by Rob Simmons | Apr 26, 2021 | Customs Broker, Delivery, Freight Forwarding, Shipping Logistics, Supply Chain, Transportation
During late March, the freight carrying ship Ever Given got lodged in the Suez Canal for almost six days. With the vessel currently freed, Egypt is now requesting more than $1B for damages and losses. As the Suez Canal opens back up and traffic is cleared, the costs from the blockage may start to come in. The Ever given is currently being held at the Suez Canal for investigation and analysis.
The Suez Canal, known for being one of the businesses canals in the world is responsible for over a billion tons of freight a day. When the canal got blocked, it hinders global trade and created fears for potential shortages. Meanwhile, the world is still dealing with the effects of the corona pandemic; so more stress was added.
Where did the payment come from?
The $1 billion requested from Egypt is a payment for the monetary and substantial damages done because of the Ever Given. Lt. Gen. Ossama Rebei, head of the Suez Canal Authority stated that the payment would include the costs of digging out dirt for six days. It will also include the damages in the canal from dredging the boat and costs from transit fees. It will not cover the cost for the 400+ boats that were delayed for almost a week and costs for freight on the boat.
The owner of the ship, Shoei-Kisen stated that what may happen will be that the shippers will split the general average amongst themselves. This could be a complex situation because of the large number of freight shippers that the boat has. When a general average occurs, cargo insurance tends to pay. However, if the shipper does not have cargo insurance, the shipper may have to pay out of pocket.
Who is liable for litigation?
If legal action is required, it could be complicated to find out who is to blame. This is because of the various nationalities associated with the freight vessel. First, the flagging of Ever Given was done in Panama. This means that the boat is registered in Panama. The firm that owns the ship is Japanese and the operator of the ship is Taiwanese. When the vessel got lodged, two of the pilots on the ship were Egyptian.
As a preventive measure, Lt. Gen. Ossama explained plans to increase the number of ships that pass through the Suez Canal a day to 95. The current number of daily ships is around 50. More support boats will also be added. What may be an issue is that the equipment used to tow the large freight boats has not developed compared to the boats themselves. The freight boats grew in size over time while the equipment stayed the same.
by Rob Simmons | Apr 22, 2021 | Customs Broker, Freight Forwarding, Import and Export Experts, Shipping Logistics, Supply Chain, Technology, Transportation
French company Compagnie Fluviale de Transport (CFT) plans on launching the first hydrogen-powered freight vessel later this year. This vessel will solely be for inland use and run fully on hydrogen fuel cells. Pallets and containers will be used to carry the freight on the boat, and it will go through the Seine river. This is all part of the Flagships project, which goal is to reduce toxic gas emissions from freight ships. Five million EUR has been given to the Flagships program for the creation of two hydrogen-powered freight vessels. One of which is currently scheduled to be released in September 2021.
Why Hydrogen-Powered?
Since the development of cargo ships, they have been a huge resource for moving freight internationally. The issue arises when it comes to the pollution that cargo ships generate. Not only may the ocean be polluted during the journey, but greenhouse gases are also being emitted into the air. Add to that the number of cargo ships in the ocean today and it can be a source of concern. Hydrogen is a perfect solution because it does not create the waste that bunker fuel does.
Bunker fuel is currently the main type of fuel oil vessel that carries freight internationally use. This type of fuel is dangerous for the environment and is known as the second leading contributor to global warming. Also, it is predicted that the wells that provide oil will dry up and be unusable in around four decades. Because of this, new energy sources like hydrogen and other renewable energy are an ideal replacement.
What can this mean for the Future?
At the current moment, the plan for the vessel is to just carry freight through the city by inland water channels. If this is successful it may open the gateway for creating hydrogen vessels for the ocean. However, developing a larger hydrogen-powered cargo vessel for the ocean may be a difficult task. This is because Hydrogen is not easily storable. The cost of producing hydrogen is also expensive compared to fossil fuels. Plus, refueling stops for hydrogen-powered ships will also have to be built, costing more money. Despite this the potential benefits of hydrogen as a widely used fuel in the future are grand.
This may be an example for not only freight-carrying vessels but other sources of climate change as well. Car companies may follow along and hydrogen-powered vehicle production may become more common. Hydrogen vessels could be the start of a greater push to a more environmentally friendly future. If international emission reduction goals are to be met worldwide, freight shipping is an important factor.
A1WWL
If you plan on exporting/importing freight, feel free to contact us at 305-821-8995. We have freight forwarders who specialize in getting your goods to the final destination. Along with forwarding by air or ocean, we also provide drayage services.
by Rob Simmons | Apr 20, 2021 | Delivery, Shipping Logistics, Supply Chain, Transportation, Warehousing
How has the creation of its first automated warehouse led to the growth of Chewy’s warehousing logistics? Chewy is a company that has used its extensive supply chain to deliver pet products across the U.S. At a time where there is a high reliance on e-commerce, Chewy has stepped the warehouse logistics up to meet the needs of customers.
What is Warehousing Logistics?
The definition of logistics itself is the comprehensive planning and execution of a complex process. Warehousing logistics is the moving of goods in and out of a warehouse and everything in between. This may include order picking, storing goods for a period of time, sorting the goods, and other intricate practices.
Different types of warehouses like fulfillment centers, Storage centers, and distribution centers have specific logistics in place. The difference between automated fulfillment centers and regular fulfillment centers is how the goods are processed. Automated facilities rely more on technology to process and move the goods.
Chewy Creates Its First Automated Warehouse.
In October of 2020, Chewy opened its first automated fulfillment center after years of planning. This warehouse is different from Chewy’s previous fulfillment centers in terms of logistics. In the past, workers would manually pick, move, and store the items in the facility. The automated warehouse allows for conveyor belts to move the goods. This saves time and energy. The storage of the goods has also been redesigned for easier access.
The idea behind this automated facility is to quicken delivery and fulfillment while improving worker safety and logistics. The amount of money saved by automation is also an advantage. Chewy’s warehouse system management team is currently examining and analyzing this first automated warehouse in hopes of producing more in the future.
What can this mean for the Future of Warehousing Logistics?
Warehousing tends to be an important part of many supply chains. With Chewy developing its warehousing operations, other companies and corporations may join in on the trend. United Natural Foods has announced that it anticipates that its new automated facility will double picking time. Big lots have also created 2 warehouses that focus solely on the processing of bulky and heavy inventory.
One of the main goals in 2020 for many companies was to protect and strengthen their supply chains. Many companies including Chewy have developed innovative ways to protect against economic downturns. This can include changing their warehousing logistics. If you are looking for a warehouse to store your imported goods and assist with your company’s logistics, call us at 305-821-8995. We have a bonded warehouse facility where your imports can be stored for 5 years without payment of duties.
by Rob Simmons | Mar 30, 2021 | Customs Broker, Customs Broker Miami, Customs Clearance, Delivery, Freight Forwarding, Shipping Logistics, Supply Chain
After over a year of stagnant to moderate business, we may be seeing a return to regularity for air freight similar to pre-Covid-19 levels. Associations such as the International Air Transport Association (IATA) and the Association of Asia Pacific Airlines (AAPA) both had positive outlooks for 2021. The IATA has noted that in January of 2021 the demand for air freight was still 3.2% lower compared to January 2019. This is before the coronavirus was announced as a global health emergency.
Despite this, the 3.2% was still higher than the 4.0% decrease in air cargo demand in December 2020, showing a small increase. It was also reported that the Asia-Pacific region’s internal load factor in January 2021 was 74%. This is a positive sign meaning that air freight is returning to high levels of demand for that region.
How does the ocean freight market affect this?
In late 2020, port congestion occurred in numerous ports across the U.S. Particularly on the west coast. Freight shipments were backed up for days and even weeks. The cause of this is the sudden surge in e-commerce due to the pandemic. With stores being temporarily closed and restrictions being put in place, online purchases became the easier alternative. The issue arises from the overwhelming amount of e-commerce purchases.
When goods are purchased online, they may be brought in internationally. The freight that was imported into the U.S. exceeded expectations and caused congestion in ports across the nation. Companies started to move their freight by air to combat the delays. Different aircraft manufacturers adapted and released planes solely for air cargo. In turn, the market for air cargo has managed to stay afloat and still growing today. Despite the pandemic inhibiting business for aircraft manufactures, a new lane arose where profit could be made.
Will Transportation fees move up?
As previously mentioned, the demand for air freight has seen a steady increase compared to Mid-2020. Comparatively, the freight capacity has not yet grown to meet the demand due to the regulations still in place in the industry. Airfreight companies have taken advantage of this and hiked up their rates in response. With how volatile the market is at the moment; it may be too early to tell what the future holds in terms of pricing.
Boeing to produce more planes.
The positive forecast for the air freight industry extends far past 2021 for many companies. In response to the demand, Boeing stated that during the next 2 decades, over 4000 airplanes will be made for the Southeast Asia region. This is part of the 40000 new airplanes that Boeing projects on needing over the next 2 decades. This includes the 2000+ airplanes that Boeing projects will be needed for the cargo industry.
A1WWL
If you are looking for a freight forwarding company to assist with your supply chain needs, do not hesitate to call us at 305-821-8995. We assist with air and ocean freight for both imports and exports.
by Rob Simmons | Mar 26, 2021 | Customs Broker, Customs Broker Miami, Customs Clearance, Freight Forwarding, Supply Chain
Since the middle of last year, vessels sales have seen a steady increase. In correlation, shipping stocks from container and dry bulk sectors have also seen growth with tankers following the trend in early February of this year. While some believed that the stocks would slow down due to the coronavirus, more people bought goods that were shipped overseas internationally, which raised the demand for ships to move the freight and rose the prices of shipping stocks. That growth has accelerated even more in early February with several stocks from the dry bulk and tanker sectors reaching an over 30% increase.
How Does the NAV Correlate to the Shipping Stocks?
The net asset value can be described as the value of a company determined by subtracting the total asset value by the liabilities. Shipping stocks have tended to trade at a discount relative to the NAV over the past decade. Likewise, the asset value of the ships also tended to be greater than the rate to charter a ship. This meant that the value of the actual ships was higher than the value they were trading for on the market. Recently, the opposite effect happened where the rate for chartering a ship was higher than the asset value of the ship, which may explain why the shipping stocks rose in early February.
Potential Reasons for the Increase
A theory proposed for the sudden rise in shipping stocks in early February is that retail investors may have run up the price of the stocks similarly to how the price of the GameStop stock rose in January but not to that extent. Another theory is that stockholders are predicting that a global economic recovery may happen later this year. With various vaccines being rolled out at a remarkable rate and restrictions slowly being lifted, investors are preparing to take advantage of the profit opportunity.
A Sign of Things to Come
The coronavirus pandemic causes an economic shutdown and a halt to businesses globally. Over a year after the pandemic was announced, we are still feeling the effects around the world. Many could believe that we are at the beginning of an upturn. It is interesting to note that compared to other shipping stocks, tankers tend to do poorly but have been performing well recently. The purchasing of stocks in the tanker sector has increased alongside dry bulk and container sectors for the first time in over a decade. The growth of Shipping stocks may be a leading economic indicator showing a return back to normalcy.
A1WWL
The world of international shipping may sometimes be tricky without the right guidance or information. If you need assistance with your shipment or want to know more about shipping freight by means of the vessel, contact us at 305-821-8995.
1035 NE 125th St Suite #320, North Miami, FL 33161.
a1worldwidelogistics.com
(305) 821-8995
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