Ocean Fast Facts
Summer is HOT, and not too many things are as hot as Florida is during the month of August. In order to celebrate the "heat of the summer" while it still lasts, this month's ocean fast facts question relates to a very high-volume ocean port in the "sunshine state."
Which Florida port boasted 828,349 TEU during 2008 and represents the state of Florida's largest port city?
- Port Everglades
- Miami
- Tampa
- Port St. Lucie
Correct Answer: b. Miami.
The port of Miami. In 2008, the port of Miami handled over 800,000 TEUs and is one of the most significant ocean ports in the United States for the Latin American trades. Additionally, Miami is an important transshipment port for cargo between Europe, Africa and the Latin American and Caribbean regions.
Source: http://www.miamidade.gov/portofmiami/business-port-statistics.asp
Open manifest
A manifest in which one or more bills of lading require some action that some action be taken for disposition according to law or practice.
Source: Directory of International Trade, 7th Edition; 2006 Edward G. Hinkelman.
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Open manifests and your freight
Open manifests have typically been a challenge for ocean carriers and co-loaders, mainly because these companies are responsible for submitting a vessel manifest prior to sailings on a per vessel basis, for customs purposes.
In the age of heightened security measures throughout the globe with the ISF / 10+2 requirements, the concept of an "open manifest" poses a challenge for these companies, and companies like AIT to "close" manifests and set the vessels on their timely way. Many ocean carriers have initiated "no docs no load" policies as well to assist in not only satisfying customs and security requirements, but also to ensure closure of manifests and timely sailings. This ultimately protects the cargo of those customers who comply with customs and security requirements.
As always, AIT would like to remind their customers to always ensure prompt and timely preparation of original such as commercial invoice, bill of sale, packing lists, shipper's export declaration (SED) etc. for exports and for customers importing to ensure all criteria is met for 10+2 and ISF initiatives in line with documentation deadlines set by individual shipment and carrier basis. Helping the carriers in the supply chain "close" the manifest by providing timely documentation to those carriers will ensure smooth and prompt arrival of your cargo at destination.
Hapag-Lloyd and OOCL to cooperate with MSC on new Canadian gateway for North Atlantic trade
Hapag Lloyd recently announced that in mid-July, they will start sharing service with OOCL and MSC between Montreal, Liverpool, Antwerp, Bremerhaven and Le Havre. This new service enhancement will already accentuate cargo services between Europe and the Americas; especially for cargo bound for the United States Midwest and Ohio Valley.
Effective on August 1, 2009, the gateway provides customers with alternatives to Northeastern U.S. ports such as New York as well as the Port of Halifax in Nova Scotia. For more information, please contact your AIT representative.
Class 1.4 explosives! To ship or not to ship?
AIT regularly handles specialized or hazardous/dangerous ocean freight throughout the globe. Recently, AIT has experienced an increase in the requests for Class 1.4 hazardous cargo. Class 1.4 cargo is highly sensitive cargo that can range from air bag inflators to hand grenades.
Because of the potential liability for certain commodity descriptions of this cargo, ship-owners, railroad companies, drayage companies, underwriters and many port terminal operators throughout the world alike restrict or prohibit the movement of this hazardous class. This also creates a potentially big problem for certain destinations throughout the world subject to higher risks of war and terrorism. Should you have this class of cargo to move, please speak with your AIT representative providing clear commodity descriptions and relevant harmonized tariff codes to determine if this cargo is acceptable before requesting rates.
Express your freight - a reminder that LCL Express is here!
Earlier this summer, AIT announced the launching of a new LCL program from Shenzhen/Yantian/Hong Kong and Shanghai to the United States west coast, with additional destinations soon to follow.
The product, called LCL Express, offers industry leading LCL transit times on dedicated weekly Cosco vessels via Los Angeles through our vendor partner, COSCOEx. Transit times of 21 to 23 days are available.
Combining direct dedicated weekly boxes with expedited delivery services to door locations throughout the Continental United States, the service offers an economic alternative to air freight, or expedited LCL solutions at a small price premium.
AIT's LCL Express service was introduced to supplement AIT's successful FCL Ocean Express program. Ask your AIT representative for more details and service specifics!
Congestion Alert!
At press time, certain port locations were reporting congestion. Port areas to be aware of during the month of August are:
- Israeli Ports / Haifa
- Algiers / Tripoli Libya
Please be advised that ocean carriers may temporarily enact "Port Congestion Surcharges" in times of peak volumes.
U.S. exports containers remain in demand
Throughout mid and late July, many ocean carriers continue to report deficit (demand) for containers at inland container depots within the interior U.S. Secondary markets such as Minneapolis, Cincinnati and Kansas City appear to be commonly impacted with limited availability for containers.
AIT continues to recommend that exporters plan early for booking export shipments; this remains especially critical when planning within your supply chain for multiple full container load (FCL) bookings. This is to ensure equipment availability in origin cities to provide the required container size and type to satisfy your booking needs. Less than container load (LCL) booking availability remains wide open.
AIT would like to remind our customers moving special equipment to also allow for ample planning and booking time for special equipment such as refrigerated and flat rack/open top equipment. Speak with your AIT representative to address your specific container needs.
Schedules, Schedules, Schedules - FCL vs. LCL? They may not be the same!
Last month, AIT provided two reliable websites for importers and exporters to consult when seeking estimated transit times and frequencies: www.jocsailings.com and www.oceanshedules.com.
As mentioned last month, while these sites provide basic sailing options, they provide estimated transit times excluding specific cargo cutoffs. Additionally, these websites are geared toward FCL (full container load) transit times with reliable and reputable carriers.
AIT has many customers who also ship LCL (less than container load) shipments, which move in consolidated containers for many shippers/exporters in one freight container. Because of this, cut-off times and routings for LCL cargo may add sometimes up to 10-14 days to the transit time.
Occasionally, the LCL cargo that moves in consolidated containers may not be a "direct" service and sometimes a transshipment and "relay" to another vessel may add to the transit time.
While these tools are useful, please contact your AIT representative to get specific transit details with optimal routing alternatives and detailed cutoff information, as schedules are often subject to change.
Lots of Locks - The Panama Canal is getting BIGGER!
Despite a slump in global shipping, the Journal of Commerce announced on July 16 that the Panama Canal Authority awarded a contract to design and build a third set of locks to the Consortium Grupo Unidos por el Canal, which had submitted the lowest bid. It was also reported that the bid awarded to Consortium Grupo Unidos por el Canal bid comes in under canal authority's target price.
The consortium is represented by companies from several nations: Spain, Italy and Luxemburg. The value of the contract, estimated at $3.12 billion USD, was lower than the target of $3.48 billion required by the terms of the Panama Canal Authorities proposal outline.
The project will allow very large ships of 12,600 TEU which are currently considered "Post Panamax" class vessel to transit the canal when the project is completed in 2014.
Finally, the canal authority said it will issue an "order to proceed" for the work to commence at a yet to be determined date. Work is expected no more than 42 days from the announcement of the award.
Source: http://www.joc.com/node/412377
The 2009-2010 Trans Pacific import season is in swing!
As earlier reported in the July 2009 AIT customer newsletter, the issue of rates as they relate to Peak Season Surcharge (PSS) and BAF were discussed for the Trans Pacific import shipping season into 2010. The question remained whether or not a Peak Season would apply. The TSA carriers servicing this trade announced on July 7th that they would "pursue further revenue improvement in 2009."
As of press time, the Transpacific Stabilization Agreement (TSA) member carriers servicing the Asia to USA trade have not announced a Peak Season Surcharge (PSS), but are proposing a general rate increase (GRI) of $500 per 40' container.
The breakdown of the proposed GRI is as follows:
$ 400 per 20' container
$ 500 per 40' container
$ 565 per 40' high cube container
$ 635 per 45' container
The increase, proposed to become effective on August 10th, applies to all modes in the tradelane: direct west coast, Minilandbridge (MLB) and All Water Service (AWS) to the United States east coast. The TSA carriers site "rate pressures in a distressed market" that have led to ocean freight rates in 12 month contracts for the 2009-2010 shipping season that threaten service levels and carrier viability.
The TSA carriers also commented that the GRI does not preclude the possibility of a peak season surcharge (PSS) if the market strengthens during the shipping season. Other factors the TSA comments are contributing to the proposed increase:
- First quarter 2009 cargo demand from Asia to the U.S. was more than 20% below levels of a year earlier, and conditions during the second quarter have shown only slight improvement.
- Competitive pressures to keep services operating and avoid further costly vessel layups eroded even the minimum rate levels carriers tried to put in place in the trade in April. TSA reports a $1,000-1,200 drop in average revenue per container during the period from October 2008 through May 2009 alone.
As cited on the TSA carriers website, lines may be required to engage with shippers in a renegotiation of contracts during the contract duration for those contracts that do not provide for some form of interim rate adjustment. The TSA acknowledged that container lines should not have given in to pressure to match short-term, concessionary rates in the market at the time contracts were being negotiated. Moreover, concerns voiced by importers and customers involved with shipping in the trade have shared concerns over the past few months that revenue deterioration would eventually lead to fewer lines operating with reduced service levels.
The TSA member list of carriers includes the following carriers: APL, Ltd., China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Ltd., Evergreen Line, Hanjin Shipping Co., Ltd., Hapag Lloyd AG, Hyundai Merchant Marine Co., Ltd., Kawasaki Kisen Kaisha, Ltd. (K Line), Mediterranean Shipping Co., Nippon Yusen Kaisha (N.Y.K. Line), Orient Overseas Container Line, Inc., Yangming Marine Transport Corp. and Zim Integrated Shipping Services.
Source: http://www.tsacarriers.org/pr_070709.html
Finally, there is discussion in the market that TSA carriers will be introducing smaller vessels into the trade throughout the next month or so to help keep capacity in line and reduce operating costs. This may create a "peak" situation ultimately reducing available capacity, especially as the holiday season approaches.
General Rate Increases - global trades
In addition to the proposed general rate increases (GRI's) on the Trans Pacific eastbound trades, please be advised that several carriers are proposing GRI's on other tradelanes in August. The following are areas impacted by GRI's for cargo destined to or from the United States and other global tradelanes beyond U.S. borders:
- United States to Australia/New Zealand
- United States to Asia
- Asia to the Mediterranean and Europe
GRI's vary by carrier and tradelane. Additional tradelanes may also apply, so please speak with your AIT representative to verify the rate levels.
The AIT Ocean Systems team would like to thank you for your support during the summer shipping season. July was quite an active month. August also promises to be an active month, as carriers advise fuel rate adjustments and any additional modifications to the proposed general rate increases.
Preview September 2009 AIT Ocean eNewsletter:
A back to school lesson about Sweden.
If you have any questions or comments regarding the Ocean eNewsletter,
please contact Kevin Krause from the AIT Ocean Department.
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