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Pros and Cons of Re-using Shipping Containers

shipping containers

Pros and Cons of Re-using Shipping Containers

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

Save your time and money

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

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

Shipping containers are durable

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

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

Protect the environment by reusing shipping containers

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

The temperature inside a container can be a problem

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

The possibility of rust and corrosion

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

Be aware of toxic exposure when repurposing

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

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

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

ships

DON’T LOOK SOLELY AT THE LARGEST SHIPS IN GLOBAL SUPPLY CHAINS

When it comes to ocean transportation, some might automatically think of massive container vessels carrying loads upon loads of cargo with ease. Vessels such as the OOCL Hong Kong, COSCO Shipping Taurus or Madrid Maersk are on the list of the largest shipping vessels across the globe. Although these and other large-scale shipping vessels significantly contribute to the movement of goods in the supply chain, there are quite a few smaller vessels and ships that are just as important and continue contributing to the transportation of goods and fulfilling other purposes for those on the water.

Our goal is to give these smaller vessels credit where it is rightfully due, all while examining their position in the ocean transportation industry and where they are headed.

REEFER SHIPS (AND CONTAINERS)

Known for being smaller in size and scale, the reefer ship serves a special purpose in transporting goods, specifically perishable goods including food and other items requiring specific cooling capabilities. The major differentiator among these ships is their unique design exclusively for transporting cold items. These ships are typically equipped with specific access points and pallets capable of holding reefer containers (usually twenty-foot TEUs). Port Technology has appropriately referred to these reefer containers as “large fridges carried by containerships.”

Among the types of cargo commonly found on one of these reefer ships, bananas are considered the most important over fruits, meats, and even blood and other expensive types of cargoes, according to Port Technology. Other items include pharmaceuticals, flowers and other perishable food varieties. Without the capabilities of these reefer ships to ensure proper temperatures are maintained during transport, many parts of the supply chain would suffer.

The reefer ship does have its competition, however. The previously mentioned “large fridges” are becoming savvier and offering more in terms of temperature variations during transport. Port Technology reports that in 2018, only eight total reefer transport specialist companies existed out of the original 20+ back in 2000. These upgraded reefer containers are cited as the main culprit of this.

BARGE VESSELS

Known for its unique “raft” appearance and functions, the barge vessel stands out by offering much more than what meets the eye. This special type of transport method requires some powering from another source, meaning it does not have its own engine to keep it moving. Although there are some self-powered barges in the modern market, the classic barge in known for relying on a tugboat to move from point A to point B successfully. The barge maintains its position for inland transportation through its environmentally friendly benefits such as reduced fuel usage while transporting more in fewer miles compared to trucks.

According to a report from the American Maritime Partnership, more than 750 million tons of cargo are moved by the famous tug-and-barge combination every year, in addition the $30 billion economic impact in America. The barge industry is not exempt from disruptions, however. Last year proved to be a difficult time for the industry due to extreme flooding and trade tensions, directly impacting the agricultural sector. The Waterways Journal reported that 19.8 million acres went without planting in 2019 due to flooding.

“While some freight rates have appreciated, we still face downward pressure in agricultural and coal markets that need significant improvements in demand before the barge industry can realize a true recovery from what we have seen in the last three to four years,” commented Mark Knoy, president and CEO of American Commercial Barge Line (ACBL) in the report.

TUGS

Think of tugs (or tugboats) as a “part two” of the barge vessel. The tug holds its own in the maritime world, however, and is not solely confined to pulling the barge in its lifetime on the water. Whether it is an ocean, sea, rescue or harbor tug, these much smaller helpers on the water work alongside non-powered vessels or other watercraft, including some sizeable ships that needs assistance when in trouble.

These small-but-mighty supporters have a decent range of displacement anywhere from 300 to 1,000 tons, depending on which type (ocean, rescue, harbor). Large tugs are of great importance to global navies. One of the largest of these types of tugs is the Russian Navy’s Vsevolod Bobrov, which boasts a 9,700-ton displacement and the ability to break ice when needed.

CHEMICAL TANKERS

Think of these tankers as the hazmat vessels of the maritime shipping world. Ranging from S1, S2 and S3 rankings of ships, the chemical tankers on the ocean vary in degrees of safety measures based on the types of chemicals onboard and their requirements outlined by the International Bulk Chemical Code (IBC). These tankers vary in size but are typically anywhere from 5,000 dwt all the way up to 50,000 dwt, although the larger tankers are not as frequently seen. These ships come equipped with individual deep well pumps, pipelines and other systems to ensure minimum risk of exposure and potential contamination.

Chemical tankers are a different breed of ships as they come with an increased set of risks from the liquids they transport. Among common risks, cargo compatibility, cargo spillage, toxicity and flammability all pose potential problems for those onboard and the environment. Compliance simply cannot be subpar in efforts when it comes to transporting chemicals and leading chemical carriers such as Odfjell Tankers, Fairfield Chemical Carriers, and B+H Shipping continue to make waves in the transport of chemicals and other related liquids across the globe.

These are just a few of the various types of watercraft supporting the global supply chain. Without these ships guiding the way, many of the things needed to keep domestic and global economies afloat would not be as easily accessible, transportable, or available. As containerships and other mega-vessels continue to challenge the ocean shipping landscape, it is important to consider the ways these smaller ocean vessels and ships can transform to better meet market demands while supporting sustainable operations. At this point in time, these smaller players in ocean shipping are here to stay.

coast

AMERICA’S LEADING PORTS FROM COAST TO COAST

What makes a well-functioning port? Let us count the ways. There are a number of factors that contribute to the success of a port. First is location. A port should be in a region with natural resources, access to transportation and enough space for future growth. Second, it should have access to funding through government or private investment. Without this, infrastructure that facilitates the transport of goods can’t be built—tanks, cranes, quays and jetties, for example.

Third, a port should be able to accommodate ships. Does the port provide easy access during low and high tides? How well are the facilities maintained, particularly during flooding, droughts, or in extreme weather? Great ports also have the resources needed to function, including piers, stacking yards, and warehouses. And last, for the ports with an eye toward the future, they should also have access to land that will help with expansion. It will provide easy access to transport—river, rail, road.

A great port is the rare amalgam of art and science—like these leading American ports from coast to coast.

1. Port of New York and New Jersey

With 72 percent of the first port of calls on the East Coast, the Port of New York and New Jersey is the busiest in the region. It has contributed to the New York City area becoming an affluent commercial district nationally and globally. The largest port on the East Coast is also the third-largest in the United States.

It supports 400,000 jobs and has generated almost $8.5 billion in local, state, and federal tax revenues. It has facilitated more than 85 million tons of cargo worth more than $211 billion. Its top exports are wood pulp, wood and articles of wood, and plastics. Top imports are beverages, plastic and machinery parts. New York and New Jersey is No. 3 nationally for the total volume of exports, the highest on the East Coast, behind the West Coast ports of Long Beach and Los Angeles.

2. Ports of Tacoma and Seattle

The Port of Seattle and the Port of Tacoma—both located in Washington State and jointly operated by the Northwest Seaport Alliance (NWSA)—is the fourth-largest container gateway. The NWSA, by way of the Port of Seattle and the Port of Tacoma, also ships bulk, breakbulk, project/heavy-lift cargos and vehicles. These ports provide a gateway for major distribution points in the Midwest, Ohio Valley and East Coast.

The NWSA is also a key trade partner with Asia. International trade generated was worth $75.3 billion in 2017. Domestic trade, which includes routes through Puget Sound on the way to Alaska, generated $5.4 billion in 2015, according to the NWSA. The No. 1 gateway for refrigerated exports, the NWSA ports helped generate more than $4.3 billion in revenue for Washington State.

3. Port of Los Angeles

The Port of Los Angeles isn’t quite located in the city of Los Angeles but is 25 miles south in the San Pedro Bay. Nonetheless, the Port of LA is the No. 1 container port in the U.S. in terms of cargo volume going in and out of the port. It includes 7,500 acres of land and 43 miles of waterfront. The Port of LA has passenger and cargo terminals that accommodate containers, cruise lines, automobiles, dry and liquid bulk, breakbulk and warehouse stage space.

Also, the No. 1 container port in the Western Hemisphere since 2000, the Port of LA moved more than 9.5 million twenty-foot equivalent units (TEUs) in 2019. The port is currently undergoing a $2.6 billion infrastructural redevelopment project to strengthen its economic arm and cargo efficiency. The gateway for trade with Asia has a diverse array of exports ranging from avocados and zinc.

4. Port of Long Beach

The Port of Long Beach is the No. 2 busiest container seaport in the U.S., which is fitting because it operates in concert with its numero uno neighbor the Port of Los Angeles. Long Beach’s port supports one in five jobs in its city and contributes to $200 billion in trade annually. The port handled more than 8 million TEUs in 2018, its busiest year. Its Middle Harbor Redevelopment Project is pioneering sustainable practices through a 10-year construction program. It will redevelop two older terminals to create a more advanced, greener container terminal.

A western gateway to Asia, the port has more than 90 percent of its shipments bound for East Asian countries. The Port of Long Beach boasts 3,520 acres of land, 4,600 acres of water, 10 piers, 62 berths and 68 post-Panamax gantry cranes. It also handles 82.3 million metric tons of cargo per year.

5. Port of Houston

Houston might not be the first city that comes to mind when you think “international city,” yet the Gulf Coast location serves as a gateway to various countries. That explains why its port is built for international trade—to the point that it’s the No. 1 U.S. port in total foreign waterborne tonnage, with imports and exports combined.

The Port of Houston contributes 20 percent of the GDP for the state of Texas, worth $339 billion. With 69 percent of all U.S. Gulf Coast container traffic, the Port of Houston is the largest container port. It also prioritizes air quality in the local region through the use of alternative fuels and low-emission equipment and vehicles.

6. South Carolina Ports

Here are two winning statistics: the South Carolina Ports boast more crane moves per hour than any other U.S. port (37), and it also exported more than 194,000 vehicles in 2019. Opened in 1942, the South Carolina Ports Authority consists of public maritime terminals at the Port of Charleston, the Port of Georgetown, and inland ports in Dillion and Greer.

Deep channels accommodate vessels up to 48 feet, and ships are two hours sailing distance from open ocean to South Carolina Ports. Turnaround times for trucks at the gates are 23 minutes with nine minutes at the interchange gate. Transportation is also amenable with interstate access within two miles of all South Carolina Ports, and rail access through CSX and Norfolk Southern railroads.

7. Port of Oakland

The Port of Oakland waters are 50 feet deep to accommodate vessels that hold capacities of up to 18,000 TEUs. This up-and-coming port has transportation partners that include Union Pacific and BNSF Railway. International accounts for 92 percent of the port’s trade, with 78 percent being with Asia, 11 percent with Europe and 2 percent apiece with Australia/New Zealand and Oceania and other foreign countries. The Port of Oakland is one of the three major container ports in California that account for more than 50 percent of total U.S. cargo volume.

The port contributes to more than 73,000 jobs in the Oakland region, and more than 827,000 in the United States. Growth With Care, a five-year growth plan the port released in 2018, aims to bring in more business, with a goal of 2.6 million TEUs and an 8 percent increase in containerized cargo volume by 2022. Investing in large projects and focusing more on sustainable practices throughout the port are also part of the growth plan.

8. PortMiami

The Port of Miami (a.k.a. PortMiami) is the U.S. container port that is closest to the Panama Canal. It provides global access to Florida and much of the rest of the United States. It’s also the closest East Coast port to Mexico.

More than $1 billion was invested in 2019 to make PortMiami even more accessible globally. It has a deeper dredge to welcome large cargo vessels, and on-port rail provides alternative transportation. The port also has an underwater tunnel that connects to the interstate to keep port traffic off of the highway. PortMiami is located strategically at the nexus of north-south and east-west trade lines.

9. Port of South Louisiana

This 54-mile long port sits at the intersection of the Gulf of Mexico and the Mississippi River, which provides easy distribution for products at the domestic and international levels. The Port of Louisiana has three main interstates that connect to the port. It is also served by six major gas and oil lines, transporting more than 1.1 million barrels of crude oil per day.

In 2019, the Port of Louisiana had 3,495 calls from oceangoing vessels, and 54,921 barge calls. The total throughput for the year totaled more than 258 million tons of cargo through vessels and barges. Port of South Louisiana’s Foreign Trade Zone 124 was ranked No. 1 by Merchandise Magazine based on admitted products worth $51.8 billion. The port, which is also ranked No. 1 domestically for total throughput tonnage, boasts the largest grain port in America. Air cargo is accessible through the Louis Armstrong International Airport.

10. Port of Corpus Christi

Operating since 1926, this 36-mile Texas port provides a 47-foot deep channel for domestic and international trade. It provides access through rail and road, connecting to two major interstate highways (37 and 181) and three railroads (BNSF, Kansas City Southern and Union Pacific). It is the third-largest port domestically and No. 2 for crude oil exports.

With a warm climate that allows for easy operation year-round, the Port of Corpus Christi is also a part of the Intracoastal Waterway that stretches from Brownville, Texas, to Boston, Massachusetts, along the Atlantic Coast. The port also implements renewable energy practices by using wind energy for breakbulk and heavy-lift cargo.

11. Port of Mobile

The Port of Mobile carries more than $22.4 billion in economic value to Alabama. The only deepwater port in the state, it sits on the Mobile River. It houses 5 million square feet of warehouse and open-yard space and has a channel depth of 45 feet. Its tonnage in 2018 totaled 26.8 million tons.

Major imports for the Port of Mobile include heavy lift and oversized cargo, containers, coal, aluminum, iron and steel. Major exports include heavy lift and oversized cargo, containers, coal, lumber, and plywood. The port has 1,500 miles of inland and Intracoastal waterways. It serves the Gulf of Mexico, the Ohio and Tennessee river valleys and the Great Lakes. It is owned and operated by the Alabama State Port Authority.

12. Port of Greater Baton Rouge

The Port of Greater Baton Rouge sits where the Mississippi River and Gulf Intercoastal Waterway converge. Its 45-foot shipping channel is upheld by the U.S. Army Corps of Engineers. This port also offers access to intermodal transportation via connections to interstate highways.

The Midwest and other U.S. regions can be accessed through the Port of Baton Rouge’s 15,000 miles of inland waterways. The port also provides access to the Gulf of Mexico, Latin America and the Panama Canal. Its bulk and breakbulk cargo include asphalt, aggregates, limestone, barite, carbon black, coal and coffee.

13. Port of Plaquemines

Twenty miles south of the Port of New Orleans (and also in Louisiana) is the Port of Plaquemines, which boasts of more than 100 miles of deep-draft access, with a minimum of 45 feet. It’s within the same Plaquemines Parish where you will find the unincorporated community of Venice, which supports oil and gas tonnage. Venice has pipelines, petroleum infrastructure and draft wharfage with both deep and shallow water to support vessels carrying oil supply.

The Port of Plaquemines, which can be accessed by 33 U.S. states, has annual tonnage exceeding 55 million tons. Popular imports include coke, carbon black feedstock, crude and fuel oil. Exports include coal, grain-corn, soybean and wheat.

14. Port of Metropolitan St. Louis

That is how the city of St. Louis, Missouri’s port authority refers to the important trade hub in the Midwest. The 70-mile port is the second-largest inland port in the U.S. Its cargoes include grain, coal, chemicals, and petroleum products.

Metro St. Louis is also the 17th largest port in the U.S., with an intermodal transportation system that includes six Class One railroads, seven interstates, and two international airports. It has access to two foreign trade zones and contributes to thousands of jobs in Missouri and Illinois. The Port of Metropolitan St. Louis ships more than 36 tons of freight annually. It has 16 public terminals and more than 130 piers, wharves, docks, and fleeting.

15. Port of Portland

Oregon’s Port of Portland may be on the West Coast, but it is a central trade hub for the Midwest, having shipped more than 4 million tons of grain worldwide in 2017. It has been an auto gateway since 1953, importing and exporting vehicles manufactured by Ford, Toyota, Hyundai and Honda. More than 300,000 automobiles were imported or exported through the Port of Portland’s terminals in 2019.

This port’s intermodal transportation includes rail and interstate highways. With three airports, four terminals, and five business parks, the Port of Portland has also helped generate more than $6.4 billion a year for the region. It has also helped spur the creation of 27,000 jobs and contributes to more than $1.8 billion in wages.

16. Port of Pascagoula

More than 32 million tons of cargo pass through this Southeastern Mississippi port each year. The Port of Pascagoula is Mississippi’s largest seaport. This port provides easy access for shipment through the Gulf of Mexico. Shipping lanes can be accessed within two hours from open ocean, and the channels are 42 feet deep.

The Port of Pascagoula is operated by the Jackson County Port Authority. Popular imports are forest products, crude oil, and chemicals. Exports are forest products, paper products, petroleum products, chemicals and project cargo. It ranks No. 23 in total trade—domestic plus international—with a volume of 27 million tons in 2018, according to statistics from the U.S. Army Corps of Engineers.

Each of these ports fulfills different factors that help them to successfully function in their respective regions. Whether it’s the depth of the channels to allow for varying size ships to dock or easy access to transportation, these ports help to facilitate domestic and international trade. In turn, they help spur the creation of jobs and stronger local, state and national economies. Overall, these ports are helping to shape the United States economy for the better—one import, one export, at a time.

ocean

An Ocean of Potential in the Blue Economy

The Blue Economy

The ocean has always been an essential part of life on this blue planet. Oceans cover over 70 percent of the Earth’s surface and contain 97 percent of the world’s water. We rely on its resources to sustain and improve our lives.

The World Bank created a definition for this “blue economy” that encompasses “sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health.”

Economic activities associated with the ocean include traditional sectors such as commercial fishing, coastal tourism and maritime transport to support global commerce. Increasingly, the ocean has been tapped for energy sources and generation of off-shore renewable energies like wind and tidal energy. Marine life is explored for applications to pharmaceuticals, desalination offers an opportunity to meet demand for freshwater, and the ocean can be used for carbon sequestration to mitigate climate impacts.

World Bank Definition of Blue Economy

Vital to Livelihoods and Growth

In one form or another, trade in ocean resources contributes between $3-6 trillion to global GDP, supporting the livelihoods of over 3 billion people on the planet.

Recognizing the importance of measuring the economic impact of the ocean, the Bureau of Economic Analysis (BEA) partnered with the National Oceanic and Atmospheric Association (NOAA) in 2019 to develop prototype statistics to measure the ocean’s contribution to the U.S. economy. From aquaculture to shipbuilding, offshore mining and power generation, marine-related activities contributed some $373 billion to U.S. GDP in 2018.

Tourism and recreation generated the most, bringing in just shy of $143 billion in wages, profits, and tax revenue for coastal communities in the U.S. in 2018. The new data also showed that between 2014 and 2018, the American blue economy grew faster than the overall U.S. economy.

SOURCE: U.S. Bureau of Economic Analysis

U.S. Ocean Economy

value added by activity in 2018 (millions of dollars)

Tourism and recreation – 38%

National defense and public administration – 33%

Living marine resources – 3%

Marine transportation – 1%

Offshore minerals and utilities – 15%

Deeper Dive into the Ocean Economy

Fisheries and Aquaculture

The ocean delivers a vital and primary source of protein in the diets of over 3 billion people. Marine fisheries employ over 200 million people either directly or indirectly. Expanded global availability of refrigerated storage and transportation has extended access to all kinds of fresh fish.

Overfishing, exacerbated by heavy government subsidies, has become a key concern, putting nearly 90 percent of the world’s fish stocks are at risk. Both the UN and the WTO have made removing these subsidies a priority to help protect vulnerable coastal communities who rely on fish for their own consumption and the local economy.

One-half of all fish we eat is farmed rather than captured. Aquaculture is the fastest growing food sector in the world. China produces a huge amount of the world’s farmed fish and is the top producer by value of carp, tilapia, catfish, shrimp, oysters and many other types. Norway leads in salmon, trout and smelt with Chile a close second.

Tourism

Tourism has long been vital to many coastal economies. Overall, tourism employs 1 out of every 11 people around the world. It is fast becoming one of the world’s biggest industries, making up 10 percent of global GDP. International tourism is an invisible export. Visitors spend money on transportation, housing and entertainment using income earned in their home country.

From scuba diving and surfing to cruises and all-inclusive beach resorts, coastal tourism comes in many flavors. It is particularly important for less-developed nations, as it creates jobs, promotes economic growth, and brings in money that is spent in local businesses like restaurants, shops, and tour services.

Tourism is the economic lifeblood of many Least Developed Countries and small island developing states such as those in the Caribbean and southeast Asia that collectively host 41 million visitors visit every year. These states are focused on delivering services to bring in more tourists while preserving the natural beauty and resources that attract visitors to their islands.

Shipping

Over 80 percent of goods traded internationally such as raw materials, food, consumer goods, and energy products were transported by sea in 2015. Despite reaching a record high of 11 billion tonnes shipped that year, world maritime trade growth decelerated to 2.7 percent in 2018, below the historical average of 3.0, reflecting a range of risks that intensified at the time including global trade tensions, protectionism, and the ‘Brexit’ decision.

Issues surrounding maritime transport are often intertwined with other global economic, environmental and political trends. Security conflicts occur over country ownership of key shipping routes and global discussions are active over the environmental impacts of fuel-guzzling container ships.

The world’s ports can often act as a weather vane for the economy as a whole. Dockworkers feel the effects of tariffs, disasters, and other trade policy changes before farmers, truckers, distributors and retailers do. Effects of the recent U.S.-China trade war and of the COVID-19 pandemic were experienced by dockers who saw the vast reductions in imports before the economic effects rippled throughout the economy.

As supply chains continue to shift and we watch for reshoring, the maritime transport sector may start to look different over the next few years, but will undoubtedly remain an essential part of the global economy.

Stats how we rely on the ocean

Preserving Our Oceans

Sustainability is a key aspect of the blue economy. Although there is an emphasis on environmental stewardship and protection in all parts of the, nowhere is this more apparent than when it comes to our oceans, a finite and critical resource.

Overfishing or pollution could deplete fish stocks and cause a severe food crisis. Environmental degradation caused by the tourism industry could ruin the economies of coastal communities. Waste and pollution from shipping could cause accumulated damage to our air and water.

According to Conservation International eight million metric tonnes of plastic is dumped into the ocean every year. At this rate, by 2050, plastic would outweigh fish in the ocean. Other concerns cited include the runoff of harmful nutrients from agriculture into the ocean, warming temperatures that are bleaching and destroying coral reefs, and even noise pollution from shipping that is killing creatures such as jellyfish.

International governmental cooperation and advances in technology can combat these problems. Conservation and sustainable use form one of the five pillars used by the United Nations Conference on Trade and Development (UNCTAD) as part of their Ocean’s Economy and Trade Strategy project. This effort aims to mitigate damage while maintaining the important economic benefits of the blue economy that supports billions of people.

It seems no aspect of economic life has been spared disruption from the COVID-19 pandemic, including many parts of the blue economy and related livelihoods. UNCTAD released a report to chart the waters of re-opening the blue economy to become more resilient post-pandemic. It proposes enhanced coordination and communication between fisheries and distributors to cut down on food waste, exercising restraint in sanitary protectionism, and closely monitoring shipping to prevent bottlenecks and delays. UNCTAD also suggests removing fishing subsidies to tackle wasteful overfishing; developing a “2.0 approach” to coastal tourism that showcases local sustainability efforts; and digitizing maritime trade procedures to achieve efficiencies and reduce CO2 emissions.

Untapped Potential

There is still a lot we don’t know about the world’s oceans, so embracing science and discovery will play an important role as we continue to draw on its precious resources and develop new markets. Untapped economic potential includes the capture of carbon, supporting the existence of a rich oceanic biodiversity, waste disposal, and the protection of coasts.

The blue economy is as diverse as its land-based counterpart – perhaps even more so. Sustainability will continue to be extremely important both for its own sake and for the preservation of the resources we rely on every day. With careful stewardship, the blue economy can continue to support billions of people and enrich all of our lives.

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Alice Calder received her MA in Applied Economics at GMU. Originally from the UK, where she received her BA in Philosophy and Political Economy from the University of Exeter, living and working internationally sparked her interest in trade issues as well as the intersection of economics and culture.

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

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.”

Globe Tracker

Globe Tracker & SeaCube for One Network Express IoT Gensets

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

“The growing demand for greater tracking, transparency, security, diagnostics and asset fleet management using smart technology will continue to be a key driver for leased solutions. By partnering with Globe Tracker, we will continue to enhance our leading-edge technology solutions and expand our commitment to the intermodal industry by providing smart asset technology leased products,” said Greg Tuthill, Chief Commercial Officer at SeaCube.
At the center of the development of the solution remains increasing visibility with smarter tracking abilities, specifically impacting reefer fleets. The anticipated kickoff of full operations is currently scheduled for mid-September through the end of 2019.
“We are extremely pleased to be working with SeaCube in providing this best-in-class genset solution to ONE. In genset telematics, we are the only provider integrated into the micro-controller of 2 out of the 3 leading brands in North America. This provides ONE with the most robust amount of data and assists in setting maintenance intervals, reducing maintenance costs, extending asset life, monitoring fuel consumption and having full operational visibility of their genset assets,” notes John Harnett, Senior Director Marine and Intermodal at Globe Tracker.

Kuehne + Nagel’s Sea Explorer Platform Extension Streamlines Operations

Kuehne + Nagel, a global leader in supply chain solutions, announced the expansion of its ocean freight platform Sea Explorer, a digitally rooted service network that bridges the gap between more than 1,200 international ports using its advanced algorithm. Expansion efforts will come in the form of adding capabilities with service connections and transshipments. It was reported that more than 63,000 port pairs and key inland locations across the globe are connected to weekly services or transshipment options.

“This extension takes Sea Explorer to the next level and complements Kuehne and Nagel’s intelligent sea freight offering; it is the smart platform for all liner services in container shipping,” says Otto Schacht, member of the Managing Board of Kuehne + Nagel International AG. “With powerful features, like comparing realistic lead times for direct services and an intuitive navigation, customers will be able to unlock new opportunities for their day-to-day operations.”

This marks the first time a platform provides full visibility on CO2 emissions across carrier and individual services, according to Schacht. “Also, in the light of the upcoming IMO 2020 regulations, this will enable shippers to contribute toward a green economy and sustainable global maritime transportation,” he adds. “Kuehne and Nagel leverages big data technology capabilities and information from the operational system to grant unique insights to sea transport options.”

Kuehne + Nagel’s innovative platform is a prime example of taking proactive measures to understanding market demands while tuning in to competitor strategies. These measures are critical to maintaining the competitive advantage while providing expert solutions.

Utilizing digitization–effectively and wisely–can determine how satisfied your customer base will be at the end of the day. Longevity serves as another benefit to digitization. No company wants to lose customers due to antiquated methods that create additional roadblocks. Digital solutions come with a priceless advantage: time savings.

Automation Changing the Pace for Shipping Operations

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.

Ocean Logistics 2019: Digitization Continues to Lead Trends

Ocean logistics in 2019 are demanding advanced, comprehensive and reliable information to cohesively support logistics needs, especially in an era when technology solutions are becoming the standard to successful operations. The continuation of digitization is a trend that industry players are not only prepared for this year but eagerly anticipating and implementing with each new solution that presents itself. Digitization continues to make its mark in the logistics and supply chain management sectors as a whole, but when it comes to ocean logistics specifically, the stakes are higher, and the solutions require careful consideration before a hasty implementation occurs.

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 automated process 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.”

Leading companies, such as global shipping lines leader Maersk, continue to make strides to eliminate manual processes and replace them with seamless management systems that remove time-consuming and error-prone tasks, specifically with administration. Consider implementing strategies that support refreshed approaches to operations.

Global Ports and Proactivity

Beyond proactivity and preparation, global ports focus on redefining infrastructure while evaluating opportunities for significant increases in cargo intake. But what about the ports that aren’t seeing the results they want? Let’s take a look at the European Ports and the challenges and proposed solutions featured in an article from Port Strategy. Of all the solutions presented and discussed, the first was the need of infrastructure evaluation.

“The challenge ports everywhere face now, is to implement projects which often are financially unattractive to the port authority and even less attractive to external investors, but which are essential for wider societal and economic reasons. Some ports are financially strong enough to finance such projects and accept the low financial returns. Other ports are challenged to implement projects which are essential but are entirely beyond their means,” details a report shared by the ESPO.

Another challenge is the demand for increased cargo but a limit in capacity, as many ports claim they are close to reaching max capacity, but want to avoid providing an opportunity for competitors to swoop up what they can’t make room for. Gauging these issues requires a carefully thought out and strategic approach to ensure shippers evaluate next steps for 2019. In the theme of modernization, Port of Oakland shared insight into their 2018-2022 strategic plan, which is inclusive of growing net revenue, modernizing and maintaining infrastructure, care for the environment and improving customer service.

The use of technology to streamline operations was one of the highlighted objectives and strategies (impacting almost every area of the business) the report emphasized on. In the age of information technology, automation and technology solutions, this goal would provide more than just a seamless flow of information, but supply owners, customers and employees improved efficiencies and reduced room for error. There seems to be a trend among these ports.

“Each of our businesses has specific modernization and maintenance objectives to meet, notably development of long-term asset management plans. Moreover, those objectives require careful attention to environmental, social responsibility and human resources issues,” the report says.

The key to implementing strong logistics solution can be found in an all-in-one approach that is inclusive of your company goals and vision, the well being and safety of your employees, customer satisfaction, competitive advantage as well as cost-effectiveness and proactivity. The common denominator is found in digitization through advanced technology solutions, fully integrated within the service platforms, touching on all bases of the operations and supply chain.