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Friday 20 May 2016

Global ship traffic as seen from space

I came across this fascinating (1min 40sec) YouTube clip of one weeks global shipping traffic as seen from space courtesy of Fleetmon.

Take a look...

All for now,

+Brad Skelton 

Wednesday 18 May 2016

Freight forwarders quotation trick #69

My team and I at Depth Logistics always give our clients comprehensive and fully transparent quotes that they can reliably budget on. This is a non-negotiable thing for us.

That being said, increasingly we are competing against operators who are at best convenient in how they present their quotations, or at worst, plainly try to mislead shippers about the true landed costs just to secure the booking.

One trick we see nearly every day relates to Australian Customs and Quarantine import charges charges which are published on government websites. Specifically EEC(Electronic Entry Charges) and DAWR(Dept of Agriculture and Water Resources) entry and inspection fees.

Unscrupulous freight forwarders will not quote these actual charges in dollar terms to a client as if they did it increases their quotation per shipment by sometimes A$2-300.00+ depending on the cargo type and import declarations required. Instead they say things like "Plus government charges" or "Plus EEC and DAWR fees" if the client is lucky.

Price is an important driver of most clients decisions as to who they trust to move their cargo. When they are making their decision they innocently compare quotes where a professional forwarder actual identifies the exact costs, because you can, against another operator who intentionally is vague(Plus Govt charges). They total the various dollar amounts listed in the quotes and compare who is the most competitive.

It is not until they get billed and find that these charges were not identified specifically in the original quotation that they realise they have actually paid too much overall.

To make matters worse operators who do this usually add EEC onto the import duty and GST on their invoice to disguise the charges further which they know will often go unnoticed by the client. If they get found out and queried later they hide behind "But our quote said Plus Govt charges" and the poor client is snookered.

So be aware of this freight forwarders quotation trick and insist that whoever you get quotations from always identifies all charges in dollar terms so you can compare apples with apples.

If you need any further clarification or want to check what you might have been billed previously, I'd be pleased to help.

+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 

Sunday 3 April 2016

Coal still has a future

The local economy in Queensland is currently hurting badly as coal miners falter with coal prices having fallen more than 60% over the last five years. Majors such as US owned Peabody Energy are going into administration or Chapter 11 which is threatening thousands of jobs in mines they operate here.

In November 2015 the OECD agreed to restrict coal fired power stations being financed by government while about two years earlier the World Bank also decided that they would only provide finance for coal in rare circumstances. These types positions are driven by the fact that environmentally coal is a dirty energy source compared to others such as gas, solar wind and nuclear. Nobody could logically argue against this.

Despite this there are some inescapable facts about coal that means it still will be a massive energy source for the world for many years to come. 

These are:
-It is still the cheapest source of fuel for base load electricity and currently accounts for about 40% of global electricity supply. Huge!
-In the third world coal demand is still growing as the need for electricity rapidly grows with urbanisation in countries such as India and China.
-While demand for coal in developed countries is decreasing the global demand overall is still growing.
-For the third world, coal is also a source of energy that is safely, easily and cheaply transported and stored. You can literally pile it up in heaps in a yard whereas gas for example needs extremely expensive infrastructure that these nations struggle to afford.

McKinsey & Co forecast that despite the boom in renewable energy fossil fuels like coal and gas will still be the dominant source of energy. Their forecast is that by 2040 renewable energy sources will only contribute about 17% to global energy needs and coal will still be meeting 31% of demand. 

Inevitably coal prices will recover and could do so quite spectacularly from where they are now in my view. Clearly demand will be strong for the next few decades while at the same time the supply side will reduce with action the World Bank, OECD and green groups are taking.

Therefore shares in low cost miners of thermal coal look like pretty good buying at the moment if you adopt a long term view.

All for now,
+Brad Skelton
Depth Commodities

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