to run an online store.

“Shipping internationally can be a major pain,” Chou says, “especially from a customer service perspective.” The Bumblebee Linens founder recommends: “Err on the side of charging more and taking extra special care of those customers.” When his company ships to Canada and timing is crucial, Chou uses UPS and FedEx door-to-door services.

When an American company uses a global door-to-door service, the process should be simple, whether they’re shipping to Canada or Rio de Janeiro, Brazil. “Ideally, it’s no different than shipping domestically for the shipper,” says James Vitez, president and owner of KMX International, a global third-party logistics provider located in Hamburg, Pennsylvania. “It’s simply a matter of having the package picked up, loaded, transported, unloaded and delivered.”

While global door-to-door shipping shouldn’t be complicated for the shipper, it is a complex process. “It becomes a maze to move something door to door internationally,” says Vitez. An American shipment headed for South America may go through five or six different scopes of work—with each one separately regulated—before it arrives at the customer’s door.

SELECTING A DOOR-TO-DOOR PARTNER
Currently, competition between global door-to-door providers is high. Over the last 15 months, U.S. exports have declined along with the U.S. dollar and “many more [are] out there seeking less work,” says Vitez. Providers include freight shippers, which make shipping bookings and outsource the process to competitive vendors, trucking companies offering global logistical services, and third-party logistics companies.

Providers may outsource the work to five or six different vendors, from trucking companies to packaging contractors to cargo loading facilities at a port, and then the reverse at the country of destination. Other companies outsource to a single-source partner responsible for all or most of the work, using company-owned assets, such as warehouses, trucks, packing facilities, cranes and employees. “This reduces risk and increases security,” says Vitez, whose company owns 75 percent of its assets and serves freight forwarders as well as manufacturers.

Beyond assets, seamless shipping extends to global relationships. Vitez says the “object is to find the person working in the freight-forwarding industry who is very strong in shipment in and out of Brazil, for example.” The person may have an office in a country and stay updated and know the resources.

PREPPING FOR THE BIG MOVE
Preparing an international door-to-door shipment can start up to a year in advance. The two main factors affecting a shipment are the size, weight and magnitude of the cargo being moved and the destination.

Shippers should start by compiling a detailed packing list. “Itemize every piece to ship,” Vitez advises. A good situation is when a company shipping a machine with 27 pieces emails the dimensions and weights of each piece, provides a destination such as South America and an origin, like Milwaukee, Wisconsin. With this information, Vitez can offer a “ballpark number that doesn’t move too much.”

An unhelpful situation is when a shipper calls up wanting to send a machine to China and suggests the logistics provider “look up a picture of it on the Internet,” Vitez says. Providers need to know if a machine is in one or more pieces and the measurements of those pieces.

By providing measurements and the final destination, the shipping path unfolds. Choosing a shipping line comes from knowing what is being shipped and how it is packaged, as some ships only take containers while others have a flat-rack service, Vitez notes. Once a shipping line is selected, a port serving that line is located, as different shipping lines call on different ports and, though there may be a great port close to the global customer, a ship may not call there.

Final shipping details and a firm quote are provided once the terms between a buyer and a seller are set. These can change right up to shipment time. “It can change or limit what a global door to door service provider can offer,” Vitez says. “Someone might add a part to a machine to change the weight and size and this can affect whether the cargo is able to go into a ship container or not.”

While international shipping can be a challenge, it doesn’t have to be hard on a company selling globally. When it comes to “domestic versus global, it’s just contracts versus different contracts. It’s domestic, with trucks and water,” says Vitez.
Using the right global door-to-door partner makes international shipping profitable versus painful.

 

10 FLATBED TRUCKING PROVIDERS

AMERICAN FREIGHT INC.
americanfreightinc.com
With more than 100 years of combined experience in the trucking and freight industry, American Freight Inc. provides full-service transportation in all 50 states, as well as Canada.

RYDER
ryder.com
One of Fortune’s Most Admired Companies in 2015, ranking for global competitiveness and social responsibility, Ryder offers flatbed solutions for industries such as energy and utilities.

ABF FREIGHT
abfs.com
ABF Freight Shipping flatbed service covers commercial heating and air conditioning, electrical transformers, oil and gas and other industries. Trailers eliminate the need to tarp and delivery on flatbeds eliminates roll-offs.

C.H. ROBINSON WORLDWIDE
chrobinson.com
An industry leader, C.H. Robinson is one of the world’s largest third-party logistics providers, having grossed $13.5 billion in 2014. Track flatbed shipments on industry-leading platform Navisphere.

MERCER TRANSPORTATION
mercer-trans.com
Mercer is one of the largest privately held flatbed carriers in the United States and has delivered 3.6 million loads to more than 12,000 customers in North America.

KMX INTERNATIONAL
kmxintl.com
A global provider of door-to-door service, KMX International offers land and flatbed hauling service as well as rail, sea and air transport. The company owns 75 percent of its assets.

AMERICAN LOGISTICS INTERNATIONAL
americanlogisticsintl.com
Based in California, American Logistics International is a full-service global logistics provider. The company is a Regional Center under the EB-5 Immigrant Investor Program.

AMERI-CAN LOGISTICS
ameri-canlogistics.com
Covering 48 states with a flatbed division fleet of more than 45 tractors and 60 trailers, Ameri-Can specializes in North American point-to-point shipping.

MEXICOM LOGISTICS
mexicomlogistics.com
Now headquartered in Montreal, Canada, Mexicom Logistics was founded in Mexico City. With Canadian and U.S. standards, Mexicom expedites Mexican border crossings. Flatbed service comes with specialized equipment like tarps and frames.

TENNESSEE STEEL HAULERS
tenh.com
Tennessee Steel Haulers is a flatbed logistics company based in Nashville, Tennessee, with a growing fleet of 500 professional drivers.

When Saving The Planet Saves Money

HOW LNG AND CNG CARRIERS CAN BOOST YOUR BOTTOM LINE

Diesel was the fuel for trucking fleets in 1980, when United Parcel Service (UPS) launched the first “rolling laboratory.” To reduce emissions, UPS experimented with alternative fuels and technologies, and implemented environmental and economic solutions within fleet.

In 1989, decades before natural gas fueled boardroom conversations, UPS began running “rolling laboratories” of compressed natural gas (CNG) delivery vehicles. In 2000, the company expanded to liquefied natural gas (LNG) in their heavy duty fleet. Between 2013 and 2014, UPS added approximately 1,300 LNG tractors to a base of 113, and built 13 new refueling stations, supporting LNG fleet operations in more than 35 states.

Now, UPS has one of the largest privately held CNG fleets and LNG fleets in the nation. The rewards? Increased environmental benefits (there are more benefits than just carbon), approximately 25 percent to 35 percent lower fuel prices (as fuel costs vary) than imported petroleum, and a near divine reputation for global environmental stewardship.

Michael Britt, director of Maintenance and Engineering at UPS, says the UPS natural gas experience has been very positive. “We’re pleased with our performance and price point,” he says, though he adds UPS is not ready to rest. “It’s very important to continue to improve these products. … Often, the engineers are happy with the status quo. We want them to do more. We understand our responsibility of being good stewards to the planet and whenever we have an opportunity to move forward we do.”

When UPS implemented LNG “rolling laboratories” in 2000, Britt was the operator in charge of operations in California and UPS was a founding Interstate Clean Transportation Corridor (ICTC) fleet partner. UPS developed LNG solutions suited to ICTC’s clean transportation corridors and public LNG stations, connecting California, Las Vegas and Utah. “That corridor is very, very hot and there’s some snow in the north,” Britt says. “Despite the temperatures, we were able to have LNG.” What UPS learned, it shared. “We didn’t want to keep what we learned private. We wanted other companies to pick it up. The more (technology) sells, the cheaper it becomes,” Britt says.

UPS has decades of LNG lessons to share. A domestic fuel source is more secure. “If you have natural gas and your own pipeline, you’re in good shape in terms of fuel supply and the cost,” Britt says.

“You’re not affected by events in places like the Middle East.” Natural gas powered trucks also use far less oil. At first, “we were draining the oil at 10,000 miles,” he continues. But while diesel engines were black, natural gas engines were clean. Now, natural gas engines have a 60,000-mile oil interval and receive scheduled maintenance up to five times less frequently than diesel engines. LNG tractors have no route limits, as they are quieter than diesel.

And driving sustainability engages employees. On a recent trip to Hong Kong, Britt interviewed a driver. “He was just happy to be part of cleaning the environment. It was one of the first things he said.”
So if natural gas offers so many benefits, why doesn’t everyone convert?

Conversion to natural gas is a significantly larger up-front investment and payback can lag. “A natural-gas tractor used to be 40 percent and is now 30 percent higher (than diesel),” says Ike Brown, vice chairman and president, NFI Intermodal at NFI Industries, a supply-chain solutions provider and transportation company. “A diesel truck that costs $100,000 is $140,000 for natural gas.” Tanks cost $30,000 and though prices are falling as manufacturers emerge, Brown says “a natural-gas truck might never come down to the cost of a diesel truck.” Mileage is also key. “A truck doing less than 100,000 miles per year is not economically feasible,” Brown says. “Trucks doing 120,000 miles per year can expect payback in four to five years.”

Cost should not be a barrier, says Tony Kritzer, director of Investor Communications at Clean Energy Fuels Corp., a natural-gas provider operating 535-plus natural-gas stations. “There are no limitations based on the size of fleet. It’s a matter of willingness,” says Kritzer, who adds financing programs are available and the company’s “prices are engineered so payback comes in a reasonable amount of time.”

A trickier barrier is the lack of national natural-gas infrastructure. Operations in California, near Chicago and in Texas “have more options” than other areas of the country, Brown says. However, stations can be custom built. When NFI was without access to natural gas–despite running a project above the Marcellus Shale, a significant natural-gas deposit–Brown says “our partner had to build us a station.” Stations can be built on routes or in yards used daily for refuse companies and public transportation.

Infrastructure is coming along America’s Natural Gas Highway. Companies like Clean Energy Fuels are building LNG fueling stations along the Interstate Highway System of large metropolitan areas.

“While we’re a long way off from having natural gas on all four corners, we are building along dedicated trucking routes,” Kritzer says.

Clearly, natural gas is no longer experimental. As infrastructure and demand for sustainability and lower fuel prices grow, it may not even be “alternative” for long.