Thursday, 9 December 2010

New Incoterms come into force on 1 January 2011.

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The International Chamber of Commerce has recently overhauled the Incoterms used in world trade and there are some substantial changes coming into effect on 1 January 2011. About every ten years the ICC reviews and attempts to make sure Incoterms align with current trends and methods of world transport.

Rather than attempting to explain all the new terms in this blog, you can get a short overview by watching a 4min 28sec presentation on this by clicking here.

For more information please feel free to post a question on this blog or alternatively you can order the ICC's Incoterms 2010 book detailing them all, online by clicking here.

Undoubtedly there will be some short term confusion until everyone involved in world trade gets used to using the new terms. Old habits die hard sometimes...

All for now,

Brad Skelton

The Shipping Bloke

Friday, 3 September 2010

ACT for kids

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ACT for kids is the charity that my company and I support and they launched their appeal today. This organisation works to treat and protect children from child abuse and is very worthy of support.


Quite a few of my Brisbane based team were at Central Railway Station this morning shaking a can trying to get some donations from the commuters. From all reports they did quite well and enjoyed the experience. Thanks gang!


If you'd like to make a donation you can do so online by clicking here.


Thanks for your support if you click through!


All for now,

Brad Skelton

The Shipping Bloke

Monday, 23 August 2010

Who you gonna call?

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I have noticed a significant shift in the market recently with many large, high volume shippers who have previously had direct deals with shipping lines gravitating back toward freight forwarders.

Shipping lines have been fighting to stay profitable and as a result are frequently changing ships, retrenching staff, dropping port calls or still have some fleet laid up resulting in lack of capacity and short shipments. The reality is that many shipping lines service levels have been faltering. I think I can say without exception every client is fed up with dealing with so called "Customer Service" centres on 1800 numbers.

So who you gonna call? Freight forwarders!

Shrewd shippers are using forwarders to help overcome these things. The forwarders are generally better positioned and resourced in meeting the needs of shippers right now and will offer a broader range of options rather than just one carrier. The range of services is usually broader too and in the volatile freight market we have had for quite a while, the forwarders are more attuned to where the deals are.

Best of all...you don't sit on hold in a phone queue waiting for ages to talk to someone and then being told "Go to www." to do that!

All for now,

Brad Skelton

The Shipping Bloke.

Sunday, 8 August 2010

Far East shipping industry recovery is well underway!

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I have been travelling the last week or so in the Middle East and Far East visiting clients and shipping lines and some of my agents in these places. Recovery from the global economic downturn, particularly with shipping lines in the Far East, is now well underway with some carriers forecasting things should be back to normal by the end of the year.

An example is Singapore owned, Neptune Orient Lines(NOL). NOL is the fifth largest container carrier in the world. After reporting a US$741m loss last year NOL expects to deliver a US$70m profit for the full year this year. Furthermore all vessels that NOL laid up to ride out the downturn are now back in service and they intend to start acquiring more. Similarly an even more spectacular turnaround is being delivered by Orient Overseas International who posted a US$1.28b profit for the first half compared with a loss for the same period last year of US$232m.

Maersk Lines, the worlds largest container carrier, has forecast they expect to return to profit this year after seven terrible consecutive loss making quarters.

Most carriers I have spoken to are hoping to be able to gradually increase rates later this year by 10-15% as space contracts on their ships again.

I am really getting the sense now that the pulse of global industry is shifting to Asia with more companies focusing on this region and the extraordinary opportunities and growth that exists here. Some are even shifting their head offices from Europe and the US to the Far East. Obtaining finance from banks and doing business in general, is easier than alot of other places in the world and the economies are less credit driven.

For my industry something that punctuates this for me is that there is a challenger to the Baltic Shipping Index coming out of China that is getting more prominent. It is called the China Containerised Freight Index and provides a benchmark index for container freight rates. At the end of June it had risen to 1171 points compared with 763 a year ago.

All in all things are looking very positive again and I think we'll be back to battling for space on ships again very soon....in fact in a few tradelanes we already are.

All for now,

Brad Skelton

The Shipping Bloke

Saturday, 12 June 2010

If you have never Googled yourself...do it now!

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This is a classic "Don't let this happen to you" story that I wanted to share with you.

I recently Googled myself and my company to check how we were being ranked.

I was surprised to find that another company popped on the first page of my search because they were using my name, Brad Skelton, and my company's buyline, the Choice of Heavy Industry, in their own website's page address without my permission. I have no association whatsoever with this company.

They obviously thought they could leverage my name and company's reputation to throw peoples hunt for us off track with internet search engines. They were effectively mis-representing themselves in an effort steal our web traffic and some business that was destined for us in the first place.

I am flattered that another company thinks so highly of mine that they would blatently leverage our name and good reputation for their own gain. Such must be their own realisation of their increasing irrelevance to the market and their inability to innovate themselves.

Well, Skelton Sherborne and I are the REAL DEAL and won't do unethical things to grow our business. I promise you now if I ever feel I need too, then I'll know it's time for me to find another gig.

All for now,

Brad Skelton

The Shipping Bloke

Thursday, 6 May 2010

The Japanese car carriers are back..cars sales must be down.


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You can always tell car sales globally are down when the Japanese car carriers start chasing business for high and heavy cargo, like earth moving machinery, that usually holds little or no interest for them. You have to try and fill those ships somehow in a downturn.

From my perspective the GFC has had both positive and negative impacts on the RoRo (roll on/roll off) shipping market.

One of positives includes rates coming back to earth. Probably too low to be brutally honest as we are still seeing rates in the market at levels I haven't seen since the 1980's. The carriers cannot sustain these levels for much longer so I firmly believe increases are just around the corner.

Carriers have been scrapping older ships which are less fuel efficient, and operationally constrained with their lower ramp capacities and speeds. This is a double edge sword though. While it is actually good to move the older girls on, with fewer vessels working it has meant that sailing frequency has dropped in many trade lanes and this combined with slower steaming speeds, to save fuel, means that you may have to wait longer than usual for your cargo to arrive.

In an effort to fill their vessels RoRo carriers have been calling at more out ports. In other words, calling at ports that are normally not scheduled and going where the spot packages of cargo are. Prior to the financial crisis it was simply not possible for carriers to even consider a deviation from the main ports. With demand strong, they were under too much pressure from their big customers to get that cargo to market. NOW!

Out of adversity there is always opportunity for enterprising people. We have seen some new carriers enter the market such as Partner Shipping's NAPA service which has brought real competition to the market between North America and Australia. We have also seen other carriers, like Wallenius Wilhelmsen, enhance their USWC transhipment services via Manzanillo. both of these things are a win for shippers.

So, what's next?

I think it depends a fair bit on what is happening economically in Europe right now however assuming cargo volumes continue improving, then freight rate restoration will soon be inevitable. As global demand for cars comes back, then if they run true to past form, we'll be saying "sayonara" to the Japanese car carriers again until the next downturn.

All for now,

Brad Skelton

The Shipping Bloke

Sunday, 25 April 2010

Customer loyalty... going, going, gone?

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Has anybody else noticed that customer loyalty seems to be dying a slow death as the forces of the internet gain more momentum? Now todays customers are better informed than ever in making their buying decisions and realise they are the ones holding all of the aces.

Courtesy of the internet today's customers can quickly search and find vast numbers of alternative suppliers of virtually any product or service and get real-time price comparisons. They don't really care anymore how long you have been in business or how big you are or how many offices you have or what great marketing promise you have come up with. The business climate has changed forever and the balance has tipped firmly toward the buyer and not the seller. Any company that thinks they can force customer loyalty somehow is now completely out of touch. In fact todays buyers can and probably will rebel against them.

If you think it is about price and price and price, then you are wrong. Sure it is a major factor in any buyers decision and every company needs to be competitive to survive however recent research suggests that in this fast paced world we live in people value their time and benefits more than their money.

This is the topic my good friend and mentor, Bob Bloom, has based his latest book "The New Experts" on. Bob has had a lifetime in marketing working for customers such as BMW, L'Oreal, Nestle, Southwest Airlines and little old Skelton Sherborne. Before retirement he was CEO of Publicis Worldwide. His immense experience is second to none and I always enjoy his no nonsense, cut through the crap style. Bob's common sense or perhaps "uncommon sense" approach has been dynamite for my business in helping me attract and retain the worlds leading shippers of heavy equipment and machinery.

I was sincerely honoured when Bob chose to write about some of the initiatives in freight forwarding we have come up with for our clients and even more honoured when he asked me to write an endorsement for "The New Experts".

This book is relevant, enjoyable and a compulsory read for anybody trying to come to terms with the thinking and habits of the new customer.

Bob has been kind enough to give me ten copies of his book. I will send a free copy to the first ten readers that leave a comment at www.TheShippingBloke.com offering a personal experience to the readers of this blog in dealing with the attitudes of todays customers.

If you miss out then you can buy a copy of "The New Experts" here.

All for now,

Brad Skelton

The Shipping Bloke

Thursday, 22 April 2010

Volatile freight rates as shipping recovers from the GFC.

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HSBC, the worlds largest bank, hosted a shipping conference on the 29th of March and I thought I'd share some of the information and ideas raised there by ship operators, ship yards, ship brokers and financiers that might be pertinent to followers of this blog. Freight Forwarders, like yours truly, seemed to be absent. The source of this information is HSBC's Shipping Day report.

Overall there was consensus that a slow recovery is underway however many operators are still delivering substantial losses and freight rates, particularly in the container sector, are likely to be very volatile in some trade lanes. I have personally seen this volatility and you have to be right on your game!

The volatility is being caused by carriers who have been hiking rates in order to try and get back into profitability and fluctuations in shipping capacity. Rate hikes the past 6 to 8 months has been due to carriers cutting their capacity as they have laid up vessels to ride out the downturn. The rules of "supply and demand" have kicked in.

Capacity is now growing again though. Some carriers have started reactivating some of the ships they have laid up while at the same time there are new container ships being delivered from the ship yards that were ordered years ago(pre GFC) which are increasing capacity. HSBC report that most of these vessels are destined for Europe/Asia tradelanes. Rates have already dropped by about 10% as a result. Good news for shippers and freight forwarders. Overall it is concerning that there is still massive over-capacity in shipping globally.

We are also seeing the RoRo carriers contemplating bringing more vessels out of "lay up" so I suggest we will see similar volatility in freight rates in this sector soon which is likely to continue until demand and capacity stabilises.

Recovery in the bulker and tanker trades seems be happening faster and in fact the ship yards reported a preference to work in these sectors. The ship yards received almost no orders in 2009 and suffered from substantial deferments of orders as well.

So, all in all, still interesting times for shipping but I am heartened that recovery seems to be slowly underway even if there are still some rough seas ahead for a while.

All for now,

Brad Skelton

The Shipping Bloke.

Thursday, 15 April 2010

The Generosity Gene.

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I am fortunate to have some incredible friends in Naomi and Peter Simson who founded RedBalloon. Their company is easily the largest online supplier of experienced based gifts. More on RedBallon.

Naomi is a marketing genius, a former Telstra Businesswoman of the year, a Mum and one of the most innovative and out of the box business thinkers I have ever known.

She has recently had the great honour of being invited to speak at a TEDx event in Sydney. Tedx is invites some of the worlds greatest minds in their respective fields to do presentations which are recorded and then uploaded to the net. The thrust of Tedx is to capture amazing ideas and spread them.

So while Naomi's presentation, "The Generosity Gene", has nothing at all to do with shipping, I thought I'd share it with you. I hope you find it as thought provoking and enjoyable as I did.

Congratulations Naomi!

Click here to "The Generosity Gene".

All for now.

Brad Skelton

The Shipping Bloke

Saturday, 10 April 2010

What happened to "My word, is my bond"?

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For centuries in shipping, a person or company's word has been something that can be relied upon absolutely. It is an industry foundation stone but I fear it is getting lost. A reputation for honouring your word is hard earned but easy to lose. It's not rocket science. Simply do what you say you will do and it keeps customers happily coming back.

So lets relate that to some of the worlds major RoRo and container lines right now. Sadly many still have substantial portions of their fleets mothballed and out of service and are losing money due to declines in cargo volumes with the GFC. It's a bad predicament the industry is in yet short shipment of cargo is on the rise again even when shipping capacity massively outweighs cargo volumes. For a shipping line to give a booking confirmation on a particular vessel to move cargo is in effect to give their word or a promise to perform.

Recently one good client of mine with a RoRo carrier suffered three consecutive short shipments in a row for his bulldozer. To be clear, this was with bookings being CONFIRMED by the shipping line in writing and yet vessel after vessel his cargo was left behind. Similarly a client moving full container loads ex Europe had virtually the same experience. The commercial impacts on these clients was massive but the shipping lines didn't seem to care.

These occurences were commonplace just prior to the GFC rolling through as cargo volumes globally were at all time highs and there was a shortage of ships. Not that this excuses short shipments. Either way you look at it, the shipping line shouldn't accept the booking if they cannot be relied upon to upift the cargo AS BOOKED! It's their "word" after all.

Perhaps I am over-simplifying it but I don't think so. To my businessmind I'd be trying hard to deliver a damned good and above all reliable service and carrying everything I could to grow profits and revenues. Particularly in challenging business times.

Now I am sure that some executives of shipping lines are reading this blog and thinking Skelton just doesn't understand. "He's been around long enough to know it's about maximising the utilisation of the ships we have in service to make a profit. Sometimes this means we have to leave cargo behind." I realise delivering a profit is a business imperative but in some circumstances is it worth the long term cost of abandoning your word and thus losing customer focus?

Lets get back to basics. I think to abandon your word is short sighted. Long term success in business means taking long term views of the business relationships you enter into and realising there will be highs and lows but because you have given your word, you stick by your customer through thick and thin.

It's about being committed enough to the relationship to take the good with the bad. Lets not forget that many ship owners have enjoyed incredible boom times prior to the GFC. The likes of which had never been seen before.

So now times are pretty tough and some of these carriers, while delivering appalling booking reliability, are arrogant enough to still think they deserve and can demand 100% loyalty from shippers and forwarders while at the same time not offer anything in damages when they leave cargo behind. To be frank they don't deserve loyalty because they haven't earned it.

My customers have long memories for bad service and many of them will go out of their way to avoid and punish carriers who have inconvenienced and cost them money before. Right now with times being tough for them too, they are less forgiving than ever. We are fortunate that most of our customers are understanding enough to know that because we, as freight forwarders, don't own the ships we are reliant on the shipping lines to perform.

In previous blog posts I have referred to three great mates of mine that I get together with a few times a year to discuss business and life over a long lunch. One of the boys coined a phrase that resonated with us all and I think is relevant to share in light of peoples abilities to keep their word.

It is, "Tough times don't build character. They reveal character".

I invite you to comment on this blog and share any short shipment war stories you may have by going to http://www.theshippingbloke.com/ .If you are one of the offending shipping lines, then I am sure my readers would like to hear your perspective too.

All for now,

Brad Skelton

The Shipping Bloke

Sunday, 28 March 2010

The collapsible shipping container..a reality?


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For as long as I have been in the shipping industry the pursuit of the collapsible shipping container has been on. Numerous designs and prototypes have been tried and they haven't really proved practical or financially viable. Well this latest design from a Dutch designer called Cargoshell might just be the one that will make the break through.

Why make a shipping container collapsible anyway?

Approximately 90% of all cargo shipped in the world these days is done so by containerisation. There is estimated to be about 200 million shipments per annum. The pinch point on the current standard design is the costs involved to deliver and return the empty containers or frequently re-position them back to export markets. The costs to do this, regardless of the mode of transport, are virtually the same as moving a full container.

So if you can find a way to collapse a container for the empty transport then you can stack them together and return or deliver a few for the same cost of returning one. Cargoshell accomplishes this with a massive volume reduction of 75% and a weight reduction per container of 25% by using composites rather than stell for their construction!

With the world chasing carbon emission reductions, a lighter container equates to significant savings on fuel and therefore emissions.

The other pinch point of past collapsable container designs has been the ease at which you physically erect them and fold them down. Once again, Cargoshell has come up with a design that can be easily errected in about 30 seconds. To see this in action click here.

For this project to ultimately succeed it will depend on the scale of adoption of this design globally. This is because currently the cost of a Cargoshell container to manufacture in fewer quantities is about three times that of a steel container. So it might take a while for shipping lines to gain reductions in their operating cost and then hopefully pass that on.

If I was in the business of operating empty container parks then I'd be worried. This innovation could lead to a 75% revenue hit.

All for now,

Brad Skelton

The Shipping Bloke

Sunday, 21 February 2010

Ever wondered exactly where the ship is with your cargo?

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GPS technology seems to get better and better and the shipping industry has been an early adopter of this for navigation purposes originally.

Now a significant leap has been made which enables anyone to track all types of ships from cargo ships and tugs to passenger liners via the internet in realtime.

Marinetraffic.com has an incredible website where you can track the ship your cargo is on, see it's speed and even some pictures of her.

I value truth and transparency and in years gone by who would have really known if the vessels agents were telling me the truth on where the ship was or even if they knew exactly themselves. I swear the shipping industry has a massive book of excuses. Well, it just got alot thinner with this great tool.

I am currently working on the integrating this technology into Skelton Sherborne's myCargo realtime tracking facility so my clients have this info available to them on the cargo they entrust to us constantly. It's in a test mode now.

All for now,

Brad Skelton

The Shipping Bloke