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Despite the Name, the Refrigerated Container Market is Red Hot, Spurring Industry Moves

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Despite the Name, the Refrigerated Container Market is Red Hot, Spurring Industry Moves

The global shipping containers market is poised to experience significant market valuation and robust growth through 2025, according to industry research published last year. Sorry about the temperature mix you are about to withstand, but the hottest segment of that market in that study was refrigerated containers, a.k.a. reefer.

Be they 20-foot, 40-foot or even higher cubes, “reefer containers are projected to be the fastest-growing segment in the product type category during the forecast period,” which was 2017-2025 for Persistence Market Research. (See https://www.persistencemarketresearch.com/market-research/shipping-containers-market.asp.)

The Compound Annual Growth Rate (CAGR) for the period is forecast by PMR to be 10.2 percent for the reefer segment, with the 20- and 40-foot sub segments expected to push the positive growth. It’s interesting to note that this factoid was part of a report that more prominently played up the predicted 8.6 percent CAGR for the dry container segment.

That said (or, more accurately, written), it is telling that PMR expects the overall container market to register a “robust” CAGR of 8.3 percent throughout the eight-year period, even with the forecast of a slowing global economy in 2020.

“The growth of the shipping containers at a global level is pushed by the growth in the economy, rising seaborne trade, increasing demand for highly efficient and superior capacity shipping containers, growth in sales of specialized shipping containers by department of defense and rising trend of increasing use of remote container management (RCM) solutions,” PMR finds.

There have been anecdotal indications of the reefer market’s continued growth. Universal Africa Lines (UAL), a conventional ocean transportation carrier that specializes in handling project cargo, breakbulk and containers, boasts a fleet of more than 4,000 containers including reefers, high cubes, open tops and flat racks with the ability to provide a multitude of shipping options including door-to-door service. Last summer, UAL announced its call at Port of Houston’s City Docks as part of its U.S. Gulf/Mexico to West Africa liner service.

Port of Houston was attractive to UAL due to the available dedicated laydown area for project cargoes and berth availability, both of which provided added flexibility to the carrier’s multipurpose fleet.

Cogoport, a leading digital freight logistics business in India, announced in July 2019 the launch of reefer cargo services to and from destinations around the globe. “We are meeting significant demand for reefer exports to North America, Europe, Asia and the Middle East, and to those importing refrigerated cargoes–enabling SME [small-to-medium enterprise] shippers all over India to deliver better productivity, service and profitability when moving their perishable cargoes,” said Cogoport CEO and founder Purnendu Shekhar at the time.

India has experienced “rapid and sustained growth in refrigerated exports during the past decade with commodities like fish, vegetables, fruit and nuts, meat, pharmaceuticals and chemicals driving demand for reefer import and export services,” explained Shekhar’s company in a press release.

“We have had a great experience working with Cogoport, moving onions to different corners of the world–saving us time and budget,” says Ankit Begwani, CEO and founder of BegwaniGlobal. “Like many other SMEs, we are also seeing huge demand for shipping of perishable cargoes, not least for fruit and vegetable exports to Malaysia and Dubai. This requires high operational output, optimization of shipments and customer satisfaction for delivering goods on time. Every cent matters to every SME business, and Cogoport has demonstrated that it can help deliver that value with better rates, better margins and better visibility.”

The reefer demand is not going one way in India, where the rise of the middle class has created a greater desire for refrigerated imports, particularly from Germany, South Korea and Russia, according to the advisory from Cogoport, which is headquartered in Mumbai and has offices in Hong Kong and the Netherlands.

Perhaps the greatest indication of reefer’s rise comes in the form of technological advances that different industry players seem to announce almost daily.

Miramar, Florida-based Wireless Maritime Services (WMS), the largest wireless network operator at sea, and Globe Tracker, the fastest growing provider of global supply chain IoT visibility for cold-chain, announced their partnership in November to bring real-time reefer monitoring to Seaboard Marine, the largest marine cargo shipping line in Central, South America and the Caribbean.

Under the multi-year, multi-ship agreement, Seaboard Marine becomes the world’s first container ocean line to implement a truly portable, fully 24/7 monitored, 4G LTE based private cellular and integrated satellite communication network for containers on vessels. The innovation and expertise from WMS and Denmark-based Globe Tracker—whose North American headquarters are in Sarasota, Florida—results in “a novel vessel network that is seamless, interoperable, and provides end-to-end enhanced visibility and real-time connectivity, both in the cloud and on the vessel at sea,” according to the companies.

They add that Seaboard Marine also becomes the world’s first ocean line to implement full IoT visibility across their fleet of intermodal assets, including reefers, gensets, chassis and vessels—all on a single integrated easy to use platform.

“By IoT equipping our Controlled Atmosphere (CA) reefer fleet and other critical assets, we are well-positioned to provide more responsive cold chain services for our trade lanes, which facilitates complex processes such as USDA cold treatment,” noted Seaboard Marine Vice President Piero Buitano in the announcement.

“The vessel system also provides real-time alerts to crew technicians, so problems can be quickly detected and corrected, if necessary, thereby increasing temperature compliance,” added Frederick Urbina, Seaboard’s Refrigerated Services manager.

Noted Pramod Arora, WMS president and CEO, of Seaboard Marine: “They have been a valuable partner in pushing us to innovate first-to-market solutions that we are now deploying within their fleet. We look forward to continuing to partner with Seaboard Marine for future innovations.”

Globe Tracker had already started the partnering mojo in September, when it announced having teamed with Woodcliff Lake, New Jersey-based SeaCube Containers, a global leader in refrigerated shipping containers and gensets, to provide IoT-enabled gensets for Ocean Network Express (ONE), the sixth-largest shipping line in the world.

The cutting-edge GT technology provides cellular communication of operational parameters from gensets, including fuel level, battery voltage, events and alarms and even remote shut-off capability for certain genset brands.

“The growing demand for greater tracking, transparency, security, diagnostics and asset fleet management using smart technology will continue to be a key driver for leased solutions,” said Greg Tuthill, chief commercial officer at SeaCube, in the joint announcement. “By partnering with Globe Tracker, we will continue to enhance our leading-edge technology solutions and expand our commitment to the intermodal industry by providing smart asset technology leased products.”

John Harnett, senior director Marine and Intermodal at Globe Tracker, added he was pleased to be working with SeaCube “in providing this best-in-class genset solution to ONE. In genset telematics, we are the only provider integrated into the micro-controller of two out of the three leading brands in North America. This provides ONE with the most robust amount of data and assists in setting maintenance intervals, reducing maintenance costs, extending asset life, monitoring fuel consumption and having full operational visibility of their genset assets.”

Palm Beach Gardens, Florida-based Carrier Transicold, which is under the umbrella of Farmington, Connecticut’s United Technologies Corp., used the Nov. 5-7  Intermodal Europe 2019 in Hamburg, Germany, to unveil its new TripLINK digital tool that is designed to make shipping perishables simple, transparent and reliable worldwide.

The tool digitally connects customers to updates on their assets, including vital cargo health information. TripLINK software securely gathers and analyzes machine and cargo-health data that it wirelessly obtains from telematics hardware in the refrigerated container and the micro controller.

“Our aim in unveiling these new digital solutions is to bring to our customers convenience, visibility and actionable intelligence, ultimately to derive more savings for them,” said Kartik Kumar, vice president & general manager, Carrier Global Container Refrigeration. “At Carrier, the future is now. Through leveraging the latest cutting-edge technology, especially on the digital front, we provide our customers practical solutions they only once dreamed possible.”

Also part of a new suite of digital solutions is the Container eCommerce portal, which began supporting customers in Southeast Asia in mid-November. The portal put on view Carrier Transicold’s full catalog of refrigerated container unit parts and allowed orders to be placed easily.

Also on display in Germany was Carrier’s new Micro-Link 5 controller, which is billed as the industry’s first wireless connectivity enabled refrigerated container unit controller that is also equipped with advanced diagnostics, allowing service technicians to save time and money by reducing container moves and the need to restack units to retrieve critical data or conduct troubleshooting. And a new DataLINE Connect mobile app allows customers to work directly with a refrigerated unit equipped to receive data via a smartphone or tablet.

Staying in Europe, but traveling back the previous month to October 2019, CEVA Logistics opened a new integrated, end-to-end cold chain facility at DP World London Gateway in Ashby-de-la-Zouch, UK.

More than 50 customers, including representatives of French container transportation and shipping company CMA CGM, attended the unveiling of The Chill Hub, which CEVA describes as a state-of-the-art facility with dedicated areas for handling pharmaceuticals, fresh and frozen produce, beverage products and flowers as well as other goods requiring temperature specific handling and storage.

The location is considered strategic because a deep-sea port is on the same site as the logistics park where The Chill Hub rests. London Gateway, which has links to more than 110 ports in 60 different countries, is considered the UK’s No. 1 reefer hub.

“With its excellent road and rail connections, our best in class warehouse management systems and direct port access, the Chill Hub is a powerful demonstration of the synergies between CEVA Logistics and CMA CGM,” said Nicolas Sartini, CEO of Baar, Switzerland-based CEVA Logistics, which has offices worldwide, including all over North America.

“This state-of-the-art facility will enable us to offer a unique value proposition to our shipper customers,” Sartini continued, “providing a faster delivery of goods through an energy-efficient building. We can also give full visibility and control of the entire inbound operation through The Chill Hub.”

CargoSmart Limited—which leverages technologies including artificial intelligence, Internet of Things (IoT) and blockchain, as well as a deep understanding of ocean shipping for its transportation and logistics clients—announced in November its new Connected Reefer Solution. The one-stop, AI and IoT-enabled reefer cargo management system for ocean carriers and shippers features end-to-end information transparency, including enhanced reefer container Pre-Trip Inspection (PTI) support, real-time container status monitoring updates, and predictive cargo arrival status.

“CargoSmart Connected Reefer Solution provides users with a one-stop, hassle-free solution that seamlessly integrates IoT-enabled containers with cloud-based monitoring software and APIs [application programming interfaces],” said Lionel Louie, CargoSmart’s chief commercial officer, in the announcement. “With the cutting-edge technologies and the vast volume of data collected, CargoSmart Connected Reefer Solution brings an unprecedented level of real-time cargo status visibility, empowers more accurate and responsive planning, and significantly drives down operation costs for carriers and shippers.”

Louie was not blowing smoke. CargoSmart reefer management was the winner of the Lloyd’s List 2019 “Excellence in Supply Chain Management” Asia Pacific and the 2019 TIBCO Trailblazer Visionary awards. And the solution received this praise from Li Dong, general manager of COSCO Shipping’s Equipment Management Center: “In addition to heightened visibility to reefer cargo status, COSCO Shipping replaced manual PTI with AI-enabled PTI, bringing significant enhancements in cost-efficiency savings as well as reefer management capabilities.”

ships

Big Ships that are Coming or Already Here Present New Challenges

The year 2020 is almost here and customer demands, import and export trends and trade tensions show no signs of slowing down. The new year presents both opportunities and challenges for players within the supply chain to increase productivity through maximizing resources or get left behind as competitors take over. There are layers of factors for global shippers to consider in determining the best approach in remaining both competitive, efficient, and to be honest, relevant. Major factors in consideration include IMO 2020, traffic increases and vessel sizing.

Looking at some statistics reveals an interesting picture of exactly what’s going on and what shippers can prepare for based on last year’s trends. According to the 2019 North American Ports Outlook report by Cushman & Wakefield, the intermodal traffic rates saw an increase by 5.5 percent, while 90 percent of internationally shipped dry, non-bulk manufactured goods are containerized. Oh yeah, automobile imports are on the rise also.

Data make clear that big ships can not only create competitive advantages but also recreate what modern competition looks like. Cushman & Wakefield’s report shows that 79 percent of the international containership supply is dominated by the 2M Alliance (Maersk and MSC), the Ocean Alliance (CMA CGM, COSCO and Evergreen) and THE Alliance (ONE, Hapag Lloyd and Yang Ming). Not only do these alliances carry a massive amount of clout among competitors globally, but they also boast massive container vessels.

COSCO Shipping Universe, for example, sits right at 21,237 TEU capacity at 400 meters x 58.6 meters. This massive vessel holds the title as the largest cargo ship in China and the fourth largest in the world. Additionally, this vessel comes with an added bonus to further charge its performance through the support of ABB Turbocharges that enable the vessel to travel at 22 nautical miles per hour.

“The ABB turbochargers on COSCO Shipping Universe will support maximum performance and fuel efficiency, in addition to contributing to COSCO Shipping Lines pursuing green shipping practices for long-term success,” stated Oliver Riemenschneider, managing director, ABB Turbocharging in a press release announcing the vessel’s delivery in June of 2018. “We foresee the ABB turbochargers on the forthcoming mega container ships in the Universe series will contribute similar viable operational gains.”

As the vessels get bigger and better, industry players can rightfully anticipate this as a major trend to keep an eye out for in 2020. Although increasing ship sizes supporting more capacity with fewer miles in between is a win-win, shippers must consider how this impacts the ports and their size capabilities and most importantly, their access to such ports. The North American Ports Outlook report states that orders for new vessels are being placed exceeding 22,000 TEUs and that East Coast ports are beginning to see more large ships. Furthermore, the Neopanamax Locks confirmed that as of just recently, it can handle over 14,000 TEU ships, but not by much. That’s not going to cut it for the big ships predicted in the near future.

MSC Mediterranean Shipping Co. announced a successful Asia-to-Europe voyage for the MSC Gülsün ship. The 23,756 TEU vessel holds the title as the world’s largest container ship and adds a new level of quality with its advanced engineering focused on energy efficiency and reduced fuel consumption overall. The Gülsün is one of more than 10 ships to be added to MSC’s advanced fleet between 2019-2020, and it doesn’t stop there. The IMO-2020 ready vessel boasts a hybrid Exhaust Gas Cleaning System (UN IMO-approved, of course) paired with a low-Sulphur fuel and/or LNG adaptation option. Not only is this ship more than prepared for revolutionizing the approach to IMO standards, but it’s also making a big dent in operational efficiencies.

Evergreen also made news last year by confirming new vessels with up to 23,000 TEU capacity are being added to its fleet. Information released from numerous sources confirmed that five or more vessels with such TEU capacity were approved for order. These mega-ships will be built at South Korea’s Samsung Heavy Industries shipyard and China State Shipbuilding Corp.with a price tag of roughly $1.6 billion. The order was placed back in September and current service estimation sits between 12-18 months, according to various reports.

Go ahead and add Germany’s Hapag-Lloyd to the list of super vessels to come. The Wall Street Journal reported that up to six ships with TEU capacity well over 20,000 were confirmed. Hapag Lloyd already boasts six vessels within the A 18 class with more than 19,000 TEU capacity. Overall, Hapag Lloyd boasts a total fleet TEU capacity of 1.7 million… and counting.

Even with these new massive ships on the horizon, it is hard to compare to the OOCL Hong Kong, the first of six in the G-class with a whopping 21,413 TEU capacity. One such ship went down in history as the world’s first to ever break the 21,000 TEU-capacity marks. Within months of this announcement, the OOCL Scandinavia, the OOCL Germany and the OOCL United Kingdom–all with 21,4313 TEU capacity—were also announced and christened.

“While our industry seems to have the knack to ‘outdo’ one another in building larger containerships relatively quickly these days, this project is nonetheless an important moment for us,” stated OOCL Chairman C.C. Tung in the announcement. “Faced with increasing competition and un-ending pressure on costs, we need to take the bold step in operating larger size ships of quality and high efficiency in order to stay relevant and compete effectively as a major container shipping company.”

Tung concluded, after the OOCL Scandinavia reveal, “This achievement is about working to bring people and companies of different professions and nationalities together to reach new heights, innovate, solve complicated engineering problems, and along the way, why not break a world record, too.”

Although the OOCL Hong Kong has yet to be replaced, competitors are pushing the limits of capacity to break new records the shipping sector has yet to encounter. Maximizing the capacity limits the industry is currently used to paired with the IMO 2020 regulations and changes will undoubtedly filter the industry leaders. The real question remains: Who will set the bar even higher than what it is now and how will they do it?

holiday

UPS: “This Holiday Season, We’ve Prepared Like Never Before.”

Today marked the first day of the peak holiday season for 2019 and the beginning of increased holiday shipments and deliveries. UPS confirmed a 5 percent increase in package shipments from 2018 record is expected in addition to an estimated 32 million packages and documents per day during peak season, primarily stemming from UPS’s retailer and B2B-focused customers. This anticipated chaos doesn’t seem to be a problem for UPS, however.

“This holiday season, we’ve prepared like never before,” said UPS Chairman and Chief Executive Officer, David Abney. “UPS has invested billions in our facilities, our air fleet and our workforce.  We have the capacity for, and are committed to, serving the unique needs of all our customers. To our customers, I simply say: We’re ready, Let’s go! You can count on us to help you make the holiday season successful.”

UPS has prepared resources in the form of added space (five million square feet of highly automated facilities, to be precise), automated superhubs, 11 newly added aircraft (increasing payload by 2.5 million pounds), optimization technologies, and a robust employee network close to 100,000 seasonal workers.

“More than ever, the 2019 holiday season proves UPS puts customers’ needs first,” said UPS Chief Marketing Officer Kevin Warren. “That starts with eliminating residential peak season surcharges, and extends into a wide range of new services that complement our industry-leading portfolio of offerings.”

Additional service enhancements have also been added to further support the growing demand, including the fastest ground-service offerings to-date, commercial/residential weekend services for pickup and delivery for customers in the top metro areas, late-night pickups via UPS Extended Hours® to qualifying customers, and more.

“We have the right strategies in place to help our customers make the most of the holiday season, with extensive forecasting, expanded ground and air capacity, effective onboarding to bring an army of seasonal employees up to speed, and the products and services that help all our customers meet high expectations this time of year,” Abney said.  “We look forward to another successful peak season.”

Ports America

Ports America Announces New Leadership for 2020

Modern Terminals Hong Kong managing director and CEO Peter Levesque was confirmed this week as the newly appointed president for the largest North American marine terminal and stevedore, Ports America. Mr. Levesque will step into the role starting in February 2020 bringing decades of experience and a proven track record of success.

“I am thrilled to have Peter be part of our leadership team of the Ports America platform. Ports America remains focused on providing best-in-class service to many of the world’s leading shipping lines as well as the work we have completed in improving workflow solutions to beneficial cargo owners to drive dramatic growth for the company,” said Ports America CEO Mark Montgomery.

Mr. Levesque brings more than 30 years of experience in maritime business, with nine years of leadership with Modern Terminals and spearheading the Public Private Partnership (PPP) for the company.

“Having Peter Levesque join Mark Montgomery, Rick Surett and Jim Pelliccio as a core part of the management team is central to the strategic growth plan for Ports America,” said Dave Starling,  company board chairman.

“Peter’s strong leadership, experience and success in building superior organizations gives the board the utmost confidence that this team will drive the continued success of the company.”

IMO 2020

Happy New Year: IMO 2020 is Here

A new year is right around the corner, which means IMO 2020 is finally here. Effective January 1, 2020, Annex VI of MARPOL, which is the international treaty governing pollution on the high seas, will mandate a significant decrease in sulfur emissions from vessels—reducing the current permitted level of 35,000 ppm to 5,000 ppm. Compliance with this new standard will primarily be achieved through the burning of low-sulfur fuel, although compliance choices include other methods like the use of scrubbers and liquid natural gas (“LNG”) as fuel. Under this regime, the primary responsible party in the freight market will be the vessel owner or operator. 

It is estimated that 10-20 percent of vessels after January 1, 2020, simply will not comply with the new IMO 2020 sulfur standard. Furthermore, because there is no industry standard specification for bunker fuel, there is an increased risk of fuel quality issues that lead to suboptimal performance and engine damage, which may give rise to inadvertent non-compliance. As a result, the industry should expect significant enforcement efforts of this new standard. 

The IMO does not have a global enforcement body. Instead, IMO member states pass laws implementing the provisions of Annex VI, which are enforced by bodies analogous to the US Coast Guard and US Environmental Protection Agency (“EPA”). In particular, port states can enforce compliance within their coastal waters while flag states may enforce the standard on vessels flagged in their countries. Both port states and flag states have the authority to arrest vessels, and issue fines, penalties and prison sentences. 

Historically, the United States has been a lead enforcer of MARPOL, and the industry should expect robust enforcement in the United States regardless of whether the non-compliance occurs in US or non-US waters. It is likely that US authorities will seek to enforce IMO 2020 through whether the vessel is maintaining true and accurate records, specifically its bunker delivery notes (“BDNs”) and fuel changeover logbook. Any listing of noncompliant fuel or false or inaccurate statements in those records could result in the US Coast Guard detaining the vessel and prosecuting the vessel owner, operator, bunker fuel supplier or other responsible party. Although the likelihood of direct non-compliance in US waters is low, even indirect non-compliance can still be enforced if the vessel’s records are false or inaccurate. 

Prior enforcement of IMO treaties—which includes multimillion-dollar fines and criminal penalties for captains and vessels—further demonstrates the likelihood of a robust US response to non-compliance. Similarly, whistleblower provisions will likely also bolster US enforcement of IMO 2020. Under US law, whistleblowers who report non-compliance can receive up to 50% of the monetary penalties levied against the owner, operator or vessel. With penalties in these cases exceeding tens of millions of dollars, the whistleblower provisions provide crew with a significant incentive to report non-compliance to US authorities. 

While direct liability of the owner and operator of the vessel is a primary concern, there are also varieties of implications non-compliance may have on other parties involved in the freight industry. For example, the detention of vessels and its owners or operators for non-compliance can also lead to delays in the shipment of goods and present significant obstacles and other logistical issues in getting a vessel released from US authorities. Moreover, the reputational harm that comes with non-compliance may also have a lasting effect on a shipper’s business. 

With IMO 2020 just around the corner, it is essential that all parties seek to implement robust compliance plans and due diligence of their counterparties—including charterparties, fellow shippers, vessel owners and operator and bunker fuel sale counterparties.

____________________________________________________________

David McCullough is a partner in the Energy & Infrastructure practice group at the New York office of Eversheds Sutherland (US) LLP. Nicholas Hillman, with Eversheds Sutherland (US) LLP in Washington DC, is not yet admitted to practice.

demand

Adapting Supply Chains for Increased Consumer Demand and Same Day Shipping

Same-day and next-day shipping options are increasing, and consumers are beginning to desire expedited shipping options with minimal delay. Through new technologies, space optimization, and supply chain auditing, there are various ways companies can adapt to this demand.

There used to be a tattered cartoon taped to every dry cleaner’s cash register. There’s a man laughing — holding his stomach, actually, as the joke is so funny — with a bold face caption that reads: “YOU WANT IT WHEN?!”

Faced with minimal competition, it was a time when companies held production and delivery control, with consumers at their mercy to indeed receive their press garments at a time of the dry cleaner’s choosing.

Those days are long gone. Armed with just a digital device, consumers have numerous options in finding suppliers who can provide things whenever they desire. As such, they expect — rather, demand —products and services on their terms.

As a result, companies must either adapt their supply chains to accommodate these expectations or find themselves with diminished market share. Below are key areas that companies must address to compete in today’s on-demand environment.

Take inventory of your inventory

As a first step, perform a comprehensive audit of your entire supply chain, even hiring a third-party specialist to develop the critical assessment. Such a deep-dive look will measure delivery accuracy, on-time performance, worker productivity and even call center effectiveness, all significant contributors to the overall efficiency of your suppliers and their impact on your supply chain.

Find a better mousetrap

Once the audit is complete, it’s time to take action, which may mean making fundamental changes to your supply chain. If you’re currently operating with a hub-and-spoke distribution model, for instance, the feedback may point to achieving greater efficiencies by adopting a decentralized distribution model (and vice versa). Especially when it comes to last-mile delivery, partnering with a third-party provider can also help, providing you with the fast turnaround that your customers expect without straining your existing operations.

Get your house in order

Any fundamental change to the supply chain must include enhancements to warehouses, adopting technological advances that deliver greater efficiencies. For some, this may mean incorporating a short-interval waving warehouse management system (WMS), which allows orders to be dispatched in clusters or waves. Other advances automate the sizing and selection of cartons, which makes packing more efficient while streamlining costs.

Taking things personnel-ly

Until supply chain logistics can all be outsourced to robots, bottom-line performance ultimately depends on the availability and performance of your employees. To those ends, leverage technology to minimize labor supply disruptions, especially during holiday seasons when demand peaks. (This is increasingly important as unemployment reaches record lows, further diminishing the labor pool.) Technology should also be used for scheduling and training, which delivers greater efficiencies and even job retention, as greater scheduling flexibility leads to increased employee satisfaction and loyalty.

Consumer demand for ever-shrinking delivery timelines makes ongoing supply chain refinements no longer optional, but mandatory. Your long-term success depends on it.

_________________________________________________________________

Neil Wheeldon is vice president — solutions at BDP International in The Hague, Netherlands.

ltl freight shipping

Benefits of LTL Freight Shipping

Less than truckload (LTL) shipping is a method of shipping that uses either LTL carriers or parcel carriers. The sticking point of this type of shipping is that it allows for people to put together their smaller loads (less than 150lbs, 68kg) and then ship them together with other people’s packages. This allows shipping companies to make shipments much more economically than with the FTL (full truckload) alternatives. But, besides economical benefits, there are other benefits of LTL freight shipping that you need to be aware of in order to incorporate it with your business. So, let us take a look at why LTL freight shipping is comparable and often preferable to FTL shipping.

Top Benefits of LTL Freight Shipping

The fastest way to ship your packages is to have a shipping company pick them up, load them and directly transport them to your desired location. Unfortunately, this is often the least economical way of doing it. In order to make shipping cheaper and more eco-friendly, shipping companies often have to use alternative ways of shipping. And one of the better ones is LTL. Even though it can be slower than direct FTL shipping, it allows for a much better cost and fuel efficiency. And, with modern technologies and regular use, it can be just as efficient as FTL shipping.

Shipping Cost

One of the largest benefits of LTL freight shipping is the reduced shipping cost. Since this method of shipping is based on smaller loads from various clients, it manages to reduce the overall shipping cost for everyone. This is due to the fact that by using LTL, shipping companies put together multiple smaller loads. By doing so they manage to reduce the fuel and the number of vehicles necessary to transport their loads. If they were to ship client by client, they wouldn’t be able to fill the vehicles to their maximum capacity (hence the less than truckload). But, by lumping up items together, LTL shipping manages to save cost on transport, while allowing the same service as FTL.

Eco-Friendliness

More and more companies are turning towards eco-friendliness as a necessary mode of operation. And, once you take a look at our current rate of climate change and our carbon footprint, you’ll also be hardpressed to look for eco-friendly solutions. Luckily, when it comes to shipping, LTL is one of the greener options. By reducing the amount of fuel and vehicles necessary for shipping, LTL allows shipping companies to be much greener. They are also able to figure out optimal pathways, due to more regular shipping that is common to LTL. So, if you are looking for an easy way to make your shipments greener, simply employ LTL freight shipping.

Increased Safety

The first way that LTL freight shipping increases the safety of your items is with ample packing. Companies like Triple 7 Movers will first make sure that your possessions are properly packed. Then they will repack them each time the total LTL shipment is altered. By reapplying protective covers, they ensure the safety of your possessions from both physical and environmental harm. Individual loads are usually either packed on a parcel and then secured, or the company puts them in protective containers. This allows for maximum safety during shipping as well as easy handling.

Another safety feature of LTL freight shipping is that there is almost no chance of a package getting misplaced. By using tracking technologies, safety measures, and notification requirements, moving companies ensure that any package on board is well looked after. Furthermore, shipping companies usually organize LTL shipping routes with as few stops as possible. This allows them to keep packages safe for the entirety of the trip.

Better Organization

The biggest worry people have about LTL freight shipping is the supposed lack of availability. After all, with an FTL, you have the control of timing and the necessary route. Meanwhile, the LTL shipments are often limited by their route and the necessary drops. So, can better organization really be one of the benefits of LTL freight shipping? Well, as it turns out, it can. LTL freight shipping is ideal for customers who have regular shipments. Shipping companies often group up regular customers together. This allows them to achieve a greater degree of reliability and consistency. Along with regular shipments, companies also use automation to figure out optimal routes.

But, the true beauty of modern LTL freight shipping is that you don’t have to rely on your shipping company’s skills alone. Modern technologies allow clients to track their packages and get live notifications of any delays or setbacks. Therefore, with LTL freight shipping, you should be able to run your business and both send and receive your shipments with a high degree of reliability.

Shipping Options

Most shipping companies offer various shipping options. These options can come at a higher cost, but they can also make your shipping much better organized. Some of them are:

Expedient shipping – You can use this option if you want your goods to arrive faster than standard transit time. This option can often be quite costly, but it is quite useful for emergency shipping.

Liftgate – Does you freight exceeds 100 pounds? Then you should opt for Liftgate. Also, consider using it if the receiving location doesn’t have a clear dock for shipments.

Limited access – You can use this type of LTL for areas that have limited access due to safety reasons. So, for your construction sites or rural locations, you would probably want to choose this kind of shipping.

Custom delivery window – If you need your shipment to arrive within a specific period, you can opt for custom delivery windows. Most companies will deal with your package so that it fits their workload. This allows them to deal with transport cheaply and efficiently. So, this option can also be costly and should, therefore, be used with ample forethought.

shipping containers

Which Items are Prohibited in Shipping Containers

While shipping undeniably makes the relocation process much easier and significantly less complicated, the shipping practices do have some restrictions. It is extremely important to be well-informed on what items are prohibited in shipping containers, so as not to encounter any difficulties, delays, or serious problems in your attempt to bring this process to end successfully. Bear in mind that each and every container is inspected in detail prior to shipping. Thus, do not try to ignore the strict regulations regarding the prohibited items in containers. 

To help you handle the whole process with ease and without any potential inconveniences, we have made a comprehensive list that can eliminate your dilemma and clear away all your doubts on what items are prohibited in shipping containers. Having studied these closely, you can start orchestrating the shipping operation and commence a search for ways to negotiate better shipping terms.

Flammable and toxic items

Flammable and toxic items are on the top position of our list for understandable reasons. These items can considerably harm not only the belongings within the shipping container but the whole shipment as well. While some of these are easy to identify, others come as a surprise. Hence, it is always a good strategy to obtain information on allowables and non-allowables from your shipping company.

The flammable and toxic items you are to avoid putting in a shipping container are batteries of all types, aerosols, household cleaners and solvents, nail polish and nail polish remover, fireworks, various chemicals, oils, fertilizers, and similar. The list is extensively long, so once again we need to emphasize the necessity of consulting your shipping company and relevant institutions on this point. Only this way will you get peace of mind and confirmation that none of your items are among non-allowables.

Plants and animals

There are numerous pros of maritime shipping, but being able to ship animals and plants is not one of them by any means. Although it does not take too much thinking to understand the reason behind this, there are still those who are willing to give this option a try nevertheless. Understandably, the outcome of such a decision always includes severe consequences. Namely, no living being is able to survive a few-day shipping in a firmly closed shipping container without light or fresh air. Moreover, some countries have very strict regulations regarding bringing non-native plants to their territory. Apparently, they feel threatened by plants and seeds potentially infected with dangerous parasites and germs. Eventually, these might affect and endanger their existing vegetation. While it is true that this may sound like an exaggeration, we cannot deny that it is still possible.  

Illegal items 

Even though certain types of items are illegal all over the world, a lot of countries have their own regulations that define legal and illegal items in shipping terms. To avoid any problems and complications, gather enough information on this point.  

Generally, firearms, ammunition, drugs, and some medications definitely need to be mentioned when discussing what items are prohibited in shipping containers. An immense number of countries have strict laws regarding bringing weapons and ammunition across their borders and these need to be obeyed at all times. 

Perishables are prohibited in shipping containers

Although the shipping industry is intensely working on automation that will change the pace for shipping operations, it is still common for containers to be placed in storage for some time until the shipping is finally scheduled. This period is more than enough for perishables to spoil and even damage some of your belongings in the container. Hence, items that are forbidden in these containers include fresh produce, frozen and refrigerated food, and any food containers that have been opened and cannot be firmly closed anymore. 

Items that are not prohibited but yet should not be in shipping containers

Besides the items which are not acceptable because they are hazardous and potentially harmful, there are those which are not prohibited but yet should not be in shipping containers.  These usually have either high material or emotional value and are, most often, considered irreplaceable for the owner. Concerning the period of time these would have to spend in a container, it is a reasonable choice not to go for this option. Otherwise, you risk damaging, losing, or even completely destroying these items irrevocably.

Hence, all the important business or personal documents, jewelry, family albums, money, computer disks and laptops, keys, and cell phones should be kept at hand and not exposed to the risk of being shipped in a container. Depending on their number, these could easily be packed in the essentials bag or box you will take with you.

Conclusion

Knowing what items are prohibited in shipping containers is of utter importance for the success of the shipping process. Should you disobey the restrictions regarding this, you risk going through some major difficulties. In other words, your shipment may be delayed or even canceled. Hence, it is advisable to get all the necessary information and do some research prior to sending your shipping container overseas. This is the only approach to this task that guarantees a positive, completely problem- and stress-free experience.

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David Nelson had worked in the shipping industry quite sometime before he became a copywriter. He has decided to share his knowledge and experience with all those who seek advice in this field. David also follows the latest trends and can provide the necessary information to make any shipping process easy to conduct, be it a part of a relocation or a try to import cargo from Japan with ease, for example. Unsurprisingly, when he is not writing, David is traveling around the globe and exploring new areas. He is a passionate globetrotter indeed.

european market

European Market for Citrus Fruit Jams and Purees – France Benefits from the Highest Export Price ($4,292 per tonne)

IndexBox has just published a new report: ‘EU – Citrus Fruit Jams, Marmalades, Jellies, Purees Or Pastes – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The market revenue for citrus fruit preserves (jams, marmalades, jellies, purees, and pastes) in the European Union amounted to $319M in 2018, growing by 8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). In general, citrus fruit preserves consumption, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 with an increase of 22% against the previous year. The level of citrus fruit preserves consumption peaked at $331M in 2008; however, from 2009 to 2018, consumption failed to regain its momentum.

Consumption By Country in the EU

The countries with the highest volumes of citrus fruit preserves consumption in 2018 were the UK (26K tonnes), Italy (24K tonnes) and Spain (18K tonnes), with a combined 56% share of total consumption. France, the Netherlands, Belgium, the Czech Republic, Germany, Romania, Ireland, Poland and Hungary lagged somewhat behind, together accounting for a further 33%.

From 2007 to 2018, the most notable rate of growth in terms of citrus fruit preserves consumption, amongst the main consuming countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

In value terms, the UK ($83M), Italy ($60M) and France ($42M) appeared to be the countries with the highest levels of market value in 2018, with a combined 58% share of the total market. These countries were followed by Spain, Belgium, the Netherlands, the Czech Republic, Ireland, Romania, Germany, Hungary and Poland, which together accounted for a further 32%.

The countries with the highest levels of citrus fruit preserves per capita consumption in 2018 were Ireland (591 kg per 1000 persons), Italy (412 kg per 1000 persons) and Belgium (410 kg per 1000 persons).

From 2007 to 2018, the most notable rate of growth in terms of citrus fruit preserves per capita consumption, amongst the main consuming countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

Production in the EU

In 2018, approx. 125K tonnes of citrus fruit jams, marmalades, jellies, purees or pastes were produced in the European Union; rising by 13% against the previous year. Overall, citrus fruit preserves production, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 when production volume increased by 29% y-o-y. The volume of citrus fruit preserves production peaked at 138K tonnes in 2007; however, from 2008 to 2018, production stood at a somewhat lower figure.

In value terms, citrus fruit preserves production amounted to $313M in 2018 estimated in export prices. The total output value increased at an average annual rate of +1.1% over the period from 2007 to 2018; however, the trend pattern remained consistent, with somewhat noticeable fluctuations throughout the analyzed period. The pace of growth appeared the most rapid in 2008 when production volume increased by 22% against the previous year. In that year, citrus fruit preserves production attained its peak level of $338M. From 2009 to 2018, citrus fruit preserves production growth remained at a lower figure.

Production By Country in the EU

The countries with the highest volumes of citrus fruit preserves production in 2018 were the UK (26K tonnes), Spain (24K tonnes) and Italy (24K tonnes), with a combined 59% share of total production. France, Belgium, the Netherlands, Germany, the Czech Republic, Romania, Denmark, Hungary and Poland lagged somewhat behind, together accounting for a further 32%.

From 2007 to 2018, the most notable rate of growth in terms of citrus fruit preserves production, amongst the main producing countries, was attained by Belgium, while the other leaders experienced more modest paces of growth.

Exports in the EU

In 2018, approx. 36K tonnes of citrus fruit jams, marmalades, jellies, purees or pastes were exported in the European Union; surging by 7.5% against the previous year. The total export volume increased at an average annual rate of +2.7% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The pace of growth appeared the most rapid in 2017 with an increase of 14% y-o-y. Over the period under review, citrus fruit preserves exports attained their peak figure in 2018 and are expected to retain its growth in the near future.

In value terms, citrus fruit preserves exports stood at $87M (IndexBox estimates) in 2018. The total export value increased at an average annual rate of +1.9% from 2007 to 2018; however, the trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The most prominent rate of growth was recorded in 2008 when exports increased by 15% y-o-y. Over the period under review, citrus fruit preserves exports reached their peak figure in 2018 and are expected to retain its growth in the immediate term.

Exports by Country

The exports of the eight major exporters of citrus fruit jams, marmalades, jellies, purees or pastes, namely Spain, the UK, Germany, France, Denmark, Italy, Belgium and Ireland, represented more than two-thirds of total export.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Spain, while the other leaders experienced more modest paces of growth.

In value terms, France ($19M), the UK ($15M) and Spain ($15M) appeared to be the countries with the highest levels of exports in 2018, with a combined 55% share of total exports.

In terms of the main exporting countries, Spain recorded the highest growth rate of exports, over the last eleven years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The citrus fruit preserves export price in the European Union stood at $2,436 per tonne in 2018, increasing by 2.5% against the previous year. Overall, the citrus fruit preserves export price, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2013 when the export price increased by 15% y-o-y. In that year, the export prices for citrus fruit jams, marmalades, jellies, purees or pastes reached their peak level of $3,042 per tonne. From 2014 to 2018, the growth in terms of the export prices for citrus fruit jams, marmalades, jellies, purees or pastes remained at a somewhat lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was France ($4,292 per tonne), while Denmark ($1,750 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by France, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2018, the amount of citrus fruit jams, marmalades, jellies, purees or pastes imported in the European Union amounted to 32K tonnes, going up by 11% against the previous year. The total import volume increased at an average annual rate of +2.9% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2017 with an increase of 36% against the previous year. The volume of imports peaked in 2018 and are likely to continue its growth in the immediate term.

In value terms, citrus fruit preserves imports stood at $69M (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +1.3% over the period from 2007 to 2018; however, the trend pattern remained consistent, with only minor fluctuations being observed throughout the analyzed period. The pace of growth was the most pronounced in 2017 when imports increased by 28% year-to-year. Over the period under review, citrus fruit preserves imports reached their maximum in 2018 and are likely to see steady growth in the immediate term.

Imports by Country

France (7,472 tonnes) and the UK (6,570 tonnes) represented roughly 43% of total imports of citrus fruit jams, marmalades, jellies, purees or pastes in 2018. Germany (3,454 tonnes) ranks next in terms of the total imports with a 11% share, followed by Italy (9.5%), Ireland (9.1%) and Portugal (6%). Poland (1,196 tonnes), Sweden (1,188 tonnes), Spain (1,175 tonnes), the Netherlands (759 tonnes) and Belgium (565 tonnes) followed a long way behind the leaders.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Portugal, while the other leaders experienced more modest paces of growth.

In value terms, the UK ($14M), France ($13M) and Germany ($10M) were the countries with the highest levels of imports in 2018, with a combined 54% share of total imports. Italy, Portugal, Ireland, Sweden, Spain, Belgium, Poland and the Netherlands lagged somewhat behind, together accounting for a further 37%.

Portugal recorded the highest rates of growth with regard to imports, in terms of the main importing countries over the last eleven-year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

The citrus fruit preserves import price in the European Union stood at $2,121 per tonne in 2018, approximately mirroring the previous year. Overall, the citrus fruit preserves import price continues to indicate a mild slump. The most prominent rate of growth was recorded in 2008 an increase of 7% y-o-y. Over the period under review, the import prices for citrus fruit jams, marmalades, jellies, purees or pastes attained their maximum at $2,824 per tonne in 2013; however, from 2014 to 2018, import prices failed to regain their momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Belgium ($4,655 per tonne), while Ireland ($1,386 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Belgium, while the other leaders experienced mixed trends in the import price figures.

Source: IndexBox AI Platform

Shipping

Five Important Ways to Negotiate Better Shipping Terms

The final price of your product or service depends on a wide range of factors. Shrewd people in business know there is more to making profits than keeping your buying price low and selling price high. Additional business expenses can reduce your final margin. These include shipping, marketing, storage, and a range of legal expenses.

Negotiating a low price from your manufacturers is just the beginning. Supply chain negotiation training seminars can teach you several ways to gain value before your products reach your customers.

The shipping industry can offer you notable savings opportunities. To identify these, you have to have a keen eye. In this article, we look at five ways you can apply negotiation training skills to obtain better shipping rates.

Understand the Shipping Terms

Global trade has thrived on the back of shipping and logistics companies for hundreds of years. As a result, the shipping industry has developed a unique culture and language. Whether you are dealing with local or multinational shipping companies, there is a range of terms that you should know.

Terms such as CIF (Cost, Insurance, and Freight) and FOB (Free on Board) are used freely in the shipping industry. If you are new to the business, you can learn shipping terms by attending a seminar on the essentials. If you don’t understand the industry’s regular terms, you risk making a deal that can be negative for your business. 

Negotiation training seminars can teach you how to prepare before sitting down to make a deal. You can improve your position by researching the industry before meeting companies. Also, you can carry out mock discussions with shipping company agents. This can give you a feel of the language and questions that may come up during a real negotiation.

Research Possible Hidden Costs

One of the things that can diminish your profits is hidden logistics costs. The final price for your products should factor in all the costs you expect to incur before delivery. Talking to the different authorities that can come into contact with your products in transit can clarify your overall costs. Knowing the factors affecting your shipping rates can help you negotiate to reduce hidden costs.

By working closely with your shipping company, you can identify smart ways to cut down your costs. Many companies have different shipping rates based on weight as well as box dimensions. If you use the standard boxes the shipping company provides, you can save a few dollars on each load.

Develop Your Negotiation Strategy

Once you have understood the market and options available, negotiation training can help you plan your strategy. Writing down your strategy and goals can give you an overview of the entire process. The points listed below are some of the elements taught in negotiations seminars that can help to strengthen your strategy.

Budget

Based on your business model, you should have a price you are not willing to go above. Your strategy should include the ideal and maximum price you are willing to offer for the shipping service.

BATNA

A BATNA is your Best Alternative to a Negotiated Agreement. It refers to a set of alternative options you can take if you cannot reach a viable deal in your negotiations. A well-planned BATNA can help you to recognize a bad deal and give you the confidence to walk away.

Timelines

Time constraints can have a significant impact on your negotiations strategy. The earlier you start discussions with shipping companies, the less pressure you will have to close a deal. Beginning your negotiations early can give you more time to reach a mutually beneficial agreement.

The Urgency of Delivery

Your strategy should state how fast you need the products to be delivered once ordered. Same day deliveries often cost more than two or three days of delivery. The delivery time constraints depend on the nature of your products and promises made to your customers.

Payment Terms

Although one-off payment offers come with attractive discounts, they can also be quite risky. Making payments in installments is safer and keeps the shipping company committed until the final payment. Offer well-balanced payment terms that enable your shipping company to deliver your products on time while limiting your financial risk.

Concessions

Well-trained negotiators plan the concessions they are willing to give before discussions begin. In your research, find concessions that can create value for the shipping company and present them in your meeting. The negotiation process can become very challenging if you are too rigid.

Use Third Party Logistics Providers (3PL)

According to the World Shipping Council, the intermodal shipping network plays a significant role in the cost and rate of service delivery. An intermodal network is made up of ships, airplanes, trucks, and trains. The connection points where cargo is transferred between modes of transport are also part of the network. Many companies depend on intermodal networks for the inland dispersal of cargo from harbors and airports.

Third Party Logistics Providers (3PL) provide a useful service by shipping your cargo via their own intermodal networks. A trusted 3PL provider can save you time and money while allowing you to focus on your core business.

3PLs allow you to negotiate with one service provider who can manage all the regulatory and intermodal networking issues you may face. Further, your 3PL can help you connect and share shipping costs with other dealers in your vicinity.

Negotiate with Other Shipping Companies

Before signing off on a deal, make sure you have exhausted your other options. If you only deal with one shipping company, you may miss a better option. In a comprehensive negotiation seminar, you can learn how to leverage competitive bids to secure better deals.

Additionally, training to negotiate with multiple companies feeds into your research. It teaches you more about the existing challenges in the shipping industry. The knowledge you acquire can help you create value as you deal with the shipping companies.

Round-Up

The shipping industry presents smart people in business with a wide array of chances to negotiate better deals. The techniques in this article are not exhaustive. However, they can set you on the right track and feed into your strategy.

Negotiation training seminars are designed to maximize your potential and spur you into action. However, there is no strict rule book that is applicable in every case. As you grow in business, you can develop your own strategies based on your training and personal preferences.