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Top 25 Container Ports In The United States

global trade container

Top 25 Container Ports In The United States

Imagine a major highway with poorly timed traffic lights. Everything slows down, causing delays and frustration. Ports in the United States are like those highways, and excellent container cargo operations are like well-timed traffic lights. They keep everything moving smoothly and efficiently.

Read also: May 2024 U.S. Containerized Imports Break 2.3M TEUs

This is important beyond port terminals because they are major economic hubs, handling a massive amount of cargo coming in and out, feeding the country’s consumer goods and industrial needs. Efficient operations ensure a smooth flow of goods, which keeps businesses running and shelves stocked. Delays at ports can disrupt supply chains and lead to price hikes for consumers.

Efficient port operations are also important beyond U.S. borders as the nation competes with other countries for international trade. Ports with fast turnaround times make the U.S. a more attractive destination for shippers. This translates to more revenue and jobs in the U.S. economy.

When it comes to gauging the top U.S. ports in the container sector, we must look at total twenty-foot equivalent units (TEUs) handled. Based on the size of a standard 20-foot long shipping container, a TEU is the standard unit used to measure the capacity of vessels and terminals. One 20-foot container is equal to one TEU and large 40-foot containers are counted as two TEUs.

Do you know who uses TEUs to determine the busiest container ports in the U.S.? None other than the U.S. Department of Transportation, whose 2024 Port Performance Freight Statistics Program Annual Report to Congress includes a list of the Top 25 Container Ports ranked by TEU. That list follows with Global Trade’s own analysis of why each port made the cut.

1. PORT OF LOS ANGELES, CA 

The busiest container port in the U.S. processes a massive amount of containers, moving more than 9 million TEUs annually. The operation is divided among seven major container terminals, each equipped to handle the loading and unloading of container ships. The Cargo Operations Dashboard web portal provides real-time data on various aspects of cargo movement, such as truck activity at terminals and vessel locations. For moving containers inland, the port connects to a vast rail network with six intermodal rail yards, a key route being the Alameda Corridor, a 20-mile express railway that zips containers directly to rail hubs in downtown L.A.

2. PORT OF LONG BEACH, CA

L.A.’s sister container cargo powerhouse also handles millions of TEUs annually. Unlike some ports that directly manage cargo movement, Long Beach operates as a “landlord port,” with private terminal operators performing the day-to-day operations of loading and unloading container ships at various terminals. The port caters to a diverse range of containerized cargo, with terminals specializing in different goods. This allows them to handle a wider range of imports and exports efficiently. The POLB is at the forefront of adopting sustainable practices, having implemented zero-emission cargo handling equipment like electric yard tractors, reducing dependence on fossil fuels.

3. PORT OF NEW YORK AND NEW JERSEY, NY & NJ

The largest containerized cargo port on the East Coast boasts a vast operation spread across six terminals and public berths, equipped to handle the world’s biggest container vessels. Like other major ports, NY/NJ prioritizes efficient cargo movement. Third-party logistics providers (3PLs) play a crucial role, offering services like consolidation (combining smaller shipments into full containers) and deconsolidation (separating a full container into individual shipments) to streamline the import and export process. The Port Authority of New York and New Jersey participates in the World Port Sustainability Program, demonstrating a commitment to environmentally conscious practices alongside the cargo handling operations.

4. PORT OF SAVANNAH, GA

Savannah boasts the largest single-terminal container facility in North America, covering over 1,300 acres and equipped to move millions of tons of containerized cargo annually. The port is well-equipped with 42 container cranes (with a target of 42 by 2028) and more than150 rubber-tired gantry cranes to handle the loading and unloading of containers swiftly. Savannah offers direct access to major highways (I-95 and I-16) and on-terminal rail facilities ensure seamless cargo movement. As the most westerly port on the Atlantic seaboard, Savannah offers shorter transit times for cargo destined for major inland markets in the southeastern United States. 

5. PORT OF VIRGINIA, VA 

Another major force in containerized cargo handling on the East Coast, Virginia has seen significant growth in recent years, with a focus on expansion and efficiency. They recently completed a $750 million expansion project that increased cargo capacity by 46 percent. Thanks to its deepwater channels and ongoing dredging projects, the port can accommodate the largest container vessels currently operating. The port utilizes semi-automated container terminals with advanced cranes to expedite cargo handling. Norfolk International Terminals is the largest terminal and will boast more than 90 semi-automated cranes upon completion of its expansion. The port offers excellent multimodal connections.

6. PORT HOUSTON, TX

The port boasts two state-of-the-art container terminals: the Bayport Container Terminal and the Barbours Cut Container Terminal. These facilities are equipped to handle the modern giants of container shipping efficiently. Port Houston is investing $750 million over five years (through 2027) to upgrade the Bayport Container Terminal’s infrastructure and capabilities—a commitment to handling more containers and larger vessels in the future. Houston’s extensive highway network and role as a major trucking hub in the U.S. contribute to the efficient movement of containers inland after they are offloaded from ships. The port also offers on-site rail connections for seamless cargo movement.

 7. PORT OF CHARLESTON, SC 

Charleston has seen significant growth in recent years, becoming the fastest-growing container port in the U.S. Major investments are being made to handle the largest container vessels. The Charleston Harbor deepening project, completed in 2021, allows the port to accommodate all post-Panamax ships (the biggest ones!) 24/7, boosting its competitiveness. The port’s container operations are spread across several terminals, including the North Charleston Terminal, the Wando Welch Terminal and the recently opened Hugh Leatherman Terminal. The South Carolina Ports Authority offers various tools like GO!Port, a system for tracking and tracing container cargo, providing real-time data and enhancing supply-chain visibility. 

8. PORT OF OAKLAND, CA 

Oakland has seen steady growth in container traffic, with a particular surge in imports in recent years. Terminals are equipped to handle this increasing volume efficiently. The port has strategically invested in infrastructure to accommodate the giants of the sea. Oakland routinely receives calls from ships with capacity for 14,000 containers and can handle even larger vessels with the necessary adjustments. Oakland prioritizes swift cargo movement. They boast some of the highest ship-to-shore crane productivity rates on the West Coast, meaning they can load and unload containers quickly.

9. PORT OF TACOMA, WA 

Among the largest deepwater ports in America, Tacoma is situated on Commencement Bay in Puget Sound, making it geographically well-positioned. The port serves as a vital gateway for cargo moving between Asia and the eastern U.S., with more than 70% of its international cargo directed toward these regions. Additionally, Tacoma handles around 80% of the marine cargo between Alaska and the Lower 48 States. Various sustainability programs are in place to reduce emissions from port operations and promote environmentally responsible cargo handling practices.

10. PORT OF SEATTLE, WA

The Port of Tacoma and Port of Seattle are managed by the Northwest Seaport Alliance, a collaboration that strengthens their overall container handling capabilities. The Port of Seattle handles millions of TEUs annually across several terminals. Efficiency is a priority there, with trucks and on-site rail connections ensuring swift movement inland. Sustainability efforts are also in place to balance economic activity with environmental responsibility.

11. PORT OF JACKSONVILLE, FL

JAXPORT, as the port’s authority and the port itself are known, ranks first among Florida’s ports for containers. The Dames Point Terminal efficiently handles millions of TEUs with connections to major highways and on-dock rail for seamless cargo movement throughout the U.S. Southeast.

12. PORTMIAMI, FL 

Known mostly for cruise ships, PortMiami handles containers, too. Cargo moves efficiently through its container terminal with connections to highways and rail for regional distribution.

13. PORT OF SAN JUAN, PR

Puerto Rico’s main port prioritizes container cargo. Three major shipping lines call there, utilizing a “carousel” crane system to efficiently load and unload containers destined for or arriving from the U.S. mainland. 

14. HONOLULU HARBOR, HI

The O’ahu facilities not only handle container cargo, they recently expanded their container terminal capacity by 40% to handle increasing volumes and improve efficiency for island trade.

15. PORT OF BALTIMORE, MD

Baltimore boasts the No. 1 container terminal on the East Coast (Seagirt Marine Terminal) with super-post-Panamax cranes and swift container handling. They handle millions of TEUs annually.

16. PORT EVERGLADES, FL

The port has a reputation for efficiently moving millions of TEUs with quick ship turnaround and connections to highways and rail.

17. PORT OF PHILADELPHIA, PA

PhilaPort’s Packer Avenue Marine Terminal is the main hub for container cargo, with rail and highway connections for efficient inland transport.

18. PORT OF MOBILE, AL

Mobile boasts fast ship turnaround with 35 container lifts per hour and 45-minute truck wait times.

19. PORT OF ALASKA, AK

Alaska’s main cargo handler in Anchorage sees twice-weekly container ships delivering essential goods for most of the state.

20. PORT OF NEW ORLEANS, LA

New Orleans’ Napoleon Avenue Terminal handles more than 600,000 TEUs annually with cranes for mega-ships up to 10,000 TEUs.

21. PORT OF WILMINGTON, NC

The North Carolina port efficiently handles containers with seven cranes, including neo-Panamax models for large ships, offering easy access to highways for distribution.

22. PORT OF WILMINGTON, DE

The Delaware port boasts a 500,000 TEU annual capacity with four gantry cranes and efficient rail connections for onward transport.

23. PORT OF PALM BEACH DISTRICT, FL

Florida’s fourth busiest container port handles more than 290,000 TEUs with 24/7 on-dock rail for smooth container movement.

24. SOUTH JERSEY PORT CORPORATION, NJ

The operator of marine shipping terminals in seven New Jersey counties focuses mostly on breakbulk and bulk cargo, but it does have cranes for containers.

25. PORT OF BOSTON, MA

Boston’s Paul W. Conley Terminal specializes in container cargo, with gantry cranes and automated stacking cranes for efficient loading and unloading.

 

biodiesel fuel

A Road Freight Logistics Perspective on the Latest Fuel Price Increase – What it Means for South Africa

As at 02 November 2022, the cost of diesel for transporters increased by R1,42 for 500ppm and R1,43 for 50ppm. That will raise the prices to R25,49 and R35,75 respectively.

The price of both grades of petrol – 93 and 95 – will increase by 51 cents per liter.

The Central Energy Fund (CEF) attributed the price hikes to rising international fuel prices and the weakened Rand.

What does this mean? Well, to put it in perspective, diesel cost R12,15 and R21,78 in January 2022. Diesel has doubled (increased by 100%) since December 2021.

Road freight transporters use – in the main – diesel as the energy source for their vehicles. They need to increase their pricing to cover the ever-increasing cost of diesel, and there are transporters who will not be able to carry on. This will be driven by the transporters’ need to fund operations (the use of fuel) whilst only being paid months after the work has been done – ins some cases up to three months afterwards.

In the meantime, the next load needs to be moved, and so on, and that all needs fuel for the vehicles. There just aren’t limitless reserves of cash to continue the high level of fuel expenditure against the delayed payment for work already done.

In some cases (and we are beginning to see more and more businesses in stress/business rescue), customers/businesses will reduce volumes to be transported or even curtail stock movement – depending on consumer consumption levels. Transporters will feel this impact on their businesses. Many transporters will not be able to muster the guarantees required for purchasing fuel on credit (required as customers take up to 90 days to pay AFTER the transport has been provided) – and the transporter has paid for fuel, paid the driver, covered other costs and still needs to operate a business – whilst others just don’t have any cash to carry themselves for 90 days.

Whether we like it – or not – the continuous increases in the price of diesel inevitably drives the cost of transport and logistics up – step by step – and, with roughly 85% of all goods moved through and around the country having a road leg at some part in the journey, there will be increases to consumers, (you and I) as the cost to transport goods increases.

Fuel breached the 55% mark in daily operating costs during the third quarter of the year, and now as we head into the final month of 2022, are already hovering around 60%. That’s a cost to company (any company or business that requires goods to be transported to manufacturing/processing/packaging/staging/distribution or retail operations) that cannot be borne by the company.

That cost will – in most cases – be borne by the consumer. You and I will pay more for – well – everything. From food to fuel, from clothing to electronic goods and everything in between. Prices will rise – some immediately, but more so a domino effect will ensue, the next in a long line of such domino effects that we have seen too often in the last few months.

Transport costs will rise. There is no alternative for transporters – and those that cannot afford to carry loads at the rates or prices customers are prepared to pay, will simply close down.

More business closures, more unemployment, less business and revenue driven through the transport sub-sector industries, and of course, higher prices at the till.

As we have experienced, the Reserve Bank has aggressively increased the Repo Rate in an attempt to restrict the inflation monster, and signs are pointing to another stiff repo rate increase in November (at least 50 basis points – if not another 75 basis points). That, together with transportation costs for goods and services, will grip the consumer in a tightest financial squeeze just before the festive season – where traditionally many retailers have generated income to carry them through the financial year.

This will not be a bountiful as it has been in the past, and there are many consumers who will “stay at home” and cut the “lavish spending” associated with the Festive Season.

freight forwarders

TOP 10 FREIGHT FORWARDERS OF 2020

By occupying six slots, including the top three, the Alpine Region of Central Europe dominates Global Trade’s list of the top 10 freight forwarders of 2020.

 1) Kuehne + Nagel

With more than a century specializing in the transportation space, Kuehne + Nagel serves multiple industries, including high tech, industrial products, perishables, pharmaceutical and healthcare industries. Services include: order management, warehousing and storage, supply chain consulting, project management, air, rail and sea cargo and expo and events. Kuehne + Nagel Management AG, Dorfstrasse 50 Schindellegi, 8834 Switzerland, Tel: 41 44 788-9511.

2) DHL

DHL Supply Chain and Global Forwarding Divisions provide freight forwarding services throughout Europe, Russia and the Middle East via rail, air and road. The company’s global reach extends from transportation and warehousing to industry-specific solutions designed to streamline worldwide logistics for its clients. Services include: dedicated freight management, warehousing, customs services, freight security, supply chain management and air, road and sea shipments. DHL Supply Chain and Global Forwarding, Deutsche Post AG Headquarters, Platz der Deutschen Post, 53113 Bonn, Germany, Tel: +49 228-1820.

3) DB Schenker

The logistics division of German rail operator Deutsche Bahn AG provides an array of logistical and supply chain consulting services for clients throughout the automobile, technology, consumer goods, special transport and trade fair logistic industries. Services include: e-commerce solutions, fulfillment logistics, lead logistics services and intermodal transportation. DB Schenker, Richard-Wagner Strausse, Essen, Germany, Tel: +49 (0) 201 8781-4990.

4) (tie) DSV Global

Headquartered just outside of Denmark’s capital of Copenhagen, DSV offers worldwide warehousing and transportation solutions for European and North American companies looking for supply chain solutions across the global stage. Services include: full or less-than-truckloads, warehousing, order fulfillment, intermodal, air, sea and rail shipments and “supply chain innovation.” DSV + Panalpina, Hovedgaden 630, 2640 Hedchusene, Denmark, Tel: +45 43 20 30 40.

4) (tie) Sinotrans Limited

With offices throughout Asia and the Pacific Rim, Sinotrans offers transportation solutions from warehousing to getting goods to their final destinations. Services include: warehouse management, distribution solutions, cross border freight hauling, intermodal transport, project lead and “innovative supply solutions.” SinoTrans Ltd., 6F Suite B Waiyun Building, Building 10 Yard 5 Anding Road, Beijing, China 100020, Tel: 86 10-5229-5600.

6) Expeditors

The Fortune 500 service-based logistics company believes because it does not own the aircraft, ships, or trucks they use every day on six continents, they can be highly flexible when it comes to supply chain management. Services include: supply chain design and optimization, order management, fulfillment, warehousing, customs brokerage and air, sea and ground transportation. Expeditors International, 14301 24th St E, Sumner, WA 98390, Tel: (253) 863-5502.

7) (tie) GEODIS

The French logistics company aims to be a growth partner with its clients through its proven expertise and emphasis on excellence. Services include: supply chain optimization, freight forwarding, contract logistics, distribution & express and ground transport. GEODIS, Espace Seine, 26 Quai Charles Pasqua, 92300 Levallois-Perret, France, Tel: +33 1 56 76 26 00.

7) (tie) Bolloré Logistics

A global leader in international transport & logistics, the French company is committed to delivering reliable, flexible, innovative and value-creating solutions that help clients grow. Services include: transport, trade compliance, contract logistics, global supply chain, e-commerce and customer care. Bolloré Logistics, Tour Bolloré, 31-32 quai de Dion Bouton, 92800 Puteaux, France, Tel: +33 (0)1 46 96 44 33.

9) Nippon Express

First established in 1937, the Japanese company operates in more than 40 countries, with clients throughout Asia, North America and Europe and overseas transit facilities in Thailand, Indonesia and Malaysia, among other locations. Services include: warehousing, distribution, cross border freight hauling, fine arts transport and moving services. Nippon Express, Higashi-shimbashi 1-9-3, Minato-ku, Tokyo, Tel: 81-3-6251-1111.

10) Hellmann Worldwide Logistics

Founded in 1871 by Carl Heinrich Hellmann, who as the lone employee used a horse-drawn cart to deliver parcels in and around the town of Osnabrück in northern Germany, Hellmann today has a worldwide network of 20,500 people in 489 branches in 173 countries. Services include: logistics, insurance, security, technology, e-commerce and road, air, rail, and marine transportation. Hellmann Worldwide Logistics GmbH & Co. KG, Elbestrasse 1, Osnabrück, 49090 Germany, Tel: 49-541-605-6450.

We created our list by considering three other lists that were released this year. In September, Armstrong & Associates, Inc. (A&A), an internationally recognized key information resource for 3PL market research and consulting, put out a list of 2020’s top 50 ocean freight forwarders that is based on 2019 TEUs, logistics gross revenue and air metric tons.

Actually, A&A updated an earlier list because two heavy hitters in the ocean freight industry, DSV and Panalpina, merged in 2019. Then came COVID-19 early in 2020, which necessitated an examination of responses to the global pandemic.

A “key trend we’re watching is the impact COVID-19 is having on various modes of transport,” A&A President Evan Armstrong explained to Logistics Management Executive Editor Patrick Burnson. “Ocean capacity may open up, but rates will escalate. In the meantime, the air cargo sector will become more reliant on expensive freighters, as passenger traffic remains in steep decline in the international marketplace.

Global Trade also considered 360 Research Reports’ Global Ocean Freight Forwarding Market Size, Status and Forecast 2020-2026 examination that focused on 25 companies and was released pre-pandemic, in January.

Thanks to the A&A and 360 Research reports, there were definitive answers about which companies would occupy most of Global Trade’s top slots. However, we also turned to a third report to settle any differences between the other two: a list of the top 10 3PLs in the world released In July by TradeGecko, which is part of Intuit QuickBooks, an accounting software company.

While freight forwarders on the Global Trade master list serve U.S. markets and have facilities in the States, our collection doesn’t exactly scream “American.” Fortunately, Armstrong also shared some wisdom with Burnson that may have Yanks ranking better in 2021. “We’ll see more shipping and sourcing in North America as shippers reevaluate their options overseas,” the A&A president says. “The ongoing trade tensions with China will also exacerbate this situation.”

The U.S. companies that did not make our top 10 but would have easily made our top 50 include: C.H. Robinson, XPO Logistics, United Parcel Service (UPS), Yusen Logistics, Mallory Alexander, Odyssey Logistics and Technology and Horizons Air Freight.

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Armstrong & Associates, Inc.’s Top 50 Ocean Freight Forwarders of 2020: https://www.3plogistics.com/3pl-market-info-resources/3pl-market-information/aas-top-25-global-freight-forwarders-list/

360 Research Reports’ Global Ocean Freight Forwarding Market, Size, Status and Forecast 2020-2026: https://www.360researchreports.com/global-ocean-freight-forwarding-market-15076500

TradeGecko’s Top 10 3PLs in the World: https://www.tradegecko.com/blog/supply-chain-management/top-10-3pl-companies

silk road

Can the New Silk Road Compete with the Maritime Silk Road?

China’s president Xi Jinping refers the Belt and Road Initiative, aka the New Silk Road, as the “Project of the Century” and according to a recent Bloomberg article, Morgan Stanley anticipates Chinese investments will total 1.3 trillion US dollars by 2027. In addition, more than 150 countries and international organizations have committed to invest in the project as well with infrastructure enhancements, such as roadways and power plants. But will this New Silk Road ever really compete with the firmly established Maritime Silk Road?

Following is a comprehensive analysis by Bernhard Simon, CEO of Dachser, an international logistics solutions provider, Mr. Simon outlines the benefits and challenges associated with the New Silk Road as well as its position as a potential competitor to the Maritime Silk Road.

Over the last few years, the more I hear and read about the New Silk Road, the more grand the expectations.  Politically speaking, the trade corridors between China and Europe, as well as Africa, seem to be China’s key to becoming a leading global power in the 21st century. Logistically speaking, it would seem that infrastructures and networks are emerging on an entirely new scale, taking a gigantic economic area—often described as representing 60 percent of the world’s population and 35 percent of the global economy—to the next level. The New Silk Road could be a kind of high-speed internet for the transport of physical goods.

As with most narratives, it is worth taking a critical look at the facts. I would like to do this now for certain logistical aspects of the Belt and Road Initiative (BRI), as the New Silk Road is officially known.

First, let’s consider the overland connection between China and Europe: the possibility of bringing Chinese consumer goods to us on the east-west route via rail. This transcontinental route was not the brainchild of China’s President Xi Jinping, who made the BRI a national doctrine in 2013.

In fact, goods have been rolling along the Trans-Siberian route from China to Europe since 1973 (with some interruptions due to the Cold War). Today, there are two routes out of northern China, which head via Mongolia, Kazakhstan and Russia to terminal stations such as Duisburg’s Inner Harbor or Hamburg. China’s western region, home to the megacity of Chongqing and its 30 million people, is also connected to the northern routes. This route allows cargo from the west to no longer need to be transported the many miles to China’s coasts.

 High Costs of Rail Freight vs. Ocean Freight

How significant are these rail links for logistics between Asia and Europe? In 2017, 2,400 trains moved about 145,000 standard containers between China and Central Europe. This corresponds roughly to the cargo of seven large container ships. The International Union of Railways (UIC) expects this to grow to 670,000 standard containers—equivalent to 33 container ships—in ten years’ time. Despite this forecast growth, the existing rail links between China and Europe are likely to remain logistical mini-niches. Steve Saxon, a logistics expert from McKinsey in Shanghai, summarizes it nicely: “Compared to sea freight, the volume of goods transported to Europe overland will always remain small.”

This is primarily a matter of cost. Transporting a standard container between Shanghai and Duisburg by rail costs between $4,500 USD and $6,700 USD; compare that to the cost of sending a similar container from Shanghai to Hamburg by ship: currently around $1,700 USD. This difference is simply too great for railway transport to be truly competitive against ocean transport, even though they move the cargo at about twice the speed. Efficiency improvements will not have a big enough impact to shift from ocean transport to rail.

Another factor is that at the moment, China heavily subsidizes these international rail connections. Once that support ends in 2021, competitiveness will erode further. It is not clear whether rail transport will be self-sustaining without subsidies.

Also, in most cases, anyone needing a shipment quickly and flexibly typically sends it via air freight, even if this option costs around 80 percent more than via railway. Thus, freight transport by rail is (and will remain) caught between economic (by ocean) and fast (by air).

Would adding more train routes change the situation?

China is planning an additional railway line in its southern region, which will move cargo to Europe via Central Asian countries, as well as Iran, and Turkey, bypassing Russia entirely. Indeed, a railway line has connected China with Iran since 2018. This route is, geographically speaking, very similar to the “old” Silk Road, a trade route for camel caravans that crossed Central Asia on its way to the eastern Mediterranean. If this railway line is completed one day, it will raise a number of questions from a European perspective: How can safety, punctuality, and reliability be guaranteed? How can delays caused by customs clearance be minimized? What effect will international sanctions have, for example, on transit through Iran? How can the misuse of containers for smuggling immigrants be avoided? In other words, many issues need to be addressed before a railway corridor south of Russia can be established.

There are two more routes in China’s BRI strategy. One is in Southeast Asia: a 2,400-mile railway line from Kunming to Singapore plus a branch to Calcutta. The other is a rail line that starts in China’s far west, then runs through Pakistan to the port of Gwadar on the Arabian Sea. Crossing over various passes in Central Asia, this technically challenging project is expected to cost $62 billion USD. However, both routes have only a very indirect connection to freight traffic between China and Europe.

So the situation will remain much the same into the future–some 90 percent of world trade will go by ship. Rail transport via the New Silk Road will not change this. If all this freight suddenly started rolling along the Silk Road, the route would be like an endless conveyor belt loop—the idea is completely absurd.

And what about the Maritime Silk Road?

More important than Eurasian railway routes is the so-called Maritime Silk Road, i.e., the transport of cargo from China to Europe by sea. As soon as Portuguese sailors opened up China for trade by sea in 1514, the old Silk Road began to fade from memory.

Today, more than 50 percent of global trade takes place on the Maritime Silk Road between China/East Asia and Europe. The world’s largest container ports are on this route: Shanghai, Singapore, Shenzhen, Ningbo-Zhoushan, Busan, and Hong Kong. The development of the Maritime Silk Road needed no Chinese master plan; logistics infrastructure arises wherever corresponding investments pay off.

China has numerous plans for these established shipping routes, including port expansions. Its shareholdings in around 80 port companies—including Piraeus and more recently Genoa and Trieste—support its plans and ensure investments. Why should we take issue with China for pursuing these goals leveraging its position as a leading global economic power? It is not the first country to promote its economic interests with direct investments and financing. Europe, too, should pursue a strategy of developing an enhanced infrastructure to transport freight to and from China/Southeast Asia in order to ensure a reciprocal exchange.

And China’s plan to step up the use of the maritime corridor through the Suez Canal, which shortens transport between China and Central Europe by at least four days compared to the route around Africa, is reasonable and less complicated. The Frenchman Ferdinand de Lesseps completed the Suez Canal in 1869 with precisely this goal in mind.

Conclusion

Nobody denies that the diverse projects of the New Silk Road hold great economic potential; that they would improve the network of connections between Asia and Europe; and that Beijing has a geopolitical interest in pursuing them. China is creating an enhanced infrastructure that will benefit all participants in the global economy. Nevertheless, it would be advisable to evaluate the logistical opportunities with the necessary dose of reality. I would caution against being dazzled by the beautiful visions and the fascinating narrative as it could cloud your vision and lead to using poor judgment and making risky investments.

 

Bernhard Simon is the CEO of Dachser Logistics
airfeight freight

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.

global

GLOBAL FORWARDING: BIGGEST, FASTEST SAVINGS FOR GLOBAL SUPPLY CHAINS

Increasingly complex omnichannel business models are resulting
in correspondingly complicated global supply chains. Maximizing
efficiencies for time and cost in moving freight around the world
is mission critical. This paper takes a high-level look at three
opportunities for optimization: cargo consolidation, cargo risk
management, and customs management.

The multichannel retail business model, along with increasing levels of global sourcing, have created staggering opportunities for importers and exporters around the world, whether huge multinationals or small companies shipping globally for the first time.

Global supply chains are becoming longer and more fragmented,
presenting significant new issues for logistics professionals. In one
survey, 104 global supply chain executives reported that visibility
(21.1%), fluctuating consumer demand (19.1%), and inventory
management (13.2%) were their biggest challenges (1).

Many factors add complexity to global supply chains, including longer lead times and lead-time variability and an increasing number of suppliers, partners, carriers, customers, countries, and logistics channels. Contrary to what you might think, global freight forwarding can offer relief for these concerns and when people, processes, and technology are leveraged, can even offer competitive advantages.

10 Approaches to Savings in the Global
Forwarding Supply Chain

EASY

1. Align shipping activities to leverage benefits of consolidation
services.

2. Minimize financial impact of cargo loss and damage by
purchasing marine cargo insurance.

3. Take advantage of transportation providers’ TMS to create
visibility and take control of the supply chain.

MODERATE

4. Develop strategies to match service modes with inventory
planning and sales forecasting.

5. Create a risk management strategy—identify and understand
risk types, probabilities, and potential costs.

6. Integrate with a single transportation provider’s TMS and
connect with suppliers and carriers globally.

DIFFICULT

7. Effectively use Incoterms® when negotiating with suppliers to
impact unit price, cash flow, inventory levels, and logistics costs.8. Actively engage with a customs professional to deploy best
practices in customs management.

9. Leverage transportation provider’s business intelligence
reporting and analytics to improve supply chain performance.

10. Utilize PO management to control the purchase order lifecycle;
go upstream to supplier order fulfillment logistics activities.

CARGO CONSOLIDATION

What it is
Few companies can fill an entire ocean or air container with their
own freight. Both ocean and air carriers require shippers to work
with freight consolidation services to accommodate small volume
shipping needs. These freight consolidators accept complementary
freight from multiple shippers, and consolidate freight all kinds
(FAK) containers for ocean shipping or unit load devices (ULD) for
air. This results in better freight rates and cargo security measures.

Why it’s important
One of the biggest areas for savings in a global supply chain is
taking advantage of space. Companies of any size can use freight
consolidation services, but it’s particularly useful if you have a lean
supply chain or operate in a just in time environment. Using logistics
efficiencies from freight forwarders, consolidators, and third party
logistics providers (3PLs), you can choose to move smaller quantities
of material more frequently. In doing so, you make a strategic
decision to spend more on consolidation shipping services and less
on inventory, storage, returns, and other costs.

Ocean versus air
Whether air or ocean consolidation is the right choice for you
depends on the required service level and transit time. Globally,
ocean is the less expensive transportation method. That cost
advantage must be carefully weighed against longer transit times, as
well as potential delays caused by adverse weather conditions, port
strikes, or other issues.

In addition, there are faster and slower ocean options. Some ocean
freight goes directly to the port of call. Other shipments can stop at
multiple ports of call, which is less expensive, but takes longer and
is more prone to unexpected disruption. Working with a reputable
freight forwarder can help reduce unexpected supply chain failures
and delays, and provide options if disruptions occur.

Air freight consolidation service is a faster, more expensive option
than ocean, but here, too, there are faster and slower options that
determine the cost. For example, if you don’t need direct service
(next flight out), choose a slower transit time at more favorable
pricing.

Best Practices for Cargo Consolidation

Choose a forwarder with:

-Sufficient freight volumes to effectively consolidate without delays and to aggressively negotiate rates with ocean and air carriers.

-Dedicated space allocations for capabilities when they are needed.

– Work in major markets with high flight capacity.

Generally, in any type of transportation, the more time there is between pickup and delivery, the less you pay. In air, for instance, use providers with gateways (vs. a hub and spoke approach)
to get cost-efficient options that meet your deadlines. Use consolidation schedules if you can for more savings.

CARGO RISK MANAGEMENT

What it is
Global shipments are exposed to risk from a wide range of human
and natural forces. Yet, global shipments are subject to a unique set
of international laws and/or treaties that limit the liability of carriers. Whether you import or export, you should understand the various types of risks that cargo could face and how you can help protect the value of the goods shipped globally.

Why it’s important
Even with proper packing, stowage, and securing of containers on
a container ship, severe weather and rough seas can cause rare but
catastrophic events like ship groundings, structural failures, even
collisions, any of which can result in loss of cargo. On average, the
World Shipping Council estimates that there were 1,582 containers
lost at sea per year between 2008 and 2016; 1,012 of these
containers (64 percent) were lost due to a catastrophic event.2 Theft, counterfeiting, hurricanes, floods, political unrest, labor disputes, documentation errors, or mechanical problems can also delay or ruin delivery of the most perfectly planned global shipment. Protecting the value of products while they are in transit across the globe can have a significant impact in protecting the bottom line.

Air and Ocean Carrier Liability

When events occur, companies are often dismayed to find that not
all risks or damages are covered by carrier liability.

Air carriers are not liable if damage was caused by:
-An inherent defect, quality, or vice of the cargo
-Defective or insufficient packing of the cargo
-An act of war or armed conflict
-An act of a public authority carried out in connection with the
entry, exit, or transit of the cargo

Even if an air carrier is held legally liable for damages, they pay the
value of the goods or 19 SDRs3 per kilogram, whichever is less.
If a ship experiences an extraordinary sacrifice or expenditure at sea,ship owners may declare general average. The concept of general average hearkens back to the days when a crew tossed cargo overboard to lighten the ship in a storm. During the emergency, there wasn’t time to figure out whose cargo should be jettisoned. After the fact, to avoid quarreling, merchants whose cargo landed safely would be called upon to contribute a share or percentage to the merchants whose goods were tossed overboard to avoid imminent peril. Today, general average declarations still mean that all the merchants with freight on the vessel are required to share in the cost of the expenditure before the goods are released.

General average is a growing risk and concern for many risk
managers and insurance experts. In recent times, there has been a
rise in the frequency and severity of extreme weather events that
have led many vessels to become grounded, causing container loss
and/or vessel damage. In addition, fires on container vessels are
more common now than in the past.

Today, when these events occur and general average is declared:

1. Ship owners have a lien on the ship’s cargo. At the time
the voyage is completed, the level of sacrificial losses will not
normally be known. Ship owners will usually call for security
from cargo interests, against which the assessed contributions
can be enforced. The amount of the claim is usually calculated
by average adjusters, appointed by ship owners. Each cargo
owner’s contribution is calculated on a percentage of the cargo
owner’s interest or commercial invoice value, ranging from
1 to 100 percent.

Ship owners have a lien on the cargo until each cargo owner’s
contribution or security is satisfied. Unless a shipment is secured
with all-risk marine cargo insurance, the cargo owner will be
required to post their contribution or security in cash before
their cargo will be released. As the frequency of general average
declarations has increased, so has the amount of the required
securities—from about 12% a year ago to about 50% today.

2. Ocean carriers are not automatically liable for loss or
damage to your cargo. The U.S. accepted the Hague Rules in
1936 through the passage of the Carriage of Goods by Sea Act
(COGSA). The rules expressly remove the ocean carrier’s liability
for loss or damage to cargo that arises from one of the 17 stated
liability exclusions. Legal liability claims are often met with
resistance by carriers.

Even if the ocean carrier is found liable at the end of a legal
process that can take months to settle, their limit of liability
under COGSA is $500 per package or customary shipping
unit, or the actual value of the goods, whichever is less. In other
words, the onus is on you to assess and minimize your
risk exposure.

Best Practices for Cargo Risk Management

-Buy the appropriate amount of marine cargo insurance for ocean or air shipments.

-Ensure the valuation clause for a given shipment defines the maximum amount an insurance company will pay for a loss. Most valuation clauses include the commercial invoice value and any prepaid charges associated with the shipment, such as freight, customs clearance, or duty. This clause can be modified to include other charges or profit margin—if requested and approved by underwriters.

-Choose an insurance intermediary with experience or specific training in international logistics and transportation insurance.

Calculating Costs to Determine Risk Exposure

The risk of lost cargo is real. Yet, without a crisis to motivate
action, most companies place risk management at the bottom of
the priority scale. The most common method used to protect the
value of goods from physical damage, theft, or other calamity is the
purchase of marine cargo insurance.

The first step you can take is to understand your risk exposure
by tying dollar values to varying types of risk. The challenge is
quantifying the potential cost. You can brainstorm to gather that
information, or can work with a logistics provider that has in-house
risk management professionals to help uncover potential liabilities
in the supply chain.

You can apply subjective probability to calculate possible losses. In
other words, you can estimate the chances of a risk event happening
and multiply it by the cost if it did happen (see below). Once the
dollar amount is calculated, the next step is to reduce the expected
loss by reducing the probability of the occurrence, or the cost of the
occurrence.

Armed with subjective probability estimates, you can effectively
buy the appropriate amount of insurance. While insurance is readily
available, it is your responsibility or the consignee’s to ensure the
coverage purchased best fits the unique exposure.

CUSTOMS MANAGEMENT

What it is
Most companies choose their customs broker for the long term.
That’s because the customs broker must truly understand your
company and products. They must also know how to navigate each
country’s compliance requirements with their own specific set of
customs rules, governmental regulations, VAT, duty rate calculations, and payment plans.

Why it’s important
Even simple trade-related mistakes, such as an incorrect spelling on
a declaration, can result in fines, penalties, or even cargo seizure.
Penalties for transgressions can be severe, depending on the
seriousness of the infraction.

For example, U.S. Customs and Border Protection (CBP) imposes
fines of up to $10,000 per entry for recordkeeping infractions.
Non-financial costs, such a shipment delays, the diversion of staff
resources to correct problems, and in rare instances, the loss of
trade privileges, can be detrimental to an importer’s business.
When you work with Trusted Advisor® experts in customs, you can
learn where the most common mistakes occur and implement best
practices to avoid them. In addition, CBP can conduct a customs
focused assessment—essentially, an audit—with any U.S. importer. A
customs expert can help your company prepare before, during, and
after a focused assessment to minimize risk exposure.

Compliance programs and options that are worth investigating
Not every compliance option will fit or resonate with every business.
Discuss specific issues with an attorney or Trusted Advisor® expert
in customs compliance and learn which elements might be the most
useful. Always seek out an expert opinion.

-Customs bond sufficiency. If you import into the U.S., you must
have a customs bond, generally 10% of the duties and taxes
you expect to pay to CBP for import transactions throughout
the year. CBP can shut down all imports if they discover you
have an insufficient customs bond. Since tariffs (and duties)
are increasing substantially, existing bonds may no longer
be sufficient. Bond insufficiency will lead to additional costs
and delays if not monitored or addressed in a timely manner.

Consider the increased duty amounts well before the bond
renewal period comes up. If the customs bond will need to be
significantly higher, the surety company may require additional
documentation—including financial statements and possibly
letters of credit—before they issue a new customs bond, all of
which will take time to get into place.

-Duty drawback programs. Duty drawback programs refund
99% of certain import duties, taxes, and fees for goods that are
subsequently exported; this supports both U.S. manufacturing
and foreign export sales. Before 2018, duties might only have
been in the 1% to 2% range, and since there is paperwork to file
to get the refund, many companies did not bother with it. Today,
those 1.2% duties have jumped up to 25% in some instances,
making duty drawback programs a potential game-changer for
your business. The downside: duties must be paid up front; your
company may wait for 1 to 2 years to receive the refund under
the current drawback environment, which can become a cash
flow issue for some companies.

-Foreign trade zones (FTZs). Foreign Trade Zones (FTZ) are
secure areas located in or near CBP ports of entry, and are under
CBP supervision. Unlike duty drawback programs, companies
don’t have to pay duties when goods enter an FTZ. Instead, FTZs
enable duty deferment; the duties are paid when the goods
enter CBP territory for domestic consumption. At that point, the
importer pays the duties at the rate of either the original foreign
materials or the finished product.

-Exclusion requests. If a company thinks their product should
be excluded from Section 232 and Section 301 tariffs, they can
request an exclusion. When filing an exclusion, make certain that
the classification used is the best classification for the product.
Also, work with a trade attorney; they can help you navigate
the law and apply it to a specific product so the exclusion isn’t
rejected on a technicality.

-Changing sourcing locations. It’s not always easy to change
suppliers, but some companies are looking at it in a new era of
tariffs. Yet, suppliers for some materials are only found in China,
and even if you locate a source in another country, there can be
issues. Can they supply at the necessary level? How long will it
take to test the new supplier against specifications? The more complicated the product, the more challenging a switch will be.
Also, keep in mind that if the cargo ships from Singapore but its
origin is China, U.S. tariffs may still apply.

-Incoterms®. Incoterms®, or International Commercial Terms,
are published by the International Chamber of Commerce.
They are the rules that define the responsibilities of sellers and
buyers for the delivery of goods under sales contracts, and
they establish where the transfer of risk takes place. However,
they vary from situation to situation. For example, if a container
being moved across the ocean from Shanghai to the United
States falls overboard, who is at risk? The Incoterms® tell the
story. If the U.S. buyer purchased the product FOB (free on
board), the importer took responsibility for the risk as soon as
the freight was loaded on the vessel in Shanghai. If the same
product was purchased DDP (delivered duty paid), the shipper
would be responsible until the product reached the purchaser’s
door in the United States. You can save money if you ensure
your purchasing team understands how Incoterms® rules will be
applied to freight.

Best practices in Customs Management

-Buyers are not transportation and compliance professionals who understand Incoterms®—they choose suppliers based on favorable pricing. You can establish internal structures or education to help buyers understand how Incoterms® impact risk management and pricing.

-Rely on a customs professional to leverage U.S. Customs data. They can combine a company’s unwieldy historical shipping data into usable trade reports to reveal whether an organization is taking proper advantage of free trade agreements around the world.

GLOBAL TECHNOLOGY CAN TIE IT ALL TOGETHER

As companies large and small continue to expand internationally,
they can no longer afford to single-handedly manage the countless
details and nuances of global freight forwarding. Shortened lead
times, the use of multiple transportation modes and carriers to
deliver product efficiently across continents, and an environment
fraught with risk requires both worldwide and regional management
of cargo flows.

Many companies rely on a transportation management system
(TMS), hoping to keep their fingers on the pulse of their global
supply chain providers. However, TMS products were developed
initially to track domestic or regional truck shipments and to
automate tedious, low-value processes performed by an enterprise’s
transportation staff. Today, few TMSs can enable global visibility to
every shipment, or can interconnect disparate systems on multiple
continents to provide the level of visibility to show where products
are at any given point in time.

A truly global supply chain network has a single TMS architecture
that spans all continents. Global visibility enables your organization
to clearly see the entire supply chain. Utilization reports for multiple
services and modes (air, ocean, rail, and road) on all continents
confers specific strategic advantages:

-Continuous improvement to supply chain logistics in real time

-Access to business intelligence, crossing all freight and spend.categories to strategically understand the impact of decisions

-Access to a centralized network of multiple providers–without
integrating individually with each provider

Work with a logistics provider that offers a full suite of services,
manages service performance, consistently communicates
performance metrics, and offers strategic optimization to gain
distinct advantages in the marketplace.

A case in point: purchase order management

-Purchase order management (POM) within a TMS delivers end to end visibility throughout the purchase order (PO) life cycle. POM enables you or your provider to manage shipment windows, work
with overseas vendors to coordinate bookings, manage exceptions,
collect and distribute documents, and provide reporting at the shipment and PO/line item level.

-POM options include PO tracking and visibility, reporting, online booking, document management, check and verification process, vendor self-service, vendor management, exception management,
and PO and shipment analytics.

5 Questions to Ask a Potential Global Freight Forwarder

IS YOUR TMS TRULY GLOBAL? There should be one system architecture that works across regions and covers all types of transportation.

CAN YOU PROVIDE CAPACITY OPTIONS?
They should ship goods by ocean, air, rail, and truck,
choosing the option that best aligns with the business
need. Ask about their consolidation programs to
optimize spend, routings, and transit time performance.

DO YOU HAVE “BOOTS ON THE GROUND” IN KEY
GEOGRAPHIC REGIONS?
Your global freight forwarder should think globally, act locally.
That is, they should know global transportation, but also
have deep knowledge of the local population, infrastructure,
languages, politics, economy, customs, currencies, tax laws,
and tariffs for each country your shipping routes touch.

CAN YOU HELP ASSESS CARGO RISK?
They must adequately help you assess and mitigate cargo
risk to help protect your bottom line.

DO YOU OFFER CUSTOMS ADVICE?
They should be experts in leveraging customs information
and programs to your company’s advantage.

 

_________________________________________________

1. “What is the biggest challenge you are facing in your supply
chain?” eft Supply Chain & Logistics Business Intelligence,
April 2018. Accessed at https://www.statista.com/
statistics/829634/biggest-challenges-supply-chain/.

2. “Containers Lost at Sea-2017 Update,” World Shipping
Council, 2017.

3. SDRs, or Special Drawing Rights, refers to a basket
of currencies designed to iron out currency exchange
fluctuations in International valuations, now used to express
the limitation under the Hague-Visby Rules and the MSA
Limitation Convention.

4. “Global Trade, Trade Statistics,” World Shipping Council,
2018. Accessed at http://www.worldshipping.org/about-theindustry/global-trade.

5. “Containers Lost at Sea-2017 Update,” World Shipping
Council, 2017.

6. Larry Kivett and Mark Pearson, “Understanding risk
management in the supply chain: Using supply chain data
analytics to drive performance,” Deloitte, 2018.

freight invoicing

How to Tackle the Freight Invoice Management Obstacles

A freight invoice is a detailed bill which includes information regarding the transportation of a company’s goods from one place to the other, along with the inclusion of the amount of charges, its weight, due dates, complete goods’ description, contact information, and names of both the receiver and the shipper, etc.

On the other hand, logistics is defined as the process of planning, implementing, and controlling the storage and movement of services and goods from the point of origin to the point of consumption within a supply chain, explains a top provider of Invoice Processing Services. The companies which deal with these processes become a part of the logistics industry and handle a few or all of the functions of supply chains as per the logistic requirements of the client.

Past Examples of Invoice Issues

-In recent times, an IT company was overbilled throughout 14 days by an amount of $935,578 owing to the incorrect weight applied by a parcel carrier.

-Auditing helped a national level entertainment retailer in saving around $35,000 from a wrong monthly invoice charge

-A worldwide renowned LED manufacturer had to pay $93,147 more due to incorrect billing currency, but the amount was recovered after the fault was discovered during the auditing process.

Top Freight Invoice Management Obstacles

Multiple Challenges

Managing invoices is extremely hard as a lot of challenges like reconciling contract terms with Bill Of Lading (BOL), invoices’ rating for correct rate selection, decisions about the acceptance of differences in charges, getting invoices resubmitted after making the carriers do corrections, etc. have to be dealt with extreme care. When these challenges are not addressed properly, they lead to errors, which further lead to overcharging, eventually adding to the overall Invoice Processing complexity.

Tedious Information Processing

The processing of information for the invoices is really tiring and tedious in nature. This is the reason employees who process the information for billing, weight, ledgers, data entry, and more commit multiple mistakes and make the final outcome inaccurate and hard to understand.

Bill Entry Issues

The very first concern which the logistics industry has to deal with during invoice management is the efficient functionality of the billing entry process which is defined below:

-Shortage of non-standardized processes and control due to operations which are not centralized for billing entry

-Multiple systems integration

-Due to missing BOL information, incomplete billable items are captured

-Multiple formats for BOL 

-Lost information regarding a customer or local-specific procedures for billing

Refund Management Issues

There are a lot of instances where the goods and services do not land safely at the doorstep of the receivers. In such cases, goods and services are returned back to the suppliers, which involves going through all the invoice processing steps again, which is extremely time-consuming for the owners of the logistics company.

Best Practices to Tackle Invoice Management Obstacles

Must-Include Invoice Listings

-Consignee and consignor names

-Shipment date

-Packages number

-Freight description

-Volume, weight, and measurement of freight

-Total outstanding charges

-Each carrier name engaging in transportation and movement route

-Shipment’s transfer point

-Issuer’s business address and remittance address

Freight Management Controls

It is important to incorporate internal controls which are powerful into the management structure of the freight. An authorization system, duty separations, and internal audits on a periodical basis are one of the most important tasks for managing risks like favoritism and fraud, which have the potential to bring down the overall profitability. 

The main objective is to make sure none of the employees have any chance for concealing and committing any illegal or unethical activity. For example, an employee who has been given the responsibility of getting the estimates should never be made the in charge of making the final freight invoice payment or selection.

Proficient Auditing System

According to a report by ReconLOgistics.com, wrong freight bills appear in about 5-6% of the entire invoices, which can raise the expenses of transportation to a great extent. With a proficient auditing system in place, along with a thorough recalculation and review can save you from overpaying due to inaccuracies in the freight bills. 

Apart from this, normal dealing procedures for lost shipment or damaged dealing, and timely claims reconciliation are an imperative part of a cost-saving management program for the freight.

Outsourcing Payment and Freight Audit

When it comes to finding the best solutions for streamlining the freight invoice management process, Outsource Invoice Processing remains a top favorite amongst the businesses due to its cost-cutting feature, along with the following benefits provided by it:

-Paper routing, filing, and handling elimination

-Centralized system for entire processing functions of the freight invoice

-Eliminating multiple systems and non-uniform processes

-Real-time insights into the invoices

-Latest technology use like artificial intelligence and automation

-Invoices’ long-term archival in the electronic form

-Carrier queries

-Increase cash flow to the maximum levels with timely invoice payments

-Receive correct and detailed accrual files and cost allocation straight into your system

-Gain visibility into operational metrics, invoice status, and payment information

Invoice Automation

Most of the industries have already incorporated the use of automation in a majority of their work processes, and have reaped great benefits in the following forms:

-Faster processing of invoices

-Elimination of costly human errors

-Invoice costs reduction by 80%

-Preventing payments duplicity and maximizing initial incentives for payments

-Enabling enhanced cash flow control and visibility

-Achieving 100% accuracy for invoice entry

Freight Software

Businesses who are trying to manage their freight invoices by themselves can ease their management workload with some of the top freight software mentioned below:

The Magaya Cargo System

This user-friendly software helps in eliminating duplicity of data entry, streamlining shipment workflows, generating Bill Of Lading, etc., along with a fully-integrated system for Invoice Accounting.

A1 Tracker

This software meets the unique business demands of the present scenario, make the working of the logistics systems smooth, and bring the required value to your business.

Freightos

The online platform for global trade management and freight booking, along with providing logistics owners with digital sales tools.

Excalibur WMS

This is a software which is fully integrated for warehouse management, accounting system, and third-party logistics (3PL) service billing.

CargoWise One

A central software system platform for worldwide providers giving logistics services.

Managing the freight invoices is definitely challenging owing to the various complexities in the form of inaccuracies and irregularities in the data and work processes, respectively. These complexities can be brought down greatly with the use of automation, outsourcing, audit systems, etc., eventually streamlining the process of freight invoice management at large, along with saving time and money at the same time.

_________________________________________________________________

Gia Glad holds the position of Business Content Writer at Cogneesol – an outsourcing firm offering finance and accounting services along with other value-added services to the small and mid-sized businesses globally.

TQL

TQL TO CREATE NEARLY 600 NEW JOBS, MAKE $20 MILLION INVESTMENT IN OHIO

Total Quality Logistics (TQL) is constructing a second building at its headquarters to accommodate its continued growth in the third-party logistics industry, according to the Cincinnati, Ohio-based 3PL

The second-largest freight brokerage company in North America, TQL offers full truckload, less-than-truckload and intermodal logistics services. The goal of the expansion is to accommodate nearly 600 new employees that the company anticipates hiring, primarily in sales and information technology roles, over the next five years.

“We continue to grow our market share with new and existing customers, and that’s a direct testament to our incredible team members who are focused on providing premium service to our customers and carriers day in and day out,” says TQL President Kerry Byrne.

“Logistics is an increasingly tech-driven industry, and we continue to make substantial investments in our proprietary technology solutions, such as TQL TRAX, to improve transparency, communication, and drive greater efficiencies in transportation,” Byrne adds. “This headquarters expansion will cater to the needs of technology professionals so we can attract and retain the highest levels of technology talent.”

The expansion of TQL’s headquarters campus on Ivy Pointe Boulevard in Union Township includes the construction of a second building ranging in size from 120,000 to 130,000 square feet next door to the company’s existing 100,000 square foot building. The company anticipates construction costs of the new building at $20 million, plus an additional investment to renovate its current site.

The complex will hold more than 2,000 employees when construction is complete. 

Descartes

Shipping Support Consolidated with Descartes ShipRush™

Descartes’ cloud-based ecommerce shipping solution ShipRush™ now provides customers increased visibility through its added less-than-truckload (LTL) freight management options.

The global logistics solutions provider announced the adding of LTL freight to the offering, further increasing efforts in streamlining shipping operations while supporting companies as they determine carriers and efficient service options.

“Descartes continues to drive ecommerce shipping innovation by bringing together LTL freight, parcel shipping and rate shopping on a cost-effective platform for ecommerce companies,” said Troy Graham, Senior Vice President, Business Development for Descartes Systems Group.

“These combined capabilities help companies, like ZUP, remove the guesswork from choosing the best combination of cost and service for their shipments.”

“As a multi-channel business, ZUP’s shipping needs are complex. We process both individual marketplace orders and large palletized orders for our network of dealers,” said Nick Kierpiec, director of operations for ZUP.

Beyond increased visibility with its all-in-one capabilites, ShipRush™  supports customers in determining the most cost-effective options for LTL management and usage. The platform assists in how and when to use LTL and can produce bulk shipping savings up to 50 percent while offering access to integrated Enterprise Resource Planning systems (ERP) and carrier rate selection processing.

“The ability to do everything in one platform, including process incoming orders and rate shop the best price and delivery options for parcel and LTL, saves us both time and money,” concluded Kierpiec.

 

freight

It’s All About Relationship with Freight Brokers. Here’s Why.

Several moving parts exist to make the transportation and logistics industry succeed. From truck drivers and innovative technology companies, to shippers, carriers, and freight brokers, each part of the marketplace helps create smoother transfer of goods while improving efficiencies across the board. When it comes to freight brokers – the licensed intermediaries who work to connect carriers and manufacturers – the ability to run a successful operation relies on a foundation of business relationships. Freight brokers must take the time to cultivate their partnerships and connections from day one to ensure they have what they need to sustain a viable business.

Understanding the Freight Brokerage Business

Recent statistics estimate the total number of freight brokers working in the United States to be slightly more than 17,000. Some work independently under their own business structure while others are employed by large brokerage firms. In either scenario, licensed brokers have to go through distinct steps to ensure they are operating within current federal laws. The most important part of the licensing process is registration and obtaining motor carrier authority through the Federal Motor Carrier Safety Administration.

Along with this requirement, freight brokers must also go through formal training at a freight broker training school to learn what is necessary to become effective in the field. The licensing regulations also require brokers to hold a bond or a trust, with the most common choice being a freight broker bond. Obtaining a freight broker bond is one of the first situations where a strong relationship is necessary.

A bond is a form of credit extended to the broker, based on their financial track record and credit history. If a claim is made against the bond because the broker has engaged in business practices outside the lines of federal regulations, the claim amount is paid from the bond on behalf of the broker. This structure means that the surety company offering the bond must trust that the freight broker is a good candidate for the bond, meaning there will be minimal claims in the future. Maintaining a relationship with the surety company is beneficial when bonds renew, and it can be helpful when claims arise.

Relationships and Cash Flow Help

Business relationships are also a crucial aspect of a freight broker’s business when it comes to financial partners. Banks, credit unions, and online lenders exist to help small businesses fund large projects, expansion, or to cover cash flow when the need arises. However, without a relationship with certain lenders or finance companies, freight brokers may find themselves in a hard to navigate position.

For some freight brokers, cash flow can become tight when customers are slow to pay or when business slows down. The business still has overhead to pay, and there may be a need for increased marketing or advertising to entice new customers to connect. Each of these issues requires available capital. A relationship with a finance company, such as an invoice factoring, small business loan, or line of credit lender can make all the difference in getting through a dry spell or a time of high growth.

Keeping Customers Satisfied

Finally, relationships are essential to freight brokers when it comes to working with their customers. Although the size of the freight brokerage market is small compared to other facets of the transportation or logistics industry, competition grows each day. The barriers to entry to start a brokerage business are minimal, as are start-up costs, and so many with industry experience join the ranks of freight brokers consistently year over year. The increased number of licensed brokers can make it challenging for seasoned professionals to keep the upper hand on competitors.

Maintaining strong working relationships with customers, business connections, and networking partners are necessary to keep ahead of the competition. When other professionals in the industry know that a particular broker is known for delivering on his or her promise to shippers and carriers, they are likely to stay busy with work. Similarly, having processes in place for clear communication and managing issues when they come about helps strengthen relationships over time.

Being in the freight brokerage market can offer a lucrative career path for those with a passion for moving freight efficiently. However, healthy relationships are a must throughout nearly every aspect of the business. Brokers need to ensure they have built up and can maintain good connections with their surety company, finance partners, and of course, their customers and business partners, if they want to be successful now and in the future.

 

Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.