web statisticswebsite tracking software
bradskelton.com theshippingbloke.com
Showing posts with label Shipping Container. Show all posts
Showing posts with label Shipping Container. Show all posts

Saturday 27 March 2021

Suez Canal Blockage of the "Ever Given" Stagnates an Already Chaotic Global Supply Chain

Not exactly the news that any shippers, carriers, and forwarders wanted to hear, but a grounded mega ship has paralysed the Suez Canal, the world’s most critical trade artery, instigating a serious build-up of traffic sending ripples of disruptions across the global supply chain that is already stretched to the limit.

The quickest sea route between Asia and Europe is gridlocked by a 400 meter long, 224,000 ton container ship, "Ever Given", operated by Evergreen, after it was knocked off course by strong winds and a sandstorm early Tuesday March 23. As gusts of wind that reached as high as 46 mph swept up dust and sand around it, causing the crew to lose control of the ship and sending the ship sideways, gridlocking the entirety of the channel.

Hundreds of vessels, mostly bulk carriers, container ships carrying consumer goods, LNG vessels, oil and chemical tankers have been delayed and are still waiting to cross the canal. Carriers, shippers, and forwarders have been forced to re-route cargoes around the much longer route around Africa. The world’s biggest container line, Maersk, said seven of its vessels had been affected so far, with four of them were stuck in the canal system, and the rest were waiting to enter the passage.

The global trade now fears prolonged delays will have a knock on effect for consumer goods, LNG, and oil prices, which were already volatile. Oil companies are starting to prepare for the worst. 

Efforts were underway to re-float the mega ship, raising hope of at least partial congestion to ease, but the operations attempts during the night had been suspended until this morning.

Putting the scale of things into perspective: the huge CAT loader, more than twice the size of humans, is merely a child's toy compared to the giant ship

The world’s supply chain industry sets their hopes on SMIT Salvage, a legendary Dutch salvage firm, to save the day. The best temporary solution, undoubtedly, will be pivoting the giant ship to position her alongside the Canal bank, and consequently allowing restricted traffic. However, given the massive weight of the mega ship, the salvors may have to reduce the weight by removing things like the ballast water, and unloading fuel.

If this situation drags on then vessels will be re-routed via the Cape of Good Hope in South Africa which will cause huge increases in transit time, fuels costs and freight rates in an already supercharged freight rate market.

All for now,

Brad Skelton

Monday 4 April 2016

How many containers can ships carry?

The larger container ships can now carry up to 19000+ 20' containers!

The economies of scale and lower fuel costs are driving rates down. Please contact me if you want to check if what you are paying now is at current market levels.

All for now,

+Brad Skelton 

Friday 26 February 2016

Mandatory Shipping Container Weight Verification Begins July 1st

From July 1st 2016 a packed container will no longer be allowed to load on board a ship unless it’s Verified Gross Mass (VGM) has been provided by the shipper named in the bill of lading, to the shipping line and/or the terminal representative.

The International Maritime Organisation's(IMO) most recent amendment to SOLAS (Safety of Life at Sea) requires verification of container weights.

The latest amendments serve to make liability and responsibilities clear, as well as preventing accidental mis-declarations of container weights which have been the source of various marine casualties in the past. At its core, authorities globally are seeking to enforce processes that should already be apart of your export documentation.

Here’s what you need to know in the lead up to July 1st.

- The new container rules apply globally.
- Containers won’t be load onto ships without a VGM.
- The shipper - the entity named on the carrier’s bill of lading- is responsible for providing the VGM. This may be outsourced to third parties.
- Container weights can be verified in two ways:
1. Physical weighing: weighing the final sealed and packed container; or by
2. Calculation method: adding the combined weight of the contents.

Compliance with weight verification will depend on the type of cargo.

You need to start preparing now for this change by deciding how your company will verify the weights of cargo you are packing into containers. For example you may need to have your forklift equipped with scales.

If you have any questions or want more detail please contact me or any of my team at Depth Logistics.

I see this as initiative as overdue by the IMO. Too many times I have seen my clients containers arriving overloaded by their supplier. Some are too heavy to be legal for road transport off the wharf. Often the first anybody knows is when the container is on the back of the truck at the destination and a sharp truck driver raises concerns before he hits the roads from the terminal.

All for now,

+Brad Skelton

Thursday 4 February 2016

Trans-Arctic Shipping means big gains for shippers

China Ocean Shipping Company(COSCO) has entered into an agreement with the American Bureau of Shipping to develop more sustainable navigation of vessels on Trans-Arctic routes.

This route shortens a typical voyage by approximately 4000 nautical miles compared with traditional Suez Canal passage.

COSCO is increasing investment in ice classed vessels and Arctic technology to open up this route further.

The operational cost savings to COSCO will translate into lower freight rates and shorter transit times which will be a huge benefit for shippers.

All for now,

+Brad Skelton 

Monday 25 January 2016

Swimming Pool Shipping Containers

I have seen some bizarre uses for shipping containers but didn't think of this one...
All for now,
+Brad Skelton 

Monday 5 October 2015

Is Bigger Still Better?

In an ever growing and rapidly expanding society, where we have little room to spare in our yards at home or on the port, it seems in more recent times the saying “bigger is better” may no longer ring true.

However, whilst bigger may not always be better on shore, out to sea, this saying certainly strikes a very different chord.

Let me introduce you to Mærsk Mc-Kinney Møller, the world’s largest container ship.

Honouring the name of the late Mærsk Mc-Kinney Møller, this feat of danish design is just the first of twenty in the Triple-E Series, proving that bigger really is still better. Affectionately dubbed the blue giant of the sea, this mega vessel stands an impressive 400 metres in length, 73 metres in height and has the capacity to transport 18,000 containers (TEU). That’s no small feat. The secret to its ingenuity however is not in its dimensions, but in its design.

Although only four metres longer and three metres wider than its predecessor, the cavity of the Triple-E Series has seen a dramatic expansion. The extra space now accommodates for up to an additional 2,500 containers per haul. Not to be satisfied of just this, the new fleet of giants also emit 50% less CO2 per container moved, effectively halving its carbon footprint. This added environmental benefit is a result of “ the unique hull design, energy-efficient engine and system that uses exhaust gas to produce extra energy to help propel the ship, make the Triple-E unmatched in energy efficiency”.

It’s no surprise these giants are creating wakes at sea and in the office. Not only are they more environmentally friendly than their competitors, but they are also unmatched in their efficiency and size.

For shippers, you’d expect this would all be good news. Greater capacity ought to equate to lesser costs, right? The answer appears unclear for the present time.

As increased capacity drives down rates, shippers are paying less; although potentially not for long, warn Hackett Associates, an international expert and advisory company to the Maritime Industry. They predict that this could be especially true for the US where “some lines have (already) cancelled voyages to counteract the downward trend”.

Nonetheless, Hackett Associates report TEU freight in the US to have increased by 4.2 percent from last year, with the first half of 2015 already 6.5% higher than the same period from last year.

Therefore despite speculation to the contrary, the global shipping task is on the rise and carriers that lead the way in design and efficiency the future is bright.

For sea freight at least, it seems the saying is true; bigger is better.

All for now,

+Brad Skelton

Thanks to +Darcy Cooper for her contribution to this post.

Tuesday 6 May 2014

Is marine cargo insurance essential?

I was talking to a Depth Logistics client yesterday who has asked us to ship a container of parts for her.

As is our standard operating procedure, I asked her whether she had marine insurance cover for the shipment? She told me that they wouldn't worry on this shipment as it wasn't big enough...or in translation to me, not worth enough that if it were lost or damaged there would be a serious financial impact on their company.

To most people it would seem commercially astute to save the small cost of an insurance premium where they believe the risk of loss or damage to their cargo is negligible. Sound logic if it were just the cargo that is at risk but it isn't!

Centuries of maritime law precedents have established an entirely different principle that make it important to have marine transit cover in place on even the seemingly small and low risk shipments. Shipping has numerous uncontrollable risks at sea and is inherently a high risk activity for any business.

Maritime law tends to side with the ship owner whether you like it or not. Most people don't realise that when they ship their cargo on any ship for a particular voyage then at law, they are considered to be in a joint venture for that voyage. What this means for shippers is that should the vessel get into distress, suffer a mishap, be forced to jettison cargo to save the ship, be lost at sea or hypothetically require salvage to remove it from a shipping channel then each shipper with cargo on board proportionately shares in these costs. That is the spirit of a joint venture after all and maritime law precedents support this regardless of fault or blame.

Therefore cargo even with a low value can end up costing the shipper a literal fortune for their share of costs incurred to deal with the mishap properly. In my career there was one occasion where a client had a single container on a ship that ran aground in a shipping channel. The vessel had to be cut up at sea and removed from the channel as it presented a risk to other vessels and the environment. My client got a bill in the region of $400,000 for their share of costs even though their cargo was worth only a fraction of this. Had they not taken been prudent enough to ask me to take out marine insurance for them this would have been a ruinous event for their company.

So you should ALWAYS ALWAYS ALWAYS...(have I shouted it enough?) ALWAYS have marine cargo insurance. It is false economy not to.

Feel free to contact me or my team if you would like some free advice on this critical aspect of shipping.

All for now,

+Brad Skelton 

Sunday 4 November 2012

40' container rates between Shanghai and Rotterdam spike up $788 last week!

Most container lines in the world are still struggling with over-capacity in ships for the current world cargo transportation task and little or no growth is forecast in cargo volumes in the coming year.

A break even result is the best many of these shipping lines can hope for with the prevailing market conditions. Despite over-capacity in ships which usually leads to lower freight rates, last week a huge and key market segment from China to Europe saw a massive increase in rates of $788 per 40' container/FEU(Forty foot Equivalent Unit). That is a 38% increase in a single week taking the average cost to ship a 40' container to US$2865.00.

(source-World Container Index)

As you can see by the rate history over the last year, rates at some stages have tripled and between January and July, effectively quadrupled.

What is causing this upward volatility when the usual rules of supply and demand suggest rates should be going lower?

Carriers are endeavouring to remove tonnage from some trade lanes to address the vessel over-capacity but the delivery of a profitable bottom line for them is the real driver after the terrible losses many of them have suffered the past couple of years. Ship owners are being forced to increase rates to ensure they stay profitable and are here in the long run. Slow steaming is still commonplace to keep fuel and operating costs to a minimum.

In my opinion we are going to see tremendous rationalisation and consolidation with shipping lines in 2013 and continued rate volatility. It just has to happen as charter rates are still low and they just can't keep carrying on with the financial performance of the last two years.

I would suggest that not only for the shipping industry but many other industries, "Volatility" is the new normal business environment that everyone has to get used too. Being lean, debt free, commercially agile and nimble will give operators the best prospects of survival.

All for now,

Brad Skelton

The Shipping Bloke

Wednesday 15 August 2012

How many containers REALLY get lost at sea?

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

Frequently in the media I hear statistics quoted that up to 10,000 containers are lost overboard  at sea each year.  In these modern times, why does it happen at all?

A number of factors ranging from severe weather and rough seas to catastrophes like the ships themselves getting lost at sea just like the "Rena" (pictured off the coast of New Zealand) contribute to the losses. Safe stowage can also be compromised by shippers overloading containers although progressively most countries are following the International Maritime Organisations agenda to have the weight of all containers properly verified before loading.

As for the reliability of the data....there is isn't central source keeping track of this nor do the marine underwriters compile or publish any accurate statistics. The World Shipping Council has surveyed it's member shipping lines to try and find out how many containers are actually lost. It was radically different to what media outlets sensationally suggest. 

Not counting catastrophic events the survey revealed a figure of only 350 containers being lost each year. If you include catastrophic losses like the "Rena" then the number only rose to 675. A far cry from 10,000! Considering the millions shipped each year that's not too bad.

So the yachties of the world are safer than they think, my clients can probably sleep tonight and so can their underwriters. I still recommend you get insurance though!!

All for now,
Brad Skelton
The Shipping Bloke

Sunday 29 April 2012

Would you live and work in a shipping container?

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

Since containerisation started in the shipping industry in 1956, the question has exisited of what to do with them when they are no longer fit for the rigors the sea throws at them? The average container has a life span on the ocean of between fifteen and twenty years and potentially much longer than that back on dry land.

Well, how would you like to use them for your home or office?

They are cheap ($1000-$3000 each depending on the age, type and condition), easy and cost effective to transport to site or re-locate, stackable, secure, incredibly durable, fast to errect with minimal foundations required, easy to plumb, easy to wire and are eco-friendly and can actually look ok.

Alright.....I only said "ok" not "great". There are now dedicated architects for shipping container buildings doing some incredible things with them. Offices, multi-storey hotels, homes, cafes can all be successfully built from them.

I can visualise the funky beach house in the future for the Skelton clan already. Maybe...

All for now,

Brad Skelton

The Shipping Bloke

Saturday 14 April 2012

Staggering overcapacity in the global shipping fleet.

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)
I recently received a commentary from Ferrier Hodgson with some amazing facts I thought I'd share on the global shipping fleet and cargo volumes.

In January 2011 there were 103,392 cargo ships operating globally. This number of ships grew an amazing 54% from 2005 in order to meet a pre-GFC high demand.

In this period the number of container ships grew by 83% and bulk carrier numbers grew by 63%. The growth in shipping capacity completed outstripped the growth in seaborne cargo which for the same period was only up 27% to 8879 million tonnes and.....the global fleet is still growing. About 16% more new ships are being added in 2012 from orders placed by ship owners years ago.

A massive imbalance in supply and demand in shipping has been created. Bulk carriers have been the worst affected with current charter rates dropping to the lowest levels in about 30 years.

The value of ships has dropped by about 30% which is causing financiers to get nervous about their security position.

For shippers and freight forwarders this situation is mostly benefiting them. It is leading to some very keen freight rates in some trade lanes as a result of carriers lowering their profit margins in an attempt to maintain or capture greater cargo volume.

The downside is that some ship owners are in a very precarious financial position and cannot withstand much more stress from ongoing operating losses and devalutions of their fleet. Most carriers are continuing to adopt cost cutting measures by dropping port calls and steaming more slowly to save fuel costs.

A consolidation of operators looks inevitable unless cargo volumes really pick up soon. With a lethargic global economy in general, I can't see that sort of growth in trade happening for a while.

All for now,

Brad Skelton

The Shipping Bloke

Saturday 10 April 2010

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

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

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?

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

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 6 December 2009

Where does a shipping container go in a year?

(You are getting this note because you subscribed to my blog-The Shipping Blokes Blog)

The BBC undertook a quirky project this past year that I thought you might find interesting.

They tracked a 40' shipping container for a full year on it's journey around the world carrying numerous different types of cargo. During the year it covered about about 50,000 miles by sea, road and rail. It is completing it's final voyage now to South Africa where it will be retired from service and turned into a soup kitchen.

This is fascinating and well worth a look. For more on this project including videos of it's journey and an interactive map of it's travels click here to go to the BBC's "The Box" website.

All for now,
Brad Skelton
The Shipping Bloke