by A1 WorldWide Logistics | Dec 7, 2023 | Importing, Shipping Logistics, Supply Chain
Recently, many U.S. companies have been discussing other sourcing alternatives instead of China, making some ask, “Are China Imports Declining?” For over a century, most labels on goods in the U.S. have had “Made in China” written on them. Single-sourcing imports have always had their benefits and drawbacks. The risks of single-sourcing from China had become more apparent not long ago.
Why Are China Imports Declining?
The coronavirus accelerated present risks and disrupted the supply chains of numerous importers from China. Ports all over China were closed or working at limited capacity due to the pandemic. This created a backlog in freight shipping and challenges for shippers and their customers. Years before the coronavirus was present, the imports from China were already lessening for several reasons. An example of a reason was that the tariff costs that importers had to pay rose to over 20%.
Companies that manufactured goods in China also had intellectual property theft issues. This is the robbery of a company’s products and ideas for their usage. The environmental impact of importing from China was another factor that companies looked at. Producers in China use specific production methods that the U.S. prohibits. This means the environmental effect may be more significant when companies manufacture goods in China instead of the U.S.
Other Alternatives
As companies looked at other options for sourcing, countries like Vietnam became attractive. The country is politically stable and has various growing industries, such as automotive and electronics. The labor costs are also relatively low, making it an ideal candidate for manufacturing companies to move to. Over the past few years, imports from Vietnam and other Asian countries have risen considerably. However, the risks, such as infrastructure and the worry for human rights, remained.
Instead of outsourcing the imports from Asia, another substitute is outsourcing from somewhere closer, like Mexico or Latin America. Mexico is already one of the biggest trading countries with the U.S. The proximity is also a huge benefit for companies that rely on imports. Trucks may become an increasingly popular conveyance method for imports entering the U.S.
Can Reshoring Back to the U.S. Become More Common?
One of the many solutions was to bring the manufacturing of goods back to the United States. There are various advantages and disadvantages associated with moving manufacturing from China to the U.S. One of the main benefits is that the transport times become significantly shorter. Shippers do not need to import into the U.S. from countries that may be far away. Also, if manufacturers make the goods in the U.S., no duties for imports have to be paid.
Despite this, reshoring back to the U.S. may be a difficult task. This is because many companies that outsource to different countries have done so for decades. Going backward on a supply chain with the same process for decades takes time. Offshoring manufacturing to foreign countries also tends to provide cheaper production costs, which can benefit companies instead of reshoring.
A1 Worldwide Logistics
Although the locations where shippers bring in freight may become more diverse, the number of U.S. imports is still increasing. If you plan to ship to and from the U.S., A1 Worldwide Logistics is here to help. We have freight forwarding services for both imports and exports. Call us at 305-821-8995 to get a quote for your shipment.
by A1 WorldWide Logistics | Nov 22, 2023 | grain exports, Shipping Logistics, Transportation
A current drought in the Panama Canal is leading to the Suez Canal gaining U.S. exports of farm products. Bulkers carrying agricultural goods like grains are rerouting their journey to Asian countries due to the crisis. At first, larger container vessels felt the effect of lowering water levels, which dry bulk carriers now feel. USDA data shows approximately 67% of year-to-date soybean, corn, and wheat exports are moving through the Atlantic Ocean. It is essential to note that the Suez Canal is a longer route and can be more expensive. The freight takes nearly ten extra days to reach China compared to using the Panama Canal.
What Is Happening In the Panama Canal
In the summer of this year, the Panama Canal Authority (ACP) set restrictions on ships entering the canal. The draft limit went to 44.5ft (13.65m) from the standard of 50ft (15.24m). A draft limit is the distance between the waterline and the lowest boat point. A lower limit means that carriers have to carry less cargo to be able to enter the Panama Canal. ACP cut the draft further to 43.5ft (13.26m) in the same month. The average number of daily transits through the canal also went down to 32 in August. The usual number of vessels passing through the canal is 36 to 38 ships.
The restrictions are due to the current drought the Panama Canal faces. Rainfall levels have been reaching record-low levels in the region, and the canal uses rainwater to move ships through. Water scarcity further rose due to the El Nino weather phenomenon. Along with having to decrease the amount of cargo that they ship, limits are extending carrier shipping times, causing delays. This is due to the backlog of ships waiting to enter the canal from lowering daily transits. Restrictions are pushing carriers to look for alternative routes to move their freight, such as the Suez Canal.
How Can The Suez Canal Gaining U.S. Exports Impact Shipping?
The Panama Canal and Suez Canal are the two most critical artificial passageways for international shipping. These waterways are shortcuts for shippers moving freight. While agricultural exporters tend to use the Panama Canal to reach Asia, delays force many to switch to the Suez Canal. Since the Suez Canal is the longer route, the increase in traffic is causing freight rates to rise. This is because farmers have fewer dry bulk vessels to load their exports into. As the Suez Canal gains importance for agricultural shipments, a concern remains nearby: the conflict in Gaza. One of the fears is that the war will close the canal during high traffic.
Shutting down the Suez Canal can result in agricultural exporters taking an even longer route to Asia. Rerouting to the Cape of Good Hope may create longer shipping times and further increase rates. While certain situations may be impossible to avoid, they should not stop shippers from transporting their goods. Exporters and importers must, however, take greater precautions to prevent misfortune. Contact A1 Worldwide Logistics at 305-821-8995 to speak to a freight forwarder regarding shipping internationally. Along with importing and importing to and from the U.S., we offer numerous other solutions for your transporting needs.
by A1 WorldWide Logistics | Nov 2, 2023 | Customs Broker, Customs Clearance, Freight
One of the most essential things a shipper should know before shipping freight internationally is the documents in customs clearance. Customs clearance is the procedure of declaring goods to customs authorities when bringing them into a country. In The U.S., they are the Customs Borders and Protection (CBP). Knowing what paperwork to provide can help simplify the transportation process and help prevent delays. There may be different documentation that a shipment needs depending on the commodity that is being imported/exported. This article will explain the more common types, and you should speak to a customs broker for a detailed explanation.
Why Is Understanding The Documents In Customs Clearance Important?
When bringing shipments into the U.S., having the correct documentation can save time and money. Incorrect or missing paperwork can result in customs placing a hold on your shipment. A business with customers can look bad if they cannot deliver their products on time. Freight that customs don’t release may also start collecting storage fees at the port, which is unfavorable for the shipper.
Documents for Clearing Customs
Commercial Invoice – This document is given to the customs officials to evaluate the value of the cargo. Customs also use the commercial invoice to determine the duties and tariffs they will assess to the shipper. It may include the freight description, information about the buyer and seller, shipment details, etc.
Bill of Lading or Airway Bill – When imports enter a country, the carrier gives the BL/AWB to customs. Customs require a bill of lading when goods enter the country using an ocean vessel, and they need an airway when an air carrier is the method. These documents are not only a receipt for what the shipper is transporting but also provide tracking information. Also, if the goods are lost or damaged, these forms are necessary for reimbursement.
Certificate of Origin – Customs use the certificate of origin to verify the country in which the export is taking place. This can be for various reasons, including political or if specific laws are in place. Check with your country’s chamber of commerce to see if it is a necessary document for your shipment.
Packing List – This is the physical description of what the shipper is transporting. It may include the dimensions, weight, and contact info. Although it is like the commercial invoice, it does not cover the fees associated with the cargo. It should, however, match the details on the invoice.
Arrival Notice – When the goods enter the destination country, the carrier sends the arrival notice to the consignee or receiver. This lets the consignee know the location details of the shipment. The arrival notice itself does not mean that the goods are available for release and allows for customs clearance arrangements. Custom brokers then provide the required documents for the release of the goods.
Contacting a Customs Broker
Along with the documents in this article, customs may require additional depending on the shipment. For example, importing firearms, chemicals, and plants requires different licenses. Since having correct paperwork can be intimidating for inexperienced shippers, they usually hire a customs broker to handle the process. If you plan on bringing cargo into the U.S., contact A1 Worldwide Logistics at 305-821-8995 to start. Along with assisting with documentation, our customs brokers offer various solutions to ensure the clearance of your goods.
by A1 WorldWide Logistics | Oct 12, 2023 | Customs Clearance, Freight Forwarding, Shipping Logistics
While the term demurrage may seem unfamiliar to new shippers, knowing how to avoid demurrage charges is essential when shipping. Demurrage is a fee that port officials place on cargo that overstays its time at a terminal. Also known as the last free date (LFD), this period is the final day that goods have free storage time. LFD can depend on various factors, such as a vessel’s arrival time at a port. Demurrage differs from detention charges when the importer exceeds the time for using the container outside the port terminal. This article will explain the causes of demurrage costs and how shippers can avoid these fees when moving goods internationally.
What are the Causes of Demurrage
Several situations can lead to cargo getting stuck at a port. One of the most common reasons this happens is because of documentation issues. If the paperwork is incorrect or missing, the shipment must stay on hold and may collect demurrage charges. An example is a Bill of Lading (BOL) with incorrect cargo or address data. The documents must also reach the receiver on time, meaning the shipper must gather the paperwork in advance. If an original BOL is lost, a shipper must take several recovery steps, which can take several days.
Another scenario that can lead to demurrage charges is a delay due to cargo inspection. Once the shipment reaches the port of import, customs checks it before clearance. If customs notices an incorrect HS code, they will place the goods on hold. A Harmonized System (HS) code is a number that customs use to classify cargo for tariff payments. Other occurrences unrelated to the shipper, such as labor strikes and bad weather, can also cause goods to remain at ports. Importers must also pay late invoice payments to prevent more costs from racking up. While several scenarios can lead to demurrage, the shipper can avoid and avert most.
How To Avoid Demurrage Charges
Although avoiding demurrage charges from situations like a labor strike is impossible, shippers can still prevent it from happening. Knowing the dos and don’ts of importing goods into the U.S. is essential. The importer should do the paperwork correctly, entirely, and on time. Before shipping, you should know the free days in your shipment contract and plan accordingly. Understanding the customs clearance process and what can go wrong is also essential. The regulations for importing can vary based on the port and the type of goods brought in. Drayage to a less costly off-port storage is ideal if your facility is not ready to receive the cargo.
Hiring a Freight Forwarder
The amount of information in this article may be confusing for first-time shippers. One of the most efficient ways to avoid demurrage charges is by having the help of a freight forwarder. A freight forwarder is an intermediary between the shipper and the final destination. They specialize in arranging cargo movement on behalf of the shipper and handle the logistics of your shipment. Along with educating you on preventing demurrage, they coordinate with the ports to ensure it doesn’t happen. Contact A1 Worldwide Logistics at 305-821-8995 to speak to one of our forwarders regarding starting your transport journey. We also have customs brokers to clear your shipment once it enters the U.S.
by A1 WorldWide Logistics | Oct 5, 2023 | Freight Forwarding, Shipping Logistics, Supply Chain
A persistent drought is leading to the Panama Canal transits lowering even further. In June of this year, the Panama Canal Authority (ACP) set various restrictions on carriers passing through the canal. The limitations are due to a drought that the waterway is currently facing. The Panama Canal relies on rainwater to move vessels across; however, the region has been experiencing a lack of rainfall. An ocean warming event known as El Nino further causes water scarcity, leading to an emergency. With the Panama Canal being one of the most important trade routes in international shipping, limitations have a considerable impact.
A few months ago, the ACP put limits on the drafts and the daily transits of vessels passing through. A draft limit is the distance from the lowest point of the boat and the waterline. On June 5th, the ACP cut the limit to 44.5ft (13.65m) from 50ft (15.24). It then went down to 43.5ft (13.26) on June 25th. The ACP also reduced the daily transits or the number of boats that pass through the canal. Usually, that number averages from 36 to 38, but it went to 31 from 32 in August. The newer Neopanamax locks will handle nine ships daily, while the older locks will have 22 pass through.
What Can This Mean For Shipping?
The decrease in the daily transits and the other limitations can negatively impact international shipping. With the Panama Canal being able to cut trade routes by miles, the most significant shippers rely on it. Around 13,000 to 15,000 vessels pass through the passageway yearly, meaning restrictions affect many supply chains. For example, loaders will put fewer containers on a ship to drop the weight when a draft limit lowers. An effect is that a shipper may move fewer containers internationally, which is unfavorable for business shipping to customers. Reducing the number of ships allowed to pass through daily can result in delays.
Will The Panama Canal Transits Lowering Delay My Shipment?
As previously mentioned, the number of vessels passing through the Panama Canal a day is 31. A decrease in daily transits causes a bottleneck where ships must wait outside longer than usual before entering. In August, the backlog peaked at over 160 boats waiting for entry. While that number is lower, it is still over 100 and may rise in the coming months. The main concern for many shippers is that their shipments will experience delays. The ACP notes that wait times for southbound transit rose from 5.56 to 8.85 days in August. Northbound transits went from 6.55 to 9.44 days.
While the restrictions may lead to delays in shipping, this should not stop you from exporting internationally. However, shippers must take steps beforehand to protect their supply chains. An example can be finding alternative routes to transport your cargo. The best way to prevent delays is to talk to a freight forwarder regarding your shipment. A freight forwarder is in charge of arranging the transportation of goods on behalf of the importer and exporter. Contact A1 Worldwide Logistics at 305-821-8995 to speak to our forwarder and ensure the safe movement of your cargo.
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