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Port Houston City Docks Confirmed for Universal Africa Lines Service

Archives, Global Trade Daily, Ocean Carriers

Port Houston City Docks Confirmed for Universal Africa Lines Service

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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
Archives, Global Trade Daily, News

World’s Largest Container Vessels Arrive at HKSPA Terminal

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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.”

 

 

security
Archives, Foreign Trade Zones, Global Trade Daily

Mozambique’s Hi-Tech Security Could be Africa’s Model

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The threat of piracy has waned around the Horn of Africa in recent years, a fact that mariners attribute to the “Djibouti rules.” Countries with coastlines on the West Indian Ocean and the Red Sea abide by the Djibouti Code of Conduct, a regional response to security, environmental and administrative challenges that have confronted shipping for many years.

In even better news, there’s now a chance for “Djibouti 2.” This wouldn’t be a diplomatic accord. Rather, advanced technology offers the promise of new dynamism to cooperation and surveillance, which we can see as a follow up to the Djibouti rules. A model for the kinds of high-tech equipment and systems that can help protect assets in the seas is now in the hands of a southern signatory to the code, Mozambique.

To be precise, the model in this case are the high-speed maritime security vessels and an accompanying set of seven unmanned radar sites and VSAT satellite surveillance services that Mozambique took delivery of a few years ago.

The wide range of threats to mariners and commercial enterprises on Africa’s East coast demand not only multinational cooperation but also real-time intelligence to inform and direct law-enforcement efforts. In its recent report on maritime security, DefenseWeb, notes that the Djibouti code has been amended to cover illicit maritime activity beyond piracy and armed robbery, such as weapons, drugs, human and wildlife trafficking; illegal waste dumping; illegal fishing; and crude oil theft. Satellite and radar are needed to pinpoint these threats.

International organizations like the U.N. Office on Drugs and Crime have focused resources on the Horn of Africa, specifically in Somalia and Somaliland. But trouble has a way of migrating down the coast. Indeed, the root causes of piracy are often ignored. According to the Africa Center for Security Policy, piracy is problem that is primarily  land-based with maritime symptoms. Many of the people who were involved in piracy and other criminal activity a decade ago are still engaged in maritime crime.  

These elements are converging in Mozambique’s Cabo Delgado province. With marauding terrorist gangs crossing Tanzania’s southern border into Cabo Delgado in northern Mozambique, spikes in violence have already been seen, including an attack there earlier this year on contractors for the U.S. energy giant Anadarko. One person was beheaded. As Anadarko and other oil and gas firms develop offshore natural gas fields, terrorists and criminals will no doubt put their sights on these target-rich environments at sea. That is the moment when satellite surveillance and radar arrays will prove valuable.

Mozambique has a state-of-the-art capacity at its disposal, even if the radar systems have not yet been deployed in some cases. This equipment, provided by the global shipbuilding company Privinvest, can be used to protect and monitor the estimated $30 billion worth of gas reserves now under development in Mozambique’s territorial waters.

In addition, the country is losing an estimated $60 million in revenue each year to illegal fishing, mostly by foreign-owned ships, according to Mozambican minister of oceans and fisheries Agostinho Mondlane. Many millions more worth of ivory, minerals, alcohol, narcotics and sugar are smuggled out of Africa through scantly-monitored ports in northern Mozambique. Tighter monitoring of its ports and maritime traffic would help the country crack down on all these crimes.

Satellite and radar tracking would complement one another especially when it comes to monitoring the Exclusive Economic Zones of coastal states in Africa. Automatic Identification Systems (AIS) aboard ships, which track vessels, can also be picked up by satellite. Illegal fishing, smuggling or pirate vessels have every reason not to turn on their AIS systems. That’s where radar systems capable of running Vessel Monitoring Systems (VMS) become essential to law enforcement. Setting up VMS with equipment already purchased by Mozambique and running them through a unified command center would make Mozambique a model to be replicated across the continent.

The Djibouti Code of Conduct depends on meaningful contributions from its signatory states. By standing up its radar stations, operationalizing its satellite services and integrating its high-speed patrol boats and interceptors into this technology-driven network, Mozambique could provide the living blueprint for maritime security in Africa.

Gregory Tosi is an attorney practicing international trade law in developing countries. He also builds personal submersibles and small boats

africa
Archives, Global Shippers 101, Global Trade Daily

RTM LINES PROVIDES INNOVATIVE SOLUTIONS TO AFRICA’S COMPLEX CARGO CHALLENGES

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Headquartered in Norwalk, Connecticut, and boasting 38 years of trans-ocean transportation, RTM Lines continues its position as a major player among global ocean carriers. RTM Lines’ initial focus was rolling stock. Over the years the carrier added competence in breakbulk, FCL and project cargo management. Comprehensive global knowledge as well as in-depth understanding of local customs and regulations allow RTM Lines to provide innovative solutions to the complex cargo challenges facing Africa and the world today.

“We are niche players and have been doing this for many years,” says RTM’s Vice President Richard Tiebel, adding, “We know who the suppliers are, what their requirements are, how their operations work, and they know what RTM can do. They appreciate our thorough understanding of the business. Our in-house responsiveness and assistance with planning and preparation on difficult loads are what sets us apart.”

“At RTM, customers and suppliers will always be able to speak with a representative who has a working knowledge of their shipments from end to end. Our clients appreciate this and keep coming back to us with their projects and shipments year after year. I love what we do, it is an exciting industry, every shipment is unique, and ocean transport is essential to global trade.”

More recently, RTM has invested efforts in learning about untapped global opportunities, specifically within African infrastructure and breakbulk. Among the continents, Africa presents resources and opportunities in regions such as Ethiopia, Northern Mozambique and the Democratic Republic of Congo (DRC). However, these same regions don’t come without unique challenges to navigate. As RTM’s vice president, Tiebel understands that before tapping into this market as he knows one must first understand both its potential and roadblocks that are found within the political and economic environments.

“Right now, the DRC is sitting on some of the world’s largest natural cobalt resource, but because of political turmoil, it makes it that much harder to get this cobalt,” Tiebel observes. “Africa has a reputation of political/government instability, so if a project was approved by one political party, throughout the life of a project it could experience some instability or complete regime changes. Certainly, this will be a big risk because if a government changes overnight, this market could change overnight. You may have a license for an exploration of a resource, and then the next government could have a different plan.”

Furthermore, Tiebel shared the importance of local knowledge as a driver behind success in international markets, such as Africa. Reiterating the company’s core value of local expertise, RTM places an emphasis on all players involved in the shipping and trading process.

“Africa is showing the exponential growth of any other continent,” Tiebel says. “Right now, markets like Ethiopia have shown eight percent GDP growth, per annum. Taking a deep dive and analyzing what is driving this growth there are a number of things within urbanization, ICT (telecommunications) and the extractives industry (oil, gas and mining).”

Diving even deeper into the region’s shifts and opportunities, Tiebel highlights key areas that need attention and research for successful utilization and navigation.

“In the next four to five years, city populations will double. This places a lot of pressure for infrastructure and the need to develop. Right now, most cities weren’t built for these amounts of people. That in of itself is an amazing opportunity, because it places a need on power, water and sanitation, housing developments, and around that the buildup of industries for support to serve these populations.”

He continues: “Most governments couldn’t support fixed-line infrastructures, but now Africa is going through an ICT revolution. Now the private sector is supporting this revolution and its allowing Africans to conduct business in a normal way, using technology. Companies like Microsoft have been investing in some African tech sectors, to develop talent and to take Africa forward.”

“Additionally, Africa has a lot of stranded resources in the middle of nowhere, no infrastructure whatsoever. The gas in Northern Mozambique is the world’s 12th largest natural gas resource. A lot of infrastructure will need to be built in order to get this gas, because the town itself is very small and barely has roads to it, no port, no airport or even power and electricity. The town of Palma will literally be built up in order to access this gas resource offshore.”

As African regions maintain a position of opportunity, industry players must continue to provide regular service at a good price by MPV conveyance while anticipating shifts, according to Tiebel. As IMO 2020 draws closer, he shared his perspective on how Africa’s natural resources could potentially offset some of the unidentified challenges to come.

“The cost of the IMO’s regulatory change on the shipping industry in unknown, but every analyst expects it to be large. As well as shipping lines, the IMO’s decision will also impact refiners, crude producers, bunker suppliers and emissions and air quality affecting the health of millions of people. With Africa sitting on many different natural resources and this new emergence of investment to extract these resources, hopefully these resources in Africa will help with the industry with the spike in fuel costs, in 2020.”

Bringing the conversation back to the core of the RTM difference, Tiebel positions the local community and its needs as a priority before changes can take place in unpredictable and shifting markets. This further confirms the company’s continued success and robust, satisfied customer base. RTM Lines is a prime example of what it takes to conduct global operations while catering to a variety of customer needs. Instead of limiting customers, RTM provides its customers timely options.

“The issue with Africa is it’s a place with a lot of internal issues that need to be dealt with,” Tiebel concludes. “To get things done, one must have local knowledge and knowing the local people to get things moving. Without local knowledge and understanding what people need, you won’t be able to move on.”

Tariffs & Shippers
Archives, Global Trade Daily, Ocean Carriers

IS THE CARGO SHIP SAILING ON NEW TARIFFS?

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Demand for Space on Cargo Ships is Surging Ahead of Anticipated Tariffs on China

As over 300 witnesses present testimony in Washington, DC this week and next on the impact of proposed China tariffs on their businesses, uncertainty hangs in the air.

Following the hearing process, committee review and publication of tariff schedules, new tariffs could be imposed as soon as late July or August, which means the cargo shipping rush is on to beat the potential hikes.

Don’t Miss the Boat

The prospect of tariff hikes acts like an “early bird” registration rate as companies are incentivized to lock in better prices now. Many retailers are competing just to find space for their goods on an ocean carrier. Air shipments are an alternative, but far costlier. The shipment surge has resulted in massive congestion at ports and warehouses that are bursting at the seams.

This scenario is familiar. Retailers scrambled last year to book cargo to get ahead of tariffs. Importers front-loaded holiday merchandise shipments to beat the 10 percent tariffs on $200 billion of Chinese imports in the fall of 2018, and then front-loaded spring 2019 merchandise imports late in the year when they anticipated the tariffs would go up from 10 to 25 percent on January 1, 2019. That threat temporarily subsided when President Trump extended the negotiation deadline with China, but reemerged in May 2019. This time, the tariff threat materialized. Goods would remain at 10 percent only if they were exported from China to the United States prior to May 10, 2019 and entered into the United States before June 15, 2019.

New Tariffs, New Shipping Surge

The President has said he will make a decision after the June 28-29 G-20 meetingwhether to impose 25 percent tariffs on an additional $300 billion in Chinese imports, meaning a tariff on nearly everything the United States imports from China, including the kitchen sink (yes, kitchen sinks are on the tariff list).

Retailers generally import most of their holiday goods in August and September, but many are moving up this timetable in anticipation of higher tariffs, accelerating the traditional holiday peak shipping season. If major importers all do the same, advancing the shipment of months of inventory, how will shipping lines manage the demand and allocate vessel space? Where does all this volume sit when it arrives? What is the impact on costs for shippers?

All of this can add up to some choppy trade waters.

Hold My Spot

Retailers, who are the “shippers” of goods, may negotiate service contracts with ocean carriers under which the shipper commits to provide a certain amount of volume over a given period and the carrier commits to a certain rate schedule and set of services. Typically, the greater amount of volume, the better the rates will be. The alternative to contracts is the less predictable spot rate market. Usually valid for only one shipment, the spot rates fluctuate with market conditions.

Larger established shippers are more likely to have service contracts, while small- and medium-sized businesses are likely to be more at the mercy of the spot rate market. Because retailers generally require more pricing certainty and service guarantees, they may opt for contractual arrangements and lose out on the chance to capitalize on weak spot markets. Spot rates can dip below contract levels, for example, if carriers add too much capacity into the system or volume slows. Some businesses play it both ways, confirming some volume under contract and turning to the spot rate market for the rest.

There can also be price-based competition to secure slots on a particular vessel during peak periods, with carriers able to demand surcharges to protect shippers from being rolled onto a later vessel departure. When tariffs are imminent, shippers are often more willing to pay these surcharges to get space on the next available crossing.

Rather than contracting with an individual shipline, a shipper may choose to work with a common carrier, like UPS, that offers ocean transportation, but does not operate the vessels. These Non-Vessel Owning Common Carriers (NVOCCs) differentiate themselves by pointing to their ability to offer a diversified carrier mix and flexibility in cases of unexpected circumstances, such as a strike at the dock a particular carrier uses. The NVOCC negotiates with ocean carriers for a number of slots on particular trade lanes, in effect negotiating as the shipper, and then offers ocean shipping service to customers.

Seeking A Port in a Storm

In theory, changes to service contracts must be agreed upon by both parties – carrier and shipper – before taking effect. In practice, however, shippers and carriers sometimes treat service contracts more as guidelines than binding agreements. Import surges have caused some carriers to hike previously agreed rates, and if the shipper won’t pay, the cargo might sit in Shanghai.

Various organizations are developing innovative solutions to address these contract challenges, including through the use of technology to record contract terms and track shipments’ conformity with those terms, financial security tools to ensure penalty settlement, and requirements to pay collateral at the time of contract, unlike the current spot market where no money is exchanged until goods are on the water and either party can cancel at any prior point without an enforceable penalty.

As the race to get goods to shore heats up, shippers not only face cost increases at sea. With ports struggling with containers stacked six or seven high, shippers also face extra charges to get their goods off ships, onto trucks and into warehouses. As one example, the onslaught of containers also means a surge in demand for chassis, the steel frames that allow trucks to carry shipping containers. If sufficient chassis are not available, truckers have to delay deliveries, incurring costs that are passed to the shipper.

With thousands of retailers moving tremendous volume, the issue of warehouse capacity also becomes a challenge. According to Los Angeles Times reporting, Southern California’s warehousing and distribution complex, the largest in the world, has a less than one percent vacancy rate. Some retailers have resorted to storing pallets outside, while others face hefty fees for exceeding storage windows.

Ports part one
China trade

Are China’s Neighboring Ports Ready?

What about sourcing from countries other than China to avoid the tariffs? That’s easier said than done, at least in the short term to beat a looming tariff deadline. Switching to new vendors and manufacturers takes money and time. New vendors must be trained to meet retailer standards and be able to meet needed lead times. Factories must be vetted for quality standards, social welfare conditions and security factors. China also has superb logistics and other supply chain advantages that other countries cannot match.

In a recent piece in The Hill, the Cato Institute’s Dan Ikenson pointed to trade data showing that, as U.S. imports from China fell by 12 percent in the first four months of 2019, imports from Vietnam grew by 32 percent over the same period. However, Vietnam’s transportation infrastructure is reportedly overwhelmed with the new volume, straining the country’s roads and ports. And, Vietnam is facing pressure to adopt more rigorous measures to ensure that Chinese products do not get transshipped through the country and into the United States, merely to avoid U.S. tariffs.

“The Port of Los Angeles and the Port of Long Beach together comprise the San Pedro Bay Port Complex…On the import side, our most recent analysis estimates the current and proposed tariffs directed at China will impact roughly 66% of all imports by value at the San Pedro Bay.”

– June 17 letter to U.S. Trade Representative Robert Lighthizer from Eugene Seroka, Executive Director, Port of Los Angeles

Rough Waters Ahead

Despite the current shipping boom as producers and retailers build inventory to get ahead of tariffs, the shipping industry is concerned about the future impacts of an inevitable falloff in volume, even if the U.S. economy remains strong. When import volumes soften, dockworkers are not called to work, and the demand shrinks for logistics workers, warehouse workers and truckers. The surges and variability caused by tariff threats – some enacted and some not — have generated a boatload of uncertainty across the wide range of industries that make up the supply chain.

That uncertainty affects not only the users of shipping infrastructure, but sometimes the infrastructure itself. The Massachusetts Port Authority (Massport) owns and operates the Conley Container Terminal in the port of Boston, which serves 1,600 regional import and export businesses. After avoiding tariffs last fall on ship-to-shore cranes to service larger container ships, Massport finds the cranes back on the proposed tariff list. The imposition of 25 percent tariffs would add at least $10 million in costs for three new cranes it plans to buy. Currently, there is no U.S. manufacturer for these cranes and the only experienced manufacturer is in China.

The President and CEO of the American Association of Port Authorities is among those testifying at the hearings this week. He will make the case that tariff increases would negatively impact ports’ ability to make investments in infrastructure that are needed to handle significant growth in trade volumes in years to come. Modern transport infrastructure and a return to greater trade certainty will add up to smoother sailing for ports, consumers, and workers across the supply chain.

Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

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

Archives, Global Trade Daily, Ocean Carriers

Everyone’s Breaking Into Breakbulk

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Time was breakbulk, project cargo and multipurpose/heavylift were their own niche sector on the global shipping spectrum, but many of today’s carriers are taking it all, from MPV/HL to roll-on/roll-off (ro-ro) to go along with their regular old vanilla container hauling (not to suggest said containers are filled with vanilla, although they could be).

The “Big Three” carriers—MSC, CMA-CGM and Maersk—continue competing with one another by each entering the comparatively lucrative breakbulk and project cargo market, which has also drawn such ro/ro specialists as Grimaldi, NYK and MOL.

For its “global out-of-gauge and breakbulk services,” MSC advertises “first class project cargo management, no matter whether you have a requirement for heavy lift cargo, or for oversized cargo which cannot fit inside a standard container.” MSC can point to more than 40 years of experience in shipping oversized freight and their “expert project cargo logistics team” that can help with the planning and execution of special loadings.

Not to be outdone, the CMA CGM website states, “Our dedicated experts will take pride in providing you with our Special Cargo services and will find with you reliable shipping solutions, whether you’re shipping sensitive materials or heavy and bulky equipment but also will take extra care of Aid and Humanitarian cargo that often exceeds the size of standard containers.”

Size matters, of course, as CMA CGM can rely on the expertise of its 755 agencies in more than 160 countries all around the world as well as an extensive network of ports, terminal operators and suppliers. “Our teams can deliver a seamless door-to-door service and integrated one-stop-shop solutions for your Special Cargo anywhere in the world,” the promo boasts.

COSCO Shipping also relies on a large fleet and experience in extra-heavy hauling. This was demonstrated in February, when the sound section of the Maersk Honam was successfully loaded aboard COSCO’s heavy-lift vessel Xin Guang Hua on open waters outside Dubai. The 228.5-meter long item arrived in March at Hyundai Heavy Industries in South Korea.

Maersk has been accepting breakbulk as well, with company officials pointing to the opportunity to be able to carry an entire project as opposed to select components that fit neatly in traditional containers. The carrier does assess breakbulk or project cargo on a case by case, depending on available space and vessels, the length and width of the cargo and the terminals to be called.

“We’ll use special gear, extra labor, and oversee operations,” Karen Hicks, Maersk’s global client manager, told JOC.com in March. “There are no cut and dried solutions.” Her company is searching for more solutions with the creation of special project cargo teams and online booking tools, however.

Wallenius Wilhelmsen Ocean (WW Ocean) is occupying the space in between containers and lift-on/lift-off (lo/lo) or geared MPV/HL, stowing cargo under the deck of ro-ro ships where less packaging and handling is required. WW Ocean officials say they see growth potential in being able to handle a single piece of breakbulk cargo, multiple pieces or pieces and materials for large, multimillion-dollar projects handled over several voyages.

Customers should be warned that pricing can be tricky. As opposed to a standard container rate, carriers have to factor in trade lanes, weight and volume, cargo type, and any special equipment needed, such as mobile loading platforms (mafis) or jack-up trailers. Surcharges for bunkers, port costs, and other assessorial charges must also be factored in. And then there are the costs for securing different types of cargo along the trade routes.

The variety of elements to consider has not swayed Höegh Autoliners away from offering transportation for all types of breakbulk cargo, as the carrier handles close to 6 million cubic meters of high and heavy and breakbulk cargoes annually worldwide. For breakbulk, project and other “out-of-gauge” cargo, Höegh relies on modern and specialized rolltrailers, which are specially designed for smooth and safe transportation of heavy and/or long breakbulk cargo.

G2 Ocean is only two years old, so most would consider the carrier new to the breakbulk game. But company officials want you to know that they actually have 50 years of experience in the sector thanks to G2 Ocean being a joint venture of two of the world’s leading breakbulk and bulk-shipping companies: Gearbulk and Grieg Star.

“We operate the largest fleet of open hatch vessels worldwide,” proclaims the G2 Ocean website. “In addition we operate a substantial fleet of conventional bulk carriers. With 130 vessels and 13 offices on six continents, we can serve all our customer’s needs. Our vessels are tailor-made for breakbulk cargoes like forestry products, steel and project cargoes. Advanced systems make shipping with us easy. The passion and expertise of our people put our customers at ease. This is the basis for reliable, efficient, flexible, high-quality and innovative services.”

However, you do not have to be a large, global conglomerate carrier concern to specialize in breakbulk and project cargo. On the other end of the roster is Florida Barge Corp. (FBC), whose 150- to 400-foot long tubs were engineered and constructed to transport heavy and concentrated cargo loads.

Routinely operating in the waters of the U.S. East Coast, the Gulf Coast, Mexico, the Caribbean and Central and South America, FBC offers project cargo, heavy-lift, and module transportation services—at rates that are less or at least competitive with the big boys.

Founder Brendan Moran boasts more than 15 years of experience in the marine transportation and project cargo industry. “Whether your needs include loading and transport of bridge beams or dredge related equipment,” states Moran’s online bio, “FBC will provide all aspects of the movement from inception to completion.”

Archives, Global Trade Daily, News

SOURCING THE BEST CARRIER/AIRPORT CONNECTIONS

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Sourcing the best airport connection can be tough when big-name companies such as Amazon Air continue to announce expansions to create and delegate more space for operations. As a prime example, Amazon Air is aggressively taking over regions in the Midwest and South through increased fulfillment centers and expanding air cargo capabilities.

Back in December, Amazon Air confirmed the expansion investment of the Chicago Rockford Airport region by 120,000 square feet to make room for an additional eight-plus planes. The quickly growing logistics network Amazon prides itself in is provided with all the tools needed to continue leveraging growth momentum. Additionally, the company is not afraid to call out the need for the potential threat the expansion poses to competitors UPS and FedEx by adding that such competitive disruption is necessary.

Additionally, Amazon announced plans to expand its network in the Lone Star State at the Lonestar Dallas Air Hub, projecting “to handle multiple flights daily” that “will be tailored specifically to Amazon Air’s larger-scale regional needs.” A Morgan Stanley report estimates that “Amazon’s volumes moving onto Amazon Air are costing UPS/FDX Air roughly 200-300 bps of volume growth.”

Consider the substantial air-cargo growth reported for Budapest Airport. Most recently, the Central European hub confirmed record rates of double-digit growth for three years straight. It seems every time Budapest Airport makes the news, it’s to report on higher growth rates from before.

“These latest figures are exciting as they represent three years of uninterrupted double-digit growth at the airport,” says René Droese, Budapest Airport’s director of Property and Cargo. “We are focusing all our efforts to make good use of the ideal conditions in Budapest and turn Liszt Ferenc International Airport into a major cargo logistics hub for the Central-Eastern European region. For this, we are establishing appropriate technical, security and traffic conditions; the relevant projects entered the phase of implementation last year, and we can successfully complete them this year. As a first step we handed over a 16,000 m2 new cargo warehouse and office capacity for our integrator partners in 2017; their traffic has been constantly developing for years.”

To continue these significant growth rates for 2019, the airport is preparing a new cargo apron to house and simultaneously operate two Boeing B-747-8F freighters.

“The combined value of this development effort in 2019 reaches EUR46 million and is financed by Budapest Airport itself,” Droese notes. “Our goal is to deliver, by the end of this year, an ideal cargo infrastructure for all segments of our well-balanced customer portfolio, for full freighters, belly cargo, integrators and roader feeder trucking, too.”

The common denominator is proactive efforts to leverage and increase the momentum before it’s too late. Key considerations include regional advantages, current and potential partnerships, operational efficiencies and even integrating technology solutions that streamline communications and transports.

“Rising demand is illustrated by the fact that last year a number of widebody and jumbo freighters were being loaded at the airport each day, including Boeing B-747s operated by Cargolux, AirBridgeCargo and Silk Way West, and Airbus A300s, A310s, A330s used by Turkish Cargo and Qatar Airways Cargo,” Droese says.

Many might recall the June 2018 Air Cargo Advance Screening Program mandating foreign shipments to be subject to providing a laundry list of pre-arrival cargo data when the U.S. is the final destination, per measures from the Department of Homeland Security. Strict screenings such as these have been implemented globally, as recently reported for Dubai Customs, which prides itself on significant progress in performance due to the advanced infrastructure as well as supportive government policies assisting in facilitating global trade efforts. The success is also paired with a proactive approach involving careful evaluation and research of trade trends.

Director of Dubai Customs, Ahmed Mahboob Musabih, explains: “We have an integrated strategy in place to develop the external trade performance further following the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, vice president, prime minister and ruler of Dubai, and along with the guidelines of Dubai Plan 2021 and the UAE Centennial 2071. We are watching closely the changes taking place in the international trade and we will turn challenges into opportunities by entering new markets and expanding our existing ones.”

More recently, however, Dubai Customs reported several cases where significant smuggling attempts were stopped because of the diligence and seamless communication strategies in place. One report identified 922 successfully prevented smuggling attempts, of which 38.5 percent were drug contrabands. Even more interesting is the time-frame the attempts occurred: between January and September of 2018.

“Thanks to our inspectors’ vigilance, we are closely in full control of all checkpoints,” explains Ibrahim Al Kamali, Dubai Customs’ director of Passenger Operations. “Our inspection officers receive the best training on body language and different types of drugs, and how to distinguish fake brands from genuine ones.”

“There are challenges facing customs authorities in countries that have strategic locations,” Musabih points out. “Dubai is not an exception. It’s strategically located between East and West, and it has spent billions of dirhams to develop its infrastructure, ports and airports.

“The Emirate has also provided an unprecedented host of services and products, including the iDeclare application which significantly reduces passengers’ time needed to declare different belongings. These advanced services will facilitate passengers’ entry into the country.”

From security and trust to reliability and competition, sourcing the best carrier and airport connection needs to align with customer needs, the types of products being transported, and compliance efforts for the region. Just because an airline is associated with a big brand does not guarantee a seamless transport of goods.

Conduct necessary research and review updated reports to learn and identify an airline’s strengths and areas of improvement. No two carriers are the same, and the options available depend on the amount of knowledge you have going in and what fits your long-term and short-term needs. Consider the partnerships involved with the airline of your choice and how these partnerships create competitive advantage. If you can’t identify what makes a carrier or airline significant, it might be time to reconsider market options.

Archives, Global Trade Daily, Ocean Carriers

Automation Changing the Pace for Shipping Operations

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Recently, Avantida announced Maersk’s implementation offering Container Triangulation for the Canadian and U.S. platforms, enabling communication between dispatchers and planners almost instantly. The process of automation will take place on Avantida’s platform, providing an opportunity for the company to penetrate the market regions.

“Both shipping lines and transporters continue to look for agile, cost-saving tools that can optimize their planning, and our platform has a proven track record of improving efficiency,” said Luc De Clerck, CEO, Avantida. “The platform has changed the way shipping lines in Europe are doing business, and after our launch in Mexico, it was a natural next step to introduce Avantida to the United States and Canada.”

Another example of how digitization is changing the pace of the market expansion is seen in the recent announcement from the digital freight forwarder, Twill. The company confirmed efforts to expand its 19-country network to the Nordic regions through operations in Denmark and Sweden, where they are being welcomed with open arms primarily because of the digital solutions platform providing customers increased visibility into each step of the process. More importantly, Twill’s online platform is applauded for the ability to co-create with its customer base. This unique feature is what sets the company apart, creating a hefty competitive advantage.

“The world is already becoming more and more digital around us, and with Twill we are challenging the fundamentals and changing perceptions in the freight forwarding industry,” says Ricco Poulsen, chief operating officer for Nordics and Eastern Europe at Damco said. “We want to be the market leader in digital solutions and our investment in this area will bring significant benefits to our small and medium customers, old and new. There are a number of ways in which Twill will continue to develop and support customers over the coming months, and we look forward to playing our part in that.”

Before understanding the impact that digitization solutions bring to the market, company leaders must first understand the core of digitization is rooted in customer demands. Without fully understanding what the customer’s needs and demands are, it can be a challenge selecting which tech solution will meet both customer and company needs, all while creating a competitive advantage and staying ahead of compliance.

Archives, Global Logistics Planning Guide, Global Trade Daily

2019 GLOBAL LOGISTICS PLANNING GUIDE

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At the core of every successful business is a well-oiled logistics machine ensuring operational efficiencies, product accuracy and maximizing business at every turn. It’s the blueprint of every business and its power should never be underestimated. Without logistics, there’s no foundation. But there is a catch that goes beyond logistics implementation for successful business initiatives, and that comes in the form of truly knowing the various types of industry-specific logistics needs, how they operate and, most importantly, how they ultimately tie together.

Carefully planned and thought out, this can be the determining factor between networking and business opportunities, navigating an evergreen market, and maintaining the steady flow of the supply chain in the midst of political changes that directly impact the products your business offers. The reputation of one’s business is found in the groundwork of operations. Industry competitors can gauge a company’s success miles away.

Think of logistics planning as you would a crisis plan–without it your business reputation is put at risk and the potential for losing solid customers is too high, and that’s the ultimate goal for our 2019 Logistics Planning Guide.

We gather the golden nuggets of logistics planning from industry leaders such as Pervinder Johar of Blume Global, Port of Rotterdam Business Consultant Vincent Campfens and CEO of A.P. Miller-Maersk Søren Skou. The key insights provided in this year’s planning guide will prepare your operations on a granular level, addressing every aspect while providing alternatives and key figures to consider as the global trade industry kicks off another year.

PORTS

Port trends for 2019 are already taking shape as the industry continues to see increased joint ventures and tandem efforts for mutual visions combined with record-breaking growth rates for 2018 from ports such as the South Carolina Ports Authority’s (which saw an impressive 15 percent growth for November 2018). The real question is how are they doing it from a logistics perspective amid the tariffs and market unpredictability? President and CEO Jim Newsome spelled it out: use timeliness and resource options to the advantage of operations. What might work one month might prove unsuccessful for the next. Keep options and eyes open for shifts and opportunities. Have a backup plan.

“While the U.S. economy remains strong, there is increasing evidence that U.S. beneficial cargo owners advanced shipments from Asia in an effort to avoid tariffs,” says Newsome, who carefully added, “The first calendar quarter of 2019, however, is much more uncertain in terms of outlook and considering strong volumes achieved in the same period in 2018.”

Port automation and the integration of technology solutions are trends that took charge in 2018 that show no sign of slowing down in 2019. The Port of Rotterdam cites proactive measures through technology solutions and gauging industry changes as key factors to success. Business Consultant Vincent Campfens puts it into perspective in the article, “42km of Connected Complexity: Operating in the Digital Future.”

Campfens comments:

“Being a smart port is much more than merely introducing awesome new technology into a port to make it safer, more efficient and more sustainable. It is also about looking further ahead in time, making strategic choices to ensure that the port still exists in the future, whilst responding to changes in climate, politics, technology, industries and cargo flows. One of our recent strategic choices is a targeted commitment to digital innovation.”

ECONOMIC DEVELOPMENT COMMISSIONS

Global Economics Prospects predicts a two-year plateau in overall global growth starting in 2019. That doesn’t mean economic development opportunities are not still very much alive and can be leveraged through a realistic, holistically charged strategy. E-commerce alone is shifting big businesses and their customer relationships, increasing product demand and reaching consumers beyond company regions. Alibaba Group announced its initiatives with the government of Rwanda in November and claimed they will utilize the digital economy to support exporters and local producers and their relationship with Chinese consumers.

Global agreements spur economic development and e-commerce success.

“We have already seen tremendous attention from Chinese consumers on Alibaba’s platforms in high-quality Rwandan products such as our top-tier single estate coffee, and we are confident that local products and travel experiences will continue to receive interest and support from the more than half a billion consumers on Alibaba’s platforms,” states RDB Chief Executive Officer Clare Akamanzi. “Alibaba’s travel services platform, Fliggy, and the RDB will also work together to promote Rwanda as a tourist destination through a Rwanda Tourism Store for booking flights, hotels and travel experiences and a Destination Pavilion where Chinese consumers can learn about visiting the country.”

With Amazon-standard expectations, it’s imperative that during the development and planning periods companies incorporate logistics solutions that tie together all modes of the supply chain, eliminating the possibility of leaving out a vital piece to the supply-chain puzzle.

OCEAN CARRIERS

Quantity and quality are two characteristics we are taught to choose between, especially in business. Maersk, the world’s largest ocean carrier, proves that through strategic planning, looking ahead and considering environmental factors to foster growth and success that support both. Additionally, the company values the need to take a step back and confront the challenges while developing solutions that align with the vision and work with what’s anticipated in the next decade. At the end of the day, companies must keep the customer experience at the center of logistics efforts and consider integration efforts for resource utilization. Forward-focused logistics solutions are the name of the game.

Maersk confirmed the strategy of integration logistics to kickstart 2019. The company is leveraging the services from Damco’s Supply Chain and combining them for Mearsk-branded products.

“We are taking further steps in the transformation of our business on a structural level and how we go to market, enabling us to offer more solutions to our customers in a simpler way,” CEO of A.P. Miller-Maersk Søren Skou said. “Our employees play a key role in making this happen and therefore we are at the same time empowering our frontline organization who is closest to our customers.”

Taking it even further, the company recently announced its goal of net zero carbon shipping by 2050. But some wonder why focus on 2050 with 2019 right around the corner? Forward thinking. Quality. Proactive efforts that alert industry players they are ready for the anticipated increase in shipping volumes, without delay. By preparing their vessels in advance, they eliminate potential logistics hiccups.

“The next five to 10 years are going to be crucial,” Skou predicts. “We will invest significant resources for innovation and fleet technology to improve the technical and financial viability of de-carbonized solutions.”

Electric caravans, increased regulations and revolutionizing the air cargo industry as a whole are on the horizon for 2019. The air cargo industry kicked off the new year preparing for growth to be at a stand-still. Industry reports are predicting a reduction from 4.1 percent to 3.7 percent and a total of 65.9m tonnes for 2019–one of the slowest growth rates on record since 2016. Not all hope is lost, however. With carefully crafted logistics in place, industry players can weather the market shifts and still generate successful initiatives. It’s all about looking at the big picture and identifying what is working in your company’s favor during uncertain times.

“We had expected that rising costs would weaken profitability in 2019,” explains Alexandre de Juniac, the International Air Transportation Association director general and chief executive. “But the sharp fall in oil prices and solid GDP growth projections have provided a buffer. So, we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile.”

Resources for airlines to leverage do indeed exist, but they are found within the framework of technology innovations and the relationships sustained and strengthened with other industry leaders. A great example is the automation efforts implemented by Sabrewing Aircraft Co. in the Alaska market. With Anchorage leading as the busiest cargo hub, the company continues to weigh out options that provide solutions for increased efficiencies within a realistic goal. The theme of technology solutions and efforts toward automation makes yet another appearance.

“I thought, there needs to be another solution, a solution that’s much closer at hand and that’s how the thought of cargo came about,” says Sabrewing co-founder and CEO Ed De Reyes, “because cargo—there’s still a lot of requirements that are placed on air cargo carriers and air cargo manufacturers—but it’s a little bit lower hanging fruit, so to speak, from the fact that we’re not flying passengers. What is it that we can do now? What are we capable of doing now and let’s build on that instead of trying to build a system that’s going to rely on massive amounts of, at this time, nonexistent infrastructure.”

Keeping the books clean requires visibility and awareness of dollars coming and going out. Once again, in the theme of digital solutions, if you want that granular level of transparency, leveraging technology solutions in 2019 is imperative, especially for large-scale businesses. Supply-chain management and financing logistics are two of the most important factors when considering logistics planning.

“In 2019, the most agile and resilient supply chains are the ones that are going to be the most successful,” says Blume Global CEO Pervinder Johar. “Natural disasters, economic flux and rising tariffs are going to remain a concern for the supply chain industry and therefore the C-suite may reconsider its current manufacturing strategies and its global operations. To help inform these decisions, companies should combine external and internal data. Predictive analytics uses historical data and machine learning to identify and anticipate certain outcomes that become increasingly valuable as the volume of data increases. When properly analyzed, this data is helpful for identifying patterns and areas for optimization, to fuel better planning and resource utilization.”

Consider implementing a seamless management system that your business can rely on to eliminate risks, such as invoice and vendor fraud, inventory stockpiling and increased inefficiencies. In doing so, companies can track products, customer purchases and deliveries all while monitoring and maintaining their supply chain.

“Predictive analytics will become highly useful to optimize resources within the supply chain in 2019,” Johar predicts. “In late 2018, Gartner identified eight strategic technology trends for the supply chain and how they can provide a competitive advantage. Combined with AI and machine learning, data is the driver for predictive capabilities—with it, future performance can be optimized based on historical results. This data is powerful and has the potential to positively impact every aspect of the supply chain, from sourcing and compliance to production and quality control. Embracing the value of technologies such as predictive analytics is essential for a strong foundation, upon which to build a digital supply chain.”

3PLs

Infosys Consulting released the 22nd annual Third-Party Logistics Study this year, proving key insights and trends to keep a watch for in 2019. Of the insights, the study revealed that maintaining balance and consistency in an ever changing market is one of the biggest challenges for the logistics industry, pertaining to 3PLs specifically. The study revealed that 91 percent of providers cite 3PLs as a resource for improved operations and logistics.

Examples of this include Seacoast Capital and its $10 million investment in Deliver-It for their consumer base, and Volvo announcing that it will own and operate, in addition to providing, the first commercial use for its automated trucks for a mining company. More big name companies are considering 3PLs as solid logistics solutions for commercial expansions.

Other leading 3PLs, such as global freight forwarder Team Worldwide, utilized global expansion efforts and strategy as a means to improve customer relationships in 2018. General Manager Brian Purugganan explained that implementing such strategies allows his company to invest in supply chain management solutions for customers, providing a way to meet individual expectations. Team Worldwide expanded the company to a new Seattle-based branch for increased customer reach that was set to open in December 2018, laying the foundation for success in 2019.

“The opening of Team Seattle is a strategic part of our domestic and global expansion,” says Team Worldwide CEO Jason Brunson. “Seattle is an important ocean gateway to and from the U.S. It will allow us to better support the needs of our customers in the Northwest and will also help expand our cross-border services with Team Worldwide, Ltd. in Canada.”

 

 

 

 

 

 

 

Archives, Global Trade Daily, Ocean Carriers

Singapore Expanding Trade Relations

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A recent Memorandum of Understanding signed between COSCO Shipping Ports and terminal operator PSA will increase strategy efforts, ultimately supporting the development of two new berths and substantiating  trade relations between Singapore and China, according to a joint release this week.

TEUs are estimated to increase by 2 million for a grand total of 5 million once the additional berths are successfully implemented.  Automated yard technology will provide efficiencies in operations, as currently seen with the three existing berths at the  Pasir Panjang Terminals.

“The COSCO-PSA Terminal is our major investment in S.E. Asia; with the continuous support from parent company and shipping alliance, volume of the terminal continues to grow. The addition of the two new berths will enable us to secure more volume from the parent company and shipping alliances by providing them with high efficiency services. As our major hub port for transhipment in S.E. Asia, the expansion in the terminal will facilitate us to capture more volume from the new global trade momentum in the region,” commented Vice Chairman and Managing Director of COSCO Shipping Ports Zhang Wei.

Beyond the substantial expansion of TEUs predicted through the agreement, overall support for the Port of Singapore and the global role it plays within the container and shipment hub sectors will be evaluated and increased opportunities for globalization provided.

“PSA is honoured by the trust that CSP has placed in us to serve as their main hub port for container transhipment in Southeast Asia. With their continued support and confidence in PSA, we will strive to augment their strategic presence in Singapore, and we look forward to the opportunities this brings to support global trade,” PSA International Regional CEO Southeast Asia Ong Kim Pong said.

Source: COSCO SHIPPING PORTS Limited