New Articles

Top 25 Container Ports In The United States

global trade container

Top 25 Container Ports In The United States

Imagine a major highway with poorly timed traffic lights. Everything slows down, causing delays and frustration. Ports in the United States are like those highways, and excellent container cargo operations are like well-timed traffic lights. They keep everything moving smoothly and efficiently.

Read also: May 2024 U.S. Containerized Imports Break 2.3M TEUs

This is important beyond port terminals because they are major economic hubs, handling a massive amount of cargo coming in and out, feeding the country’s consumer goods and industrial needs. Efficient operations ensure a smooth flow of goods, which keeps businesses running and shelves stocked. Delays at ports can disrupt supply chains and lead to price hikes for consumers.

Efficient port operations are also important beyond U.S. borders as the nation competes with other countries for international trade. Ports with fast turnaround times make the U.S. a more attractive destination for shippers. This translates to more revenue and jobs in the U.S. economy.

When it comes to gauging the top U.S. ports in the container sector, we must look at total twenty-foot equivalent units (TEUs) handled. Based on the size of a standard 20-foot long shipping container, a TEU is the standard unit used to measure the capacity of vessels and terminals. One 20-foot container is equal to one TEU and large 40-foot containers are counted as two TEUs.

Do you know who uses TEUs to determine the busiest container ports in the U.S.? None other than the U.S. Department of Transportation, whose 2024 Port Performance Freight Statistics Program Annual Report to Congress includes a list of the Top 25 Container Ports ranked by TEU. That list follows with Global Trade’s own analysis of why each port made the cut.

1. PORT OF LOS ANGELES, CA 

The busiest container port in the U.S. processes a massive amount of containers, moving more than 9 million TEUs annually. The operation is divided among seven major container terminals, each equipped to handle the loading and unloading of container ships. The Cargo Operations Dashboard web portal provides real-time data on various aspects of cargo movement, such as truck activity at terminals and vessel locations. For moving containers inland, the port connects to a vast rail network with six intermodal rail yards, a key route being the Alameda Corridor, a 20-mile express railway that zips containers directly to rail hubs in downtown L.A.

2. PORT OF LONG BEACH, CA

L.A.’s sister container cargo powerhouse also handles millions of TEUs annually. Unlike some ports that directly manage cargo movement, Long Beach operates as a “landlord port,” with private terminal operators performing the day-to-day operations of loading and unloading container ships at various terminals. The port caters to a diverse range of containerized cargo, with terminals specializing in different goods. This allows them to handle a wider range of imports and exports efficiently. The POLB is at the forefront of adopting sustainable practices, having implemented zero-emission cargo handling equipment like electric yard tractors, reducing dependence on fossil fuels.

3. PORT OF NEW YORK AND NEW JERSEY, NY & NJ

The largest containerized cargo port on the East Coast boasts a vast operation spread across six terminals and public berths, equipped to handle the world’s biggest container vessels. Like other major ports, NY/NJ prioritizes efficient cargo movement. Third-party logistics providers (3PLs) play a crucial role, offering services like consolidation (combining smaller shipments into full containers) and deconsolidation (separating a full container into individual shipments) to streamline the import and export process. The Port Authority of New York and New Jersey participates in the World Port Sustainability Program, demonstrating a commitment to environmentally conscious practices alongside the cargo handling operations.

4. PORT OF SAVANNAH, GA

Savannah boasts the largest single-terminal container facility in North America, covering over 1,300 acres and equipped to move millions of tons of containerized cargo annually. The port is well-equipped with 42 container cranes (with a target of 42 by 2028) and more than150 rubber-tired gantry cranes to handle the loading and unloading of containers swiftly. Savannah offers direct access to major highways (I-95 and I-16) and on-terminal rail facilities ensure seamless cargo movement. As the most westerly port on the Atlantic seaboard, Savannah offers shorter transit times for cargo destined for major inland markets in the southeastern United States. 

5. PORT OF VIRGINIA, VA 

Another major force in containerized cargo handling on the East Coast, Virginia has seen significant growth in recent years, with a focus on expansion and efficiency. They recently completed a $750 million expansion project that increased cargo capacity by 46 percent. Thanks to its deepwater channels and ongoing dredging projects, the port can accommodate the largest container vessels currently operating. The port utilizes semi-automated container terminals with advanced cranes to expedite cargo handling. Norfolk International Terminals is the largest terminal and will boast more than 90 semi-automated cranes upon completion of its expansion. The port offers excellent multimodal connections.

6. PORT HOUSTON, TX

The port boasts two state-of-the-art container terminals: the Bayport Container Terminal and the Barbours Cut Container Terminal. These facilities are equipped to handle the modern giants of container shipping efficiently. Port Houston is investing $750 million over five years (through 2027) to upgrade the Bayport Container Terminal’s infrastructure and capabilities—a commitment to handling more containers and larger vessels in the future. Houston’s extensive highway network and role as a major trucking hub in the U.S. contribute to the efficient movement of containers inland after they are offloaded from ships. The port also offers on-site rail connections for seamless cargo movement.

 7. PORT OF CHARLESTON, SC 

Charleston has seen significant growth in recent years, becoming the fastest-growing container port in the U.S. Major investments are being made to handle the largest container vessels. The Charleston Harbor deepening project, completed in 2021, allows the port to accommodate all post-Panamax ships (the biggest ones!) 24/7, boosting its competitiveness. The port’s container operations are spread across several terminals, including the North Charleston Terminal, the Wando Welch Terminal and the recently opened Hugh Leatherman Terminal. The South Carolina Ports Authority offers various tools like GO!Port, a system for tracking and tracing container cargo, providing real-time data and enhancing supply-chain visibility. 

8. PORT OF OAKLAND, CA 

Oakland has seen steady growth in container traffic, with a particular surge in imports in recent years. Terminals are equipped to handle this increasing volume efficiently. The port has strategically invested in infrastructure to accommodate the giants of the sea. Oakland routinely receives calls from ships with capacity for 14,000 containers and can handle even larger vessels with the necessary adjustments. Oakland prioritizes swift cargo movement. They boast some of the highest ship-to-shore crane productivity rates on the West Coast, meaning they can load and unload containers quickly.

9. PORT OF TACOMA, WA 

Among the largest deepwater ports in America, Tacoma is situated on Commencement Bay in Puget Sound, making it geographically well-positioned. The port serves as a vital gateway for cargo moving between Asia and the eastern U.S., with more than 70% of its international cargo directed toward these regions. Additionally, Tacoma handles around 80% of the marine cargo between Alaska and the Lower 48 States. Various sustainability programs are in place to reduce emissions from port operations and promote environmentally responsible cargo handling practices.

10. PORT OF SEATTLE, WA

The Port of Tacoma and Port of Seattle are managed by the Northwest Seaport Alliance, a collaboration that strengthens their overall container handling capabilities. The Port of Seattle handles millions of TEUs annually across several terminals. Efficiency is a priority there, with trucks and on-site rail connections ensuring swift movement inland. Sustainability efforts are also in place to balance economic activity with environmental responsibility.

11. PORT OF JACKSONVILLE, FL

JAXPORT, as the port’s authority and the port itself are known, ranks first among Florida’s ports for containers. The Dames Point Terminal efficiently handles millions of TEUs with connections to major highways and on-dock rail for seamless cargo movement throughout the U.S. Southeast.

12. PORTMIAMI, FL 

Known mostly for cruise ships, PortMiami handles containers, too. Cargo moves efficiently through its container terminal with connections to highways and rail for regional distribution.

13. PORT OF SAN JUAN, PR

Puerto Rico’s main port prioritizes container cargo. Three major shipping lines call there, utilizing a “carousel” crane system to efficiently load and unload containers destined for or arriving from the U.S. mainland. 

14. HONOLULU HARBOR, HI

The O’ahu facilities not only handle container cargo, they recently expanded their container terminal capacity by 40% to handle increasing volumes and improve efficiency for island trade.

15. PORT OF BALTIMORE, MD

Baltimore boasts the No. 1 container terminal on the East Coast (Seagirt Marine Terminal) with super-post-Panamax cranes and swift container handling. They handle millions of TEUs annually.

16. PORT EVERGLADES, FL

The port has a reputation for efficiently moving millions of TEUs with quick ship turnaround and connections to highways and rail.

17. PORT OF PHILADELPHIA, PA

PhilaPort’s Packer Avenue Marine Terminal is the main hub for container cargo, with rail and highway connections for efficient inland transport.

18. PORT OF MOBILE, AL

Mobile boasts fast ship turnaround with 35 container lifts per hour and 45-minute truck wait times.

19. PORT OF ALASKA, AK

Alaska’s main cargo handler in Anchorage sees twice-weekly container ships delivering essential goods for most of the state.

20. PORT OF NEW ORLEANS, LA

New Orleans’ Napoleon Avenue Terminal handles more than 600,000 TEUs annually with cranes for mega-ships up to 10,000 TEUs.

21. PORT OF WILMINGTON, NC

The North Carolina port efficiently handles containers with seven cranes, including neo-Panamax models for large ships, offering easy access to highways for distribution.

22. PORT OF WILMINGTON, DE

The Delaware port boasts a 500,000 TEU annual capacity with four gantry cranes and efficient rail connections for onward transport.

23. PORT OF PALM BEACH DISTRICT, FL

Florida’s fourth busiest container port handles more than 290,000 TEUs with 24/7 on-dock rail for smooth container movement.

24. SOUTH JERSEY PORT CORPORATION, NJ

The operator of marine shipping terminals in seven New Jersey counties focuses mostly on breakbulk and bulk cargo, but it does have cranes for containers.

25. PORT OF BOSTON, MA

Boston’s Paul W. Conley Terminal specializes in container cargo, with gantry cranes and automated stacking cranes for efficient loading and unloading.

 

sourcing

The Pros and Cons of Local Sourcing

The Pros and Cons of Local Sourcing

Local sourcing is the practice of contracting suppliers located within your country or even city. This term also applies to the suppliers in your home county. However, there is always considerable debate over whether to prioritize the local suppliers or cast your net wider. To help decide, it is wise to look at the pros and cons of local sourcing.

The pros of local sourcing

Local sourcing means faster and more predictable delivery times

The news of supply chain disruptions is prevalent. Also, planning for survival in the new normal the pandemic has left us with is complex. So, it is no wonder that perhaps the most significant advantage of local sourcing is its reliability. Considering that the distance your cargo would need to travel is vastly reduced, the problems it can run into are fewer as well. You would not need to worry about ports or airports closing down and leaving your goods stranded. And, with that increased reliability, it becomes much easier to handle the risk factors of high-profitability deals.

You can work with suppliers much more closely

Another of the advantages of local suppliers is that you can work with them more closely. When dealing with an international supplier a whole sea away, it is natural that you can have at most one or two meetings in person a year. On the other hand, a short trip is all that would take to reach and discuss business with a local supplier. Of course, this means that you can also get them to customize some of their services for you, particularly if you need certain parts that need to be custom produced for your needs or a similar demand.

You would not need to manage your warehouses as meticulously

When your supplier is just down the street or a city or two away, timing deliveries right becomes easier. It means that, instead of having huge shipments that take up lots of space and cause logistics problems, it is possible to have a string of smaller deliveries. And, with the reduced risk and delay factors that we have already discussed, you can also order them, so they arrive before you need to have them shipped out. In turn, this would ensure that your warehouse is kept busy but never overflows or has shipments clogging up space better used for something else. And you could even manage with much smaller warehouses.

You could more easily make last-minute orders

Making a last-minute order is not something you should turn into a habit. However, if any of your suppliers run into problems, or you have a sudden order of goods yourself, you would be able to resolve the situation much more easily. A quick trip or a phone call would allow you to check in with your partners and look for additional goods. And the proximity would make getting the goods to you a breeze, as well. In the end, this extra wiggle room would let you approach your business in a much more relaxed way than ordering goods from overseas. After all, a missing shipment in such cases might take weeks to make up for.

You would not need to deal with import taxes

It is impossible to avoid worrying about taxes when trying to import goods. For any legitimate business, it is not too difficult a hurdle to cross. However, it can be tough to manage when you are just starting, and they are cutting into your profits. That is why, especially for brand new businesses, local suppliers that allow them to bypass this expense are an excellent choice. There are plenty of rare and common U.S. customs clearance issues you would entirely avoid by choosing to go through a local supplier, too.

Enhancing Sustainability and Reducing Carbon Footprint

One of the most significant advantages of local sourcing is its positive impact on the environment. By reducing the distance that goods travel, you contribute to lower carbon emissions and minimize the ecological footprint of your supply chain. With growing awareness of environmental concerns and increasing consumer demands for sustainable practices, opting for local suppliers can significantly boost your company’s reputation and attract eco-conscious customers.

Fostering Community Growth and Support

When you source locally, you actively contribute to the growth of your community and support the local economy. By providing business to nearby suppliers, you help create job opportunities and stimulate economic development. This, in turn, can lead to increased consumer spending within the community, benefiting other businesses as well. Additionally, building strong relationships with local suppliers can foster a sense of camaraderie and collaboration among businesses, creating a supportive network for mutual growth.

The cons of local sourcing

The local supplier might grow over-dependent on your business

It might sound odd. But be it for the supplier or the business, over-dependence is not great. If a supplier starts to prioritize the demands of the company they rely on for the majority of their profits, it can seriously impact their competitiveness in the market. They can grow too specialized to grow their business, and it can be challenging to secure new contracts. There is also the matter of their new product development slowing or halting entirely. It means that they might eventually be left behind and lose their chief source of income as well. It would make demand planning for the buyers difficult as well if planning to branch out to new products.

Canceling a contract can incur a lot of backlash

Hiring local suppliers and helping the local economy is fantastic for PR. However, if you ever need to move on from those contracts, you would be facing an equal amount of backlash and ill-will. No matter how justified your decision might be. The public could still view it as abandoning those same businesses and economies you were lauded for helping.

You might not be able to obtain the best or latest products

Local suppliers might not be able to offer you top-of-the-line goods. They are likely solid and reliable manufacturers, yes. But with the world as a stage for your business, it is always possible to find someone producing better versions of the product you are interested in. So, you are more or less choosing between reliability versus quality. Of course, there are exceptions.

Local suppliers can be less efficient

Even though they are more reliable, local suppliers can have efficiency problems. They tend to be smaller and have a smaller production capacity. Of course, as you work together and prosper, they might expand their business and build more facilities. But then you run the risk of our first cons: their reliance on your purchases growing to the point they practically only cater to you.

It is hard to ensure objective supplier selection

You might, over time, develop a tight-knit bond with the local suppliers, especially if they have been there for you since the foundation of your company. That is natural. However, if your company is developing faster than they are, you might find yourself in need of new partners to keep up with the demand you are facing. At such a time, due to your friendship or perhaps fear of public backlash, it wouldn’t be easy to objectively select another supplier better suited to your needs.

Limited Access to Specialized Products

While local suppliers offer reliability, they may not always have the capacity or expertise to provide highly specialized or cutting-edge products. In industries where innovation is crucial, you might need to explore international options to access the latest advancements and unique offerings.

Higher Costs and Reduced Cost Competitiveness

Local sourcing might come with higher production and labor costs compared to countries with lower manufacturing expenses. This can affect the cost competitiveness of your products in the global market. As a result, careful cost-benefit analysis is essential to ensure that the benefits of local sourcing outweigh the potential price disadvantages.

Dependence on Regional Vulnerabilities

By relying heavily on local suppliers, your supply chain could be susceptible to regional vulnerabilities. Natural disasters, economic downturns, or political instability in the region could disrupt your supply chain and affect your operations. Diversifying your sourcing strategy can help mitigate these risks and ensure a more resilient supply chain.

Final word

Now you know the pros and cons of local sourcing, so it should be easier to make an informed decision. Whether you decide to pursue local or international suppliers, remember that your priority is always the development and future of your company.

 

SkillsTrader® TA versacold TIVE BDP delivery of advanced education to future port industry leaders through LU’s fully online Master of Science in Port and Terminal Management.

TA Services Announces Acquisition of Alabama-based C2 Freight Resources

Acquisition Positions TA Services for Further Expansion in Brokerage Services

TA Services Inc., a premier full-service logistics provider and division of PS Logistics, announced today it has completed the acquisition of Houston, Alabama-based C2 Freight Resources, a high-end brokerage specializing in dry-van, flatbed, temperature-controlled, expedited and LTL services. The acquisition of C2 Freight Resources is part of TA Services’ commitment to continued brokerage growth and expanded services for new and existing customers. Financial terms of the transaction were not disclosed.

C2 Freight Resources was founded in 1998 by Jeff Gunnin and John Cunningham to bring third-party efficiencies to shippers across North America. Its customer base includes Fortune 500 companies in industries ranging from building materials, paper, and animal products to food and beverage, packaging, and consumer goods. C2 has been recognized for its top-tier service with awards including the NASTC Broker of the Year.

Scott Schell, CEO and President, TA Services explained that they share the value of developing long-lasting relationships with both shippers and carriers adding that this acquisition will be additive to the company’s vision and ability to continue providing top-level service across the board. The acquisition accelerates TA Services’ growth to over $600 million in revenue, 750 employees, and over 23 global locations, spanning from Monterrey, Mexico, to Toronto, Canada.

Jeff Gunnin, President and co-founder, C2 Freight Resources emphasized on how fairly carriers are being treated while putting a tremendous emphasis on customer service, which means a lot to the company. He expressed gratitude on how exited he was for the opportunity to unite their people, their carriers, and their customers with TA Services as a result of the acquisition.

The acquisition of C2 Freight Resources is another example of recent strategic developments in TA Services’ business, building on the acquisition of Scout Logistics in August 2021 and Top Gun Freight in November 2020, the merger with Sellers Logistics in February 2020, and the acquisition of certain assets of Celadon Logistics in April 2019. In 2021, TA Services was named the winner of a Bronze Stevie® Award in the Transportation Employer of the Year category in the sixth annual Stevie Awards for Great Employers and was named to Transport Topics’ Top 50 Freight Brokerage Firms of 2021. In 2020, TA Services was also named to Transport Topics’ Top 50 Freight Brokerage Firms and Inbound Logistics’ Top 100 Third-Party Logistics Providers lists.

About TA Services

Headquartered in Mansfield, Texas, with offices located in strategic markets throughout North America, TA Services Inc. has been trusted as the premier integrated solutions provider for Freight Brokerage, Managed Transportation, Warehousing and Fulfillment, and Cross-Border Logistics for over 35 years. TA Services has strategically situated 23 facilities across North America for maximum geographic coverage.

Founded in 2004, PS Logistics is one of the largest and fastest-growing transportation solution providers in the United States. PS Logistics provides a full range of asset-based transportation, brokerage, 3PL and supply chain services. This hybrid model delivers optimal flexibility to address customers’ transportation needs in various industries throughout the United States.

demurrage The Port Authority of Valencia (PAV) has approved the concession of a space in the Port of Sagunto to ZELEROS to carry out a pilot for its hyperloop transport system.

Shippers Paid More Than $114M in Demurrage Fees in Feb and March 2022

National demurrage fees continue to climb as shippers search for capacity

Dray Alliance today released an outlook for April based on the activity within its container trucking platform from Feb-March 2022. Dray Alliance findings reflect the impact of the continued port disruptions and demurrage fees being incurred by shippers with containers sitting at the ports.

The demurrage issue has become a financial burden to those who have containers sitting at ports, particularly the Port of Los Angeles. Detention and demurrage penalties have soared since the start of the pandemic and as further supply chain disruptions have hit. According to Dray Alliance, drayage carriers have been turned away from picking up loaded imported containers because of unpaid demurrage charges — a major contributor to delays and slowdowns.

“Containers keep sitting at ports, and demurrage fees keep tallying up, not by choice but by the difficulty of how to retrieve them. This has caused a financial burden to all of those in the industry,” said Steve Wen, Co-Founder, and CEO, Dray Alliance. “In our experience working with the Port of Los Angeles, we have seen how data confirms the penalties being paid due to demurrage fees. These, added to the lack of truckers and ways to distribute cargo, are a continued contributor to port backlogs.”

A Forbes article cited The American Trucking Association, who reported that this sector is headed for a shortage of 160,000 drivers by 2030. Additionally they estimate the need for one million new drivers over the next 10 years. While container volume has increased to record highs, truck driver capacity has not matched the growth, resulting in appointment slots remaining finite, leading to an increase in demurrage penalties. As the March data shows, for all of the containers currently discharged at the Port of Los Angeles, 41% are incurring demurrage, meaning a total of 25,258 out of the 61,944 shipments are past due over five days after discharge.

“The carriers view these penalties – whether right or wrong – as a profitable part of their business,” said Brian Glick, CEO and founder of Chain.io, a systems integration platform that works closely with shippers and freight forwarders.

“So even if the Ocean Shipping Reform Act passes, they’ll become compliant with the law, but won’t work against their own self-interest. They’re a for-profit entity, and it’s hard to envision them willingly sacrificing a profitable part of their business for what’s perceived to be a moving target of playing fair,” he added, in a recent Supply Chain Management Review article.

Dray Alliance data from February 2022:

  • Average time from discharge to outgate was 5.8 days. Assuming four free days at the terminal, that’s 1.8 days of demurrage per shipment on average.

  • Depending on the terminal, the charges for one day of demurrage are anywhere from $175-$225/day; which escalated over time and equaled an average of $168.75 per day

  • During this month, the Port of Los Angeles moved 424,072.85 TEUs of loaded imports (212,036 feet).

  • Using this metric as the total number of containers, shippers paid $71.56M in demurrage fees through POLA in February 2022.

Dray Alliance data from March 2022:

  • Average time for discharge was 4.9 days, assuming four free days at the terminal, that’s 0.9 days of demurrage per shipment on average.

  • Utilizing a daily demurrage rate of $187.50, the average March shipment through the Port of Los Angeles incurred an additional $337.50 worth of demurrage.

  • In March, the Port of Los Angeles moved 509,953 TEUs of loaded imports (254,977 FEUs).

  • Using FEU’ s as the total number of containers, shippers paid $43.03M in demurrage fees through POLA in March 2022.

Headquartered near the Port of Long Beach, the Dray Alliance platform provides complete container management, including automated status notifications, real-time GPS tracking and document management and analytics for every container. In December 2021, Dray Alliance completed a $40M Series B round led by global venture capital group Headline.

About Dray Alliance

Dray Alliance is a venture-backed startup that is focused on building a container trucking platform to deliver shipping containers from ports to warehouses. Its technology connects container shippers with a network of vetted truck drivers through a mobile app. By leveraging API integrations with the ports and data from the mobile app, Dray Alliance’s platform allows container shippers to manage and track all container deliveries in a single web portal and make truckers more efficient. The company has raised a total of $55M in venture capital and working capital financing, and is already working with over one hundred enterprise customers, delivering thousands of containers a month. Steve Wen is the Co-founder and CEO of Dray Alliance, and was named to Forbes’ 2022 30 under 30 list. Please visit drayalliance.com for more information.

emissions

Reducing emissions requires efficient supply chain solutions

In November 2021, the United States Department of State and the United States Executive Office of the President released a new long-term strategy for reducing CO2 emissions. The report laid out the ambitious goal of achieving net-zero emissions no later than 2050, which will require significant change, adaptation, and transformation across almost every sector, and in particular the manufacturing and transport industries.

These ambitious targets build on last year’s summit, where the US pledged to reduce net greenhouse gas emissions by 50-52% in 2030, in line with the European Council’s requirements. According to experts around the world, these new, increased goals are essential when it comes to meeting objectives set for the middle of the 21st century.


 

Around the world, the food and beverage sector is responsible for about one third of all greenhouse gas emissions, largely due to their complex supply chains. Without taking significant action to address supply chain emissions, meeting emissions targets will be a challenge. Mitigation efforts will require a significant shift in the way supply chain issues are considered within the sector, particularly when it comes to agriculture and land use.

The largest direct source of greenhouse gas emissions, is the US transportation sector, having overtaken the power sector back in 2015. It is responsible for 29% of all US greenhouse gas emissions, according to an EPA report released in 2021. As part of the drive towards Net Zero, President Joe Biden signed an Executive Order on Strengthening American Leadership in Clean Cars and Trucks in December 2021. This set a target of 50% of cars and light trucks to be zero-emissions by 2030 and directed NHTSA to finalize emissions targets for medium- and heavy-duty vehicles by December 2022.

These strategies, targets, and directives are a clear indication that the US approach to CO2 emissions is hardening, and that decisions are being made that will have significant impacts on those responsible for supply chains.

However, reducing emissions is not solely linked to vehicles, and clean technologies and lower-emission cars and trucks cannot be the only solution, even in the transportation sector. A huge part of achieving these ambitious goals will come from significant improvement in efficiency throughout the entire logistics process, including, of course, the decisive areas of warehouse and transport management. Warehouse management solutions (WMS) and transport management solutions (TMS) have become key elements that not only improve general efficiency, but are also essential to creating a more effective and seamless supply chain process, optimizing transportation and, in turn, reducing emissions.

Warehouse management solutions

The warehouse is the heart of the entire logistics system, and its management has a direct impact on the rest of the links in the supply chain including, unsurprisingly, on transportation. An effective WMS not only guarantees more efficient use of physical warehouse space but also optimizes the movement of goods and materials inside the warehouse, ensuring cost savings and reduction of emissions right from the outset. But a WMS is not just about managing what goes on in the warehouse itself. It improves the organization of transportation and creates significant improvements in this area by synchronizing warehouse operations with arrivals and departures of carriers, transferring the newfound efficiency of the warehouse to transport, and onwards to the entire supply chain.

Transportation Management Solutions

Increased focus on emissions and environmental improvements reinforces the strategic value of TMS tools as well. According to analysis by Gartner and Supply Chain Digest, among others, TMS tools can offer immediate savings of anywhere between 15% (for the annual transport costs) and 30% (for personnel and management). Greater efficiency also undoubtedly has an effect on the reduction of emissions throughout the entire logistics chain. The two-pronged benefits of using technology to improve your supply chain operations is a decisive element for companies in the immediate future.

Transportation and Climate Initiative

Many leading companies looking to take proactive and practical steps towards decarbonization participate in the Transportation and Climate Initiative (TCI), a scheme similar to the European Lean & Green platform. The TCI is a regional collaboration of 13 Northeast and Mid-Atlantic states and the District of Columbia that seeks to improve transportation, develop the clean energy economy, and reduce carbon emissions from the transportation sector.

As with the Lean & Green initiative in Europe, many companies who operate under the jurisdiction of the TCI take advantage of Generix’s WMS and TMS solutions to achieve greater efficiencies in warehouse and transportation management; solutions without which it would be extremely difficult to reduce and ameliorate the energy costs of transport.

In short, logistics is in the process of a significant transformation to meet the demands of an increasingly demanding market, as well as to address environmental targets and requirements. There are a number of technological tools already standard in the world of logistics that have completely changed the productivity of the sector, and which will be essential to be able to take the next steps towards productivity, efficiency, and decarbonization.

For the manufacturing and transport industries, the path to Net Zero does not have to be a painful one. The tools and processes that are vital for reducing emissions also come with significant benefits and improvements for productivity and efficiency.

Supply chains are central to the fight against climate change. Decarbonization and emission reduction efforts also help improve sustainability, as well as making supply chains more resilient for the future.

If you want to reduce your carbon footprint through our solutions, contact us!

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

dry bulk

DRY BULK PROFITS SURGE TO MULTI-YEAR HIGHS DESPITE PANDEMIC-RELATED DEMAND AND DISRUPTIONS

Heading into the 2021 holiday shopping season (a.k.a. the strongest part of the year), dry bulk owners could already celebrate a very profitable year with the temporary factors helping the market stay strong expected to continue providing support in 2022.

DEMAND DRIVERS AND FREIGHT RATES

The dry bulk shipping industry continued in late 2021 to enjoy a bumper year, with average earnings continuing to outshine any profits made in the past couple of years. As is often the case, Capesizes (the largest dry bulk ships) are taking the spotlight, with recent earnings peaking above $50,000 per day. A much more consistent and stable increase is recorded for Handysize and Supramax ships. These saw average earnings rise to $33,087 and $36,832 per day on Sept. 3, 2021. On the same day, a Panamax ship could expect to earn $32,445 per day.


 

Time charter rates underline the current strength of the market, with charterers currently paying double, if not 2.5 times as much, at the end of August compared with the start of 2021. A one-year time charter on a Capesize ship at the start of the year would have brought owners $16,500 per day. By Aug. 27, the figure was $32,750. Supramax ships have recorded the largest increase, with one-year time charter rates rising by 179.3% since the start of the year to $29,500 per day.

The high freight rates can be partially attributed to the restrictions and problems at ports due to the pandemic, which are tying up ships for longer than usual. On Sept. 1, 2021, 674 dry bulk ships had been waiting in China for two days or more. On the same day in pre-pandemic 2019, only 287 dry bulk ships had been waiting this long (source: Oceanbolt).

As an example of what this means for an individual trade, Oceanbolt data for ships sailing from Port Hedland, Western Australia, to Qingdao, China, shows that the average time for the journey (including waiting time at the load and discharge ports) has risen by 22.7%. In July 2021, it took an average of 33.5 days, while in July 2019 it could be completed in 27.3 days.

As well as congested ports, the recent pick-up in Brazilian iron ore cargoes to China has helped lift the Capesize market. In August, 21 iron ore cargoes were offered on the spot market, compared to 11 in July and the highest weekly number of cargoes since April (source: Commodore). During the first seven months of the year, Brazil exported 198.8m tons of iron ore, a 10.8% increase from 2020 and up 1.0% from 2019. However, it remains 15.0m tons lower than the record-high exports of 213.7m tons that were recorded in the first seven months of 2018.

China has received 65% of Brazilian iron ore exports during the year to date (through September 2021), with volumes on this trade growing by 6.2% over this period. Here, volumes of iron ore have grown compared to 2018, as China has taken a larger share of the total. This is clearly good news for dry bulk demand; the larger the share heading to China, the higher the ton mile due to the long distance.

There has also been strong growth in grain exports from the world’s largest exporters. Grain exports from the biggest exporters grew by 6.3% to a record 162.0m tons in the first six months of 2021. The driver of this growth was the U.S., which has seen its grain exports rise by 39.3%, jumping from 51.3m tons in the first half of 2020 to 71.5m tons. In contrast, exports from Brazil and Argentina have declined. Brazilian exports are down by 0.3% to 61.5m tons, while those from Argentina have fallen by 26.3% to 29.0m tons.

American coarse grains exports have seen the highest growth, up 19.2m tons (+67.1%) in the first seven months of 2021 compared to the same period in 2020. These additional volumes are the equivalent of an extra 257 Panamax loads (75,000 tons). Just behind in terms of volume growth are U.S. soy bean exports, which had a strong off-season, with exports in the first six months of 2021 amounting to 17.8m tons, a 7.8% increase from last year.

The new U.S. marketing year began in September, and exports of soy beans will have once more increased. Compared to the start of the 2020/2021 marketing year, outstanding sales are much lower, currently standing at 17.8m tons, compared with 29.4m tons on Sept. 1, 2020. While more sales will soon be added to the current level of outstanding sales, it is unlikely that volumes in the 2021/2022 season that is now under way will reach the 60.3m tons of soy beans that were exported in the 2020/2021 season.

FLEET NEWS

Around three-quarters of the dry bulk deliveries expected for 2021 arrived, adding 26.7m DWT of capacity and bringing the total fleet to 934m DWT. BIMCO expected the fleet to grow to 940m DWT over the subsequent months, result in fleet growth of 3% for the calendar year.

Of the 26.7m DWT delivered so far this year, half came from the 61 new Capesize ships, of which 51 have a capacity of 180,000 DWT or more, with 10 of these exceeding 300,000 DWT.

At the other end of the lifecycle, only 4.8m DWT of capacity has been demolished. BIMCO expected demolition by the end of 2021 to reach around 7m DWT, less than half of what was removed from the market in 2020, as the earnings potential for ships has incentivized owners to keep their ships sailing. This once again proves that the strength of the freight markets has a much greater influence on demolition than steel prices.

The summer months saw the dry bulk orderbook grow by 67 ships, as 5.7m DWT was ordered in June through August. All but one will be delivered in 2023 and 2024. The orders include 2.3m and 2.5m DWT of Capesize and Panamax ships, respectively.

Including all orders, the orderbook currently stands at 53.9m DWT, a significant decrease from 71.6m DWT in August 2020 and 97.8m DWT in August 2019, as ships have been delivered faster than new ones are being ordered.

OUTLOOK


In what was seasonally the strongest part of the year for dry bulk—fall/winter—the market looked promising, and operators had already been recording solid profits for the year.

While countries enforce quarantine and testing requirements, and ports face sudden disruptions due to local and regional outbreaks, the congestion that is draining the market of capacity will continue to support earnings in the dry bulk market. The market is expected to stay strong into 2022 until the factors that are currently beneficial to the market such as congestion and pandemic related delays, spill-over from the red-hot container market, stimulus driven demand and strong growth in the manufacturing sector become less so.

In the longer term, however, the underlying volumes may be less supportive. After strong growth in the first half of 2021, the Chinese government seems keen to clamp down on the steel and other heavy industries to limit emissions. One big question is how strictly these measures will be enforced and whether they will start to constrain economic growth. The two largest dry bulk goods imported by China in terms of volume, iron ore and coal, both fell year-on-year during the first seven months of 2021. Iron ore imports fell by 10.5m tons (-1.5%) and coal imports were down by 30.4m tons (-15.0%). Imports of both of these goods stood at a record high in 2020, and as government restrictions come into play, it seems increasingly unlikely that these levels of imports will be repeated.

____________________________________________________________________

Peter Sand had been the chief shipping analyst for more than 10 years when Copenhagen, Denmark-based BIMCO, which is one of the largest international shipping associations for shipowners, published this report in September. That same month, Xeneta announced that Mr. Sand had joined the Oslo, Norway-based market analysis company.

emissions

Helping the World is Good for Business

There aren’t many times in any industry when going the extra mile to do the right thing is actually really good for business too. But it does happen.

Skeptical? You’re not alone. After two years of juggling, pivoting, problem solving, reimagining and then doing it again – all of which have drained energies and operational budgets – any transportation logistics executive in charge of budgeting, could be forgiven for taking a hard line on non-essential expenditures.

Proactively protecting the environment? That’s a must-do for every industry, but it’s low on a priority list that has been exclusively focused on finding and retaining carrier capacity and keeping the flow of goods moving across the country and around the world.


 

As we all continually re-examine ways to cut costs and realize even greater operational efficiencies, improving environmental protocols – and reducing C02 emissions specifically – presents a rare win-win dynamic in which operations leaders can preemptively align around incoming regulations, optimize network efficiencies and reduce C02, an increasingly problematic contributor to greenhouse gasses (GHG’s) and overall environmental impact. If all of that sounds a little like having your cake and eating it, you’re not wrong. Let’s dig in, get some broader perspective and take a closer look at the issues and strategic steps to lowering emissions and raising profits.

The Global Perspective: efforts to reduce emissions

Protecting the environment seemed more an extreme activist position a few decades ago but it’s rightly now a global perspective – and with good reason. The Paris Accord – an agreement by countries around the world to reach net zero carbon emissions by 2050 – mandates a target of no more than a 1.5 degree Celsius change in global temperature beyond pre-industrial levels. According to Stanford University, as of March 2021, 64 countries signed the agreement but the race is on. While pandemic lockdowns and other confinement measures cut global emissions by 2.6 billion tons of CO2, about seven percent below pre 2019 levels, experts say that level of control cannot be maintained and the world is on track to increase global temperature by 3-5 degrees Celsius by the end of the century: a world-changing problem.

The good news is that change is being affected at the global, national, corporate and individual levels. Or at least initiatives are in place to fast track new behaviors. At the international level, 27 countries have implemented a carbon tax, imposing fees on industries for carbon emissions in an effort to incentivize a switch to improved practices and both green technologies and power sources. Pro-tax countries include Argentina, Canada, Chile, China, Colombia, Denmark, the European Union (27 countries), Japan, Kazakhstan, Korea, Mexico, New Zealand, Norway, Singapore, South Africa, Sweden, the United Kingdom, and Ukraine. Others considering joining include Brazil, Brunei, Indonesia, Pakistan, Russia, Serbia, Thailand, Turkey, and Vietnam. In addition, 64 carbon pricing initiatives are currently in force across the globe on various regional, national, and subnational levels, with three more scheduled for implementation, according to The World Bank. Together, these initiatives have been estimated to cover 21.5% of the global greenhouse gas emissions in 2021.

A gradual shift to renewable energy worldwide is also underway with solar-generated power leading the way. While coal and gas still account for around 60% of the world’s energy, renewable forms of energy production are growing fast. According to Earth.org, worldwide solar power production has grown 25% year-on-year with overall renewable energy now accounting for 29% of the global power supply and the first countries, like Iceland, being close to 100% renewable-energy-powered. This pace of change will pick up, but it’s also going to require the major industries that generate large amounts of C02  – for example manufacturing and livestock-based meat production – as well as other private sector companies and every team within them – to affect change from the top down and bottom up. While the earth’s agriculture goliaths tackle damaging methane gas emissions (9.6% of all U.S. greenhouse gas emissions), a society-wide movement is beginning, with the adoption of consumer and coming commercial electric vehicles, single use plastics, ride sharing and plant-based food production.

The C-Suite Perspective: targeting the supply chain and improving visibility

While all of that is tremendously encouraging and needed, corporate America and its global counterparts are being asked to do more. Forbes reports leaders now recognize the need for their companies and organizations to drive more proactive environmental change through C02-limiting practices across the organization but particularly in relation to the supply chain. According to the Environmental Protection Agency (EPA), company supply chains now account for a staggering 90% of an organization’s greenhouse gas (GHG) emissions.

While changes to other emissions-reducing strategies, including business travel practices, electric vehicles and renewable energy use, all help corporations lower their carbon footprint, tackling supply chain emissions from manufacturing to the transportation, handling and management of goods is the single greatest impact generator for many businesses. Kevin Sneader, global managing partner, McKinsey & Company hits the nail squarely on the head about exactly what’s needed to affect this level of network-wide change:

“While there wasn’t much debate about the science [of necessary reduction of C02 emissions], executives and investors were concerned about the lack of reliable data on the efforts companies and society are making, not to mention their impact. Greater clarity is required in order to speed development of new standards to help markets act more efficiently and reward progress.”

The answer lies, as with many operational efficiencies initiatives, in clear access to data across your supply chain operation. How much C02 is being emitted at any given time? What are the major causes, modes or geographies and other contributing variables? Only by tracking this data, by embedding an enterprise-wide approach to ongoing C02 monitoring, can we build effective strategies to manage and reduce emissions and realize greater efficiencies at the same time. This is especially critical post global pandemic as many industries re-set and examine better practices to mitigate risk and manage challenges.

Creating Sustainability Practices in Transportation Logistics

When it comes to creating sustainable practices in logistics transportation, the great news is that the train has already left the station. Meaning shippers are already organically looking for better ways to improve execution and lower costs. And typically those changes – optimizing network and mode, carrier/LSP selection via advanced routing as well as packaging strategies to reduce dimensional weight and trim cost – will all contribute to emissions reduction. The challenge, of course, comes in how to measure any impact from these actions as part of an overall carbon reduction program.

How do we begin thinking about C02 monitoring and measurement? How do we acquire quantitative proof of progress or KPI’s that can demonstrate we’re delivering against our footprint- reduction goals? Measurement needs to include everything from the role warehouse management, packaging, product sourcing all play in emissions as well as, of course, the movement of inbound materials or inventory delivery and outbound transportation of goods across mode, region and geography.

Tracking CO2: Supporting a Broader Sustainability Initiative

As we set about to review sustainable practices within an operation, it’s a good idea to adopt a broader view of sustainability. Yes, transportation will be a major driver of C02 emissions and require monitoring, but let’s review other contributing factors too. Do your carriers across your network practice emissions-reduction strategies? Things like load consolidation, which will typically lower cost per unit weight, reduce your number of shipments, reduce fuel needs and lead to an overall reduction of C02. If they’re not using basic emissions-reduction practices or considering doing so, it may be time to find new carriers.

Unfortunately, there is no global standard to measure CO2 in relation to transportation logistics which makes comparison across the industry extremely difficult at present. In the United States, the EPA’s Smartway program is attempting to standardize CO2 coefficients but not all companies have adopted a single source of CO2, nor a common definition as it relates to transportation logistics. Until this happens, the best course of action is internal measurement: consistently monitoring and measuring across your operation and benchmarking emissions- reduction against your own goals and initiatives to affect them. Only by doing this and having the data-driven proof points can we set new goals as well as broader sustainability targets that can all be reported to customers, partners, investors and other stakeholders.

It’s All About Data: FAP’s Role in CO2 Measurement

Visibility is the key to delivering on your targets for sustainability and emission reduction, and that can only come from data collection, curation and analysis. Two fundamental components for measuring CO2 emissions in transportation logistics are weight and distance. How large and heavy are my goods? How far and by which means do they need to travel, what’s the fuel required and how efficient is consumption? A good quality Freight Audit and Payment (FAP) system tracks weight and lane, which can help calculate distance, plus additional variables, making it a foundational step and required tool for any CO2 measurement and reduction effort.

While there is no single source or method to deriving CO2 yet, distance, weight, and mode of transportation are all key fundamental elements that support the calculation of CO2 related to transportation logistics. The bottom line is that by combining these input values with CO2 coefficients, it’s possible to calculate the CO2 associated with any shipment, regardless of mode of transport and geographic region.

A natural place to begin is where carbon emissions reduction has a material impact (transportation logistics) and where transportation spend management data is available (historical record of shipping activity with specific distance, weight, mode of transport available).   Dashboards and trends along with KPIs for both cost to serve metrics (cost per unit, cost per shipment, cost per unit weight) and carbon emissions (CO2 by lane, by LSP) create awareness and can be used to establish baselines and alignment for both carbon reduction and transportation spend optimization. This same dashboard can be used by logistics, procurement, operations management, and executives to align on, and report, progress at all levels of the organization at any given time.

Getting the Most from Your KPI’s

According to Forrester, 59% of all companies worldwide now follow data-driven strategies and that number is growing as even small-to-medium sized organizations realize the benefits of data analysis. As you build your sustainability protocols and measurement practices to get the most from your KPI’s, two things are important.

Continuous Process Improvement

Set goals and use appropriate KPI’s and influencers (cost per unit of distance, CO2 per unit of distance) which will deliver ongoing process improvements: proper supplier and LSP management across your operation as well as more informed decision making for everything from mode of transportation and packaging choice all the way to corporation level decisions around emissions control strategies.

Optimized Strategies

Build carbon emission reduction strategies into your overall optimization strategies. They’re one and the same. Putting in place operational changes to improve efficiencies will reduce emissions. Setting emissions reduction goals will necessitate changes that improve efficiency. And consistent, standardized and high quality data is essential for both.

Do both of these things: continually drive improvement across every process and embrace data- driven decision making to optimize strategies, and you’ll put in place the steps and tools to not just lower C02 emissions, but related operational costs too.

___________________________________________________________________

Steve Beda is executive vice president of customer solutions for Trax Technologies, the global leader in Transportation Spend Management solutions. Trax elevates traditional Freight Audit and Payment with a combination of industry leading cloud-based technology solutions and expert services to help enterprises with the world’s more complex supply chains better manage and control their global transportation costs and drive enterprise-wide efficiency and value. For more information, visit www.traxtech.com.  

economy

The role of the moving and storage industry in the US economy

We often fail to see the big picture when considering the moving and storage industry. Sure, we all know that tens of thousands of Americans move every year. But, what is the role of the moving and storage industry in the US economy, and can one function without the other. This article will tackle this rather complex question and hopefully provide a deeper understanding of the moving and storage industry.


 

US economy and the moving and storage industry

As you’ll soon see, the connection between the US economy and the moving and storage industry is a rather complex one. There are various ways in which one impacts the other, and often those ways interact. So, while we will try to give you a decent overview, we can’t cover the entirety of this subject. If this interests you, we strongly recommend that you keep reading our blog and find out more about the connection between the US economy and moving and storage.

The tight correlation between the US economy and the moving and storage industry

It doesn’t take much research to learn that the US economy and the moving and storage industry are closely related. Almost every economy study available will show that as the economy increases or decreases, so does the moving and storage. This is best seen in times of recession, where a sharp drop in the economy perfectly correlates with a decline in moving and storage. The only notable difference is that moving and storage usually lag behind the economy. While the economy can recover relatively quickly, it takes moving and storage a bit more time to get things underway.

Understanding the moving and storage industry

When it comes to pure shipping, there are three major companies in the US – FedEx, Amazon, and the United Parcel Service. But, we have a different picture when it comes to moving and storage. The moving industry is mainly comprised of small to medium companies. These companies are spread out through the US, where each service has its area. As a moving company is dependent on the local market, it can be pretty difficult for companies to branch out. Some do, but usually at the expense of service quality.

This is important to keep in mind as there is no go-to moving and storage company, even for commercial purposes. If companies need to relocate their offices, they need to rely on local moving companies to see them through. Seeing that many companies need to relocate their offices, it doesn’t take much to realize that the moving and storage industry is integral to the US economy.

Furthermore, you have people moving for work all the time in the US. Getting the exact numbers can be difficult. But, it is safe to assume that at least a third of relocations in the US is due to work. Add to this the mass exodus from larger cities brought by remote work, and you’ll soon see how vital moving and storage are.

Do other countries depend on US moving and shipping?

As previously stated, tackling moving and storage is usually local work. Therefore, if people from other countries want to relocate to the US or transfer items, they cannot help but rely on the local moving industry. Some companies focus mainly on international moving with having websites in different languages. You will likely get help with customs and international moving insurance for your items through these companies. Some even provide educational services for future ex-pats. As you can imagine, this plays an important role in the US economy. It not only allows foreign professionals to come to the US with relative ease. But, it also helps US professionals relocate abroad. It is especially important in STEM fields as relocating to a different country is usually necessary for further education.

Military moving

The US has the most prominent military industry in the world. As such, it has a tremendous workforce backing it up, both in research and in defensive military duties. All those working in the military usually need to relocate as their duty requires. Not surprisingly, this would be a much bigger problem for both the military personnel and their families if the moving industry didn’t step in. A large number of moving companies offer military moving services. These help military personnel organize and handle relocations with relative ease. Again, we see an aspect of the US economy where the moving and storage industry plays an essential role.

Final thoughts on the role of the moving and storage industry in the US economy

As you can see, there are many aspects of the US economy where moving and storage play an integral role. From helping people relocate to find work to assisting companies in changing their commercial space. Moving industry as a whole is the literal driving force without which the US economy would be inconceivable. You can use the potency of the local moving industry to determine how strong the local economy is. Solid and stable economies usually bring in a new workforce. And the more people choose to move to a particular area, the more likely it is that a new moving company will spring up.

Autonomous vehicles

The one notable change we might see in the role of the moving and storage industry in the US economy comes with the advancement of autonomous vehicles. Namely, as self-driving vehicles become more and more advanced, we will likely see a change in how moving companies operate. As it is now, a single team takes care of a single relocation, start to finish. But, if you can automate transport, you would only need people to load and unload. While this may not sound like much, it can have serious implications for the moving and storage industry.

______________________________________________________________

Jamie Walker worked as a mover and relocation organizer for over 20 years. He now writes helpful articles for Miami Movers for Less and other websites that focus on shipping, relocations, and logistics.

coloring matter

European Trade in Natural Colouring Matters Peaks Near $720M

IndexBox has just published a new report: ‘EU – Colouring Matter Of Vegetable Or Animal Origin – Market Analysis, Forecast, Size, Trends And Insights‘. Here is a summary of the report’s key findings.

Over the past decade, European exports of natural colouring matters expanded from $494M in 2010 to $720M in 2020. Spain, the Netherlands, Italy, Denmark, Germany and France represent major European exporters of natural colouring matters, accounting for 89% of the total export volume in the EU. The Netherlands, Italy, France, Germany, Spain and Denmark comprise the largest natural colouring matter importers in the EU.


 

Natural Colouring Matter Exports in the EU

In 2020, approx. 47K tonnes of colouring matters of vegetable or animal origin were exported in the EU, waning by -2.7% in 2019. The total export volume increased at an average annual rate of +3.1% from 2010 to 2020.

In value terms, colouring matter exports spiked from $651M in 2019 to $720M (IndexBox estimates) in 2020. The total export value increased at an average annual rate of +3.8% from 2010 to 2020.

The most significant shipments were recorded from Spain (12K tonnes), the Netherlands (8.8K tonnes), Italy (7.1K tonnes), Denmark (5.4K tonnes), Germany (4.5K tonnes) and France (3.7K tonnes), together reaching 89% of total export. Ireland (1.3K tonnes) and Austria (1.1K tonnes) followed a long way behind the leaders.

In value terms, the largest colouring matter supplying countries in the EU were the Netherlands ($143M), Spain ($116M) and Denmark ($113M), together comprising 52% of total exports. These countries were followed by Germany, Italy, France, Ireland and Austria, which together accounted for a further 43%.

Over the past decade, Austria (+23% per year) recorded the highest growth rate of the value of exports, while the other leaders experienced more modest paces of growth.

In 2020, the export price for colouring matters of vegetable or animal origin in the EU amounted to $15,228 per tonne, surging by 14% against the previous year. There were significant differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was Ireland, while Spain was amongst the lowest. From 2010 to 2020, the most notable rate of growth in terms of prices was attained by Austria, while the other leaders experienced more modest paces of growth.

European Largest Importers of Natural Colouring Matters

In 2020, the Netherlands (13K tonnes), distantly followed by Italy (8.3K tonnes), France (5.3K tonnes), Germany (5K tonnes), Spain (4.8K tonnes) and Denmark (3K tonnes) represented the leading importers of colouring matter of vegetable or animal origin, together achieving 79% of total imports. The following importers – Belgium (2.1K tonnes), Ireland (1.4K tonnes), Austria (1.3K tonnes) and Poland (1.3K tonnes) – together made up 12% of total imports.

In value terms, Germany ($108M), Spain ($97M) and France ($77M) constituted the countries with the highest levels of imports in 2020, with a combined 46% share of total imports. Italy, the Netherlands, Denmark, Belgium, Ireland, Poland and Austria lagged somewhat behind, together comprising a further 45%.

Source: IndexBox Platform

ecommerce

Three Ways Subscriptions Will Help You Thrive in the Ecommerce Era, and How to Get Started

The past two years have marked a tipping point in modern commerce. Suddenly, retail businesses have found themselves struggling to keep up with a dramatic spike in demand as ecommerce sales skyrocketed.

Subscription Ecommerce: Not a Passing Fad

But is the rush to buy online just a temporary side effect of the pandemic? UBS financial services firm predicts that this “subscription economy” will grow to $1.5 trillion by 2025, more than doubling its current $650 billion estimate.

To capitalize on and sustain this growth trend, many ecommerce businesses are adding subscriptions to their offerings. To be successful though, they need to keep several factors in mind.


 

Issues to Consider

There are many issues to consider when developing a subscription model. For example:

-Acquisition: How do you convince customers to sign up for an ongoing subscription?

-CX: How do you build a delightful end-to-end customer experience that retains customers?

-Payment Options: How do you decide on the best payment gateways?

-Growth: How will you expand into new markets and geographies?

-Pricing: How do you optimize your subscription pricing and packaging?

-Inventory: How will you deal with demand volatility and ensure sufficient supply?

-Compliance: How do you ensure inter-state and international sales are tax compliant?

Three Ways Subscriptions Can Future-Proof Your Business

Despite these questions, building a successful subscription ecommerce business is worth the effort. Continued growth in this area is on the horizon —in part because subscriptions provide merchants more ways to diversify revenue, enhance customer relationships, and extend customer lifetime value (LTV).

There are three primary reasons why subscriptions should be part of your consumer offering, and why you should consider them as a way to future-proof your business.

1. Manage Volatile Supply and Demand

Ecommerce businesses need to be able to estimate consumer demand and respond to ups and downs. Demand forecasting and readiness will continue to be crucial in the foreseeable future.

Subscriptions can add a level of predictability. For replenishable goods that consumers buy repeatedly, Amazon incorporates subscriptions into its ecommerce offerings with the ‘Subscribe and Save’ option. In addition to infusing its businesses with a steady stream of recurring revenue, this model also helps them predict future demand.

2. Quickly Test and Optimize

As the old saying goes, practice makes perfect. And as the new saying goes: you can always improve on perfection. To continually thrive in the face of dynamic consumer behavior, ecommerce businesses need the ability to adapt quickly and continuously to make proactive changes to their value proposition, pricing, and packaging.

A subscription model allows companies to offer consumers various pricing and packaging options including monthly and annual memberships, curated and set boxes, Subscribe & Save, and more. Ecommerce companies can choose to run A/B tests to learn what works best for each customer segment.

3. Foster Long-Term Relationships

Nurturing long-lasting relationships with customers is more rewarding for brands than one-off interactions. Subscriptions can cultivate customer loyalty and improve retention.

The subscription offering itself can also scale with customers. Once they have subscribed, a self-serve subscription model can provide consumers with a wide variety of choices over their consumption decisions, providing them the ability to alter their preferences, pause or skip shipments, seamlessly switch between subscription and ȧ la carte offerings—all can encourage long-term customer loyalty.

For subscription boxes, customization enables businesses to satisfy consumer needs on their own terms and also adds an element of surprise within each box—keeping customers hooked.

How Technology Powers Subscription Strategy and Consumer Experience 

Exceptional customer relationships have always been the best currency in business. That’s even more true in the subscription economy. To provide the best end-to-end consumer experience, automating workflows at scale is now more important than ever because it enables you to save time by eliminating workflows and processes with manual touchpoints.

Pricing and packaging testing also involves time-sensitive decisions. Ecommerce companies need the flexibility to experiment, and the insights to learn fast and iterate. Homegrown systems struggle with rapid testing and sophisticated data analysis. These complexities only increase with scale. That’s where automated subscription management and billing can help

To keep their business focus and maintain growth without having to expend resources, ecommerce businesses should consider vendors that make automating complex subscription billing processes their sole mission. They also need a reliable, frictionless payment partner.

For front-end operations to run smoothly, your billing system has to be robust and scalable. That’s rarely the case with homegrown subscription management and recurring billing systems. They are seldom built to scale, and they are expensive and time-consuming to maintain. Every time you need to add more product categories or expand into new geographies, you need to tack on extra code to stay sales tax compliant and change your operations. As you expand globally, it can be an obstacle to rapid growth and flexibility.

____________________________________________________________

Krish Subramanian is the co-founder and CEO of Chargebee, a subscription billing and revenue management solution for scaling businesses. He is based in Amsterdam and leads a global team of professionals to serve customers in 53 countries to drive Chargebee’s growth year over year. Krish is an engineer by profession and a problem solver at heart with over 20 years of experience in the software field. @cbkrish https://www.chargebee.com/