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Airfreight vs. Sea Freight – Which Works Better?

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Archives, Global Shippers 101, Global Trade Daily

Airfreight vs. Sea Freight – Which Works Better?

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Airfreight vs. sea freight has become a burning dilemma for all those in need of this type of services. While both solutions come with a set of advantages and disadvantages, the final choice one makes will depend on a variety of factors. We are willing to share our knowledge and findings with you so that you can make the best possible decision regarding your shipment in the given circumstances. 

Airfreight vs sea freight – the costs can be a decisive factor

Undeniably, the amount of financial means necessary to afford airfreight services is considerably higher than that of sea freight. Moreover, the appearance of the largest cargo aircraft in the world announces great changes and improvements in this field. The Antonov An-225 could cause a further rise of the airfreight costs, but it will also guarantee higher quality. On the other hand, sea freight is much more affordable and, consequently, the number one choice of a vast majority of clients. Opting for sea freight provides clients with acceptable service but at a significantly lower price.

Time matters greatly!

Most often, clients want their shipment delivered as soon as possible, which can cause problems for those offering sea freight services. Not seldom do customs issues or hold-ups at ports cause serious delays. However, we must admit that a giant step forward is evident in this field. Firstly, high-quality, modern ships are much faster now than it was the case in the past. Secondly, there are some canal upgrades that can eliminate tedious and tiring delays on some routes. Finally, sea freight forwarders can guarantee delivery times, which is vital for business owners when it comes to organization.

The type of cargo affects the final choice on airfreight vs. sea freight dilemma

The type of cargo is one of the most important factors influencing the choice in the airfreight vs. sea fright dilemma. In this case, we must admit that sea fright seems like a much better solution since it has no limitations you have to be aware of. One of the crucial pros of the maritime shipping is that you can ship even the bulkiest and extremely heavy goods. Conversely, airfreight is limited in this discipline. Before you opt for this type of goods transportation, it is advisable to make sure that the type of your cargo is acceptable. In addition, there is a very long list of the items which are prohibited and those listed as hazardous materials. Depending on your final destination, the rules and laws may differ. Yet, getting sufficient information on the subject must still be the first step in the process.

Safety of your cargo is the top priority

Understandably, the safety of cargo is always the top priority. It is important to emphasize that air cargo has to be dealt with the utmost attention and in accordance with the regulations which are very strict and clear. All the crucial elements, including handling and securing your cargo as well as the proper storage, are defined by airport regulations. This is a great benefit and a guarantee that the safety of your goods will be at the maximal level. On the other hand, we cannot say that sea freight is a bad alternative either. In this case, the goods are transported in containers, but the human factor is crucial. Proper packing strategies are essential in order to decrease any chances of potential damage during transport. If this is not conducted appropriately, the chances are some of your goods might get seriously damaged or even cause further problems on the ship.

Do not forget about the accessibility of your goods

If we analyze the accessibility of your goods as one of the criteria, airfreight is a more favorable option by all means. The procedures are clear, cargo is in smaller volumes and there are no unnecessary waitings to receive your goods. Using sea freight for your cargo often results in additional costs due to heavy congestions in seaports. If your goods are not delivered at the arranged time, you are required to pay for detention and demurrage costs, which may be a heavy burden on your budget. However, we must not forget to mention an advantage sea freight offers comparing to airfreight. The accessibility to markets is much higher in case of sea freight. The reason is very simple. When unloaded from ships, containers can move further inland by using the services of intermodal shippers. 

Eco-friendly practices 

Finally, let us not forget about the environment when choosing between airfreight vs sea freight. Applying eco-friendly practices is becoming increasingly important, so it does not surprise this is one of the factors shippers base their decision on. According to this particular criterion, sea freight is a more reasonable option since it has a significantly better carbon footprint. Quite the opposite, airplanes are serious polluters and require special attention and measures to reduce their carbon footprint to minimal values.

Final words on airfreight vs sea freight dilemma

The decisions and choices you make concerning airfreight vs sea freight dilemma will depend on miscellaneous factors. It is of key importance to weigh the pros and cons of each of these options and then make your decision final.  A serious effort is required to negotiate the best shipping terms and only then can you expect to ship your goods completely fuss-free.

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Susan Daniels is a passionate copywriter who loves exploring home improvement ideas and real estate market. Lately, she has gained considerable knowledge in the types of moving services and the qualities of respectable moving companies such as DA Moving NYC, for example. She enjoys giving advice on the best places to live and exciting places to visit. Traveling makes her happy as well as reading good books.

Lancaster
Archives, Global Trade Daily, News

BYD’s Lancaster Plant Celebrates 400th Bus

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Los Angeles World Airports welcomed its 20-bus order this week of which included the official 400th bus made by the Lancaster team at the world’s leading electric vehicle company, Build Your Dreams. The 60-foot articulated K11M model transit bus will aid in terminal and gate guest transportation.

“The 400th American bus is another great milestone for our Lancaster team,” said BYD North America President Stella Li. “Since the delivery of our first American battery-electric bus from Lancaster in 2014, BYD has provided buses to customers in 14 states and four Canadian provinces.”

In the theme of emissions-free and environmentally friendly efforts, BYD is proud to represent the largest North American battery-electric bus manufacturer. The company boasts 50 municipal, transit agency, university, airport, federal, and other commercial/private-sector bus customers. Among these customers includes the Los Angeles Department of Transportation, Antelope Valley Transit Authority, Denver RTD, Kansas City International Airport, and Solano County Transit.

BYD’s Lancaster team operates a half a million-square-foot manufacturing plant which originated as a 100,000 square foot motorhome manufacturing facility. The more than 750 employees for BYD North America represent expansion and growth seen by the company throughout the last six years, of which $250 million was invested. BYD Lancaster employees include women, veterans and second-chance employees in addition to boasting all-union workforce and a pioneering Community Benefits Agreement.

BYD shows no signs of slowing down emissions-free efforts and will continue breaking ground on innovative, sustainable transportation technology solutions.

“We are passionate about our mission to create a cleaner environment here in North America and across the globe.”

fuel cell
Archives, Global Trade Daily, News

Nuvera Breaks Ground on Automated Fuel Cell Production Facility in China

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Nuvera Fuel Cells, LLC, a provider of fuel cell power solutions for motive applications, is pleased to announce construction of a fuel cell stack production line in the Hangzhou district government of Fuyang, China. A ground-breaking ceremony was held on Dec. 17, 2019 attended by Lucien Robroek, CEO and Jon Taylor, President of Nuvera, along with Fuyang government officials.

In December 2018, Nuvera signed a cooperation agreement with the Fuyang government, located in Zhejiang province, to enable the local manufacture of Nuvera® fuel cell stacks. The agreement provided incentives to Nuvera for the establishment of its production facility. The fuel cells will power zero-emissions, heavy-duty vehicles such as delivery vans and transit buses.

“China is leading the world in the adoption of fuel cell electric vehicles, and we are excited to be at ground zero of this transformation,” said Lucien Robroek. “The new manufacturing site establishes Nuvera as a major fuel cell provider both in China and in the entire Asian region.”

The combined market for fuel cell forklifts, passenger vehicles and commercial vehicles in China is expected to reach nearly 50,000 units per year in 2025 and 400,000 units per year by 2030, according to information provided by customers in China. The Nuvera site incorporates equipment for the automated manufacture of up to 5,000 fuel cell stacks per year for vehicle applications. Additional capacity can be added as demand requires.

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ABOUT NUVERA FUEL CELLS, LLC

Nuvera Fuel Cells, LLC is a manufacturer of heavy-duty, zero-emission engines for mobility applications. With facilities located in the U.S. and Europe, Nuvera provides clean, safe, and efficient products designed to meet the rigorous needs of industrial vehicles and other transportation markets.

Nuvera is a subsidiary of Hyster-Yale Group, Inc., which designs, engineers, manufactures, sells, and services a comprehensive line of lift trucks and aftermarket parts marketed globally primarily under the Hyster® and Yale® brand names. Hyster-Yale Group is a wholly owned subsidiary of Hyster-Yale Materials Handling, Inc. (NYSE:HY). Hyster-Yale Materials Handling, Inc. and its subsidiaries, headquartered in Cleveland, Ohio, employ approximately 7,800 people worldwide.

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Archives, Global Trade Daily, Special Reports

How to Use Invoice Factoring to Improve Your Business Cash Flow

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Cash flow can be difficult for a business to manage effectively. When you wait 30, 60 or 90 days for payment of work already completed, expenses don’t wait with you. They need to be paid now.

But you aren’t at liberty to change payment terms you agreed to with customers. If you try it, they’ll just leave you to find another company that will work with their terms.

Let’s look at a cash flow example. Say you own a small trucking business with a fleet of 5 trucks. The trucks are assigned as collateral to the company that financed them.

Business is good. You have experienced drivers and your trucks haul for great customers who pay well. But paying well does not mean paying quickly.

Yet you have truck payments, fuel, maintenance, insurance, taxes, payroll, and other overhead. You find yourself burning through cash before you get more.

You don’t want to lose your drivers or your trucks. And you’d hate to lose your customers to competitors. But debt is not an option; the trucks are already financed. If only you could get paid quicker.

Then you hear about invoice factoring and how it can smooth out cash flow. You decide to give it a try.

How Does Invoice Factoring Work?

Invoice factoring is not a new concept. It’s been around for centuries. It is selling accounts receivable to get cash for your business.

In the example of the trucking company above, when a load is delivered and the customer is billed it creates an account receivable. But the customer doesn’t pay until the agreed upon terms. That long wait time puts stress on the business.

With invoice factoring, instead of billing the customer, you sell the invoice to a factoring company. The factor then pays you an advance of up to 98% of the invoice value.

The advance you receive depends on the agreement reached between you and the factoring company. That advance is paid to you within 24 hours or less.

The factor bills the customer and waits for payment. Once your customer pays the factor, the remainder is paid to you minus a small fee for factoring.

Instead of waiting long times for payment, your business receives cash immediately after transmitting each invoice. Now the trucking company has the consistent cash flow to carry on hauling freight. As long as you deliver loads, you’ll have the cash right away.

And the factoring company takes on the billing and collections. No more trying to manage accounts receivable and no more spending time trying to collect on them. The factor does it all for you.

How Invoice Factoring Can Help Grow Your Business

Now that the trucking company has improved business cash flow it’s time to focus on growth. Meeting all your expenses on time, having extra money on hand, and saving time and money on accounting services frees you up to take on more work. Here are 20 easy ways trucking companies can increase their profit margins.

Your customers are happier than ever that you’re so dependable, always delivering on time now. They offer you additional loads. Instead of turning them down for lack of cash to operate, you jump at the opportunity.

You begin to add more trucks, more drivers and more trips. And your business is thriving, all because you improved your cash flow by invoice factoring.

And the more your business cash flow grows, the more your factoring grows with it.

Is it Hard to Qualify for Invoice Factoring?

No, not at all. You don’t need a high credit score. In fact, it doesn’t matter if you have bad credit. With factoring you’re not borrowing so your credit is not important.

It’s the credit worthiness of your customers that matters. As long as your customers have good credit and a strong history of paying you will most likely qualify.

That’s why invoice factoring is a great idea for those new to the business and/or having a low credit score. Factoring is getting paid on work you’ve already done. It’s your money; you earned it. You just get it without having to wait. The factor does the waiting for you.

Invoice factoring is also good for businesses that are thriving but experiencing interruptions in cash flow. Getting paid immediately on invoices can really improve business cash flow and reduce the stress caused by long payment wait times.

If you’d like to improve business cash flow, reduce accounting costs and grow your business, you owe it to yourself to look at invoice factoring. It’s used by all sorts of businesses, not just trucking.

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Rachel Donaghy is the Senior Director of Account Management at eCapital.com. eCapital is building a brighter future for the transportation industry. It’s a future where freight companies get paid at the click of a button. Where document exchange becomes data exchange. Where complexity disappears into the background and drivers have the freedom to focus on delivering the next load. You can find Rachel on LinkedIn and Twitter.

crowdsourcing
Archives, Global Trade Daily, Stories

Crowdsourcing, Drones and Why I’ll Never Buy a Bugatti

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Amazon has taught me I don’t have to wait for my next two-pack of ravioli cutter stamps, so if you can’t get them to me in under two hours, I know someone else who can. It’s 2019, and customers want what they want, when they want it. According to a recent report, the global last-mile market is now expected to hit $55.2 billion by 2025, up from $30.2 billion today – and it’s no wonder. Amazon’s deep investments in delivery continue to fuel a surge in e-commerce; meanwhile, customer expectations and the entire supply chain have been completely upended.

The good news is that the more retailers invest in delivery, the more their e-commerce revenue grows. For businesses who’ve made supply chain a top priority, it’s huge validation.

So where does that leave us in the race to the doorstep? Companies are throwing cash at everything, from drones to self-driving robots to crowdsourcing. Who’s got the best chance of success? How can each one lower costs, increase speed and mitigate risks? Can they disrupt the industry without being, well… disruptive?

Drones: The droids you’re looking for?

Drones entered the mainstream about five years ago as a cool photography gadget. Thanks to falling prices, they’re a hot item on every kid’s Christmas list this year, but they’ve also generated a lot of buzz about their potential applications for logistics.

In rural areas, drones have huge promise for parcel delivery. They’re already supplementing human workers in large warehouses – flying to far-flung corners to pick goods on high-up shelves. And they’re working out in the freight yard, too, helping to track and manage trucks, trailers and containers.

Companies like UPS, Amazon, Google and even Dominos are experimenting with drones in the last mile. One popular model uses a carrier van on the highway as a hub for an armada of drones that fly out of the back to deliver small parcels to nearby homes. It’s an impressive, futuristic version of hub and spoke. Can it work? At what cost?

Just like commercial aviation and the automobile, drones have major hurdles to navigate, especially when we think about how they’ll work at scale. We’ll need major regulatory oversight to address safety, noise and privacy concerns. We’ll need to build control towers, write better algorithms, improve GPS, and figure out what to do about the weather. But these challenges will likely all be worked out, given enough in time and investment.

Autonomous vehicles and robots: Bots with brains.

What about autonomous cars and robots? Are they more viable in the near term?

McKinsey predicts autonomous vehicles could slash last-mile delivery costs in urban areas by as much as 40 percent. And companies from FedEx to Bosch have made bets on sidewalk delivery bots, deploying prototypes in San Francisco office parks, where they’re tightly controlled.  Long-term, the potential is clear, and companies with the deep pockets to make early bets could save a lot of money in the long run.

Both autonomous cars and bots cost thousands of dollars per unit to manufacture, though, and depend heavily on human supervision and maintenance. When it comes to flexibility and scalability, is a sidewalk droid really that different from a truck? Both are rigid, asset-heavy systems that require a big capex investment upfront with even higher maintenance and upgrade costs over time.

Think of it this way: earlier this year, actor and comedian Tracy Morgan from Saturday Night Live and 30 Rock bought himself a sweet new supercar: a Bugatti. He forked out a cool $2 million for it. But later that day, he was sideswiped by a driver in a Honda CR-V. It was just a minor fender-bender, but it turns out fixing a scratch on a Bugatti costs more than the entire value of the car that hit him – somewhere to the tune of $32,000.

The truth is, even if I had the cash to buy a Bugatti, I could never afford to maintain it. Will a fleet of delivery droids be the same?

Whether it’s drones or robots or some other yet-to-emerge autonomous technology, asset-heavy logistics strategies will always suffer from the same Achilles heel: whether it’s changing wiper blades or switching from lithium batteries to solar – hardware is expensive. And if a new hardware solution can’t solve for the demands of flexibility in the last mile, there will still be a need for something that can.

This doesn’t even take into account all the regulatory hurdles, infrastructure dependencies and real-world obstacles from bikes to baby strollers, pranksters to potholes, larcenists to labor unions.

But what folks aren’t talking about, and what I find most interesting, is the inherent limitations that come with any fixed-asset system.

Drones and robots may well be efficient, and hopefully one day safer. But what happens when a last-minute order comes in and the customer needs delivery now? How do you adjust a pre-planned droid route at the last minute – when the droid has already left the store?

Crowdsourcing: Using an infrastructure that’s already there.

Robots may well be our future, but how do we solve the delivery challenges we have today? That’s where crowdsourcing comes in.

Crowdsourcing lets retailers leverage existing resources already on the road to make delivery faster, more efficient and more flexible. While others are making big bets on drones, our Roadie drivers are delivering gigantic garden gnomes. We’re delivering temperature-controlled medicine that won’t be ready for pickup until 9 p.m. We’re working with Walmart to save busy parents a trip to buy groceries. We’re returning your lost luggage from the airport, and bringing you the ladder you bought online at The Home Depot this morning.

Some of the biggest brands in retail are investing in crowdsourcing. Today, we’re partnering with SMBs and Fortune 100 retailers to deliver everything from makeup to mattresses, paint to puppy food. Businesses across virtually every industry are solving today’s delivery challenges with an asset-light strategy that allows them to experiment and learn. They’re addressing delivery demand today, without making new capital investments or locking themselves into a futures bet with complex hardware systems. And most importantly, they’re not disrupting their existing supply chain in a way that can’t be undone without a huge cost if and when the autonomous tech winners begin to emerge over the next decade or two.

And that’s really the point. Retailers need optionality. Customers want to personalize their delivery for each and every purchase at the point of sale. A great customer experience means having a delivery solution for every customer delivery problem, whether you’re scheduling a sofa delivery on Sunday or sending a rescue inhaler right now. Making that work in the real world means having an arsenal of tools in your delivery toolkit.

We’re solving the problems retailers are having today, at scale – not iterating on solutions that may work at a required scale years in the future. Crowdsourcing is a sustainable solution that ensures we’ll all be around to see what delivery looks like in the future.

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Don Pancho_University for Peace Visit

Marc Gorlin is the Founder and CEO of Roadie, a crowdsourced delivery service that works with consumers, small businesses and national companies across virtually every industry to provide a faster, cheaper, more scalable solution for scheduled, same-day and urgent delivery. With over 150,000 verified drivers, Roadie covers 89% of U.S. households — the largest local same-day delivery footprint in the nation.

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Archives, Global Trade Daily, Imports/Exports

Trade and the Impact on Imports and Exports in 2020

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Significant and sustained increases in the world trade index (an index measuring the number of times the word uncertainty or its variants are mentioned in Economist Intelligence Unit (EIU) reports at a country level) should be a worry for many as “the increase in trade uncertainty observed in the first quarter could be enough to reduce global growth by up to 0.75 percentage points in 2019”[1]

In August, the US Institute for supply management[2] latest report shows a contraction in production, purchasing, and employment indices.

Ahir, H, N Bloom, and D Furceri (2019), “The global economy hit by higher uncertainty”, VoxEU.org. https://voxeu.org/article/trade-uncertainty-rising-and-can-harm-global-economy

 

Uncertainty generated from Brexit, the US-China trade war, Japan – South Korea trade wars, and general discontentment with global trend towards widening income inequality is creating a toxic mix for politicians to deal with. The irony is the conventional approach of blaming your trading partners for your problems is only likely to exacerbate a general lack of confidence and increase further uncertainty.

The current round of the G7 summit in Biarritz concluded with support “to overhaul the WTO to improve effectiveness with regard to intellectual property protection, to settle disputes more swiftly and to eliminate unfair trade practices.” In essence, it’s signaling a need to strengthen the capabilities of the WTO to act faster and more decisively in resolving disputes that are even more political than structural in nature, requiring a more multi-faceted engagement approach. Whilst this may help in the long-run, in reality, companies will have to contend with uncertainty in global trade for some time to come as well as the impacts on the real economy from these disputes.

And all of this is happening as IMO 2020 approaches, the January 1, 2020, date by which the International Maritime Organization mandates a switch to lower sulfur fuels in order to achieve an 80% reduction in sulfur emissions leading to significant cost increases in the shipping goods via ocean freight (initial estimates between 180USD – 420 USD per TEU dependent on routing, base fuel costs, carrier).

So given the significant uncertainty around global trade agreements, the increasing use of trade as a political football, the increasing costs to trade and the shortening of product lifecycles as customers want faster, newer more differentiated offerings. Is it still worth it?

Of course this is very much dependent on what industry you are in. Whether you’re a global manufacturer or a wholesaler sourcing goods, your perspectives may be different based on investments made, sensitivity to current trade/tariff measures, customer demands, your markets, and the degree to which you are exposed to political debate and targeting.

However, I would offer that the benefits of specialization, economies of scale and unique factors of production that have underpinned global trade still exist as Adam Smith put it in 1776:

“By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?”[1]

Today this simple analogy still holds true in skills, competences, capabilities, and access to markets and insights so that over time the expectation is that trade will prevail.

While the recent outlook has been gloomy, opportunities for 2020 include a resolution to a number of ongoing disputes and a final settlement on Brexit (we hope). Additionally, the maturation in technologies such as blockchain, process automation, forecasting and demand management solutions can also offset costs associated with IMO and support greater agility in the uncertain supply-chain world that we currently live in.

Indeed, if 2019 was the year of trade uncertainty, 2020 could be a restorative year in our ability to execute global trade.

Partnering with an experienced supply chain leader will be essential to minimizing cost increases while ensuring the efficient flow of your company’s goods and services.

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[1] World Economic Forum:https://www.weforum.org/agenda/2019/07/how-trade-uncertainty-is-impacting-the-global-economy/

[2]https://www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1

[3]Adam Smith: Wealth of nations 1776

Neil Wheeldon is the Vice Presidents Solutions, BDP International.

expert logistics
3pls, Archives, Global Trade Daily

The Benefits of Hiring an Expert Logistics Company

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When it comes to running a business, it’s extremely important to always keep economic efficiency in mind; that’s the only way to expand your business while maintaining a profit. And in many situations, that means making sacrifices. However, if you work smart instead of hard, you can avoid most of that.

For example, it’s crucial to know when your company needs to do something on its own, and when to hire a third-party to do the job for you. If you need goods transported across vast distances, hiring an expert logistics company is probably better than doing it on your own. There are many benefits to such a move, and we’re here to lay them out clearly!

Saving Time

You probably know the old adage “time is money”. Well, there’s no field in which that’s truer than in business. At the end of the day, no matter your managerial capacity, you’ve only got so much time to deal with the important details of running a business. That’s why it’s important to have professional staff and third-party companies who will handle crucial parts of the job for you, so you’re not stretched too thin.

 To give you an example – most businesses are aware that there are many advantages to maritime shipping. However, it’s also incredibly complicated, which warrants the hiring of an expert logistics company to deal with the goods transportation for you. After all, if you were to do it in-house, that would mean tons of research, a lot of new staff, not to mention all of the compliance issues. But if you hire a logistics company to take care of this instead, you’ll be able to reap the benefits of international shipping and trade without dealing with the pesky minutiae.

Consider Cost Efficiency

If we’ve established that time is money and that hiring an expert logistics company saves time, let’s take a look at the former side of that coin. In other words – the money part of the equation. Naturally, many companies around the world have in-house logistics departments. But bear in mind, these are usually large, multi-national conglomerates – companies that can afford to avoid hiring an expert logistics company and bear the costs of transportation themselves.

 On the other hand, if you’re a medium-sized business (and on a global scale, most companies are), you should keep in mind that this will be very costly. And why do it in the first place, really? Outsourcing some of these tasks means not dealing with all of the doing-business costs of a full-fledged logistics department in a large company.

High Standard of Service

Bear in mind that, if you’re thinking of hiring an expert logistics company, you should go with a reputable one. Logically, renowned logistics companies have a brand image to uphold, just like any other firm. And that means that they have well-trained staff and tight schedules – everything you need in order to make sure that your logistics are handled the right way! If you want your end-users and consumers to have a product in their hands without delay, building an in-house logistics team just wouldn’t cut it.

 Also, if your company needs some international transportation, the details of that are definitely something you don’t want to handle on your own. There are plenty of US custom clearance issues and pesky bureaucratic procedures. And while these could seem arcane to you, expert logistics companies handle that kind of stuff on a daily basis.

Latest Technology

When it comes to delivery services and things like freight forwarding, believe us – not hiring an expert logistics company would be a huge mistake. While this might seem like purely menial labor on the outside, shipping involves far more than the loading and unloading of crates. In reality, especially in the contemporary world of global interconnected trade, any kind of concerted transport involves the usage of highly advanced software and technology.

And that kind of modern transport tech is more expensive than you might think; adding a further reason to not bother with logistics on your own. If you hire a specialized company to do it for you, there will be no further investment in logistics that you’d have to make. And that’s definitely important from the cost-efficiency side of things. That’s right, you’re beginning to see why even the biggest product-oriented companies in the world opt for using external logistics experts. At the end of the day, if you’re not a company solely focused on logistics, they’re complicated enough to warrant leaving them to a company that does. 

So, what can you take away from this small outlook into the world of transport logistics? There’s really no other conclusion you could reach, save for the fact that it’s best to leave logistics to the experts. In other words – hiring an expert logistics company to handle all of it for you. That gives you ample time to focus on issues that deserve your attention more, like growing your business and improving the revenue streams.

And that’s something you’ll be able to do if you don’t spend your valuable time on logistical details. More specifically, it would also be fiscally irresponsible to spend money on managing and developing an in-house logistics team, when outsourcing is a much cheaper option. Sure, outsourcing isn’t always the obvious solution, but if you ask us, in this case, it’s a no-brainer.

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 James Greene is a freelance journalist, most often providing insights into topics related to international commerce. He also advises people on topics ranging from global shipping solutions to how to transport your vehicle in no time from Saudi Arabia. When he’s not writing articles on trade, he likes playing chess and hiking on Appalachian trails.

a&r logistics
Archives, Dispatches, Global Trade Daily

OmniTRAX Joins with A&R Logistics at Atlanta Waterfront Terminal

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OmniTRAX, Inc., one of the largest privately held transportation service companies in North America and an affiliate of Denver-based The Broe Group, and A&R Logistics, North America’s largest provider of integrated dry bulk logistics solutions for the chemical and plastic industries, are opening a new transload facility in Atlanta.

The Atlanta Waterfront Terminal, located adjacent to the Fulton County Railway (FCR) tracks southwest of downtown, will initially enable the contents of 10 rail hopper cars to be simultaneously offloaded to trailers, with expansion expected. A&R will use the depot to transfer plastic pellets shipped by rail from resin producers across the country onto specialized pneumatic trailers and then transport the product to extruders throughout Georgia and neighboring states.

“The new Atlanta Waterfront Terminal is a great location for A&R, complete with access to the interstate system and great opportunities for growth,” says OmniTrax CEO Kevin Shuba. “We look forward to working with the A&R team to ensure the facility safely reaches its full potential.”

“The key to the Atlanta Waterfront Terminal is flexibility,” adds Dan Jaworski, chief commercial officer at A&R, which provides a comprehensive suite of services including transportation, warehousing, packaging and fully outsourced logistics management. “The location allows our trucks to get anywhere in the metro Atlanta area quickly and efficiently, plus the site is expandable to fit our growing needs.”

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Archives, Global Trade Daily, Imports/Exports

Common U.S. Customs Clearance Issues & Overcoming Them

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For people who are not intimately familiar with the international freight industry, it can appear to be dauntingly complex. After all, dabbling in international trade means dealing with a host of different entities, each of which has its own regulations and rules that you have to follow. And US customs are just one large piece in an ever-increasing puzzle.

However, understanding common US customs clearance issues and anticipating them is crucial for a successful global trading endeavor. That’s why we’re going to delve into some of them, and propose ways to of solving them.

Customs Exams

If you want to deal with common US customs clearance issues, be prepared for customs exams. Naturally, you probably know that random checks at customs aren’t that rare of an event in the world of maritime shipping. And sure, only up to 10% of global shipments are inspected in reality. While that may be a small fraction of the overall volume of shipping; you need to be prepared. And that goes for any customs in the world, including the US.

Issues with US Customs Clearance

The first thing you need to understand regarding US customs clearance issues is – they are different in each country and port. So, some things you read about the priorities of Dutch customs won’t necessarily be true when the US is concerned. Generally, U.S. customs tend to have frequent random inspections.

Know that there are separate, country-specific inspections that they conduct, depending on what country your shipment is coming from. That’s the sort of information that importers regularly provide to freight forwarders. So, that sort of logistical information is important, as any misleading information can lead to long-term distrust; not a good thing for trading efforts. If complete information flows both ways, your freight transport will be a smooth process. And in the case of the contrary, you’ll be dealing with another issue: delays.

Delay Expenses

One of the most common US customs clearance issues is delays. And these happen precisely because of different exams and holds. These, in turn, lead to fees and charges that are a consequence of delays. Which can happen for an entire slate of different reasons. However, not all delay charges are the same. Generally, they are divided into per diem, detention, and demurrage. So, make sure you familiarize yourself with the terms, before negotiating with a shipping company.

Missing Documentation

When it comes to your shipping process, know that the original copy of your Bill of Lading is the most crucial document. And its misplacement is a surprisingly common problem that happens to shippers. If the Bill of Lading is missing, be sure that you will face issues regarding your shipment’s release. And that will result in additional delays. That’s why you need to be sure that the Bill of Lading will be carried through a channel you can rely on. That’s where the aforementioned trustworthiness comes into play.

If you’ve got a supplier with whom you have a fairly trusting relationship, you can opt for an Express Release or a Telex Release. Though, you may require more particular paperwork, depending on the type of cargo and the port of destination. Uncertainty and trade volatility is something that all shippers face; being familiar with all the details will go a long way towards reducing them to the minimum.

Missing Taxes and Duties

As we’ve mentioned just now, you may need some specific sort of paperwork, depending on where the shipment is going and the sort of cargo you’re shipping. And not abiding by this is one of the common US customs clearance issues, but you want to avoid that. After all, this additional paperwork is there to protect the interests of the country’s residents and the economy. Thus, some commodities may be forbidden, while others are allowed, but only with special permits.

To give an example – auto-shipments are among those which require specific documentation. Before the shipping is done, have a look at the HS Code of the cargo that you’re transporting. You may encounter extra taxes and duties in order to clear your shipment. So, if you want your shipment to go through smoothly, be certain that you have all of the particular documentation that all the different ports require.

Cargo Damage

Unfortunately, cargo damage is something that happens often in the world of shipping. That’s why you want to make sure your cargo is safely secured in its container at the port of origin. Statistics show that 90% of cargo damage actually happens due to improper storage and packing. Plus, bear in mind that the loading process in your origin point should be perfect. Take care of all the details, like remembering how many pallets you can actually fit into the container.

Because in reality, cargo damage rarely happens due to terminal or carrier mishandling. But if that does happen, do not forgo filing an insurance claim. And while doing that, take great care to go through all the proper procedures step by step, if you want to be certain that you will be compensated for the losses. Still, though; we recommend safely securing your cargo, and you won’t have to go through any of this.

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Nathan Smith is a freelance author, mostly writing analyses of the maritime and air shipping industries. When he’s not writing about moving companies like Four Winds Saudi Arabia, he likes reading crime fiction and watching science fiction movies.

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Archives, Foreign Trade Zones, Global Trade Daily

The UAE Foreign Direct Investment (FDI) Law

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For a great many years, global businesses have viewed the United Arab Emirates as an attractive global investment market. With a strong presence of high-net-worth consumers and a geographically strategic location from which to distribute throughout the Middle East and North Africa, the UAE is rife with opportunity.

Yet, many international corporations could not own companies outright in the UAE and were restricted to a maximum ownership of 49%. Ownership laws, however, are now being revisited to diversify the country’s economy beyond the energy sector, which has been the source of UAE wealth for decades. But precisely the degree to which economic liberalization is taking place is very much based on one’s perspective.

Background

The United Arab Emirates (UAE), a federation of seven Emirates (member states), has served as a global centre for trade for centuries. However, most global businesses had often expressed discomfort with the country’s investment laws which, despite allowing 100 percent foreign ownership of businesses in the country’s Free Trade Zones (FTZs), stipulated that at least 51 percent of a company established  within the UAE, and outside a Free Trade Zone, must be owned by UAE citizens, or companies wholly owned by UAE citizens.

In addition, agency and distributor laws require that only a local commercial agent could sell products in the UAE market; and only UAE citizens or companies wholly owned by UAE citizens could register with the Ministry of Economy as commercial agents. Regulations also prevent the termination, or non-renewal, of a commercial agency contract unless the principal has a material reason to justify the termination or non-renewal; and the principal must often approach a court to terminate a contract.

Legislating Economic Diversification

The most recent Trade Policy Statement issued by the UAE through the World Trade Organization’s Trade Policy Review mechanism in 2016 stated the country aims to drive towards economic diversification by being less reliant on the oil sector and to increase its attractiveness to foreign investment.

The UAE enacted Federal Law No. 19, the Foreign Direct Investment Law (FDI Law) in November 2018. To promote and develop the investment environment and attract foreign direct investment in line with the developmental policies of the country, the Law established a framework for the country’s Cabinet to mandate which sectors and activities of the economy would be eligible for 100 percent foreign ownership. However, a list of eligible economic sectors and activities was not published by the UAE Cabinet until July 2019.

The list comprised of 122 economic activities across 13 sectors that would be eligible for up to 100 percent foreign ownership. The decision simultaneously conveyed that each emirate (member state of the UAE) could determine the percentage of foreign ownership under each activity suggesting that foreign ownership levels could vary from emirate to emirate. It was also clarified that oil & gas production and exploration sectors, air transport, and security and military sectors would be excluded from the purview of the FDI Law.

A Method of Recourse

It is also of interest that news reports indicate that for activities that are not included in the list of activities/sectors eligible for 100 percent foreign ownership, companies could approach the government for permission for a higher level of ownership; and that approvals may be granted on a case-by-case basis. The sectors that would allow 100 percent foreign ownership include:

-Space

-Renewable Energy

-Agriculture

–Manufacturing

-Road Transport & Storage

-Hospitality and Food Services

-Information and Communication Services

-Professional, Scientific and Technical activities

-Administration and Support Services

-Education

-Healthcare

-Art & Entertainment; and

-Construction

For those businesses that do qualify under the FDI law, their products will be treated as being of UAE origin and therefore, eligible for such treatment under international agreements to which the UAE is a party. This is a privilege that is not available to goods manufactured by foreign-owned companies based in UAE Free Trade Zones. In addition, they can transfer abroad operating profits and proceeds from sale of investment or other assets.

Measuring Success

The Emirate of Dubai has reported that it has attracted US $12.7 billion in foreign direct investment (FDI) in the first half of 2019 thereby ranking the emirate third globally in FDI capital flows into Greenfield Projects. Also, in October 2019, Dubai assumed the presidency of the World Association of Investment Promotion Agencies (WAIPA), a global entity that works for the smooth flow of cross-border investments.

Although it is still too early to gauge the impact of the FDI Law and other developments, the consensus is that the UAE has taken steps to accelerate foreign direct investment into the country. It remains to be seen whether further steps such as changes to the agency and distributor laws, and changes to regulations related to the termination of agency contracts will be implemented to enhance the attractiveness of the UAE to foreign investors.

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JC Pachakkil is a senior consultant in Global Trade Management at trade services firm Livingston International.