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Showing posts with label RoRo. Show all posts
Showing posts with label RoRo. Show all posts

Wednesday 9 January 2019

Good news for Depth Logistics clients in 2019.

I wanted to let you know about what we are rolling out at Depth Logistics this year to enhance our service offering and pass on some other good news for our clients in general.

We are excited to announce that we have begun investing in trucking assets to improve the service to our clients and ensure we are always delivering on our brand promise of “Absolute Reliability”. The fleet will start taking to the road in February and will include 100T low loaders, flat top and drop deck trailers and we have a side loader trailer also on order for container deliveries.

The truck fleet will be based at our new terminal, which will be established at the Port of Brisbane. The terminal will broaden the scope of services we can supply clients “in house” and will include the full suite of Biosecurity treatments including washing, a customs bond store, storage, container packing/unpacking and pre-delivery processing of RoRo cargo. The terminal will have ultra-high security for clients we act for in moving sensitive cargo.

Major Quarantine issues with brown marmorated stink bug are ongoing and it seems may be here to stay. So far we have succeeded in minimising the impacts of this on our clients through being hyper-vigilant on carrier selection and offshore treatment providers and to soon have fumigation ability in our own terminal in Brisbane will mean faster clearance of cargo we are handling.

The investments in our trucking fleet and new terminal for the company are underpinned by the good recovery we are seeing from our resources clients and growth in defence procurement supply chains we are working in.

We are recruiting more new senior team members and have already recently hired Chad Pennington as our new financial controller and Holli Delaforce as our executive assistant.

Our Clark, Philippines team have just moved to a brand new much larger branch office to give us more room to grow.

This year we will continue to invest in the digital delivery of more of our services as trends are that clients are preferring to use digital channels more and more to accomplish their shipping. An example of this is with our myCargo Insurance platform we launched late last year, which many of our clients now love using.

1 January 2019 also heralded the commencement of more Free Trade Agreements (FTA) for Australia with other countries. Many import duty rates have dropped as part of phased reductions in tariffs as of this date. More FTA’s are coming online with other countries this year. See this link from the Dept of Foreign Affairs and Trade to get a great overview of what FTA’s are in operation and coming.

I am sincerely excited with our 2019 strategic direction and expanding our own “in house” logistics capabilities and thank you for your ongoing support.

In the meantime if there is any help, advice or quotes you need, please contact me 24/7 toll free on 1DEPTH (133784) or +61730544670.

Yours with “Absolute Reliability”,

Brad Skelton

Monday 15 October 2018

Green shipping but there is a significant price

Major shipping lines have commenced a cost recovery campaign to compensate for the International Maritime Organisation (IMO) commitment to reduce sulphur emissions from shipping lines by 85% by 1 January 2020.

Two of the largest carriers, Maersk and MSC, have each calculated the costs for compliance to the regulations will add USD2bn in operating costs each per annum which they intend to recover from shippers by way of surcharges.

For CMA CGM the average cost based on current operating conditions will be $160 USD / TEU.

Despite the 2020 effective date of the regulation, Maersk, MSC and others, are introducing their new fuel surcharge mechanisms from 1 January 2019- a year before the regulation kicks in. They say they have a heavy capital expenditure over the next year to prepare vessels and other infrastructure for the different fuels.

RoRo carriers are introducing surcharges in the region of USD1.00 per revenue tonne.
Here are a few of the major shipping lines announcements:
Maersk Line- IMO Regulations 2020: New BAF to replace SBF

MSC- IMO Sulphur Cap Surcharges

CMA CGM- Low Sulphur Regulation 2020

Hapag Lloyd- Marine Fuel Recovery Mechanism

OOCL Fleet moves to meet IMO 2020 Regulation

I have been posting for a long time that container rates are too low and unsustainable and many carriers have been unprofitable and this has caused tremendous consolidation of the container carrier market in particular over the last five years or so.

With the climate of very low freight rates the only thing carriers can do is pass on the sulphur emission cost imposts to their clients. Shippers demand reliable shipping services and simple fact is that takes profitable carriers for services to be sustained.

I have been telling my clients to factor in 10-20% freight increases for sometime however these new surcharges have not been part of my consideration.

I hope that in time the tide will turn as from my perspective GREEN = MORE EXPENSIVE not just for the shipping industry.

All for now,
Brad Skelton

Friday 31 January 2014

Crack down has started on RoRo carriers for alleged unfair practices

It seems that the Japan Fair Trade Commission and the US Federal Maritime Commission have finally acted against carriers alleged to be engaged in unfair practices that have violated antitrust laws.

Personally I am very pleased to see the authorities getting tough. My clients and I have been on the receiving end of these types of practices on the USA to Oceania trade lane where one carrier always tried to force 100% commitments of cargo to them in shipping contracts. This obviously closes out competition and is unfair. My USA based lawyers advised that this practice runs foul of both US and European Union competition law but nonetheless they held their stance.

WW, K Line, Nissan Motor Car Carrier, NYK, Eukor and MOL have all been under scrutiny by regulators.

Wallenius Wilhelmsen(WW) has been fined US$33 million for alleged unfair practices in the Japan to Europe trade lane.

K Line has provisioned for a JPY5.7bn fine from the Japan Fair Trade Commission this year. To put the size of this fine into perspective their forecast profit to March 31 this year is JPY16bn.
Hopefully fairer competition and better rates will result from this crack down on carriers.
All for now,

Monday 28 October 2013

Which carrier wouldn't allow a marine surveyor on board their ship?

Today I had a client with a crane being loaded and shipped with one of the worlds largest RoRo shipping lines ex Brisbane. The client and his underwriters requested that a marine surveyor conduct a survey on the cargo and most importantly the lashing and securing of the cargo once on board the vessel. A fair and reasonable request and one that goes to the heart of the cargo's safe delivery, integrity and also to maritime safety in general.

To everyone's surprise and frustration, the shipping line refused to allow a marine surveyor on board their ship to conduct the survey. This is an unbelievable, arrogant and potentially risky stance adopted by the carrier and one that has caused my client to tell me to never ship cargo with them again. 

Marine Surveyors are highly qualified to inspect cargo, vessels and equipment on behalf of shippers, shipping lines and underwriters. On the waterfront they are highly respected as many of them are retired ships captains with tremendous experience who understand from first hand experience the power of the sea and it's effects on ships and cargo alike. Furthermore their ethics are considered by all as being beyond reproach and in my experience they have always conducted themselves in a neutral and highly professional manner. 

They play an essential role in shipping and one that is key to maintaining safe and high standards in maritime operations for all stakeholders and the environment. Many times they have raised concerns prior to or during loading of a ship that has potentially avoided dangerous incidents.

Any carrier who denies a marine surveyor on board their vessels in my view is short sighted, unreasonable and perhaps should not be entrusted with my clients cargo. Marine surveyors should be allowed to go anywhere and draw attention to any concerns they see. It is in EVERYONES interest to have such experienced people present to conduct a survey!

Many ships have capsized or sunk in heavy seas as the lashings on the cargo have not been correctly done or weren't secure enough to stop the cargo moving and slamming into the hull of the ship or other cargo. Several years ago a wheel loader broke it's lashings at sea during heavy weather. Every time the vessel pitched and rolled the bucket and it's teeth rammed into the hull. The machine was stowed below the waterline and eventually the teeth poked a sizable hole in the hull which lead to the entire vessel sinking.

Would anybody like to take a guess at which carrier denied my client a survey of his cargo? You can leave a comment in the field at the footer of this post.

All for now,

Friday 21 September 2012

Shipping Line Fuel Surcharges... Blatant Ripoff?

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

Fuel for ships is known as "bunker fuel" and since the global financial crisis(GFC) bunkers have fluctuated dramatically with a sharp drop post GFC followed by a dramatic increase.

I am amazed at how different carriers apply or choose not to apply bunker surcharges of one description or another even when they operate in the same markets and source their fuel from the same place. Of course the carrier charging it claims they are bleeding and simply can't afford not too. I always enjoy the the look of terror on the sales reps face when I ask how come their competitor isn't charging it and has nearly identical cost structures. I am yet to ever get a plausible explanation.

The carriers that do apply a surcharge most commonly call it B.A.F. This stands for Bunker Adjustment Factor. Another one used by one RoRo carrier is E.F.A.F which stands for Emergency Fuel Adjustment Factor. The word "Emergency" always puzzles me too. Where is the emergency when bunker prices are falling? It's really just marketing spin to help justify a charge that perhaps isn't fair in the first place both in it's conception and it's application.

Another puzzling aspect is why does the application of BAF or EFAF not follow oil price increases and decreases exactly?

When a carrier prices a shipment the rate is made up of a few components. Vessel cost (whether it be charter fees or repayments to banks), part of the port fees, fuel and administration costs. Why then do carriers apply their BAF of say 55% to the components other than fuel? This is another thing any shipping line sales rep is yet to be able to explain to my customers and I.

By the way, how can you possibly charge 55% anyway? That's enormous and surely far outweighs the actual fuel cost itself.

Where there is confusion in terms, or emergencies, there is scope to squeeze more money out of the shipper in the end. I think it's about time some shipping lines came clean and stop the games and rip off. The market can't afford it any more.

My clients and I would rather see all carriers drop this charge altogether and build their fuel costs into their freight rates like most other transportation operators do whether via road, rail and air.

What could be more transparent than that?

All for now,

Brad Skelton

The Shipping Bloke

Thursday 6 May 2010

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

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

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

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

Wednesday 19 August 2009

95 years of the Panama Canal.

(You are getting this note because you subscribed to Brad Skelton's blog-The Shipping Bloke)

The 15th of August saw the Panama Canal hit it's 95th anniversary of operations.

During this time about 983,000 ships have passed through it safely and it has been instrumental in the development of Panama itself.

Tolls are levied on the ships according to their net tonnage and type. So for a RoRo ship like Wallenius Wilhelmsen's, "Tampa", that has a net tonnage of 26,072, the toll applied per transit is about US$99187.00. For containerships the rate applied by the authority is US$72.00 per 20' container the vessel is carrying. See where some of the money goes in the freight rates you pay?

Right now the Panama Canal Authority(ACP) is undertaking a US$5 billion expansion so it can cater for the new larger vessels and increased traffic that cannot currently pass through it.

It's fascinating watching vessels go through the canal. The ACP operates live webcams so you can tune in and see ships transitting through. Check it out. Alternatively for a time lapse ride on a cruise ship please click here.

The Panama Canal is a vital link in global shipping reducing transit times and operating expenses for vessel owners and I am certain will remain as important as ever for another 95 years.

All for now,
Brad Skelton
The Shipping Bloke