by A1 WorldWide Logistics | Aug 15, 2024 | 3PL, Economic trends, Supply Chain
On August 9th, an explosion at Ningbo port halted traffic at the shipping terminal. While a vessel carrying hazardous organic peroxide materials was arriving at Beilun Phase III Terminal, it exploded. The vessel owner has recently reported that the fire is under control, and members on board are safely evacuated. Officials reported no injuries by the blast, but terminal operations are closed until further notice. Ningbo is China’s second largest container port, responsible for more than 100,000 TEUs (twenty-foot equivalents) yearly. In 2023, the port had a volume of 33.35 million TEUs. While the cause of the incident is still under investigation, it may have significant implications for international shipping.
What Does The Explosion At Ningbo Port Mean For Shipping?
Due to the Ningo port’s size, a terminal’s closure may impact many supply chains. The effects could grow with international shipping at the start of the peak season. Peak season is a time of the year when exporters move the most cargo domestically and internationally. A significant consequence of the closure is nearby port congestion resulting from the closed terminal. Port congestion has increased over the past year due to various situations. For example, scenarios like the Iseral-Hamas conflict, the Ukraine-Russia war, and the Baltimore Key bridge collapse grew congestion globally. A typhoon in east China in July 2024 also impacted nearby supply chains.
Another effect of the carrier explosion is that delays in shipments may rise. The delays may not only come from the rerouting of vessels but also from a scarcity of container availability. Trans-Pacific trade lanes moving freight out of Asia may feel most of the impact. Container rates have been rising since the start of 2024 and could continue to surge. Along with the terminal shutdown creating scarcity in available containers, the shipping industry has just entered the peak season. Despite the potential effects, freight analysts believe the situation will not significantly impact the market.
How Can Shippers Prepare?
With the explosion potentially impacting supply chains in international shipping, shippers must be ready. Before deciding to move cargo, exporters must be up to date with any situation that may affect their shipment. Shippers can do this by continuously monitoring news reports for updates. They must prepare for extended delays and deterioration of ocean schedules. Shippers can also prepare by looking for alternative routes or ports to move their cargo. During the Iseral-Hamas conflict, carriers responded to the situation by rerouting through the Cape of Good Hope in South Africa. Another solution is to look for other methods of conveyance, like land or air.
While shipping during disruptions may be daunting, It should not stop you from moving your freight. An ideal way to prepare against any scenario is by getting the assistance of a 3PL (Third Party Logistics) provider. 3PLs offer numerous services for transporting cargo while determining the best course of action for the shipper. They are also with you throughout the shipping process until the goods reach their final destination. Call A1 Worldwide Logistics at 305-440-5156 to speak to a 3PL provider regarding the transport of your cargo. Along with International shipping, we provide solutions like importing, freight forwarding, and more to ensure your supply chain’s success.
by A1 WorldWide Logistics | Jul 25, 2024 | Air Freight, Importing, Shipping Logistics
Saving costs on airfreight can be valuable when shipping cargo internationally by air. While moving goods by air is one of the most convenient methods of transport, it may be costly. Over the last decade, the demand for this method has skyrocketed. The coronavirus pandemic further increased demand since customers bought more products online and rose imports. Expenses like fuel prices and other expenditures have further raised costs. Because of this, Shippers have found it increasingly beneficial to find strategies to increase savings. This article will explain the various costs of transporting freight by air and how you can save when starting.
Understanding The Costs Involved In Shipping Cargo By Air
Due to the numerous components involved in international shipping, there are different costs a shipper should be aware of. Before the air carrier transports the cargo, trucks typically move it to the loading port. This means that domestic transport can add to the entire cost of an air shipment. Other costs include the base rate, which covers the airline’s operational fees. Various factors affect the base rate, including volume, route, weight, season, etc. Other costs include security screening, customs clearance, peak season surcharge, etc. Fuel surcharges are fees included in airfreight and can account for over 30% of the total rate.
What Are Common Ways That Shippers Are Saving Costs On Airfreight?
Some of the most common ways that shippers can save on air shipping include:
- Consolidating Shipments – Consolidation is a process where a carrier combines smaller shipments into a single shipment. For airfreight, this can considerably reduce costs for shippers by paying only for the space you use. Other fees like handling also decrease with the grouping of cargo. Consolidation allows for faster transit times, too.
- Shipping Off-Peak Times – Demand for transporting cargo internationally can determine the shipping cost. The peak season is when the demand for moving goods is at its highest. During this time, the price to ship tends to hike due to scenarios like limited capacity. Transporting freight during periods of low demand may result in lower rates and smoother operations.
- Optimizing Packaging – A way to save on airfreight that shippers tend to overlook is using efficient packaging. Since air carriers have less space than vessels, they charge extra on volumetric weigh and space. It can be critical to optimize packing by removing packaging materials or using different crating to minimize bulk.
Using A Freight Forwarder
Another way to save when shipping cargo by air is using a freight forwarder. Freight forwarders are the middleman between the shipper and the carrier. Along with coordinating the movement of goods, they ensure the success of the shipment while finding cost-saving solutions. For example, they can offer the various saving methods mentioned in the article. Forwarders also have established relationships with carriers and can negotiate rates on the shipper’s behalf. Call A1 Worldwide Logistics at 305-821-8995 to speak to our expert freight brokers regarding your shipment’s success. Whether the transport method is air, land, or sea, we help streamline the transportation process.
by A1 WorldWide Logistics | Jul 18, 2024 | Economic trends, Shipping Logistics, Transportation
Severe weather over the last week has resulted in harsh shipping around Africa. Containerships are halting their journeys around the Cape of Good Hope due to the current conditions. Vessels are currently seeking shelter from more than 30-foot-high waves and high-speed winds. The storms are due to a cyclone that passed through the region over the last few days. Weather reports indicate another hurricane will pass through South Africa later this week. There are reportedly over 600 containerships currently routing around the location that may feel the impact. The amount of traffic, which is still growing, will directly impact international cargo movement.
Why Has The Cape Of Good Hope Increased Traffic?
Since the beginning of 2024, vessels that pass The Cape of Good Hope have been rising. Compared to the 1,800 ships that passed through the location in December of 2023, that number was 2,728 by February. By May 2024, maritime trade around the region increased by over 125%. The reason for the surge is due to the ongoing Israel-Hamas conflict that has been present over the last year. Nearby Houthi attacks around the Red Sea are causing ships to reroute their directions from the Suez Canal. Since approximately 30% of the world’s container volume passes through the Suez Canal, rerouting sends massive traffic to other locations.
One of the central locations that the ships rerouted to is the Cape of Good Hope. While longer and more costly, this route had more significant perceived safety advantages for shippers. Particularly for shipping between ports in Europe, Asia, and the U.S. East Coast. This was before the extreme weather, which had already taken its toll on vessels passing through. Along with ships having to halt, dozens of containers are falling overboard and damaged by the storms. Transits across the cape have returned on July 10th after a three-day pause from July 7th to July 9th.
What Can Harsh Shipping Around Africa Mean For Shippers?
The high volume of cargo vessels has switched to Africa, which can have significant implications for shippers. A primary concern is that shipping delays will persist. When carriers originating rerouted ships from the Suez Canal, they added an extra 14% days to the journey for some shipments. Having to halt due to a storm can add more delays to the cargo transport. Further congestion from vessel stoppage also adds to transportation time. Adding nearly 3,500 nautical miles on a trip also requires almost $1 million in extra fuel, which may lead to higher costs for the shipper. If the exporter is a business with customers, delays and price increases can look unfavorable to the company.
While the current conditions may seem daunting, they should not stop you from shipping your goods. A shipper should take the necessary steps, however, to prevent any issues like delays from arising. It is essential to be current with any situations that can affect your supply chain and act accordingly. An ideal way to ensure the success of your shipment is by using a freight forwarder. They coordinate the transportation process for the shipper while educating them on the best course of action to take. Reach A1 Worldwide Logistics at 305-440-5156 to speak with a freight forwarder and get assistance moving your cargo internationally.
by A1 WorldWide Logistics | Jun 20, 2024 | 3PL, Economic trends, Shipping Logistics
On Wednesday, June 12th, the Port of Baltimore reopened after nearly three months of working at limited capacity. A containership struck the Francis Scott Key Bridge on March 26th, collapsing into the Patapsco River. The bridge collapse resulted in the deaths of six workers and cut off vessel access to the port. Port officials responded by opening temporary alternative channels only for essential vessels and direct responders. Traffic in and out of the main channel was put on halt. The closure of the port led to logistics disruptions for many supply chains. Eleven weeks after the accident, the Fort McHenry channel is now back in regular operations.
How Did The Closing of The Port Affect Shipping?
The Port of Baltimore is known in international shipping as the busiest port in the U.S. in terms of vehicle imports. Along with automobiles, the port is famous for handling sugar, gypsum, construction machinery, and other commodities. Importers and exporters immediately began rerouting their cargo to nearby ports, causing bottlenecks in supply chains. Redirecting shipments also increased delivery time, which was unfavorable for shippers who had to move goods promptly. Congestion in the nearby ports like Savannah, Charleston, and Norfolk also increased due to the traffic moving their way. Some importers have also switched their shipments to West Coast ports, which has posed logistics challenges.
Domestic shipping was also affected by the collapse, with the port being a significant location for RoRo (Roll-On/Roll-Off) operations. Before the accident, approximately 3600 trucks crossed the Francis Scott Key Bridge daily, nearly 1.3 million yearly. Land congestion grew, with the area around the bridge being a significant trade region. This created delays for domestic shipping as well. Along with the cargo movement, the halting of operations also affected the regional economy. Thousands of longshoremen and small businesses have felt the impact of the port closure and bridge collapse. With the port opening up, longshore workers will return to their jobs as operations pick up.
Are Shippers Returning With The Port Of Baltimore Reopened?
When the Baltimore port closed, many regular shippers sought alternative seaports to import their cargo. The monthly general cargo went from almost one million tons in January 2024 to 1,822 tons in April. No importers have reported plans to modify their supply long-term from the closure. The rerouting was more of a short-term plan until operations returned to normal. Shippers that used the Port of Baltimore did so due to its many advantages. Along with its capability to handle numerous cargo types, it’s one of the closest East Coast seaports to Midwestern markets. Traffic has already started to pick up with vessels returning to the port.
Shippers should be aware of many considerations when beginning to move goods internationally. Situations like port closures and other scenarios can deter the shipping process and be unfavorable for the shipper. An ideal way to prepare against any scenario is by getting the assistance of a 3PL (Third Party Logistics) provider. 3PLs offer numerous services for transporting cargo while determining the best course of action for the shipper. Contact A1 Worldwide Logistics at 305-425-9456 or info@a1wwl.com to get started on your shipping journey. Whether it’s the Port of Baltimore or any other port, we help import and export your shipment anywhere globally.
by A1 WorldWide Logistics | Jun 6, 2024 | Economic trends, Shipping Logistics, Supply Chain
Over the last few weeks, an increase in container volumes has resulted in growing Singapore port congestion. The Port of Singapore is the 2nd largest seaport internationally, handling over 591.7 million tons of freight in 2023. Various international shipping circumstances have recently caused global backlogs across ports, with the Singapore port being an epicenter. A market intelligence firm report noted that nearly 450,000 TEU (Twenty-foot equivalents) are in the queue. For reference, this is a greater volume than the coronavirus pandemic. Shipping delays in the port have also doubled nearly in May, with vessels waiting almost seven days for a berth. What can the congestion mean for shipping as the peak season quickly approaches?
What Is Causing The Growing Singapore Port Congestion?
While different contributors are resulting in current port congestion, the Red Sea Crisis is one of the primary issues. In 2023, the Iseral-Hamas conflict in Gaza made its way to the Red Sea as militants struck multiple vessels. The sea connects to the Suez Canal, one of the significant artificial pathways for international shipping responsible for nearly 30% of the world’s container volume. As a result, containerships began rerouting to locations, such as the Cape of Good Hope in South Africa. A side effect of the conflict was an increase in off-schedule arrivals to ports like the Port of Singapore. When carriers arrive off-schedule, at the same time, it creates a vessel-bunching effect.
As more containerships remain outside the Port of Singapore, berth wait times increase. Vessels typically wait around half a day to dock at the port but currently take up to seven days. As a result, several ships have canceled their shipment to the port. However, that may create congestion for nearby ports. The Singapore port has responded to the jam with plans to open three additional berths later this year. Congestion has become a growing concern globally, with Asian and Mediterranean ports feeling a significant strain. The market intelligence firm also notes that nearly seven percent of global port capacity is currently congested. Usually, the number is between two to four percent.
What Will This Mean For International Shipping?
Geopolitical events like the Red Sea crisis have significantly affected shippers’ supply chains that move goods internationally. Along with rising transit times, another effect is that freight rates have increased over the last few months. The global container freight index has risen over 30% in May 2024 alone. Asia-North America West Coast spot rates have increased by over 70% since the end of April. If the existing trend continues, container rates could reach over $15,000 by the end of the year. Other situations affecting the rising prices include sudden demand increases, capacity constraints, equipment shortages, and rising fuel prices.
Although the current situation can seem intimidating, it should not stop the movement of cargo internationally. It is, however, essential that you are informed and protect your supply chain. Using the assistance of a 3PL (Third Party Logistics) provider is an ideal way to begin. 3PLs handle various parts of a shipper’s supply chain, including international and domestic shipping, storing, customs brokering, etc. 3PLs also offer consulting services to ensure you take the best actions for your supply chain. Reach A1 Worldwide Logistics at 305-425-9513 to find out about our numerous solutions for moving your shipment. We help you navigate the shipping world and move your goods to the final destination.
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