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Ocean Fast Facts
Before you know it, the cooling days of Fall will be upon us. In the spirit of "back to school" season, let's start September's Ocean Fast Facts with a question from the far northern latitudes.
Which Swedish port boasted over 850,000 TEU in container volume during 2008 and is Sweden's largest port in terms of maritime freight carried annually?
- Vastervik
- Stockholm
- Kristianstad
- Gothenburg (Göteborg)
Forwarder's Certificate of Receipt (FCR)
A forwarder's certificate of receipt (FCR) is a document that is used in lieu of an ocean bill of lading when the shipper gives up/surrenders the freight at origin prior to the cargo being laden on board the vessel. FCR's are often used when shipments are on letters of credit to verify freight has been received by the forwarder to help fulfill obligations to the banking institution providing the funds on a letter of credit. Normally, a freight forwarder will charge a nominal fee to prepare this document for an exporter.
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ISF Reminder = 10+2 Question and Answers Online
The January 26, 2010 deadline for Import Security Filling (ISF), otherwise known as "10+2," is fast approaching. Providing timely and complete 10+2 information is the responsibility of the importer or the importer's authorized agent. Failure to comply with inaccurate or incomplete information is subject to minimum fines of $5,000 per occurrence.
United States Customs and Border Patrol has been posting 10+2 questions and answers on their website. For more information, visit the following link:
http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/carriers/security_filing/10_2faq.ctt/
10_2faq.doc#TIMING
Congestion in Venezuela
Due to the recent nationalization of Venezuelan ports on July 31, 2009, warehouses, ports and container yards have come under the authority of the Bolipuertos, or National Port Authority. During this time, the main ports in Venezuela, such as Puerto Cabello, Maracaibo, Valencia and La Guaira, have reported congestion situations. As a result, several of the main ocean carriers servicing Venezuela have enacted congestion port surcharges. Please be aware of these surcharges and contact your AIT representative to verify the specific surcharge for your cargo.
Fumigation Updates! India and Indonesia
The governments of India and Indonesia have recently provided updated requirements and reminders regarding the fumigation of wood or wooden product packaging into the month of September. Wooden products packaging for import to Indonesia is prohibited and in all cases wooden cases or pallets will have to comply with Fumigation formalities of the International Standards for Phytosanitary Measures (ISPM)-15. For India, similar restrictions apply and have been in effect since February 4, 2009. Should you have questions relating to fumigation requirements for these or other countries, please contact your AIT representative.
Express your freight - LCL Express!
AIT recently 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!
Security Charges - Morocco
Some lines servicing Morocco are starting to institute high security seal surcharges or seal check surcharges. Zim is among the first lines to be charging this fee. The fee will apply to all Morocco base ports.
September Congestion Alert!
At press time, certain port locations were reporting congestion. Port areas to be aware of during the month of September include:
- Venezuela Ports
- North African Ports (Tripoli / Algiers)
Please be advised that ocean carriers may temporarily enact "Port Congestion Surcharges" in times of peak volumes. As always, contact your AIT representatives with any concerns or questions.
U.S. export container demand and vessel capacity
During late August, several ocean carriers continue to report deficit (demand) for containers at both port and inland container depots. Additionally, due to reduced capacity in several U.S. export trades, especially between the United States and Latin America (Brazil), vessel space remains at a premium. Major ocean lines are reporting high vessel utilization in the area of the high 90% range. Some vessels to Brazil and Europe have been overbooked and containers have been rolled (delayed) to later vessels.
For container availability, secondary markets such as Minneapolis, Cincinnati and Kansas City continue to be in near deficit situations; these markets experience occasional shortages and limited availability of containers.
AIT continues to recommend that exporters plan early for booking export shipments, allowing a minimum of 48 to 72 hours for standard equipment and addition time to secure special equipment including open tops or flat racks. This remains especially critical when planning within your supply chain for multiple full container load (FCL) bookings. 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 and scheduling needs.
Service Consolidation in the
Trans Pacific Trade means reduced capacity
Several carriers have announced newly consolidated sailing strings which will ultimately result in reduced vessel space from Asia to the United States. The reduced space will result in a carrier-induced high demand which may cause recently increased rates to remain at higher levels through the peak shipping season this fall. The reduction in service is hitting some of the following core carrier groupings:
- Evergreen Line operated NUE Service (North Asia - U.S. east coast - European Pendulum). Reduced vessel/size.
- CMA-CGM/Maersk/MSC rationalizing Central and North China services to the U.S. west coast. The Yangzi loop service will be discontinued after September 7 and will be replaced with the new Bohai Rim service calling Dalian, Xingang, Shanghai WGQ, Shanghai Yangshan, Ningbo, Los Angeles, Oakland, Dalian with 5 ships of 8100 TEU capacity. Service will be weekly.
- Effective September 27, 2009 CMA CGM, MAERSK and Hyundai suspend one of their Asia/ US east coast service via Panama.
According to CMA-CGM and their vessel sharing partners, the joint decision allows CMA CGM, MAERSK and Hyundai to rationalize existing services and capacity to meet market needs. These moves come at a time where historically shipping volumes peak prior to the holiday season in North America.
In a customer announcement, Philippe Thénoz, CMA-CGM Vice President North America, describes the moves as follows: "This rationalization of port coverage and slot supply corresponds to the actual trend demand observed on the Asia/US market since beginning 2009. Suspension of services is, in our mind, a temporary move. We are fairly confident that the North America trade will rebound in the near future."
Source: http://www.joc.com/node/413106. CMA Customer Announcements
2009-2010 Trans Pacific Imports = Update on the GRI and PSS
As earlier reported in the August AIT customer eNewsletter, the issue of rates as they relate to Peak Season Surcharge (PSS), General Rate Increase (GRI) and BAF were discussed for Asia to USA imports during the 2009-2010 shipping season. During August, several of the TSA carriers made effective their earlier announced August 10th GRI.
In addition to the August 10th GRI, the question remained as to whether or not a PSS would apply in September. As of now, the carriers are proposing PSS with effective dates spread out throughout September. The TSA carriers servicing this trade announced on July 7 that they would "pursue further revenue improvement" in 2009.
As of press time, the Transpacific Stabilization Agreement (TSA) member carriers servicing the Asia to US GRI and PSS can generally be summed up as follows:
The breakdown of the recently enacted GRI from August 10, 2009, roughly equated to the following:
$ 400 per 20' container
$ 500 per 40' container
$ 565 per 40' high cube container
$ 635 per 45' container
For existing or new rates, this "GRI" would be rolled into the base ocean freight rate and normally will not be broken out in the ocean freight rate level. Please note that these rates are subject to change based on current evolving market conditions.
Additionally, the increase that came effective on August 10 is graphically illustrated by showing 40' container rates between Hong Kong and Los Angeles for 10 weeks leading up to the GRI. This graph can be viewed at The Journal of Commerce website: http://joc.com/marketpulse.
The GRI represented a rate increase of over 50%. The recent GRIs apply to all modes in the tradelane: direct west coast, Minilandbridge (MLB) and All Water Service (AWS) to the United States east coast.
The breakdown of the upcoming Peak Season Surcharge (PSS) effective either September 1, September 7 or September 14 are proposed as follows by most TSA member carriers:
$ 300 per 20' container
$ 400 per 40' container
$ 450 per 40' high cube container
$ 510 per 45' container
GRI and PSS may vary by carrier, so please speak with your AIT representative to validate the GRI and PSS level for your ocean rates. GRI and PSS are subject to change without notice.
Ocean carriers are holding relatively firm on the recent GRI to offset huge losses reported in late 2008 and into 2009. The lines are drastically reducing capacity by utilizing smaller vessels to minimize operational losses. This reduction in capacity may result in limited vessel space, so remember to book early, especially for multiple container bookings.
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
General Rate Increases (GRIs) - a September update on global trades
In last month's edition, the AIT eNewsletter reported that in addition to the proposed GRIs on the Trans Pacific eastbound trades, several other lanes would be impacted by GRIs. Nearly every export tradelane from the USA is impacted by GRIs, most notably the following:
- United States east, Gulf and west coast to Brazil
- United States east coast and west coast to the Far East
- Europe and Med to/from the United States
- India to the United States
These GRIs apply to FCL and LCL cargo and are subject to change. Customers should be reminded that GRIs vary by carrier and tradelane. Please contact your AIT representative to verify the rate levels in your tradelane.
The AIT Ocean Systems team would like to thank you for your continued support during August. It was quite an active month for rate requests and new customers. It seems September will also be quite active at AIT, as peak season might actually arrive because of smaller ships filling up more quickly. Enjoy the last few days of summer as the cool winds of fall fill your sails while cruising toward the end of 2009.
Preview October 2009 AIT Ocean eNewsletter:
A Southern US 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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