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NEW REPORT: DEMURRAGE & DETENTION CHARGES MORE THAN DOUBLE IN A YEAR

demurrage D&D voyager

NEW REPORT: DEMURRAGE & DETENTION CHARGES MORE THAN DOUBLE IN A YEAR

Demurrage and detention charges imposed on shippers by container lines have soared at unprecedented rates globally over the last year, according to the Demurrage & Detention Benchmark 2021 report published today by Container xChange, the world’s leading online platform for the leasing and trading of shipping containers,

However, the hikes are hugely inconsistent, with large differences apparent both by port and by carrier.

Across the world’s 20 largest container ports, the report found that average Demurrage and Detention (D&D) fees levied by container lines on customers two weeks after a box was discharged from the vessel more than doubled across ports and shipping lines between March 2020 and March 2021, climbing 104% or the equivalent of $666 per container across all container types.

None of the world’s top 20 ports by throughput saw a decrease in D&D fees over the period.

On average, D&D charges (see definitions below) in March this year were $720 per box across standard container types two weeks after the box discharge from the vessel.

“Demurrage and detention prices have always been an area of conflict between shippers and carriers and that tension has reached a new level this year as costs have spiraled,” said co-founder of Container xChange Christian Roeloffs.

“The key to minimizing D&D is to create transparency around the fees. With shippers informed about the costs associated with D&D, they’ll be able to make business decisions and enter negotiations informed of the accurate costs and per diems. We hope this report gives all parties increased transparency.”

Methodology

To compile the report Container xChange collected more than 20,000 data points from publicly available sources. These were used to compare D&D rates imposed on customers by the world’s ten largest shipping lines across the world’s top-20 container ports. The data was then compared against data collected by Container xChange in March 2020.

The ten leading Chinese ports experienced a +126% increase in average D&D charges from March 2020 to March 2021. Qingdao saw the biggest rise in D&D rates, up 194% year-on-year, followed by Dalian where shippers suffered an average increase of +187%.

However, D&D charges in China remain far lower than in many other leading ports with seven of the top 10 cheapest ports located in the country. By contrast, average D&D fees two weeks after discharge at the Port of Long Beach in March were $2638, the most expensive in the world. In second place was neighboring Los Angeles at $2593.

“In the US, the Federal Maritime Commission is now looking into the practices of the container shipping industry and searching for ways to ensure that container users, many of whom feel they have been charged unfairly by carriers for D&D, can be refunded,” said Dr. Johannes Schlingmeier, CEO & Founder of the container leasing and trading platform. “Certainly, D&D rates have been accelerating, adding to the burden on shippers and industry on top of record container rates and global container shortages.”

Rotterdam had an average D&D rate in March of $756, Singapore was $615, and Antwerp was $709.

At the bottom of the spectrum was Busan (South Korea) with average D&D charges of only $132 in March this year. The next cheapest after the South Korean port were the Chinese ports of Dalian and Tianjin both with averages of $201.

Variations by carrier within ports

D&D charges do not just vary by port, they also vary by shipping line within each port. At the port of Los Angeles, which has been central to the chaos evident on the trans-Pacific container trade over the past year, average D&D charges increased by +142,7% from March 2020 to March 2021. CMA CGM’s D&D rates increased the most, up 167% over the period. Maersk was a close second, with its customers seeing a 161% increase in D&D charges.

By contrast, COSCO, unlike the other carriers in the Port of Los Angeles, lowered its average D&D fees by 15% over the period from $1417 in March last year to 2020 to $1213 in March 2021.

In Hamburg, meanwhile, the cheapest carrier in March this year was CMA CGM, which charged $258 in D&D after two weeks. Yang Ming was the most expensive line with rates of $1612.

Globally, the cheapest combination of carrier and port was COSCO and the Port of Busan in South Korea. The most expensive combination was CMA CGM at the ports of Long Beach and Los Angeles.

vessel

ARTIFICIAL INTELLIGENCE AND OTHER INNOVATIONS ARE FOREVER CHANGING LARGE VESSELS

Throughout the course of human history, civilizations have relied on transit across water to travel, trade and invade. Archaeologists can trace the use of boats back many thousands of years, with circumstantial evidence pointing toward their use as early as 9,500 BC, well before the Pesse canoe, commonly thought to represent the world’s oldest known boat.

Navigational knowledge and boatbuilding techniques have advanced steadily over time; the enormous ships we see transporting people and goods today are extraordinary evolutions of their ancestors.

In the container ship realm, it was not until the 1950s that the first commercially successful vessel completed its maiden voyage. Named Ideal X, it was a T2 tanker owned by Malcom McClean that carried 58 containers between Newark, New Jersey, and Houston. By contrast, today’s largest container ship, the HMM Algeciras, can carry up to 24,000 TEUs. 

Shipping is, quite literally, big business. In monetary terms, the $900 billion shipping logistics industry is expected to be valued at more than $2 trillion by 2023, growth underpinned by increasingly efficient vessels that make use of cutting-edge innovations. 

For instance, by 2025 the global market for electric-powered shipping vessels is set to be worth $8.4 billion, rising to $15.6 billion come the end of the decade. 

Meanwhile, the demand for maritime data analytics is set to increase from $895 million in 2019 to more than $1.8 billion by 2027. Wherever you look, technology is steering the value of big ships upwards. 

Artificial intelligence – an unstoppable tide?  

One strand of technological innovation in ships that is making waves is artificial intelligence (AI). 

Defined as the ability of a machine or a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment, AI is taking on an increasing number of use cases aboard large vessels. 

Fuel is one of the largest costs for shipping companies. For Swedish shipping giant Stena Line, it constitutes a massive 20 percent of all running costs. Innovation to help cut fuel consumption has therefore become a major priority. 

Stena, which is also one of the world’s largest ferry operators, has been experimenting with the use of AI technology on one of its vessels as it travels overnight from Gothenburg to the German Port of Kiel. 

Working in collaboration with Hitachi, the Stena Fuel Pilot can predict the most fuel-efficient way to operate a vessel and assist the onboard captain and crew to lower the fuel consumption. The results from Stena Scandinavica show a reduced fuel consumption of 2-3 percent per trip, results which have prompted Stena to deploy the AI assistant across its entire fleet of 37 ships.

Niklas Kapare, captain on M/S Skåne, has used the technology first-hand. He commented: “We can see that it is working, even though we need to continue to adjust it to improve the results. As a captain, I get a good overview of several factors such as wind, currents and squat, and assistance to use the right power and number of engines to lower the fuel consumption.”

Another important use case for AI aboard vessels is navigation. Using sophisticated tracking software in tandem with IoT connectivity, these systems can be leveraged to analyze multiple navigational scenarios. 

Stena is, once again, leading the way in this regard through its AI Captain solution. It is capable of recalculating routes during voyages when it receives information to suggest that problems may lie ahead. Such problems could be in the immediate distance, and it is here that AI-powered image recognition technology has a role to play. 

An example of this in action is a collaboration between Chinese tech firm SenseTime and Japanese shipping company Mitsui OSK Lines. SenseTime’s system leverages ultra-high-resolution cameras and a graphic processing unit to automatically identify vessels in a ship’s surrounding area, designed to prevent large vessels such as container ships and cruise liners from colliding with smaller ones. The solution can also alert crew to other hazards when visibility is poor.

It is not just aboard ships that AI can have an impact, however. The industry could also benefit from slicker terminal operations, with AI being trialed in a number of areas such as container handling, decking systems, gate volume predictions and vessel stowage. 

According to a study from Navis toward the end of 2019, 88 percent of respondents indicated that automated decision-making will be very, if not extremely, important for the future of innovation at terminals. 

Andy Barrons, chief strategy officer at Navis, said at the time: “Just a few short years ago, only a handful of our customers were even open to the idea of automation or other disruptive technologies designed to make the container terminal smarter, safer and more sustainable.

“The survey demonstrates just how far the industry has come–and will continue to go–in harnessing technology in the right ways to automate decision making within terminals. We firmly believe that automation and the use of AI is our future, and will continue to support our current and future customers as they embark down this critical path.”

A fully autonomous future?

But just how far will AI technology embed itself into the workings of ships and the wider industry? 

It is a mightily difficult question to answer, but there are signs that we are only just at the beginning of AI’s shipping industry voyage. 

Yara Birkeland is an emission-free and fully autonomous 120 TEU container ship that is under construction and due to be launched imminently. At the end of November 2020, the ship was handed over to Yara from the Norwegian shipyard Vard Brattvåg, where it is undergoing testing for container loading and stability before being sailed to a port and test area in Horten for further preparations. 

Elsewhere, the European Union through its Horizon 2020 Research and Innovation program is funding a three-year project aimed at creating trade lanes linked by automated port services and used by autonomous ships. 

The Advanced, Efficient and Green Intermodal Systems (AEGIS) initiative is expected to complete in May 2023 and is in line with the EU’s plans to accelerate efforts to shift road transport volumes to rail and waterborne transport. Although the project is targeting smaller ships and short-sea operations, the wider implications could be momentous if it is deemed a successful endeavor. 

However, one of the stumbling blocks in relation to automated ships is cost. 

The enormity of the technology required (at least at present) means that many ship operators, especially those with large vessels, will not be entertaining the prospect of full-scale fleet conversion anytime soon. The Yara Birkeland, for example, is estimated to cost around $25 million–three times more than a conventional container vessel of the same size. 

While AI has proven to yield considerable financial savings, operational efficiencies and safety benefits across a range of use cases, it may be some time before we see unmanned giants roaming our seas. 

climate

International Windship Association Shares Open Letter Urging Solutions for Climate Concerns

The undersigned,

We call on all maritime industry decision-makers and the entire shipping community to fully assess and utilize all available power solutions that deliver the necessary deep, swift cuts in carbon emissions over the next decade commensurate with responding to the climate emergency. To that end, readily available and proven wind propulsion solutions must be integrated at the very heart of decarbonization deliberations.

Direct wind propulsion provides abundant, free energy, immediately and uniquely suited to and accessible to shipping worldwide without the need for costly land-based infrastructure or logistics investment. Wind technology helps de-risk shipping from its dependency on bunker fuels. Emerging alternative fuels come with multiple challenges – cost, availability, density, and quality and wind propulsion decouples shipping somewhat from these huge uncertainties around whatever ‘flavor’ eco-fuel is adopted.

Whatever size or type of commercial vessel, wind-assist or primary wind propulsion systems quickly provide credible, practical, robust, scalable and economically viable solutions – a dozen large ocean going vessels will be in operation by the end of Q1, 2021, along with 20+ small sail cargo and small cruise vessels.

The potential exists for 20-30% of the global fleet’s energy requirement to be delivered by wind systems. By adopting wind
solutions as part of a hybrid propulsion approach, vessel owners and operators can substantially deliver on the initial level emission savings targets for 2030, thus providing a critical component and step for achieving the 2050 target. A UK Government commissioned study forecasts up to 45% penetration of wind technologies into the global fleet by 2050. A key EU-commissioned report on wind estimates up to 10,700 installations are possible by 2030, including roughly 50% of bulkers and 67% of tankers alone.

Wind propulsion reduces demand, cost and power storage requirements for the next generation of alternative fuels, which
further helps to accelerate and enable the take-up and cost efficiency of these alternative fuels.

Therefore, we call on all shipping industry decision-makers to:

1. Establish a Multi-Stakeholder International Working Group to evaluate and quantify wind propulsion’s potential contribution to decarbonizing the global fleet in the face of the climate emergency. Promote the potential from a hybrid approach to decarbonization with wind propulsion fully integrated together with operational and vessel optimization measures along with eco-fuels.

2. Launch a Comprehensive Strategic Review of shipping industry decarbonization efforts in the context of the climate emergency. Covering all criteria, designations and databases/resources being used, this review would incorporate wind propulsion into all calculations and include a full life cycle analysis of all alternative propulsion systems and fuels so that the industry can fully appreciate the merits of each proposed system. The review should quantify all externalities including infrastructure development and production costs of all alternative propulsion systems and fuels along with their direct and indirect climate impacts.

3. Ensure a ‘level playing field’ is created and maintained for all power systems, removal of market and non-market barriers
as well as fair and balanced allocation of R&D finances and resources in the future.

4. Do more and go beyond the current narrow fuel-centric approach by adopting a fully integrated alternative propulsion approach to decarbonization pathways and policy. Doing so will create a proportionate, measured strategy that is absolutely essential to achieving the industry emissions targets. We believe that wind propulsion systems must be fully integrated within this strategy to help achieve decarbonization as quickly as possible and that this will be broadly welcomed by the shipping industry.

marine

YOU GO YOUR WAY AND WE’LL GO THE NEW MARINE HIGHWAY

In our latest Dispatches edition, we took a look at how the port industry is kicking-off in 2021. Needless to say, Port Everglades and California’s Port of Hueneme caught our attention.

Port Everglades in Broward County, Florida, welcomed the new year with the first call of a cargo ship arriving from the U.S. Maritime Administration’s new Marine Highway. National Shipping of America’s American-flagged vessel National Glory followed Marine Highway M-10, which begins in Houston and extends east, to pick up containers in Port Everglades for delivery at the end of the M-10 line: in Puerto Rico.

“This service product has economic, environmental and safety advantages with the objective of taking trucks off the road,” says Torey Presti, president of National Shipping Agencies, Inc.

On the opposite coast, the Port of Hueneme in California recently heralded the U.S. Department of Transportation’s official designation of the SEA LINC Project. Formally known as Spurring Economic Advantages with Logistical Investments for New Connectivity, the project aims to move cargo off federal and state highways by shifting the cargo to barge along Marine Highway M-5 instead.

“The successful designation of this project is another example of how we are thinking outside of the box to grow our services at the port, while reducing the impacts on our environment,” said Oxnard Harbor District Board President Jess J. Ramirez.

shipping containers

Pros and Cons of Re-using Shipping Containers

If you keep up to date with the latest worldwide architectural trends, you must know that a lot of fuss has been made over old shipping containers. These days, they aren’t just discarded after their expected life is over. Instead, people turn them into houses, storage units, coffee shops, restaurants – you name it. You have to admit how crafty this is for those who want to start a business amid a global crisis. However, it can’t be denied that there are both advantages and disadvantages of reusing shipping containers. I would like to cover the basic ones, in case you are pondering about giving an old shipping container a new life.

Save your time and money

Building a home from scratch (or any other structure that provides shelter) is not only an expensive project – it is also a time-consuming one. Anyone who has ever been in the situation to go through the entire construction process will be able to give you first-hand insight into all the difficulties ahead. The good thing is that most of those time and money-related problems can be solved by repurposing shipping containers.

Not only are they very affordable, but you can also build them incredibly quickly: you stick them together like Lego pieces. An added benefit is that you can easily move them to a new location. After all, that is their original purpose. This certainly comes in handy in the fast-paced world we live in – you never know where you might end up.

Shipping containers are durable

As you already know, shipping containers are built to sustain all the challenges of maritime shipping. The ocean can certainly be rough at times, leading manufacturers to build extremely durable units. Compared to cement units, shipping containers are lightweight since they have a steel structure. All of this leads to a much more resilient unit against earthquakes – a feature you surely want your home or business property to have.

Apart from being safe, one has to admit that a structure made by putting together a couple of shipping containers does look contemporary and unique. Talk about a great way to have a safe yet aesthetically-pleasing home at the same time.

Protect the environment by reusing shipping containers

It’s quite simple to see how you protect the environment by repurposing shipping containers. Did you know that you can save about 3500 kilograms of steel by reusing just one shipping container? Now imagine how much you save by using a couple of them. Moreover, by turning a plethora of shipping containers into a building, you can prevent the use of brick and cement for the new structure. Knowing that cement is one of the biggest sources of CO2, one of nature’s biggest enemies, gives you an additional reason to reuse old containers.

The temperature inside a container can be a problem

It’s impossible to talk about the biggest cons of reusing shipping containers without mentioning the difficulties of controlling the temperature inside. Since containers are made of steel, they can very easily absorb both heat and cold. So if you are thinking about starting a new business or building a home entirely out of shipping containers, you will need to invest in insulation. Otherwise, you could be facing incredibly low temperatures in the winter and extreme heat in the summer. And those are two extremes you definitely don’t need to experience.

The possibility of rust and corrosion

If you plan on repurposing old shipping containers, you need to be ready for the fact that they require a lot of maintenance. They are not corrosion or rust-proof and they do best in moderate climate conditions. If you live in a dry area with very little rainfall, you live in the perfect place to avoid the problems mentioned above. But if you don’t, we suggest you prepare for the fact that rust and corrosion might appear sooner rather than later.

Be aware of toxic exposure when repurposing

Many shipping containers will need to be exposed to multiple insecticides to meet the global import and export regulations and procedures. If you plan on residing or starting a business inside such containers, you might face toxic exposure. Since you don’t want to risk your health and that of others, I strongly suggest you remove the container’s wooden floor. Also, cover the inside surface with bare metal, which you should later cover with non-toxic paint.

Whether you decide that reusing shipping containers is the right move for you is your decision. I wanted to familiarize you with both the benefits and the disadvantages of doing so. If you don’t mind putting a bit of extra maintenance into the process, repurposing a container is a great idea. Otherwise, you might do better by going down the traditional route.

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Julia Richards is the owner of a small business with a degree in finance and accounting. Apart from being a successful business owner with 15 years of experience, Julia also enjoys working as a freelance writer on a variety of different topics and a number of websites, including Zippy Shell of Greater Philadelphia. Her passion is helping young entrepreneurs surpass the challenges of the business market, as she has been doing for over a decade. Julia resides in Seattle with her husband, two kids, and a family dog. 

vessel

HONG KONG SEAPORT ALLIANCE WELCOMES THE WORLD’S LARGEST CONTAINER VESSEL

Despite the political turmoil gripping Hong Kong, the Hong Kong Seaport Alliance (HKSPA) welcomed HMM GDANSK, the world’s largest container vessel, on its July 12 maiden call to Hong Kong at Kwai Tsing Container Terminal 7.

HMM GDANSK , which is one of the twelve 24,000-TEU class of mega vessels of HMM Co., Ltd., the vessel features a length of 1,312 feet, a width of nearly 201 feet and a maximum capacity of 23,964 TEU. Since June, the vessel has operated THE Alliance Far East Europe 3 service that connects major ports in China, Asia and Europe.

“We are excited to welcome the world’s biggest vessel on its maiden call at such challenging times,” said Leonard Fung, managing director of Hongkong International Terminals (HIT), upon the HMM GDANSK’s arrival.

“This is a momentous event for Hong Kong’s maritime industry and HIT, signifying a vote of confidence in our offering and allowing us to capture future opportunities.”

The vessel is billed as being equipped with the world’s most advanced DS4 (DSME Smart Ship Platform), ECDIS (Electronic Chart Display and Information System), monitoring system and smart navigation system. In response to the new International Maritime Organization’s environmental regulations, HMM GDANSK has installed scrubbers to reduce its sulfur emissions.

vessels PIT

Vessels for Life: Here are the Ships that Make Our Lives more Livable

It’s amazing how interconnected we are as a world—from delivering goods along the supply chain to your local grocery store to the social distancing that has helped to control what we’ll unlovingly refer to as “The Outbreak.” As much as it can be sometimes difficult to be connected, it is this interconnectedness that also allows us to subsist in our day-to-day lives. Toilet paper, cars, and even oil are goods that we can access thanks to the Svengali-esque magic—or organization, rather—of the global supply chain. One could say that it, in fact, makes the world go ‘round.

So today, we’d like to introduce some of the power players in this arena, the unsung voices that help us to have access to different goods each and every day. And these unsung voices are ships, the carriers that are key to our worldwide supply chains.

What follows are five major carriers and eight individual vessels that play an important role in shipping vehicles, cargo containers for manufacturers and other goods and equipment of all sizes that make our lives more livable each day.

MSC Gülsün (MSC)

The MSC Gülsün is a ship in the fleet of the Mediterranean Shipping Co. (MSC), a world leader in container shipping. The MSC Gülsün is the largest container ship in the world, with a max capacity of more than 23,000 TEUs. (Try that on for size!) It has more than 2,000 refrigerated containers; a hybrid exhaust gas cleaning system; a dual-tower firefighting system; 35 cabins; and double-hull protection.

The MSC Gülsün also has an eye for sustainability, increasing the efficiency of the CO2 emitted by 48 percent. With a hybrid exhaust gas cleaning system (EGCS), this ship is also self-cleaning. The vessel can carry 8 million solar panels, more than 47,500 cars, 223 million bananas, nearly 3 million washing machines and 386 million pairs of shoes, MSC boasts.

The ship was built in South Korea at Samsung Heavy Industries. The MSC Gülsün is 400 meters long and 60 meters wide. Despite its size, its engineering reduces resistance from the wind, which leads to lower fuel consumption.

Venus Leader (NYK Line)

The Venus Leader is a vehicle carrier with the Nippon Yusen Kaisha (NYK) Line, a global shipping and logistics company. The roll-on/roll-off (ro-ro) division of NYK is the largest worldwide. Built in 2010, the Venus Leader sails under the Japanese flag. It carries up to 15,301 t DWT (tanker deadweight tonnage). Her draught is 7.1 meters. The Venus Leader has a length of 186.03 meters and is 28.2 meters wide.

The NYK line has a fleet of 118, which carries more than 3.4 million cars each year. In addition to cars, the NYK ro-ro division also carries agricultural machinery, plant equipment and specialty cargos such as boilers, transformers and yachts. The company has sustainability goals. For instance, by 2050, it aims to have a zero-emissions ship, the NYK Super Eco Ship.

M/V Liberty (ARC)

The M/V Topeka was re-flagged to American registry and re-named the M/V Liberty on Jan. 31, 2017, to be consistent with the practice of owner American Roll-on Roll-Off Carrier (ARC) to name its ships after American values. M/V Liberty is now among the most capable and militarily-useful vessels in the U.S.-flag commercial fleet, able to carry tracked vehicles, helicopters, trucks, and other military and high and heavy project cargoes. The vessel is 199.99 meters long with a beam of 32.26 meters, a stern opening of 15.2 meters wide and 5.4 meters high, and a stern ramp rated for cargo up to 237 metric tons.

Vessels in the ARC fleet are known for their ramp access and system optimization, which helps with quick reconfiguration that allows for maximum lift capacity. That explains why, besides military cargo, ARC ships carry commercial breakbulk as well as agricultural and construction equipment for developing countries. Considering itself one of one part of its partners’ supply chains, ARC also works with the warehousing capabilities of other countries.

Actuaria, ACX Crystal, ACX Diamond (ONE)

The top three vessels with Ocean Network Express (ONE), based on TEUs, are the Actuaria, ACX Crystal and ACX Diamond. Built in 2009, the Actuaria holds up to 6,589 TEUs and flies under the Portugal flag. Built in 2008, the ACX Crystal carries up to 2,858 TEUs and flies the Panama flag. And built in 2008, the ACX Diamond can handle 2,858 TEUs and flies the flag of Singapore. They are but three of 225 vessels in ONE fleet that travels to more than 120 countries and can handle a total of more than 1.5 million TEUs.

The sixth-largest carrier worldwide as of January 2020, ONE operates under four core values: “Lean & Agile” to be a new definition of what a new reality can be; “Teamwork” that builds new value; “Best Practice” through the collaboration of its partners; and “Challenge” that takes strengths to face challenges without being afraid to fail.

Magleby Maersk and Munich Maersk (Maersk)

Two of the biggest ships of Maersk—the Denmark-based logistics giant—are the Munich Maersk and the Magleby Maersk. The Munich Maersk, which has a TEUs capacity of 19,630, was built in 2017 and sails under Denmark’s flag. It has a draught of 7.1 meters with an overall length of 399 meters and a 58.6-meter width.

The Magleby Maersk, which can handle up to18,270 TEUs, is 398 meters long, 33 meters deep and 73 meters high. Built in the Daewoo Shipbuilding and Marine Engineering shipyard, the ship is engineered with two low-revolution and two long-stroke engines. Each packs 9,785 horsepower. According to Vessel Tracking, Maersk operates 538 container ships, which can ship more than 3 million TEUs.

In short, these are a handful of ships that are making waves in transportation and logistics, playing a major role in moving the goods that keep us going each day. Onward!

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.

Globe Tracker

Globe Tracker & SeaCube for One Network Express IoT Gensets

One Network Express (ONE) confirmed an IoT-focused partnership with SeaCube Containers and Globe Tracker to develop a genset solution through utilizing Global Tracker’s layered technology capabilities. This along with other market solutions continue the reported increase in maritime logistics IoT demand overall.

“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. 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,” said Greg Tuthill, Chief Commercial Officer at SeaCube.
At the center of the development of the solution remains increasing visibility with smarter tracking abilities, specifically impacting reefer fleets. The anticipated kickoff of full operations is currently scheduled for mid-September through the end of 2019.
“We are extremely 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 2 out of the 3 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,” notes John Harnett, Senior Director Marine and Intermodal at Globe Tracker.
blockchain

SMALL AND MEDIUM-SIZED GLOBAL TRADERS ARE BANKING ON BLOCKCHAIN

This is the second in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

Give Me Some Credit

Every business requires capital to operate. To sell products to customers overseas, many companies also need trade financing and insurance from third-party lenders. About 80 percent of all global trade is transacted through third-party lenders and cargo insurers, but the process is complex, can be costly and many banks find it too risky to support small and medium-sized enterprises (SMEs).

Blockchain has the potential to increase transparency, speed and accuracy in assessing risk across the trade finance process, which in turn could expand the supply of credit available for international trade transactions – good news especially for SMEs that face significant hurdles accessing credit. Here’s how.

Pay Me Now or Pay Me Later

Buyers who import goods from sellers in other countries generally want to pay upon receiving the merchandise so they can verify its physical integrity on arrival. Exporters, on the other hand, generally prefer to be paid as soon as they ship the goods. Trade finance can bridge this gap.

Exporters and importers engage third-party lenders and insurers who will guarantee payments on the basis of collateral and indemnify the exporter, importer and related parties in the event that the merchandise is damaged, stolen or lost while in transit. In this way, trade finance provides the credit, payment guarantee and insurance needed to facilitate an international trade transaction on terms that will satisfy all parties.

80% of trade relies on finance

Steps on the Trade Journey

Intermediaries such as freight forwarders typically manage the physical journey of merchandise, from the original producer to the border, across the border (maybe several borders), and to the final buyer.

Each step must be verified: when was the merchandise transported from the factory or farm to a warehouse, when was it moved from the warehouse to a container, when was the container loaded onto a ship, when did the ship get underway, when was the container unloaded from the ship at port, and when was the merchandise transported from the port to the end consumer.

Different trade finance instruments, such as lending, letters of credit, factoring and cargo insurance cover legs of the journey. A letter of credit is a guarantee from a bank that a buyer’s payment will be received and be on time or else the bank will take responsibility for the payment. Factoring is accounts receivable financing to accelerate cash flow. Cargo insurance insures the merchandise while en route.

Without Finance, Trade Would Sink

The World Trade Organization estimates that 80 percent of global trade relies on trade finance or credit insurance. The global trade finance sector (i.e., the global volume of letters of credit) is worth roughly $2.8 trillion. Demand for trade financing exceeds availability, resulting in the underutilization of existing capital. According to the Asian Development Bank, the global trade finance gap — the difference between the demand for and supply of trade finance — has reached $1.6 trillion.

SMEs Face a 50 Percent Rejection Rate

The shortfall in supply reflects the complex and risky nature of trade finance which often involves multiple parties. Before banks will issue letters of credit in trade finance, they require potential customers to present a solid credit history and a strong balance sheet, conditions that tend to favor larger institutions.

SMEs typically experience more difficulty navigating the trade finance process and dealing with the cost and complexity of banking regulations than larger companies. In 2014, SMEs had trade finance requests before financial institutions rejected at a rate of over 50 percent. In comparison, the rejection rate for multinational corporations was only seven percent.

Links in the Trade Finance Chain

According to the United Nations, there are typically eight major steps required to obtain a letter of credit, although in practice the Credit Research Foundation lists more than twenty. Each step of the process is dependent on the previous steps, and some steps involve sending the same document back and forth for verification purposes. The administrative burden is greater for SMEs than for large firms.

survey of 2,350 SMEs and 850 large firms conducted by the U.S. International Trade Commission in 2010 showed that lack of access to credit is the major constraint for SME manufacturing firms seeking to export or expand into new markets and it is one of the top three constraints for SME services firms.

rate of rejection for trade finance

How Blockchain Can Help Ease Trade Finance

Requirements to authenticate each transaction in the trade finance and insurance process can engender large amounts of paperwork and cause delays at each step. Every handoff must be approved and verified.

Instead, blockchain uses digital tokens that are issued by each participant in the supply chain to authenticate the movement of goods. Every time the item changes hands, the token moves in lockstep. The real-world chain of custody is mirrored by a chain of transactions recorded in the blockchain.

The token acts as a virtual “certificate of authenticity” that is much harder to steal, forge or hack than a piece of paper, barcode or digital file. The records can be trusted and greatly improve the information available to assure supply-chain quality.

Using blockchain as a digital ledger for these handoffs would allow involved parties to instantly track and receive secure information about the traded goods. Parties can monitor the entire shipping process and verify the completion of each step in real time. This increased transparency and ease of monitoring reduces the risk that a borrower presents to a potential lender or insurer.

Banking on Blockchain

A number of financial institutions are piloting the use of blockchain-enabled trade finance platforms.

Bank of America, HSBC, and the Infocomm Development Authority of Singapore collaborated in 2016 to develop a trade finance application designed “to streamline the manual processing of import/export documentation, improve security by reducing errors, increase convenience for all parties through mobile interaction, and make companies’ working capital more predictable.” Using the application, each action in the workflow is captured in a distributed ledger and all parties (the exporter, the importer, and their respective banks) can visualize data in real time, offering transparency to authorized participants while ensuring confidential data is protected through encryption.

Barclays used blockchain in 2017 to issue letter of credit that reportedly guaranteed the export of $100,000 worth of agricultural products from Irish cooperative Ornua to the Seychelles Trading Company, noting the parties were able to execute a deal in four hours that would usually take up to 10 days to complete.

A group of European banks launched a trade finance blockchain platform in July 2018, initially focused on facilitating small and medium-sized businesses trading within Europe. In September 2018, the Hong Kong Monetary Authority announced plans to launch a trade finance blockchain platform. Twenty-one banks are participating in the platform, including large institutions such as HSBC and Standard Chartered. The Hong Kong Monetary Authority is also reportedly working with its counterpart in Singapore to develop a blockchain-based trade finance network to settle cross-border transactions.

Lessons for Trade Policymakers

As the trade finance industry begins to utilize blockchain technology, there are some potential implications worthy of policymakers’ attention.

First, the large number of intermediaries and corresponding administrative costs in trade finance tend to fall particularly hard on SMEs and the relatively higher cost of each transaction makes SME financing less attractive to banks. If blockchain can reduce the costs of trade finance, more small and medium-sized businesses could trade globally.

Second, although blockchain technology does not alter the fundamental credit risk of borrowers, the increased transparency and access to information it delivers could improve the accuracy of banks’ risk assessments. If perceived risk is greater than actual risk, a nontrivial number of loan applications may be denied even though those loans have the potential to be successful. If blockchain brings greater confidence and issuance of good loans — that is, those that are paid back — the transactions they support would bring value to the economy.

In these important ways, blockchain can increase transparency across the trade finance process and decrease risk for all parties, in turn expanding the supply of credit available for international trade transactions.

ChristineMcDaniel

 

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

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