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A Tough Year on the Water Hasn’t Dampened Innovation for these Ocean Carriers

ocean

A Tough Year on the Water Hasn’t Dampened Innovation for these Ocean Carriers

To say that 2019 has been challenging for ocean carriers would be an understatement. The year began with the National Retail Federation forecasting a decline in year-over-year growth, echoing World Bank chatter of a slowing global economy.

And don’t forget the tariff wars between the U.S. and China (heck, the U.S. and just about anyone). Managing capacity on ships has also been an issue, and then there is the potential biggest bogeyman of all: the International Maritime Organization’s low-sulfur fuel mandate taking effect Jan. 1, 2020.

Sure, we could dwell on the gloom and doom, but that would not be very Global Trade magazine of us, now would it? We here in our silky ivory tower like to spotlight the positive, which we reveal with these ocean shippers we love.

MSC

Mediterranean Shipping Co. this year watched the world’s largest container ship, the MSC Gülsün, complete its maiden voyage from northern China to Europe. With a width of 197 feet and a length of 1,312 feet (!), the Gülsün was built by Samsung Heavy Industries at the Geoje shipyard in South Korea. It can carry up to 23,756 TEUs shipping containers on one haul. That capacity can include 2,000 refrigerated containers for shipping food, beverages, pharmaceuticals or any other chilled and frozen cargoes. That’s a lot of snow cones!

MOL

Mitsui O.S.K. Lines sees MSC Gülsün and raises you the MOL Triumph, which achieved a new world load record this year. Departing Singapore for Northern Europe on THE Alliance’s FE2 service with a cargo of 19,190 TEU. That surpassed the previous load record achieved in August 2018, when Mumbai Maersk sailed from Tanjung Pelepas to Rotterdam with 19,038 TEU onboard. Yes, you are correct, that’s a pretty slim margin of victory, and analysts suspect the MOL Triumph record won’t last long given the 23,000 TEU ships being introduced.

HYUNDAI MERCHANT MARINE 

Speaking of THE Alliance, current members Hapag-Lloyd, ONE and Yang Ming will be joined in April 2020 by Hyundai Merchant Marine (HMM). The South Korean carrier recently signed an agreement to join THE Alliance and then passed the pen to the founding members, who extended the duration of their collaboration until 2030. “HMM is a great fit for THE Alliance as it will provide a number of new and modern vessels, which will help us to deliver better quality and be more efficient,” said Rolf Habben Jansen, Hapag-Lloyd’s chief executive. 

HAPAG-LLOYD

Oh, speaking of the fifth-largest container shipping company in the world, Hapag-Lloyd is piloting an online insurance product as part of a digital offering to try to overcome the widespread practice of shippers relying on the limited cover provided under the terms of carriers’ bills of lading. While Hapag-Lloyd says it takes the utmost care in transporting cargo, company officials acknowledge things can and have gone wrong. Thus, the introduction of Quick Cargo Insurance, which is underwritten by industrial insurer Chubb in Germany and is limited to containerized exports from that country, France and the Netherlands. However, the carrier says it plans to expand the offer.  

MAERSK

To navigate new environmental regulations, A.P. Moller-Maersk A/S is considering going old school. We mean really old school by using a modern version of the old-fashioned sail to help power its ships. Currently being tested on one of Maersk’s giant tankers, the sails look less like the flapping silk you know from Johnny Depp movies and Jerry Seinfeld’s puffy shirt and more like huge marble columns. But they are nothing to laugh at as two 10-story-tall cylinders can harness enough wind to replace 20 percent of the ship’s fossil fuels, according to their maker, Norsepower Oy Ltd. 

MOL, THE SEQUEL

While we’re getting all green up in here, it’s worth also pointing out that Mitsui O.S.K. Lines Ltd. This year joined three other Japanese companies— Asahi Tanker Co., Exeno Yamamizu Corp., and Mitsubishi Corp.—in teaming up to build the world’s first zero-emission tanker by mid-2021. Their joint venture e5 Lab Inc. will power the vessel with large-capacity batteries and operate in Tokyo Bay, according to a statement the foursome released on Aug. 6. Thanks to the onslaught of legislation to improve environmental performance, other companies are also looking to battery power. Norway’s Kongsberg Gruppen is developing an electric container vessel, and Rolls-Royce Holdings last year that started offering battery-powered ship engines.

AMAZON

No, this is not a leftover strand from a different story in this magazine about moving packages on the ground. “Quietly and below the radar,” USA Today recently reported, “Amazon has been ramping up its ocean shipping service, sending close to 4.7 million cartons of consumers goods from China to the United States over the past year, records show.” While other ocean carrier leaders prepare for the bald head of Jeff Bezos, his move really should be no surprise given Amazon’s attempt to control as much of its transportation network as possible. (See my September-October issue story “Air War: Fast, Free Shipping has UPS, FedEx and Amazon Scrambling in the Air”). Of Amazon now floating into the sea, Steve Ferreira, CEO of Ocean Audit, a company that utilizes data and machine learning to find ocean freight refunds for the Fortune 500, told USA Today: “This makes them the only e-commerce company that is able to do the whole transaction from end-to-end. Amazon now has a closed ecosystem.” 

wood

U.S. Wood Container and Pallet Market – the U.K. Strengthened Its Position As the Largest Market for U.S. Exports

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

The revenue of the wood container and pallet market in the U.S. amounted to $10.7B in 2018, rising by 8.9% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +10.2% from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2014 with an increase of 20% y-o-y. Wood container and pallet consumption peaked in 2018 and is expected to retain its growth in the near future.

Production of Wood Container and Pallet in the U.S.

In value terms, wood container and pallet production stood at $10.5B in 2018. The total output value increased at an average annual rate of +9.2% from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The pace of growth was the most pronounced in 2014 when production volume increased by 16% against the previous year. Over the period under review, wood container and pallet production attained its maximum level in 2018 and is likely to continue its growth in the immediate term.

Exports from the U.S.

In 2018, approx. 106K tonnes of wood container and pallet were exported from the U.S.; increasing by 7.7% against the previous year. In general, wood container and pallet exports continue to indicate a temperate expansion. The most prominent rate of growth was recorded in 2014 with an increase of 134% year-to-year. Exports peaked at 334K tonnes in 2015; however, from 2016 to 2018, exports stood at a somewhat lower figure.

In value terms, wood container and pallet exports totaled $200M (IndexBox estimates) in 2018. The total export value increased at an average annual rate of +9.7% over the period from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2014 when exports increased by 32% against the previous year. Over the period under review, wood container and pallet exports reached their maximum at $200M in 2015; however, from 2016 to 2018, exports remained at a lower figure.

Exports by Country

The UK (48K tonnes) was the main destination for wood container and pallet exports from the U.S., accounting for a 45% share of total exports. Moreover, wood container and pallet exports to the UK exceeded the volume sent to the second major destination, Ireland (17K tonnes), threefold. Japan (14K tonnes) ranked third in terms of total exports with a 14% share.

From 2013 to 2018, the average annual growth rate of volume to the UK amounted to -4.3%. Exports to the other major destinations recorded the following average annual rates of exports growth: Ireland (+28.6% per year) and Japan (+25.9% per year).

In value terms, the UK ($77M) remains the key foreign market for wood container and pallet exports from the U.S., comprising 38% of total wood container and pallet exports. The second position in the ranking was occupied by Ireland ($31M), with a 16% share of total exports. It was followed by Japan, with a 13% share.

From 2013 to 2018, the average annual rate of growth in terms of value to the UK was relatively modest. Exports to the other major destinations recorded the following average annual rates of exports growth: Ireland (+33.5% per year) and Japan (+31.2% per year).

Export Prices by Country

In 2018, the average wood container and pallet export price amounted to $1,886 per tonne, rising by 1.7% against the previous year. In general, the wood container and pallet export price continues to indicate strong growth. The pace of growth appeared the most rapid in 2016 an increase of 93% against the previous year. Over the period under review, the average export prices for wood container and pallet attained their maximum in 2018 and is likely to continue its growth in the immediate term.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was Spain ($2,620 per tonne), while the average price for exports to the UK ($1,617 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to the Philippines, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

Wood container and pallet imports into the U.S. totaled 227K tonnes in 2018, picking up by 5.4% against the previous year. The total import volume increased at an average annual rate of +2.6% from 2013 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations throughout the analyzed period. The growth pace was the most rapid in 2016 when imports increased by 14% y-o-y. Imports peaked in 2018 and are likely to see steady growth in the immediate term.

In value terms, wood container and pallet imports amounted to $376M (IndexBox estimates) in 2018. Overall, wood container and pallet imports continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2017 when imports increased by 11% year-to-year. In that year, wood container and pallet imports reached their peak of $389M, and then declined slightly in the following year.

Imports by Country

In 2018, France (159K tonnes) constituted the largest wood container and pallet supplier to the U.S., accounting for a 70% share of total imports. Moreover, wood container and pallet imports from France exceeded the figures recorded by the second-largest supplier, China (32K tonnes), fivefold. Spain (6.2K tonnes) ranked third in terms of total imports with a 2.7% share.

From 2013 to 2018, the average annual growth rate of volume from France was relatively modest. The remaining supplying countries recorded the following average annual rates of imports growth: China (+5.7% per year) and Spain (+57.9% per year).

In value terms, France ($218M) constituted the largest supplier of wood container and pallet to the U.S., comprising 58% of total wood container and pallet imports. The second position in the ranking was occupied by China ($105M), with a 28% share of total imports. It was followed by Brazil, with a 1% share.

From 2013 to 2018, the average annual growth rate of value from France was relatively modest. The remaining supplying countries recorded the following average annual rates of imports growth: China (-1.7% per year) and Brazil (+15.9% per year).

Import Prices by Country

The average wood container and pallet import price stood at $1,659 per tonne in 2018, going down by -8.2% against the previous year. In general, the wood container and pallet import price continues to indicate a measured decline. The pace of growth was the most pronounced in 2015 an increase of 18% against the previous year. In that year, the average import prices for wood container and pallet reached their peak level of $2,097 per tonne. From 2016 to 2018, the growth in terms of the average import prices for wood container and pallet remained at a somewhat lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was China ($3,254 per tonne), while the price for Spain ($388 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by France, while the prices for the other major suppliers experienced a decline.

Companies Mentioned in the Report

Ifco Systems North America, Peco Pallet, Timber Creek Resource, Index Packaging, Palletone, Northwest Pallet Supply Co., Kamps, The Pallet Factory Inc, Atlas Global Solutions, Buckeye Diamond Logistics, Southwest Forest Products, Independent Stave Company, Elberta Crate & Box Co., Edwards Wood Products, American Fibertech Corporation, Hinton Lumber Products, Wisconsin Box Company, Nefab Packaging, Madison County Wood Products, Supply Chain Solutions, Satco, Commercial Lumber & Pallet Co., Crimstone AAA Operating Company, Wooden Pallets, Missouri Cooperage Company

Source: IndexBox AI Platform

Report: Seafood Product Market in the USA

IndexBox has just published a new report, the U.S. Seafood Product Market. Analysis And Forecast to 2025. Here is a summary of the report’s key findings.

The revenue of the seafood product market in the U.S. amounted to $16B in 2018, growing by 7.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

The market value increased at an average annual rate of +5.7% over the period from 2013 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed in certain years. The most prominent rate of growth was recorded in 2015, when the market value increased by 8.5% y-o-y. Over the period under review, the seafood product market attained its peak figure level in 2018, and is likely to see steady growth in the immediate term.

Seafood Product Production in the USA

In value terms, seafood product production stood at $14.2B in 2018. The total output value increased at an average annual rate of +5.7% from 2013 to 2018; the trend pattern remained relatively stable, with only minor fluctuations being observed throughout the analyzed period. The pace of growth appeared the most rapid in 2014, when it surged by 9.8% year-to-year.

Seafood Product Exports

Exports from the USA

In 2018, seafood product exports from the U.S. stood at 13K tonnes, surging by 9.4% against the previous year. In general, seafood product exports continue to indicate an abrupt contraction.

In value terms, seafood product exports amounted to $78M (IndexBox estimates) in 2018.

Exports by Country

The UK (4.9K tonnes), Australia (4.6K tonnes) and the Netherlands (1.3K tonnes) were the main destinations of seafood product exports from the U.S., together comprising 81% of total exports. New Zealand, Japan and China lagged somewhat behind, together comprising a further 9.4%.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Japan (+2.4% per year), while the other leaders experienced a decline.

In value terms, the largest markets for seafood product exported from the U.S. were the UK ($28M), Australia ($26M) and the Netherlands ($6.6M), with a combined 78% share of total exports. Japan, New Zealand and China lagged somewhat behind, together comprising a further 9.3%.

Export Prices by Country

In 2018, the average seafood product export price amounted to $5.8 per kg, surging by 19% against the previous year. Over the period from 2013 to 2018, it increased at an average annual rate of +5.2%.

Export prices varied noticeably by the country of origin; the country with the highest export price was Japan ($9 per kg), while the average price for exports to China ($2.9 per kg) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of export prices was recorded for supplies to New Zealand (+8.3% per year), while the export prices for the other major destinations experienced more modest paces of growth.

Seafood Product Imports

Imports into the USA

In 2018, approx. 334K tonnes of seafood product were imported into the U.S.; rising by 4.3% against the previous year.

In value terms, seafood product imports stood at $1.5B (IndexBox estimates) in 2018.

Imports by Country

In 2018, Thailand (124K tonnes) constituted the largest seafood product supplier to the U.S., accounting for a 37% share of total imports. Moreover, seafood product imports from Thailand exceeded the figures recorded by the second largest supplier, China (54K tonnes), twofold. The third position in this ranking was occupied by Ecuador (33K tonnes), with a 9.9% share.

From 2013 to 2018, the average annual growth rate of volume from Thailand stood at -1.6%. The remaining supplying countries recorded the following average annual rates of imports growth: China (+0.4% per year) and Ecuador (+5.2% per year).

In value terms, Thailand ($508M) constituted the largest supplier of seafood product to the U.S., comprising 34% of total seafood product imports. The second position in the ranking was occupied by China ($183M), with a 12% share of total imports. It was followed by Ecuador, with a 9.7% share.

Import Prices by Country

In 2018, the average seafood product import price amounted to $4.5 per kg, rising by 6.1% against the previous year. In general, the seafood product import price continues to indicate a relatively flat trend pattern.

Import prices varied noticeably by the country of origin; the country with the highest import price was Fiji ($6.3 per kg), while the price for China ($3.4 per kg) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of import prices was attained by Senegal (+15.3% per year), while the import prices for the other major suppliers experienced more modest paces of growth.

Companies Mentioned in the Report

Trident Seafoods Corporation, Gorton’s Inc., Bee Bumble Foods, Icicle Seafoods, Tampa Maid Foods, Blount Fine Foods, Omega Protein Corporation, Peter Pan Seafoods, Orca Bay Seafoods, Tampa Bay Fisheries, Sea Watch International, Trans-Ocean Products, Consolidated Catfish Companies, High Liner Foods (usa), The Harris Soup Company, Kanaway Seafoods, Fisherman’s Pride Processors, Copper River Seafoods, State Fish Co., America’s Catch, North Coast Sea-Foods, Heartland Catfish Company, North Pacific Seafoods, Ocean Beauty Seafoods, California Shellfish Company, Thai Union International

Source: IndexBox AI Platform

Locus Announces $22 million in Series B Funding Secured

AI-backed supply chain and logistics solutions company, Locus announced
Falcon Edge Capital, Tiger Global Management, Exfinity Venture Partners and Blume Ventures contributed to $22 million in funding towards enhancements of AI-focused solutions and expansion of teams in North America and Southeast Asia.

“Locus provides autonomous supply chain optimization, thus minimizing the dependency on human intelligence, built by an incredible team of PhDs and Engineers,” said Locus CEO Nishith Rastogi said. “Product applications include clubbing of forward and reverse logistics in a single route plan, schedule and on-demand dispatch planning, and automatic escalation management.

“Locus is on an unprecedented path to automate every possible decision in the supply chain. The funding will act as a boost to our global expansion efforts as we amplify our team size specifically in North America and continue to build our IP.”

Locus has established itself as a premier provider of AI-backed logistics and supply chain solutions in India following successful customer roll-outs. Additionally, one of the region’s largest e-grocers employs Locus to meet
99.5% SLA adherence for more than 10 million customers. Among its solutions portfolio, customers can find route optimization, real-time order tracking, insights and analytics, dynamic sales journey plans, and automated shipment sorting. 

“We believe the trillion-dollar global logistics market is ripe for disruption via technological change, particularly AI and machine learning-driven solutions,” said Navroz D. Udwadia, Co-Founder, Falcon Edge Capital. “We are excited to lead a Series B round in Locus, a company that deploys AI/ML/deep tech to drive route optimization outcomes in global logistics markets.”

“With Hindustan Unilever, Blue Dart and other prolific anchor customers, the team has demonstrated the ability to build and deliver cutting-edge technology and algorithmic-driven outcomes that provide attributable ROI to the enterprise at scale. We are excited to help Locus expand its breadth and depth of product and sales reach, moving from route optimization to a full-stack SaaS offering to the enterprise around its logistics needs.”

Source: Locus


Trade Economist Appointed to U.S. – China Economic and Security Review Commission

Less than a year after becoming President for the Economic Policy Institute, Thea Lee was appointed to the U.S. – China Economic Security Review Commission at the request of Senate Minority Leader Chuck Schumer. Lee will provide her trade expertise as well as counsel to Congress in regards to U.S. – China trade initiatives and legislative decisions.

“Thea Lee is laser-focused on how U.S. trade policy impacts working families, and her years studying China’s abusive trade practices make her an excellent addition to the U.S. China Commission,” said Schumer. “Thea has and will continue to provide thoughtful counsel to Congress, and I trust she will stand up for American workers in her new role.”

Additionally, Lee brings over a decade of experience with EPI, beginning in the 1990s as an international trade economist. Lee brought an extensive amount of economic research with her from her previous role as deputy chief of staff AFL-CIO. She also played an important role at the AFL-CIO through overseeing policy agenda and guiding the company through a series of changes.

“I’m delighted to have the opportunity to join the U.S.–China Commission,” said Lee. “Our relationship with China is critical, and indeed vital to the economy, but it’s important to gather and review evidence from a wide range of sources and perspectives on how this important relationship is evolving—and how that evolution is impacting workers in the U.S. and China. I look forward to working with the commission to shed light on these issues.”

Source: EPI.org

 

Another Airfreight Acquisition for 2018

Quick International Courier, known for its global role as a leader in time-intensive transportation and logistics in addition to generating 200 million annual net revenue, is officially supporting Kuehne + Nagel’s footprint extension strategy, according to a release this week.

“This acquisition is an important milestone in the implementation of our solutions strategy and a confirmation of our leading position in airfreight. With its unique expertise in time-critical shipments in the fields of aviation and pharma & healthcare – both key strategic focus and investment areas for Kuehne + Nagel – the company perfectly complements our existing global portfolio. Our customers will benefit from a much greater scope of services and capability for time-critical shipments, while Quick’s customers will get access to Kuehne + Nagel’s global network across more than 100 countries”, Yngve Ruud, Member of the Managing Board of Kuehne + Nagel said.

The announcement released this week accounts for the second acquisition for Kuehne + Nagel in a month. Back in October, the company announced the acquisition of Wira Logistics in an effort to support the warehousing distribution network in Indonesia.

“Kuehne + Nagel’s M&A strategy is focused on expanding our footprint, creating synergies and acquiring know how. The acquisition of Quick is another accelerator to drive network growth and to enhance our global customer solutions portfolio”,  Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG said.

With Q1 around the corner, industry experts continue making strides as seen with various acquisitions to maximize growth and extension opportunities on a global scale. With improved transportation of critical logistics intense materials, Kuehne + Nagel are now able to provide some of the most complex deliveries.

“We are looking forward to become part of the Kuehne + Nagel Group. Joining forces with one of the leading logistics providers offers us new growth perspectives within a worldwide operating network”, Dominique Bischoff-Brown, CEO of Quick International Courier said about the acquisition.

Source: Kuehne-Nagel

Overcoming Operational Challenges

In the age of Amazon-inspired standards and expectations, everything moves faster while changing just as quickly. In an evergreen market, the main key to success stems from proactive, digital solutions that are equipped with the ability to keep up in an ever-changing industry.

So what is really needed to make it work and go above set expectations within your organization and standards of operations? Below are three high-level tips to consider as we approach cyber-Monday and one of the busiest times of the year for e-commerce.

1. Be selective and remain modular.

It can be tempting to research and invest thousands into a solution that crosses multiple platforms while offering various strategy solutions. Although this is great, it produces higher risks and takes away from the actual needs of the company. Focus on what can be improved based on the company’s needs first, then look into broader solution options. Be cautious of investing in a solution that is new but irrelevant to operational needs. Prioritize your business goals to align with efficiencies on a multi-platform solution and approach. Remember what the customer needs and what is realistic in terms of delivering within operations.

2. Address internal and operational issues.

Everyone talks about transparency with customers for success, but you must first take an honest assessment at what is and isn’t working, internal/external challenges, pain points and inefficiencies before you can deliver the best to customers. You can’t produce quality results externally without fixing an area that needs improvement first. After a thorough evaluation is done, you can wisely select solutions and changes needed for success. Remember the example of the domino-effect business model, each part of the business is impacted by the other.

3. Choose fully-integrated solutions.

The implementation of digital solutions is at its peak. But what if a solution leaves out one area or another? For example, a digitized delivery system tracking ETA but can’t provide temperature control or visibility. Project44 said it best, “The holy grail is a truly integrated supply chain which connects all your modes and nodes including ocean carriage, drayage, deconsolidation, inland transportation, and final mile.”  When vetting solutions, remember each operational sector and choose the one that fits all.

 

Source: Project44