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U.S.-China Trade War of 2019 Spills into 2020 for Ports, Shippers and Manufacturers

U.S.-China

U.S.-China Trade War of 2019 Spills into 2020 for Ports, Shippers and Manufacturers

The Jan. 15 signing of a U.S.-China Phase One agreement did spawn a sigh of relief among those troubled by the trade tensions between the two nations. But six days later, a warning came from a couple experts closely watching the unfolding events on behalf of ports, shipping lines and manufacturers. The crux of that warning? Stay tuned.

“This is a truce,” said Phil Levy, chief economist at Flexport, a San Francisco-based freight forwarding and custom brokerage company. “This is not the end of the trade war.”

Levy shared that opinion as he joined his company’s CEO Ryan Peterson in leading a webinar on Jan. 21 that was listened in on electronically by some of their 10,000 clients in more than 200 countries. Those who rely on the company’s expertise in ocean, air, truck and rail freight, drayage & cartage, warehousing, customs brokerage, financing and insurance–all informed and powered by Flexport’s unique software platform—heard Levy say of the U.S.-China trade war: “We haven’t seen a retaliatory escalation of this magnitude in the post-World War II era. … This really was a 2019 story that worsened throughout the year.”

He pointed to a graphic that showed trade between the world’s two biggest economies fell markedly last year, and that no one overseeing trans-Pacific supply chains were immune from economic harm. Many webinar participants could relate as 64 percent of Flexport’s customers rely on the trans-Pacific trade routes, according to Peterson.

Yes, the Phase One deal was a positive first step, but Levy pointed to some examples of lasting victims from the trade war. It exposed the continued “decay,” as the economist put it, of the World Trade Organization (WTO), which is supposed to prevent the escalation of trade disputes. The “keeper of peace” amid trade tensions was largely frozen out of U.S.-China talks and, therefore, silent as events transpired.

A second heavy blow came in December 2019, when the WTO’s appellate body ceased to function, according to Levy, who noted that the formation of the “WTO system was one of core achievements since World War II.”

Peterson found equally worrisome the first-ever disappearance of peak season when it comes to shipping. As many known, imports grow during the fall and really heat up by November’s holiday shopping season. That not happening in 2019, couple with a steady decline is U.S. imports from China after years of solid growth, is a reason for concern, according to the CEO, who maintained, “global trade is down due to tariffs.”

For one thing, not having a peak season to rely on, coupled with steadily declining trade, “from our perspective makes life very hard to plan for,” Peterson said.

He did see on the horizon what many may view as a green lining: lower freight fees and consumer prices. “Lower prices do sound good,” Peterson conceded, “until someone goes bankrupt. We want stability, predictability. Things getting too cheap is unpredictable. You are playing with fire.”

Feel the burn? Peterson called our current “degree of uncertainty relatively unprecedented. We learn about things in a tweet. Was that really implemented or not?” As an example, he cited France proposing a digital tax and President Donald Trump striking back with threats of tariffs on cheese and wine. “Is that policy or not?” Peterson asked rhetorically. “Right now it’s a tweet. It makes it very hard to plan for.”

Levy warned “there is no safe play.” You can withstand the brunt of the tariffs and see what that does to your bottom line, or you can figure out a way to work around them and then have a trade deal come along with no way to return to normal operations quickly enough.

As Peterson pointed out, it’s not just the sting of the tariffs but the amount of paperwork and other adjustments one must handle while trying to remain agile. That time takes away from other things you need to be doing with your business.

Speaking of time away, Levy believes there will be no further movement in deescalating trade tensions between the U.S. and China until after America’s November presidential election. He suspects that China agreed to the Phase One conditions, which were much more weighted against that country than the U.S., “to buy a year of peace.” He added that China could be playing it coy in the weeks ahead as Beijing awaits the outcome that determines whether they will continue to deal with Trump or a new White House occupant. “If Trump loses, it’s likely the trade agreement will change anyway,” Levy said.

In the meantime … uncertainty. Peterson noted that one Flexport client had to close a manufacturing plant due to the tariffs. Levy held onto the hope that an eventual U.S.-China trade deal will be beneficial economically, pointing to markets that opened up with the U.S.-Mexico-Canada Agreement replacing the North American Free Trade Agreement. But you never know, as evidenced by USMCA having also resulted in some restricted trade, particularly in the automobile sector. “That was disappointing,” he admitted.

Don’t be surprised if the pain ultimately spreads, as Levy predicted what will happen after the U.S.-China trade war comes to a head. “There are a lot of signs the president will turn his trade policy focus away from China and toward Europe,” said Levy, who later noted Trump has also begun accusing Vietnam of cheating when it comes to trade.

So what to do about all this?

“My stance is there is nothing more important than agility, the ability to adapt,” Peterson said of dealing with tariffs, real or threatened. “It can mean restructuring a supply chain or seeking exemptions.” Companies that foster a culture with an ability to adapt can look at these challenges, Peterson says, and respond: “Bring it on, bring on the change.”

trends

Global Shipping Trends: What to Expect in 2020

Now that the fireworks are over and New Year’s resolutions are set, it’s time to prepare for global shipping in 2020. And that means looking at ongoing trends and changing regulations. One thing’s for sure, freight forwarding never has a dull moment.

Recapping 2019’s top global shipping disruptors

Before we jump into expectations for this year, let’s set the stage by looking at some of the top events in 2019 that may have affected global shipping strategies around the world.

Geopolitical uncertainties

From the ongoing Brexit discussion to the China-U.S. trade war and the trade conflict between Japan and Korea, these and other disruptions caused serious challenges to the transportation industry.

Preparation for International Maritime Organization (IMO) 2020

While the latest revisions didn’t go into effect until January 1, 2020, preparation for the changing IMO requirements was well underway in 2019. The requirement to reduce sulphur oxide emissions from 3.5% to 0.5% was a drastic change that will likely continue to affect shipping costs and capacity availability.

E-commerce expectations

With the growth of e-commerce and high-tech products flooding our markets, air freight is a go-to mode of transportation for many shippers—any time of year.

To best understand how these and other mode-specific changes will affect your 2020 shipping year, let’s break them down by service.

Ocean service in 2020

In the past, ocean shipping followed the basic law of supply and demand. When demand increased, rates went up. When demand decreased, rates dropped. This often occurred regardless of carrier profitability. But that is changing, which could reshape expectations for 2020.

Carriers controlling capacity

Today’s ocean carriers are quick to withdraw capacity when demand changes. By adjusting the amount of equipment available, ocean carriers are better able to ensure demand remains tight enough to protect their profits. This is a successful technique because there are fewer ocean carriers than in the past, allowing for a quicker reaction when supply and demand shifts.

Increasing carrier costs

While ocean carriers can control capacity to help ensure rates remain compensatory, we can still expect some level of imbalance due to the IMO 2020 mandate, which increases carrier costs.

Driver and drayage capacity shortages

California Assembly Bill 5 (AB-5) went in effect on January 1, 2020, which limits the use of classifying workers as independent contractors rather than employees by companies in the state. This may affect the availability of the number of dray carriers in the busiest ports. This, in turn, can drive drayage costs up.

Air service in 2020

Last July, we posted about ongoing uncertainty in the air freight market. The good news is that air freight service has stabilized a bit since then. While we’re predicting a somewhat stable air freight market for the year, this could obviously change if there is some catalyst that changes the speed products need to come to market.

Stable demand expectations

We expect demand for air freight to remain stable for the time being. Many organizations continue to focus on managing expenses and are looking for cost-effective, efficient options for delivering on short timelines without breaking the budget.

Capacity to hold steady

Capacity will also likely remain stable. Most new capacity is coming in the form of lower deck. Pure freighter capacity will continue to move based on market yields that make sense from a carrier standpoint. There may be some capacity growth in off-market locations, based on passenger demand.

Customs compliance in 2020

It’s always smart to have a customs compliance program that aligns with your business goals, which is especially true this year. Customs and Border Patrol (CBP) has several customs changes slated to take place in 2020, and now’s the time to prepare. If you haven’t reviewed your customs program recently, our customs compliance checklist may help.

CBP moving away from ITRAC data

According to CBP, they will be eliminating Importer Trade Activity (ITRAC) reports in favor of the Automated Commercial Environment (ACE) system. If you don’t already have an ACE portal account, now is the time to get one to ensure all your customs data is available to you when you need it most.

CBP’s continued focus on compliance and enforcement

CBP will continue to scrutinize tariff classification and valuation in an increasing post-summary environment. As the United States Trade Representative (USTR) continues to provide exclusions, many importers will depend on brokers to submit refund requests via post summary corrections (PSCs) or protests. CBP often requires additional data and/or documentation to ensure that tariff classifications and valuations are correct. It is imperative that you maintain a high degree of confidence in your compliance program and can substantiate any post summary claims with CBP.

Increasing Importer Security Filing (ISF) penalties

Throughout 2019 we saw CBP issuing more ISF penalties for inaccurate and/or untimely submissions. This will likely continue and could become a growing issue in 2020.

Disruptors affecting the industry in 2020

While certain trends and regulations only directly affect a single mode or service, there are still plenty that affect freight forwarding in general. Looking at 2020, it’s probably safe to say that the following disruptors will continue to affect the year ahead.

Broadening of sourcing locations

While there may be an end in sight to some of the trade war uncertainties, the initiative to broaden sourcing locations beyond China will likely continue. Southeast Asia has already seen clear benefits of this and will likely continue to see manufacturing growth in 2020.

Switching sourcing strategies can also bring risks, including capacity availability, infrastructure support, and geopolitical stability. While China will continue to be the largest exporter into the United States, we simply cannot deny the trends that continue to show volume shrinkage from China.

Accelerated evolution of technology

Significant investment in technology and transportation platforms continues to accelerate across the industry. Beyond private equity groups, well-respected and established providers like C.H. Robinson are making investments that will reshape logistics. These growing technological investments will continue to create value across the supply chain.

While this opens new options for shippers and carriers alike, you may likely need to spend more time researching which technology option is the best fit for your own organization. After all, the right technology offers tailored, market-leading solutions that work for supply chain professionals and drive supply chain outcomes.

Prepare for the year ahead

Overall, 2020 will be a great year for strategizing. Continuous improvement efforts—including a close look at service levels and mode choices—will help reach your short- and long-term supply chain goals.

Looking for a provider that can help in the coming year? C.H. Robinson has a global suite of services backed by technology and people you can rely on that will make 2020 preparations smooth and effective. Connect with an expert today.

blume

Blume Global & Hapag-Lloyd Kick-off 2020 Partner Connectivity

This month marked the beginning of Blume Global’s support of Hapag-Lloyd’s global network of carrier partners. Hapag-Lloyd’s selection was confirmed earlier in December with a start date in January starting in North America to ensure that high-quality, door-to-door service capabilities were provided for its partners.

Known for being a global leader for shipping companies, Hapag-Lloyd boasts a fleet of 231 container ships, of which include competitively modern reefer containers that require expert handling and a level of visibility and partner connectivity that goes beyond the basics.

“Blume Logistics will help improve the quality of our door service for our customers including first and last-mile visibility while enhancing the efficiencies of our motor carrier partners”, said Uffe Ostergaard, President of Hapag-Lloyd North America Region. “Our North American customers are asking for enhanced end-to-end shipment visibility to better manage their supply chains and by implementing this integrated cloud-based solution we will be able to offer that value-added service.”

Blume Global will manage a streamlined connection for Hapag-Lloyd’s motor carrier partners, enabling digital and hassle-free capabilities for dispatch work orders, drayage rates, appointment scheduling, accessorial charges, live tracking, proof of delivery, invoicing and robust reporting.

“Blume Logistics helps companies successfully manage logistics execution across the supply chain network, and around the world, with first and last-mile shipment visibility and control over transportation spending. It also improves customer service quality and enhanced vendor relations,” said Pervinder Johar, CEO, Blume Global.

shippers

Shippers Capitalize on Deep-Water Improvements

Shipping lines have responded to containerized trade growth by increasing vessel size, which has resulted in fewer port calls to move the same number of containers. And larger vessel sizes also limit which ports can be called due to insufficient access channel depths and air drafts as well as cranes to serve the biggest ships.

“A useful proxy is the average size of containerships transiting the Panama Canal—which increased by 13.1 percent during the canal’s most recent fiscal year (ended Sept. 30, 2018),” states Cushman & Wakefield’s 2019 North American Port Outlook. “The Panama Canal Authority reports that its Neopanamax Locks can now handle ships of almost 15,000 TEUs. Large ship visits are now increasingly common at East Coast ports that have the requisite water depths in channels and at berths. How large will vessels get? Orders have been placed for ships as large as 23,000 TEUs.”

The industry trend toward larger vessels has caused ports to literally dig deeper, particularly on the East Coast. Port of Miami last year completed $1 billion in infrastructure improvements that increased the channel depth to 50-52 feet and also included the addition of a fast access tunnel with direct access to the interstate, the modernization of the on-dock freight rail system and the installation of new Super Post-Panamax cranes that have an outreach of 22 containers wide. Among the projects at other East Coast ports that got underway in 2019 were:

*The $32.7 million deepenings of a second container berth to 50 feet at the Helen Delich Bentley Port of Baltimore’s Seagirt Marine Terminal, which should be done later this year.

*Port of Jacksonville’s Harbor Deepening, which will take the shipping channel to a depth of 47 feet, is expected to conclude in 2023, as is a coinciding project to construct a $238.7 million international container terminal at Blount Island. JAXPORT has already widened Mile Point Harbor (only mitigation work was outstanding at press time), and turning basins at Brills Cut, which is authorized and under review, and Blount Island, which is in the design phase, are also part of the deepening project.

*Port of Virginia increasing the channel depth to: 59 feet in the Atlantic Ocean Channel; 56 feet at Thimble Shoals; and
55 feet in the Norfolk Harbor and Newport News Channels. It also includes widening the channel in select areas to include Thimble Shoals over the Chesapeake Bay Bridge Tunnel.

Deepening the Port of Charleston’s Harbor Entrance Channel up to its busiest container terminal, the Wando Welch, is expected by early 2021 and will allow the port to handle 14,000 to 18,000 TEU vessels drawing 50 feet or more without significant depth and other navigational restrictions. Port Everglades’ widening and deepening of navigation channels from 42 feet to 48-50 feet is expected to be completed between 2021-2025. The Georgia Ports Authority’s deepening of Savannah Harbor and its shipping channel from an authorized depth of 44 feet to 47 feet is slated for completion by late 2021 or early 2022.

As ports scramble to accommodate the biggest ships, some shippers have already been taking advantage of their arrival. As the Georgia Ports Authority announced in December it was on track to exceed 4.6 million TEUs for the first time in a calendar year, GPA Board Chairman Will McKnight remarked, “Exciting new business opportunities such as the export of the Georgia-made Kia Telluride, and resins produced in Pennsylvania and the Gulf States, as well as the import of cold-treated fresh produce, are driving the increase in trade through our deepwater ports.”

In roll-on/roll-off cargo, Colonel’s Island Terminal at the GPA’s Port of Brunswick handled 500,512 units of cars, trucks and tractors from January through October 2019. Ocean Terminal in Savannah added another 37,476 for a total of 537,988 units. As of December, total Ro/Ro trade was up for the year by 3,300 units, helping to make Georgia is the second busiest U.S. hub for the import-export of Ro/Ro cargo behind only Baltimore.

Another milestone was the GPA’s decade of partnership with Kia Motors Manufacturing Georgia (KMMG), which has shipped nearly 350,000 TEU of parts and materials through the Port of Savannah to supply its manufacturing plant near the town of West Point, supporting thousands of jobs in Georgia’s transportation and logistics supply chain. Kia also sends shipments in the other direction with overseas exports of the American-made Kia SUV, the Telluride.

“From the first production equipment arriving at the Port of Savannah in 2008 to the first Kia Telluride exports that left the Port of Brunswick this past February (2019), KMMG, the Georgia Ports Authority and the State of Georgia have maintained a strong bond,” said KMMG President and CEO Jason Shin in a statement.

February 2019 was also momentous for Port Manatee, which is the closest U.S. deepwater seaport to the expanded Panama Canal. Then-new terminal operator Carver Maritime Manatee LLC on Feb. 6 brought nearly 50,000 tons of raw material to be used in Florida cement manufacturing. The 47,650 metric tons of the bulk material brought from Europe on the Osprey I to the Central-Southwest Florida Gulf Coast port was soon followed by other Carver shipments.

As part of an agreement with Port Manatee that could extend for as many as 20 years, Carver has extensively renovated a 10-acre cargo facility with deepwater access, including rehabilitating a 1,400-foot-long conveyor system on the leased site. “We are delighted to have Carver as an active participant in the expansion of our port,” said Carlos Buqueras, Port Manatee’s executive director, at the time. “Carver’s operations are a perfect complement to the increasingly diverse activity taking place at Manatee County’s seaport.”

Taking advantage of deepwater ports is not confined to the East Coast, however. In Washington state, the Port of Vancouver USA received the largest single shipment of wind turbine blades in the history blade manufacturer Vestas on June 24, 2019, breaking the previous record of 156 blades on a single ship.

The 198 blades, each measuring 161 feet long, were manufactured and shipped from Italy. Once unloaded from the ship, the blades were moved to the port’s Terminal 5, which boasts 86 acres of unobstructed laydown area with immediate proximity to the port’s deep-water berths. From there, the blades were transported by truck to the Marengo wind farm near Dayton, Washington, where they are now being used to re-power existing turbines.

“With our North American headquarters based in Portland, it is especially gratifying to be part of bringing the environmental and economic benefits of wind energy to the Pacific Northwest,” said Chris Brown, president of Vestas North America, which partnered with project owner PacifiCorp on the blade shipment. “The arrival of this shipment and its 198 blades, represent the significant supply chain industry and jobs created and supported by the wind energy economy.  We’re proud to partner with PacifiCorp and the Port to bring more wind energy benefits to Washington.”

Shrugged Vancouver USA’s Chief Commercial Officer Alex Strogen, “The port is uniquely qualified to handle these types of projects.”

 

St. Lawrence Seaway

TRANSPORTATION SECRETARY CHAO COMMEMORATES ST. LAWRENCE SEAWAY’S 60TH ANNIVERSARY

U.S. Transportation Secretary Elaine L. Chao marked the 60th anniversary of the St. Lawrence Seaway, the U.S.-Canadian waterway, at a Sept. 24 ceremony at the Eisenhower Lock in Massena, New York. 

“For 60 years, the St. Lawrence Seaway has been a safe and reliable gateway for global commerce, further demonstrating our nation’s strong and strategic partnership with Canada,” Chao said.

She was joined by Transport Canada Director General of Marine Policy Marc-Yves Bertin, Congresswoman Elise Stefanik (R-New York), U.S. Seaway Deputy Administrator Craig Middlebrook, Canadian Seaway President and CEO Terence Bowles and U.S. and Canadian government and transportation officials.

 Chao and Representative Stefanik also used the event to announce $6 million in funding for the St. Lawrence Seaway Development Corp. to construct a new Visitors’ Center at the U.S. Eisenhower Lock. This new center will welcome the tens of thousands of people from around the world who come to watch ships transit the lock each year, and serve as a cornerstone for tourism in the North Country region of New York.

The bi-national waterway was officially opened in 1959 by Queen Elizabeth II and President Dwight D. Eisenhower. It has been proclaimed as one of the 10 most outstanding engineering achievements of the past 100 years. Since its inception, nearly 3 billion tons of cargo, valued at over $450 billion, have been transported via the Seaway

ocean

A Tough Year on the Water Hasn’t Dampened Innovation for these Ocean Carriers

To say that 2019 has been challenging for ocean carriers would be an understatement. The year began with the National Retail Federation forecasting a decline in year-over-year growth, echoing World Bank chatter of a slowing global economy.

And don’t forget the tariff wars between the U.S. and China (heck, the U.S. and just about anyone). Managing capacity on ships has also been an issue, and then there is the potential biggest bogeyman of all: the International Maritime Organization’s low-sulfur fuel mandate taking effect Jan. 1, 2020.

Sure, we could dwell on the gloom and doom, but that would not be very Global Trade magazine of us, now would it? We here in our silky ivory tower like to spotlight the positive, which we reveal with these ocean shippers we love.

MSC

Mediterranean Shipping Co. this year watched the world’s largest container ship, the MSC Gülsün, complete its maiden voyage from northern China to Europe. With a width of 197 feet and a length of 1,312 feet (!), the Gülsün was built by Samsung Heavy Industries at the Geoje shipyard in South Korea. It can carry up to 23,756 TEUs shipping containers on one haul. That capacity can include 2,000 refrigerated containers for shipping food, beverages, pharmaceuticals or any other chilled and frozen cargoes. That’s a lot of snow cones!

MOL

Mitsui O.S.K. Lines sees MSC Gülsün and raises you the MOL Triumph, which achieved a new world load record this year. Departing Singapore for Northern Europe on THE Alliance’s FE2 service with a cargo of 19,190 TEU. That surpassed the previous load record achieved in August 2018, when Mumbai Maersk sailed from Tanjung Pelepas to Rotterdam with 19,038 TEU onboard. Yes, you are correct, that’s a pretty slim margin of victory, and analysts suspect the MOL Triumph record won’t last long given the 23,000 TEU ships being introduced.

HYUNDAI MERCHANT MARINE 

Speaking of THE Alliance, current members Hapag-Lloyd, ONE and Yang Ming will be joined in April 2020 by Hyundai Merchant Marine (HMM). The South Korean carrier recently signed an agreement to join THE Alliance and then passed the pen to the founding members, who extended the duration of their collaboration until 2030. “HMM is a great fit for THE Alliance as it will provide a number of new and modern vessels, which will help us to deliver better quality and be more efficient,” said Rolf Habben Jansen, Hapag-Lloyd’s chief executive. 

HAPAG-LLOYD

Oh, speaking of the fifth-largest container shipping company in the world, Hapag-Lloyd is piloting an online insurance product as part of a digital offering to try to overcome the widespread practice of shippers relying on the limited cover provided under the terms of carriers’ bills of lading. While Hapag-Lloyd says it takes the utmost care in transporting cargo, company officials acknowledge things can and have gone wrong. Thus, the introduction of Quick Cargo Insurance, which is underwritten by industrial insurer Chubb in Germany and is limited to containerized exports from that country, France and the Netherlands. However, the carrier says it plans to expand the offer.  

MAERSK

To navigate new environmental regulations, A.P. Moller-Maersk A/S is considering going old school. We mean really old school by using a modern version of the old-fashioned sail to help power its ships. Currently being tested on one of Maersk’s giant tankers, the sails look less like the flapping silk you know from Johnny Depp movies and Jerry Seinfeld’s puffy shirt and more like huge marble columns. But they are nothing to laugh at as two 10-story-tall cylinders can harness enough wind to replace 20 percent of the ship’s fossil fuels, according to their maker, Norsepower Oy Ltd. 

MOL, THE SEQUEL

While we’re getting all green up in here, it’s worth also pointing out that Mitsui O.S.K. Lines Ltd. This year joined three other Japanese companies— Asahi Tanker Co., Exeno Yamamizu Corp., and Mitsubishi Corp.—in teaming up to build the world’s first zero-emission tanker by mid-2021. Their joint venture e5 Lab Inc. will power the vessel with large-capacity batteries and operate in Tokyo Bay, according to a statement the foursome released on Aug. 6. Thanks to the onslaught of legislation to improve environmental performance, other companies are also looking to battery power. Norway’s Kongsberg Gruppen is developing an electric container vessel, and Rolls-Royce Holdings last year that started offering battery-powered ship engines.

AMAZON

No, this is not a leftover strand from a different story in this magazine about moving packages on the ground. “Quietly and below the radar,” USA Today recently reported, “Amazon has been ramping up its ocean shipping service, sending close to 4.7 million cartons of consumers goods from China to the United States over the past year, records show.” While other ocean carrier leaders prepare for the bald head of Jeff Bezos, his move really should be no surprise given Amazon’s attempt to control as much of its transportation network as possible. (See my September-October issue story “Air War: Fast, Free Shipping has UPS, FedEx and Amazon Scrambling in the Air”). Of Amazon now floating into the sea, Steve Ferreira, CEO of Ocean Audit, a company that utilizes data and machine learning to find ocean freight refunds for the Fortune 500, told USA Today: “This makes them the only e-commerce company that is able to do the whole transaction from end-to-end. Amazon now has a closed ecosystem.” 

CarrierGo

Blume CarrierGo Provides Motor Carriers with All-Encompassing Business Solutions

This year’s Intermodal Expo in Long Beach, California featured some of the latest solution offerings disrupting the transportation sector. Among leading industry experts including logistics and supply chain solutions provider, Blume Global unveiling their latest product offering, Blume CarrierGo. Blume Global boasts over 25 years of transportation solution offerings in the cloud enabling international multimodal operations including shipment planning, execution, visibility, invoicing, invoice processing & settlement.

“Blume CarrierGo is a product we created that offers our global network of 7,000-plus carriers more than just execution, adding more value for both the carriers and the drivers,” explains Glenn Jones, GVP Product Strategy at Blume Global. “CarrierGo is localized in 22 languages and utilized by customers around the globe, so it’s not limited to the United States. This solution enables carriers to increase turns per day while reducing empty miles and maximizing efficiencies.” 

The days of manual processes are becoming a thing of the past, particularly in transportation and carrier services as automation continues setting a new and more improved standard of streamlining operations. Blume CarrierGo solution identifies processes such as appointment scheduling for carriers lacking levels of automation needed for optimization. Another example is opportunities with street turns found within the Blume import and export-heavy freight forwarding customers.

“We have insight into what independent freight forwarders might not be able to see, such as import and export maps leading to an opportunity for a street turn recommendation or automatic allocation. Dwell times also provide an opportunity for automation. We may have 20, 30, or even 50 carriers trying to pick up containers out of the same terminal. By leveraging our visibility across multiple freight forwarders we can either make recommendations or we can delay making appointments through the insight we have into marine terminals with delays,” Jones adds. 

And how about invoicing? Blume covers all bases for carriers in terms of accessorials and eliminating the element of surprise when it comes to unpredictable charges backing up processing times. The Blume solutions process requires carriers to gain approval for accessorials before they even happen. 

“If a carrier needs to get to a port and they’re unable to, there might be a demurrage charge or there might be a carrier in a dwell time charge situation unexpectedly. They can gain approval from the buyer for that accessorial and when it appears on the invoice days – or hours later, there’s no surprise and the invoice will be processed faster,” Jones adds. “This is particularly useful for carriers in 3rd world countries, where the carriers tend to be much smaller and require payments quicker than what the freight terms offer,” Jones adds. 

Processes like these are found within the CarrierGo solution, providing maximized efficiencies and reducing costly and time-consuming overhead freight audits and manual payment processes. Carriers are not only paid on time, but have increased opportunity for invoice factoring discussions in international markets. This is a major differentiator found within the Blume solutions structure impacting global scale capabilities across the supply chain, creating seamless flows between all players and competitors in the multimodal sector. 

For more information about how Blume CarrierGo can improve your cargo needs, please visit booth 512 at Intermodal Expo or visit Blume Global on the web. 

__________________________________________________________

Glenn Jones, GVP Product Strategy, Blume Global

 Glenn has a proven track record of growing businesses by building and leading product management/marketing and R&D organizations to define, develop, position, and sell highly innovative and high value enterprise solutions delivered in the cloud. He was formerly the COO of Sweetbridge and the CTO of Steelwedge Software. He also held leadership positions at several other companies, including Elementum and E2Open.

intermodal

HOW TO BE AN INTERMODAL SHIPPER OF CHOICE

Fluctuating capacity and freight rates along with increased focus on efficiency and sustainability have led to substantial growth in the intermodal market in recent years. As more companies now compete for intermodal capacity at competitive rates, it is important for shippers to set themselves apart from the competition by being attractive partners to their intermodal carriers. 

By being a “shipper of choice” and implementing flexible and efficient practices, companies can build collaborative, mutually beneficial relationships with their intermodal carriers. This better positions them to secure capacity at stable, competitive pricing and enhance service levels and improve overall performance. 

Why It’s Important to be an “Intermodal Shipper of Choice” 

While being a “shipper of choice” has been a hot topic in recent years, the focus has primarily been placed on over-the-road shipping. And while there are many similarities between the two modes, there are also some nuances that must be considered to be an “intermodal shipper of choice” in particular. 

First, because loads are tied to the equipment instead of to an individual driver, there must be an equal (if not greater) focus on equipment management and efficiency in addition to driver efficiency. By placing equal focus on implementing “carrier-friendly” tactics for intermodal freight, shippers can strengthen carrier relationships and better control costs. This, in turn, ensures enhanced intermodal service performance–increasing the ROI of utilizing the mode.

Here are some strategies organizations can use to become an intermodal shipper of choice:

Engage in annual renewals with incumbent carriers rather than annual RFPs. While annual RFPs can yield savings, they also increase uncertainty and risk for both shippers and carriers. By focusing on long-term commitments with incumbent carriers through annual renewals, shippers and their core carriers can continuously foster a relationship of mutual trust and ongoing success. Through this relationship, the carrier and its drivers become intimately familiar with the shipper’s network, freight and business, and the shipper gets to know the carrier’s operations and the drivers responsible for picking up and delivering their loads.

Accurately forecast freight volumes. The ability to forecast freight volumes and seasonal swings allows shippers and carriers to proactively plan (and reposition) equipment and drivers to provide adequate capacity. Sharing this information not only helps provide more consistent service but can be beneficial for both sides on an ongoing basis. 

Consistent freight volumes. Having consistent volume spread out throughout the week, month or year makes appointment scheduling and equipment planning easier for the carrier. And if shippers do ship heavier at certain times, it is important to set and manage expectations with carriers. 

Equipment pool requirements in line with volume. Pool requirements that are in line with volume allow shippers to turn boxes on a regular basis and keep loads moving at a consistent pace. This helps maximize equipment utilization while minimizing equipment costs.

Inbound and outbound volume. Setting consistent inbound and outbound volume out of facilities allows drivers to pick up loads immediately following a drop-off. This reduces empty miles and improves both driver and equipment utilization. These efficiencies will ultimately result in better rates from carriers. 

Utilize drop and hook freight capabilities. Drivers want to be able to get in and out of a facility in an efficient manner, at any time. Drop and hook freight capabilities create load flexibility, reducing congestion in the yard and maximizing driver utilization by minimizing detention time. 

Flexible pick-up and delivery appointments. For customers that require pick-up and delivery appointments, it is important to make them as flexible as possible. This drives further efficiencies for both the carrier and the shipper.

Reasonable payment terms. Shippers should have timely freight payment terms (often 30 days or fewer) and keep to those terms. It is also important to have a system in place to quickly resolve any discrepancies.

Provide driver amenities at the facilities. By providing driver amenities at their facilities (such as bathrooms or waiting lounges), shippers help make the pick-up and delivery process easier and more comfortable. These simple comforts show that the shipper views the carrier (and its drivers) as a valuable part of their operations versus a commodity. 

Utilize facilities in close proximity to intermodal terminals. Facilities that are located near intermodal rail terminals allow rail to be a more competitive option for a shipper. While this is not always possible, shippers looking to build new facilities should consider placing them near rail ramps in order to take advantage of more intermodal opportunities. 

Intermodal Presents Significant Opportunity for Shippers

Intermodal continues to be a cost-effective, efficient and sustainable way to move freight and should be a key piece of any strategic modal mix. And as more shippers compete for capacity and competitive rates, it’s important for shippers to best position themselves to be attractive partners to intermodal carriers. This will allow them to better take advantage of intermodal while helping to control costs and enhance service performance. 

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Doug Punzel is president of Celtic Intermodal, Transplace’s intermodal business unit. David Marsh serves as Celtic Intermodal’s chief operating officer and helps oversee all daily operations. 

Port Houston City Docks Confirmed for Universal Africa Lines Service

Port Houston’s City Docks have been officially selected by Universal Africa Lines (UAL) as part of their U.S. Gulf/Mexico to West Africa liner service following the success of the first vessel call of MV MarMalaita last week. Port of Houston was specifically selected because of the availability for project cargoes and berths, adding flexibility to the ocean carrier’s multipurpose fleet.

“Port Houston is excited about our new partnership with UAL and that they are entrusting us with their services here at the port’s city docks,” said Dominic Sun, Director of Trade Development for Port
Houston. “We look forward to working with UAL in providing them, along with their ultimate customers, with the best customer experience possible here at Port Houston.”

UAL boasts a robust fleet consisting of over 4,000 containers ranging from reefers and high cubes, to open tops and flat racks. All fully capable of providing a multitude of shipping options. Additionally, UAL currently conducts between two and three sailings monthly from Houston while focusing on the oil and gas industries and providing logistics solutions for clients shipping to hard-to-reach regions.

“UAL is grateful for the partnership we have been able to establish with Port Houston and thank everyone involved for their efforts during this transition; we are looking forward to a long-lasting
relationship that offers growth potential for UAL,” said Dianna Knight, President UAL America. “UAL America, on behalf of Universal Africa Lines, will continue to provide the paramount level of customer service that our clients have grown accustomed to; we are confident this move will help with our vessel turnaround time while operating in a safe environment.”

Source: Port of Houston

HKSPA

World’s Largest Container Vessels Arrive at HKSPA Terminal

Hong Kong Seaport Alliance announced the successful arrival of the OOCL Hong Kong and ten additional OOCL and Cosco Shipping Lines Ltd. mega vessels at the HKSPA Terminal 8 facility this week, just six months following the alliance’s formation. OOCL Hong Kong- known as one of the largest container vessels in the world, deployed along with the other mega vessels at the end of June for the OCEAN Alliance’s Asia-North Europe Service, which included Hong Kong as a port of call.

Hong Kong, despite being small in size, has been in the league of the world’s top ten ports for the past 30 years or so. This is an enviable achievement not easy to accomplish. Credits must go to our port operators for the provision of highly efficient and professional services to the international shipping community,” said Angela Lee, Commissioner for Maritime and Port Development and Deputy Secretary for Transport and Housing (Transport).

“Coupled with our sound fundamentals built over the years, including our free port status, strong international connectivity, trusted common law system, and a level playing field for business, I am confident that our port would be able to further leverage on new opportunities presented by the Greater Bay Area Development, the Belt and Road Initiative and the New Land-Sea Corridor, and continue to thrive as a regional transshipment hub,” Lee added.

The massive OOCL Hong Kong container vessel boasts 21,413 TEU capacity and holds the title as the first in the world to exceed the 21,000 TEU capacity threshold. There are currently only 12 container vessels that can boast capacity of this size, and eight of them are among the mega vessels deployed during the OCEAN Alliance’s Asia-North Europe Service, including Cosco Shipping’s GALAXY. 

“As a Hong Kong company deeply rooted in the city, OOCL HONG KONG’s maiden call has a very special place in many of our hearts, said Andy Tung, Co-Chief Executive Officer of OOCL. “Containerships like the OOCL HONG KONG are important ambassadors of world trade and as a home carrier, we are very proud to have this vessel carry the name of Hong Kong, flying the flag of Hong Kong, and continue serving the industries of Hong Kong. OOCL is very blessed to call Hong Kong our home and being an integral part of the city’s vibrant business community over the last 50 years, providing a vital link to global trade. We like to thank the HKSPA for the wonderful hospitality and celebrating this milestone event together with us.” 

“We are proud of being ranked as the World’s Best Transshipment Port by COSCO SHIPPING this year,” said Hanliang Zhu, Managing Director of the Asia Container Terminals Limited (ACT) during the welcoming reception. “We will keep on working closely with the carriers as well as the shippers and other logistics providers to maintain Hong Kong as a reliable transshipment hub in the region.”