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How to Best Prepare for Current (and upcoming) Supply Chain Disruptions

supply chain

How to Best Prepare for Current (and upcoming) Supply Chain Disruptions

Weekly meal planning is a recurring event in our household. Although this activity is not particularly exciting, every Saturday my wife and I sit down to plan out our family meals. This process helps us avoid the mid-week supermarket scramble, as well as sidestep overspending on items we don’t actually need. Sound familiar? Supply chain planning is no different when it comes to yielding efficient results, especially this year.

It’s no secret the way companies ship their freight has shifted due to COVID-19. C.H. Robinson is great at helping customers secure capacity and optimize their global freight across our suite of service offerings as their needs evolve. Due to COVID-19 market changes, our global team of supply chain experts has spent extra time securing expedited less than container load (LCL) capacity for companies that can work with extra lead time. Another big change is how many ghost or charter flights are used to make up for lost capacity from the mass decline in global passenger travel.

However, COVID-19 is not the only event putting pressure on the freight market now. And with passenger travel not expected to recover until 2024, proactive solutions are needed to avoid current and upcoming disruptions.

Prepping for peak shipping season and new tech launches

When it comes to maximizing your global freight, it’s important to take seasonality into consideration. Peak shipping season for global air freight historically begins in October, and we’re already anticipating a busy peak season due to the unbalanced relationship between supply and demand. Even if air freight volumes were consistent or less than previous years, there is a lot less capacity to work with. Additionally, ocean shipping is experiencing a busy peak season now as companies prepare for the holiday shopping surge.

Consumers are also eagerly awaiting new technology releases—including the iPhone 12, Sony PS5, Xbox, and more. High priced commodities, like consumer electronics, primarily ship via air. And while consumer tech launches are not uncommon during the holiday season, the lack of passenger planes aren’t helping the situation this year. This, combined with the volume surge in other commodities related to peak shipping season and continued demand for personal protective equipment (PPE) creates a tighter market.

What can global shippers do to combat tight capacity?

The key is to remain flexible and remember it’s never too late to start planning. Although some items, such as technology, tend to move by air, global shippers can consider shifting other commodities to expedited LCL or expedited full container load (FCL) service to mitigate disruption and stay agile in a tight global freight market.

However, for those shippers that truly depend on air capacity, shifting modes isn’t always an option. So, while ghost flights were a reactive solution for many this past spring, C.H. Robinson took our own planning advice and proactively chartered weekly 747 cargo flights from China to the U.S. from October to November, as well as Europe to the U.S. until the end of the year. Capacity on a 747 cargo aircraft can hold up to five times more freight than an average ghost flight. And our global network of experts knew proactively purchasing that space was necessary as global shippers face peak season, PPE from Asia, and a recovering economy out of Europe. We’re already seeing this approach drive solutions for our customers.

Looking forward to COVID-19 vaccines

COVID-19 vaccines are on the horizon. Once one or more is available for global circulation, it will likely create a significant ripple effect throughout supply chains. Even if your company is not directly connected to distributing or manufacturing a vaccine, the time to start planning alternative modes or routes is now.

Like technology, vaccines primarily ship via air to monitor the temperature and deliver them to market quickly. According to IATA, 8,000 747 flights would be needed to distribute a single dose of the vaccine to 7.8 billion people around the world. Although a vaccine with this large of a global magnitude is new, we can get a sense of the supply chain reaction by looking back at the height of global demand for PPE. Throughout the spring we saw airlines, 3PLs, carriers, companies, and government agencies go above and beyond, working extra hours and expediting products in order to create and deliver PPE around the globe quickly. It’s likely we’ll see the same comradery with the vaccine—pulling manpower and capacity away from other shipping needs.

Although we know air freight will play a vital role in distributing vaccines, last -mile is also an important area companies and logistic professionals are planning for. Last-mile planning will be especially important in countries where road or manufacturing infrastructure may be underdeveloped. However, keep in mind whether your company is involved in vaccine distribution or not, it’s still likely your supply chain will be impacted by higher transportation rates or additional capacity constraints across modes.

Final thoughts

As the pandemic spread across the globe, we saw air cargo rates rise to unprecedented levels. Airlines and cargo operators continue to adapt quickly to this dynamic market. Now it’s time for companies to evolve, too. Never before has a balance between proactive planning and flexibility been so important.

Planning ahead and using forecast data can be the difference needed to turn a dysfunctional supply chain into a strong, agile one that is ready to face this volatile market. We know logistics can’t exist in a world of absolutes. This makes it difficult to prepare for today’s (and tomorrow’s) disruptions—or even to know where to begin. That’s where C.H. Robinson comes in. Utilizing our information advantage, you can rely on our people to bring you smarter solutions across your global supply chain. Reach out to one of our experts today to start the conversation.

cargo

Shipping Strategies for High-Value Cargo

Shipping cargo of any kind requires taking certain precautions to ensure the shipment arrives at its destination safely. Things get more complicated when high-value cargo is involved. Shipping cargo that includes unique pieces of art, fine jewelry, electronics, luxury apparel, pharmaceuticals, alcohol, and high-end food is riddled with even more risk. Any company can use a variety of shipping strategies for high-value cargo. The main aim, however, is always to completely eliminate the risk of damaging, losing, or anyone stealing the items. The strategies have to account for an optimal delivery route and provide security at each stage of shipping – transshipment, transport, and storage.

How does cargo theft happen?

Most logistics companies worth their salt are able to ensure their shipments of high-value cargo do not get lost or damaged by taking all of the necessary precautions. However, one risk that is getting increasingly harder to eliminate is that of theft. If the company’s capacity is tight, this might force them to work with carriers they don’t have longstanding relationships with. This can open up the door for sophisticated theft. People who do this know a lot about the luxury goods supply chain. They are able to obtain the right credentials, or at least look like they did.

If they don’t opt for fraud, they will opt for hijacking. Different territories around the world report different criminal patterns. Shipping companies have to toe the line of providing the best and most effective security strategies for the shipping of high-value cargo without their surcharges skyrocketing. Through careful planning, identifying problem areas, and mitigating risks, a company can develop successful shipping strategies for high-value cargo.

Speed

One of the simplest ways of eliminating the risk of theft when it comes to high-value cargo is to expedite the entire shipping process. The more quickly it happens, the fewer opportunities there are for something to go wrong. Picking the right timing can both help with the speediness of the delivery as well as further lowering the risks. For example, it is advisable to avoid the shipping of luxury items during weekends and holidays. The company should also plan the route meticulously. In turn, it should require the drivers to check in with the dispatcher at regular intervals as well as report any detours.

Expedited shipping requires a lot of careful planning and ensuring the security of the entire supply chain. Properly preparing the shipments for transit, monitoring the security measures, and ensuring visibility of the shipment throughout the process are all important strategies to ensure the safety of high-value cargo.

Building trust

Unfortunate incidents are more likely to happen when dealing with new partners companies don’t have sufficient experience with. Creating lasting business relationships means staying informed and involved in every part of the shipping process. It is one way to ensure your high-value cargo arrives at its destination safely at the allotted time. Building the trust between a company and its partners requires a lot of work on the ground. This includes regular visits to the facilities, educating the personnel about security threats and how to spot them, and learning about the language, infrastructure, and common practices of new countries they do business in.

Security measures

Shipping strategies for high-value cargo usually involve several different security measures. Some of the common combinations are using box trailers or anti-slash curtains, dedicated trucks, carefully selecting and training carriers, and having fixed parking instructions. It is also important to ensure that the shipment is monitored at all points of transport. Visibility means following a shipment from the pick up to its final destination. Some of the tools used for this include barcoding, RFID tags, and GPS trackers.

Another one of the great strategies for preventing theft is hiding the fact that the shipment is anything worth stealing. Checking the regulations and working within their confines can help you make the documentation as generic as possible. As much as they can, shippers try to use generic terms or code instead of listing specific information about the shipper and consignee. This is particularly important to apply to the description of the high-value cargo.

Furthermore, it might even be a good idea to limit access to sensitive information within the shipping company itself. It is also important to require a sign-off of count and condition whenever the shipment changes hands.

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Neal Samson is a freelance writer with extensive working experience in the logistics industry. He mostly writes articles for companies like Tik Tok Moving and Storage and covers a variety of different topics related to logistics, shipping, and moving.

dangerous goods

Automation Trends and Challenges in Transporting Dangerous Goods

In just about every moving part of shipping logistics in the modern trading landscape, automation in some form or capacity is present or in the works to better support operations. From robotics to drones to autonomous vehicles, technology innovation is changing the way logistics operates, one bleep at a time. But when it comes to the transport of dangerous goods, there are factors present that create more of a danger when paired with innovation, creating more of a need for risk mitigation measures. The safety and compliance efforts going into transporting goods (particularly if they are dangerous goods) should always be just as important as the level of efficiency of the transportation process.

Drones, for example, continue making news headlines in logistics-focused transportation. Not only do drones provide an emissions-free, congestion-free and cost-effective alternative, but they also provide a new method of competitive positioning, according to Navigant Research. Pharmaceuticals have successfully been delivered utilizing this method of transportation in the last year. UPS is among the big names reinventing the way healthcare logistics is approached after the company announced its new drone logistics partnership with AmerisourceBergen, a pharmaceutical distributor.

“Delivery bots, RDVs and drones are set to displace millions of truck and van deliveries over the next decade, as they are far smaller, more flexible, lower in cost, and naturally suitable for automation and electrification,” says Ryan Citron, senior research analyst at Navigant Research, in a release earlier this year. “These technologies are expected to make last-mile logistics (LML) more efficient and sustainable, while also transforming local commerce and user experience through new business models such as on-demand store-hailing.”

While this is great news for some of the goods transported on a daily basis, drones are not exactly a realistic solution for the case of dangerous goods, at least for the time being in transportation and innovation regulation. That is when the conversation of autonomous vehicles comes in.

When transporting dangerous goods on wheels, what role does the autonomous vehicle fulfill? Let us start with what could go wrong with transporting dangerous goods. In an interesting evaluation of this process, Occupational Health and Safety released an in-depth article outlining the potential risks associated with ground transportation of dangerous goods. These risks included collisions and accidents, emergency response measures, loading and unloading, and the measures taken to properly secure such materials after loading for the ride. In all of these examples given by OHS, a physical driver is needed in some form or capacity, and not just any driver, but a trained hazmat employee. Without the properly trained employees or advances in technology to ensure compliance is met, a physical employee will need to be present for the majority of the “autonomous” vehicle experience, even if that employee isn’t the one doing the driving.

Another important thing to remember when merging technology and the transport of dangerous goods is their compatibility with other important–and vital–parts of the process. In a recent blog from Labelmaster, the concept of a solid data foundation is explained as a key part of a three-pillar system. The company’s VP of Software & Customer Success, Mario Sagastume, reiterates that when one of these pillars is off, the others follow suit.

Technology innovation does not always equal fancy robotics or massive automation takeovers. In some cases, it boils down to a clear set of data that provides a clear view of the big picture while identifying bottlenecks, risks and a lack of resources. It is important to consider the basics of technology before diving into complex solutions. After all, dangerous goods shipping is already a challenge. You want to simplify and support the process, not overcomplicate it. Solutions such as Labelmaster’s hazmat shipping software solution, DGIS, is an example of how data and technology work together for success in hazardous shipping processes.

Whether you’re transporting dangerous goods by sea, road, rail or air, one common element is ever-present: the human factor. This factor is identified in several studies as one of the main culprits of risk when evaluating potential issues in transporting dangerous goods. One specific study conducted by Jelizaveta Janno and Ott Koppel from Tallinn University of Technology, School of Engineering, Estonia, states that, “…the risk of DGT is strongly related to a human factor as all decisions, processes and procedures within a transportation chain are made by different parties involved.”

The authors explain that every part of the transportation process of these dangerous goods involve the human factor in some capacity, as seen with the previous point of autonomous vehicles and the required human presence for parts of the process.

This brings the conversation to the topic of adequate training. With all the technology, innovation and automation in the world, the human factor will almost always be present. This is not a bad thing, it is a wakeup call that technology cannot fix what thorough training, education and accountability can.

In another blog from Labelmaster, survey results from the annual Dangerous Goods Symposium revealed that the complex nature of hazmat and dangerous goods regulations, along with lack of robust education efforts, are causing headaches for a variety of shippers in the supply chain. One survey responder specifically cited the need for curriculum specific to the dangerous goods arena of supply-chain management.

Training and education (on regulations and operations) must be held to a higher standard for those filling positions in the supply chain, but especially for those handling dangerous goods at every level. Without this imperative part of the equation, technology and innovation efforts will be compromised. The investment must start with the employees and with leadership.

Before investing heavily in the next technology solution on the market, look carefully at the internal processes first. Take an honest inventory of how compliance is managed, how paperwork is processed, and the quality of employee communications. Recall the example from the experts at Labelmaster: Technology is a part of the bigger picture. When one pillar is impacted, they are all impacted.

airlines

United Airlines Moves Cargo Around the World in Cargo and Passenger Planes

If you’ve been wondering who is filling commercial jetliners these days, we have the answer: some brave travelers and a whole lot of cargo.

United Airlines has played a vital role in helping keep the global supply chains stable during the COVID-19 pandemic by flying needed goods not only in its cargo planes but what are normally passenger planes as well.

In addition to current service from the U.S. to Asia, Australia, Europe, India, Latin America and the Middle East, United has added cargo-only flights to Dublin, Paris, Rome, Santiago and Zurich.

“Air cargo continues to be more important than ever,” explains United Cargo President Jan Krems. “This network expansion helps our customers continue to facilitate trade and contribute to global economic development and recovery. I’m proud of our team for mobilizing our cargo-only flights program that enables the shipment of critical goods that will support global economies.”

Since United Airlines began the program on March 19, more than 2,400 cargo-only flights have transported more than 77 million pounds of cargo.

Meanwhile, despite a three-year-old blockade on air, land and sea travel imposed on Qatar by its neighbors Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, Qatar Airways claims its share of the passenger and air cargo market has grown significantly over the past three months.

“Qatar can be proud that it is home to not only the Best Airline in the World but also the current largest passenger airline, the largest cargo airline and the Third Best Airport in the World,” states a company release.

The Middle East countries cut diplomatic and trade ties with Doha and imposed the blockade on June, 5, 2017, because Qatar allegedly supported “terrorism” and was too close to Iran. Calling the blockade “illegal,” Qatar rejects the claims and says there was “no legitimate justification” for the severance of relations.

private aviation

How Small Companies are Shaping the Future of Private Aviation

Executive aviation has a strong reputation based on its reliability, cost-efficiency, and flexibility, three key variables that have changed how companies are doing business all over the world. Kyle Patel, CEO of South Florida based BitLux shares his thoughts.

Time is a valuable commodity across markets. How a business can achieve, in less time, the delivery of a product or service, without undermining quality, is the building block for success. This is the case for small, medium, and large companies; they are all tied to time-bound experiences towards their clients. How does this connect to private aviation?

For small and medium corporations, with fewer employees and overall budget, accomplishing more in less time is vital to remain relevant, especially amid the pandemic outbreak. This translates in less time wasted in the airport, arriving closer to the destination, and departing right after delivering a product. Say goodbye to waiting for a late commercial flight back to your home base and welcome the possibility to depart from a regional or domestic airport at any time.

The previous is decisive in the success of smaller companies, in constant search for underdeveloped markets with the purpose to get where multinational corporations still haven’t found interest in taking action. This often means moving to locations with no airline connections; exactly where private aviation thrives by landing in secondary airports that don’t fit larger aircraft and reducing, sometimes even in hours, lengthy and costly ground transfers before reaching the destination.

There’s a misconception that executive aviation is only for Fortune 500 companies and powerful CEO’s. The access to this segment has risen during the past years thanks to an increase in availability, a change in perception and competitive prices worldwide. Private aviation serves entrepreneurs, small and medium business owners in a mission to satisfy their needs and meet even their most ambitious growth plans, thanks to a much sounder management of time.

Global trend powered by turboprops

Worldwide and especially in emerging markets where large jet aircraft are still scarce, small businesses rely on turboprops. Small towns with secondary airports are a great example. BitLux, a private aviation company based in Palm Beach, has ample experience connecting isolated regions within the state and country, taking passengers to places where commercial aviation lacks presence, thus connecting small-town businesses to various opportunities.

Many of these companies and clients can’t rely on the visit of major airline carriers. However, several regional airports serve the purpose of business aviation while also attending specific needs of local clients. It’s the case of a small-town IT company in Oregon, showcased by the No Plane, No gain campaign, which relies on private aviation to serve its clients.

Never heard of No Plane, No Gain? It started in 2010 as an effort between the National Business Aviation Association (NBAA) and the General Aviation Manufacturers Association, with the purpose to educate the public on the importance of private aviation for its communities, companies, and citizens. Today, 10 years down the runway, it remains strong and serves as a source of information for debates about the future of the industry.

In essence, it’s challenging not to prefer private aviation over commercial. Less time invested in flights, the possibility to depart earlier if a meeting ends ahead of schedule, staying more time at a certain location without missing the flight back home, and reducing uncertainties while managing time. All these features help justify, in a tangible way, the use of business aviation.

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BitLux provides executive jet charter and cargo charter brokerage services in the most thorough, safe, and ethical way possible. If you would like to speak with us about a shipment involving a top priority load, please contact us immediately at covidresponse@bitluxtravel.com.

international shipping

How to Save Time and Money With Your International Shipping

Whether you are just dipping your toes into international shipping, or you are a veteran who wants to update the firm’s processes, there is always more you can do to make your shipping practices more streamlined and efficient. After all, if you are going to compete with local players, then you need to be offering the best deal possible on international shipping. How you can do that is going to be unique to your firm, but some general practices can help.

From managing customer’s expectations of speed to optimizing your packaging, investing in cargo insurance to getting help when you need it, read on to learn how to save time and money with this guide to international shipping.

1. Balance your need for speed.

Generally, the quicker you want your shipments to be delivered, the more expensive the shipping is going to be. Therefore, it is essential that you balance your need for speed with your budget and your customer’s expectations. Customers expect reliable delivery times, not necessarily the fastest possible time, and in many cases, they are happy to wait a couple of days to bring costs down.

Therefore, your best strategy is to provide them with a variety of delivery options to choose from. That way, they can decide how much they are willing to pay and how long they can wait for their goods. Keep in mind that for most companies, the goal is to limit the number of individual shipments and instead maximize the amount of cargo shipped. This generally brings about the most efficient results.

When organizing international shipping for your customers, it is essential that you make their experience as pleasant as possible. One of the best ways to do this is by providing them with accurate shipping information that keeps their expectations in check.

2. Optimize your packaging.

One of the most overlooked ways to reduce international shipping costs is to optimize your packaging. The ideal packaging keeps your products safe and secure while also reducing shipping weight and box size so as not to receive additional charges. In order to find the optimal packaging for your goods, you need to take different factors into consideration, including a product’s height, weight, and volume.

From there, look for boxes that fit your product while leaving minimal wasted space. Additionally, choose lightweight packaging materials that still protect your items. Depending on what you are shipping, you may want to consider utilizing standard sized packaging that is provided by your freight provider, as this will remove your firm’s requirement to source custom box sizes.

When planning your packaging strategy, it is vital to think dimensionally, which means knowing the length, width, and depth, which together comprise the dimensional weight of your goods. If you are shipping in bulk, keep in mind that you want your packages to be shaped so that they can be expertly arranged to fit into the smallest size carton.

3. Invest in cargo insurance.

Just as you have insurance for your home, car, and health, it is also essential that you have coverage for your cargo. Unfortunately, it only takes one international shipping incident for your firm to feel adverse effects, which is why cargo insurance is so important. By getting this insurance, you will be covered for damaged goods, cargo theft or loss in transit, and any other unforeseen events that affect your products.

While many carriers and freight forwarders offer liability insurance, this is generally limited to a specific monetary amount and has many exclusions. Therefore, you don’t want to solely rely on this liability insurance because it usually is not enough to cover the costs of severe loss or damage. On the other hand, cargo insurance will render you a more comprehensive level of protection, ensuring you can recover the full value of lost, damaged, or stolen goods.

Having cargo insurance is highly recommended because it provides you with greater peace of mind which, in the long run, makes for a more efficient and streamlined international shipping process. The last thing you want is to be worried about your firm going under because something happens to a shipment that is out of your control. Do your company a favor and invest in cargo insurance.

4. Get help when you need it.

No matter what size your company is, what products you are shipping, or whether you are moving individual parcels or sizable cargo, there is no need to do it all on your own. After all, there are experts in these fields who have the knowledge and experience to help you reduce your costs and the number of resources you have to spend on shipping logistics.

By opting to work with an online freight forwarder, such as Shipa Freight, you are not only setting yourself up for shipping success now but also in the future. From generating an online quote to scheduling your shipments and then tracking them, an online freight forwarder provides you with all the tools you need to make your international shipping processes as streamlined as possible.

For example, as an individual, it can be challenging to locate the ports and other destinations that you need, but a high-quality freight forwarder can find them for you. Additionally, you will be personally guided by a representative throughout the process so that you can be assured that you are choosing the best options for your firm. When working with Shipa Freight, you will always be treated as a partner, not a commodity.

Final Thoughts

When it comes to international shipping, if you want to come out on top, then your firm must incorporate as many cost-saving and time-effective measures as possible. By including these steps into your international shipping strategy, you will be well on your way to having the most efficient shipping process possible.

What do you think are the most effective steps for reducing costs and time related to international shipping? What strategies does your firm use?

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As Chief Product Officer for Shipa Freight, Paul Rehmet is responsible for translating the vision of Shipa Freight into an easy-to-use online freight platform for our customers. Formerly Vice President of Digital Marketing for Agility, Paul managed Agility’s website, mobile apps, content marketing and online advertising campaigns. In his 25-year career, Paul has held various technology leadership positions with early-stage startups and Fortune 500 companies including Unisys, Destiny Web Solutions, and US Airways. Paul has a Masters in Software Engineering from Carnegie Mellon University and a Bachelor of Computer Science from Brown University. Paul is based in Philadelphia.  

cargo

GLOBAL CARGO IS LEAVING ON A JET PLANE

With the ongoing threat of COVID-19, airlines have seen a precipitous drop in passenger travel and are focused on the possibility of a voluntary or mandated halt to U.S. passenger flights. In response, major carriers are finding ways to keep flying during the global health crisis.

American Airlines and United Airlines, for example, have offered their passenger aircraft for charter cargo flights. Even in normal times, the lower deck of passenger aircraft carries cargo to maximize the utilization of space. With the sharp scale-back in passenger travel, however, the companies are offering dedicated cargo runs to deploy their assets and replace revenue while helping to keep supply chains moving and facilitate the shipment of essential goods.

Attention All Passengers:

Many air travelers don’t realize that it’s not just their own and fellow travelers’ luggage that checked in for their flights. The big passenger airlines generally have a lot of available space in their bellies. With operating costs covered by passenger tickets, the airlines often generate supplemental revenue by carrying packages, freight or mail for the U.S. postal service on board passenger flights.

In turn, cargo shippers secure relatively cheap space and can get goods close to their ultimate destination given the dense network of airports serving passenger flights around the world. Even logistics players like UPS and FedEx partner with passenger airlines, particularly in emerging markets where trade volumes may not justify the deployment of their own regularly-scheduled aircraft. Technology tools enable precise coordination to ensure goods off-loaded from a freighter aircraft make their departure on a passenger aircraft and vice versa.

Cargo split

The trend is taking off. The International Air Transport Association (IATA) has been cited as estimating the split between cargo carried by passenger airlines and freighter aircraft at 60/40 and forecasts that will grow to 70/30 in the coming years.

In 2018, American Airlines moved 2 billion pounds of cargo and raised $1 billion of cargo revenue despite not operating cargo aircraft. Airlines based in Asia such as Korean Air and Cathay Pacific do have freight fleets, but still carry more than half of their cargo in the bellies of passenger aircraft. McKinsey has noted that with the expansion of the major Middle Eastern passenger carriers and new aircraft designs with large belly-cargo configurations, the belly capacity of Middle Eastern carriers flying into Europe in 2016 equaled the capacity of more than 100 weekly Boeing 777 freighter flights.

Open Skies

“Open Skies” agreements governing the transport of people, pallets and packages are designed to enable market forces to guide decision-making about routes, capacity, and pricing. Critically, Open Skies agreements also provide both passenger and cargo flights unlimited market access to partner markets and the right to fly to all intermediate and beyond points. The United States now has Open Skies agreements with over 100 partners around the world, including both bilateral agreements and two multilateral accords. So-called fifth freedom rights – also called beyond rights – are a core element of Open Skies agreements, permitting a carrier to fly to a second country, offload passengers and cargo, pick up new passengers and cargo, and continue on to a third country.

Over 100 Open Skies

While Open Skies agreements provide benefits to both passenger and cargo carriers, cargo carriers to a large extent fly international packages and freight themselves, while passenger carriers utilize codeshare agreements and worldwide alliances. The different business models and complex tie-ups can produce a divergence in interests. A prominent example was the dispute between the “Big Three” U.S. passenger carriers – American, Delta, and United – and the governments of the United Arab Emirates (UAE) and Qatar, who the carriers alleged were providing billions of dollars in subsidies and other benefits to their state-owned carriers: Emirates, Etihad, and Qatar Airways. Among other serious concerns, this raised red flags about subsidized fifth freedom operations (e.g., Newark-Athens-Dubai) and the potential for their expansion, negatively impacting U.S. passenger airline service to the Middle East and India.

U.S. Airlines for Open Skies, a coalition that included FedEx, Atlas Air, the Cargo Airline Association and JetBlue (which has a code-sharing agreement with Emirates), opposed the call of the Big Three for restricted Gulf fifth freedom rights (a violation of the U.S.-UAE and U.S.-Qatar Open Skies agreements if restricted involuntarily). The cargo carriers expressed concern that challenges to the Open Skies accords with Qatar and the UAE put at risk the fifth freedom rights that cargo carriers depend on for their complex global networks. They discounted the view that the U.S. could breach passenger fifth freedom rights without setting a dangerous precedent for the equivalent all-cargo rights.

The dispute was ultimately resolved in 2018 through U.S. government agreements with the Qatar and UAE governments under which the parties acknowledged that government subsidies adversely affect competition and committed to financial transparency and business on commercial terms.

Air Cargo Players

In the Upright Position for Takeoff

As passenger carriers step up to support cargo at this extraordinary time, you may not know that from 1997-2001, UPS also ran passenger operations. For a period of years, the company had contracts with tour companies and cruise lines to offer vacation flights as well as charters for college and pro sports teams, politicians, the press corps and others. In under four hours, a 727-100QC could be ready to carry 113 passengers. See here for the UPS Quick Change process.

Air cargo capacity is critical at this time of crisis and the airlines’ role is deemed a critical infrastructure industry by the Centers for Disease Control and Prevention (CDC). American Airlines reports that its recent cargo-only charter carried medical supplies, mail for active U.S. military, and telecommunications equipment and electronics to support people working from home. United’s wide-body charter cargo flights are likewise getting critical goods into the hands of businesses and people in need. Stakeholders across the cargo and passenger industries look forward to a post-pandemic era where all can return to their respective roles in transporting people and cargo globally, described well by United’s slogan “Connecting People. Uniting the World.”

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Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

This article originally appeared on TradeVistas.org. Republished with permission.

live animals

THE GLOBAL TRAVELS OF LIVE ANIMALS

Horses, Asses, Mules and Hinnies Atop the Tariff Schedule

Unless you’re a farmer or animal breeder, the first item in Chapter 1 of the Harmonized Tariff Schedule is one we may think about the least – Live Animals. For most Americans, live animals are a long supply chain away from the supermarket.

At over $21 billion in 2017, global trade in live animals has increased 140 percent over the last two decades. Some 45 million hogs, 16 million sheep, 11 million head of cattle, 5 million goats and 1.9 million poultry (mainly chickens) were transported around the globe, some for breeding and about 80 percent intended for consumption.

A specialized segment within the transportation sector is dedicated to transporting live animals by air, land and sea – from air cargo, tractor trailers and trains, to ocean container shipping.

HTS snippet 0101

Shifting Resource Burdens

The world will be home to 9.7 billion people by 2050. With more mouths to feed, agriculture production must become more efficient against the challenges of limited arable land, energy and water resources, especially in developing countries. International development agencies promote raising livestock as a way to increase income for smallholder farmers (owners can sell products and/or offspring) and to achieve greater food security in rural areas through access to high quality proteins. Importing livestock in the last few months of their life can reduce expenses associated with animal feed and veterinary care while conserving limited water resources.

The water-stressed Middle East region has become a major importer of live animals. Demand for meat and dairy products has grown steeply in Egypt, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar and Saudi Arabia. Importing mature live animals avoids the need to rear animals from birth, shifting the water burden while meeting demand for animals freshly slaughtered in adherence to religious requirements.

Trade in live animals 3x increase

Trade in Genetics, No Goats No Glory

Countries are investing in improving their livestock by either importing live animals or importing frozen semen and embryos for artificial insemination, a process that is achieving higher success rates as costs are coming down. Global trade in purebred animals for breeding in 2017 was a $780 million industry. The animal genetic market is projected to grow from $4.2 billion in 2018 to $5.8 billion by 2023.

In November last year, 1,503 U.S.-origin Holstein heifers valued at $3 million were sold out of Statesville, North Carolina and shipped to Egypt aboard a livestock carrier in an effort by the Government of Egypt to improve the country’s dairy operations supporting output of milk for yogurt and cheese. Qatar is importing American-born dairy cows to surmount trade bans by neighboring countries.

Chickens are by far the largest category of live animals traded globally with hogs coming in second. But it’s dairy goats that could prove key to achieving the United Nations’ 2030 Agenda for Sustainable Development. Goats consume fewer resource inputs than cows, goat milk is nutritious, and women often have strong roles in dairy goat ownership and management.

Caprikorn Farms is the oldest goat dairy in Maryland. Raising some of the best dairy goats in the United States and the world, their genetics are in demand. They have worked with Russian authorities to not only send several live animal shipments to Russia but also improve Russia’s health protocol for international shipment. Ten of their goats even flew to Qatar on a private jet.

Bees also get in on the global trade act. Not only do bees circulate throughout the United States to pollinate our many crops, $48.1 million worth of live bees – including Queen bees and semen — were exported globally in 2018. Europe shipped $26.5 million or 55.2 percent of the global total.

Live animal trade routes 2017

Protecting Livestock on the Journey

While North American cattle and hogs have a short truck ride or may even live on ranches along the borders, many animals face a long ocean journey during which their health can be compromised. They are sometimes relegated to older vessels that may be converted from general cargo and not purpose-built to transport the animals in safe conditions. Often on journeys for weeks at a time, animals are at risk for fatigue, heat stress, overcrowding, injury and the spread of disease in close quarters.

The World Organization for Animal Health (OIE) issued the Terrestrial Animal Health Code in 2019 that provides standards for transporting animals by land, sea and air to protect the health and welfare of the animals and prevent the transfer of pathogens via international trade in animals.

As the global population increases and agricultural producers seek to maximize the resources available to them while improving output, global trade in live animals is likely to continue to grow. Standards and cooperation in international trade practices will need to evolve along with that trend.

Contributor Sarah Smiley lives on her family farm in Appalachia where they have raised fainting (myotonic) goats and Charolais cattle for more than 20 years.

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Sarah Smiley is a strategic communications and policy expert with over 20 years in international trade and government affairs, working in the U.S. Government, private sector and international organizations.

This article originally appeared on TradeVistas.org. Republished with permission.

Pharmaceutical

Global Air Cargo Trends Re-Shaping Pharmaceutical Transport

As we welcome the new decade and the exciting advances it is expected to unleash, many of the forces that shaped the past decade for transporting pharmaceuticals will continue. Price pressures, alternatives to air freight and increasing automation are just a few. However, there are emerging trends that make 2020 unique.

As we look forward, these are the air cargo trends expected to shape the transport of pharmaceuticals in 2020 and beyond.

The Greta Thunberg Effect — Flying Shame

We can’t ignore the effect that climate change activist Greta Thunberg is having on air travel that runs on fossil fuels. Thunberg’s reliance on trains to travel from her home country of Sweden to other countries in Europe connected by rail has triggered a material effect on passenger numbers in Sweden. According to Bloomberg, Swedish air travel diminished in 2019 — while train travel jumped to a record level.1

What could this mean for shipping pharmaceuticals by air? As “extinction rebellion” shows no sign of slowing down, air freight carriers — like their passenger transporting counterparts — will feel more pressure to seek alternative fuel sources and replace older planes with more fuel-efficient models. To further address the Thunberg effect, carriers and their logistics partners will also need to elevate their brand image by demonstrating they are adopting eco-friendly practices such as reusable or waste-stream friendly shipping containers made from recyclable materials. Especially for shipping pharmaceuticals, these shipping containers must still maintain strict temperature control to ensure valuable payloads arrive intact.

Global Trade Pressures Drive Down Air Freight Demand

After years of wrangling over the details of Brexit, the UK is departing from the European Union (EU) — and entering a transition period through the end of 2020. The effects of Brexit and the fact that Germany only narrowly avoided an official recession at the end of the last decade have been driving down European air freight demand. Furthermore, US tariffs aimed at four counties in retaliation over subsidies to Airbus has hit Germany especially hard.

Meanwhile, the US-China trade war began to thaw with the signing of an initial trade deal. But trading data showed the climate would have to improve significantly to combat the year-on-year 8.1% decline in freight tonne kilometers experienced in 2019.2 Price is the crudest and quickest tool at air freight’s disposal to address diminishing demand. However, long-term price cutting is not sustainable and in the face of continued change, air freight companies will have no choice but to cut flights from their schedules and mothball aircraft — and cease to exercise purchasing options that did not factor in declining demand.

Diminished Air Freight Demand Means Reduced Capacity

Air freight remains the predominant mode of transportation for moving life-saving pharmaceuticals around the globe, especially for the most valuable and sensitive therapies that require strict temperature control. Sea transport, accounting for approximately 20% of pharmaceutical shipments3, made gains in recent years as an alternative transport mode for non-temperature sensitive products and the return of containers after payloads have reached their destination. However, for the foreseeable future, pharmaceutical companies will remain reliant on air freight for transportation of products that could succumb to temperature excursions.

Declining air freight and passenger demand combine to produce a double whammy for the pharmaceutical industry. As air freight capacity becomes an even more precious and dwindling resource, there are things that can be done to mitigate reduced capacity. For example, temperature-controlled packaging systems will need to step more into the foreground to reduce volumetric weight, providing higher performing insulation and phase change materials that can considerably improve volumetric efficiency.

However, packaging systems currently available to reduce volumetric weight are typically more expensive unless they are re-used, and re-use can’t always be achieved efficiently for both financial and environmental reasons. The pharmaceutical packaging industry will need to look more closely at the installed capabilities of aircraft to manage temperature, which could make lower-grade packaging materials more acceptable. The capabilities of the aircraft will also need to be matched to ground conditions and reliable sourcing can be difficult in less developed regions of the world.

 Pharmaceutical Packaging: No Longer Rickshaw Vs. Tank

When it comes to pharmaceutical packaging, one size does not fit all — nor should it. The days of choosing between a rickshaw or a tank are behind us. Pharmaceutical packaging manufacturers have broadened their product portfolios to enable the most efficient solutions to be selected, qualified and deployed on a lane-by-lane basis across truly global supply chains. Making the right selections and performing the necessary qualifications can be daunting compared to the old simplicity of “I’ll have a tank everywhere.” But this is the challenge we must face to deliver value and make responsible use of dwindling resources such as global air freight capacity.

The good news is that cold chain consultants have the tools and resources to streamline this new approach. Packaging products have been engineered and tested to incorporate operational consistency and simplicity that might otherwise make it too complex to deploy. Networks and services have also been developed and deployed to enable efficient and reliable outsourcing of operations.

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Dominic Hyde is the Vice President of Crēdo on Demand at Pelican BioThermal.

References:

1. As ‘Flying Shame’ Grips Sweden, SAS Ups Stakes in Climate Battle, Bloomberg, April 14, 2019.

2. Air Cargo Demand Continues Negative 2019 Trend, International Air Transport Association (IATA), May 29, 2019.

3. Will Ocean Freight Be the Dominant Mode of Transport for Pharma Payloads?, Pharma Logistics IQ, July 12, 2018

airfeight

Airfreight vs. Sea Freight – Which Works Better?

Airfreight vs. sea freight has become a burning dilemma for all those in need of this type of services. While both solutions come with a set of advantages and disadvantages, the final choice one makes will depend on a variety of factors. We are willing to share our knowledge and findings with you so that you can make the best possible decision regarding your shipment in the given circumstances. 

Airfreight vs sea freight – the costs can be a decisive factor

Undeniably, the amount of financial means necessary to afford airfreight services is considerably higher than that of sea freight. Moreover, the appearance of the largest cargo aircraft in the world announces great changes and improvements in this field. The Antonov An-225 could cause a further rise of the airfreight costs, but it will also guarantee higher quality. On the other hand, sea freight is much more affordable and, consequently, the number one choice of a vast majority of clients. Opting for sea freight provides clients with acceptable service but at a significantly lower price.

Time matters greatly!

Most often, clients want their shipment delivered as soon as possible, which can cause problems for those offering sea freight services. Not seldom do customs issues or hold-ups at ports cause serious delays. However, we must admit that a giant step forward is evident in this field. Firstly, high-quality, modern ships are much faster now than it was the case in the past. Secondly, there are some canal upgrades that can eliminate tedious and tiring delays on some routes. Finally, sea freight forwarders can guarantee delivery times, which is vital for business owners when it comes to organization.

The type of cargo affects the final choice on airfreight vs. sea freight dilemma

The type of cargo is one of the most important factors influencing the choice in the airfreight vs. sea fright dilemma. In this case, we must admit that sea fright seems like a much better solution since it has no limitations you have to be aware of. One of the crucial pros of the maritime shipping is that you can ship even the bulkiest and extremely heavy goods. Conversely, airfreight is limited in this discipline. Before you opt for this type of goods transportation, it is advisable to make sure that the type of your cargo is acceptable. In addition, there is a very long list of the items which are prohibited and those listed as hazardous materials. Depending on your final destination, the rules and laws may differ. Yet, getting sufficient information on the subject must still be the first step in the process.

Safety of your cargo is the top priority

Understandably, the safety of cargo is always the top priority. It is important to emphasize that air cargo has to be dealt with the utmost attention and in accordance with the regulations which are very strict and clear. All the crucial elements, including handling and securing your cargo as well as the proper storage, are defined by airport regulations. This is a great benefit and a guarantee that the safety of your goods will be at the maximal level. On the other hand, we cannot say that sea freight is a bad alternative either. In this case, the goods are transported in containers, but the human factor is crucial. Proper packing strategies are essential in order to decrease any chances of potential damage during transport. If this is not conducted appropriately, the chances are some of your goods might get seriously damaged or even cause further problems on the ship.

Do not forget about the accessibility of your goods

If we analyze the accessibility of your goods as one of the criteria, airfreight is a more favorable option by all means. The procedures are clear, cargo is in smaller volumes and there are no unnecessary waitings to receive your goods. Using sea freight for your cargo often results in additional costs due to heavy congestions in seaports. If your goods are not delivered at the arranged time, you are required to pay for detention and demurrage costs, which may be a heavy burden on your budget. However, we must not forget to mention an advantage sea freight offers comparing to airfreight. The accessibility to markets is much higher in case of sea freight. The reason is very simple. When unloaded from ships, containers can move further inland by using the services of intermodal shippers

Eco-friendly practices 

Finally, let us not forget about the environment when choosing between airfreight vs sea freight. Applying eco-friendly practices is becoming increasingly important, so it does not surprise this is one of the factors shippers base their decision on. According to this particular criterion, sea freight is a more reasonable option since it has a significantly better carbon footprint. Quite the opposite, airplanes are serious polluters and require special attention and measures to reduce their carbon footprint to minimal values.

Final words on airfreight vs sea freight dilemma

The decisions and choices you make concerning airfreight vs sea freight dilemma will depend on miscellaneous factors. It is of key importance to weigh the pros and cons of each of these options and then make your decision final.  A serious effort is required to negotiate the best shipping terms and only then can you expect to ship your goods completely fuss-free.

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Susan Daniels is a passionate copywriter who loves exploring home improvement ideas and real estate market. Lately, she has gained considerable knowledge in the types of moving services and the qualities of respectable moving companies such as DA Moving NYC, for example. She enjoys giving advice on the best places to live and exciting places to visit. Traveling makes her happy as well as reading good books.