Ocean Fast Facts

In 2007, which European ocean port handled 10.7 million TEU and is the largest volume container port in Europe?

Click here to see the answer!

A Post-Olympic view at Peak Season for Imports from Asia

There was anticipation in the market following the Beijing Olympic games that ocean carriers would see a spike in container volumes leading up to the national holiday in China during the week of September 29 - October 5. The anticipated "spike" did not hit the market and as a result, most ocean carriers have either postponed Peak Season Surcharges (PSS) or are only charging a minimal PSS fee.

Peak season is being applied for all water service into the U.S. east coast, but Peak Season Surcharges into the west coast from Asia for port and intermodal (IPI) service remain minimal in most cases: $25 to $50 per TEU (depending on the carrier). Ocean carriers are reporting available capacity in the area of 70 - 90% on most services into the United States, with higher load factors into the U.S. east coast. Please speak with your AIT representative if you have questions relating to which PSS applies to your U.S. bound cargo.

The month of October is typically the "peak" of peak season, as retailers plan to distribute their holiday goods into the U.S. market by the Thanksgiving holiday. Even though vessel capacity has not experienced peak season volumes to date in 2008, it remains important to plan your shipments as far in advance as 10 - 12 days if possible, as certain ports such as Ningbo, Shanghai and Yantian/Hong Kong may have less available capacity during the first half of October.

Booking Adjustment Fees - U.S. Exports

Customers should be advised that as a result of limited vessel space and container availability, ocean carriers such as Zim are charging and enforcing booking adjustment fees if customers are requesting advancement to earlier sailings or "rolling" their cargo to later sailings. Please be reminded of this possible fee when making export bookings and scheduling loading of your export containers to avoid unnecessary charges.

Update and Reminder: Clean Truck Fees coming to the Port of Los Angeles / Long Beach

Effective October 1, the ports of Los Angeles and Long Beach were to begin collecting a new local-based fee for imports and exports delivered by truck into the ports terminals. The fee will be assessed to ensure the development of environmental infrastructure projects such as subsidizing costs to purchase trucks that meet the emissions requirements of the clean trucks initiative in the Los Angeles Basin. As of late September, the ports of Los Angles and Long Beach announced a delay in implementation due to computer programming issues that will be solved within the coming days. The fee is going to apply as follows:

LCL Export	$3 W/M
LCL Import	$2 W/M
FCL Import and Export	$35 per TEU

The Clean Truck Program - Continued Greening of the Ocean Supply Chain

October 1 was the proposed start of the Clean Truck Program that has been planned by the Ports of Los Angeles and Long Beach. Under the plan, trucks dating back to 1988 and earlier are banned from operating at the ports. The program bans all trucks that do not meet 2007 emission standards by 2012 in order to meet the program's objective, which aims to reduce air pollution from harbor trucks by more than 80% within five years.

To finance the $2 billion price tag for the truck replacement, the ports are collecting the above mentioned fees. In order to support local truckers who must comply with the new ruling, the Port of Long Beach is offering pre-launch workshops and has already provided Webinars for beneficial cargo owners (BCOs), ocean carriers, customs brokers, freight forwarders and other industry professionals during September.

At press time, the Ports of Los Angeles and Long Beach have cleared all legal hurdles to begin assessing the fee; however, as mentioned above, due to computer programming issues, the implementation of the fee has been delayed until further notice. An update will be provided as the official start date of the fee is announced.

China Holiday Advisory - September 29 - October 5

Customers should be advised that many suppliers and ocean carriers in China and Hong Kong will be closed the week of September 29 - October 5 for the National Holiday. When planning for shipments from China, please consider that communication for operational and pricing requests may be delayed during this time.

The October Ocean U.S. Export Report!

Despite recent economic volatility in the U.S., exports remain quite strong. September volumes were brisk and consequently, customers should be reminded that container and vessel availability remain limited in certain U.S. locations. The cities most impacted include Dallas, Denver, St. Louis, Minneapolis, Houston and Chicago. Houston continues to be a "deficit" area, even in the aftermath of Hurricane Ike. Ocean carriers report that ships remain near full capacity.

Customers should be reminded to allow 7-10 days to help 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 improve significantly. Special equipment such as open-tops, flat racks and refrigerated containers remain especially limited, so allow additional time when requesting rates for these types of equipment. Check with your local AIT office to discuss alternatives and be mindful that rates for making an earlier sailing that fits your schedule demands may be higher.

U.S. Customs Requires ISO Seals on all Containers

United States Customs and Borders Protection announced that beginning on October 15, all U.S. bound maritime containers must have seals that meet the ISO/PAS 17712 standards for unique numbering, strength, durability and resistance to tampering. In a notice posted in the Federal Register, U.S. Customs also said carriers must use the Vessel Automated Manifest System to supply Customs with all seal numbers at least 24 hours before U.S. bound cargo is loaded at overseas / foreign ports. Should you require information as to where to purchase ISO Seals, please contact your AIT representative.

Port Congestion in Saudi Arabia: Where are all the Containers?

Throughout the months of August and September of this year, several trade periodicals and ocean lines are reporting congestion at port terminals in Saudi Arabia. The congestion has resulted from limited space and crane capabilities for berthing ships at Saudi Arabian and United Arab Emirate ports.

The cause of the congestion involves a substantial increase in imports to the region. The importing of products supporting the construction boom for cities such as Dubai is one main culprit of the congestion, while the closure of the former Port Rashid location in Jebel Ali has also contributed to the problem. Port operators such as DP Ports in Jebel Ali are attempting to combat the congestion by adding new high-efficiency tandem gantry cranes to allow vessels to be turned at port more efficiently. American Shipper Magazine reported in September that since 2007, the port of Jebel Ali is expanding capacity at its Container Terminal 2, which will ultimately bring total port capacity at the Port of Jebel Ali to 15 million TEU by 2009.

Because of the congestion, some ocean lines are diverting their ships and omitting port calls in Saudi Arabia due to delays of up to a week to berth a vessel. Be on the lookout for port congestion surcharges in Saudi Arabia. Maersk Line has already implemented a $100 per TEU, $200 per FEU, Port Congestion Surcharge at Jebel Ali. Please be advised if you have cargo destined to Saudi Arabia or trans-shipping by a Saudi Arabian port such as Jebel Ali, Jeddah or Dammam that potential delays may exist and you should speak with your AIT representative to route your freight accordingly.

Customer Advisory = Peak Season and Congestion Surcharges

Congestion is on the rise at certain ports in developing or emerging countries around the globe. As mentioned above, Saudi Arabia and the United Arab Emirates are experiencing congestion. As a result, temporary Peak Season Surcharges or congestion surcharges are being implemented and applied by the ocean lines. Additionally, countries not typically exposed to Peak Season Surcharges such as Nigeria have now implemented them. Maersk recently announced a Peak Season Surcharge for Nigeria of $200 per TEU. Carriers calling other West African countries are also charging congestion or peak season surcharges, so please be advised accordingly if exporting or importing freight to these locations.

Free out

Free out is a pricing term used in shipping to indicate that unloading charges are for the account of the receiver.

Source: International Directory of Trade, 7th ed. Edward G. Hinkelman, 2006.

Free out is a very important term to understand, especially if you see it as a foot note in an ocean quotation. Establishing familiarity with Incoterms and such buzz words as "free out" can help ensure an accurate apples to apples comparison when reviewing ocean rate quotations as well as identifying "who is responsible" for payment along the many points of the supply chain.

The Parting "Wave"

The entire AIT Ocean Systems Team sends their
well wishes as the "peak of peak season" approaches.

Preview October 2008 AIT Ocean Newsletter:
More "Ocean Fast Facts" comin' at ya!

If you have any questions or comments regarding the Ocean eNewsletter,
please contact Kevin Krause from the AIT Ocean Department.

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