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U.S. Export & Reexport Compliance for Canadian Operations

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Archives, Executive Education, Global Trade Daily, Imports/Exports

U.S. Export & Reexport Compliance for Canadian Operations

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January 25 – 27, 2022 | Toronto, ON + Livestream Option Available

The Canadian Institute (CI) and the American Conference Institute (ACI) invites you to attend the 11th Annual Forum on U.S. Export & Re-Export Compliance for Canadian Operations in Toronto, ON on January 25–27, 2022!

Over the last decade, this acclaimed event has gathered senior U.S. and Canadian government officials, as well as legal and compliance experts from aerospace, defense, technology, satellite, space, telecom, energy, logistics, and many more industries. CI/ACI are excited to host this event in-person this year (following all local Covid measures) to give a chance for attendees to network once again in-person. The event will also be live-streamed to give a wider audience a chance to access the expertise and updates shared by CI/ACI’s speaker faculty.

As in past years, the 2022 agenda will focus on the most complex issues posed by the interplay of U.S. and Canadian export/re-export controls, as well as the nuances of applying U.S. requirements to the Canadian context.

HERE ARE YOUR TOP 5 REASONS TO ATTEND:

1. Hear directly from key government decision-makers.

2. Benchmark with leading exporters through audience polling and structured breakout conversations.

3. Stay in the loop on critical development in Canada and the U.S.

4. Gain best practices for navigating compliance risks that are unique to the Canadian context.

5. As the only event of its kind in Canada, this is your best chance to expand your network and brain trust.

Don’t miss the only comprehensive event for the export and re-export compliance community in Canada!

Register now to take advantage of early rates! SAVE 10% with Global Trade Magazine Code: D10-856-856BX01.

Online: https://bit.ly/3kEgKx2

Email: customerservice@canadianinstitute.com

Phone: 1-877-927-7936

lumber
Archives, Global Trade Daily, News, Special Reports

The COP26 Deforestation Pledge Will Not Cut Global Lumber Supply Please mention the Source

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IndexBox has just published a new report: ‘World – Industrial Roundwood – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.

Over 120 countries signed the Glasgow Leaders’ Declaration on Forests and Land Use, a voluntary commitment to halt deforestation. The world’s top lumber suppliers, such as Canada, Russia and Sweden, are among the signatories, as well as those countries with the highest rates of tropical forest loss – Brazil and Indonesia. Based on experience from a similar 2014 agreement signed in New York, the obligations will not force suppliers to significantly slow their pace of deforestation but rather instigate an increase in planting new trees to replace those cut-down.

Key Trends and Insights

In November 2021, more than 100 countries signed the Glasgow Leaders’ Declaration on Forests and Land Use, obligating them to halve deforestation by 2020 and cease it altogether by 2030. The endorsers account for about 90% of global tree cover, and 28 out of these countries are obligated to stop clearing tropical forests to produce palm oil, cacao and soy. The COP26 obligations permit the continuation of clearing forests as long as new trees are planted to replace those cut down.

The declaration is accompanied by $19.2B in financing and is legally non-binding because it was approved outside the UN Framework Convention on Climate Change. The world’s largest lumber suppliers, such as Canada, Russia and Sweden, are among the signatories, as well as those countries where tropical forests are located, namely Brazil and Indonesia. Malaysia, Laos, Cambodia, Myanmar and Paraguay, which are among the countries with the highest deforestation rates, did not sign the Glasgow Declaration.

According to Global Forest Watch, in 2020, the global landmass covered by forests decreased by 25.8M Hectares. The most significant decrease in forest mass was recorded in Russia (5.44M ha), Brazil (3.29M ha), Canada (1.20M ha), the US (1.97M ha) and Indonesia (962K ha). As a consequence of Covid restrictions, global trade in industrial round wood decreased from $17B to $15B, dropping in real terms from 233 to 205 cubic meters.

Theoretically, the Glasgow Declaration could have a severe effect on the global lumber market. If it were legally binding, the critical lumber supplying countries would decrease logging activities, which would lead to a deficit in lumber around the world. The resulting effects of the preceding 2014 New York declaration prove that such agreements do not slow down the pace of deforestation in signatory countries, for example, Indonesia. It’s more likely that governments will increase efforts to plant new trees to comply with the agreement and only insignificantly decrease logging. The high demand for lumber in the construction industry will decrease prospects of reining in the pace of deforestation worldwide.

Global Industrial Roundwood Imports

In 2020, overseas purchases of industrial roundwood decreased by -12% to 205M cubic meters for the first time since 2017, thus ending a two-year rising trend. In value terms, industrial roundwood imports fell $16.9B to $14.8B (IndexBox estimates) last year.

In 2020, China (92M cubic meters) represented the leading importer of industrial roundwood, committing 45% of total imports. Austria (21M cubic meters) ranks second in total imports with a 10% share, followed by Sweden (6.2%). Germany (9.1M cubic meters), Finland (7.1M cubic meters), Japan (6.6M cubic meters), Belgium (5.7M cubic meters), India (4.4M cubic meters), South Korea (4.4M cubic meters), Poland (3.4M cubic meters) and Canada (3.2M cubic meters) took a relatively small share of total imports.

Imports into China increased at an average annual rate of +4.2% from 2010 to 2020. At the same time, Belgium (+9.5%), Austria (+4.8%), Sweden (+1.9%) and India (+1.3%) also displayed positive paces of growth. Moreover, Belgium emerged as the fastest-growing roundwood importer globally, with a CAGR of +9.5% from 2010-2020. Poland and Germany experienced relatively flat trend patterns. By contrast, Finland (-2.8%), Canada (-3.1%), Japan (-5.5%) and South Korea (-8.4%) illustrated downward trends over the same period.

In value terms, China ($8.4B) constitutes the largest market for imported industrial roundwood worldwide, comprising 57% of global imports. The second position in the ranking was occupied by Austria ($713M), with a 4.8% share of global imports, and it was followed by India, with a 4.4% share.

The average industrial roundwood import price stood at $72 per cubic meter in 2020, flattening from the previous year. Prices varied noticeably by the country of destination; the country with the highest price was India ($147 per cubic meter), while Austria ($35 per cubic meter) was amongst the lowest. From 2010 to 2020, the most notable rate of growth in terms of prices was attained by South Korea, while the other global leaders experienced more modest paces of growth.

World’s Largest Industrial Roundwood Suppliers

In 2020, New Zealand (40M cubic meters), distantly followed by the Czech Republic (21M cubic meters), Germany (20M cubic meters), the U.S. (18M cubic meters), Russia (15M cubic meters), and Uruguay (12M cubic meters) represented the leading exporters of industrial roundwood, together constituting 64% of total exports. Australia (7.4M cubic meters), Norway (6.8M cubic meters), Canada (4.4M cubic meters), France (4.2M cubic meters), Latvia (4M cubic meters), Papua New Guinea (3.9M cubic meters), and Belarus (3.6M cubic meters) followed a long way behind the leaders.

In value terms, New Zealand ($2B), the U.S. ($1.6B) and Russia ($1B) were the countries with the highest levels of exports in 2020, together accounting for 40% of global exports. Germany, the Czech Republic, Uruguay, Papua New Guinea, Australia, Canada, France, Norway, Latvia and Belarus lagged somewhat behind, together accounting for a further 39%.

Source: IndexBox Platform 

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Archives, Global Trade Daily, Imports/Exports, News

China Sharply Reduces Aluminium Foil Exports to India

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IndexBox has just published a new report: ‘China – Aluminium Foil – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.

China’s aluminium foil exports dropped by -4.9% to 1.2M tonnes. The supplies to South Korea, Thailand and India constitute 22% of China’s foil exports. India, the largest importer of Chinese foil, recorded the most remarkable reduction of purchases. The supplies from China to South Korea, Thailand and Indonesia grew slightly.

China’s Aluminium Foil Exports by Country

Aluminium foil exports from China fell to 1.2M tonnes in 2020, waning by -4.9% against 2019 figures. In value terms, aluminium foil exports dropped from $4B in 2019 to $3.8B (IndexBox estimates) in 2020.

India (98K tonnes), Thailand (97K tonnes) and South Korea (75K tonnes) were the main destinations of aluminium foil exports from China, with a combined 22% share of total exports. These countries were followed by Indonesia, Saudi Arabia, the United Arab Emirates, the U.S., Mexico, Japan, Viet Nam, Malaysia, Italy and Canada, which together accounted for a further 38%.

In value terms, South Korea ($354M), Thailand ($278M) and India ($261M) appeared to be the largest markets for aluminium foil exported from China worldwide, with a combined 23% share of total exports. Japan, the U.S., Indonesia, the United Arab Emirates, Saudi Arabia, Malaysia, Mexico, Viet Nam, Italy and Canada lagged somewhat behind, together accounting for a further 38%.

Among other countries, India saw the most remarkable reduction of supplies from China. In 2020, exports to India shrank by -29% y-o-y estimated in physical terms and by -30% y-o-y in value terms. By contrast, China’s exports to South Korea (+2% y-o-y), Thailand (+5% y-o-y) and Indonesia (+4% y-o-y) grew.

In 2020, the average aluminium foil export price amounted to $3,109 per tonne, almost unchanged from the previous year. Prices varied noticeably by the country of destination; the country with the highest price was Japan, while the average price for exports to Saudi Arabia was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was recorded for supplies to Japan, while the prices for the other major destinations experienced more modest paces of growth.

Source: IndexBox Platform

supply
3pls, Archives, Global Logistics, Global Trade Daily

FORWARD-THINKING FORWARDERS: HOW TO MANAGE CUSTOMERS’ CHANGING NEEDS ALONG A CHANGING SUPPLY CHAIN

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For the modern-day 3PL provider, managing expectations while successfully retaining customers goes well beyond cost savings and providing the fastest alternative to moving products. It did not take the pandemic to realize the consumer market continues to shift significantly, creating spikes at every angle from transport costs, sourcing, space, resource flexibility… and the list goes on.

The meaning of “competitive” is now determined by a 3PL provider’s agility and predictability in tandem with optimizing the flow of goods throughout the supply chain. The big kicker in the current market is that as costs continue to go up, the available labor pool becomes smaller. So, then, how can 3PL providers keep up with the competition while retaining their customer base and adding value? It starts with how you manage customer relationships. Many times, the biggest competition is not the opposing team;  it is keeping up with the hit-and-miss market. 

Andy Frommenwiler, vice president of Air Freight USA at Dachser, has compiled a list of the top three shifts his company’s customers are considering or implementing:

1. Alternative solutions to source their product. To that end, local sourcing has become more competitive and paired with unpredictable rising costs of transportation.

2. Customers are moving toward longer-term forecasting to allow for disruption and the lack of supply chain fluidity.

3. Taking advantage of space availability for customers with smaller orders.

“Market disruptions will continue, and it is imperative to properly plan now because it is clear there will be ongoing capacity challenges and other forms of disruption throughout the year,” Frommenwiler cautions.

In addition to piecing together the puzzle of transporting goods without breaking the bank and tarnishing the reputation, 3PL providers are laser-focused on retaining their customer bases. While the market is scrambling, customer retention is a critical element to remaining resilient and maintaining a competitive edge. The key here is not so much about what you can offer customers, but more so how you can extend stability and transparency. 

“In today’s environment, it is crucial to maintain an initiative-taking approach and open dialogue with your customer,” advises Frommenwiler. “Informing customers of the current market situation, such as unstable pricing and space shortages, makes the customer aware of today’s challenges, which not only allows them to properly prepare but also highlights the importance of a strong, knowledgeable logistics partner.”

Always remember that the disruptions you are experiencing as a 3PL provider are almost always parallel to the challenges your customers are struggling to navigate. The value is how the 3PL provider not only provides support in solving these challenges, but also how much visibility is gained through the partnership. 

“Very high demand with low supply, port congestion, trucker shortages, mounting detention and demurrage charges are just some examples of the challenges companies are faced with today,” Frommenwiler notes. “As the planning experts, it is our responsibility to not only identify the challenges, but also to provide alternative solutions such as LCL expedited service, standard LCL or air freight options. 

“It is also critical that we insist on customer forecasts to facilitate better planning, booking, space allocation and superior utilization. It is important to gain trust and ensure the customer understands that, as their appointed forwarders, we are their partners and are not capitalizing on the situation by taking advantage and over-charging for our services.”

Another significant challenge in the current market is the labor shortage. Look at any industry, and you will find the need for workers. The same is true for players in the logistics arena–from 3PLs to customers, all are hurting from the labor shortage. 

“The current labor shortage situation is particularly challenging and difficult to manage,” Frommenwiler concedes. “Ground handling companies, which are managing several airlines, are simply overwhelmed with the amount of cargo and limited warehouse space. Consequently, it takes days to break down cargo. These delays contribute to further disruptions throughout the supply chain.”

The role of a logistics provider is to understand these disruptions while providing solutions that benefit the customer. Demand will continue to increase, that is not changing. When you take on the challenges of the customer as a logistics provider, you create the opportunity to understand what your competitors are faced with. The more solutions you provide to your customer base, the more trust, reliability and increases to your bottom line you create. When you invest in your customer, you invest in your company. 

“It is important for companies to start making proper investments now to position themselves for a successful future,” Frommenwiler says.

Dachser USA takes these investments to the next level when considering the needs of its customer base. In July 2020, the global logistics leader announced its new dedicated weekly Frankfurt-Chicago-Frankfurt flight service, connecting U.S. customers to the European market through a comprehensive land transport network from Frankfurt with rotations each weekend. The pandemic inevitably took its toll on the flow of the supply chain and in true Dachser style, the provider stepped up to the challenge, paving the way for advancements in innovation and expansion. 

“This new dedicated weekly transatlantic flight service offers a solution to the current air freight capacity challenges that our customers are facing,” Frommenwiler says. “They called upon us to provide a timely, efficient transportation option to move their cargo between the U.S. and Europe in a way that allows them to properly plan and meet their deadlines.” 

Market disruptions do not have to be the end of your brand–in fact, they can be the very thing that sets your services portfolio apart from the competition. At the end of the day, customers will select the logistics provider that can get the job done, maximize the bottom line and add value to the partnership. If your customer suffers, your company suffers. Offering the latest technology means nothing without measurable results, scalability and increased visibility. When thinking about how your company can best meet the needs of customers in a volatile market, start with the basics: clear communication. 

_____________________________________________________________________

Andy Frommenwiler is vice president, Air Freight USA, at Dachser.

agricultural products chloride
Archives, Global Trade Daily, Imports/Exports

Largest Importers of U.S. Agricultural Products

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According to the U.S. Department of Agriculture, U.S. agricultural and related exports totaled $162 billion in 2020, the third-highest total on record. The U.S.’s top agricultural export partners have shifted over the years, from Western Europe and Russia to South and East Asia, Latin America, and North Africa. A growing world population and expanding middle class in developing countries suggest that U.S. agriculture will remain in high demand looking ahead.

Total U.S. agricultural and related goods exports peaked in 2014 at over $170 billion. The following year, the value dropped by 12% due to a significant appreciation of the U.S. dollar; agriculture exports remained fairly constant after that. Tariffs imposed during the Trump administration resulted in retaliatory tariffs by important trade partners, which impacted U.S. agricultural exports to those countries, particularly to China. However, the impact on total agricultural exports was minimal, in part due to increased exports to other non-retaliating countries.

Since 1980, consumer-oriented goods have made up an increasingly large share of U.S. agricultural exports. Consumer-oriented agricultural products are higher-value goods destined for direct consumer consumption, and include things like meat, eggs, fruit, and vegetables. This trend is due in part to changing consumer preferences resulting from rising incomes globally. Many developing countries—including China, Mexico, and Indonesia—are important trade partners to the U.S., and rising household incomes in these countries have led to increased demand for higher-value products such as meat, dairy, and fresh produce. Bulk goods make up the second-largest share of U.S. agricultural exports and include products like grains, oilseeds, and cotton.

While the U.S. and Europe have historically been the world’s largest importers and exporters of agricultural goods, emerging economies are becoming increasingly important to global trade. On a regional basis, East Asia—which includes China, Japan, South Korea, and Taiwan—is the largest importer of U.S. agricultural products, accounting for 34% of all U.S. agricultural exports in 2020. Southeast Asia—which includes Vietnam, the Philippines, and Indonesia—is now the third-largest importer of U.S. agricultural products, behind North America and ahead of the European Union. For context, Southeast Asia ranked seventh in 1990.

To find the largest importers of U.S. agricultural products, researchers at Commodity.com analyzed data from the U.S. Department of Agriculture. The researchers ranked countries according to the total value of U.S. agricultural products that each country imports. Researchers also calculated each country’s value as a share of total U.S. agricultural exports, the top U.S. agricultural product exported to each country, and other detailed statistics.

Here are the biggest importers of U.S. agricultural products.

Country
Rank
Total value of U.S. agricultural exports to country
Country’s value as a share of total U.S. agricultural exports
Top U.S. agricultural product exported to country
Bulk total value
Intermedial total value
Consumer-oriented total value
Agricultural related total value
China

 

   1 $28,750,288,000    17.7% Soybeans $19,132,864,000  $1,872,701,000  $5,393,904,000  $2,350,819,000
Canada   2  $25,414,534,000    15.7% Bakery Goods, Cereals, & Pasta

 

 $1,023,675,000  $4,160,305,000  $17,093,000,000  $3,137,555,000
Mexico

 

   3  $18,962,080,000    11.7% Corn $6,132,761,000  $3,914,580,000  $8,288,950,000  $625,787,000
Japan   4  $12,887,108,000    8.0% Beef & Beef Products

 

 $3,966,270,000  $1,377,563,000  $6,371,574,000  $1,171,700,000
South Korea   5  $8,241,801,000    5.1% Beef & Beef Products

 

 $1,604,410,000  $1,560,234,000  $4,541,906,000  $535,251,000
Vietnam

 

   6  $3,744,450,000    2.3% Cotton $1,790,124,000  $643,589,000  $928,273,000  $382,465,000
Netherlands   7  $3,741,523,000    2.3% Soybeans $1,158,135,000  $965,926,000  $1,221,265,000  $396,197,000
Taiwan   8  $3,349,146,000    2.1% Soybeans $1,194,534,000  $350,236,000  $1,729,362,000  $75,015,000
Philippines   9  $3,230,646,000    2.0% Soybean Meal $919,558,000  $1,182,673,000  $1,107,535,000  $20,881,000
Indonesia   10  $2,897,691,000    1.8% Soybeans $1,486,644,000  $682,172,000  $654,523,000  $74,352,000
Colombia   11  $2,881,065,000    1.8% Corn

 

 $1,305,913,000  $923,885,000  $632,865,000  $18,402,000
United Kingdom   12  $2,740,498,000    1.7% Forest Products

 

 $119,602,000  $506,820,000  $1,100,002,000  $1,014,074,000
Hong Kong   13  $2,182,661,000    1.3% Beef & Beef Products

 

 $31,654,000  $89,541,000  $1,911,321,000  $150,145,000
Egypt   14  $1,920,256,000    1.2% Soybeans $1,509,877,000  $180,781,000  $204,093,000  $25,506,000
Thailand   15  $1,900,352,000    1.2% Soybeans $868,546,000  $508,351,000  $398,499,000  $124,957,000

 

For more information, a detailed methodology, and complete results, you can find the original report on Commodity.com’s website: https://commodity.com/blog/us-agricultural-importers/

crab
Archives, Global Trade Daily, Imports/Exports, News

U.S. Preserved Crab Meat Imports Recover from Last Year’s Slump 

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IndexBox has just published a new report: ‘U.S. – Prepared Or Preserved Crab Meat – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.

American imports of prepared or preserved crab meat show a sign of recovery this year. In the first seven months of 2021, the U.S. imported 17.5K tonnes of crab meat, which was +4.4% higher than the figures for the same period of 2020. In 2021, the average price for imported crab meat rose approximately by +22% compared to the previous year. Indonesia remains the largest supplier, providing nearly half of the total American import volume. Last year, the U.S. boosted purchases from Indonesia, while imports from Venezuela and China declined.

American Imports of Prepared or Preserved Crab Meat

In the first seven months of 2021, the U.S. purchased 17.5K tonnes of crab meat against 16.7K tonnes of the same period of 2020. In value terms, they increased from $327M to $417M. The average price for imported crab meat grew approximately by +22% compared to the figures of 2020.

In 2020, the amount of prepared or preserved crab meat imported into the U.S. dropped to 30K tonnes, down by -7.8% against the year before. In value terms, prepared or preserved crab meat imports dropped sharply from $693M to $562M (IndexBox estimates) in 2020.  In 2020, Indonesia (14K tonnes) constituted the largest supplier of prepared or preserved crab meat to the U.S., with a 47% share of total imports. Moreover, imports from Indonesia exceeded the figures recorded by the second-largest supplier, Venezuela (2.5K tonnes), sixfold. China (2.4K tonnes) ranked third in terms of total imports with an 8.2% share.

In 2020, the import volume from Indonesia rose by +11.2% y-o-y. The supplies from Venezuela and China declined by -15.9% y-o-y and -14.4% y-o-y respectively.

In value terms, Indonesia ($280M) constituted the largest supplier of prepared or preserved crab meat to the U.S., comprising 50% of total imports. The second position in the ranking was occupied by the Philippines ($46M), with an 8.2% share of total imports. It was followed by Viet Nam, with a 7.4% share.

The average import price for prepared or preserved crab meat stood at $18,894 per tonne in 2020, declining by -12.1% against the previous year. There were significant differences in the average prices amongst the major supplying countries. In 2020, the country with the highest price was the Philippines, while the price for China was amongst the lowest.

Source: IndexBox Platform

mobile phone imports
Archives, Global Trade Daily, News

American Mobile Phone Imports Accelerate 

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IndexBox has just published a new report: ‘U.S. – Wireless Phones – Market Analysis, Forecast, Size, Trends And Insights‘. Here is a summary of the report’s key findings.

In the first seven months of 2021, American mobile phone imports reached $29B, which was +21% higher than the figures of the same period of 2020. The U.S. constitutes the world’s leading importer of mobile phones. Last year, American imports dropped by -9.5% y-o-y to $49.5B. China remains the largest exporter of mobile phones to the U.S., supplying 79% of American imports in value terms. In the first half of 2021, Chinese exports to America grew by +45% to $20.5B compared to $14.1B recorded in the same period of 2020. The average mobile phone import price rose by +3.9% to $273 per unit in 2020.  

American Wireless Phone Imports 

In the first seven months of 2021, the U.S. imported wireless phones worth $29B against $24B in the same period of the last year. America leads in global imports of wireless phones, with a 17%-share of the total volume.

American mobile phone imports saw a significant drop in the previous year, declining from $54.7B in 2019 to $49.5B (IndexBox estimates) in 2020. In physical terms, imports of wireless phones into the U.S. shrank to 181M units, declining by -12.9% against 2019 figures.

In value terms, China ($39.1B) constituted the largest supplier of mobile phone to the U.S., comprising 79% of total imports in 2020. Viet Nam ($8.1B) occupied the second position in the ranking, with a 16% share of total imports. It was followed by South Korea, with a 2.7% share. In the first half of 2021, Chinese wireless phone exports to the U.S. grew to $20.5B against $14.1B recorded in the same period of 2020.

In physical terms, China (134M units) constituted the largest mobile phone supplier to the U.S., with a 74% share of total imports in 2020. Moreover, mobile phone imports from China exceeded the figures recorded by the second-largest supplier, Viet Nam (37M units), fourfold. The third position in this ranking was occupied by India (3.6M units), with a 2% share.

In 2020, the average mobile phone import price amounted to $273 per unit, growing by +3.9% against the previous year. There were significant differences in the average prices amongst the major supplying countries. In 2020, the country with the highest price was South Korea ($488 per unit), while the price for India ($127 per unit) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by India, while the prices for the other major suppliers experienced mixed trend patterns.

Source: IndexBox Platform 

airfreight
Air Cargo, Archives, Global Logistics, Global Trade Daily

Airfreight Prices Reach New Heights Ahead of the Holidays

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Numerous analysts agree that the upcoming holiday season could bring numerous supply chain challenges resulting in sold-out products, delayed replenishments and disappointed customers. Airfreight cost rises are already emerging as an obstacle in the mix.

Capacity Shortages and Rising Demand

Insights from airfreight logistics professionals and other people in the know suggest that reduced capacity on flights coupled with surging demands are two factors contributing to the current conditions.

An analysis of air cargo rates for September 2021 illuminates how all regions could experience the effects of more logistics professionals availing of air cargo services when they can. The push to secure spaces has pushed some major brands to invest in their own planes. However, smaller retailers are often left out because they lack the resources to cope with higher rates, let alone dedicated aircraft.

Global demand levels were up by 9.1% compared to figures collected for September 2019. Unfortunately, available capacity is 8.9% below pre-COVID-19 levels. However, other sources clarified that although volumes are up, not all planes are full.

When the report drilled down into regional situations, it revealed that Asia-Pacific airlines saw international cargo volumes rise by 4.5% compared to September 2019 figures. European carriers saw a similar 5.3% volume increase, and demand went up by 6.9% for the North Atlantic trade lane.

African, Middle Eastern and Latin American carriers felt even more intense pressure during the studied period than in September 2019. African airlines coped with a 34.6% jump in international cargo demand, while those in the Middle East and Latin America had overall upticks of 17.6% and 17.1%, respectively. The capacity shortage was particularly pronounced for Latin American air cargo specialists, with availability down more than 24% on 2019 levels.

Air Cargo Still an Appealing Option

Since goods often travel incredibly long distances to reach their destinations, intermodal transportation is increasingly necessary. It involves using at least two methods, such as a ship and a truck, to get cargo to the right places. However, it’s not always easy to choose the best options. That’s because airfreight is not the only sector saddled with extra demand.

In the United States, March 2021 container volumes for the Long Beach and Los Angeles ports were up 97% on the previous year, resulting in the busiest March recorded so far.  Also, the United States, Europe and Great Britain are among the places dealing with truck driver shortages.

While facing those obstacles, logistics professionals may understandably conclude air cargo carriers are among the best options, provided they’re willing to pay the associated rates. One issue is that many experts believe port backups won’t resolve anytime soon. A proposed solution to keep some United States ports open 24 hours may not be enough to make significant impacts, either.

Those realities have pushed more people to consider air cargo as a possibility. Bruce Chan, a senior analyst at investment bank Stifel, said, “Terminals and container yards are full. Drayage capacity is tight due to structural driver supply issues, as well as compounding disincentives to pick up from ports as a result of the delays.”

He continued, “As such, we believe there is a contingent of inventory that will not arrive in time for the seasonal rush via ocean and that freight may be converted to air.” Numerous logistics professionals have nonetheless warned consumers to expect product shortages this year. Some have recommended that shoppers take pictures of items and put them into holiday cards in case the actual products show up late.

A Few Things to Know Before Considering Airfreight Options

Shipping things by air is often the most desirable method when speed is a priority. Plus, delicate items, such as electronics and designer clothing, are among the products that most commonly travel in planes.

Airfreight cost averages were typically higher than other transportation methods even before these recent rises. Therefore, shipping more expensive items by plane was a popular choice because the hope was that the higher product revenue would justify the expenses.

However, carriers don’t accept goods in all cases. For example, aerosols with an aggregate weight of more than 150 kilograms cannot travel in a passenger aircraft. People should take the time to verify that cargo specialists will accept their products rather than assuming that’s the case. All forms of product transportation require considering things like weight and flammability to ensure safety.

It’s also more complex to prepare products for shipment by air versus sea. The cargo gets loaded onto a pallet in a warehouse, wrapped with plastic, and secured with cords and ropes. Packing the products together as tightly as possible is critical because shifting significantly during a flight could cause the plane to crash.

These details mean that even if someone is prepared to deal with rising airfreight costs, they must take the time to check that plane-based shipments are right for their products and their overall needs.

Passenger Air Travel Increases Could Decrease the Crunch

Even if there are no significant airfreight cost decreases on the horizon, an expected bump in passenger flights could ease the current capacity issues. For example, the United States recently reopened its borders to many international travelers who can show proof of their COVID-19 vaccinations.

The largest cargo holds in passenger planes’ bellies accommodate the equivalent of two 40-foot freight containers. At one time, they carried as much as half of the total air cargo capacity. Many airlines expanded their cargo space during the pandemic, but it still did not compare to levels seen previously.

Part of the reason was that airlines most dedicated to expanding cargo capacity limited the changes made. Representatives worried that demand could dry up in the future, meaning any efforts to expand cargo space might only bring short-term payoffs. However, the anticipated passenger flight boom won’t universally affect available areas.

Logistics professionals expect the most benefits to come from planes carrying people between the United States and Europe. However, the effects will not be as notable for transpacific flights.  For example, many pandemic-related travel restrictions remain in effect for China. Plus, more passengers originating in Europe traveled to the U.S. than to Asian destinations even before the pandemic.

Airfreight Logistics Are Continually Complex

People considering shipping goods by air have many pros and cons to weigh, and that was the case before rates began climbing. Being aware of those aspects will help them conclude whether the cost is worth the money when considering all other factors.

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Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.

freight
3pls, Archives, Global Logistics, Global Shippers 101, Global Trade Daily

Logistics Providers Have a Higher Calling than Freight’s ‘Middleman’

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Since the domestic onset of the COVID-19 pandemic last March, logistics providers and freight brokers have had to deal with two extremes in the market — and in short succession.

In the initial economic fallout in the first few months of the pandemic, freight volumes sank, and so did per-mile rates. There simply weren’t enough loads to go around for all of us who make a living moving freight, and the slowdown happened so fast, we were all left searching for answers.

At least I know here at Circle Logistics, we weren’t immune to that sudden freight vacuum.

But then as the recovery gained steam, freight volumes hit a warp speed, seemingly making up for lost time last spring and due to consumers spending money on hard goods rather than services or entertainment.

Behind that pendulum swing, logistics providers this year have faced a tall task in keeping up with the demands of their shippers. There’s been a dearth of transportation capacity, and 3PLs have often had to book loads at a loss to make sure we take care of our shippers.

Between freight volumes slamming the brakes in spring of 2020 and then mashing the throttle this year, I’m sure we as an industry will glean many lessons from the trials we’ve weathered.

But there’s a fundamental lesson staring us in the face right now: We have to pivot our industry away from transactional deals and work to create real, trusted relationships with each other.

This involves all of us — shippers, brokers, and carriers. We’re at a precipice in the logistics industry, and it’s incumbent upon all of us to heed the requirements of this new world. That starts with ditching the old ways and forging a path in which mutually beneficial relationships rule, and in which we utilize those relationships to help manage the current crisis and any future events that occur.

For freight brokers and 3PLs, first and foremost, this starts with shedding the label of a freight  industry “middleman.” That might have been true of yesteryear’s freight broker. You know the type — the guy at a desk working a big landline phone with four or five different lines connected into it. But it absolutely cannot be true of a modern logistics provider.

We need to be viewed as a valued, trusted source of market information and trucking capacity by our shipper customers. And we must be viewed as a business partner of our carriers — a sales team working to find loads that fit their lanes and rates, a dispatcher trying to get them backhauls, and someone who they’d turn to for a load over taking a chance on a random broker from a loadboard, even if it pays a little better.

By building these relationships on both sides, you can ward off the situation where shippers try to pit 3PLs and brokers against each other in negotiations. Or the situation where you try to squeeze a carrier for a few pennies a mile on a one-and-done load and then find you need their service a few weeks or months later for a different load.

Will every freight transaction be this way? Of course not. Logistics providers still have to turn to loadboards to find carriers, and carriers will still have to utilize some one-time deals to reposition or simply keep the wheels turning.

Also, shippers’ procurement managers will still mostly be working to find transportation services at the best cost for their company. They still have a boss to answer to, too.

But what I hope has become a stark realization during these turbulent times is that we’re all in this business together, for better or worse. Shippers need their freight hauled. Carriers need loads to move to keep their operations afloat and their bills paid. And freight brokers and 3PLs, more than ever, are the conduit to bridge those two parties’ needs.

In an 18-month span which has seen both ends of the spectrum — carriers unable find loads at sustainable rates and shippers unable to find capacity — the new calling for freight brokers has been laid bare: We must work to build the relationships that keep goods moving and keep the supply chain chugging. Anything less is a step in the wrong direction.

Polyamide
Archives, Global Trade Daily, News

Germany’s Polyamide Exports to Set New Record This Year

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IndexBox has just published a new report: ‘Germany – Polyamides (In Primary Forms) – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.

German polyamide exports may reach a new record in 2021, rebounding after two years of decline. In the first half of this year, Germany exported 424K tonnes of polyamides worth $1.55B against 348K or $1.12B in the same period in 2020. Germany remains the world’s largest polyamide supplier, accounting for 19% of global exports. Italy, Belgium and France are the key importers of polyamides from Germany. Turkey recorded the highest spike in imports from Germany. In 2020, the average polyamide export price amounted to $3,205 per tonne, down by -7.7% y-o-y. 


Germany’s Polyamide Exports by Country 

In the first half of 2021, Germany exported 424K tonnes of polyamides worth $1.55B, which was 22% more in physical terms and 38% more in value terms than the figures of the same period of 2020. Germany leads in global polyamide exports, supplying 19% of the total volume.

In 2020, approx. 713K tonnes of polyamides in primary forms were exported from Germany; declining by -9.3% on the year before. In value terms, polyamide exports contracted dramatically to $2.3B (IndexBox estimates) in 2020. German exports peaked in 2018, reaching $2.98B.

Italy (100K tonnes), Belgium (72K tonnes) and France (45K tonnes) were the main destinations of polyamide exports from Germany, with a combined 30% share of total exports. Poland, Turkey, the Czech Republic, Austria, the U.S., China, Spain, South Korea, Hungary and the UK lagged somewhat behind, together accounting for a further 42%.

In value terms, the largest markets for polyamide exported from Germany were Italy ($243M), Belgium ($224M) and Poland ($148M), with a combined 27% share of total exports. France, the Czech Republic, China, the U.S., Austria, Turkey, Spain, Hungary, the UK and South Korea lagged somewhat behind, together accounting for a further 44%.

Among the main countries of destination, Turkey recorded the highest growth rate of the value of exports, over the period under review, while shipments for the other leaders experienced a decline.

In 2020, the average polyamide export price amounted to $3,205 per tonne, with a decrease of -7.7% against the previous year. Prices varied noticeably by the country of destination; the country with the highest price was China, while the average price for exports to South Korea was amongst the lowest.

Source: IndexBox Platform