Ocean Fast Facts

Which port is located on the Gulf of Finland, located west northwest of St. Petersburg, Russia, and "finn-ished" with over 600,000 TEUs combined during the full year of 2008?

Port Rostok
Port of Helsinki, Finland
Port of Kotka, Finland
Port of Turku, Finland

Click here to see the answer!

Universal Port

There are a variety of ports around the world: container ports, breakbulk ports, inland river ports, the list goes on. But WHAT exactly is a universal port?

Definition: In addition to container handling, a universal port is geared to all forms of non-containerized cargo such as project cargo, suction cargo, liquid cargo, grab cargo and bulk cargo.

Source: http://www.hafen-hamburg.de/en/list/facts

Kevin Krause and Melody Lee Attend
3rd annual TPM Asia Conference

On October 21-22, 2009, Melody Lee, AIT-HKG, and Kevin Krause, AIT-ORD, attended the 3rd annual TPM Asia Conference in Shenzhen, China.

Focusing on container trade and logistics in the Europe-Asia, TransPacific and Intra-Asia markets, the conference presented a series of in-depth sessions with top-level speakers, roundtable discussions and formal presentations intended to give industry professionals a detailed briefing on a range of urgent issues affecting container shipping and logistics in Asia.

"During the conference in Shenzhen, the keynote speakers gave a very insightful global economic view of the TransPacific marketplace from the Asia perspective," said Krause.

Pointing to signs that the stimulus programs enacted over the past year in China are beginning to take effect, industry leaders made it clear that economies of key global trading partners in Europe and the United States must show signs of recovery before China can return to a path of economic growth.

According to Krause, the conference also addressed that the top priority for ocean carriers in 2010 will be the return to profitability.

"Carriers will need to keep capacity artificially 'tight' to maximize the operating costs of their vessels and equipment," he said. "I believe inventories of raw materials or partially finished goods in the U.S. that go into manufacture of end user products (auto parts) will reach low levels in early 2010 and there will be slight recovery in shipping from Asia to the U.S. in early 2010 as importers act to fill inventories."

Krause notes how security will remain a hot spot in early 2010 when the January 26, 2010 enforcement of Customs' 10+2 ISF (importer security filings) regulation goes into effect.

"This issue was debated at the conference, as many segments of the industry must pay a price to manage the process and develop operating procedures to achieve timely and accurate ISF filings to avoid fines," he said. "AIT has already been working with all parties, importers, agents, carriers and U.S. Customs to help ensure full compliance for AIT's import customer base."

Krause envisions that within the next 5-10 years, container trade throughout Asia will experience growth in trades between China, Vietnam, India and emerging economies such as Brazil.

"Container trade throughout Asia is very diverse and trade between these regions has yet to reach its full potential," he said. "Previously peak season trade lanes like Asia to the United States and Europe may not recover to the growth level potentials in trade lanes between Asia and Latin America; especially Brazil."

- by Christine Nicholson, corporate public relations coordinator

ISF - Just when you thought there were already too many acronyms in ocean freight!

BAF, FAF, CAF, AMS, ACC, PSS, ACS, THC... and now ISF. Ocean freight has long known to be a slower and more affordable transportation alternative to air freight. Not only is ocean slower than air freight, but ocean freight has historically been much more regulated in the United States. On top of that, ocean rate quotes and bills of ladings often appear to be plagued by a long list of surcharges frequently appearing as abbreviations listed in addition to the basic ocean freight transportation charge itself.

In January 2005, another acronym or abbreviation associated with ocean freight joined the seemingly never-ending list of acronyms that customers will see for the processing of ocean imports into the United States. That acronym, which has increasingly begun to appear, is that of the ISF fee. ISF, or the "Importer Security Filing" (also known as 10+2), is an acronym that will remain a very important topic for importers.

As reported in earlier editions of the AIT customer eNewsletter, the United States Customs and Border Protection 10+2 or ISF program will be enforced effective January 26, 2010. Submission of timely and correct ISF data is the ultimate responsibility of the importer of record. AIT has been participating in official U.S. Customs and Border Patrol ISF seminars and has been educating customers and agents alike to ensure ISF data is managed properly. Should you have questions or comments about the 10+2 required data elements, please contact your AIT representative. For a copy of current documentation relating to the ISF program, please refer to the following: http://www.cbp.gov/xp/cgov/trade/cargo_security/
carriers/security_filing/

January 26th, 2010 will be here soon, can you afford to pay $5,000.00 penalty for non-compliance to the pending 10+2 Importer Security Filing (ISF) mandate? Please contact AIT Worldwide Logistics or visit the US Customs web site at www.cbp.gov.

Who's Who among AIT's Ocean Carriers into 2010?

AIT has always worked with a plethora of ocean carriers to provide various transit and pricing options for our diverse account base. AIT works directly with many of the world's most reputable ocean carriers of all size and scope. Ocean carriers on the roster for AIT into 2010 include the following:

OOCL
APL
China Shipping
Hamburg Süd
K-Line
Hyundai
Safmarine

Mediterranean Shipping
Company (MSC)
CMA-CGM
Zim
NYK
Evergreen
COSCO / COSCO Express

If you don't see one of your familiar or preferred carriers on the above list, chances are AIT works with that particular line and has options in addition to those carriers mentioned above. Contact your AIT representative for more details.

December Congestion Alert!

At press time, certain port locations were reporting congestion:

Colombia (Buenaventura)
India (Kolkata)
North African Ports (Tripoli / Algiers)
Venezuela Ports (Puerto Cabello)

Please be advised that ocean carriers may temporarily enact "Port Congestion Surcharges" in times of peak volumes; contact your AIT representative with any questions or concerns.

Export Update = Export vessels running near capacity

Several of AIT's primary ocean carriers continued to report export sailings to Europe and Asia at near or full capacity during November. Sailings southbound from the United States to Australia and Brazil appear to be the most impacted. Also be reminded that several carriers have enacted no documents no load policies, or "no docs, no load" policies, which means that exporters must submit documents for proper AES filings prior to vessel cut-offs to ensure sailing on originally booked vessels.

AIT continues to recommend that exporters plan early for booking export shipments, allowing a minimum of 48 to 72 hours for standard equipment and additional time for special equipment such as open tops or flat racks. Planning early will ensure equipment is available and vessel space can be accommodated by 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 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 shipment needs, whether FCL, LCL or break-bulk.

General Rate Increase Advisory

During November, carriers continued to announce General Rate Increases in the following trades:

United States east and west coasts to Asia (Trans Pacific) effective December 1
Europe / Med to the United States effective January 1, 2010
United States and Canada to the Mediterranean effective January 1, 2010
United States to Europe effective January 1, 2010
New Zealand to the United States effective January 1, 2010

A Brief Ocean Snapshot for 2010 - Trans Pacific Eastbound

As of mid-November, the Journal of Commerce reported freight rates in the trans-Pacific will go up in 2010, even though supply-demand economics will most likely not be favorable for ocean carriers.

"We will increase rates because we have to," said Ronald D. Widdows, chief executive and group president of the NOL Group, parent company of APL.

Essentially, Widdows asserts that rates will have to increase a lot, and soon. Otherwise, carriers will go out of business. According to Widdows in an address to the annual transportation conference sponsored by the Intermodal Association of North America (IANA), the National Industrial Transportation League and the Transportation Intermediaries Association, ocean lines will lose $20 billion in their global operations. Moreover, all indications are that excess capacity will plague the Asia - United States trade lane in 2010 and possibly for the next three or four years, because of all the vessels that are on order. Widdows estimates that the earliest the trade can anticipate a capacity squeeze is in 2013.

This capacity squeeze is not anticipated sooner as carriers are attempting to manage capacity by reducing vessel strings, eliminating port calls and combining services. Already in 2009, carriers have reduced capacity and continue to hold capacity down into 2010.

Source: http://www.joc.com/node/414703

Maersk to rejoin the TSA Carriers in December

The Journal of Commerce reported in early November that Maersk Line will rejoin the The Transpacific Stabilization Agreement (TSA) effective Dec. 24. As voiced by chairman of the TSA Group Ron Widdows, member carriers believe that having Maersk on the roster of carriers will help "strengthen" the voice of the TSA. TSA will now have 15 members and those lines will control more than 90 percent of the capacity in the U.S. import trade from Asia.

Source: http://www.joc.com/node/414538

The TSA member list of carriers includes the following prior to the Maersk return to the TSA: 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

The Parting "Wave"

2009 was an exciting year for AIT Ocean Systems. Despite the extreme market fluctuations throughout the year, AIT continued to develop and enhance our carrier and partner relationships to further improve the variety of our ocean service offerings. One service addition for us this year was the LCL Express program, which still remains an expedited product for cargo exiting Asia coming into the United States.

Rates will most likely continue to rise into 2010 as carriers regain profitability. In part, this is welcomed, as it will allow carriers to survive what otherwise may have failed had they not raised the rates. Ultimately, that type of situation could lead to carrier failures and less competition in the market, thus driving rates higher as fewer carriers would be controlling the markets. Hopefully 2010 will not see carrier company failures or further service cuts, keeping the rates competitive. The ocean rates in the global trades were not sustainable in the long run.

As 2010 approaches, AIT would like to thank our customers for their continued support and feedback in helping us further enhance our ocean product. The entire AIT Ocean Systems team wishes you all the best for a happy and healthy New Year. We look forward to servicing your ocean freight needs throughout 2010 and beyond.

Preview January 2010 AIT Ocean eNewsletter:
You'll really get a "kick" out of this port.

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

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