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Germany’s Production of Potato Starch Is Continuously Decreasing Due to Exports Contraction

potato starch

Germany’s Production of Potato Starch Is Continuously Decreasing Due to Exports Contraction

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

Production in Germany

Potato starch production in Germany stood at 345K tonnes in 2018, coming down by -6.7% against the previous year. Overall, potato starch production continues to indicate a significant contraction. The most prominent rate of growth was recorded in 2014 when production volume increased by 7.2% year-to-year. Potato starch production peaked at 464K tonnes in 2009; however, from 2010 to 2018, production failed to regain its momentum.

In value terms, potato starch production totaled $229M in 2018 estimated in export prices. In general, potato starch production continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011 with an increase of 39% against the previous year. In that year, potato starch production reached its peak level of $302M. From 2012 to 2018, potato starch production growth remained at a lower figure.

Exports from Germany

In 2018, the amount of potato starch exported from Germany amounted to 263K tonnes, declining by -6.5% against the previous year. Over the period under review, potato starch exports continue to indicate a deep contraction. The pace of growth appeared the most rapid in 2012 with an increase of 39% y-o-y. Exports peaked at 406K tonnes in 2009; however, from 2010 to 2018, exports remained at a lower figure.

In value terms, potato starch exports totaled $206M (IndexBox estimates) in 2018. Over the period under review, potato starch exports continue to indicate a slight curtailment. The growth pace was the most rapid in 2011 with an increase of 17% against the previous year. Over the period under review, potato starch exports reached their maximum at $288M in 2012; however, from 2013 to 2018, exports stood at a somewhat lower figure.

Exports by Country

The Netherlands (48K tonnes), South Korea (41K tonnes) and the U.S. (19K tonnes) were the main destinations of potato starch exports from Germany, with a combined 41% share of total exports. Malaysia, China, Italy, Japan, the UK, Thailand, China, Hong Kong SAR, the Philippines and Spain lagged somewhat behind, together comprising a further 33%.

From 2009 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Malaysia, while the other leaders experienced more modest paces of growth.

In value terms, the Netherlands ($36M), South Korea ($34M) and the U.S. ($19M) were the largest markets for potato starch exported from Germany worldwide, together comprising 44% of total exports. These countries were followed by the UK, Japan, Italy, Malaysia, China, Thailand, the Philippines, Spain and China, Hong Kong SAR, which together accounted for a further 30%.

Japan recorded the highest growth rate of exports, among the main countries of destination over the last nine-year period, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average potato starch export price stood at $782 per tonne in 2018, increasing by 8.4% against the previous year. Over the period under review, the export price indicated noticeable growth from 2009 to 2018: its price increased at an average annual rate of +3.9% over the last nine years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, potato starch export price increased by +20.3% against 2015 indices. The most prominent rate of growth was recorded in 2011 an increase of 78% year-to-year. In that year, the average export prices for potato starch attained their peak level of $968 per tonne. From 2012 to 2018, the growth in terms of the average export prices for potato starch failed to regain its momentum.

Prices varied noticeably by the country of destination; the country with the highest price was the U.S. ($996 per tonne), while the average price for exports to China ($520 per tonne) was amongst the lowest.

From 2009 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to Spain, while the prices for the other major destinations experienced more modest paces of growth.

Imports into Germany

In 2018, the amount of potato starch imported into Germany amounted to 70K tonnes, growing by 40% against the previous year. In general, potato starch imports continue to indicate a remarkable expansion. The most prominent rate of growth was recorded in 2018 when imports increased by 40% y-o-y. In that year, potato starch imports attained their peak and are likely to continue its growth in the immediate term.

In value terms, potato starch imports stood at $49M (IndexBox estimates) in 2018. Over the period under review, potato starch imports continue to indicate a remarkable increase. The pace of growth appeared the most rapid in 2011 when imports increased by 95% year-to-year. Imports peaked in 2018 and are expected to retain its growth in the immediate term.

Imports by Country

France (25K tonnes), Denmark (15K tonnes) and the Netherlands (12K tonnes) were the main suppliers of potato starch imports to Germany, together accounting for 74% of total imports. Poland, Austria, Finland and Belgium lagged somewhat behind, together comprising a further 24%.

From 2009 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Poland (+57.6% per year), while the other leaders experienced more modest paces of growth.

In value terms, France ($15M), Denmark ($11M) and the Netherlands ($9.4M) were the largest potato starch suppliers to Germany, together comprising 72% of total imports. Poland, Austria, Finland and Belgium lagged somewhat behind, together accounting for a further 26%.

Among the main suppliers, Poland (+53.4% per year) recorded the highest growth rate of imports, over the last nine-year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the average potato starch import price amounted to $704 per tonne, surging by 2.9% against the previous year. In general, the potato starch import price, however, continues to indicate a slight shrinkage. The growth pace was the most rapid in 2011 when the average import price increased by 84% against the previous year. In that year, the average import prices for potato starch attained their peak level of $940 per tonne. From 2012 to 2018, the growth in terms of the average import prices for potato starch failed to regain its momentum.

Prices varied noticeably by the country of origin; the country with the highest price was Poland ($863 per tonne), while the price for Belgium ($563 per tonne) was amongst the lowest.

From 2009 to 2018, the most notable rate of growth in terms of prices was attained by France, while the prices for the other major suppliers experienced a decline.

Source: IndexBox AI Platform

carousel

CAROUSEL RETALIATION: TARIFF UNCERTAINTY ON ANOTHER RIDE

The Ride Music Starts

On October 2, a World Trade Organization (WTO) arbitrator rendered a decision that authorizes the United States to apply retaliatory tariffs on as much as $7.5 billion worth of European exports each year until WTO-illegal European subsidies to its aircraft industry are removed.

In a press release issued that day, the U.S. Trade Representative (USTR) announced that beginning October 18, the United States would apply WTO-approved tariffs on a list of EU products. The list includes 10 percent duties on civil aircraft, but also 25 percent duties on goods we consume directly including butter, various cheeses, clementines, clams, green olives and single-malt Irish and Scotch Whiskies.

Before their next cocktail party, U.S. shoppers might stock up to beat the tariffs, but they may not want to go overboard buying Parmigiano Reggiano. That’s because the Administration is reportedly considering what is known as “carousel” retaliation – a regular rotation of goods targeted for tariffs, designed to impose maximum pain. The United States and Europe have been on this ride before.

Theme Park Rules

In a trade dispute, the parties first enter into consultations. If they are unable to come to an agreement, the complainant may request a WTO panel to review the dispute. Once the panel issues a report, the WTO Dispute Settlement Body (DSB) will adopt it, unless a party appeals it or all DSB members vote against adoption.

If there is an appeal, the Appellate Body reviews the case and delivers its findings, together with the panel report as modified by the appeal, to the DSB. If the complaining party wins, the losing party is given a “reasonable” period of time to implement the decision. The original panel may be called upon to determine if the losing party implemented the ruling in the agreed timeframe. If not, there are two alternatives for the party bringing the case: seek compensation or retaliate. In the latter case, the complainant estimates its loss, the losing party can seek arbitration on the level, and the DSB authorizes the final amount.

Such countermeasures should be “equivalent” to the injury caused and “related to” the economic sector of the illegal measure, with the goal to induce the removal of the offending measure. Often the offending party will, in fact, withdraw the measure before the imposition of authorized retaliatory measures.

US wins 7.5 billion dispute against EU on Airbus illegal subsidies

Beef and Bananas – How Carousel Started

In some cases, applying tariffs on imports isn’t enough to induce compliance. When the United States, Ecuador, Honduras, Guatemala and Mexico won their case in the WTO challenging the legality of Europe’s banana import policy, the European Union (EU) failed to comply with the ruling, even in the face of nearly $200 million in U.S. tariffs.

U.S. banana exporters, increasingly frustrated with the EU’s lack of compliance with the WTO ruling, looked to Congress to enact a new tool to increase the pressure. They found allies in U.S. livestock exporters, who had won a WTO case that a European ban on U.S. imports of meat produced with hormones was inconsistent with the EU’s WTO obligations. As with the banana case, the EU had employed delaying tactics to stall implementation of the panel decision against it.

Riding a New Horse

Two months after USTR imposed retaliatory tariffs in the beef hormone dispute, a group of Senators introduced S.1619, the Carousel Retaliation Act of 1999. Proposed as an amendment to Section 301 of the Trade Act of 1974, its provisions would have required USTR to “carousel” or rotate its product retaliation list when an offending country does not implement a WTO decision. More specifically, USTR was to rotate items 120 days after the first retaliation list and every 180 days thereafter, with the ability to opt not to do so if compliance is imminent or rotation is deemed unnecessary. The bill language ultimately became part of the Trade and Development Act of 2000.

While banana and meat producers were supportive, other industries were not. Some argued that frequently rotating the products subjects to tariffs would be challenging for retailers. The EU contended the method was WTO inconsistent, though the WTO never ruled on the matter.

USTR ultimately did not pull the trigger to rotate its retaliatory tariff list in either the banana or beef cases as the matters got bound up in a separate dispute over U.S. tax benefits for foreign sales corporations (FSC). The EU had previously won a case against FSC and the U.S. amended its law in November 2000 in response. The EU challenged whether that revision brought the measure into WTO compliance. The United States and EU agreed informally that the EU would not pursue sanctions in the FSC case, but if the United States revised its product lists under the carousel provisions, all bets were off. Ultimately, the WTO ruled the revised U.S. law was not compliant, the United States lost its appeal, and the issue was not resolved until five years later.

Others Get on the Ride

The United States develops retaliation lists with an eye to maximizing pain on the trading partner that committed the foul, while trying to minimize the inevitable adverse impact on its own consumers and firms. Mexico has adeptly turned this practice against the United States in response to practices it viewed as inconsistent with WTO or NAFTA obligations.

NAFTA provisions governing retaliation state that an injured party should first “seek to suspend benefits in the same sector” as that covered by the restrictive measure. If it is not practical or effective to suspend benefits in the same sector, the injured party “may suspend benefits in other sectors.”

During the original NAFTA negotiations, the United States and Mexico agreed to phase out restrictions on cross-border passenger and cargo services. In 1995, however, the United States announced it would not lift restrictions on Mexican trucks and, in 2001, a NAFTA dispute panel found the U.S. to be in breach of its obligations. After years of negotiation and a false start with a U.S. pilot program, Mexico retaliated in 2009 on more than $2 billion worth of U.S. goods.

Mexico used a carousel approach, rotating different products on and off the retaliation list. The first list of 89 products went into effect in March 2009. The list was revised in August 2010, by removing 16 of the listed products and adding 26 more, bringing the total number of products on the updated list to 99. Through this method, Mexico was able to target key pain points, leading the U.S. to institute another pilot program in 2011, and Mexico to remove its tariffs.

More recently, when the Trump Administration moved forward with 25 percent tariffs on Mexican steel imports and 10 percent tariffs on Mexican aluminum imports in June 2018, Mexico responded with retaliatory tariffs on $2.7 billion of U.S. goods that included various steel products but also pork legs, apples, cheese and other agricultural products that had seen significant growth in export value and market share in Mexico.

In March 2019, Mexico’s Deputy Economy Minister Luz Maria de la Mora stated that if the United States did not repeal the tariffs, her government would have an updated list in its “carousel” of U.S. targets ready in about two months, noting that Mexico would bring in some new products and remove others. In early May, she announced the revised list was ready and under final review, but the United States agreed in mid-May to remove its tariffs, hoping to boost the chances of ratification of the U.S.-Mexico-Canada (USMCA) agreement.

Round and Round We Go

Perhaps symbolic of the differences that the United States and Europe are trying to bridge, in America carousels turn counterclockwise and in England and much of Europe, they rotate clockwise.

Some observers see the recently announced U.S. retaliation list against the EU as more restrained than expected. Tariff rates of 100 percent had been possible and some of the announced exemptions were not anticipated. We’ll soon know more about the Trump Administration’s thinking on a carousel approach and how the Europeans will respond. There are no height restrictions to get on this tariff retaliation ride, but riders may need to buckle up.

__________________________________________________________________

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. Republished with permission.

USMCA

THESE COMPANIES KEEP CROSS-BORDER CARGO MOVING, EVEN WITH USMCA UP IN THE AIR

Our trilateral trade bloc is in a sort of limbo, stuck between the North American Free Trade Agreement (NAFTA) that went into effect on Jan. 1, 1994, and the floundering United States Mexico Canada Agreement (USMCA), which the countries’ leaders signed on Nov. 30, 2018, but has only been ratified in Mexico.

According to the U.S. Chamber of Commerce, which has pushed for more ease of free trade among the three nations for years, about $1.7 billion worth of goods and services flow between the U.S. and Mexico borders every day. That’s about 2 percent of the GDP in America, where, according to the United Nations’ International Trade Center, Mexico and Canada are the two largest trading partners for U.S. manufacturers and shippers after China.

Despite these uncertain times, there are North American cross-border traders that continue to thrive. Consider the collection that follows. 

AVERITT EXPRESS

One of the nation’s leading freight transportation and supply chain management providers, Averitt is celebrating 50 years of service. The company cites customized, cross-border transportation solutions among its many, many specialties. Five years ago, Averitt slashed less-than-truckload (LTL) service times from the U.S. Midwest to Ontario, Canada, in recognition of the province’s rise as a manufacturing hub. Averitt’s strategically placed border service centers in Laredo, El Paso, Harlingen and Del Rio provide easy access to all points throughout Mexico, by rail, truck or expedited air. 

BNSF RAILWAY

One of North America’s leading freight transportation companies, BNSF boasts a.32,500 route-mile network covering 28 U.S. states and three Canadian provinces. The railway utilizes multiple strategies to make international shipments easier for customers. These include market experience, customs clearance know-how and participation in special North American rail service alliances. The BNSF network also includes five U.S.-Mexico gateways (San Diego, El Paso, Eagle Pass, Laredo and Brownsville) and operations in Fort Worth, Texas, and Mexico City, Guadalajara and Monterrey, Mexico. Service options include carload, transload and intermodal (Mexi-Modal) that allow for shipments of all major commodities into and out of Mexico.  

CG RAILWAY

Picture in your head a railroad line extending from the American South to southern Mexico. You can imagine the track snaking along the contour of the Gulf of Mexico, extending west from Alabama through Mississippi and Louisiana before reaching Texas and turning due south through the border and beyond. What you did not picture was a shift from rail at Alabama’s Port of Mobile to an ocean ferry making a direct route over water to Puerto Coatzacoalcos in Veracruz, Mexico. That’s what CG Railway (CGR) has been doing since 2000: providing a faster, more cost-effective route between the eastern U.S. and Canada to central and southern Mexico. CGR offers C-TPAT (Customs Trade Partnership Against Terrorism) certification, bilingual customer support, proactive port security, reduced mileage and wear and tear on equipment and direct interchanges with the CSX, Norfolk Southern, Canadian National and Kansas City Southern railroads, the Alabama & Gulf Coast Railway and Terminal Railway Alabama State Docks and their Mexican counterparts. 

CN NORTH AMERICA

Canadian National is based in Montreal, Quebec, and the Class I freight railway’s network is the largest in that country by physical size and revenue. Established in 1919 and formerly government-owned, Canada’s only transcontinental railway spans from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia, across about 20,400 route miles of track. But you’d be mistaken to think CN, as it has more commonly known since 1960, is strictly a Great White North concern. The railway also serves the U.S. South and Midwest and, having gone private in 1995, it now counts as its single largest shareholder Bill Gates. Through the ’90s and 2000s, CN North America has acquired multiple lines passing through several U.S. states.

CROWLEY

The private, Jacksonville, Florida-based corporation is the largest operator of tugboats and barges in the world. Crowley American Transport provides ocean liner cargo services between the U.S., Canada, Mexico, South America and the Caribbean. Its American Marine Transport unit delivers local, over-the-road, and commercial trucking services in the continental U.S. Crowley Marine Services provides worldwide contract and specialized marine transportation services, including petroleum product transportation and sales, tanker escort and ship assist, contract barge transportation and ocean towing, logistics and support services, marine salvage and emergency response services, spill-response services on the West Coast and all-terrain transportation services.

CSX TRANSPORTATION

The subsidiary of CSX Corp., a Fortune 500 company headquartered in Jacksonville, Florida, CSX Transportation is a Class I freight railroad operating in the eastern United States and the Canadian provinces of Ontario and Quebec. The railroad operates around 21,000 route miles of track. While its lines blanket the east coasts of Canada and the U.S., you don’t have to be located on railroad track for CSX to help you, as it has access to 70 ports and nationwide transloading and warehousing services.

DB SCHENKER 

The global logistics and supply chain management giant has 93 branches in every U.S. state, Mexico and Canada. Schenker of Canada Ltd. provides logistics services, airfreight, custom brokerage, custom consulting, sports events, land transport and courier services. DB Schenker Mexico celebrated its 40th anniversary in 2017, having begun down there with a single location and 40 associates and now boasting of 500 employees in its corporate office in Mexico City as well as in Guadalajara, Monterrey, Queretaro, Puebla, Cancun, Ciudad Juarez and various other branches. DB Schenker Mexico offers air freight, ocean freight, land freight, customs brokerage, over-dimensioned projects, warehousing and contract logistics.

KANSAS CITY SOUTHERN

The KCS North American rail holdings and strategic alliances are primary components of a NAFTA railway system linking the commercial and industrial centers of the U.S., Mexico and Canada. “KCS is just one interchange away from every major market in North America,” boasts the railroad. KC Southern de Mexico offers unique rail access to the Port of Lazaro Cardenas on Mexico’s Pacific coast, which is an ideal spot to avoid congestion in U.S. West Coast ports. KCS also has access to Gulf of Mexico ports, including Altamira, Tampico and Veracruz in Mexico and Brownsville, New Orleans, Corpus Christi, Houston, Gulfport, Lake Charles, Mobile and Port Arthur in the U.S. 

LIVINGSTON INTERNATIONAL

Billed as North America’s No. 1 company focused on customs brokerage and compliance, Livingston International also offers international trade consulting and freight forwarding across the continent and around the globe. Headquartered in Chicago, Livingston operates along the U.S.-Canada border, with regional air/sea hubs in Los Angeles, New York and Norfolk. Livingston employs more than 3,200 employees at more than 125 key border points, seaports, airports and other strategic locations in North America, Europe and the Far East. Livingston is a customs brokerage leader in Canada, and the company also promises to move goods seamlessly into Mexico.

LOGISTICS PLUS

Whether it is working as a 3PL or 4PL partner, the Erie, Pennsylvania-based company specializes in total logistics management, LTL and truckload transportation, rail and intermodal services, project cargo and project management, import/export services, air and ocean freight forwarding, warehousing and distribution, global trade compliance services and logistics and technology solutions. Logistics Plus serves small and large businesses throughout the Greater Toronto Area, with an office in the zone that has access to the Port of Toronto and expertise in shipping in and out of Canada though the St. Lawrence River and Lake Ontario. Bilingual logistics experts help customers with intra-Mexico, cross-border, or international shipping using air, ocean, ground or rail transportation. 

LYNDEN

Seattle-based Lynden not only delivers to, from and within Canada, the company does business there. Its long-established Canadian presence allows it to provide complete coverage for any transportation need. They can help with warehousing and distribution or 3PL in Canada, where Lynden boasts of knowing “the ins and outs of customs brokerage, duties and taxes, imports and exports.” From its offices in Edmonton and Calgary, Alberta, and Whitehorse, Yukon Territory, Lynden offers scheduled less-than-truckload (LTL) and truckload (TL) service to points in Alaska and the Lower 48.

LYNNCO

The Tulsa, Oklahoma-based company optimizes customers’ supply chains coast-to-coast in the U.S., Canada, and Mexico. LynnCo manages businesses and determines how and when ground, international air/ocean, spot/capacity, procurement and expedited services are the best options. For instance, LynnCo helped a U.S. manufacturer determine if shifting units to Mexico was profitable. The answer was no after factoring in the risks of moving, poor facilities, added shipping costs and product quality. 

POLARIS TRANSPORTATION GROUP

Billing itself as “an American company headquartered in Toronto,” Polaris has a quarter century of experience in scheduled LTL service between the U.S. and Canada. The company knows both countries’ customs rules and participates in every border security program, including C-TPAT, PIP (Partners in Protection), CSA (Customs Self- Assessment) and FAST (Free and Secure Trade). The company’s scheduled service connects Ontario and Quebec markets with the U.S. through a combination of its fleet and facilities along with those of its long-established partner carriers.

PUROLATOR INTERNATIONAL

The U.S. subsidiary of Canada’s leading provider of integrated freight and parcel delivery services, Jericho, New York-based Purolator International seamlessly transports shipments between the U.S. and Canada and manages the respective countries’ customs processes with aplomb. They pick up/drop off at every point in the U.S. and boast of a distribution network that extends to every Canadian province and territory. What truly takes Purolator International over the top is a commitment to continue improving, as evidenced by a recent $1 billion growth investment that includes two new hubs that will allow for faster fulfillment for both courier and e-commerce shipments from the U.S. throughout Canada, where consumers also will be seeing more access points, including upgraded retail pickup locations.

R+L GLOBAL

“Shipping to Mexico is facil,” according to Ocala, Florida-based R+L Global Logistics. Its qualified network of premium carriers in Mexico provide secure door-to-door Less than Truckload (LTL) and Full Truckload (FTL) services. They cover the entire Mexican territory and move cargo across all major U.S./Mexico border gateways. They also move intra-Mexico shipments. 

SCHNEIDER

The Green Bay, Wisconsin-based giant specializes in regional trucking, long-haul, bulk, intermodal, supply chain management, brokerage, warehousing, port logistics and transloading. Decades of cross-border freight experience means customer cargo moves without question or delay. Once goods move across the border, Schneider has the assets and personnel in place to deliver it safely and securely. “Here’s the simple fact: No one makes shipping to Canada and Mexico easier or more efficient than Schneider,” the company boasts. “By road or by rail, your freight is in the best hands possible.”

SENKO 

The Japanese logistics giant has offices in the U.S., where their own trucks and warehouses work with a network of vendors. The 3PL/4PL supply chain solutions provider uses its own IT technology developed in Japan to help arrange liquid tank transportation, flatbed, drayage, refrigerated, dry, expedited shipping and freight broker services. Senko Logistics Mexico is the company unit south of the border.

SUNSET TRANSPORTATION

The St. Louis-based company has offices and agents across the country, and customers whose shipments are moved around the globe. Sunset arranges freight for a wide range of industries, from wholesale food distribution to specialized construction equipment. “Cross-border solutions” include customs clearance for land, rail, air and ocean, LTL, TL, intermodal, rail, air, expedited and specialized freight, contracted lane and spot market, C-TPAT compliance, multimodal programs, a Laredo, Texas, warehouse and distribution facility and 24/7 bilingual, bicultural support.

SURGERE 

Headquartered in North Canton, Ohio, Surgere is a leader in linking OEMs, tier suppliers and logistics providers through an automotive data system that provides visibility on returnable containers at every stage of their movement between supplier and vehicle maker. The supply chain innovators, whose clients include Nissan and CEVA Logistics, recently opened Technologias Avanzadas Surgere de Mexico in Aguascalientes, Mexico, which has more than 1,300 suppliers and automotive plants within 200 kilometers of the location. “Central Mexico is the automotive hub for Latin America—making it a natural progression—and a welcomed challenge for us,” explained David Hampton, Surgere’s vice president for International Operations, in announcing the move. Surgere hopes to have the Mexico office fully staffed before the end of this year.

TQL

Cincinnati, Ohio-based Total Quality Logistics (TQL) was founded in 1997 and is now the second-largest freight brokerage firm in the nation, with more than 5,500 employees in 57 offices across the county. Known for combining industry-leading technology and unmatched customer service, TQL boasts of providing competitive pricing, continuous communication and “a commitment to do it right every time.” They move more than 1.6 million loads across the U.S., Canada and Mexico annually through a broad portfolio of logistics services and a network of more than 75,000 carriers.

USA TRUCK

The Van Buren, Arkansas-based company provides customized truckload, dedicated contract carriage, intermodal and third-party logistics freight management services throughout North America. USA Truck has nearly two decades of experience servicing Mexico, which has allowed the company to expand its presence south of the border and partner with many Mexican carriers. USA Truck’s Capacity Solutions coordinates transportation into and out of Mexico with a vast carrier network, and they service most major Mexican markets and consistently maintain C-TPAT certification. USA Truck also has a select fleet of third-party carriers providing service into the provinces of Ontario and Quebec, Canada.

UTXL

Launched in 1997 by four founders with more than 100 years of combined asset-based trucking experience, UTXL started with this goal: to be the safest, most reliable and cost effective niche capacity resource to customers in support of their core carrier programs. UTXL has served thousands of shippers across the U.S., Canada and Mexico, including some of the largest shippers in the world. One of their mottos is: “Any point in the U.S., Canada or Mexico … any length of haul.”

WERNER ENTERPRISES

“We keep America moving” is the motto of this Omaha, Nebraska-based company that has one of the largest transportation services to and from Mexico and is a premiere long-haul carrier to and from Canada and throughout North America. Werner has offices in Mexico and Canada as well as experienced and knowledgeable staff engineer solutions. PAR documentation allows for quicker access through customs into Canada, and their network of alliance carriers can manage entire supply chains within Canada and Mexico regardless of equipment needs.

WW SOLUTIONS

The unit of Wallenius Wilhelmsen Logistics participates in Mexico’s automotive industry not only as a carrier and logistics provider. WW Solutions specializes in processing solutions at ports and at OEM plants, providing services that include pre-delivery inspections, accessory fittings, repairs, storage, washing, vehicle preparation, quality control, inventory management and the procurement of technical services.

YRC FREIGHT

Yellow Transportation (founded in 1924 in Oklahoma City, Oklahoma) merged with Roadway (founded in 1930 in Akron, Ohio) to create YRC Freight, which is the largest subsidiary of YRC Worldwide Inc. based in Overland Park, Kansas. A leading transporter of industrial, commercial and retail goods, YRC Freight offers solutions for businesses across North America and is the only carrier with on-site, bilingual representatives at border crossing points in Mexico to expedite customs clearance.

C-TPAT

C-TPAT DRIVES SUPPLY CHAIN SECURITY AND TRADE COMPLIANCE

In today’s ever-chaining business environment, organizations are faced with ongoing security challenges. It’s crucial for shippers to understand any potential risks to their supply chains and establish security plans to avoid disruption. One significant way for shippers to proactively protect their operations is by becoming a member of the Customs-Trade Partnership Against Terrorism (C-TPAT) program.

Established in 2001, as a direct result of the September 11 terror attacks, the C-TPAT program is part of the U.S. Customs and Border Protection’s (CBP) multi-layered cargo enforcement strategy. Through this voluntary program, the CBP works with the importers, shippers, carriers, brokers and logistics providers to implement best practices for ensuring a safe, secure and expeditious supply chain. Today, there are more than 11,400 certified C-TPAT partners in the program, and these companies account for more than 52 percent of the products imported into the U.S.

C-TPAT Member Benefits

In addition to promoting supply chain security, participating in the C-TPAT program can yield significant benefits for shippers and transportation providers, including:

Fewer customs inspections – C-TPAT certification offers companies the opportunity to decrease customs inspections and documentation reviews. According to the CBP, C-TPAT members are 3.5 times less likely to incur a security or compliance examination. 

Faster border crossings – Members have access to special Free and Secure Trade (FAST) lanes at border crossings, and can move to the front of the line during inspections. This can significantly expedite border crossings at many Canada/Mexico land border ports.

Quick response time – Following a national emergency, companies participating in the C-TPAT program are eligible to resume business first. 

Enhanced reputation – Participating in a national security program reflects a company’s ongoing commitment to safety. Some companies will only do business with importers that are C-TPAT certified–giving members a competitive edge. 

Cost avoidance – By decreasing potential supply chain disruptions, C-TPAT members can avoid costs associated with delayed shipments. Additionally, organizations penalized in any way is eligible to receive up to a 50 percent reduction on the imposed fine. 

Joining C-TPAT

While almost every organization that is involved in the import and export business can enroll in the C-TPAT program, eligibility requirements vary by business type. But to achieve certification, all companies are required to:

-Conduct a risk assessment

-Implement a supply chain security management system that complies with C-TPAT requirements

-Submit a detailed application

 -Meet with CBP representatives to verify security measures

In addition to obtaining their own certification, organizations can support the C-TPAT program by working with third-party logistics (3PL) providers that are also C-TPAT certified. C-TPAT-certified 3PLs act as an additional layer of protection against supply chain attacks, because they operate as an extension of the company’s established security procedures, essentially building a stronger company brand. 

A 3PL with active participation in the Mexican and Canadian markets also brings a portfolio of carriers and companies that are approved by C-TPAT, or that comply with minimum requirements for C-TPAT partners, essentially giving shippers a competitive advantage. 

Addressing Evolving Supply Chain Risks


As supply chain risk continues to evolve, so too do the C-TPAT requirements. In May, the CBP announced that it has added Minimum-Security Criteria (MSC) requirements to the C-TPAT guidelines to help further mitigate risks. Some of the areas that were incorporated and updated in the program’s new criteria included:

-Issues related to cyber security

-Protection of the supply chain from agricultural contaminants and pests

-Prevention of money laundering and terrorism financing

-The proper use and management of security technology, such as intrusion alarms and security camera systems

-Members are expected to implement the new criteria throughout the remainder of 2019, and validation of the new MSC will begin in early 2020.

Support Supply Chain Safety

With security risks threatening supply chains around the globe, it is important for companies to support initiatives that aim to tackle and prevent supply chain risks. By obtaining C-the certification, businesses have the unique opportunity to take an active role in supporting national security while improving their own supply chain operations. 

While there are no costs associated with joining the C-TPAT program, companies often have to invest in improving their practices to meet the minimum-security requirements and effectively maintain a compliant program. However, this investment goes a long way in helping companies mitigate risk, avoid supply chain disruptions and drive greater efficiencies for cross-border transport.  

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Linda Bravo is the Corporate Customs Broker at Transplace, where Sergio Flores is the Safety and Security Coordinator. Transplace is a 3PL provider offering logistics technology and transportation management services to manufacturers, retailers, chemical and consumer packaged goods companies. Learn more at Transplace.com.

Shipping

Five Important Ways to Negotiate Better Shipping Terms

The final price of your product or service depends on a wide range of factors. Shrewd people in business know there is more to making profits than keeping your buying price low and selling price high. Additional business expenses can reduce your final margin. These include shipping, marketing, storage, and a range of legal expenses.

Negotiating a low price from your manufacturers is just the beginning. Supply chain negotiation training seminars can teach you several ways to gain value before your products reach your customers.

The shipping industry can offer you notable savings opportunities. To identify these, you have to have a keen eye. In this article, we look at five ways you can apply negotiation training skills to obtain better shipping rates.

Understand the Shipping Terms

Global trade has thrived on the back of shipping and logistics companies for hundreds of years. As a result, the shipping industry has developed a unique culture and language. Whether you are dealing with local or multinational shipping companies, there is a range of terms that you should know.

Terms such as CIF (Cost, Insurance, and Freight) and FOB (Free on Board) are used freely in the shipping industry. If you are new to the business, you can learn shipping terms by attending a seminar on the essentials. If you don’t understand the industry’s regular terms, you risk making a deal that can be negative for your business. 

Negotiation training seminars can teach you how to prepare before sitting down to make a deal. You can improve your position by researching the industry before meeting companies. Also, you can carry out mock discussions with shipping company agents. This can give you a feel of the language and questions that may come up during a real negotiation.

Research Possible Hidden Costs

One of the things that can diminish your profits is hidden logistics costs. The final price for your products should factor in all the costs you expect to incur before delivery. Talking to the different authorities that can come into contact with your products in transit can clarify your overall costs. Knowing the factors affecting your shipping rates can help you negotiate to reduce hidden costs.

By working closely with your shipping company, you can identify smart ways to cut down your costs. Many companies have different shipping rates based on weight as well as box dimensions. If you use the standard boxes the shipping company provides, you can save a few dollars on each load.

Develop Your Negotiation Strategy

Once you have understood the market and options available, negotiation training can help you plan your strategy. Writing down your strategy and goals can give you an overview of the entire process. The points listed below are some of the elements taught in negotiations seminars that can help to strengthen your strategy.

Budget

Based on your business model, you should have a price you are not willing to go above. Your strategy should include the ideal and maximum price you are willing to offer for the shipping service.

BATNA

A BATNA is your Best Alternative to a Negotiated Agreement. It refers to a set of alternative options you can take if you cannot reach a viable deal in your negotiations. A well-planned BATNA can help you to recognize a bad deal and give you the confidence to walk away.

Timelines

Time constraints can have a significant impact on your negotiations strategy. The earlier you start discussions with shipping companies, the less pressure you will have to close a deal. Beginning your negotiations early can give you more time to reach a mutually beneficial agreement.

The Urgency of Delivery

Your strategy should state how fast you need the products to be delivered once ordered. Same day deliveries often cost more than two or three days of delivery. The delivery time constraints depend on the nature of your products and promises made to your customers.

Payment Terms

Although one-off payment offers come with attractive discounts, they can also be quite risky. Making payments in installments is safer and keeps the shipping company committed until the final payment. Offer well-balanced payment terms that enable your shipping company to deliver your products on time while limiting your financial risk.

Concessions

Well-trained negotiators plan the concessions they are willing to give before discussions begin. In your research, find concessions that can create value for the shipping company and present them in your meeting. The negotiation process can become very challenging if you are too rigid.

Use Third Party Logistics Providers (3PL)

According to the World Shipping Council, the intermodal shipping network plays a significant role in the cost and rate of service delivery. An intermodal network is made up of ships, airplanes, trucks, and trains. The connection points where cargo is transferred between modes of transport are also part of the network. Many companies depend on intermodal networks for the inland dispersal of cargo from harbors and airports.

Third Party Logistics Providers (3PL) provide a useful service by shipping your cargo via their own intermodal networks. A trusted 3PL provider can save you time and money while allowing you to focus on your core business.

3PLs allow you to negotiate with one service provider who can manage all the regulatory and intermodal networking issues you may face. Further, your 3PL can help you connect and share shipping costs with other dealers in your vicinity.

Negotiate with Other Shipping Companies

Before signing off on a deal, make sure you have exhausted your other options. If you only deal with one shipping company, you may miss a better option. In a comprehensive negotiation seminar, you can learn how to leverage competitive bids to secure better deals.

Additionally, training to negotiate with multiple companies feeds into your research. It teaches you more about the existing challenges in the shipping industry. The knowledge you acquire can help you create value as you deal with the shipping companies.

Round-Up

The shipping industry presents smart people in business with a wide array of chances to negotiate better deals. The techniques in this article are not exhaustive. However, they can set you on the right track and feed into your strategy.

Negotiation training seminars are designed to maximize your potential and spur you into action. However, there is no strict rule book that is applicable in every case. As you grow in business, you can develop your own strategies based on your training and personal preferences.

St. Lawrence Seaway

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

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

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

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

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

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

syrup

U.S. Market for Flavoring Syrup And Concentrate Peaked at $12B in 2018 and Is Likely to See Steady Growth

IndexBox has just published a new report: ‘U.S. Flavoring Syrup And Concentrate Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

The revenue of the flavoring syrup and concentrate market in the U.S. amounted to $12B in 2018, rising by 5.5% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +5.1% from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2015 when the market value increased by 17% against the previous year. Flavoring syrup and concentrate consumption peaked in 2018 and is likely to see steady growth in the immediate term.

Production of Flavoring Syrups And Concentrates in the U.S.

In value terms, flavoring syrup and concentrate production stood at $11.8B in 2018. The total output value increased at an average annual rate of +4.4% from 2013 to 2018; the trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The most prominent rate of growth was recorded in 2015 when production volume increased by 16% y-o-y. Over the period under review, flavoring syrup and concentrate production attained its peak figure level in 2018 and is likely to continue its growth in the immediate term.

Exports from the U.S.

Flavoring syrup and concentrate exports from the U.S. amounted to 11K tonnes in 2018, dropping by -15.5% against the previous year. Overall, flavoring syrup and concentrate exports continue to indicate a dramatic shrinkage. The pace of growth appeared the most rapid in 2015 when exports decreased by -0.2% year-to-year. Over the period under review, flavoring syrup and concentrate exports attained their maximum at 49K tonnes in 2013; however, from 2014 to 2018, exports stood at a somewhat lower figure.

In value terms, flavoring syrup and concentrate exports amounted to $98M (IndexBox estimates) in 2018. Over the period under review, flavoring syrup and concentrate exports continue to indicate a drastic deduction. The most prominent rate of growth was recorded in 2018 when exports increased by 1% against the previous year. Over the period under review, flavoring syrup and concentrate exports reached their maximum at $237M in 2013; however, from 2014 to 2018, exports stood at a somewhat lower figure.

Exports by Country

Guatemala (2.1K tonnes) was the main destination for flavoring syrup and concentrate exports from the U.S., accounting for a 20% share of total exports. Moreover, flavoring syrup and concentrate exports to Guatemala exceeded the volume sent to the second major destination, Brazil (832 tonnes), threefold. The third position in this ranking was occupied by Japan (644 tonnes), with a 5.9% share.

From 2013 to 2018, the average annual rate of growth in terms of volume to Guatemala amounted to +13.4%. Exports to the other major destinations recorded the following average annual rates of exports growth: Brazil (-21.1% per year) and Japan (-32.9% per year).

In value terms, the largest markets for flavoring syrup and concentrate exported from the U.S. were South Korea ($14M), the Netherlands ($11M) and Guatemala ($9.8M), together comprising 35% of total exports.

South Korea experienced the highest rates of growth with regard to exports, among the main countries of destination over the last five-year period, while the other leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average flavoring syrup and concentrate export price amounted to $8,975 per tonne, picking up by 20% against the previous year. In general, the flavoring syrup and concentrate export price continues to indicate a prominent increase. The most prominent rate of growth was recorded in 2017 an increase of 63% y-o-y. The export price peaked in 2018 and is likely to continue its growth in the immediate term.

Prices varied noticeably by the country of destination; the country with the highest price was South Korea ($27,871 per tonne), while the average price for exports to Israel ($3,031 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to the Netherlands (+56.1% per year), while the prices for the other major destinations experienced more modest paces of growth.

Companies Mentioned in the Report

The Coca-Cola Company, Sensient Technologies Corporation, Flavor & Fragrance Specialties, David Michael & Co., Flotek Industries, Sodastream Usa, Tampico Beverages, Agrana Fruit Us, Bi Nutraceuticals, Monin, Virginia Dare Extract Co., Illes Food Ingredients, Mane, Delavau, Dr Pepper/Seven Up, R. Torre & Company, Wiley Organics, American Fruits and Flavors, Mastertaste, Allen Flavors, Felbro Food Products, Delano Growers Grape Products, Eagle Beverage and Accessory Products, Sensient Flavors, Jus-Made, Caribbean Refrescos, Cesi Chemical

Source: IndexBox AI Platform

corn exports

U.S. Wet Corn Exports Rose for the Third Consecutive Year

IndexBox has just published a new report: ‘U.S. Wet Corn Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

The revenue of the wet corn market in the U.S. amounted to $8.7B in 2018, dropping by -8.3% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the period under review, wet corn consumption continues to indicate a drastic deduction. The pace of growth appeared the most rapid in 2016 with a decrease of -1.8% against the previous year. Wet corn consumption peaked at $15.3B in 2013; however, from 2014 to 2018, consumption stood at a somewhat lower figure.

Wet Corn Production in the U.S.

In value terms, wet corn production stood at $9.6B in 2018. In general, wet corn production continues to indicate an abrupt shrinkage. The most prominent rate of growth was recorded in 2016 when production volume decreased by -1.1% year-to-year. Wet corn production peaked at $16.7B in 2013; however, from 2014 to 2018, production remained at a lower figure.

Exports from the U.S.

In 2018, the amount of wet corn exported from the U.S. stood at 2.1M tonnes, falling by -15.1% against the previous year. Over the period under review, wet corn exports continue to indicate a perceptible decline. The most prominent rate of growth was recorded in 2016 when exports increased by 5.2% year-to-year. Over the period under review, wet corn exports reached their peak figure at 2.6M tonnes in 2014; however, from 2015 to 2018, exports remained at a lower figure.

In value terms, wet corn exports stood at $922M (IndexBox estimates) in 2018. In general, wet corn exports continue to indicate a deep shrinkage. The pace of growth was the most pronounced in 2017 with an increase of 1.8% y-o-y. Over the period under review, wet corn exports attained their peak figure at $1.6B in 2013; however, from 2014 to 2018, exports remained at a lower figure.

Exports by Country

Ireland (493K tonnes), Israel (265K tonnes) and Colombia (147K tonnes) were the main destinations of wet corn exports from the U.S., with a combined 43% share of total exports. Chile, Egypt, the UK, Indonesia, Turkey, Morocco, New Zealand, Portugal and China lagged somewhat behind, together comprising a further 39%.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by New Zealand (+86.2% per year), while the other leaders experienced more modest paces of growth.

In value terms, Chile ($96M), Ireland ($92M) and Colombia ($78M) were the largest markets for wet corn exported from the U.S. worldwide, together accounting for 29% of total exports. Egypt, Indonesia, China, Israel, the UK, New Zealand, Turkey, Morocco and Portugal lagged somewhat behind, together comprising a further 34%.

New Zealand recorded the highest growth rate of exports, among the main countries of destination over the last five-year period, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average wet corn export price stood at $435 per tonne in 2018, going down by -11.2% against the previous year. In general, the wet corn export price continues to indicate a deep descent. The pace of growth was the most pronounced in 2015 when the average export price increased by 1.7% y-o-y. Over the period under review, the average export prices for wet corn attained their peak figure at $629 per tonne in 2013; however, from 2014 to 2018, export prices remained at a lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was China ($1,055 per tonne), while the average price for exports to Portugal ($153 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to China, while the prices for the other major destinations experienced a decline.

Imports into the U.S.

In 2018, approx. 467K tonnes of wet corn were imported into the U.S.; increasing by 5.5% against the previous year. Overall, the total imports indicated a strong expansion from 2013 to 2018: its volume increased at an average annual rate of +9.5% over the last five years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, wet corn imports increased by +57.5% against 2013 indices. The growth pace was the most rapid in 2015 with an increase of 16% year-to-year. Imports peaked in 2018 and are likely to see steady growth in the immediate term.

In value terms, wet corn imports totaled $506M (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +7.7% over the period from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2018 when imports increased by 12% y-o-y. In that year, wet corn imports reached their peak and are likely to continue its growth in the immediate term.

Imports by Country

Thailand (128K tonnes), Germany (70K tonnes) and the Netherlands (41K tonnes) were the main suppliers of wet corn imports to the U.S., with a combined 51% share of total imports. These countries were followed by Pakistan, Denmark, France, China, Belgium, Taiwan, Chinese, Poland, Viet Nam and Brazil, which together accounted for a further 34%.

From 2013 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Viet Nam, while the other leaders experienced more modest paces of growth.

In value terms, the largest wet corn suppliers to the U.S. were Germany ($84M), Thailand ($82M) and the Netherlands ($46M), together comprising 42% of total imports. France, Belgium, Pakistan, China, Denmark, Taiwan, Chinese, Viet Nam, Brazil and Poland lagged somewhat behind, together comprising a further 40%.

Viet Nam recorded the highest growth rate of imports, among the main suppliers over the last five-year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the average wet corn import price amounted to $1,083 per tonne, rising by 6.6% against the previous year. In general, the wet corn import price, however, continues to indicate a mild downturn. The growth pace was the most rapid in 2018 when the average import price increased by 6.6% year-to-year. Over the period under review, the average import prices for wet corn reached their maximum at $1,194 per tonne in 2014; however, from 2015 to 2018, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Belgium ($2,141 per tonne), while the price for Thailand ($641 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Taiwan, Chinese, while the prices for the other major suppliers experienced more modest paces of growth.

Companies Mentioned in the Report

Archer-Daniels-Midland Company, Ingredion Incorporated, Roquette America, Inc., Penford Corporation, Penford Products Co., Briess Industries, Inc., Rahr Malting Co., Malteurop North America Inc., Tate & Lyle Ingredients Americas LLC, Malt Products Corporation, Enjoy Life Natural Brands, Semo Milling, Great Western Malting Co, Western Polymer Corporation, Gro Alliance, Philadelphia Beer Works Inc, Unilever Bestfoods North America, Anderson Custom Processing, Tate & Lyle Americas, Great Western Malting, La Aceitera Inc, Holdings In Zone Inc, Staley Holdings, Cornproducts/Mcp Sweeteners, High Sea Sugar

Source: IndexBox AI Platform

IMO 2020

IMO 2020: Understanding the Impact of Cutting Sulphur Oxide Emissions

As global shippers prepare for the busy season approaching, the International Maritime Organization (IMO) has a new international regulation scheduled to begin the first of January. IMO 2020 is a regulation designed to reduce Sulphur oxide emissions from ships, which will reduce the harmful impact of the shipping industry’s byproduct fuel emissions. Lower sulfur emissions will improve air quality in port cities as well as lessen ocean acidification. With roughly four months remaining before the regulation is implemented, trans-ocean logistics companies are urging vessel owners to plan accordingly so they are not fined for surpassing the Sulphur limit specifications. 

The IMO 2020 regulation applies to all ships on international and domestic voyages. New IMO compliant fuels are being created, but due to limited supply and high demand, the price of the new fuel is expected to fluctuate. These additional costs can create a trickle-down effect, which has the potential to affect both vessel owners and shippers. Shippers will most likely find the cost of ocean transportation increasing as the marine sector must utilize these more costly fuels.

RTM Lines a respected trans-ocean transportation company providing, knowledgeable, cost-effective and professional expertise in the ocean transportation industry is committed to assisting our clients to navigate these changes. The new IMO 2020 regulation will affect the entire industry including a variety of vessel operators by reducing acceptable fuel sulfur content from 3.5% to 0.5%.  “Even the smallest amount of Sulphur will subject vessels to a fine or the ship will be pulled out of trade,” said Richard Tiebel, Head of Operations at RTM Lines. “The more proactive vessel owners are about reducing the amount of Sulphur there is in the fuel, the fewer problems they will have to deal with when the IMO 2020 regulations are in effect.” 

“Fuel treatment remains the most effective way to address compliance. However, fuel treatment is in short supply, so we will likely see higher costs for this service, ultimately coming out of the consumer’s pocket. Another solution is flushing of the tanks; this is costly in more ways than one as it has the potential to put a vessel out of commission for a significant amount of time. When weighing their options, shippers should consider capacity, as non-compliant vessels will be pulled out of service or denied entry at certain ports.” Tiebel said. 

Freight costs are already showing signs of an unpredictable landscape. Tiebel shared that, “A $20 difference between IFO 380 bunker and marine gas oil, adds an additional $2.50 per freight ton to breakbulk shipments on a booking note basis. Current and future bunker prices will be based on web-based bunker platform reports which will be provided along with the freight invoice.” In other words, shippers are starting to see an added invoice to charges previously quoted simply due to fuel changes. Furthermore, these charges are covered with right to adjust at time of quotation, time of loading, and at time of discharge.” 

Although the IMO 2020 regulation, has the potential to be more expensive, it can drastically reduce pollution in the environment. The move beyond traditional shipping fuels will transform the ocean shipping industry. These changes in the industry, though challenging, can make a significantly reduction in emissions and create a positive impact on the environment.

“I believe once IMO 2020 is implemented, it’s going to help the environment tremendously. Compliance will be a big step in bringing our industry up to date in protecting the marine environment we utilize. It is the key ingredient not only in ocean transport but in our lives and those of our families.” Tiebel concludes. 

coconut

Global Coconut Market 2019 – Thailand’s Imports Continue to Grow Robustly, While Domestic Production Declines

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

In 2018, the global coconut market size increased by 3.5% to $35.6B. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Consumption By Country

The countries with the highest volumes of coconut consumption in 2018 were Indonesia (19M tonnes), the Philippines (14M tonnes) and India (12M tonnes), with a combined 72% share of global consumption. Sri Lanka, Brazil, Viet Nam, Papua New Guinea, Mexico and Thailand lagged somewhat behind, together comprising a further 16%.

From 2007 to 2018, the most notable rate of growth in terms of coconut consumption, amongst the main consuming countries, was attained by Viet Nam, while the other global leaders experienced more modest paces of growth.

In value terms, India ($10B), the Philippines ($6.7B) and Indonesia ($4.5B) appeared to be the countries with the highest levels of market value in 2018, with a combined 60% share of the global market. These countries were followed by Sri Lanka, Brazil, Papua New Guinea, Thailand, Viet Nam and Mexico, which together accounted for a further 20%.

The countries with the highest levels of coconut per capita consumption in 2018 were Papua New Guinea (140 kg per person), the Philippines (131 kg per person) and Sri Lanka (124 kg per person).

From 2007 to 2018, the most notable rate of growth in terms of coconut per capita consumption, amongst the main consuming countries, was attained by Viet Nam, while the other global leaders experienced mixed trends in the per capita consumption figures.

Production 2007-2018

In 2018, approx. 61M tonnes of coconuts were produced worldwide; leveling off at the previous year. Overall, coconut production continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2012 with an increase of 5.3% y-o-y. Over the period under review, global coconut production attained its peak figure volume at 62M tonnes in 2013; however, from 2014 to 2018, production failed to regain its momentum. The general negative trend in terms of coconut output was largely conditioned by a relatively flat trend pattern of the harvested area and a relatively flat trend pattern in yield figures.

In value terms, coconut production stood at $36.3B in 2018 estimated in export prices. Overall, the total output indicated a mild expansion from 2007 to 2018: its value decreased at an average annual rate of -0.1% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, coconut production increased by +35.7% against 2016 indices. The most prominent rate of growth was recorded in 2009 when production volume increased by 50% y-o-y. In that year, global coconut production reached its peak level of $49.4B. From 2010 to 2018, global coconut production growth remained at a lower figure.

Production By Country

The countries with the highest volumes of coconut production in 2018 were Indonesia (19M tonnes), the Philippines (14M tonnes) and India (12M tonnes), together accounting for 73% of global production. These countries were followed by Sri Lanka, Brazil, Viet Nam, Papua New Guinea and Mexico, which together accounted for a further 15%.

From 2007 to 2018, the most notable rate of growth in terms of coconut production, amongst the main producing countries, was attained by Viet Nam, while the other global leaders experienced more modest paces of growth.

Harvested Area 2007-2018

In 2018, approx. 12M ha of coconuts were harvested worldwide; standing approx. at the previous year. In general, the coconut harvested area continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2010 with an increase of 2.5% y-o-y. Over the period under review, the harvested area dedicated to coconut production attained its peak figure in 2018 and is expected to retain its growth in the near future.

Yield 2007-2018

In 2018, the global average yield of coconuts amounted to 4.9 tonne per ha, approximately reflecting the previous year. In general, the coconut yield continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2012 with an increase of 4.3% against the previous year. Over the period under review, the average coconut yield attained its maximum level at 5.4 tonne per ha in 2007; however, from 2008 to 2018, yield stood at a somewhat lower figure.

Exports 2007-2018

Global exports stood at 555K tonnes in 2018, surging by 49% against the previous year. Overall, the total exports indicated resilient growth from 2007 to 2018: its volume increased at an average annual rate of +7.3% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2018 with an increase of 49% against the previous year. In that year, global coconut exports reached their peak and are likely to continue its growth in the immediate term.

In value terms, coconut exports totaled $269M (IndexBox estimates) in 2018. Overall, the total exports indicated a buoyant increase from 2007 to 2018: its value increased at an average annual rate of +7.3% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, coconut exports increased by +107.2% against 2012 indices. The most prominent rate of growth was recorded in 2014 with an increase of 33% year-to-year. Over the period under review, global coconut exports reached their maximum in 2018 and are expected to retain its growth in the near future.

Exports by Country

Indonesia was the largest exporter of coconuts in the world, with the volume of exports amounting to 290K tonnes, which was near 52% of total exports in 2018. Thailand (70K tonnes) took the second position in the ranking, followed by Viet Nam (57K tonnes). All these countries together held near 23% share of total exports. The following exporters – Cote d’Ivoire (23K tonnes), Malaysia (19K tonnes), the Netherlands (16K tonnes), Mexico (14K tonnes), Guyana (12K tonnes) and India (11K tonnes) – together made up 17% of total exports.

Exports from Indonesia increased at an average annual rate of +12.8% from 2007 to 2018. At the same time, Guyana (+97.7%), Viet Nam (+43.2%), Malaysia (+18.9%), India (+11.3%), the Netherlands (+6.8%), Thailand (+6.4%), Cote d’Ivoire (+4.2%) and Mexico (+3.9%) displayed positive paces of growth. Moreover, Guyana emerged as the fastest-growing exporter in the world, with a CAGR of +97.7% from 2007-2018. While the share of Indonesia (+38 p.p.), Viet Nam (+10 p.p.), Thailand (+6.2 p.p.), Malaysia (+2.9 p.p.) and Guyana (+2.1 p.p.) increased significantly, the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the largest coconut markets worldwide were Thailand ($70M), Indonesia ($65M) and Viet Nam ($22M), with a combined 58% share of global exports. Cote d’Ivoire, the Netherlands, India, Mexico, Guyana and Malaysia lagged somewhat behind, together comprising a further 23%.

Among the main exporting countries, Guyana (+104.1% per year) recorded the highest rates of growth with regard to exports, over the last eleven years, while the other global leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average coconut export price amounted to $483 per tonne, declining by -12.6% against the previous year. Overall, the coconut export price, however, continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2008 an increase of 19% against the previous year. Over the period under review, the average export prices for coconuts reached their peak figure at $553 per tonne in 2017, and then declined slightly in the following year.

Prices varied noticeably by the country of origin; the country with the highest price was India ($1,127 per tonne), while Indonesia ($223 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by India, while the other global leaders experienced more modest paces of growth.

Imports 2007-2018

In 2018, approx. 671K tonnes of coconuts were imported worldwide; surging by 26% against the previous year. In general, coconut imports continue to indicate a resilient increase. The growth pace was the most rapid in 2016 when imports increased by 48% against the previous year. Over the period under review, global coconut imports reached their peak figure in 2018 and are likely to continue its growth in the immediate term.

In value terms, coconut imports totaled $334M (IndexBox estimates) in 2018. In general, coconut imports continue to indicate a remarkable expansion. The pace of growth appeared the most rapid in 2011 with an increase of 43% y-o-y. The global imports peaked in 2018 and are likely to see steady growth in the immediate term.

Imports by Country

Thailand (210K tonnes) and Malaysia (199K tonnes) were the largest importers of coconuts in 2018, reaching approx. 31% and 30% of total imports, respectively. China (60K tonnes) ranks next in terms of the total imports with a 9% share, followed by the U.S. (5.7%). The United Arab Emirates (27K tonnes), the Netherlands (19K tonnes) and Singapore (11K tonnes) followed a long way behind the leaders.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Malaysia, while the other global leaders experienced more modest paces of growth.

In value terms, Thailand ($77M) constitutes the largest market for imported coconuts worldwide, comprising 23% of global imports. The second position in the ranking was occupied by the U.S. ($34M), with a 10% share of global imports. It was followed by China, with a 8.9% share.

In Thailand, coconut imports increased at an average annual rate of +30.9% over the period from 2007-2018. In the other countries, the average annual rates were as follows: the U.S. (+12.0% per year) and China (+8.2% per year).

Import Prices by Country

The average coconut import price stood at $498 per tonne in 2018, falling by -5.9% against the previous year. Over the period under review, the coconut import price continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2015 when the average import price increased by 23% year-to-year. In that year, the average import prices for coconuts reached their peak level of $631 per tonne. From 2016 to 2018, the growth in terms of the average import prices for coconuts remained at a somewhat lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was the U.S. ($880 per tonne), while Malaysia ($147 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by the United Arab Emirates, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform