Cargo weight limits and specifications
Interestingly enough, one of the common problems shippers face at destination is cargo weight. That comes in two different flavors, making things a bit more complicated for shippers. First, there are times when the container’s weight does not match the submitted paperwork. That can make it impossible for the cargo to transfer because of the allowable road weight limit, the ‘risk’ wrong papers carry, or simple limitations on the equipment required to handle cargo above a certain weight. The second problem is if the cargo is unevenly distributed in the container. That can cause many issues when moving the load out of the truck or vehicle. That, in turn, often leads to damage. And you don’t need to be well-versed in global trade to understand why that’s horrible for business.

Damaged or missing cargo
Speaking of damaged cargo, or even outright missing cargo, it’s the next of the common problems shippers face at the destination on our list. When you are shipping cargo internationally, the reality of the situation is that it’s easy for it to sustain damage. Even if you take all the necessary precautions, that can still happen to you. And naturally, this can also make your entire shipment worthless. Damaged cargo is especially common when doing LCL shipping, as your cargo shares space with other people’s cargo within a container. Businesses do this to reduce expenses when they don’t have enough load to justify renting an entire container. That is also the most common scenario when your cargo can go missing, not because of any malicious theft but because it can easily get mixed up with other people’s cargo.

Problems with paperwork
While uncommon, your paperwork can be mislabeled, misplaced, or lost. Of course, losing a document is very difficult in the age of digital paperwork. But one such example that can happen is Bills of Lading. The original copy of the Bill of Lading is essential. And it is crucial to release your shipment on time and without hassle. It is best to ensure it is only handled by reliable channels and with great care. And this isn’t the only piece of paperwork that you need to worry about when you do international trading!

Customs taxes, duties, and penalties
Two primary sources of additional taxes, duties, and penalties are associated with common problems shippers face at destination. First, there’s the fact that shippers must comply with all the regulations related to importing cargo. If they fail to do so, they incur fines and penalties that cut into your profits. The second potential source of these troubles is limitations on goods by certain countries. Your goods may be outright contraband or require special permits. That is, of course, something you need to worry about ahead of time. So long as you carefully check the list of banned or restricted goods and prepare the required paperwork for all the needed goods, you should not have to worry about this coming up!

The cost of delays
Delays are insidious killers of profit. They are both common problems shippers face at their destination and are easily among the most expensive ones to take care of. First, because you are bound by contract to make deliveries of goods on time, you can alleviate that by planning for delays to an extent. However, due to the various problems with customs, paperwork, etc., which we’ve already covered or will cover, you can even go over these ‘generous’ promised delivery times. And then there are the fees you might need to pay for going over your rental period for the containers your goods are in. These pile on the expense delays imposed on you and further cut your profits. That is why you need to do everything you can, such as reducing truck detention times as much as possible.

Customs clearance
Customs clearance is a source of two different potential problems at the destination. First, of course, is the delay that a thorough customs check would impose on your shipment. It is not common for your goods to go through a thorough customs check. But it can and will happen if you regularly export or import. You completely counter the second problem through simple good judgment and full disclosure of complete shipment information. And it’s carrying goods that are not on your papers. That gets you in trouble with the customs officials, and you can bet that your shipments will be a target for detailed inspection for a long time.

Holiday-related delays and challenges
The final of the common problems shippers face at destination is, ironically, holidays. You must understand that when making international trade, export or import. You must account for the culture of the countries you work with and your own. Your well-planned delivery schedule can be thrown off because your shipment needs to pass through a country when it’s celebrating a national holiday and everything is closed. Planning for everything the first few times is annoying and stressful. But, once you’ve all the significant holidays marked out and noted in your schedule, they become a matter of routine. To get around the issue, you can use some methods to alleviate warehousing and fulfillment stress, such as smaller, faster shipments.

Success through proper planning for at-destination problems
As long as you know the common problems shippers face at destination, you can plan for them and find ways to resolve them quickly. That is why planning is always crucial for anyone who wants to do international import or export.

Original Source:https://www.globaltrademag.com/common-problems-shippers-face-at-destination/

Mitigating fire risk at sea as lithium-ion batteries proliferate

Allianz’s Safety and Shipping Review 2023 report states that fire was the second-most often cause for the loss of shipping vessels last year (after foundering) with eight lost and more than 200 incidents reported – the highest for a decade. Captain Rahul Khanna, global head of marine risk consulting at Allianz Commercial, highlighted some of the factors behind this trend.

“Although shipping losses have declined by 65 percent over the past decade (38 vessels in 2022 compared with over 100 in 2013), unfortunately fire incidents have not followed,” he said. “We continue to see major events involving large container ships, car carriers and ro-ro vessels for example. There were over 200 reported fire incidents during 2022 alone (209) – the highest total for a decade. Meanwhile, 64 ships have been lost to fires in the past five years. AGCS analysis of 250,000 marine insurance industry claims shows fire is also the most expensive cause of loss, accounting for 18 percent of the value of all claims analysed.”

He explained that fires need to be contained quickly, yet it may take several hours to get to the base of a fire on a large vessel, the size and design of which makes fire detection and fighting more challenging. Once the crew has abandoned ship the emergency response and salvage operations become more complex and expensive, and the risk of total loss increases.

“Misdeclaration of cargo is a real problem. Industry reporting systems attribute around 25 percent of all serious incidents onboard container ships to mis-declared dangerous goods, such as chemicals, batteries, and charcoal, although many believe this number to be higher,” Khanna added. “Failure to properly declare, document and pack hazardous cargo can contribute to blazes or hamper firefighting efforts. Labelling cargo as dangerous is more expensive. Therefore, some companies try to circumvent this by labelling fireworks as toys or lithium-ion batteries as computer parts, for example.”

Lithium-ion batteries, either transported as cargo or as part of an electric vehicle (EV), are moved safely every day. They do not necessarily burn more frequently than other goods. It is only when they ignite that they are more difficult to extinguish as they can burn more ferociously and are capable of spontaneously reigniting hours or even days after they have been put out. “Most ships lack the suitable fire protection, firefighting capabilities, and detection systems to tackle such fires at sea, which has been made more difficult by the dramatic increase in ship size – container-carrying capacity has doubled in the last 20 years. We have seen many fires where malfunctioning or damaged batteries have been attributed as a contributing factor in recent years,” he warned.

He said that the risk of such fire will decrease over time as manufacturers, carriers, and regulators address the current challenges. In the meantime, attention must be focused on pre-emptive measures to help mitigate the peril. Action is needed, given that Mckinsey, an industry analyst, expects the global lithium-ion battery market to grow by over 30 percent annually from 2022 to 2030.

“State of charge (SOC) of lithium-Ion batteries is an important consideration in their safe transportation and should be around 30-50 percent. More towards 30 than 50. Both shipping lines and shippers should ensure this is the case. Shippers should also request proper certification like the test summary from the manufacturers before transporting them as defective manufacturing is a one of the leading causes of fires in such batteries,” Khanna said. “Other measures to consider include ensuring staff/crew receive adequate training and access to appropriate firefighting equipment, improving early detection systems and developing hazard control and emergency plans.”

Moreover, he said that several large container shipping companies have turned to technology to address this issue of misdeclaration using cargo screening software to detect suspicious bookings and cargo details. Some large container operators are imposing penalties, although unified requirements and penalties for mis-declared hazardous cargo would be welcomed.

“The debate about EVs in the shipping industry is ongoing, with conversations about whether there is a need for dedicated ro-ro vessels for EVs. From an insurance perspective, this is something we would like to see – purpose-built vessels for transporting EVs, designed to substantially reduce the risk of fire. We have already seen shipping companies stop transporting EVs on their ships because of the potential fire risk,” he added.

Original Source: https://www.heavyliftpfi.com/sectors/mitigating-fire-risk-at-sea-as-lithium-ion-batteries-proliferate/22874.article?

In 2015, Amazon entered into the ocean and air cargo businesses, purchasing container space on ships and leasing Boeing planes, taking over their supply chain and expanding their footprint in the global economy. Today, Amazon is equipped with the best technology and analytics available. So, how do businesses compete with a company like Amazon? Differentiation and data are the key.

Do Business with the Commodities that Amazon Does Not Ship

When browsing Amazon’s website, it seems as if they sell everything. But there are several items that Amazon does not sell or ship. Agricultural equipment, aircrafts, automotives, and industrial equipment are bulky items that Amazon does not work with. Ocean transportation companies can place more attention on specific areas where they have gained an advantage strategically, and have captured that particular niche in the market. Entering these less saturated segments will help corporations establish a firm position in the market and competitive advantage. 

Use Data to Segment Your Customers Based on Behavior 

Companies must learn to let go of outdated business solutions that may have succeeded in the past. Instead, they need to leverage their unique business model to analyze their business and customer data. This will determine which customers and products will produce the largest revenue. Effective data analysis and implementation is the way of the future. 

Understand How Sensitive Your Customers are to Price 

Companies working in the logistics industry must utilize their data to calculate how important price is to their customers and streamline processes to understand how best to adjust rates. By providing competitive rates  and understanding what is important to your customers in addition to pricing, i.e. experience, customer service, personalization, the ocean transportation industry can stay competitive.

Covid-19 is Disrupting Amazon’s Supply Chain

But even a giant e-commerce company like Amazon is being affected by the pandemic.. As the novel coronavirus spreads on a global scale, the increasing demand for Amazon’s services has placed enormous strain on its supply chain. Many Amazon employees are unable to work due to the infection and many Amazon sellers source products from manufacturers, who are currently producing at below average rates. In the current climate, Amazon’s sheer scale may be the very thing that impedes it, creating opportunities for smaller organizations to step in and fulfill needs in the supply chain.

While RTM Lines does not compete with Amazon directly, we have seen how differentiation and data can help a business compete in the ocean transportation market. RTM’s business model of creating “innovative solutions for complex shipments” fills a need in the market. It gives us a competitive advantage especially when transporting cargo that cannot be transported in containers due to weight or measurements. Shipping and Logistics  specialists adapting a similar approach can create opportunities for their companies to succeed even against a juggernaut like Amazon.

Over the last couple of years aggregated contracts worth billions of dollars were exchanged in what the DGCX aptly called “brisk trading.” A promising indicator for the exchange is the Average Open Interest for 2019, which was higher than it has ever been. This begs the question: Is the Middle East becoming the new shipment hub for world trading? 

The scheme and response from the Middle East

Without a doubt, the Middle East is attempting to  position itself as an epicenter for global trade. Innovation and a  joint drive for implementation of improved systems are a large factor behind the Middle East’s rise. Local organizations focused strongly on technology in their operations and invested heavily in creating rock-solid global connectivity and market data products to attract international trade.

Obstacles and difficulties

While the Middle East is building its connectivity with the goal of becoming the new global shipment hub, it faces many difficulties along the way. It’s central location makes it the perfect hub for international trade, but factors including overcapacity and regulations are two possible setbacks. Middle Eastern ports have quickly added capacity. In fact, from 2011 through 2016, container capacity increased by 16 million 20-foot equivalent units (TEU). Ports have announced plans to add capacity totaling approximately 57 million TEU by 2030. If the demand cannot keep up the Middle East’s growing capacity, this can create lower returns for investors which can reduce investments down the road.

In 2018, a myriad of global financial firms grappled with implementing regulation MiFID II. Some of the requirements of MiFID II require organizations to have an easily manageable network. The Middle East has established an increasingly improved network in the last couple of years and has future plans to expand. 

With this agreement and manageable network clearing, services in the Middle East are projected to soar in the future. Clearing houses and additional supportive services will have to be prioritized for the Middle East to keep up with expected growth in the region. 

For the latest news and additional information about the freight and logistics industry, browse the RTM Lines News page here.