Ocean Fast Facts

In 2008, which Argentine port saw nearly 1.8 million TEUs of container throughput volume that represented an increase of nearly 800,000 TEUs from their 2001 TEU container throughput volume?

Ushuaia
Buenos Aires
Puerto de la Casa Rosada
Port of Rosaro

Click here to see the answer!

Freight All Kinds (FAK)

A carrier's rate classification that usually refers to a consolidated cargo shipment where items of different classes (weight, bulk or value) are shipped in a single container, but charged at a single rate. This rate classification is used only for establishing shipping rates and is not acceptable on customs documents, which must detail the specific contents of a shipment.

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

Just the FAKs - Freight All Kinds

Often times, importers and exporters may hear their ocean freight sales representatives comment that their rate quotation covers "FAK" rates. FAK, also known as freight of all kinds, covers several different commodity descriptions that apply at a single rate level.

Normally, ocean rates vary slightly on a given "same" origin / destination pair based on cargo value. For example, high value plasma televisions generally move at a higher freight rate than recycled paper. Obviously, shippers of both these products have different cost margins to consider and the cost of transportation is typically figured into the unit price of these products. Plasma televisions move as a higher end, fully-manufactured consumable product, while recycled paper almost always represents one portion product used in the manufacture of low to middle priced consumable goods.

Individual importers or exporters frequently utilize ocean freight as a mode of transportation to ship multiple commodities that their individual companies distribute and sell. For example, an office supply importer may move staplers, office chairs, papers and pens. Often times, these companies "combine" their mixed commodities into an FAK rate, which merges the individual commodities at a given rate level rather than paying an individual freight rate for each specific commodity. While this may save the importer/exporter on ocean transportation charges, the importer practicing this process must ensure their commercial documents meet international customs law requirements and individual commodities are declared to customs lawfully. For commodities destined to or from the United States, importers must also properly file commodity descriptions within their ocean carrier's tariffs to satisfy Federal Maritime Commission (FMC) requirements.

Should you have questions about FAK rates and how they may impact your existing or planned shipping methods, please contact your local AIT representative.

Original Documents - Handle with care; get your freight there!

At AIT, we handle a significant amount of freight to and from door locations throughout the world. Shippers have increasingly begun to attach original documents to the actual shipment itself, or given to a driver rather than being sent directly to AIT.

Certain countries, in fact most United States trading partners, require presentation of these documents prior to arrival of the cargo overseas. Additionally, original documents (commercial invoice, bill of sale, packing lists, shipper's export declaration, etc.) are required documents, some of which are used by U.S. Customs for AES purposes and many customs entities around the globe to determine the true transaction value of goods.

It is important that these documents are appropriately sent to AIT to ensure prompt handling of cargo. If this is not done just after booking and prior to receipt of cargo, your shipments can be subject to delays and additional costs due to expedited courier charges, re-printing/signing, etc. In order to guarantee your cargo will move expeditiously and without impediment, please always remember to prepare your documents and get them into the hands of your AIT operations or customer service representative in a timely manner.

July - a month of celebrating red, white and blue around the world.

Don't be blue if your freight incurs delays due to one of the few major "patriotic" holidays being celebrated throughout the world in July. As those in the northern hemisphere are enjoying the long "dog days" of summer, especially those in extreme northern climates like Scandinavia, Siberia, Northern Canada and Alaska, it is important to remember July is also a significant time for holidays, especially in the United States and France.

American Independence Day falls this year on Saturday, July 4th. However, take note that many ocean carriers, pier terminals, trucking companies and railroads will be closed on Friday, July 3, in observance of this holiday. In France, Bastille Day will be celebrated in June. Office closures in these countries may be in effect during July as well as bank holidays in the United Kingdom. Should you have questions regarding holiday closures throughout the world during the month of July, please check with your AIT representative.

Click to see AIT's Indendepence Day eCard:
http://www.aitworldwide.com/cards/fourthofjuly.aspx

Express your freight - a reminder that "LCL Express" is here!

Last month, AIT announced the launching of a new LCL program from Shenzhen/Yantian/Hong Kong and Shanghai to the United States west coast. More destinations will soon follow. The program, called "LCL Express," offers industry leading LCL transit time on dedicated weekly vessels using Cosco vessels via Los Angeles through our vendor partner, COSCOEx.

The service combines direct dedicated weekly boxes with expedited delivery services to door locations throughout the Continental United States. "LCL Express" offers an economic alternative to air freight, or expedited LCL solution at a small price premium. The service was introduced to supplement AIT's successful FCL Ocean Express program. Ask your AIT representative for more details and service specifics!

U.S. exports containers remain in demand - plan ahead!

As reported in the June edition of AIT's eNewsletter, export volumes remain steady. This overall market stability has resulted in high container demand, especially at depot locations within the United States interior. Intermodal markets such as Minneapolis and Kansas City report "deficits" in the availability for containers.

AIT continues to recommend that exporters plan early for booking export shipments; this remains especially critical when planning for multiple full container load (FCL) bookings and ensuring equipment availability within your supply chain. Less than container load (LCL) booking availability remains wide open.

As always, AIT would like to remind our customers moving special equipment to 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 and commodity considerations.

Piracy and liability - a brief follow up

In previous editions of the eNewsletter, AIT reported on war risk insurance and its relation to piracy. AIT advised customers to investigate insurance requirements and determine adequate cargo coverage in high risk regions, such as the Gulf of Aden near Somalia. The Journal of Commerce recently provided commentary which specifically addresses acts of piracy and where the "liability" falls for the carrier: http://www.joc.com/node/411647.

While the subject matter does not provide a 100% clear response, the reader is provided with governing laws and possibilities as where liabilities start and end when piracy is involved.

India - Port of Cochin strike ends

A brief strike on June 26 at the Port of Cochin has ended. The strike involved a dispute between local labor unions and port management relating to hiring additional manpower at the port. Delays of cargo were not reported at press time.

Source: http://www.joc.com/node/412108

Schedules, schedules, schedules - how long does it take and when does it sail?

Importers and exporters frequently request to get a basic idea of how long it takes their shipments to get from Point A to Point B.

Several websites can assist in providing estimated transit times and landed cost of transportation; www.jocsailings.com or www.oceanschedules.com. Try these tools if you need a basic estimate, yet please keep in mind that they exclude specific cargo cutoffs. Contact your AIT representative to get optimal routing alternatives and detailed cutoff information, as schedules are often subject to change.

The 2009-2010 Trans Pacific Import Shipping Season is here ... well, almost!

As earlier reported in the June AIT customer eNewsletter, the question was recently raised on whether or not there would be a Peak Season and corresponding Peak Season Surcharge (PSS) during the 2009-2010 shipping season.

As of press time, the Transpacific Stabilization Agreement (TSA) member carriers servicing the Asia to USA trade have not yet announced a PSS charge for the 2009-2010 shipping season, which historically has commenced by midgame of each shipping season.

Peak Season generally lasts through October or November of each year, depending on the routing (United States west coast, Minilandbridge (MLB) or All Water Service (AWS) via the United States east coast). Additionally, while TSA carriers are finalizing new contracts through April 2010, it currently appears that rate levels will remain relatively constant in the short term, as they have been in the trade for the past 30 to 45 days; meaning there is no significant increase planned into August. However, this does not mean that the rates will remain constant at historically low levels seen from May into June of this year.

Due to recent increases in the price of fuel, the fuel adjustment factor (FAF), also known as bunker adjustment factor (BAF), charged by the TSA carriers will be passed along to customers. This charge will result in a minor increase in the bottom line ocean transportation spend per container, or per LCL shipment.

Earlier in 2009, the TSA carriers proposed to help recoup costs and stabilize revenues by proposing general rate increases. As of press time, considering the lack peak season volumes as the middle of June approached, flat market conditions, and feedback from the shipping community, the TSA has been able to pass along previously proposed increases or corresponding "minimum" rate levels. As the 2009-2010 shipping season commences, ocean freight levels on the Trans-Pacific eastbound service remain at historically low levels. Some ocean carriers claim to have non-compensatory rate levels, meaning the carriers are losing money on certain trade lanes.

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.

Customers who have not yet received their post July 1 rate levels will soon receive their rates for the upcoming shipping year. Finally, as reported last month, the "signs of life" and some moderate market recovery continued through June. There was talk in the marketplace of some spot situations in China over the past two weeks, when very large importers scheduled last minute "slugs" of bookings, which caused a lack of available space to the United States, ultimately causing some customer's containers to "roll" to later vessels.

For those customers seeking new rates for the 2009-2010 shipping season, please bear in mind the shifting market conditions on the Transpacific trade lane and contact your AIT representative to clarify rate validity as needed.

The Parting "Wave"

The AIT Ocean Systems team would like to thank you for your support during this very busy month of July. Rate requests are at an all-time high and we would like to take this opportunity to thank existing and new customers for giving AIT the opportunity to quote on your perspective ocean freight. It's too early to tell if it will be a peak season during 2009, but AIT is prepared to assist with your shipping volumes, high or low, during the upcoming shipping season.

Preview August 2009 AIT Ocean eNewsletter:
Summer heat ... and a HOT port - Miami!

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

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