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Ocean Fast Facts
This month's AIT Ocean Fast Facts begins with a hot topic that has been burning on the minds of our customers ... Fuel! An AIT customer recently asked just how much fuel is burned on a typical vessel between Hong Kong and Los Angeles.
Well, the answer to that question is subjective depending on a variety of factors: the size of vessel, the commodity mix and gross cargo weights on board that vessel, the weight of empty containers, and weather and navigational factors in transit.
While we can't offer an objective answer to this question, we can share a small fun fact provided to us by one of AIT's leading ocean carriers:
A ship the size of 7,750 TEUs burns approximately 217 metric tons of fuel per day. Note, the average transit between Hong Kong and Los Angeles between 11 and 13 days, so approximately 2,821 metric tons of fuel is utilized on a one-way voyage between Hong Kong and Los Angeles.
Market Notes
Pre-Summer Update! Trans Pacific Peak Season Surcharges
Peak Season is rapidly approaching. Several carriers originally proposed a June 1, 2008 start to the Peak Season surcharges. In 2008, the effective date for these surcharges has been announced and varies by carrier. As of now, these charges will go into effect as follows:
| Carrier |
PSS effective Date |
| Evergreen |
June 15, 2008 |
| NYK |
June 15, 2008 |
| CMA-CGM |
July 1, 2008 |
| ANL |
July 1, 2008 |
| MSC |
June 15, 2008 |
| OOCL |
June 15, 2008 |
| Maersk |
July 1, 2008 |
| ZIM |
June 15, 2008 |
| Wan Hai |
June 15, 2008 |
Currently, the proposed PSS levels are $320/20' $400/40' and $450/40hc, but may vary by carrier. Further information will follow in upcoming AIT eNewsletters or customer alerts.
Planning for Peak! As peak is approaching, there will be a rush for exporters to move their cargo before the Peak Season surcharges apply. Taking this into consideration, it is especially important for AIT customers who are anticipating shipments during peak season to forecast accurately and allow up to 10 days to pre-book at origin to ensure container and equipment availability!
Cargo Weight Mis-Declaration and Weight Limitation Fees
Please be advised that several carriers are currently charging either weight mis-declaration and/or weight limitation fees for cargo to and from the United States. The weight limitation fees are averaging between $150 and $250 when gross container and cargo weights approach the maximum legal road weight limitations as determined by the United States Department of Transportation. These fees also apply when combined container and cargo weight exceed railroad weight standard limitations. Mediterranean Shipping Company (MSC) is one carrier to enforce this policy.
Additionally, ocean freight carriers are becoming stricter in their enforcement of declared weights on shipping instructions, commercial invoices, and master bill of lading instructions. This is due in part to United States Customs and Border Protection 10+2 requirements but also because of increased maritime laws enacted in foreign countries such as Brazil. Please always ensure proper representation of cargo weight, as there is a possibility for resulting fines from steamship lines, local and federal government enforcement agencies. Mis-declared weights on bills of ladings may also violate certain national and international laws. Fines by governmental bodies for mis-declaration of cargo weight can exceed $1,000.
United States Bridge Law - The Weight Debate
Speaking of weight limitation fees, the U.S. Department of Transportation recently implemented a Federal Bridge Law as a result of heavier trucks being utilized on U.S. roads. The law was created to protect bridges and overall safety on U.S. roads. Recently, legislation proposed changes to the law that would increase allowable legal road and bridge weights up to 97,000 lbs. (including rig, chassis, container/trailer and cargo). A counter-proposal effort is under way to allow heavier trucks on U.S. roads, as Sen. Frank R. Lautenberg, D-N.J., is introducing legislation that would preserve the current 80,000-pound weight limit.
In addition to the weight restriction, the proposed Safe Truck Operations and Preservation Act of 2008 would expand that limit to most of the roads on the interstate highway system, as well as restrict truck length to the current 53-foot limit. Safety is the key issue of the proposed legislation and the majority of the nation's roads and bridges would need to be re-built should the new law come into effect. The initial legislation for the revised increase to the allowable road weight is being pushed by shippers and truckers in hopes of testing the new legislation in 6 states and includes the infrastructure improvements in the next highway reauthorization bill.
Source: Journal of Commerce Online; May 15, 2008
US Customs and Border Patrol to Require Bolt Seals
For All In-Bound
As part of the 2007 Safe Port Act, customers should be advised that effective October 15, 2008, U.S. Customs will require that all freight containers in transit to the U.S. by ship, rail or truck have bolt seals that meet the ISO PAS 17712 standard. Customs is likely to provide exceptions to the bolt seals requirements for containers which cannot accommodate seals (e.g., tanks, open-topped containers), and Customs has indicated that air shipments are not intended to be included in the mandate.
The main impact of this new requirement will be on importers who are not C-TPAT certified, since C-TPAT importers must currently use seals which meet or exceed the current ISO PAS 17712 standard. Customs is expected to issue a June 2008 notice to the trade regarding these requirements, but did not indicate whether comments will be accepted.
China and the forthcoming Olympics: Routing your Cargo around the Games
August 8, 2008 is the start of the Olympic Games to be held in Beijing and surrounding areas through August 24. Beginning in mid-June as the games approach, ocean carriers and local government bodies will restrict the movement of cargo in ports and cities near Olympic venues into October.
Olympic venues extend as far south from Beijing into Hong Kong; therefore, it is important to plan accordingly. Large cities such as Shanghai will also be impacted. Additionally, shippers of hazardous cargo will be restricted altogether and cargo will either need to be re-routed or held for shipping until after restrictions are lifted. For ideas on routing alternatives during this time, please contact your AIT representative.
A Note on Ocean Export Container and Vessel Space Availability
AIT would like to remind their U.S. export customers that container availability and vessel space is limited, especially in inland locations including Chicago, Minneapolis, St. Louis, Denver and Dallas. Furthermore, export vessels are full. In order to ensure container availability and vessel space for your export bookings, it is recommended to allow 7-10 days to secure space for your export bookings, especially for multiple container shipments. Last-minute bookings are very difficult to secure with the ocean lines, but if you plan accordingly your chances of loading on earlier vessels improves significantly.
ILWU and PMA Contract Still Underway
Contract discussions between the ILWU, representing the Longshoremen at 29 United States west coast ports, and the PMA (Pacific Maritime Association), representing the ocean freight carriers, continue to make progress. Discussions remain upbeat in hopes of avoiding a strike at west coast ports in the U.S when the current labor contract expires on July 1, 2008.
According to the ILWU website re-negotiations, http://contract2008.org/bargaining-update, with only 5 weeks left in the negotiation period, the ILWU is pushing for stronger safety codes to protect members from recent accidents which have killed longshore employees. The Pacific Maritime Association website simply mentions negotiations are progressing.
Shipper's letter of instruction (SLI)
One of the many important documents in the movement of freight, the shipper's letter of instruction (SLI) is a form used by a shipper to authorize a carrier to issue a bill of lading or an air waybill on the shipper's behalf. The form contains all shipment details and authorizes the carrier to sign the bill of lading in the name of the shipper.
Source: International Directory of Trade, 7th ed. Edward G. Hinkelman, 2006.
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The Parting "Wave"
As spring comes to a close, the AIT Ocean Systems team would like to thank you for a successful spring!
Preview July 2008 AIT Ocean Newsletter:
Another Ocean Fast Fact!
If you have any questions or comments regarding the Ocean eNewsletter,
please contact Kevin Krause from the AIT Ocean Department. |
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