Blue Eco-friendly Containers

Next time, if you see a blue container, don't just think of "Maersk Line" container. It may be one of the 400 eco-friendly prototype containers being tested and used in the real world.


After researching and testing, the Institute of International Container Lessors (IICL) introduced 2 types of eco-friendly containers in September and October 2008.


The objectives are:

1. reduction of wood in container floor.

2. application of water-based exterior paints.

3. eco-friendly production that are relatively subtle and cost neutral to the industry.


The 2 selections being tested are:




1. "a pattern of every other wood blank separated by a steel strip that runs the length of the container, which IICL calls the “omega”;



2. the “tunnel” pattern which includes a wide steel strip up the middle of the box with wood planks on both sides.

Traditional Containers	Eco-friendly Containers
All-wood container floor	Half wood, half steel plating.
	-- support folk lifts and heavy cargoes.
	-- allow blocking materials to be nailed into the floor.
	-- met IICL and classification society criteria.
Solvent-based paint	Low-solvent, non-zinc water-based paint
Advantage: dry within 24 hours even in extreme humidity	Advantages: allows Hydrocoat to be applied inside without harsh paint fumes. reduces the risk of toxic solvent exposure.
Disadvantage: adverse effects on earth ozone layer.	Disadvantage: Require temperature and humidity control for drying. Unknown about the tolerance of salty, moist air on ocean waters.

So, if you use one of these 400 blue containers next time and want to write a comment, you can send it to Universal Cargo Management and we will forward it to IICL and/or its shipping line.

Ocean Shipping Rates - Volatility Can Mean Opportunity to the Vigilant

Is anyone else nervous about the volatility in the stock market of late? We in the cargo, freight and logistics business have been on an especially wild ride since 2008. Bill Corley of Export America lays it out for us in his informative Technical Advice article.

Basically there are six key contributing factors to the price and availabiity swings we're managing behind the scenes when as help our customers move their personal effects, business exports and dry goods abroad:

Continually increasing freight charges within the logistics chain; those are the fees and tarifs we pay along the way when moving containers from origination point through to destination point).

Vessel capacity; the room available on ocean-going cargo shops which seem to us to be unnecessarily scarce..so much so, that the Federal Maritime Commission is investigating the causes of this shortage. Anyone flying over Singapore seeing the miles-upon-miles of "mothballed" cargo ships has to wonder why these assets are not being put to use...hmmm.

Shipping lines selectively excluding customers of certain volume and revenue characteristics. We've all heard of "reserving the right to refuse service to anyone"...but come-on people! We're talking cargo containers, not country club memberships here. Like the highway system in our great nation, the shipping lanes are maintained, reguleted and protected by the tax-paying, sweat-equity business owners - we've earned access so let's get real about whose paying their bills right now. Even cargo customers with "preferred" status are waiting upwards of 4 weeks to get their stuff aboard so something just doesn't add up behind these conditions.

Logistics is a complex business with lots of room for mistakes. Clearly understood forms and documents in one country can be grossly misunderstood in another. And when imperfect paper-based processing is abundant, imagine what automating those same processes over the internet can do! There is both humor and caution in what we learned during Shanghai's Expo 2010 . Funny, yes; but only until you ponder the potential disasters these sorts of misunderstandings can trigger in tense logistics and emergency communications situations. It's slow going for these folks, but we must honor their persistence and stand poised for the advice they'll have for the rest of the world when they're done.

Long road ahead for recovery: Shipping, as a lagging indicator of economic growth, is still in it's downturn. NASSCO has announced a significant layoff for this summer; which means that a domestic response to constrained vessel capacity isn't likely in the near term - workers in this sector are shifting their focus from building to repair.

Bottom Line: Tough times continue; so trust your friends or look for new ones (with good references), book in advance, be flexible with rate swings and ship dates, make backup plans. Chaos breads opportunity for new relationships and gives the better agents an opportunity to demonstrate their capabilities.

With 25 years experience in Asia freight logistics, a deep network of experienced partners, and good relationships with agents all over the world; Universal Cargo Management, Inc. in Los Angeles should be on your short list when seeking bids and new business relationships. www.universalcargo.com

Same Issues Different Day - U.S. and China Continue to Arm Wrestle

Recently U.S. govt and Chinese govt officials met for the Strategic and Economic Dialogue (S&ED) talks for another round with the indigenous innovation issues.This involves China’s desire to develop and export more “High end” technology and compete with the U.S. WHERE WE RULE and will hopefully continue if our education system ever gets back on track, but I digress.

While China's government continues to drag their feet in making it harder for copycats to steal our technologies.

However score this round to the U.S. for not only getting China to be more flexible about this issue, but they are now willing to “rewrite” the contract for being in the WTO when they all sit down next month.

The other issue would be on what exactly does China plan to do with their currency evaluation?  If you are in the business if Import you are most likely crossing your fingers and telling the Obama administration to “shut the hell up”, or if you are an exporter, or a U.S. manufacturer you are screaming at the top of your lungs “ADJUST THE YUAN EXCHANGE RATE to reflect the Market” so America can rebuild it’s competitiveness on the World market for it’s goods and services.

Either way, it appears as China is not only becoming a consumer market on the world’s stage, but also slowly moving towards a higher end technology (like what happened to Japan in the ‘80’s and Taiwan in the ‘90’s) they realize that it is inevitable that the RMB strengthens another 10-15% in the coming year.  China is just biding their time, while the U.S. keeps nudging them along.  So America, it’s time to get your thinking cap on and get back to the workshop and innovate. (That and maybe buy a few RMB along the way maybe)

3 Hot Trends in International Shipping and Container Transport

In trying to make sense of recent sea freight and air cargo rate fluctuations, we've gathered information from several sources and made the following observations:

1) Rates are going up and staying up, not down
2) Space will be an issue probably all year
3) Expect “new” surcharges

IN SHORT: We're all paying for that great 12 months we all had with the lowest freight rates in History between Oct ’08 through Sep ’09.

• Lack of boxes adds to transpacific capacity squeeze, freight forwarders fear new surcharge
• Battle for Space on the Transpacific: Richard Owens, Asia Pacific CEO for DHL’s global customer solutions unit, told IFW that even “a company with DHL’s clout” was being forced to fight for space.

Here's a rate chart showing what we're seeing (as of 29-May-2010) at
Universal Cargo Management, Inc. 
 

CARRIER	EFFECTIVE DATE	2010 PSS				Remark
APL	2010.8.1	320	400	450	505	from China to USA (except Puerto Rico and Virgin Islands)
CMA	2010.6.15	320	400	450	510	from Asia to USA/Canada (East & West Coast, IPI, MLB) - cargo receipt date at origin
Cosco	2010.6.15	320	400	450	506	from Far East and Indian Sub-Continent to USA/Canada
CSAV	2010.6.15	320	400	450		from Asia to USA
CSCL	2010.6.1 ~ 2010.11.30	320	400	450	505	from Far East, Middle East and Indian Subcontinent countries/areas to USA
EMC	2010.6.15	320	400	450	506	from Far East (except India)/S.Africa to USA/Canada
	2010.6.15	360	450	506	570	from India to USA/Canada
Hapag	2010.6.28	320	400	450	510	from Asia and Indian Sub-Continent to USA/Canada, except India - date of cargo receipt at origin
	2010.6.28	300	375	425	n/a	from India to USA/Canada - date of cargo receipt at origin
Maersk	2010.6.15	320	400	450	510	from Far East Asia to USA/Canada (Transpacific Eastbound)
Matson	2010.6.16	320	400	450	506	Transpacific Eastbound (excluding Hawaii, Guam)
MOL (PSC)	2010.6.15 ~ 2011.3.31	400	500	565	635	from Asia to USA/Canada
MSC	2010.6.15	320	400	450		to USEC and US intermodal points via USEC
	2010.6.15	400	500	563		to USWC and US intermodal points via USWC
OOCL	2010.6.15 ~ 2010.11.30	320	400	450	505	to USA/Canada - base on cargo receiving date
Wanhai	2010.6.15 ~ 2010.11.30	320	400	450	510	to USWC

 

BOTTOM LINE: At Universal Cargo Management, Inc., we advise our clients to make reservations early if possible and structure your contracts carefully making certain thatall fees are clearly declared in order to prevent unpleasant surprises.

Time to "Pay The Piper"?

In History, an old tale tells us of, the piper who was owed payment after solving an overcrowding problem for a small medieval village, dire consequences awaited the village when they tried to avoid paying the piper for his expertise in export services. 

Over the past few years, international shipping companies have been operating at significant loss in order to address demand for cargo services, especially between the U.S. west coast and Asia. 

Not so any more.

The carriers have been on a mission since last summer to raise the ocean freight rates in an effort to make back all that money they lost in ’08 and ’09.  Right now in the Pacific Rim where most traffic lies, the ocean freight rates have risen dramatically this year (between $1500-2000 a ’40) with another Peak Season Surcharge set for June 15^th of $400/40 avg.  

Just as we have seen for the past few years, the Cargo Carriers also use the bunker (BAF) or floating fuel surcharge as leverage to have a reason to raise the rates if they have contracts locking in prices with their customers.

As we notice the price of a barrel of oil has decreased recently from $90 to $70 a barrel, of course the ocean freight or BAF has not decreased, it has not changed.  However when the price of oil goes back up again, which you can bet on given the recent Gulf mess, there is a high likelihood that the bunker will increase again sometime this year.  Otherwise you may find more “space problems”.

SOURCE:
http://www.hellenicshippingnews.com/index.php?option=com_content&task=view&id=102937&Itemid=79

The cost to produce/extract mineral/fossil fuels goes up when disasters like our oil spill in the Gulf. Especially as resource exploration and drilling production regulations adjust to prevent similar disasters in the future.

BOTTOM LINE: Get your shipping contracts in place sooner rather than later to lock in your best prices.

Can an Importer from Shreveport, Louisiana Partner with an Exporter in Louisville, Kentucky?

Changes in demand for global freight logistics have opened new opportunities for collaboration. It doesn’t take an expert on global trade or economics to see that America is beginning to export more and import less. This is good news for American business, but does present some unprecedented challenges in moving goods overseas.

“...carriers don’t like to move cargo inland as they want their containers in the ports to save the cost of repositioning.” - Devin Burke, CEO, Universal Cargo Management, Inc. 

Although most of the growth in shipping traffic is still bulk items, such as scrap,produce, lumber, rawhide, cotton, etc, this country is growing in exports of such items such as used vehicles, construction equipment, as well as new manufactured goods such as building materials, medical equipment, sporting goods, high endfurniture. You couple that fact with the weak dollar, an Obama administration pushing to “double our nation’s exports in 5 years”, a growing middle class Chinese population developing an acquired taste for goods “made in America”, and other aggressive trade policies between America and countries like South Africa and Australia you would have to see there is a growing trend in exports. So what we are experiencing on the logistics side of exports are a steady increase in space and equipment shortages for anything being shipped out of America. Therefore if you are an exporter you not only face a space problem, where you may have to wait 3-6 weeks to get on board a vessel, depending upon the port,you are also experiencing shortages of actual equipment, especially in interior cities. So you may have to wait 2-3 weeks before equipment arrives before the carrier will accept booking. On the import side, while there has been a decline in volume because of the decline in the American consumer’s buying power, retail decline, weak dollar,unemployment and other factors that severely slowed down the amount of cargo coming into this country from Asia in the past 2 years, there exists strangely enough since the 4th quarter of last year a severe space problem on ocean freight carriers from Asia, especially China.

The Big Disconnect: Import / Export Challenges 

Now most of us all know the cause of this space problem to be manipulated by the carriers themselves when they decided to dock many of their vessels in ports like Singapore.(If you fly into Singapore you will see an ocean of between 6-700vessels sitting there empty, it’s quite a sight). This was done to “save” the lives of carriers because of the billions they lost last year (I heard Maersk lost $2 bill, wow, they supposedly have never lost money, ever, but who knows with creative accounting what the truth is, but still, wow). Well this capacity constraint actually worked for the carriers, as if you are an importer you will know the freight rate shave gone up from $700/40 from China to the west coast during the summer of’09, to now most importers are looking at paying around $2500/40 this summer. But even with the increase in revenue for the carriers, they are cleverly withholding their vessels in order to continue the space crunch, so they can maintain their high ocean freight rates for inbound freight to the USA.  

The Federal Maritime Commission is investigating this matter and urges anyone wishing to participate in these hearings or offer information relevant to the development of the record in this proceeding to contact her office at (202) 523-5715.

So, What Are We Looking At?

We have a shortage of equipment for exports, and a shortage of space because of too many containers coming into America ? So why the disconnect ? One obvious answer is the fact the carriers don’t like to move cargo inland as they want their containers in the ports to save the cost of repositioning. However if an importer in say, Shreveport , Louisiana cannot get space for cargo coming from Shanghai and now has to pay freight somewhere in the range of $4500 or more (up about$1300-1500 from a year ago) uses a carrier like Maersk, or MSC that also has an exporter customer in a nearby town in Northern Louisiana of lumber, waste paper,or cotton who cannot get equipment and space for their exports for 3-4 weeks, why doesn’t MSC or Maersk put these two needs together to solve each others' problem? It would seem to me that either the people running these carriers are too shortsighted, or maybe the cargo moving out of this country is just too far away and costly to match with the destinations of imported cargo, I don’t know for sure, but I would bet on the former.

Bottom Line:In the past, carriers essentially subsidized the inland distribution of containers;now, with some homework on the part of American businesses, collaboration with May 22, 2010 to save container distribution costs can be leveraged in negotiating for space on outbound ships.Universal Cargo Management, Inc. has over 25 years experience assisting customers and partners in freight logistics internationally and domestically. Visit their website at www.universalcargo.com or call 800-826-2276. Mention this article for additional discount on orders placed before June 31, 2010

Furniture Exporting Gaining Momentum - What it means for US Freight and Cargo firms

On 1/12/10 the Baltic Exchange Dry Index (BDI) website quoted Reuters report that Dry bulk ship owners are insisting vessels go via the Cape of Good Hope on voyages from South Africa to Mediterranean ports to avoid pirates in the Gulf of Aden - adding 10 days to shipping times. Utilities in Italy, Greece and Israel which use coal shipped from Indonesia and South Africa are having to pay higher shipping costs for the longer voyages, utility sources said. Around 60 percent of South Africa's 60 million tonnes a year of coal exports goes to Europe. 

FURNITURE TODAY NEWS - Go After Globe Express' customers..
Barcalounger, American of Martinsville file Chapter 11
Companies could be sold to affiliate of current owner
Larry Thomas -- Furniture Today, May 20, 2010

WILMINGTON, Del. - Upholstery producer Barcalounger and its sister
company, contract furniture source American of Martinsville, have filed
for Chapter 11 bankruptcy protection.

The joint filings, made a little more than a month after the two
companies shut down their factory in Martinsville, Va., said parent
company Hancock Park Capital already has agreed to sell the companies to
another affiliate of Hancock for $1.5 million.

The sale would have to be approved by the bankruptcy court, which would
conduct an auction if another bidder surfaces...(more)

Trade Logistics 101: An Introduction to Forwarding

By William Corley

As the world economy recovers, opportunities increase for U.S. companies to export their products. But international shipping remains daunting for many new or relatively inexperienced exporters, particularly small and medium-sized firms. To assist these firms, we offer the first in a series of articles about international trade logistics.

Considering the Options

Effective use of transportation equipment and modes reduces shipping and logistics costs. However, export planning entails all sorts of considerations, from inventory levels and manufacturing lead times to customers' preferences and transportation options. Ocean export is generally much cheaper than air export, but the transits from warehouse dock to consignee door are measured in weeks instead of days.