Ocean Fast Facts
Which North American port handled 1.4 million TEUs inbound and outbound and acts as fresh water direct ocean port alternative to the ports of New York / New Jersey and Halifax, Nova Scotia?
Answer: Montreal, Quebec Canada. In 2008, the port of Montreal handled 1,473,914 TEUs.
The port of Montreal is one of North America's leading container ports and offers an alternative to the larger and occasionally more congested United States east coast ports such as New York/New Jersey. Several leading ocean carriers call on the port of Montreal and offer transportation into the United States interior midwest, Ohio Valley and eastern region cargo.
Source: http://www.port-montreal.com/ste/1_0/1_6_4.jsp?lang=en
Reminder: U.S. exports remain steady - be prepared
In last month's AIT customer newsletter, it was reported that because of the decrease in import freight and inbound container equipment, the supply of export containers had dwindled in certain markets. This was especially the case in key intermodal markets within the US such as Chicago, Minneapolis, Kansas City and St. Louis. AIT also advised exporters to plan early for booking export shipments, and this remains especially critical when scheduling for multiple full container load (FCL) bookings within your supply chain.
Planning ahead ensures equipment availability in origin cities to satisfy the container size and type for your booking needs. Less than container load (LCL) booking availability remains wide open. Be mindful to plan early for standard dry equipment, but also plan carefully for special equipment such as refrigerated and flat rack/open top equipment. Please speak with your AIT representative to address your specific container needs.
May Day! = May Holidays throughout the World
Throughout the globe, May is a month that is chock full of holidays. It is important to be aware of these holidays, as it may delay the delivery of freight. Key holidays in May are as follows. Office closures may be in effect in certain countries. Several bank holidays also exist in May, so please check with your AIT representative to ensure accurate information regarding closures:
May 1 - Labor Day (throughout the globe)
May 3 - Constitution Day (Japan)
May 4 - Labor Day (throughout the globe)
May 5 - Cinco de Mayo (Mexico)
May 8 - VE Day (France); Israel Independence Day (Israel)
May 11 - Victory Day (Russia)
May 17 - Constitution Day (Norway)
May 18 - Victoria Day (Canada)
May 25 - Memorial Day (USA)
May 28 - Dragon Boats and Dragon Festival (China and Taiwan)
Maersk Line steps up Anti-Piracy Efforts
As a result of increased piracy activities off the coast of Somalia and the recent seizure and release of the Maersk Alabama, Maersk Line said it will step up measures to guard ships against pirates and called upon governments to cooperate in fighting piracy. While Maersk has said it will not arm container ship crews, it will keep ships running at full speed while moving through the Somalia coast and Gulf of Aden region. The company is also taking other security precautions as well but were not provided in detail. With the initiative, Maersk aims to make access to their vessels more difficult to seize. "We have expanded the area off the coast of Somalia where only vessels with a certain freeboard or capable of sailing certain speeds are allowed to enter," said Søren Skou, a partner in A.P. Moller - Maersk Group and Maersk Tankers CEO." These are among the measures Maersk is taking to safeguard their ships and crews working the region.
The trend of piracy within the Somalian coast and Gulf of Aden region has had minimal inpact on cargo destined to or from the USA. The cargo mostly impacted is traveling on tradelanes such as Asia-Europe or Europe-South Africa.
Source: Journal of Commerce, Online; April 29, 2009
>> Ocean Buzz Word: Freeboard
Trans Pacific Market Update - TSA Carriers plan for the 2009-2010 shipping season
The Transpacific Stabilization Agreement (TSA) member carriers are recommending an unprecedented schedule of minimum base freight rates from Asia to U.S. for their upcoming service contracts. The recommendations arrive as the TSA is making efforts to stabilize revenues and services based on the recent activity in rate reductions. Members of the TSA are proposing the establishment of floor rates to help ensure rate stability and keep freight rate levels profitable for the member carriers.
According to an April 9th announcement on the official TSA website, www.tsacarriers.org, the member lines have not been as successful as initially anticipated in balancing acceptable rate levels during the off-peak period, considering lower cargo demand and the resulting overcapacity.
The carriers are faced with two challenging choices: either set their pricing at minimally sustainable levels or experience significant losses in the 2009-2010 shipping season, which would have a significant impact on the stability within the trade.
It is anticipated that the TSA will attempt cost recovery indicated by the following proposed actions by the member lines:
- Current spot rates initially set to expire on June 30, 2009, should now be expired within 30 days' notice from the earliest day possible, and by no later than May 15.
- New minimum rates (per 40' container) should be applied in all contracts not yet concluded, as soon as possible but no later than July 1, as follows:
- US $1,350 to the west coast
- US $2,500 via east coast all-water service
- Guideline minimums have also been adopted for selected mini landbridge (MLB) and inland point destinations.
- Guideline minimum rates per high-cube 40-foot container have been recommended at levels $100 above those for standard 40-foot units.
- All 2009-10 contracts should expire by no later than April 30, 2010, the traditional cycle in the Transpacific.
- All contract offers should be subject to full, floating bunker charges per TSA's revised formula, with quarterly adjustment and separate charges for west coast and east coast sailing.
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.
Several AIT customers are already inquiring about the "new" post May 1 rate levels. As indicated in the highlights of the TSA's 2009-2010 contract negotiations plan, carriers are aggressively seeking cost recovery. As May unfolds, floor threshold levels being presented by the TSA carriers represent an increase over many of the current rate levels being offered in the current marketplace. The carriers will attempt to expire existing rates by mid-May rather than June 30th of this year in an effort to reset the market levels for the 2009 season.
For those customers seeking new rates, please bear in mind the shifting market conditions on the Transpacific tradelane and contact your AIT representative to clarify rate validity as needed.
The "weight" is never over!
Often times, AIT customers ask questions about acceptable cargo weight before booking containers. In April, AIT received numerous inquiries from existing and potential clients about weight restrictions. There are different weights to consider: commodity as well as vehicle and chassis weight. While the maximum payload within containers may be over 50,000 pounds, containers moving within the United States are subject to local municipality, state and federal guidelines for acceptable gross weights of containers moving over the road and rails. This guideline is well below the 50,000 lbs. container payload. It is important to keep this in mind when planning your inbound and outbound container loads.
The chart below can be used as a reference; however, it is subject to local, municipality, state and federal guidelines. For example, over the road weight restrictions in the United States are governed by the Federal Bridge Law. Additionally, ocean carriers, railroads and overseas governments may also have additional weight restrictions, so please check with your AIT representative if you have questions.
Gross Maximum - Commodity Weight in Pounds (lbs)
| 20' with slider chassis: |
38,000 |
| 20' with triaxle chassis: |
45,000 |
| 40' with gooseneck chassis: |
44,000 |
| 40' with ultra light chassis: |
47,000 |
Weight Restrictions in Pounds (lbs)
|
20' slider |
40' |
Triaxle |
| Steer Axle |
12,000 |
12,000 |
7,000-8,000 |
| Drive Axle |
32,000 |
34,000 |
32,000 |
| Trailer Axle |
32,000 |
34,000 |
42,000 |
| Gross Weight |
80,000 |
80,000 |
80,000 |
Relay
Definition: A shipment that is transferred to its ultimate destination port after having been shipped to an intermediate point.
Source: Directory of International Trade, 7th Edition; 2006 Edward G. Hinkelman.
Relay or Transshipment? That is the question!
Most often, the "slower" mode of ocean transportation (when compared to air freight) moves on direct service. Direct ocean service is when a container is loaded to a single vessel from one port to another port directly by the given vessel on which that container is loaded. Occasionally, if a quick transit time is not required, customers may opt to send their cargo via "relay," "indirect," or "transshipment" service. Transshipment service is when a container is loaded at a port on one vessel and transferred to another vessel for a second sailing leg of the ocean journey.
Transshipment generally involves the movement of cargo from origin to destination utilizing two or more vessels in addition to any other modes of transport such as truck or rail. One example of relay service would be the Port of Hong Kong to Port of Tampa via the Port of Kingston Jamaica. This indirect service may be compared to routing air or passenger cargo via an airport hub. Relay or transshipment may or may not provide a lower cost alternative to traditional direct sea freight modes, depending on the origin and destination combination. The transit times will be longer, but it may be worth the overall savings.
Please speak with your AIT representative to investigate whether or not "relay" or transshipment service would be a benefit to your supply chain.
Freeboard
Free as a board! A bonus ocean "Buzz Word of the Month"
Freeboard: Distance between the level of water and the upper surface of the freeboard deck amidships at the side of a hull: regulated by the agencies of various countries according to the construction of the hull, type of cargo carried, area of the world in which it sails, type of water, and season of the year. Sometimes compared to load line.
Source: http://dictionary.reference.com/browse/freeboard
Last month, the world was alarmed when pirates off the coast of Somalia overtook the container vessel the Maersk Alabama. The pirates were able to board the container vessel with little assistance, endangering the lives of the crew as well as the safety of the ship and others around her.
The size and speed of the of the 1,092 TEU Maersk Alabama is quite small in comparison to one of Maersk's largest and more speedy ships, the Maersk Emma. At 11,000 TEU, the Maersk Emma can move along at sea at approximately 25.5 knots, which is the equivalent of 47.2 kilometers, or 29.3 miles per hour.
The Maersk Alabama maintains a speed of 18 knots, or the equivalent of 33 kilometers (20.68 miles) per hour. Quite a difference in speed between the small captured ship and the larger and faster vessels. Professional water skiers compete at speeds sometimes up to 36 miles per hour - and for a pirate to attempt boarding a 1,300 foot vessel moving at nearly 30 miles per hour takes some skill. In the case of the Maersk Alabama, the ship was slower and smaller. It also had a smaller "freeboard," which may have made it easier for the pirates to board.
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The AIT Ocean Systems team would like to thank you for your support during the month of April. As we enter May, we look forward to seeing where the markets unfold as Peak Season approaches. Will 2009 be a Peak Season? The month of May will hopefully unravel some of the clues to answer that question.
Preview June 2009 AIT Ocean eNewsletter:
An ocean "fast fact" from south of the equator!
If you have any questions or comments regarding the Ocean eNewsletter,
please contact Kevin Krause from the AIT Ocean Department.
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