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Green Pressure Continues to Mount for the Shipping Sector 

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Global Logistics, Global Trade Daily

Green Pressure Continues to Mount for the Shipping Sector 

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The shipping industry offered a collective applause when the International Maritime Organization set its ambitious goal of halving carbon emissions by 2050. Behind the scenes, however, the reception was mixed. While some large operators such as Maersk plan on having a carbon-neutral fleet by 2040, others are beginning to question the viability of such ambition in the face of troubling inflation and elevated operating costs.

 The price tag for new ships, alternative infrastructure, and fuel production needed to lower emissions over the coming decades is roughly $3 trillion (per shipping-services provider Clarksons). Ocean shipping is responsible for approximately 3% of global greenhouse-gas emissions and methanol has emerged as a potential long-term contender to replace fuel oil. A.P. Møller-Maersk A/S ordered 19 ships late last year that can run on a mix of methanol and traditional fuel. Cosco Shipping, China’s state entity, committed to spending $2.9 billion for a dozen methanol-fueled box ships, while France’s CMA CGM SA is set to put into motion six methanol-powered ships.

 While this would appear to be a significant step forward, not every player is on board. The people who work in procurement departments are compensated on their ability to get the best deal possible. Heavier-polluting fuels remain cheaper than their more environmentally friendly alternatives, and this is not going to change anytime soon. According to a survey by the Boston Consulting Group, 82% of firms are willing to pay more for sustainable shipping solutions. Yet, the willingness to pay more falls short of what is needed to reduce emissions in a concrete way.

 One firm that is testing an alternative model is Tapestry, Inc. The owner of the popular Kate Spade and Coach brands has partnered with GoodShipping BV, a Netherlands-based company to test out an emissions-reduction fuel purchase program. Tapestry will continue to book cargo shipments on regular container ships, but in parallel will pay additional fees for biofuels to be implemented in other ships. The company is seeking to reduce its emissions by 42.5% over the coming seven years and these additional fees to non-cargo related ships appear to be a better bet (financially speaking).

 Meanwhile, regulators are expected to pick up the pressure. California has preliminary plans in place to phase out diesel-powered trucks at the golden state’s ports, and a determined proposal of equipping 100% of its docks with battery-electric and hydrogen trucks by 2035. The European Union is moving on the introduction of carbon-emission taxes in 2024 while President Biden has proposed some onerous new standards on heavy-truck emissions.

 A growing fear is too much regulation will invariably squeeze the competition leaving the larger shipping industry in the hands of even fewer firms. This is welcome news for some, but not the greater majority. 

 

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Archives, Commentary, Global Trade Daily, Technology

How Drone Delivery Could Change the Shipping Industry

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It is a fact that drone delivery could change the shipping industry. Here is everything you need to know about drone delivery today!

Shipping strategies rapidly change as new technologies become a part of the logistics industry. We are witnessing a substantial reshaping of commercial shipping companies through mobile apps, GPS tracking, autonomous trucks, and many other beautiful innovations. The last one on this long list of technological development is drone delivery. It is no secret that drone delivery could change the shipping industry in ways we cannot even imagine. Let’s talk in more detail about this fantastic addition to the logistics industry and how it can improve businesses
worldwide.

The birth of cargo freight drones

If we observe the growing number of commercial drones, we can safely assume that the commercial drone market will triple by the end of 2024. A cargo freight drone is an aerial vehicle used for delivering packages to client locations. It is unmanned, which substantially reduces operational costs. Not only that, but it also has fantastic benefits for our environment. Drones do not use fuel.

Can drones deliver heavy packages?

While eco-friendly, the first question everyone will ask is, can drones replace trucks? The answer is yes. The current maximum capacity can go up to 4500 pounds.

If we consider that drone technology is still advancing, we can only expect more improvement in this area.

One thing to understand is that drones are way cheaper than trucks. If you are looking for ways to reduce costs in your warehousing business, this is the way to go.

How it works

One of the reasons drone delivery is so popular today is that it is fast. The idea is to deliver a shipment from a warehouse to a customer’s location as quickly as possible. Imagine 2-day
shipping becoming an industry standard. Both shippers and clients are very enthusiastic about this positive change.

Shipping companies mostly use trucks today, and this change in the delivery process would substantially reduce delivery time and delivery costs. The logistics industry is rapidly improving because there is an evolving relationship between drones, autonomous vehicles, and mobile robots.

We now have an alternative solution to solve the issues with increased demand and supply chain. This is the best way to provide quick delivery requirements that jumped up because of increased
online shopping.

How it all started

The first major company that started using drones for delivery was Amazon. They experimented with this option back in early 2013. Even though this was an amazing idea, they faced many challenges, and the project was delayed. The idea was to use drones as a part of their Prime shipping service.

What are the main advantages of drone freight delivery?

We already mentioned how drone delivery reduces shipping costs and delivery time. There are no more traffic jams, which is a fantastic improvement. And, since it is an unmanned vehicle, there is no need to hire a human crew to operate the trucks. Furthermore, it is an eco-friendly way that helps reduce our carbon footprint.

Another huge benefit is that drones could also improve the restocking process. Just as companies use drones to connect with customers, they can also use them to create communication between warehouses, retailers, and production factories.

Besides all of these outstanding advantages, drones also solve the problem of delivering to remote locations where the infrastructure is undeveloped.

How drones improve eCommerce and Retailers

We spoke about the communication between warehouses and retailers with the help of drones. The technology makes it possible to use drones to scan through inventory, navigate around isles, and improve internal processes. This approach is much quicker and faster. You can reach the highest shelves in a couple of seconds and quickly locate any package. Retailers will improve the organization of their warehouses and reduce human errors in their supply chain.
While this advancement in technology is rapidly improving the warehousing industry, it is highly likely to eliminate the need for the human workforce completely.

There is no more doubt that drone delivery could change the shipping industry

There is a divided opinion on the use of drones for commercial purposes. A vast number of people do not like them. They are constantly flying above our heads, and drones come with cameras, so there is always a thought that someone is watching. However, even with this, there is no doubt that commercial companies want to use drones, and there is nothing that will change this.

Furthermore, the increase in drone shipping will also affect the number of online orders. If you can purchase something and get it in two days or less, the impulse for buying will go up.

Another vital thing to consider is that this change will jeopardize retailers. If people have the option to shop from home and get a quick delivery, retailers will have problems with trying to
get the customers to visit their stores.

There is also a question of law regulations regarding drones in different countries. International shipping will be affected by this. Furthermore, it is crucial to understand how companies will
approach the process of handling damaged packages.

While there is no more doubt that drone delivery could change the shipping industry, it is fascinating to see how these changes affect the world we know. Everything is moving forward, and the way we shop will rapidly change in the months and years to come!
Author Bio

John Smalls is a professional blogger and content creator for Best Movers in Florida. He has a passion for technology, and John’s articles explore how technological advancements change the world.

car shipping
Archives, Global Shippers 101, Global Trade Daily

Effects of COVID-19 Outbreak on the Car Shipping Industry

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There is hardly an industry in the world that hasn’t been affected by COVID-19. While tourism and travel industries have arguably suffered the most, industries related to shipping are not far behind. So, what precisely are the effects of the COVID-19 outbreak on the car shipping industry, and how will it behave in the following months? Well, that is what we are here to find out.

How COVID-19 affects car industry

To get a good understanding of the effects of the COVID-19 outbreak on car shipping we first need to take a look at the car industry itself. After all, a big part of car shipping is closely connected to car manufacture and sale. So it stands to reason that any effects that the coronavirus outbreak has had on the car industry will have a ripple effect on car shipping.

Reduced production

The best way to imagine the effect of the COVID-19 pandemic is to envision it as a wave. It started off in China and then made its way into numerous countries. This means that it did not affect all countries at the same time. Therefore, there is a notable time difference when the COVID-19 started effecting companies depending on where those companies were situated. And there will be a notable time difference to when these companies will be able to start recovering from the effects of COVID-19.

Worker safety

The first effect that COVID-19 has had on both the car industry and the car shipping industry is the mandatory safety standards for workers. Standards such as:

-Physical distancing.

-Hand sanitation.

-Mandatory masks and protective gloves.

-Increased ventilation.

Countries were quick to instate these measures, as they are the most cost-effective. And they will also be the last ones that the countries are able to lift. This, as you might guess, makes the overall industry a bit slower. Not only do workers have to take the time to adhere to these regulations, but, there is also an increase in state inspections that ensure that those regulations are met.

Little to no demand

As the coronavirus pandemic got stronger, the economy of the affected countries grew weaker. After it became evident that the safety measures weren’t enough, countries turned towards lockdown and curfews. This has led to a significant drop in trade. The full economic repercussions of the coronavirus pandemic are still hard to quantify. But, if there is one thing we can say for sure, it’s that the demand for cars has plummeted as a result. People were fearful of losing their jobs. And seeing that 22 million Americans claimed for unemployment benefits as a result of COVID-19, those fears were not without ground. And the last thing that unemployed or scared people do is go out of their way to purchase cars.

The following effects of COVID-19 outbreak on the car shipping

So, with the reduced trade and halted production, what were the following effects of the COVID-19 outbreak on car shipping? Well, not good. There is hardly a shipping company that hasn’t taken a hard financial hit due to worldwide lockdowns. Companies that also deal with medical shipping did fair a bit better since a lot of countries urgently needed medical supplies. But, when it comes to car shipping, companies have slowed down to a crawl.

International shipping

Since almost 80% of car manufacturers have some part of their production done in China, they were among the first industries to feel the effects of the COVID-19 outbreak on car shipping. Once the outbreak started it was almost impossible to ship cars or car parts outside of China as the country soon went into lockdown. This scenario, as we mentioned, occurred in subsequent countries as they became affected by COVID-19. International trade, and therefore international shipping of cars, has slowed down considerably. Now, since it is fairly safe to ship cars even during COVID-19, companies managed to tackle a large number of shipments scheduled before the COVID-19 outbreak. But during the hiatus of the pandemic, international car shipping was practically non-existent.

Local shipping

When it comes to local shipping, car shipping companies are doing a bit better. Companies that are situated in a country with a decent local economy had no trouble dealing with local car shipping needs. After all, intrastate shipping has far fewer restrictions during the COVID-19 outbreak.

Moving industry

A big part of car shipping is related to the moving industry. After all, one of the reasons why people choose to ship their cars is because they need to move. Or, they have already relocated and they need their car shipped to them. So, with this in mind, what was the effect of the coronavirus on the moving industry (when related to car shipping)? Well, again, not good. Relocation was practically non-existent in the past couple of months. This, in turn, means that people didn’t ship their cars due to relocation. There was a decent amount of people moving back to their home states when quarantine measures were instated. But, international car shipping was difficult, to say the least.

Recovery

If the car shipping industry is to recover from the effects of COVID-19, it needs to do so slowly. As of writing this article, the coronavirus pandemic is slowing down and countries are lifting certain safety measures. Therefore, we should see an increase in international trade, especially from China (which is quite important for car shipping). But, if we are not careful, we might see another coronavirus pandemic in the near future. The key thing here is for countries and companies to slowly tackle the recovery process and to keep public health in mind while increasing trade. Only by doing so will the effects of the COVID-19 outbreak on the car shipping industry wane. After all, the last thing we want is for another wave of the coronavirus to hit.

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Scarlett-Rose Duffy is an established expert in the moving and shipping industry. She is most known for work as an industry advisor, in addition to her work with All Season Movers NJ.

IMO 2020
Archives, Global Logistics, Global Trade Daily

IMO 2020: Understanding the Impact of Cutting Sulphur Oxide Emissions

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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.