Inflation and U.S. import rates have continued to climb, making it more and more difficult for businesses to operate. Learn more about how inflation and rising prices have impacted the U.S. shipping process and if there’s anything you can do to stop it.

Inflation and U.S. Shipping

Currently, there are global supply and demand issues. Demand has increased in recent months, but supply chains are still experiencing delays that have trapped goods in ports worldwide.

As a result of these issues, insurance, shipping and freight rates have all skyrocketed. To add more difficulties, China has recently locked down several cities due to one of their worst COVID spikes yet. In other places, factories are still closed, or companies are raising wages while still having difficulty finding workers.

Russia’s war on Ukraine has also worsened matters. Each of these factors plays a role in the United States’ current inflation level.

Inflation impacts many sectors of U.S. shipping, including:

• Import container backlogs.
• Less labor availability.
• Congestion at ports.
• Rising fuel prices.
• Unreliable supply chains.
• Surcharge increases.
• More expensive raw materials.
• Delays and long lead times.

As inflation raises the shipping rate, you can only do so much to absorb those costs. Inflation has not been easy on anyone. Many companies have little choice but to increase the prices of their products to account for high shipping costs.

Small and medium-sized companies face the brunt of inflation as they try to figure out how to handle these issues.

How Can Businesses Combat Inflation?

Inflation impacts everyone, from companies to shippers and consumers, so it’s essential to look for ways to reduce it. Shippers can work to minimize the impacts of inflation by planning ahead.

Planning ahead by weeks or months can reduce the effects of inflation or make them easier to deal with. Avoiding last-minute shipments also helps lower shipping costs.

Stay on Top of the Changing Landscape With Universal Cargo

Whether you’re importing or exporting goods in the United States, you’ve likely noticed the effects of inflation. It has caused numerous issues, ranging from rising fuel prices to higher surcharges and other supply chain logistics problems.

Keep an eye on the fluctuating relationship between shipping and inflation by reading and subscribing to our blog today.

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How Does the War Affect United States Imports?

Russia and Ukraine have done business with the United States for many years. They have also supplied everything from food and energy to fertilizer to countries on a global scale. 

The Russia-Ukraine war impacts imports and trade in several ways. First, the physical destruction of infrastructure can cause trade costs to increase as Ukraine and Russia raise prices to rebuild. In addition, grain shipments through Black Sea ports have halted due to the conflict, causing shortages and increased prices.

Russia has traditionally been one of the biggest exporters of natural gas and oil for countries worldwide. As a result, many areas have been affected by higher gas prices due to the war, as well.

Russia Invasion Shipping Issues

While there are few direct Russian imports to the U.S., the U.S. will still feel what experts call a “commodities crunch,” which means there is a high demand for goods but a limited supply. The result is that prices for raw materials will increase, along with the costs of finished goods.

Any countries or businesses importing materials from Russia or Ukraine could also experience supply chain interruptions and shipping delays. On top of that, the United States imports many goods from China. As a result, how the war impacts China, including flight disruptions and other issues, will affect the US.

How Long Will the Shipping Impacts Last?

Unfortunately, there’s no way to predict how long the effects on shipping due to the Russian invasion will last. Depending on the length of the war and which countries become involved, the Russia-Ukraine conflict could cause prolonged issues for global shipping operations.

Stay Updated With the Universal Cargo Blog

Shipping issues due to the Russia-Ukraine war will likely impact imports to the United States. While the U.S. doesn’t do a lot of direct imports from Russia, we are in the global trade market — if one country is affected, everyone else will probably feel the pinch. 

Stay up to date on our blog today to keep an eye on what’s going on in the shipping world.

The post The Russia and Ukraine War’s Impacts on Imports to the U.S. appeared first on Universal Cargo.

After you give the freight forwarder your information on shipment specs and they return a quote, where does it go from there? Well, once you have a quote, the power is in your hands. You decide whether to agree to the arrangements. But you might be concerned about what the process looks like after you accept the quote. You’ll want to know what happens next and especially what you’ll need to do before you decide to import or export with a freight forwarder.

Learn what to expect with a freight agent or when working with a freight forwarder like Universal Cargo.

 

 

 

 

Process You Can Expect for Importing

Importing goods to the United States is a complicated process because of all the rules and regulations involved in U.S. customs. Working with a freight forwarder makes the importing process much smoother, as they’ll handle all the details so your items arrive safely in the U.S. After you accept your freight forwarder’s quote, the process of importing from China or another country to the U.S. follows five steps.

1. You’ll Fill out Some Import Paperwork

When importing goods, you’ll need a power of attorney (POA) agreement. Your POA is a legal document that allows your freight forwarder to handle the customs clearance process on your behalf. You’ll need to provide:

• An IRS, importer ID number or a social security card and driver’s license
• A “doing business as” (DBA) certificate if doing business under a trade name other than your official legal business name
• Your full name and the official legal name your business is registered as
• The jurisdiction where your company operates
• An authorized signature from an officer at your company

Your freight forwarder will also request additional information to create a Standard Operating Procedure (SOP) for your shipment. The SOP is a document that lays out the details and expectations for the shipping process. The details could involve a delivery schedule, the procedure for approving changes, the descriptions of the products you’re shipping, the contact information for shipping alerts and other information.

Your freight forwarder cannot proceed without the POA or the SOP, so it’s essential to pass this paperwork along quickly.

2. The Freight Forwarder Requests a Booking

With all the information and legal authority needed to handle your import, your freight forwarder can reach out to a customs broker to request a booking. They’ll coordinate the air or ocean carrier to get the goods to customs and ensure an agent handles the customs clearance process at the port.

3. You’ll Approve All the Booking Details

Once the booking is coordinated, your freight forwarder will pass along all the details for you to sign off on. You should receive:

• Your information as the shipper and co-signee
• Details about your goods, including the commodity descriptions and volumes
• Estimated time of departure (ETD), or the date when your carrier will depart with your goods
• Estimated time of arrival (ETA), or the date when your goods will arrive at their final destination
• The cutoff date, or the last day that the goods may arrive at the port to make the trucker’s estimated time of departure
• The cargo ready date, or the day your goods will be ready for pickup at their starting port
• Cost of the shipment.

Once you approve of all these details, your freight forwarder will confirm your booking. The import process will commence according to the details you’ve discussed.

4. You’ll Receive and Pay Your Invoice

Typically, your payment will be due before your goods have been delivered at their final destination and after they’ve been submitted for customs clearance. At that point, you’ll receive an invoice and all the payment details from your freight forwarder. In most cases, this invoice will include all charges.

5. Your Goods Will Arrive

Once the goods have cleared customs, they’ll be ready for pickup at the shipping port or airport. Typically, you’ll have worked with your freight forwarder to discuss trucking transportation to your facility from the port. A week after the carrier’s ETD, a few more documents will come through — a worksheet (WS) and debit note (DN) — which your freight forwarder can handle.

Process You Can Expect for Exporting

The exporting process for shipping from the U.S. to another country is a little different. Luckily, a freight forwarder can handle all the details for you so your items arrive at your customer or international location safely and quickly. Once you accept a quote from your freight forwarder, the process looks like this:

1. You’ll Fill out Some Export Paperwork

The export paperwork differs from the import paperwork. The main thing you need here is a shipper’s letter of instruction (SLI). Your freight forwarder should send you an SLI to fill out and return and request a commercial invoice and packing list (CIPL) to confirm what you’re exporting for the customs declaration.

The SLI conveys your export’s important details, such as where it is going and how to ship it. This document grants the freight forwarder permission to handle customs on the export side. Next, your CIPL will be used in customs to determine the value and quantity of the exported items. The commercial invoice should include:

• Country of origin
• Supplier or manufacturer information
• The full name and business address of the customer buying the shipped goods and a note on whether it’s a different entity than the importer
• The full name and address of the recipient of the freight
• Quantity of the units for each product, plus the unit value and an accurate product description

The packing list should include the weight, dimensions, quantity and carton count of the products. The PL should match the CI.

Once you have provided these documents, your freight forwarder can prepare all official export documentation for you.

2. You’ll Receive and Pay Your Invoice

Once you’ve confirmed all the details with your freight forwarder, they’ll draw up an invoice for all the shipping and exporting fees based on the volume and weight of your shipment.

3. Your Freight Forwarder Will Request a Booking

Once you pay your invoice, your freight forwarder will request the booking with a shipping carrier. The air or ocean carrier will take your goods to the destination shipping port or airport, where they will go through customs clearance and then on to their final destination.

Does This Include Trucking?

In most cases, no. The process we’ve outlined thus far is for air and ocean importing and exporting. It’s a smart idea to coordinate trucking alongside this process. Experienced freight forwarders like Universal Cargo offer trucking freight transport services in addition to air and ocean freight, allowing you to take advantage of intermodal shipping.

We recommend coordinating trucking during the export or import process before requesting a booking with a carrier. This measure ensures a truck will be ready to pick up your freight at the shipping port or airport in your good’s destination country and take them to their final destination. It’s important to talk to your freight forwarder about trucking needs. They can recommend carriers and coordinate the shipping process from the starting point to the end destination so the entire shipping process goes smoothly and efficiently.

What Makes Universal Cargo Different?

Universal Cargo is an experienced, full-service freight forwarder that can get your goods imported or exported via ocean freight or shipped via air freight to or from the U.S. Our services include door-to-door shipping, where we’ll also coordinate trucking on the import or export side of the shipment, customs clearance and more. We’ve built our business on strong industry relationships, which means we can find reliable partners for your unique shipments and the best rates possible.

We’ve been importing and exporting to and from the U.S. for more than 30 years, and we work hard to deliver the best customer experience. When you work with us, you’ll have a dedicated salesperson to guide you through the process and ensure your goods get to where you need them to go. To coordinate a shipment, contact us and request a rate today.

The post Importing and Exporting Process When Working With a Freight Forwarder appeared first on Universal Cargo.

Machinery shipping can be quite an undertaking. Since it doesn’t usually conform to a standard size or weight and is typically expensive or delicate, a machine needs meticulous procedures to arrive in one piece. 

What Should I Review When Shipping Machinery?

Machinery shipping is a precise process, as is any form of importing or exporting. When the two combine, you have to take many factors into account to ensure your machines stay protected while in transit and meet all regulatory requirements.

• Dimensions: Any item that ships must have declared dimensions to allow carriers to accommodate them aboard planes, ships or trucks. To ensure the carrier can fit your machinery shipment, it’s crucial to measure the height from its tallest point, length from its longest, and width from its widest. Failing to account for an antenna or other appendage may mean the machine can’t fit where your carrier has planned to put it.
• Weight: Your freight’s transportation mode may have limitations on weight, and your carrier will use weight to determine an accurate price for your shipment. Some shipping methods will require your equipment to be lowered onto and lifted off a vessel for transport, and the weight of your machine will determine the crane needed.
• Density: The dimensions and weights by themselves won’t tell a hauler everything they need to know when it comes to accommodating your irregularly shaped machinery. You’ll use density to communicate your shipment’s cubic foot weight, and your carrier will use it to determine your freight class. To calculate density, take your machine’s dimensions in inches, as though it were a perfect cube. Divide your measurement by 1,728 to determine the total cubic feet, and then divide it by the machine’s weight. You can express your shipment’s density as pounds per cubic feet.
• Starting and endpoints for delivery: As with any shipment, you need to make arrangements at the ports where you plan to ship out and pick up the load. You can pick the items up yourself or arrange truck transportation to collect the machinery from the port and carry it to its final destination.
• Government regulations: Importing and exporting have many related regulations. Since any international shipment will involve at least two countries, your freight will be subject to more rules imposed from either the starting point or destination. You’ll also need to consider any regulations for docking your items at any stops along the route. The U.S. and China, common senders and receivers of machinery shipments, both have stringent customs laws for importing and exporting. A freight forwarder can help you make sense of all these nuances and help you clear customs.
• Freight class: Your freight class will be between 50 and 500, and can get more complicated for heavy machinery. The freight class is calculated based on the shipment’s density, stowability, level of care needed in handling and liability. Higher density items usually stay more secure during shipment, lowering the fright class. Heavy machinery usually ranks high on the density scale. Its dimensions determine how easy it is to stow, and its delicacy determines how to approach handling. Liability can be influenced by its price per pound, breakability and susceptibility to theft.
• Insurance: Heavy machinery is a high-value asset, made even more precious if it’s a custom product or one for a highly specialized industry. These factors and more can add additional risk when shipping heavy machinery. It’s generally smart to purchase third-party freight insurance beyond what your carrier covers to protect yourself from liability.

Universal Cargo is an expert freight forwarder that can help you through the entire process. We have plenty of experience in oversized loads and all kinds of heavy machinery, and we can take your cargo under our wing through the process. We’ll prepare all the paperwork, from the bill of lading to customs forms, so you can rest assured your machinery gets to where it needs to be on-time, without a hitch.

Is Shipping Machinery Popular?

The short answer is — yes. One of the world’s most common freights is a piece of machinery — automobiles. Cars are a popular commodity worldwide, and foreign vehicles are of particular interest to American consumers. Over $8 million worth of cars and car parts ship around the world each year.

Besides automobiles, machines used for industrial, construction, manufacturing and technical industries often travel as freight. These items need to ship from their original equipment manufacturers (OEMs) to their intended users. Whenever machines need to get from one place to another, via ocean or truck, machinery shipping comes into play. These large, high-value items are usually shipped with a freight forwarding partner to ensure the shipment runs smoothly.

The United States and China are frequent machinery shippers, as these countries are known for their manufacturing industries. Companies that make heavy machinery and those that need it for their factories or work sites have a strong presence in these regions.

China held 22.2% of the global market for machine tool producers in 2018, the largest share dedicated to any one country. That same year, the U.S. exported more machinery and transportation equipment than any other country. The total value of U.S. machinery exports rested at $1.3 trillion. The second-largest exporter was China, followed by Germany, Hong Kong and France. Considering the full value of worldwide machinery exports was over $7 trillion, we can say it with absolute certainty — shipping machinery is quite popular.

Shipping Heavy Machinery

How does heavy machinery usually ship? The process often looks different from how other items travel. Usually, machines like cars or construction equipment are overweight or oversized cargo. So, while most freight travels in 20- to 40-foot containers, bulky equipment needs something different. Machinery shipping can be referred to as “project freight” because planning the logistics gets so complicated.

Standard containers have a weight limit of 20-21 metric tons and usually require the machine to be disassembled to fit. While you won’t have any weight restrictions for an overweight or oversized shipment, you have some limits on what can ship by truck. The legal load limit for a flatbed truck is 8.5 feet high, 8.5 feet wide, 43-53 feet long and 46,000 pounds.

In some states, oversized cargo trucks over 12 feet wide will need travel escorts. These cars will warn drivers of accidents, road work and other issues ahead. Oversized flatbeds sometimes have restricted travel hours and must avoid the road on nights, weekends and holidays. These vehicles also often need special markings in the form of flags, symbols or lights to warn other drivers.

When container shipping isn’t an option — and it usually isn’t — heavy machinery shippers have several other methods, which can apply to trailers and ships alike:

• Lift-on/Lift-off (LOLO): When equipment can’t come aboard by another means, it may require a crane. This method can get expensive since it involves using another heavy machine and a trained crew to operate it.
• Roll-on/Roll-off (RORO): Instead of bringing your heavy machinery airborne, it’s often easier to roll them. If your machine has wheels, RORO is often the preferred method. The only downside is that carriers will have difficulty stacking the machinery aboard the vessel, which means your machines will limit the available space.
• Flat rack shipping: While a standard container is out of the question, a flat rack container can handle bulk loads and project freight with ease. It’s a specialized container without sidewalls or a roof, allowing a machine to be strapped down and stacked on top of another surface. While this leaves machinery out in the open, you can protect your equipment with tarps and careful packaging.

Can Universal Cargo Assist Me With My Heavy Machinery Shipment?

Of course! As a freight forwarder, we make it our mission to take all the hassle out of any shipping ordeal. To those freights that need extra steps and accommodations — like heavy machinery — we say, “Bring it on.” Our services include end-to-end machinery freight forwarding, pickup and delivery, cargo insurance and customs clearance. Once we have the information from you, we take it from there. We can help you find the right combination of transportation methods and carriers with vehicles that can handle your shipment’s shape, weight and dimensions.

The post Shipping Machinery appeared first on Universal Cargo.

Our processes have adapted to utilizing a partnership with protective equipment sourcing specialists, Banah Trading.

Gloves are one type of PPE that hold particular importance right now. The Centers for Disease Control and Prevention (CDC) recommends disposable gloves be worn when disinfecting surfaces or caring for someone who is sick. Gloves are also essential for workplaces as they reopen. Employees need them to disinfect surfaces and while performing daily health screenings. Health screeners should use a clean pair of gloves when conducting temperature checks and change them for each individual they test.

In health care settings like hospitals, gloves are a vital and limited resource. Ideally, health care workers will change gloves between every patient they contact. Due to their scarcity during the pandemic, many use them for prolonged periods, disinfecting them between patients.

With every workplace using gloves and health care facilities turning to contingency plans to conserve supplies, a reliable source of safe-to-use gloves is more vital than ever. During these trying times, Universal Cargo has been a critical sourcing partner for disposable gloves and other PPE.

Importing Medical Gloves During a Time of Need

As highly regulated medical supplies, there are many types of gloves that health care facilities and other businesses can use for distinct purposes. Each type needs to be carefully sourced from a reliable manufacturer with quality assurance measures in place.

Universal Cargo has been a critical partner in sourcing many types of gloves, including nitrile examination gloves. Usually considered the best latex-free option, nitrile gloves are durable and can be classified for medical use. They are also common in food processing. 

We have sourced from some top brands for medical and industrial-grade gloves, like V-Glove®, Superior Glove, Unigloves and Top Glove. Usually, we import gloves in bulk carton shipments via containers or pallets. To maintain supply chain resiliency, Universal Cargo has connections with ports all over the world. We import PPE to the United States from manufacturing partners in China, Vietnam, Malaysia and around the globe.

How COVID-19 Is Impacting the Procurement and Use of Medical Gloves

Gloves are a crucial part of health care and have many applications for the COVID-19 pandemic. However, they have been in short supply. Hospitals and health care facilities have resorted to many tactics to conserve supplies. For example, the CDC has stated that gloves similar to FDA-cleared versions can be used for surgical and examination purposes. Some models that meet Chinese or Malaysian performance standards have been approved for use in place of examination gloves.

In severe crises, it’s even permissible to use non-medical disposable gloves when health care professionals will not expose themselves to pathogens. The Food and Drug Administration (FDA) recommends that any food service, embalming, cleaning or industrial-grade gloves in use closely align with the American Society for Testing and Materials (ASTM) standards for medical gloves.

The FDA and the Federal Bureau of Investigation (FBI) alike have warned of the potential for fraudulent medical gloves. If you are a health care professional or anyone charged with procuring gloves for your workplace, it’s crucial to be on a close watch for scams. Some signs of suspicious activity include:

• Unusual payment terms, such as up-front payments or proof of payments
• Last-minute price changes
• Last-minute shipment delays
• Unexplained bulk supplies

Many medical supply scammers will claim that gloves or other equipment were seized at a port or stuck in customs. Working with an import and logistics partner, like Universal Cargo, is one way to prevent these issues. A professional customs broker, like those on our team, carefully studies the regulations for medical supplies. These agents know exactly how to declare the products and provide the right specifications to avoid seizures by U.S. Customs and Border Patrol (CBP).

Other Personal Protection Equipment (PPE) That Universal Cargo Has Been Assisting With

Universal Cargo is capable of assisting companies with importing, exporting or transporting their freight on a global level. During the current pandemic, we have helped companies source and transport PPE such as:

• Masks: Universal Cargo has helped many businesses, including assisted living homes, maintain an uninterrupted supply of medical-grade masks. We have sourced and transported 3-ply disposable surgical masks and KN95 particle respirators. We’ve also navigated the many evolving import regulations for these life-saving PPE.
• Medical gowns: We’ve sourced both surgical and non-surgical isolation gowns intended for medical use. Our medical attire is FDA certified, and we can provide PPE with certification levels 1-3 to our clients. We’ve also sourced head and shoe covers intended for medical use.
• Medical devices: We have assisted clients in sourcing and shipping ventilators and other medical devices that have increased importance during the COVID-19 pandemic.

How the Universal Cargo PPE Process Works

The Universal Cargo PPE importing process falls into two steps. First, we must source PPE that meets our client’s specifications. There are many different grades and types of medical gloves and face masks, each for specific purposes. For example, many gloves are not marketed or intended for medical use. To find the PPE that meets your particular needs, we work with our sourcing partners at Banah Trading.

Next, Universal cargo facilitates the logistics needed to get gloves from southeast Asia to anywhere in the U.S. The process involves coordinating the transportation and navigating the customs process. In light of the COVID-19 pandemic, the process to import PPE and medical supplies has changed. Many restrictions have been lifted due to the need for adequate medical equipment.

Following FDA Guidelines

Surgical gloves and other medical equipment are classified as PPE by the FDA. Medical gloves are considered class 1 medical devices, which means the FDA must approve the gloves to meet safety and performance standards. They must receive a 510(k) premarket notification before shipment to the U.S.

Universal Cargo’s sister company, Banah Trading, specializes in sourcing PPE throughout southeast Asia, where most medical gloves and other equipment are manufactured. Banah Trading works directly with FDA-approved manufacturers and visits their facilities for inspections. By partnering with manufacturers that use sophisticated quality control programs, we can help import gloves and other products that meet FDA and international standards.

Taking on International Logistics and U.S. Customs

Once our partner has sourced the needed FDA-approved gloves or other supplies, Universal Cargo takes care of logistics. Importing has always been complicated because it requires customs clearance and extensive documentation. Before the COVID-19 pandemic, importing surgical gloves and other medical supplies from China incurred tariffs. In March 2020, these tariffs were lifted to prevent shortages of vital supplies during the crisis.

While there are no tariffs on PPE, we take many steps to ensure a fast, smooth import process and avoid disruptions in the supply chain. We organize all import documentation, including customs bonds, required for any goods regulated by a government agency, such as the FDA.Contact Universal Cargo for Importing and Exporting of Gloves and Other PPE

During the COVID-19 pandemic, a flexible supply chain and access to medical supplies are critical. We understand that our ability to deliver PPE is saving lives and helping businesses stay open. We can help you find the most reliable transportation method and streamline the customs process for importing gloves and PPE to the U.S.

At Universal Cargo, we strive to make sure your shipments arrive when you need them. Contact us to request our sourcing, importing and exporting services for PPE. 

Please check our restricted shipments list before submitting your form.

The post Importing Gloves and Other PPE During a Pandemic: How Universal Cargo Has Been Helping Businesses appeared first on Universal Cargo.

What Is a Domestic Freight Forwarder?

Even if you have never used a freight forwarder before, you likely will need one at some point. The rise of ecommerce and an increased need for shipping have led to freight forwarding’s compound annual growth rate of 4% to 4.5% from 2019 through 2020. Even if you only ship within the United States, you can still use the services of these logistics experts.

Domestic freight forwarders concentrate their efforts on in-country shipping. They help you to get your products and goods across the country. Think of this type of company as a concierge for your products. You can turn over everything to the forwarder.

Freight forwarding companies work as agents between your business and U.S. freight trucking and other transportation options for moving your cargo. You do not need to directly contact shipping companies for your products. Additionally, you do not have to worry about paperwork governing the shipment, including insurance. The forwarding company handles everything for shipping.

What Are Domestic Freight Services?

Everything related to shipping falls under the job of a freight forwarder. Insurance, storing and transporting are freight services a domestic forwarder can offer. Always check with the freight forwarder about specifics concerning your shipment.

1. Insurance

For domestic freight movement, you won’t need your goods to go through customs. However, you will still need to have insurance for your products in case of damage or delays. Remember, domestic freight forwarders set up deliveries, but they do not have fault or responsibility if weather, damaged goods or unexpected events cause delays in the shipment.

Cargo insurance on your shipment provides financial protection for you in case of a disaster. For example, even the best trucking company drivers can get into accidents or lose loads. You need insurance to protect your business if something like this happens.

For time sensitive shipments, snowstorms, closed roads and construction could cause delays you don’t anticipate. A good relationship with your freight forwarder and insurance on your cargo can make these delays easier to handle. The freight forwarder cannot stop a snowstorm, but the company can do everything possible before the shipment to make everything go smoothly.

Note that many freight forwarders do not offer cargo insurance separately. Typically, you must have the company handle your shipments to take advantage of the cargo insurance. Freight forwarding companies are not insurance providers. They manage the logistics of shipping and offer cargo insurance as an added feature of their primary service.

2.  Storage

Warehouse storage provides a safe place for your products until shipment can happen. A freight forwarding company’s combination of warehousing and shipping services allows you to streamline your supply chain — with warehouse space, you can save yourself from needing to store your products in a separate location until transfer. If you cannot manage your warehouses in addition to all the other jobs you do, this domestic freight forwarding service stores your goods as they await transportation across the country.

3.  Transportation

Transportation is the main reason that you need a freight forwarder. For many small and medium-sized businesses, securing transport with a carrier directly is difficult. Many carriers require a minimum cargo load, putting small businesses at a disadvantage.

A domestic freight carrier can work with whatever cargo loads your business has. The company arranges the best transit method for your business’s needs while taking the pressure off you. Trucking and air are two conventional methods that domestic freight forwarders use.

What Is It Like Working With a Domestic Freight Forwarder?

Working with a domestic freight forwarder will depend significantly on your relationship with the forwarder and the service you receive. The process should be simple because the job of a forwarding service is to reduce the effort you need to put forth to ship your items. When you choose the right company to work with your shipping needs, you will gain the benefits inherent to a quality partnership.

1. Multiple Shipping Services

When you work with a freight forwarding company, you gain a wide variety of services with one business connection. Services, as noted, include insurance, warehousing and transportation of your cargo. If you need something to have a specific delivery date, the job of a freight forwarder is to do everything possible to get your shipment delivered on time.

2. Less Effort From You

A freight forwarder takes the pressure off you and your business from having to find a suitable shipper. For example, if you have a small business, booking a U.S. freight trucking company for your deliveries can seem almost impossible. You will have too many options to choose from. Also, your cargo may not meet the minimum requirements of some companies for direct booking. However, if you connect with a freight forwarder, you get the benefit of the connections that the company has.

3. Ability to Handle Tough Shipments

The job of a freight forwarder is to help your cargo get where it needs to go. If you have a tough shipment to send, you can use the expertise of the freight forwarder to get it delivered. Some examples of hard-to-ship cargo include the following:

• Oversized products
• Temperature-sensitive items
• Tight delivery deadlines
• Fragile goods

To get these types of items shipped, you may need extra paperwork or labeling. Check with the freight forwarding company’s restrictions list because some materials are not always allowed in shipments. Other commodities may have requirements for how and when you can send them.

Temperature-sensitive or fragile goods may require special shipping containers to keep them protected from the elements. Oversized products or heavyweight goods will also have special shipping requirements. Trust a freight forwarder with these to take the extra paperwork and delivery steps off your hands.

4. Product Pickup

As a small business owner, you don’t have the time or personnel to send out to take your products to a warehouse for delivery. However, with domestic freight forwarders, many will pick up your products from your facility and send them to a warehouse to await shipping.

This type of service becomes especially helpful if your business does not have a large truck to take your goods to the warehouse. Simply have what you want to be delivered ready for pickup at a designated time, and let the freight forwarder handle the rest of the process until the delivery is complete.

Perks of Working With Universal Cargo

You have numerous options for domestic freight forwarders, but not all these companies offer the same advantages. In the business of freight forwarding, the absolute lowest cost may not be the best. You need quality service and expertise to add value to your experience. You get those things when you work with us at Universal Cargo, as well as our other benefits.

1. Based in the United States

Universal Cargo has its headquarters in the United States. Since we work here, too, we can handle any domestic shipments you have. From the East Coast to the West Coast, if you need to book U.S. freight trucking services for your cargo, we can help with this and other aspects of sending your shipments across the country.  

2. Ability to Handle Domestic and International Shipping

Many of our customers mention how important it is for their business to be able to import and export goods from Mexico, Canada and many other countries, and we comply by providing freight forwarding to these locations.

If you need international shipping, we can handle that. Our business is to know the ever-changing import and export regulations around the world. Instead of needing to learn all the requirements of every country you ship to, let us take care of your shipments. We work to make getting your products through customs with the right paperwork easier for you. However, please note that we have a handful of countries that we do not service. Aside from these few exceptions, we have the connections to get your goods anywhere in the world. 

3. Dedicated Account Team

One of the major perks of choosing Universal Cargo is the high level of personalized service you get. Every one of our accounts has a team dedicated to making the shipments happen for it. When you call us, you will talk to your account representative, who knows about your company and its delivery needs.

Our account support teams are on hand to answer any questions you have about your shipment. Also, because each account has a specific contact person, you get fast, friendly responses to all your inquiries. We set ourselves apart by giving our customers the individual service they deserve.

For more than 30 years, we have helped businesses with their shipments. During that time, we have learned a lot about the industry and how to best serve our clients. We offer dedicated account teams because we have determined that this method provides the best service possible.

4. Easy Online Shipment Tracking

We understand how difficult it can be to trust another company with your shipments. You can always know where your cargo is during the delivery process through our online shipment tracker. Simply log in at any time to see where your shipment currently is.

With the ability to see your cargo’s location, you can address customer concerns about their orders. Additionally, you can verify that your products arrive at their destination on time. With online shipment tracking, you still get the information you need about your order without the hassle of organizing delivery.

How Do I Pick the Right Domestic Forwarder for My Business?

When you choose a domestic forwarder, you need to have a company you can trust with your cargo. Your choice of a freight forwarder will take responsibility and control of your shipment. To ensure you can get your products where you want on time, you have to choose a quality freight forwarding service.

First, look for a company that has experience and connections in the industry. Because the transportation modes and companies depend on the domestic freight forwarder’s network, you want a well-established business that has operated long enough to create quality contacts.

Second, you should look for a company that has a record of service that satisfies customers. Testimonials and customer reviews are one way to examine this. However, some of the most candid remarks come from unsolicited sources. If you see a freight forwarder receiving customer praise from the customer’s website or blog, that is a sign the forwarding service goes above and beyond.

Lastly, look for the services offered by the company. Do you need supply chain value-added services such as packing and warehousing? Not all companies offer these. Additionally, always verify that you can get cargo insurance from your freight forwarder. Your cargo is valuable to your business, and you want to ensure it has full coverage in case something goes wrong during the transport.

Universal Cargo Can Help Domestically and Internationally

While Universal Cargo can help you with your domestic shipments, we can also make transport throughout North America possible. Many American companies do business with operations in Mexico or Canada. For sending goods to these locations, you still need our expertise. We can help move your products anywhere across the North American continent.

As your company grows, your import and export needs will, too. If you want to expand your shipping to Asia or Europe, let us know. We have freight forwarding partners in these parts of the world that can help you with imports and exports, and we know those overseas freight forwarders will offer you a similar level of service that you have come to expect from us at Universal Cargo.

Contact Universal Cargo for a Free Quote Today

Even if you don’t ship internationally, you still need a domestic freight forwarder that can remove the burden of cargo delivery from you. When you outsource product delivery, you get expert shipping services and more free time to dedicate to growing your business.

At Universal Cargo, we service businesses that have shipping needs throughout the United States and North America. To find out how we can provide you with industry-leading service at quality rates, make a rate request online. If you know the type of shipping you need, you can also send inquiries for our ocean rates, air rates, domestic freight trucking rates and warehousing rates. Regardless of the option you select, we will do everything possible to provide you with dedication, care and high-quality service when handling your goods.

The post Everything You Should Know About Domestic Freight appeared first on Universal Cargo.

China has long been one of the United States’ largest supplier of imported goods. But for many U.S. companies, Mexico has become an optimal choice for imports. According to the United States Trade Representative, the U.S. imported $371.9 billion from Mexico in 2018. This total ranked Mexico as the United State’s second-largest goods importer in 2018, but the recent trade war between the U.S. and China has been pushing Mexican imports even higher.

With Mexican imports on the rise, your company may be able to find a profitable import solution close to home. Take a look at some of these benefits to determine if importing goods from Mexico to the U.S. might be right for your business.

Why Do so Many Businesses Import From Mexico to the US?

In 1994, the United States entered a trade and investment relationship with Canada and Mexico known as the North American Free Trade Agreement (NAFTA). The parties involved with NAFTA enjoy fewer trade barriers, which makes importing between these countries advantageous.

The United States initiated a renegotiation of NAFTA in 2017. These negotiations eventually led to the new United States-Mexico-Canada Agreement (USMCA) that was signed by all three countries on Nov. 30, 2018. Though all three countries have agreed to USMCA, it will not take effect until it is ratified in each country.

The changes from NAFTA to USMCA are subtle, but a recent International Trade Commission report predicts USMCA will promote a 3.8% increase in imports between the U.S. and Mexico. For now, businesses benefit from importing from Mexico under NAFTA. In the future, these benefits may expand under USMCA. Whatever the case, businesses can capitalize on this opportune time to import from Mexico.

Based on trade agreements and other logistical concerns, importing goods from Mexico offers several business advantages:

• Affordability: When you import from Mexico, you have the ability to pick the transportation method that works best for you. Whether you need trucking or air freight, both options are readily available. This offers increased budget flexibility compared to importing from countries that require ocean or air freight only. In addition, NAFTA and USMCA grant some goods a duty-free or reduced-tariff status. This can lower your overall importing costs compared to other countries.
• Proximity: Take one look at a world map and you’ll see that Mexico is much closer to the U.S. than Asia or Europe. This proximity is an asset when it comes to shipping costs. Products imported from Asia will travel a greater number of miles, which may rack up increased shipping costs and time. Importing from Mexico offers a closer solution that may pose a lower-cost and quick shipping time.
• Logistics: In general, importing involves detailed logistics. Importing from Mexico may offer a more convenient flow. For example, if you need to travel to your supplier’s facilities, a flight can have you there in a few hours. The similar time zones can also simplify coordination efforts.

Though there are many benefits to importing from Mexico, working out the details can be challenging for business owners. This is where Universal Cargo steps in.

Mexico to US Services

When importing, you need knowledge and experience to help address detailed trade laws and processes. At Universal Cargo, that’s our specialty. We strive to be your one-stop shop for international shipping and logistic needs. Universal Cargo can partner with your business along every step of the logistics cycle to keep you informed and effective.

Some of our Mexico-to-U.S. services include:

• Finding trucking companies: Finding a trucking company to haul freight long distances can require detailed coordination and connections. Universal Cargo has trucking partners all across North America to help you move your freight from Mexico to the U.S. We’ll handle all the logistics directly with the carrier, so you won’t have to worry about any paperwork.
• Determining LTL or FTL: When importing and shipping via trucks, you’ll either use a less-than-truckload (LTL) or a full truckload (FTL) carrier. LTL shipments are priced according to the weight of the freight, whereas FTL shipments are priced per mile. Universal Cargo can help you figure out which method is most economical when transporting your goods from Mexico.
• Product sourcing: Establishing a supplier in Mexico from whom to import can be difficult without connections. Some businesses have to invest additional capital to partner with sourcing organizations, but that isn’t necessary when you work with Universal Cargo. We can help you find trustworthy business partners in Mexico and maintain a healthy supplier relationship in addition to handling logistical concerns.
• Warehousing: Depending on your business, you may need to store your imported goods in a warehouse. Universal Cargo is equipped to store and ship your goods at a moment’s notice. Our warehousing service is one more way you can streamline your supply chain for smooth operations.

These are just some of the ways Universal Cargo can assist with your Mexico to U.S. importing. If you aren’t sure what your business needs to improve your supply chain, submit a form for more information and assistance.

Is Mexico a Destination to Consider for Importing to the US?

In short, yes. The ongoing U.S. and China trade war has opened doors for increased imports from Mexico. A study conducted by the United Nations Conference on Trade and Development (UNCTAD) cites that Mexico has increased its U.S. exports by $3.5 billion as a result of the trade war.

Mexico’s gain during the trade war has been influenced by tariffs and foreign direct investments (FDIs). Put simply, the U.S.-imposed tariffs on China make it more expensive for U.S. businesses to import Chinese goods. Both American and Chinese business owners want to avoid tariffs, and they have both turned to Mexico.

Under NAFTA, business owners can import many goods duty-free. China has capitalized on this statute with FDIs — that is, Chinese-owned companies operating in Mexico. Between 2014 to 2016, China invested over $4 billion in more than 40 FDI deals with Mexico. These businesses allow China to export goods duty-free and without the China-to-U.S. tariffs.

In essence, the trade war has prompted the flow of goods from China to Mexico to the U.S. This has and continues to provide opportunities for affordable and reliable imports from Mexico to the U.S.

Universal Cargo Has Mexican Relations for Importing, Trucking, Sourcing and More

If you’re importing from Mexico, Universal Cargo has the connections and experience to assist. Whether you need Mexico-to-U.S. trucking or help with customs, we can help you establish and refine your logistics cycle.

In addition to our comprehensive services, Universal Cargo has more than 30 years of experience in the industry. Our dedicated team is ready to provide prompt, helpful and friendly service in whatever area you need. All of our services feature reliable customer service, detailed tracking information and a partnership with an operations account manager.

To request a rate or find out how Universal Cargo can serve your cargo needs, contact us today!

The post Importing From Mexico to the US appeared first on Universal Cargo.

The landscape of distribution has changed dramatically in the past 10 years. With the increasing use of third-party logistics, businesses now have access to full-service supply chain partners who help with the distribution of goods as well as warehousing, fulfillment and inventory management.

What Is a Third-Party Logistics Company?

Third-party logistics (3PL) companies provide a middle layer of service between the manufacturer and the end-user. In a traditional or one-party business, the manufacturer provides goods directly to the consumer. In a second-party logistics framework, the business hires a transportation company to fulfill shipment to the customer. In a third-party logistics model, the company hires the provider for transportation and warehousing, as well as several other services as needed.

Expanding businesses may find themselves suddenly needing extra warehouse space to store their inventory while it waits to be shipped to the customer. However, warehouse space is expensive, especially when you’re a growing business that can’t risk accumulating high inventory carrying costs. Essentially, a third-party logistics provider eliminates much of the risk businesses incur when they own and operate their own warehouses.

While 3PLs provide physical warehouses for businesses to ship their products to and store until they’re ready to be delivered to the end customer, this is just one of many third-party logistics examples. Many 3PLs own, operate and manage storage facilities, and some also assist businesses with freight and distribution, as well as many other important steps in between. Some third-party logistics companies even specialize in particular industries or niches, such as cold storage for frozen food, or regional commerce, such as the Asia-Pacific trade.

Advantages of Third-Party Logistics for Your Business

The more the third-party logistics market continues to hone and refine its service offerings, the more advantages they offer to businesses. If you’re a new or expanding business looking to streamline your distribution and improve your bottom line, consider these important advantages of third-party logistics providers:

• Save time and money: Third-party logistics companies are designed to take the burden of warehousing and distribution operations off of product manufacturers or importer-exporters. With third-party logistics, you’re essentially splitting supply chain costs with the 3PL company’s other customers. Shared warehousing and distribution saves money and time. Establishing your own warehouse and distribution chain is a time-consuming undertaking. With a 3PL, the process is already in place, and you can scale it to your needs at any time.
• Expand into new markets: Expanding businesses can receive the largest benefits from third-party logistics. Some businesses grow to a certain point where they must start to invest in new market opportunities to grow their profitability to the next level. Third-party logistics providers can provide businesses with direct distribution channels into new desired regions. They already have the ability to facilitate global commerce and can meet the regulations and requirements of international trade.
• Leverage vast resources: It’s a significant investment for businesses to build their own resource networks — whether that’s transportation assets, warehouse supplies or distribution partners. Effective 3PLs have well-established resource networks that their customers can easily and conveniently leverage.
• Remain flexible: All businesses experience peak periods and slow times. An expensive warehouse operation can make it difficult to respond nimbly when your client or customer needs change. Partnering with a 3PL gives you the advantage of scaling up or down as needed. You can rely on your third-party logistics provider to be flexible and meet your changing needs.
• Optimize your distribution chain: By working with a third-party logistics provider, you can focus on what you do really well — manufacturing goods and delivering high-quality customer service. Similarly, 3PLs stay laser-focused on continuous optimization of their processes and distribution chains. By making constant tweaks to improve offerings, it alleviates the burden on businesses that can instead safely rely on their 3PLs to deliver efficient, streamlined services.

Any business needing warehousing, distribution and shipping on a national or global scale can benefit from partnering with an experienced 3PL. But it’s important to know that not all third-party logistics providers are created equal. Hiring a provider is a highly personal choice that must align with your business needs.

What to Consider When Selecting a Third-Party Logistics Provider

Choosing a third-party logistics provider is like going into any other long-term partnership. You need to know you’ll work well together and that you have the same goals. You want to know that you can trust them with your inventory and that they’ll deliver dependable and consistent service. If you’re in the market for a third-party logistics provider, consider these important factors when choosing your 3PL:

• Location: Location is essential when establishing a distribution partnership. Businesses need to access the 3PL warehouse easily, and the logistics company must also be able to distribute within the markets you’re targeting. Whether that’s locally, nationally or internationally, your 3PL should already have an established distribution channel or have the ability to seamlessly establish one.
• Services: As the third-party logistics market grows, so too do most providers offerings. When looking for a 3PL to partner with, consider the full range of services they offer. Typical services include inventory management, warehousing, fulfillment, freight and even returns. Even if you don’t require global shipping now, it’s good to know that your 3PL can provide it if and when your business does reach this point of expansion.
• Value: It’s critical that businesses receive good value from their 3PL for it to make long-term financial sense. When searching for the right third-party logistics provider for you, find out about the different services and the cost of each one. This includes all costs associated with storing, picking, packing and shipping.
• Experience: Especially when dealing with global markets, it’s highly important for businesses to partner with experienced international 3PLs. Global shipping can be a tough field to navigate, but an experienced third-party logistics provider will be more than capable of distributing your products to your desired global markets. They’ll provide cost-effective solutions to your most difficult warehousing and shipping challenges.

How Do I Find a Third-Party Logistics Provider?

A partnership between a business and its 3PL should support long-term success and help businesses grow and expand. The right third-party logistics provider for your business can deliver personalized service that responds to your changing needs. Universal Cargo is proud of the many partnerships we’ve established in our more than 30 years of business. We’ve got the experience, resources and innovation necessary to help businesses like yours succeed in the global marketplace.

Contact Universal Cargo to learn how we can help with shipping, freight forwarding, product sourcing, trucking and much more. Call us today at 1-866-826-2276 or contact us online.

The post Everything You Need to Know About Third-Party Logistics appeared first on Universal Cargo.

In this guide to global product sourcing, we’ll cover the fundamentals of product sourcing, where to source high-quality products abroad and what to consider when choosing product sourcing services.

What Is Product Sourcing?

Product sourcing is the critical process of procuring products to sell. E-commerce, import-export and manufacturing businesses, like original equipment manufacturers (OEMs), all need to source products from reputable suppliers. But businesses can’t just source any products. They need to find high-quality, good-value products that their customers need and want to buy. Without products to sell, you don’t have a business.

Product sourcing may seem like a straightforward process — you conduct market research, find a reputable supplier and place an order. But there’s much more to it than that. Product sourcing requires planning and negotiation to ensure you get enough product at the right price and from the right supplier. Product sourcing is now a global endeavor, with many businesses ultimately finding products of high value from international markets. While businesses can source products themselves, they may not be getting the best price or the best value considering other cost influences like freight, shipping times, tariffs and other trade barriers.

In most cases, your best bet as a business is to hire a professional product sourcing company or brokerage. These companies handle the research and help you easily facilitate trade. Global product sourcing services investigate potential suppliers from around the world, finding you the best deal. They help you get your desired product from the manufacturer to your local warehouse, taking this responsibility off your shoulders.

Some product sourcing services specialize in certain types of products, while others may specialize in certain geographic regions, such as China product sourcing. Professional product sourcing companies specialize in establishing trade relationships with global suppliers. As a result, they’ve earned tremendous purchasing power, and they pass on these cost savings on to their customers. Product sourcing providers help you find the right products at the best price, but they may also provide third-party inspection services to ensure that the products you’re sourcing are of the highest quality and safety standards and that manufacturers adhere to requirements. Global product sourcing companies may also provide services like brand consulting and product packaging.

Where Are the Best Places to Source Products From?

We live in an increasingly globalized world, interconnected by a vast, open network. Because of how easy it is to facilitate trade between countries and continents, many U.S. businesses today look to source products overseas. Global product sourcing is highly accessible and has leveled the playing field for small and medium-sized businesses to be able to compete and grow their businesses. This is in large part due to the ability to source products at significantly lower prices abroad.

If you’re looking at sourcing a new product line or searching for different markets to source better value products from, then it’s important to look at several potential places. Internationally, there are a few key regions that supply products and are excellent places to begin your product sourcing search. Here are a few countries to look to for global product sourcing:

• China: China is one of the most significant global contributors to the product-sourcing landscape and is known for its abundance of affordable and diverse products. China is the United States’ leading global trading partner. The most commonly imported goods from China to the U.S. are consumer electronics followed by machinery. U.S. businesses also import significant amounts of bedding and furniture, toys and sports equipment, as well as plastic components from China.
• Mexico: In recent years, Mexico has become an emerging market for product sourcing. It now competes heavily with China for similar products, as wages in China are steadily increasing. Businesses can source a plethora of high-quality and affordable products from Mexico, including petroleum derivatives, textiles and manufactured goods.
• Vietnam: Vietnam is an important trading partner for the West as it has a developing economy driven by its manufacturing sector. Many businesses pursue trade partnerships with Vietnamese product suppliers because of the array of high-quality goods the country has become known for. The leading categories of goods sourced from Vietnam include electronic machinery, textiles, footwear and agricultural products.
• Indonesia: Indonesia has a growing economy backed by a massive labor force. It’s conveniently located for global shipping, making it a strategic trading partner for U.S. businesses. Indonesia is known for its agricultural exports, including seafood and coffee. It’s also an exporter of apparel as well as rubber and other commodities.

Where you choose to source your products from depends on your business goal. If your objective is to keep your product costs as low as possible, then in many cases, China will be the cheapest source for products due to their vast industrial infrastructure that has created incredible economies of scale.

If you’re looking to source products nearby to reduce freight costs and shipping times, then Mexico may be your best choice due to its proximity to the United States. Additionally, Mexico and the United States have an open trade agreement, reducing trade barriers and incentivizing import-export relationships within North America.

Another factor to consider when deciding where to source your products from is the category of product you’re sourcing. China is known as the dominant marketplace for sourcing electronics and manufactured goods, while Vietnam and Indonesia are becoming known as experts in textiles. When deciding where to source products from, always get clear on your business goals and product objectives to narrow down the right supply marketplace.

China Product Sourcing and Our Economy

China is a global economic powerhouse and has the second-largest GDP in the world after the United States. Contributing to nearly 20% of the world’s GDP, China’s economy is driven by manufacturing and agricultural activity. After China embraced a capitalist economy in the 1970s, the country began investing heavily in commerce and trade, establishing the economic infrastructure necessary to bolster its prosperity. With a minimal cost of living, Chinese wages have remained relatively low, making it economically viable for Western countries to buy Chinese-made products.

According to the Office of the United States Trade Representative, the United States imported $539.5 billion worth of goods from China in 2018. Over 21% of our country’s imported goods came from China, a figure that has been steadily increasing since 2008. Importing goods from China allows U.S. businesses to keep their overhead costs low and make products more affordable to average American consumers.

Overall, the U.S.-China trade relationship is a win-win scenario for both countries. American demand for consumer goods provides an opportunity for China to continue manufacturing products, and China’s low wages keep American manufacturing costs low. Without imported goods from China, the U.S. economy would struggle to maintain an affordable standard of living for the average American. More U.S. businesses would be forced to source products from elsewhere, including more expensive markets, such as the domestic manufacturing market. Inevitably, higher production costs would cause products to increase in price, making daily life more expensive for Americans.

Continued trade with China is critical to maintaining a mutually beneficial situation for both American and Chinese citizens. Both economies need to prosper and maintain a sustainable rate of growth for the relationship to continue to work. When China’s economy grows too rapidly, it strains Western economic interests that rely on low manufacturing costs to continue to keep products affordable for consumers. When America’s economy suffers, consumer demand decreases, meaning fewer products get sourced from China, leading to economic decline there.

Because of how important Chinese manufacturing is to the U.S. economy, businesses are encouraged to investigate the Chinese market when sourcing products to manufacture their goods. Many businesses import goods manufactured in China to sell directly to American consumers. In other cases, U.S. businesses ship raw materials to China where they’re manufactured into end products, which are then shipped back to the U.S. At Universal Cargo, we serve many U.S. businesses that rely on China to source affordable, high-quality products. Our clients find long-term, cost-effective relationships with Chinese suppliers that help them deliver the products their customers need. By working with the right China product sourcing company, U.S. businesses find the best products at the best price.

Factors to Consider When Sourcing Product

If you’re a U.S. business owner considering outsourcing your product manufacturing globally, there are many benefits this approach can afford you. Global product sourcing helps you keep your manufacturing costs down, allowing you to reinvest your capital into other business areas, such as human resources and innovation. When venturing into the world of business product sourcing, it’s important to be very informed about your options and all the factors that go into international trade. When you’re looking to source products from around the world, consider these important factors:

• Cost per unit: One of the biggest factors businesses look at when choosing a product source is the cost per unit. In many cases, this price can be negotiated based on volume. The more products you order, the lower the cost per unit will be. These rates vary by supplier, so it’s critical to look at several different suppliers to determine the best cost per unit.
• Landed cost: Cost per unit isn’t the only cost factor to look at. A product might have a lower cost per unit, and you might be able to order it in higher volumes, but calculate what the final cost will be after factoring in expenses like freight, tariffs, insurance or brokerage fees. Often these are location-dependent costs, but they can vary by supplier.
• Product quality: Product quality is of high importance for several reasons. Firstly, you want your customers to receive goods of high value that they’ll be happy with and purchase again. Secondly, products must reach a certain quality standard to be considered safe enough to import into the country. Always source products from a reputable supplier and ensure that goods are thoroughly tested and meet safety standards.
• Logistics: Ensuring you can get your products from the supply point to your location is critical. When choosing a supplier, you must ensure that there is the local infrastructure available to get your shipment from the manufacturing plant to the nearest international port.
• Location: Your total cost depends a lot on the location where your products are sourced from. Location affects transportation times, which can drive up costs. It also produces variables like seasonal fluctuations and weather changes, which can interrupt your supply chain and negatively impact your business.
• Culture: It’s easy to overlook culture as a factor in where you source your products from, but it plays a bigger role than you might realize. For example, in China, credit cards aren’t standard. To pay for products, you need to initiate a wire transfer, which is the typical payment method for the country. Additionally, language barriers are always a challenge, as well as local holidays, which differ from the United States.
• Trade regulations: Each country has its own set of regulations on exports, which will impact which products you can source and how much it will cost. Additionally, some trade barriers can be time-consuming to overcome, which can delay shipments and even incur expensive penalties. To avoid these snags, it’s critical to work with a freight forwarding company with vast experience in the country from where you are sourcing products.
• Supply chain efficiency: When sourcing products from overseas, it’s critical to know how long it will take for products to become available. If it takes you too long to get your goods to market, your competitors can take advantage of these supply chain delays and you may lose market share.
• Technology: It’s easy to take technology for granted, but not all parts of the world have reliable information technology networks. It’s important to source your products from a supplier that has the technological infrastructure in place to remain in regular communication with you about your product orders and be able to respond promptly when challenges arise.

Choose Universal Cargo Management for Help With Global Product Sourcing

Global product sourcing is a critical business advantage, allowing you to import high-quality, affordable goods so you can reach more customers. But navigating international trade with product suppliers abroad can be a complex and time-consuming process. That’s why it’s critical to partner with a product sourcing service provider that can handle this process for you.

Universal Cargo is a full-service international shipping and logistics service company with over 30 years of experience in global import-export markets. With strategic partnerships in China, Vietnam, Mexico and Indonesia, Universal Cargo can help you reach the right suppliers to solve your product sourcing problems.

For more information on global product sourcing, contact Universal Cargo today. Call us at 1-866-826-2276 or contact us online to request a rate for commercial shipping.

The post Guide to Business Product Sourcing appeared first on Universal Cargo.

To import and export musical instruments safely and efficiently, manufacturing brands will need a freight forwarder to bring their products in for resale in the United States. Several factors come into play when manufacturers must decide how to export their musical instruments, as well as the company they choose to handle importing them into America. In this article, we’ll discuss the best ways to import and export musical instruments, so they arrive at their destination in perfect condition.

What Instruments Are Commonly Imported or Exported?

Although some musical instruments are U.S.-made, many others get manufactured in Eastern countries and require shipping to the U.S. and other Western nations. This process works the other way, as well, with Western countries having to ship the musical instruments they manufacture to Eastern nations.

Whether manufacturers are importing goods to or from the United States, the following five instrument categories are the most common in global shipping.

1. Electric Musical Instruments

Electric musical instruments are the 686th most-traded product in the world, with their top exporter, China, shipping out about $764 million worth of products that fall under this category in 2017 alone. The top importer of electric musical instruments is the U.S., which brings in about $446 million in electric musical instruments each year.

Musical instruments that fall under this category include:

• Electric guitars
• Keyboards
• Bass guitars
• Synthesizers

2. Stringed Musical Instruments

Stringed musical instruments, also typically referred to as acoustic instruments, are not quite as popular imports and exports as electric instruments, but countries still commonly trade them. This category breaks down even further to regular stringed instruments and stringed instruments played with a bow. China is the top exporter for both categories, shipping out $306 million of regular stringed instruments and $82.3 million stringed instruments played with a bow.

Regular stringed instruments that are common imports and exports include:

• Grand pianos
• Acoustic guitars
• Harps
• Banjo
• Mandolin
• Ukulele

Examples of stringed instruments played with a bow are:

• Violins
• Violas
• Cellos
• Upright basses

3. Musical Instrument Parts and Accessories

As the 794th most-traded product, the musical parts and accessories industry is even more substantial than that of some of the instruments themselves. China exported $217 million worth of musical instrument parts and accessories in 2017.

A few examples of the top-exported musical instrument accessories and parts include:

• Metronomes
• Reeds
• Tuners
• Pickguards
• Strings
• Radio receivers
• Microphones
• Headphones

4. Drum Sets and Other Percussion Equipment

Drum sets and other percussion equipment comes next in the list of top-exported musical goods, with China’s 2017 total for exported percussion equipment being $145 million. The percussion category is much broader and more inclusive than some of the others, which a wide range of instruments falling under it. Some examples include:

• Drums — bass, snare, timpani, etc.
• Cymbals
• Bells
• Chimes
• Shakers
• Triangle
• Tambourine

BTW, a business that helps companies find drum sets and does an awesome job at referral marketing is Drum Set Lab.

5. Wind Instruments

Despite being last on this list, the category of wind instruments — not including those made of brass — is still a significant one in terms of foreign trade. China exported a total of $110 million worth of wind instruments in 2017 alone.

Some non-brass wind instruments that are common imports and exports include:

• Clarinets
• Flutes
• Piccolos
• Oboes
• Bassoons

Methods to Import and Export Musical Instruments

There are two methods of importing and exporting musical instruments from China and other Eastern countries to the United States: ocean and air. Each option has its pros and cons and is best suited for specific instruments and conditions. To decide which method you should use, consider the number of items you’re sending, the size of the items, the weight of the items, how far they will be traveling and how quickly you need them to reach their destination.

1. Ocean Freight Shipping

If you are shipping a significant amount of musical instruments — and especially if they are large instruments, like a piano or upright bass — it’s best to opt for ocean freight shipping. Ocean freight shipping takes a bit longer than opting to ship by air, but it is more economical if you are exporting or importing large, heavy instruments in bulk.

Heavy musical instruments would be difficult to ship via air because they would weigh down a plane and eat up a lot more of its fuel than a cargo boat designed to carry tons of equipment. No matter where you’re shipping pianos or other heavy musical instruments to or from, ocean freight shipping is the best way to make sure they reach their destination safely and cost-effectively.

2. Air Freight Shipping

The second method of shipping musical instruments is via air, which is an excellent complement to the ocean freight shipping option. Air freight shipping is ideal for smaller musical instruments because they are easier for cargo planes to carry while using less fuel. Air freight shipping is also a faster method than ocean freight shipping, making it the right choice for time-sensitive shipments.

However, keep in mind that even if your shipment of heavy musical instruments like grand pianos or organs is time-sensitive, it may be worthwhile to save some money and resources by opting for ocean freight shipping. Your cost will increase significantly if you have to import or export these large items via air, as an airplane will use significantly more fuel than a cargo boat that is intended to carry loads of several tons.

Top Countries for the Music Industry

Music is one of the only industries that is alive and well in almost every country — whether that’s financially speaking or culturally speaking. However, there are a few key players involved in exporting and importing musical instruments.

We’ve broken down the following two lists to analyze which countries have the most booming musical instrument industries based on the top five exporters of musical instruments, as well as the top five importers of musical instruments.

Top Five Exporters of Musical Instruments

The five top exporters of musical instruments are below in order.

1. China ($1.6 Billion)

As you may have noticed based on the numbers in the previous list of the top-exported musical instruments, China dominates the musical instrument export industry. China’s music market is one of the fastest-growing industries in the world, so it’s not surprising they’re also the No. 1 exporter of musical instruments by a long shot.

If you add up the 2017 numbers mentioned earlier in this article for the top five most-exported instruments, China exported somewhere around $1.6 billion in all categories of musical instruments that year.

2. Indonesia ($582 Million)

Coming in second on the list of the world’s top musical instrument exporters is Indonesia. The country is responsible for manufacturing a large portion of the world’s electric, stringed and wind instruments.

• Electric instruments: $422 million

• Stringed instruments: $80.7 million

• Wind instruments: $79.3 million

These numbers add up to a total of $582 million exported musical goods from Indonesia.

3. United States ($531 Million)

While most people will think of the United States as a significant importer of musical instruments, the U.S. is also home to several instrument manufacturers. The U.S. exports many types of musical instruments to other countries.

• Electric instruments: $181 million

• Stringed instruments: $119 million

• Accessories and parts: $185 million

• Percussion instruments: $46.1 million

These figures result in a total of $531 million of musical instrument products exported from the United States each year, based on the 2017 data.

4. Germany ($473 Million)

Germany is another power player in the manufacturing and export of musical instruments of all types. In 2017, the country exported the following amounts of each product type.

• Electric instruments: $124 million

• Stringed instruments: $35 million

• Accessories and parts: $199 million

• Percussion instruments: $47.6 million

• Wind instruments: $67.4 million

When you add these numbers, you’ll find Germany exported a total of $473 million of the top five most exported musical instruments.

5. Japan ($170 Million)

The nation of Japan comes in fifth place for the most music-related exports in 2017. Even though they only exported two of the five most popular instruments, their numbers for those two categories are high enough to make them a top exporter.

Japan has earned a reputation for exporting musical instruments such as the following.

• Accessories and parts: $92.4 million

• Wind instruments: $77.6 million

In total, Japan exported $170 million music-related products across the globe in 2017.

Top Five Importers of Musical Instruments

On the other hand, the following five countries are the top importers of musical instruments.

1. United States ($1.1 Billion)

You might have guessed this one already based on the numbers discussed earlier in the article, but the United States takes first place for the largest importer of musical instruments in the world. That is even despite the 2.7% to 3.5% duty tax American companies must pay to import musical instruments into the country. It is also despite the United States’ most recent tariff update on importing Chinese products, including musical instruments. The president’s new ruling states that beginning Sept. 1, 2019, tariffs on $300 billion in Chinese imports will start at 10% and could eventually increase to 25% or more.

Of course, the following numbers are from 2017 before these new tariffs came about, so it will be interesting to see how they will affect the number of musical instruments the country imports in the future.

The United States imported the following dollar amounts for top categories of musical instruments in 2017.

• Electric instruments: $446 million

• Stringed instruments: $204.6 million

• Accessories and parts: $197 million

• Percussion instruments: $114 million

• Wind instruments: $131 million

Adding these numbers together, we come to a total of $1.1 billion worth of musical products imported into the U.S.

2. Germany ($569 Million)

Coming in second place on the list is Germany, which imports even more musical instruments and accessories than it exports. The nation is a well-known musical instrument manufacturer, especially electric instruments. In 2017, Germany imported the following amounts for each of the top musical instrument categories.

• Electric instruments: $269 million

• Stringed instruments: $64 million

• Accessories and parts: $133 million

• Percussion instruments: $50.7 million

• Wind instruments: $52.6 million

With a total value of $569 million musical instruments and accessories imported, Germany has a significant market for these devices.

3. Japan ($435 Million)

Not far behind Germany is Japan, which imports a total of $435 million worth of musical instruments and related products each year, according to the 2017 data. The country ranks third on the list by importing music-related products from the following categories.

• Electric instruments: $179 million

• Stringed instruments: $64 million

• Accessories and parts: $122 million

• Percussion instruments: $19.8 million

• Wind instruments: $50.7 million

4. United Kingdom ($213 Million)

With its bustling and incredibly advanced music scene, it’s no surprise the United Kingdom is one of the top five importers of musical instruments. Countless legendary bands have come from the UK, and there are likely still many more to come. With a total of $213 million in music-related imports in 2017, the nation certainly has a lively music industry and market.

We can break that number down by category as follows.

• Electric instruments: $146 million

• Stringed instruments: $49 million

• Percussion instruments: $18.3 million

5. China ($161 Million)

Although they are the No. 1 exporter of all musical instruments in the world, China is also a high-ranking importer of the same products. As you’ll notice, China imports a high value of musical accessories and parts compared to other countries — presumably to build the musical instruments they then export across the globe.

China’s most significant music-related imports include the following.

• Accessories and parts: $138 million

• Percussion instruments: $22.8 million

In total, China brought in $161 million worth of musical instruments in 2017.

Can Universal Cargo Ship My Guitar?

Since Universal Cargo’s focus is on importing and exporting for businesses, we specialize in shipping musical parts and instruments in bulk. If you are looking for a way to ship your guitar — whether it’s to your new home across the country or your vacation destination because you just can’t go a week without your six-stringed best friend — we recommend working with a consumer logistics company like UPS, DHL or FedEx. You should also opt for one of these if you’re looking to send a single instrument to someone else as a gift.

While Universal Cargo is the go-to choice for companies importing and exporting musical instruments in bulk, individuals will have a smoother experience by shipping a musical instrument with a consumer logistics company.

Partner With Universal Cargo for Importing and Exporting Musical Instruments and Parts

If your business needs to import or export bulk orders of musical instruments and parts, partner with the experts at Universal Cargo. Our trained team works directly with the manufacturers to ensure the transaction gets completed correctly and as quickly as possible. Once we collect all the necessary information and documents from you, the business owner, we’ll handle the rest of the process to get your products either to or from their origin or destination. We have experience in shipping musical instruments to or from the United States and other countries across the globe.

Ready to import or export musical instruments for your company? Browse our service offerings to learn more about what we can do for you, or contact our team directly for more information.

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Every industry has its own special vocabulary. The international shipping industry probably has more than most, along with a great many acronyms.

It can be hard for new people working in the industry to understand what is being said when the shipping jargon gets heavy, so imagine what outsiders are thinking when they hear all the shipping acronyms and vocab flying around.

To help with that imagination, we’ve created this series comparing Logistics Glossary definitions to definitions of the same words and acronyms from the Urban Dictionary.

Since words often have different meanings, it’s not a bad idea for shippers to know how others define the words they’re using. And reading the Urban Dictionary definitions for shipping terms is always good for a laugh.

Here are the links to the previous two installments of this series:

International Shipping Definitions Vs. Urban Dictionary Definitions

More International Shipping Definitions Vs. Urban Dictionary Definitions

Alright, let’s get this things started with today’s shipping/urban words…

Terminal

Terminal seems like a straight forward word. At the very least, it is one we use all the time in the international shipping industry.

Logisitics Glossary definition of terminal:

Transportation facility with one or more of the following roles:

1. System access: terminals are points at which freight enters and leaves the transportation system.

2. Freight consolidation/distribution

3. Mode transfer: freight may change from one mode to another, for example, rail to truck.

4. Vehicle transfer: within a single mode, freight may transfer from one vehicle to another.

5. Storage and warehousing

6. Fleet maintenance

So terminal is a noun. Well, not necessarily according to the Urban DIctionary.

Top Urban Dictionary definition of terminal:

I had a terminal day yesterday–I got the samsung 990 and then played dalmuti at taco bell for 9 hours.

I would have thought with the words “sick” and “ill” in the definition that this adjective definition of the word would have described a life-ending disease. Instead, it turned out much more positive.

It should be noted that judging from the Samsung 990 being used in the example, this slang may be out of date or obsolete. If that is the case, I think it should be brought back if only so shippers can call awesome terminals “terminal terminals.”

Of course, the Urban Dictionary tends to have multiple definitions for words, and the Urban Dictionary has a noun version of terminal as well.

Another Urban Dictionary definition of terminal:

FTL

Like terminal, FTL is a shipping term that is used all the time.

The acronym stand for Full Truckload.

Here’s how our Logistics Glossary defines it:

A trucking industry term; a truckload shipment is when the shipper contracts an entire truck for direct point-to-point service. Truckload shipments are priced per mile within designated lanes, regardless of the size of the shipment provided it fits (weight, cube) within the vehicle. Less expensive per unit weight shipped than LTL. A truckload carrier is a trucking company specializing in point-to-point truckload shipments.

You know the Urban Dictionary is going to have another definition for an acronym like this. In fact, they have several.

Top Urban Dictionary definition for FTL:

“People who think FTL means “For the Lose” are taking english tests FTL”

Look at Urban Dictionary also helping us out with a bit of grammar. Placing a verb after an article where there should be a noun is a fail.

While most people on Urban Dictionary seem to agree with the above definition, there is a large contigent who have another definition for the acronym FTL. And this one is weird.

Another Urban Dictionary definition for FTL:

People working in the shipping industry probably thought booking an FTL was a win, but, french the llama, now they know better!

Even with the above solid definitions of FTL, the Urban Dictionary was not yet done with the acronym. This final definition for the acronym might just be the funniest.

Another ‘nother Urban Dictionary definition for FTL:

LTL

If we’re going to cover FTL in this edition of Urban Dictionary Vs. Logistics Glossary, then we have to cover LTL. It only seems right.

Logistics Glossary definition of LTL:

Source: Shipping

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I’ve heard this question asked. The short answer is:

“Because you’re a shipper.”

If that isn’t enough for you, keep reading.

Cargo insuranse reduces shippers’ exposure to financial loss. Yet, so many shippers choose to risk importing and exporting goods without getting cargo insurance.

Unfortunately, many shippers have suffered great loss for taking this risk.

Below are eight reasons shippers should get cargo insurance. Some of the reasons are dangers that can cause loss or damage to cargo, but the list actually goes well beyond that.

In truth, there are even more reasons to get cargo insurance than what we’ve listed below, but this is a blog, not a book.

#1 – Cargo Theft Rising

Cargo theft, especially through identity theft and fictitious pickups, is on the rise.

We’re not even counting piracy, which is a major risk of cargo theft and loss in modern international shipping.

We won’t spend too much time on this topic as three of our last four blogs had to do with cargo theft. You can read them by clicking the below links:

7 Things Every Shipper Should Know About Peak Season Shipping

Real Shipping Container Heist of $10 Million in Silver Could Be Movie

7 Tips to Beat Cargo Theft by ID Theft Like Tom Brady Beat NFL Suspension

Being in the middle of the peak season for cargo theft and seeing a plethora of stories on cargo being stolen lately are big factors why we are posting this blog about getting cargo insurance. That made us start the list with cargo theft; however, it is only one of many reasons to get cargo insurance.

#2 – More Containers Lost at Sea Every Year

Every year, containers are lost to sea. With the trend to megaships, carrying huge stacks of shipping containers across the oceans, cargo containers overboard have actually increased.

The World Shipping Council conducts surveys to find out approximately how many shipping containers are lost to sea in a year. Their 2014 update reveals a very significant rise in cargo containers lost to sea from their 2011 survey.

#5 – General Average – Expedite Cargo Release

You may be required to post a bond and/or cash deposit in order to obtain release of your cargo following a general average – even though there was no loss or damage to your goods.

By purchasing insurance, your insurance company assumes the responsibility and expedites the release of your cargo in these instances.

General Average is an internationally accepted principle where if certain types of accidents occur to the vessel, all parties share in the loss equally. You definitely do not want to find yourself in a General Average situation without insurance.

#6 – Contractual Requirement

Shippers’ sales contracts may obligate them to provide ocean cargo insurance to protect a buyer’s interest or their bank’s interest. This is especially true when selling goods CIP or CIF.

Shippers should always pay attention to the small details of their contracts. Unfortunately, insurance sometimes gets overlooked and the shipper can be held responsible.

Failure to get cargo insurance when a shipper is contractually obligated to do so can not only subject the shipper to financial loss if there is loss or damage to the goods, but non-compliance with the terms of the contract with the buyer can lead to loss of sales and legal problems.

Litigation can quickly surpass the financial repercussions of uninsured cargo that is damaged or lost.

#7 – Coverage for Limited Carrier Liability

Carriers, by law, are not responsible for many common causes of loss that occur in transit (for example, acts of God, General Average, etc.).

Even when carriers are liable, carriers’ liability in the event of a loss is limited – either by contract in the bill of lading or by law.

In most cases, shippers will only recover cents on the dollar from the carrier.

Shippers should never count on the carrier that is shipping their goods to cover losses or damage that may occur over the course of a container ship voyage.

#8 – More Control Over Insuring Terms

Relying on the buyer’s or seller’s insurance may be a viable option, but shippers must be satisfied that the insurance has in fact been purchased and that the insuring terms, valuation, and limits provided by each insurer on each shipment are adequate to meet their needs.

If shippers leave the insurance up to the other party or other parties when importing and exporting, they run the risk of not being properly protected.

On top of that, if there is a claim dealing with a foreign insurance company, perhaps in a different language, it can be time consuming and frustrating. If there’s a claims issue, international shippers are often dealing with courts in a foreign country.

Shippers who purchase cargo insurance themselves are usually much better protected than shippers who allow other parties in their importing or exporting transactions to handle the cargo insurance.

Source: Export

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Two weeks ago, we blogged 7 tips to beat cargo theft from identity theft. Last week, we blogged about a heist of a shipping container containing $10 million in silver bars. What are these leading to?

Peak season for cargo theft! Yes, you read that right.

Usually when we talk about “peak season” in the international shipping industry, we’re talking about the months leading up to the holiday season. August and September are big, big months for U.S. ports as shippers are importing goods for the holidays. Shipping numbers tend to remain strong right up through the holidays.

This is international shipping’s peak season. We’re in it right now. It is not all celebration, however. We are also now in the peak season for cargo theft.

A recent FleetOwner article, heavily citing information and data from FreightWatch International, highlights how September through December is not just peak season for cargo shipping but also peak season for cargo theft.

Below are some 6 key points from FleetOwner’s article and a bonus point, which all add up to 7 things all shippers should know about peak season shipping.

#1: Cargo is at Higher Risk During Holidays

We don’t want to ruin your holidays by quoting the following from the FleetOwner article, but shippers need to be aware that special care should be taken of their goods during holidays. Since the opposite often happens, shippers have their holidays too often ruined by theft.

“Holiday weekends are notorious for presenting increased cargo theft risks for transportation companies, shippers, and manufacturers,” [FreightWatch International] noted in a recent update. “Organized theft rings are always active and recognize holiday weekends can cause shipments to be unattended for prolonged periods of time.”

#2: Cargo Theft Peak Season Surges in October

It’s not just the Halloween decorations everywhere that makes October scary; this is cargo theft’s peak season’s peak!

FreightWatch pointed out that in 2014, the “concentration” of cargo theft activity between September and December totaled 245 incidents, with the greatest number – almost one third of the period’s total – occurring in October as a “surge” of goods flooded the supply chain ahead of “Black Friday,” the day after Thanksgiving retail shopping extravaganza.

#3: Electronics, Clothing, & Apparel Especially Targeted

Electronics and clothing and apparel are very popular types of goods for international shipping. These items are strong performers when it comes to the market and among the best items for shippers to make money importing. Given that these items perform strongly for shippers, it should not be a surprise that they are strongly targeted by thieves.

Here’s what the FleetOwner article says:

The firm noted that two “coveted commodities” are targeted every year during the pre-Thanksgiving shipment run-up: electronics plus clothing and apparel, comprising 23% of the reported thefts yielding average losses $1.37 million and $328,051, respectively.

#4: Fictitious Pickups Are a Growing Threat

This should already be sinking in for shippers who read our above mentioned blogs on cargo theft through identity theft and the cargo container of silver heist. Both include fictitious pickups.

It’s amazing how often thieves are stealing shippers’ goods right out from under their noses. Don’t feel too bad, shippers; they’re doing it to ports too.

Another growing threat: fictitious pickups. They’ve increased sharply from 2011 to 2012 and have remained on a relatively constant increase ever since, FreightWatch stressed.

“During the 2014 pre-holiday peak, 13 cases of fictitious pickups were reported in the U.S. totaling over $2.2 million in lost cargo,” the company said. “Electronics plus clothing and shoes were targeted in 38% of those crimes.”

#5: Full Truck Load Thefts Most Common

Obviously, when fictitious pickups are happening, full truck loads are getting stolen.

And that’s how cargo theft happens. It is not usually one or two items stolen like with shoplifting. Full truck loads or container loads get taken like the whole Maersk shipping container from the Port of Montreal in the silver bars heist.

If you get hit by cargo theft, expect to lose an entire truck or container load. That’s how close to 90% of cargo theft works according to the FleetOwner article. But what is really surprising is how often actual truck drivers (this is different from fictitious pickups) are involved in the thefts.

FreightWatch added that full TL thefts constitute 89% of cargo theft in the U.S. now, with a majority of reported cases occurring at unsecured parking areas, with many of them driver theft incidents involving either direct theft by the driver, the driver’s voluntary collusion or complicity in the crime, or a deceptive criminal posing as a legitimate carrier resource.

“This ‘modus operandi’ has evolved to often include drivers orchestrating mechanical failures, documentation of repair services, and the subsequent use of a viable alibi upon the arrival of law enforcement,” the firm noted. “This growing trend – surreptitious driver – warrants acute awareness as the shipping industry enters its peak season.”

#6: Peak Shipping Season Creates Opportunity for Theft

Why is there a peak season for cargo theft? Well, it largely exists because there is a peak season for international shipping. It creates opportunity.

When shipping volumes increase dramatically as they do during peak season, everyone in the supply chain, from shippers to freight forwarders to trucking companies, has to be careful of whom they are working with and hiring.

Check out what FleetOwner says here:

Another reason why cargo theft activity spikes during the “peak season” is due to the supply and demand constraints that occur when freight volumes increase.

“Limitations on available carriers often necessitate more brokering, as well as re-brokering to the second, third and sometimes fourth-order carriers,” FreightWatch said. “Awareness of the threat is integral. Exercising proper due diligence when sourcing carriers is essential. In addition, ensuring that all participants in the supply chain comply with industry best practices is paramount.”

#7: All Shippers Need Cargo Insurance

There’s nothing about cargo insurance in the FleetOwner article, but the article certainly inspires this section.

With all the cargo theft happening, and the increased threat during the peak season, it has never been more important to make sure you get cargo insurance when importing and exporting goods.

We did a blog a number of years back giving 5 reasons shippers should get cargo insurance, and we’ll probably do an updated version soon, but you could consider the above sections as 6 reasons to get cargo insurance. 

Unfortunately, cargo theft, damage, and loss could happen to any shipper at any time. Gambling on it not happening to you is a risk no shipper should take.

Click Here for Free Freight Rate Pricing

Source: Shipping

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What Happened?

In case you missed it, massive explosions shook the port and city of Tianjin, China last week, leaving over 100 people dead, hundreds more injured, and dozens still missing.

The explosions lit up the night sky bright as broad daylight while taking lives, damaging property, and disrupting operations at China’s 5th largest port.

Many importers and exporters who ship goods through the Port of Tianjin are feeling extreme negative effects on their businesses and it will be a while before the full impact of the explosions is known. However, we do know much about how international shipping is being affected.

Worse than negative impact on international shipping and business is the fact that lives are still in danger.

Here’s a YouTube video showing a collection of phone cam footage of the explosions:

Hazardous Materials & Toxic Chemicals Putting Lives in Danger

While the initial cause of the explosions is unknown, they happened in a waterfront warehouse storing shipping containers of hazardous materials that are believed to be part of the cause.

CNN reported:

The warehouse was a temporary storage facility that housed materials after they arrived at the port and before they were transported elsewhere, city officials have said.

Several hundred tons of sodium cyanide, a highly toxic chemical that can kills humans rapidly, have been found at two locations and are being cleaned up, they added.

Residents in Tianjin with homes near the blast site have shared their concerns about the long-term environmental and health consequences of the blasts.

Residents are right to be concerned. An even more recent CNN article, just updated today, reports:

High levels of dangerous chemicals remain at the site of last week’s deadly chemical warehouse blasts in the northern Chinese city of Tianjin — hundreds of times higher than is safe at one spot — officials said Thursday, signaling that a cleanup has a significant way to go.

Water tests show high levels of sodium cyanide, an extremely toxic chemical that can kill humans rapidly, at eight locations at the blast site, Ministry of Environmental Protection official Tian Weiyong said.

The sodium cyanide level at one spot was 356 times higher than a safety limit, Tian said.

The Chinese government’s history of being honest with its people is not exactly pristine. Many worry about what information is not being shared and if the already obvious dangers to the people who live near the explosion sites might be graver than reported.

The CNN article continues with U.N. criticism of China’s handling of the situation, including the following quote:

“Moreover, the reported restrictions on public access to health and safety information and freedom of the press in the aftermath are deeply disturbing, particularly to the extent it risks increasing the number of victims of this disaster.”

Shipping Returning to Normal at Tianjin Port?

Obviously, these explosions caused interruptions at the Port of Tianjin. However, according to an article from the Wall Street Journal, shipping is already returning to normal:

Cargo ships have resumed normal loading and unloading at Tianjin freight terminals, bringing work at the port closer to normal even as many shippers still seek information on goods that may have been damaged in last week’s deadly explosions.

Many, many, shipping containers of cargo at Tianjin were destroyed in the blasts. Especially shippers who neglected cargo insurance will be hurting from major financial loss.

But there was not total loss for shipping across the board at Tianjin. Disruption of shipping operations varied, depending on how close terminals were to the actual explosions.

The day following the explosions, many freight forwarders and shippers received emails such as the one quoted below that we received from Sea Master:

As a result of this unfortunate incident, operations at the terminal have been stopped until further notice; customs has also stopped operations due to damages to the system; and temporary traffic control is being implemented on main roads leading to the port. Facilities we use for our operations located close to the centre of the explosions have also been closed.
 
The above will cause delay to shipments scheduled to arrive or depart from the port of Tianjin/Xingang.

We are trying to identify any damage to the goods of our customers that were stored at / delivered to the warehouse or facilities nearby. Whereas for other shipments not yet arrived, we will advise the truckers to return the goods to their factories.

But even that email included information that not all terminals were non-operational:

While Tianjin Port Eurasia International Container Terminal (TECT) remains non-operational, the following five terminals have resumed operations:

  Five Continent International Container Terminal (FICT)

  Tianjin Port Alliance International Container Terminal (TACT)

  Tianjin Port Pacific International Container Terminal (TPCT)

  Tianjin Orient Container Terminal (ECTS)

  Tianjin Port No.3/4 Container Terminal (GS3 / GS4)

Large carriers, like MSC, were quick to reassure their shipping customers and partners. The email from them was as follows:

In the wake of massive explosions near Tianjin port on Wednesday 12th August, MSC would like to, in response, inform all concerned clients that Tianjin Pacific International Container Terminal (TPCT), called by MSC services is located at East Port Area, 6 kilometers from the blast site. Additionally, MSC vessels have been unaffected and MSC do not foresee further major disruptions to the sailing schedules.

All onshore operations have resumed functionality on 14th August, however, customs house will officially accept export and import declarations as of next Monday, 17th August but will provide interim services upon special request.

So it only took two days for port operations to resume in Tianjin, as could be read in the above from MSC and in similar updates from other carriers. However, there was one major change.

Hazardous Material Shipping Halted in Tianjin

On August 14th, Hapag-Lloyd sent a similar update as the MSC one above, which included the following information:

As of today, terminal operations and custom procedures have resumed operations. However, all hazardous cargo handling and related activities are subject to the local authorities’ approval and further instructions.

Please be advised that no new hazardous bookings from and to Tianjin (import and export) will be accepted until further notice.

Tianjin has halted hazardous materials from being imported and exported through the port. This will have a major impact for many U.S. shippers and major ports. The Journal of Commerce (JOC) reports:

Tianjin port has suspended the import and export of all hazardous cargo following two deadly explosions linked to dangerous cargo, forcing U.S. shippers to reroute their shipments through other Chinese ports.

That’s hitting shippers using the ports of Los Angeles, Long Beach and New York-New Jersey the hardest, as they are the busiest U.S. gateways for containerized hazardous shipments moving through Tianjin, according to an analysis of data from PIERS…

…

“Even if the importers of dangerous chemicals have issued letters of credit, they cannot get their cargo, and have to choose another port to load the chemicals,” a local source said.

…

Of the 256,405 twenty-foot-equivalent units imported to the U.S.  from Tianjin in the first seven months of the year, 4 percent, or 10,581 TEU, contained hazardous materials, according to PIERS,

Most of these hazardous containers were bound for the U.S. West Coast, with Long Beach receiving 27.6 percent, or 1,920 TEUs; Los Angeles 15.2 percent, or 1,612 TEUs. New York-New Jersey was the largest East Coast gateway, with 12.7 percent, or 1,343 TEUs. The major carriers of imported hazardous cargo  are Mediterranean Shipping Co., CMA CGM, and Hapag Lloyd, with 15.4, 14.9, and 12.3 percent of the market, respectively.

In the first half, the U.S. sent a total 130,013 TEUs to Tianjin, of which 7,020 TEUs were hazardous cargo….

Los Angeles-Long Beach and New York-New Jersey are also the dominant players in the export of hazardous cargo to Tianjin, with Long Beach sending 1,996 TEUs, Los Angeles 1,378 TEUs and New York-New Jersey 748 TEUs.

While many shippers and companies have reported loss and rerouting due to the Tianjin explosions, the shift in hazardous material shipping policy could very well be the biggest consequence on international shipping.

Source: China

The post Tianjin Explosions Effects On Lives & International Shipping appeared first on Universal Cargo.

To be clear, a merger has not happened yet. But first there were rumors. Then there were confirmed merger talks.  It seems all but inevitable that the rankings of the world’s largest shipping companies is about to shift.

Rumor spread that China Ocean Shipping Group Company (COSCO) and China Shipping Group are merging.

Those rumors of merger talks between the state-owned shipping giants put the financial market in an uproar.

On August 7th, the Journal of Commerce (JOC) reported:

The rumor that China’s two main shipping lines, Cosco and China Shipping, planned to merge was again wreaking havoc with the financial markets today as stock prices for the state-owned companies soared enough to lead to a trading halt.

Confirming such news is virtually impossible, but it doesn’t take much to spook China’s jittery financial markets. By the close of trading on the Hong Kong Exchange, Cosco’s share price had risen 13.56 percent and China Shipping Container Line (CSCL) was up almost 24 percent.

A Reuters article on August 11th moves the merger talks from rumor to reality with the halting of trading in the shipping companies’ shares:

The listed units of the two state-owned companies, including COSCO’s flagship ChinaCosco and China Shipping’s China Shipping Development halted trading in their shares from Aug. 10, adding that they were “planning major issues”.

COSCO and China Shipping Co. merging is a big deal. It is only natural to see a big reaction in the financial market at the news, and even rumors, of merger talk.

Gaining from 6 & 7 to 4

The Reuters article reports, “COSCO and China Shipping are currently the world’s sixth and seventh largest container shipping firms, respectively, according to consultancy Alphaliner.”

With a merger, the larger China-owned shipping company would make a significant jump from occupying the sixth and seventh largest shipping company spots to the world’s fourth largest shipping company in the world.

The JOC article projected:

A potential merger would create the world’s fourth-largest single carrier, controlling a good 8 percent of global container shipping capacity. The new entity would be solid on the Asia-Europe trades but would have less share of the market on the other trades.

The COSCO and China Shipping merged company would usurp the world’s fourth largest shipping carrier seat from Hapag-Lloyd, which became the fourth largest carrier by merging with CSAV.

The three largest container shipping companies in the world are Maersk, Mediterranean Shipping Co., and CMA CGM.

Updated Carrier Craziness Bracket

That’s right, I can’t let a major change in the standings of the ocean carriers go without updating my Carrier Craziness Bracket.

The Carrier Craziness Bracket started as a spoof on March Madness brackets to illustrate all the carrier alliances that were happening. Since its creation, the bracket has gotten out of control–broken as many times as your March Madness bracket after you finally decided to put money on it.

It is still easy to see how the world of international shipping carriers is shrinking. The merger between COSCO and China Shipping Co. will be one more step in the ever decreasing number of competitors shipping containers across the oceans.

Chinese Government Driving Force Behind Merger

China is looking to rule international shipping by 2030. China is restructuring, streamlining, merging companies, and allowing a larger private sector role in the country’s economy (and international shipping industry) in order to increase their competitiveness and even dominate globally.

That being said, it is the Chinese government pushing the companies into merger talks.

Reuters reports:

The report said the firms would set up a five-member working group to consider the merger plan, with three members from China Shipping and two from COSCO. China Shipping’s chairman, Xu Lirong, would head the team, it said.

While China is serious about this merger and reform to the state-owned shipping companies, as well as to the private sector of international shipping, this will be no easy task.

The JOC article helps illuminate what a task the Chinese government is undertaking:

… the merger would be driven by the the state-owned Assets Supervision and Administration Commission of the State Council, a powerful authority tasked with the modernization and restructuring of large state-owned enterprises.

… The integrated and complex nature of China’s state-owned shipping ownership structure has resulted in a dizzying maze of companies and subsidiaries, many interconnected and several with dual listings on the Hong Kong and Shanghai exchanges. 

Back in 2009, according to the List of International Shipping Operators, the Ministry of Transport approved 214 international shipping companies, about two-thirds of which were state-owned. Some were China-foreign joint ventures and the rest were private firms.

More than 60 of these 214 shipping companies are branches, subsidiaries and joint ventures of the three major state-owned shipping corporations. In fact, in terms of shipping capacity, the three major state-owned corporations comprise 71 percent of the gross tonnage, with 43.5 percent of the capacity held by Cosco alone, according to the Shanghai International Shipping Institute (SISI).

Of course, it always seems that when the Chinese government wants to do something, they make it happen. Don’t expect the complex web of shipping companies and subsidiaries to stop China from achieving this merger and combining COSCO and China Shipping Co. to form the world’s fourth largest carrier.

Source: China

The post COSCO & China Shipping Merger Rattles Market appeared first on Universal Cargo.

That’s 81 years the United States has had its Export-Import Bank! We may now be seeing the end of this federal agency.

Why Are We Blogging on This?

Matthew Matuse asked for our thoughts on the lapsing Export-Import Bank on our Facebook page.

We love getting questions and blog suggestions from you on our social media pages. We take you and your thoughts seriously and are always willing to blog on the topics with which you’re concerned.

Thank you for your question, Mr. Matuse. This blog will discuss the situation with the Export-Import Bank and then I’ll share my thoughts. As a disclaimer, I would not presume my opinion represents the opinion of everyone here at Universal Cargo Management.

What is the Export-Import Bank?

There’s a good chance the average American doesn’t actually know what the Export-Import Bank is. I’ve seen it referred to as obscure. So we start with the basic foundation of what the U.S. Export-Import Bank is.

As the official export credit agency of the U.S. federal government, the U.S. Export-Import Bank subsidizes foreign purchase of U.S. export goods.

Using loans, guarantees, and insurance programs, the Import-Export Bank makes export deals happen with customers who cannot or will not assume the credit risk involved with such deals.

Export-Import Bank Opposition

I actually blogged on this three years ago when reauthorization of the Export-Import Bank met resistance in Congress.

In 2012, Congress ultimately passed legislation to reauthorize the Export-Import Bank, but the agency was in danger of being dissolved then.

Reauthorizing the Export-Import bank met resistance on a couple counts. The first criticism is that the Export-Import Bank is the government stepping into the marketplace. This concerns many conservatives and Republicans.

Back then when I blogged on the Export-Import Bank, a Bloomberg Businessweek article by James Rowley on the topic quoted then Majority Leader Eric Cantor as he gave voice to many Republicans’ concerns that “export subsidies distort the free market and global trade.”

This first count brought against the Export-Import Bank from Republicans and conservatives has not subsided over the last three years. In fact, it represents a concern that may have even grown stronger.

Justin Amash, R-Cascade Township, who represents Michigan’s 3rd Congressional District, wrote a guest column, published on MLive, titled “Keep Export-Import Bank in its corporate-welfare grave“.

The title alone is enough to know Congressman Amash’s view on the Export-Import Bank; however, quotes help demonstrate why the Export-Import Bank is so strongly opposed by those like Congressman Amash:

On June 30, regular Americans won a big victory with the expiration of a particularly egregious example of cronyism, the Export-Import Bank, also known as Ex-Im.

Congressman Amash goes on to call the Export-Import Bank not only “cronyism” but also “corporate welfare”. He then states, “corporate welfare is inherently unjust and immoral.”

This idea of corporate welfare is the second major count brought against the Export-Import Bank. Most of the financial aid from the Export-Import Bank goes toward benefiting large corporations, and Boeing in particular.

In 2013, opponents of reauthorizing the Export-Import bank pointed out that $11 billion–a little over a third of the financial support given by the Import-Export Bank the previous year–supported Boeing sales of aircraft. Delta Airlines said this hurt their profits because the government was giving subsidies to their competitors for buying Boeing’s latest aircraft.

No real change came during the last three years after the Export-Import Bank’s reauthorization. Congressman Amash points it out in his guest column:

Ex-Im subsidizes the exports of mostly large, well-connected corporations. The top beneficiaries of Ex-Im’s support in 2014 included Boeing, General Electric, and Caterpillar — hardly companies in need of taxpayer assistance. Boeing alone received more than 68 percent of the benefits from Ex-Im’s long-term guarantees in 2014, which is why people derisively refer to Ex-Im as “Boeing’s Bank.”

The below chart shows exporters who receive financial assistance from the Export-Import Bank.

Conservatives and Republicans who oppose the Export-Import Bank argue this is not somewhere taxpayer money should go. As quoted above, Congressman Amash would even say it is immoral for taxpayer money to go to the Export-Import Bank’s programs.

Support for the Export-Import Bank

President Obama is pushing for Congress to reauthorize the Export-Import Bank.

According to an Associated Press (AP) article on USNews.com, the president “warned Wednesday that American businesses are suffering while the Export-Import Bank lapses…”

In a New York Times article (the one Mr. Matuse shared in the impetus for this blog), there are a couple quotes from President Obama that capture two of the biggest arguments given for reauthorizing the Export-Import Bank.

“The Export-Import Bank makes money for the U.S. government,” Mr. Obama said, referring to the loan repayments and proceeds from borrowers. “This is not a situation in which taxpayers are subsidizing these companies.”

The Export-Import Bank has a webpage titled “The Facts About Exim Bank“. That webpage states:

Over the past two decades, the Bank has generated nearly $7 billion more than the cost of its operations. That’s money EXIM Bank generates for the American taxpayer, to help reduce the federal deficit.

The next President Obama quote from the New York Times article representing an argument for the reauthorization of the Export-Import Bank is:

“For us to be the only country that leaves these outstanding companies high and dry makes absolutely no sense,” the president told reporters who were briefly admitted to his White House meeting with 10 business owners, two mayors and several Democratic lawmakers. “This should be a no-brainer,” he added.

The argument here is that losing the Export-Import Bank puts the United States at a competitive disadvantage with the rest of the developed nations in the world when it comes to the global market.

The AP article quoted above gives credit to President Obama as saying “the lapse puts the U.S. at a disadvantage because ‘every other advanced country has a program like this’ to promote its exports.”

In his push to get the Export-Import Bank reauthorized, President Obama has met with small exporters and is calling on their support. Proponents of the Export-Import Bank emphasize its financial assistance for smaller exporting businesses over corporate giants like Boeing.

The Export-Import Bank says on its facts page:

In FY 2014, Export-Import Bank financing supported $27.5 billion worth of U.S. exports. $10.7 billion of that total represents exports from U.S. small businesses, making small business exports the top category for EXIM Bank supported exports last year.

Here’s the Export-Import Bank’s pie chart of the 2014 Export Value by Industry and Small Business:

My Opinion on the Export-Import Bank

Okay, so I’m finally going to actually answer Mr. Matuse’s question. The only problem is, it’s a little complicated because I’m ambivalent on the subject.

Overall, I think the Export-Import Bank can aid the United States’ competitiveness in the global market and help U.S. exporters. For those reasons, I am for the Export-Import Bank, but I also have reservations and think amendments are appropriate with its reauthorization.

During the last reauthorization, greater transparency was pushed for by Republicans and put on the Import-Export Bank. Greater transparency is a very good thing.

The deal creating greater transparency and allowing the Export-Import Bank to get reauthorized in 2012 “directs the bank to make clear that loans are needed for such reasons as assuming risks the private sector won’t undertake or meeting competition from foreign export credit agencies,” according to the Jim Abrams Associated Press article from the time.

Again, that the Export-Import bank does not compete with the private sector is very important and I’m in favor of strong regulations on the agency ensuring that. When aiding businesses, especially corporations, the Export-Import Bank must be able to clearly show it is to meet competition from other countries in the global market not to undercut competitors from the U.S.

Amendment Time: Increase requirements to document above criteria.

It seems the transparency could be made greater than it currently is. The Mercatus Center chart above shows the top export beneficiaries of financial assistance from the Export-Import bank, but somehow the second largest business (with financial assistance valued at $2.9 billion) is unknown.

Unknown? Amendment time: More transparency.

Boeing receiving a competitive edge over Delta through the Export-Import Bank is a problem.

Amendment time: Regulation against favoritism of one U.S. business over another.

While on the topic of Boeing, the Export-Import Bank does subsidize corporations that do not really need this kind of help from the government.

Amendment Time: Increase regulation on the Export-Import Bank’s corporate financing.

One area that would largely affect whether or not to really support the U.S. Export-Import Bank is whether or not it actually makes money for the country or costs the country money.

According to the Congressional Budget Office (CBO), a nonpartisan analysis company that produces independent analyses of budgetary and economic issues to support the Congressional budget process, the “Ex-Im Bank’s six largest programs would generate budgetary savings of $14 billion under FCRA accounting but cost $2 billion on a fair-value basis.”

Not surprisingly, Congressman Amash pointed this out in his column.

Amendment Time: Independent, nonpartison accounting and overview must be used to keep costs/profits accountable.

So that’s where I stand on the Export-Import Bank–renauthorize it with ammendments increasing the regulation on the federal agency. Again, that is not the position of everyone here at Universal Cargo Management nor is it UCM’s official stance.

Where do you stand on Export-Import Bank. Let us know in the comments section below.

Source: Economy

The post Is the U.S. Export-Import Bank Finished? Should Exporters Be Up in Arms? appeared first on Universal Cargo.

After just over a year, the contract negotiation process between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) has come to an end.

The ILWU ratified the new contract between the PMA and themselves on Friday, May 22nd.

The PMA just ratified the contract days before on Wednesday, May 20th.

ILWU slowdowns and mini-lockouts from employers in retaliation had things so backed up at the ports during negotiations that imported holiday products never hit store shelves and U.S. agricultural exports rotted on the docks.

The ILWU press release announcing the ILWU members’ vote to ratify the 5-year contract by 82% quoted the ILWU president saying something we all already knew:

“The negotiations for this contract were some of the longest and most difficult in our recent history,” said ILWU International President Robert McEllrath.

But why?

Why were these negotiations so long and difficult? Why did shippers and the U.S. economy need to suffer as the PMA and ILWU worked out a new contract?

The sad fact is that there is no good answer to that question. It was long and difficult and fraught with union slowdowns and employer retaliations because that’s the way longshore contract negotiations on the West Coast are done.

Seriously.

It’s as infuriating as when you were a child and asked your parents why only to get the answer, “Because we said so.”

Consider this excerpt from a Bill Mongelluzzo article in the Journal of Commerce (JOC) that says the new contract is “no game changer” right in the title:

What is so disconcerting about the 2014-15 negotiations, compared to those of 2002 and 2008, is that those contracts brought significant change to West Coast ports. The 2002 contract opened the door for unlimited use of computerization and information technology at marine terminals. ILWU marine clerks fought those changes because they knew that loss of jobs would result. Employers were equally adamant that productivity could not advance without the use of computers and a free flow of information.

The 2008 contract was potentially the most revolutionary of the last three contracts. It gave individual terminals the unrestricted right to introduce automation —computer-controlled ship-to-shore cranes, unmanned horizontal ground transportation and automated stacking cranes in the yard — that could eliminate 40 to 50 percent of the ILWU general longshore jobs. The 2008 contract negotiations were relatively peaceful.

The contract that was ratified Friday is unremarkable in most every aspect. Going into the negotiations, the main point of controversy was supposed to revolve around who would pick up the tab for the estimated $150 million a year in additional medical costs associated with the so-called Cadillac tax in the Affordable Health-Care Act. In retrospect, the PMA had always paid 100 percent of the dockworkers’ healthcare costs, so why should the ObamaCare provision be any different? The PMA agreed to pay it.

Agreement on the Obamacare’s Cadillac tax between the PMA and ILWU was announced all the way back on August 26th, leaving the industry feeling positive about the progression of the contract negotiations.

I even posted a UCM blog titled “2 Reasons the ILWU PMA Contract Negotiations Will Resolve Soon” but it didn’t take long for the negotiations to fall apart like negotiations between the Detroit Lions and Ndamukong Suh.

There were, of course, sticking points in the contract negotiations. Jurisdiction over repair and maintenance of chassis and then the ILWU wanting to get rid of arbitrators who ruled against them are the issues that got reported.

Are these issues worth pushing shippers away from West Coast ports? Because that’s what happened.

Andrew Edwards, at the end of his Press-Telegram article about ILWU’s ratification of the contract, quoted Mark Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders Association:

Hirzel said West Coast dockworkers do their jobs well, but the prospect of future disruptions has motivated some shippers to divert their goods to other destinations.

“We’ve definitely lost freight, and I know customers that have proudly told me that they have 100 percent rerouted their containers from L.A. and Long Beach,” Hirzel said. “What shippers have said is, they’re willing to pay more for greater predictability.”

Apparently, both the PMA and ILWU recognize there is a need for change in the horrible process of longshore contract negotiations on the West Coast.

The JOC article quoted above also pointed out the PMA and ILWU addressing a problem with the current way contract negotiations are happening:

PMA President Jim McKenna told JOC.com at an event in New York last week the current process of negotiating contracts “is not sustainable.”

In an address to a Toy Industry Association meeting in Long Beach on Thursday, Bobby Olvera, president of ILWU Local 13 in Southern California, said he is a firm believer in action. When disputes arise on the waterfront, both parties should address them immediately rather than letting them fester until the next round of negotiations five years later.

But didn’t the PMA and ILWU see problems with the process back in 2002 when union slowdowns and employer lockouts resulted in the permanent loss of shipping business to West Coast ports?

What’s to say we won’t be going through this whole thing again in 2019? The process needs to change now. Not four years from now. When are we actually going to see that change?

Source: Shipping

The post ILWU Ratified Contract – But Will the Horrible Process Change?! appeared first on Universal Cargo.

“With three blasts from its horn, the freighter John G. Munson signaled the start of the Twin Ports shipping season on Monday,” reported Pioneer Press on TwinCities.com on Monday, March 23rd.

There’s still a great deal of ice in the Great Lakes as ships like the Munson begin making their way through the cold waterways to pick up and drop off cargo. Ice-cutting ships are out, helping make way through the Great Lakes.

The Pioneer Press article, mentioned above, speaks of a couple such ice-cutting ships and the optimism about the start to the shipping season in the Great Lakes:

The U.S. Coast Guard cutter Alder departed after the Munson en route to Whitefish Point, where significant ice cover will come between the Munson and the Soo Locks. The Coast Guard cutter Mackinaw will be working its way through the ice from the other direction.

Although ice still is prevalent in the eastern Great Lakes, this year’s shipping season should get off to a better start than last year’s, Yorde said.

“The industry felt it lost four weeks of shipping time (last year),” she said.

While the Pioneer Press highlights the optimism for a better start than last year, this year’s ice has already caused problems for Great Lakes shipping.

On the same day the Pioneer Press posted the story of the John G. Munson getting the Twin Ports shipping season started, the New York Times posted a story by Ian Austen and Mary M. Chapman featuring a cargo ship getting trapped in the ice of the Great Lakes.

The New York Times article begins:

The trip to pick up a load of iron ore powder in Conneaut, Ohio, was supposed to take four days by way of the Great Lakes.

But within sight of its destination, the cargo ship, the Arthur M. Anderson, got trapped in ice. Two heavy icebreakers from the Canadian Coast Guard eventually broke the vessel free.

It was a 24-day ordeal, and the ship returned to its home port in Wisconsin without picking up the cargo.

While shipping through the Great Lakes greatly slows in the late winter months, ships are still usually able to make short trips. Unfortunately, two harsh winters in a row have proven extremely costly for Great Lakes shipping that is crucial for a wide range of industries in the U.S. Midwest and Canada, not only in receiving needed cargo shipments but exporting goods to markets around the world.

The New York Times article helps give a good grasp on how costly the winter was for Great Lakes Shipping last year:

Last year’s ice-induced delays reduced early shipments from the United States by seven million tons, according to the Lake Carriers’ Association, which represents American shipowners. That amounts to about 10 percent of all American shipments on the lakes.

While this winter was a little less severe than last, it was still quite severe.

In 2014, ice cover peaked at 92.5 percent, according to the National Oceanic and Atmospheric Administration’s Great Lakes Environmental Research Laboratory in Ann Arbor, Mich. Ice persisted in some places until June. This year, ice cover was 89.1 percent.

As the shippers who were trying to move iron ore powder on the cargo ship Arthur M. Anderson already know, this year’s ice will have its effects and costs on Great Lakes shipping. Shippers are hoping that this year, the ice won’t cost a month of the shipping season.

For many cargo shipments that go through the Great Lakes, truck and rail simply are not viable options. For companies trying to recover from losses suffered by last year’s severe winter and ice delays in the Great Lakes, a loss of a month of cargo shipping through the Great Lakes this year could be disastrous.

Source: Shipping

The post Great Lakes Shipping Season Starts, But Ice Still Halts Cargo appeared first on Universal Cargo.

Today we take a break from blogging about all the things making the port congestion situation worse for shippers like ILWU job action, carriers’ congestion surcharges, and truckers strikes (yes, that’s happening again and we’ll look at the situation for Thursday’s blog) to look at a story in international shipping news that’s just plain weird.

That’s right, it’s time for another installment of Universal Bizargo, Universal Cargo Management’s series that spotlights the bizarre tales of international shipping.

31-year-old American tourist, Ryan McPherson was questioned by Bangkok police after he tried to ship preserved human body parts, including an infant’s head, a baby’s foot, and an adult heart to the United States, ABC News reported.

The body parts were stolen from the medical museums of one of Bangkok’s biggest hospitals, but McPherson claimed to buy the items from a Bangkok night market when questioned by Bangkok Police Col. Chumpol Poompuang.

The following is from the ABC News story by Thanyarat Doksone:

“He [McPherson] said he thought the body parts were bizarre and wanted to send them to his friends in the U.S.,” Chumpol said, adding that the man was questioned along with an American friend for several hours and released without charges.

Bizarre is right in the story itself. How could this not end up in Universal Bizargo?

The friend McPherson was questioned along with was 33-year-old Daniel Tanner. While the story of buying the stolen items at a Bangkok night market was apparently good enough to be accepted by the police and get the pair released, the two men did visit the museum from which the human body parts were stolen. That could just be coincidence, but it adds credence to the police’s several hours long interrogation of the two men. The ABC News story does say that “closed circuit television video did not show them taking any items away.”

There’s a good chance you haven’t heard the names Ryan McPherson and Daniel Tanner before, but this is not the first time they’ve ever showed up in the news for a weird reason.

There’s a good chance you’ve heard of McPherson and Tanner’s previous business venture, “Bumfights”.

Yes, it seems that these same two men pitted homeless people against each other in fights, filmed them, and successfully sold the videos back in 2002.

The ABC News article said Bumfights had “sales of about 300,000 copies at $20 each…” If my elementary math skills are not letting me down, that comes out to about 6 million dollars in sales. I guess with that kind of money, you could afford to travel to Bangkok and buy human body parts at a night market. But would you?

To go from producing Bumfights to showing up again in the news some years later for trying to ship human body parts from Bankgog to the U.S. that police said were labeled as toys, according to the ABC News story makes it seem like there may be something bizarre going on in the heads of these men.

I’m reminded of the “You might be a redneck…” comedy routines Jeff Foxworthy did in the late 90’s. For this story, I would change redneck to weirdo.

If you give bums cash and alcohol to fight on camera… you might be a weirdo.

If you buy human body parts at night markets in Bangkok… you might be a weirdo.

If you ship said body parts to friends labeled as toys… you might be a weirdo.

I’ll just end with one more if. If your weirdo activity involves international shipping… you might find yourself written about in a Universal Bizargo blog.

Source: Shipping

The post Universal Bizargo: American Shipping Human Body Parts from Bangkok appeared first on Universal Cargo.

As Monty Python would often say, “And now for something completely different.”
Today’s blog is all about logistics quotes. Usually when we talk about logistics quotes, we’re talking about international shipping pricing, but not today.

I stumbled across an Alexander the Great quote that is, well, great, albeit morbid. Perhaps if you’ve had things go wrong with an import or export, in your frustration you felt like killing your logisticians (whether freight forwarder, supply chain manager, drayage driver, etc.). Alexander the Great would actually kill logisticians if things went wrong. I guess you can do that if you conquer the known world.

Reading the quote, I wondered how many other great historical logistics quotes were out there. So I jumped on this handy-dandy thing we call the interweb and went searching.

When are you going to share this so-called great Alexander the Great logistics quote?!

I’m getting there. Here’s a list of great logistics quotes, including the Alexander the Great quote, ranked in a top 10 list according to how much I like them.

Runners Up:

Okay, we’re almost to that top 10 list I mentioned. First, here are a couple logistics quotes I liked, but didn’t crack my top 10. You may disagree with my ranking. Feel free to tell me all about how I’m wrong in the comments section.

“Creativity is an import-export business.” – Ethan Zuckerman

Since the above quote is more about creativity than logistics, it became a runner up. Still, I’m tempted to rank this quote–the only employing the words “import” and “export”, I might add–higher.

“Logistics must be simple–everyone thinks they’re an expert.” – Anonymous

This quote also would have made the top 10 if only it weren’t by Anonymous. I hate that guy. He says the most annoying things that get posted all over social media sites like Facebook and Twitter. Since the writer or speaker of this quote is anonymous, this only makes the runners up list.

“The war has been variously termed a war of production and a war of machines. Whatever else it is, so far as the United States is concerned, it is a war of logistics.” – Admiral E. J. King

Admiral E. J. King has another logistics quote that made the top 10 so cutting this one became easier. But still, this is a great historical picture of logistics, the U.S., and war.

But enough talk about quotes that didn’t make the top 10, here’s the actual list:

Number 10:

“The tactics…no, amateurs discuss tactics,…. Professional soldiers study logistics.” – Tom Clancy

I guess I don’t really think of Tom Clancy as a historical figure, but since he passed away a year ago and must have set some records with his prolific writing, it would probably just be snobbish of me to snub him from this list.

Still, I can’t bring myself to move Clancy up further than number 10.

Number 9:

“Behind every great leader there was an even greater logistician.” – M. Cox

I don’t even know who M. Cox is. Maybe you can help me with that information in the comments section below. But the simplicity and ring of truth in this quote help it edge out Clancy.

Its parallelism to “Behind every great man there’s a great woman” makes it feel less original and keeps it from climbing higher than 9. 

Number 8:

Logistical error. Number 8 was lost.

Number 7:

“You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.” – General Dwight D. Eisenhower

When Eisenhower spoke, people listened. If he spoke about logistics, it would surely have to make this list. Of course, this is a great quote no matter who said it.

Number 6:

“Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics.” – Tom Peters

The specificity and juxtaposition of toilet paper and bullets puts this quote over the top of the ones that preceded it. Its clarity and authority also help make this quote higher on the list. 

Number 5:

“The line between disorder and order lies in logistics…” – Sun Tzu

Sun Tzu has a tendency to creep me out sometimes, but he’s ever so quotable and nails it with this logistics quote.

Number 4:

“Logistics is the ball and chain of armored warfare.” – Heinz Guderian

Are you noticing a war theme in these logistics quotes? I guess that’s because logistics is the ball and chain of armored warfare. Thanks for pointing that out, Heinz.

Number 3:

“Know when to email vs. when to meet. Logistics are best handled over a non-immediate communication channel like email or Asana tasks. Detailed status meetings will suck the life out of your day.” – Justin Rosenstein

Amen, Justin. Preach it. I haven’t said that since I served with Pastor Justin Tarsiuk at the Oasis church in L.A.

Number 2:

“I don’t know what the hell this ‘logistics’ is that Marshall is always talking about, but I want some of it.” – Admiral E. J. King

Lol. The ability to make me laugh is enough to get Admiral E. J. King all the way to number 2 on this list.

And the top historical logistics quote is…

Number 1:

“My logisticians are a humorless lot … they know if my campaign fails, they are the first ones I will slay.” – Alexander the Great

Finally, the Alexander the Great quote that was talked up so much at the beginning of this blog. The sad part is logisticians still tend to be a humorless lot even without the risk of being slain.

“And now for something completely different…”

For the type of logistics quotes we usually talk about, international shipping freight rate pricing quotes, just click on the button below.

SOURCES (WHERE I FOUND THE QUOTES):

http://www.logisticsworld.com/logistics/quotations.htm

http://www.brainyquote.com/quotes/quotes/e/ethanzucke554843.html#hT4zKeGiBwxQsUiz.99

http://www.brainyquote.com/quotes/keywords/logistics.html#g73tRbs7SwPjL8CZ.99

http://www.thelogisticsoflogistics.com/2011/07/famous-logistics-quotes-2/

Source: Export

The post Top 10 Logistics Quotes appeared first on Universal Cargo.

“Suddenly beneath you swims the biggest creature there’s ever been. He sings a booming, lonely song into the empty blue.” My two-year-old son likes to say these words, quoting one of his children’s books, Under the Sea by Anna Milbourne and Cathy Shimmen as it describes the “gentle giant” that is the blue whale.

It has always seemed presumptuous to me that we say the blue whale is the largest creature that has ever been in the whole existence of earth, but if you ever saw a full-grown, 100-foot-long blue whale up close, it would be hard to imagine a bigger creature and even harder to imagine this creature being vulnerable to anything.

Yet, the giant blue whale does have vulnerabilities. One of the biggest dangers blue whales face comes in the form of giant cargo ships that sail across the oceans, carrying shippers’ imports and exports.

ThinkProgress reported in an article on Tuesday:

“One of the largest threats to whales right now is ship strikes,” said Sean Hastings, resource protection coordinator for the Channel Islands National Marine Sanctuary. “The slower ships go, the better chance whales have of surviving strikes, and presumably they also have more time to get out of the way.”

The article is about a coordinated effort of six major international shipping carriers to slow down their ships along the coastline of Santa Barbara to protect endangered whales and reduce air pollution.

It seems like we haven’t been hearing as much about “going green” lately as we did two or three years back when it was such a hot button topic.

Despite “going green” not seeming to be as hot of a topic as it used to be, organizations are still making moves to protect the environment. A few green stories are in the news right now.

Over the weekend, Australia launched “Green Army” recruiting young people for environmental conservation and rehabilitation projects, Detroit Lions’ quarterback Matthew Stafford along with his backup QBs practiced in green jerseys yesterday made out of recycled plastic bottles to promote recycling, and here we have six international shipping carriers about to slow down ships from around 21 miles per hour to under 14 miles per hour in this trial program to reduce pollution and protect whales.

The motives of the shipping companies may not be as altruistic as it sounds.

“The participating companies — COSCO, Hapag Lloyd, K Line, Maersk Line, Matson, and United Arab Shipping Company — will receive $2,500 per slowed-down transit…” according to the ThinkProgress article.

It goes on to report:

“This is a pilot program meant to show that ships slow down when given the incentive,” Shiva Polefka, a researcher for the Center For American Progress’s Ocean Program told ThinkProgress. “Once the data is in hand, higher level authorities with more funding may get involved to broaden coverage. What makes this program noteworthy is that local environmental advocates and managers got international companies to come to the table and start implementing a simple solution that reduces air pollution and protects marine wildlife.”

The program is meant to show that ships slow down given incentive? We already know carriers will slow their ships given incentive. Look at the move to slow steaming in the international shipping industry. Carriers adopted this practice because of the incentive of saving money on fuel cost with the added benefit of lowered emissions. Carriers save money while getting the PR benefits of going green.

Will ships slow down if you pay the shipping companies to look good by joining a going green initiative? Duh.

“… there is currently enough funding for 16 transits. However the coalition received more than 30 ship transit requests to be included in the trial and is seeking additional funding to expand.

What carrier wouldn’t want to slow down their ships in this transit (or any other, for that matter) to receive more money? With many carriers having years with losses in the billions of dollars, they’re all looking for ways to increase profits. Would they slow down ships if the only incentive was environmental benefits? Now there’s a question.

I don’t actually think the program is about showing ships will slow down if given the incentive, but about the environmental benefits that will be seen by getting ships to slow down.

SIMILAR STORIES:

Slow Down Shippers, Watch Out for that Whale!

Freight News: Cargo Ships Ramming Blue Whales in Sri Lanka (w/ video)

Slow Steaming (SS) or Super Slow Steaming (SSS) for Container Shipping Part I

Slow Steaming (SS) or Super Slow Steaming (SSS) for Container Shipping Part II

Of Cholera and Kings: How Ballast Water Can Increase Shipping Costs (w/ video)

Freight News: Alaska Shipping Rates Vs. EPA Cargo Carrier Fuel Rules

The Green Standard Part I: Ocean Shipping Lines on the Global 100 List

The Green Standard Part II: Is a Company Green Enough?

Source: Green

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עֲזָאזֵל – Azazel (az-aw-zale’)

‘Bind Azazel hand and foot, and cast him into the darkness: and make an opening in the desert, which is in Dudael, and cast him therein. And place upon him rough and jagged rocks, and cover him with darkness, and let him abide there for ever, and cover his face that he may not see light. And on the day of the great judgement he shall be cast into the fire…. And the whole earth has been corrupted through the works that were taught by Azazel: to him ascribe all sin.’

— 1 Enoch 10:4-9

Azazel is a cool sounding name, but you may want to avoid giving it to your son.

In the incredibly fascinating First Book of Enoch, Azazel was one of the fallen angels known as the Watchers. Chapter 6 of 1 Enoch explains that the Watchers “lusted after” the “beautiful and comely daughters” of men. So these angels left heaven, took the beautiful women as their wives, and corrupted people.

Azazel in particular was a corruptor:

And Azazel taught men to make swords, and knives, and shields, and breastplates, and made known to them the metals of the earth and the art of working them, and bracelets, and ornaments, and the use of antimony, and the beautifying of the eyelids, and all kinds of costly stones, and all colouring tinctures. And there arose much godlessness, and they committed fornication, and they were led astray, and became corrupt in all their ways….

— 1 Enoch 8:1-3

It would seem from 1 Enoch that the Watchers were much to blame for things getting so bad God had to send a flood and press the reset button on humanity with Noah.

Blame is what brings us to what we’re talking about in this quarter’s Word of Wisdom.

The Hebrew word transliterated “azazel” appears in Leviticus of the Hebrew Bible. Strong’s Exhaustive Concordance of the Bible translates azazel as goat of departure or scapegoat.

Ooh, scapegoat. Now there’s a word with negative connotation. No wonder “Avoid Azazel” starts the subtitle of this Word of Wisdom. Not only does that Azazel character sound nasty, but no one wants to be a scapegoat.

A scapegoat is someone or something that undeservingly takes the blame belonging to others.

You know what else no one wants? A boss who scapegoats. If you’re a business owner or a leader in a business, there are few better ways to sabotage that business and your position in it than scapegoating.

Ah, finally, the Word of Wisdom gets to business.

Passing the blame for business failures or personal failures on things other than yourself, even on things that seem innocuous like the economy or weather, is a fast way to lose respect. Even worse is making an employee a scapegoat.

A company where people get scapegoated will quickly see the morale and loyalty of its staff drop off. Even if the staff is not being scapegoated, if employees see their boss blaming other things than himself or herself for failures at the company, respect falls along with productivity and personal responsibility from staff members. After all, a team will follow suit from its leader.

A good leader has to be able to make decisions, even tough ones, and then take responsibility for the good and bad results. President Truman was fond of the saying, “The buck stops here.” He even had a wooden sign on his desk displaying that phrase which reminded himself and others that the tough decisions had to be made by the president and he was responsible for their results.

If you’re president, CEO, owner, or a leader at your company, maybe you should get one of those signs for your desk and see what kind of difference it makes for your staff when you have a “the buck stops here” attitude.

For several years, I led a drama team for Oasis Youth. During one service, the team was supposed to perform a skit but was not ready to go. I stood up in front of the entire youth group and youth leaders at the service and let them know that there would be no skit from the drama team that day because I had failed to properly prepare them. It wasn’t my team’s fault they couldn’t perform. It was my fault. It was my job to prepare them for performances. I wasn’t going to blame circumstances or scapegoat anyone on the team. There would be no azazel, allowing the responsibility to move away from me.

While standing in front of everyone and confessing that I had failed was humbling and felt like a weakening of my leadership in the moment, it had the opposite result of weakening my leadership with the drama team. Afterward, they were willing to put in extra work at memorizing lines and preparing skits for performance while taking direction from me much more enthusiastically than they had before.

I believe that was a direct result of my being unwilling to scapegoat in that moment of failure.

Many of us are familiar with the word scapegoat, but are not familiar with the word’s origins.

In Leviticus 16, the scapegoat (or azazel) was part of the atonement process for Israel. The priest would confess the people’s sin over a goat, symbolically placing their sin on the goat’s head. The goat would then be released into the wilderness.

This blog has been built on the premise that one should avoid azazel. But there is a piece of the azazel process (if I can call it that) which really should not be avoided. That’s confessing failure. Instead of trying to cover up a mistake or blame something else for it, watch how much better your business will perform when you own up to mistakes and learn how not to repeat them.

Even though this blog didn’t talk about international shipping, we are a freight forwarder always ready to help you with your importing and exporting. (And this blog could apply as much to a shipping business as any other).

Source: Shipping

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Yes, it’s another story of shrinking carrier competition in the international shipping industry.

China Ocean Shipping Co., perhaps better known as Cosco, and China Shipping Co. are forming an alliance.

The international shipping industry has gone through some tough years of late, but we’ve often blogged about unfortunately timed ship ordering, overcapacity, and economic downturns pushing carriers into losses so we won’t do it again in this blog. What we will point out again are all the carrier alliances being formed.

Back in January, we did a Hunger Games of the Sea blog series about the moves and counter moves shipping companies have been making in attempts to dominate or just survive in the tough international waters of cargo freight shipping. The biggest focus of the series was on all the alliances being formed between carriers.

There’s the G6 Alliance between Hapag-Lloyd, NYK Lines, Orient Overseas Container Line, Hyundai Merchant Marine, APL, and Mitsui O.S.K. Lines; the CKYH Alliance between COSCO, K Line, Yang Ming, and Hanjin that Evergreen joined forces with; and the—dare we speak its name—P3 Network Alliance.

The P3 Network is between the three largest carriers in international shipping: Maersk, Mediterranean Shipping Co., and CMA CGM. This has caused many to fear what will happen to the market when this alliance goes into action.

We shouldn’t have to wait much longer to find out. The U.S. Federal Maritime Commission (FMC) is expected to approve the alliance this month. With conditions attached to ensure fair treatment for smaller competitors, freight forwarders, and fuel providers, of course.[1] I think I can already feel some readers from those groups rolling their eyes at that.

The Wall Street Journal had a nice quote on the FMC approving the P3: “The FMC already sees this as more of a partnership rather than a merger, so if it gets the necessary safeguards for fair competition, the P3 will be approved.”

Of course, full out mergers are not out of the question in the battles carriers are waging for market share.

Hapag-Lloyd and CSAV are working on a merger between their respective shipping companies.

But what we’re adding to the list right now is the alliance between Cosco, the world’s 5^th largest container shipper and China Shipping Co., the world’s 9^th largest container shipper.

There are some who even speculate that this alliance could be the first step toward an actual merger. Check out this from the Wall Street Journal:

“The agreement does not constitute merger talks, but it represents a solid step towards becoming a consolidated Chinese container carrier,” said Alan Murphy, chief operating officer at container shipping consultancy SeaIntel Maritime Analysis, in a note.[2]

These two companies used to be fierce competitors. That they’re able to put aside their history battling each other says a lot about how carriers are viewing the international shipping industry today.

So we keep seeing the oceans of carrier competition shrink. It seems summed up well by a Zhang Yongfeng quote in the Wall Street Journal. Yongfeng is deputy director at the Shanghai International Shipping Institute and his words were:

“It is increasingly challenging for a standalone shipping operator to operate on international trade lanes.”

Perhaps the thoughts and feelings of the carriers about that challenge could be summed up simply with the two word expression that also conveys my thoughts and feelings as I’m trying to potty train my son: “Oh, crap.”

Source: China

The post Carving Carrier Competition: Cosco & China Shipping Form Alliance appeared first on Universal Cargo.

UPDATE FROM GLOBAL NEWS: “Unifor says agreement has been reached. It will be taking the agreement to members no later than Saturday. Protests will remain in place until then. Non-union truckers also say they support the agreement.”

—http://globalnews.ca/news/1191334/truck-drivers-at-port-metro-vancouver-could-be-going-on-strike-at-noon/

Yes, there already has been a truckers’ strike happening at Port Metro Vancouver. But today at noon is when it is scheduled to go full scale.

The non-unionized truckers started striking last week on Wednesday. Then the unionized truckers voted unanimously to join the strike.

Noon today is when the strike is expected to go full scale.

Leading up to today, Port Metro Vancouver has managed to keep all its terminals operating despite reports of violence, intimidation, and sabotage of trucks and truckers entering and exiting the port.

Gavin McGarrigle, the B.C. area director of Unifor, said the issues the strike is over “are pay rates and undercutting by some companies, as well as costs being downloaded onto container truckers and long wait times.”[1]

Already struggling with long wait times, Port Metro Vancouver has been feeling the pressure of this strike. But they have made moves in an attempt to avoid it.

Besides the federal injunction against truckers disrupting operations at the port, Port Metro Vancouver has agreed “in principle” to an eight-point plan to resolve work stoppage that was created by the BC Trucking Association and the shipping industry.[2]

Without getting into detail, the eight-points of the plan are:

1. Terminals to develop recovery plans to ensure a quick return to fluidity after the resolution of the current trucking disruption.
2. Extend gate hours at terminals Monday through Friday.
3. Adopt industry-wide funding to support extending terminal truck gate hours.
4. Commitment to conduct full rate audits of all trucking companies licensed through the Port Metro Vancouver Truck Licensing System.
5. Waiving of Terminal Gate Compliance Fee.
6. Terminal Gate Efficiency Fee to be paid to trucking companies impacted by terminal truck processing delays.
7. Terminate the Independent Operator Permits of any owner-operators involved in harassment, intimidation, property damage or other disruptive behavior affecting the flow of traffic to and from the port. Terminate the licenses of full service operators deemed to be in noncompliance of the 2005 Memorandum of Agreement.
8. Lift the Independent Operator Permit moratorium to offset the loss of owner/operators whose permits have been revoked due to disruptive behavior during work stoppage.[3]

Port Metro Vancouver also has ongoing improvement and construction plans for their infrastructure to bring down wait times at the port to help them reach reduced wait time goals talked about in our last blog.

But it does not seem that any of these things are going to stop this truckers’ strike from happening today at noon.

So far, carriers have not announced ships being diverted from Port Metro Vancouver, mainly do to the fact mentioned above that the port has managed to keep all terminals operating through the labor dispute so far.

Maersk, for example, communicated to their customers last week after the non-union truckers began their strike that “All terminal gates remain open and the terminal is fully operational and secure. The current vessel schedule remains unchanged… The rail cargo also continues to move off the terminal.”

But now that the unionized truckers are about to join the strike, that scenario could change and many are speculating cargo ships and shipments will be diverted to other ports. The Port of Seattle is top on the list of ports likely to gain from the troubles of Port Metro Vancouver.

International shipping experts and the port say this strike has already cost the port in shippers diverting their shipments to other ports like the Port of Seattle.

To get a feel for how costly this truckers’ strike could be for Port Metro Vancouver, here are some numbers reported by The Vancouver Sun:

Port Metro Vancouver said Tuesday that local trucking moves about 1.3 million TEUs (twenty-foot equivalent units) of containers per year and that based on the 2011 economic impact study figures, the value of those goods would be approximately $46 billion per year, or $885 million worth of cargo moved by truck weekly.[4]

We’ll keep an eye on this situation and keep you updated.

The UCM Ops Team works hard on the routing of your imports and exports so your shipments go as smoothly as possible even when things like strikes hit at ports.

SOURCES:

Source: Export

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Intimidation. Brake lines cut. A thrown rock smashing through the window of a truck traveling 70 kilometers per hour on the highway.

It’s getting real at Port Metro Vancouver!

Port Metro Vancouver posted the below security video on Youtube ellegedly of United Truckers Association (UTA) members stopping a truck trying to gain access to Port Metro Vancouver and sabotaging it. The video helped the port gain a federal injuction to prevent protesting truckers from disrupting port activities.

Port Metro Vancouver is the biggest port in Canada, eh? The same Canada that our media likes to make fun of, stereotyping it as overly friendly and passive?

I guess it’s not so passive when it comes to cargo trucking.

We haven’t really talked much about the truckers’ strike happening at Port Metro Vancouver. But you’d better believe we’re paying attention to the situation. And other shipping industry professionals, including carriers/shipping lines, are watching very closely too.

The situation keeps heating up. So what’s going on at Port Metro Vancouver?

It’s been a hard winter for truckers all over North America. Unusually harsh winter weather, especially in the Midwest and East Coast, has caused delays in the supply chain and been very difficult and costly for truckers.

Many truckers who pick up import cargo and drop off export cargo at Port Metro Vancouver have had enough.

Last week, on Wednesday, non-union members of UTA went on strike at Port Metro Vancouver over wages and wait times for picking up cargo. Then on Saturday Unifor members, the unionized UTA colleagues of the truckers already striking, voted unanimously to join the strike.

“… members voted 100 per cent in favor of job action over long line-ups and wait times at the Port of Vancouver taking money out of truckers’ pockets.” [1]

It seems everyone, even the port, agree that wait times are too long; however, Port Metro Vancouver has presented numbers in a press release to suggest the average truck is not waiting excessively long at the port:

Though recently wait times have occasionally been long due to unusually severe weather in the east and elsewhere, GPS data shows the average truck wait time is well within industry standards. Sixty-four per cent of trucks are waiting less than one hour to pick up or drop off cargo, while less than 5% are waiting longer than two hours.[2]

Obviously, truckers don’t think that’s good enough. But Port Metro Vancouver doesn’t appear satisfied with these wait times either as they are working on improvements. The port went on in the press release to say:

We are working with terminal operators and key stakeholders to reduce wait times. The goal for 2014 is to reduce wait times to less than one hour, 75% of the time. The long-term goal is to have 100% of wait times under one hour.

Work being done to reduce weight times for truckers couldn’t prevent a truckers’ strike. It’s important not to forget that wages are a key factor in why truckers are striking.

“Container truckers, like workers across this country, make the economy work,” said Unifor’s national president, Jerry Dias, in a statement. “They deserve to be compensated fairly for their role in generating wealth, but if workers can’t share in that wealth, we’ll help shut that port down until they get it.”[3]

Wages are set by trucking companies, not ports. Trucking companies under bidding each other to get business from shippers plays a large role in pushing truckers’ wages down. Of course, shutting down the port hurts trucking companies and shippers alike.

Despite the strike, all terminals at Port Metro Vancouver have remained open and operational. Though you could not say operations at the port have not been affected.

Since the strike began, there have been reports of intimidation, sabotage, and violence against truckers who are still attempting to access the port.

Even after the injunction to stop disgruntled truckers and others from impeding any individuals or vehicles from entering or exiting the port, these reports of violence and threats continue.

The most dramatic example of violence connected to the truckers’ strike I’ve seen so far is the one mentioned in the opening. A trucker was hit in the head by a rock thrown through his window as he was driving 70 kilometers per hour. The assault could easily have killed him and other motorists on the highway.

Here’s a CBC News video on the story:

We’ll have more on the truckers’ strike at Port Metro Vancouver in our next blog.

Source: Export

The post Violence, Sabotage & Strike: What's Going On at Port Metro Vancouver? appeared first on Universal Cargo.

If you follow our blog, you probably know about UCM’s most recent contest giveaway, “The Box”, where the winner could pick a tablet of their choice as the prize.

In January, we announced the winner of “The Box” contest is Peter Vickerman, who chose the Microsoft Surface 2 with regular keyboard cover and 32GB storage.

Congratulations, Mr. Vickerman and excellent choice!

In the time that has passed since January, I got the chance to catch up with Mr. Vickerman and ask him a few questions about his business.

Peter Vickerman is President of Vickerman Company.

Here’s a quick profile of the company:

“Vickerman Company is an importer and wholesaler of quality seasonal decorations including traditional and realistic artificial Christmas trees, wreaths, and garlands. In addition, the company offers other realistic looking holiday foliage, Giant Christmas trees and a full line of unique display trees.” —http://www.vickerman.com/#about

To get a better feel for this successful importing business, below is a Q & A with Mr. Vickerman.

Q: What role does international shipping play in your business?

A: It plays a major role in our product cost since 98% of our product is imported.

Q: What’s your favorite part of your business?

A: Working with customers in our showrooms.

Q: What made you want to go into seasonal decorations?

A: It’s been in our family since 1940 when my grandfather started selling Christmas lights.

Q: How did you get started?

A: I worked for my father, beginning in 1981 and my first trip to Asia was in 1987.

Q: What’s the biggest Christmas tree you’ve ever sold?

A: 48’ Tall.

Q: Is your house the best decorated one at Christmas time or do you not take your work home with you?

A: Unfortunately, my busiest months are October through March with travel to our Atlanta and Dallas showrooms during December and January so you will only find a 2’ Christmas tree in my house.

 Q: What has been one of the biggest challenges for your business?

A: Managing growth.

Q: What accomplishment are you most proud of?

A: Taking the business from a local 5 state area business to nationwide [with] some international presence.

Q: Being around since 1940, Vickerman Company has been going strong for nearly 75 years. What are keys to maintaining long-term business success?

A: Taking care of your customer with integrity, quality, and service.

Q: What advice would you give to an entrepreneur looking to start a business in which they import products?

A: Make sure you know who you’re dealing with.

The last thing I wanted to know was if a tree falls in the forest and nobody’s there to hear it, how can it become a Christmas tree? But Vickerman Company and its president weren’t about to give up that trade secret.

A big thank you goes out to Peter Vickerman for taking the time to answer these questions.

Congratulations again on winning the tablet through Universal Cargo Management’s “The Box” contest. May Vickerman Company continue to thrive for another 75 years and beyond.

Make sure you’re subscribed to Universal Cargo Management’s blog so you’ll be able to enter our next giveaway contest.

And you don’t have to win a UCM contest to have your company put in the spotlight on our website. Getting your company spotlighted is easy! Just visit our Customer Spotlight Page and share your story with us.

As always, we’re also ready to help you with your international shipping, whether importing seasonal items like Vickerman Company, exporting year-round goods you manufacture, or anything between.

Source: Export

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by Jared Vineyard

The Asian Exporters Index from eBay revealed many Chinese exporters are making over a million dollars annually selling on eBay.

What’s happening is many businesses and manufacturers in China are shifting from a business-to-business sales model to a business-to-consumer model. Where importers in the U.S. would buy wholesale from a manufacturer in China and sell to consumers here, the Chinese manufacturer is selling straight to U.S. consumers using sites like eBay and Amazon.

As an American importer, or a person with an entrepreneurial mind looking to get into importing and selling goods on eBay, this shift of cutting out the “middle man” (or middle woman or middle business) may make you nervous. After all, the “middle man” being cut out is you! You can’t really compete with the manufacturer on a price point basis if you’re trying to sell the same items to the same consumers.

Take a deep breath. Try not to worry.

There are still distinct advantages you have as an American importer selling on eBay (or Amazon, your own site, etc.) in this market over Chinese exporters who are selling directly to consumers using eBay. It’s also good to remember that you don’t compete strictly on a price point basis.

Below are 3 advantages you have as a U.S. importer selling on eBay in the American marketplace over Chinese exporters selling here on eBay.

It should be noted that this is not meant to be a complete list of advantages nor that there are no advantages held by those manufacturers who export from China.

1 – Better Knowledge of the Market

You know the American market better than your Chinese counterpart.

How can I be so sure about that?

You are part of the market. You’re not observing the market from a distance. You’re in it every day. You can have confidence in your instincts and tastes when it comes to products for the U.S. market because you developed your tastes growing up inside the American market and have been influenced by American culture your whole life.

Most Chinese exporters are smart, probably study our market, and even have a genuine love for American culture. But they don’t have the same intimate relationship with it you have.

I’m not saying you shouldn’t still study the marketplace you’re selling in, just that being part of it gives you the edge in this category.

This advantage will help you in many aspects of selling products from the marketing material of pictures and descriptions to the selection of products to sell.

Speaking of selecting products to sell, that brings us to…

2 – More Product Flexibility

Importing goods from China (or anywhere around the world), as opposed to being the manufacturer trying to export and sell your own products, gives you much wider options in what you sell.

You’re not limited to selling a particular product or line of products because that’s what you produce.

If you find an item doesn’t sell well, you can easily shift to another. You have all the manufacturers of the world to choose from instead of your own operation’s products.

This ability to change and adapt easily with trends and selling performance of products in the market gives you, the American importer an advantage over the Chinese manufacturer who exports into your market.

3 – Faster Shipping

More and more consumers have an “I want it now” mindset.

When it comes to selling on eBay, shipping time makes a difference. And you hold the advantage again in this category.

I sell books of church skits and scripts online and know first hand how shipping time can affect sales. Selling books I have on hand has a distinct selling advantage over the longer shipping time of selling books print-on-demand. The instant gratification of e-books takes it to a whole ‘nother level.

International shipping has gotten faster, especially with things like the USPS deal made with eBay and China Post to help China exporters ship from China to the U.S. faster and easier. But shipping purely domestically, you still have better shipping times and are able to get products to consumers faster than Chinese exporters.

Advantage you.

How To Import for Selling on eBay

It’s easy to look around and see negatives, but hopefully this blog pointing out a few of the advantages you have for selling on eBay as an importer helps keep your outlook positive.

The next blog in this 3 part series about successfully selling on eBay will look at how you import for selling on eBay.

Source: China

The post 3 Advantages For US Importers Selling On eBay Over Chinese Exporters appeared first on Universal Cargo.

There’s a heated debate over a legal right happening in the U.S. There are several, aren’t there? I’m not referring to the pro-life/pro-choice abortion debate. Nor same-sex marriage. I’m not even talking about legalizing marijuana. The debate I’m talking about will likely affect every average American personally while the average American probably has no idea the debate is even happening.

To export or not to export? That is the question.

The debate is whether or not lift the ban on the exporting of U.S. oil. Hanging in the balance of this debate is how much you pay for gas.

A Brief History

NPR has a nice article which goes into this history with a bit more detail. But I’ll be quick here.

-In 1973, the Organization of the Petroleum Exporting Countries (OPEC)–whose founding members are Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela–start an embargo stopping oil shipments to the United States.

-Oil, and therefore gas, prices dramatically increase.

-In 1975, Congress enacts the Energy Policy and Conservation Act which bans the export of American produced oil with the goal of creating energy independence for the U.S.

The Debate

The world oil situation, especially as it pertains to the U.S., has changed since the 70’s, hasn’t it? Should the U.S. ban on exporting oil from the 70’s be lifted? Is lifting the ban in the nation’s best interest?

Last week there was a Senate hearing on this topic. You can watch a video of the hearing here (but you should skip about 40 minutes into the video for it to start).

Will Lifting the Export Ban Increase Gas Prices?

Right at the center of this debate is how much you and I will pay at the gas pumps if the ban on oil exports is lifted. There are extremely different views on whether lifting the ban will cause higher gas prices.

The biggest argument against lifting the ban is the concern that it will increase gas prices in the U.S.

Sen. Cantwell, very concerned over gas prices, made a statement at the hearing last week and said, “When a congressional research gave an informal back of the envelope estimate about this particular issue on exports, it’s saying consumers could pay as much as 5 to 10 cents per gallon if the ban is lifted.”

Many are concerned that gas increases could be much higher with oil companies able to sell to the world market at much higher prices than they currently can domestically and dependence on foreign oil will increase but could be severely affected by conflicts and natural disasters.

Mr. Daniel J. Weiss, Senior Fellow and Director of Climate Strategy brought up what appears to be the closest thing to a case study to support lifting the ban could increase gas prices:

The only experience we’ve had in the United States of lifting export prohibition occurred during the 1996 removal of a ban on Alaskan oil exports. During the ban, much Alaskan oil was shipped to the West Coast. A congressional research service analysis found that lifting the oil ban tripled the already existing price difference between West Coast and national gasoline prices. CRS concluded that “when Alaskan exports ceased, the gasoline price differential between the west coast and the national average did decline.” Lifting the nationwide crude oil export ban could similarly raise gasoline prices.

But on the other hand, there are those who argue lifting the ban could actually lower gas prices.

Bloomberg has an opinion article titled Want Cheaper Gas? Lift the U.S. Oil Export Ban by Mary Duenwald.

In it, Duenwald brings up the basis for the argument that gas prices will rise by removing the ban. She says, “This argument is largely based on the price of U.S. crude, now about $10 a barrel lower than the global oil price.”

Then Duenwald refutes the argument with:

…U.S. refiners can take advantage of lower U.S. oil prices, but they don’t necessarily pass along their savings to American consumers.

After all, even though U.S. oil producers are confined to the North American market, U.S. refiners do business around the world. They sell diesel to Europe and South America, and gasoline to China. Thus, refined products in the U.S. are still heavily influenced by global prices.

Duenwald goes so far as to say “there is no reason to expect [lifting the ban] would raise consumer prices in the long term. In fact, it might even lower them — by removing a barrier to the global oil trade.”

To support lifting the ban would actually lower gas prices in the long run, Duenwald quotes Amy Myers Jaffee, an energy expert at the University of California at Davis, who says, “The less bottlenecks in a market, the less distortions there are. And generally the less distortions, the lower the price.”

Why Export Ban Debate is Heating Up Now

Sen. Landrieu said at the hearing last week, “We are witnessing an energy revolution in the country today, producing more energy at home here today than we have in decades.” She cited an EIA prediction that this year 8.5 million barrels of oil will be produced per day, which is 1 million more barrels a day than in 2013 and said this is nearing the record of 9.6 million barrels a day that was last reached back in 1970.

Sen. Landrieu went on to say that this 8.5 million per day number could be increased substantially by new technologies and opportunities.

We’re seeing something of a boom in U.S. oil. Allowing American oil companies to enter the global market would certainly be extremely profitable for them. It could also create jobs and give a boost to the U.S. economy.

But would that be at the cost of higher fuel prices and less energy security? And will this debate turn into a big government vs. big business argument.

Most of our readers are international shippers, whether exporters or importers, and know the benefits of international business. Do you think crude oil companies should be allowed to take advantage of the world market place?

—

Sources:

http://www.npr.org/2014/02/01/268942696/a-global-bathtub-rethinking-the-u-s-oil-export-ban

http://www.bloomberg.com/news/2014-02-03/want-cheaper-gas-lift-the-u-s-oil-export-ban.html

http://www.energy.senate.gov/public/index.cfm/hearings-and-business-meetings?ID=4257c751-1911-4467-aaa5-0ff7863777fa

Source: Export

The post Affordable Gas Prices May Depend On Export Regulation appeared first on Universal Cargo.

Guest Blog by Gareth Collins

Freight shipments may weigh quite a bit and their storage needs special care, so if you’re planning on shipping cargo of your own you should do your best to leave the job to the professionals rather than trying to handle things yourself. If you are keen on doing the preparations by yourself, you should follow some basic tips, such as the following:

• Load up your shipment on a pallet. You should make sure you find the right size pallet for your needs and the cargo you’re planning on palletizing. When you do that you will make the end costs smaller as well as protecting the cargo further against damage. In all cases you can work with either used or new pallets to get the job done, just remember to double-check them for integrity and strength so they won’t fall apart. Putting the items on the pallet as close as possible will allow you to protect them as much as possible while keeping them compact as well. Shrink-wrap the entire pallet as close and tight as possible, bracing all items against each other in the process.

• Put your pallet down for easier wrapping on top of another pallet. That way you won’t have to bend too far and you will have a stable base. You could even place the pallet at a 45-degree angle if you have the space for it so it will overlap with those underneath it for greater stability.

• To wrap the pallet down you should start by doing the following: Peel off a few feet of shrink wrap and use about eight or so inches of it to create a ropey end so you can squeeze it through one end of the pallet where you should tie it up. You should avoid making a knot as it will be hard to make one, you could just wrap it around until it holds so you’ll have an easier time wrapping the rest of the pallet. This will keep the loose ends from unwrapping.

• Wrap the base of the pallet in the direction of your choice and make sure you do so several times on a single spot so the wrap will hold. This is a very important step that keeps your cargo safe from spilling all over the place so don’t skimp out on the shrink-wrap. Pull the wrap tight along the cargo and make sure it’s as secure as possible, then tuck the end of the wrap in once you’re done with it.

• You will want to aim at making the entire pallet a single unit capable of moving as one without anything falling off of it. Make sure you wrap things as thoroughly and strongly as possible before you consider them ready for transport with several layers on top of each other.

This was a guest blog by Gareth Collins.

Click on the Guest Blog image above to email Raymond Rau if you would like Universal Cargo Management to publish an original blog from you.

Source: Shipping

The post Cargo Shipping Tips and Guidelines for Palletizing Cargo appeared first on Universal Cargo.

by Jared Vineyard

Universal Cargo Management blogged previously about how melting ice in the arctic is opening up new shipping lanes. Climate changes and global warming have made advantageous new routes possible that could save huge geographical distances for international shipping.

But arctic and ice cap melting is not all good for international shipping.

While countries are getting excited about capitalizing on international shipping through arctic routes like the Northern Sea Route or even the possibility of going directly through the north pole, melting ice down in the Antarctic is giving reason for concern.

The Independent reported last week that a giant iceberg broke off of Antarctica and could drift right into shipping lanes.

A similar, but separate, occurrence was reported by The News two days later. An iceberg broke off a glacier in the Antarctic that could drift into shipping lanes. This iceberg is 33 square miles or the size of Manhattan, The News reported.

The News went on to report that scientists say icebergs of this size break off of glaciers every two years on average and can survive a year or longer as they drift. The risk being that they will drift into shipping lanes and put ships into danger.

The risk goes beyond the danger to ships. The News quoted Professor Grant Bigg from the University of Sheffield as saying, “If these events become more common, there will be a build-up of freshwater which could have lasting effects.”

For a little perspective, the iceberg that sunk the Titanic is believed to have been around 80 feet tall and 200 feet wide. Assuming the width and length of the Titanic sinking iceberg were both 200 feet, it would take a little over 871 of them to equal the size of the iceberg that broke off the glacier in the Antarctic.

But that’s nothing compared to the iceberg that The Independent reported about breaking away from Antarctica.

They reported that this iceberg is 270 square miles, 8 times as big as Manhattan or equivalent to the size of Singapore.

This gigantic iceberg was part of the Pine Island Glacier which is part of the Western Antarctic ice sheet.

The British government gave experts, headed up by the University of Sheffield’s Professor Grant Bigg, a £50,000 grant to attempt to track the iceberg and predict its movement.

“It often takes a while for bergs from this area to get out of Pine Island Bay but once they do that they can either go eastwards along the coast or they can… circle out into the main part of the Southern Ocean,” Bigg is quoted as saying in the Independent article.

That’s where the danger to ships would come in.

Here’s the picture of the danger for international shipping from The Independent article:

Prof Bigg said a previous iceberg in the area had been tracked going through the Drake Passage, a gap between Cape Horn at the bottom of South America and Antarctica’s South Shetland Islands.

This would take it into the path of one of the world’s busiest international shipping lanes, and trigger hazard warnings via a number of observation agencies.

Of course, even as Antarctica falls apart, international shipping is pressing on.

If you need your goods exported or imported, we’re ready to take care of your international shipping. And we’ll keep an eye out for shipping lanes blocked by giant chunks of ice.

Sources/Continued Reading:

http://www.independent.co.uk/environment/giant-antarctic-iceberg-could-pose-hazard-to-shipping-lanes-scientists-warn-8937168.html

http://www.thenews.com.pk/article-126454-87sq-km-iceberg-could-threaten-international-shipping:-study

Source: Export

The post Watch Out International Shipping, Antarctica is Falling Apart! appeared first on Universal Cargo.

Let’s face it, blogs and stories related to international shipping can be a bit on the dry side and even, I dare say, boring. However, every once in a while there’s an international shipping story so weird it’s almost hard to believe it’s true. Thus, Universal Bizargo is born: Universal Cargo’s new blog series sharing the bizarre stories of the international shipping world.

Most of us have probably seen the movie the Hangover. Three guys wake up after a bachelor party with no recollection of what happened the night before. While there’s a new member to their group (a giant tiger in the bathroom), they’ve lost the groom who they’re supposed to take to his wedding that day.

A real life version of the Hangover happened a couple months ago in Qingdao, China.

The story doesn’t quite have the flash of the Hangover. There’s no tiger and Mike Tyson never shows up and punches anybody, but there’s actually more at stake in this real life story than there was in the movie the Hangover.

A couple months ago, a man named Jiang Wu had such a wild night of drinking that he woke up locked in a shipping container that was about to be shipped from China to Los Angeles, according to a story from msnNOW.com.

If they ship from China to Los Angeles, Jiang Wu isn’t likely to survive as the trip takes two weeks, UPI reported.

Life and death stakes trump getting to a wedding on time. If this were a movie, instead of being a big budget comedy, it would probably be a low budget suspense. But the incredible thing is that this was no movie; it actually happened and finding Jiang Wu in time to save his life was no easy task!

Jiang Wu was in a shipping container 60 feet in the air in the middle of thousands of shipping containers ready to hit the ocean and sail for Los Angeles.

Luckily, Jiang Wu awoke from his drunken stupor before the shipping container set sail.

When he woke up, Jiang Wu started calling everybody he knew. Another lucky thing for him was that he got reception. Can you hear me now?!

“He’s very lucky. If he’d been asleep for another hour the next stop would have been America,” Daily Star quoted a docker as saying.

Perhaps the first smart move he made was also calling the police.

Eventually, the police were able to find Jiang Wu from the noise he was making inside the shipping container.

Apparently, Jiang Wu got so drunk the night before that he mistook the shipping container for the bed and breakfast he was staying at and fell asleep inside. How bad was his B&B that he could mistake a shipping container for it? Maybe the question should be how drunk do you have to get to mistake a shipping container for a B&B.

Either way, this is one of the most bizarre shipping stories we’ve come across. We did once find a story of someone who did accidentally get shipped from China to Los Angeles in a shipping container.

That story was actually about a cute little kitten that was found clinging to life inside a shipping container that had just made the trip. You can read about the cute kitten stowaway here.

If you have cargo you want to ship from China to the U.S., Universal Cargo Management is always here to give you a free freight rate quote and make sure your import ships smoothly. Just know that we won’t help you ship people or kittens.

Sources/Further Reading:

http://now.msn.com/jiang-wu-chinese-man-allegedly-stumbles-drunk-into-shipping-container

http://www.upi.com/Odd_News/Blog/2013/08/14/Chinese-man-was-nearly-shipped-to-US-in-container/7301376491935/

http://www.dailystar.co.uk/news/latest-news/332203/Night-on-the-lash-lands-drunk-in-sealed-container-on-2-week-sea-voyage

Source: China

The post Universal Bizargo: Hungover Man Wakes in Sealed Shipping Container appeared first on Universal Cargo.

The U.K. government and members of the international maritime community gathered to launch the first ever London International Shipping Week according to an article from MarineLink.com.

“London’s crucial central role in the global shipping industry was highlighted,” the article stated.

Norman Baker MP, Parliamentary Under Secretary of State for Transport spoke of how the maritime sector adds £14billion to the U.K. economy and how employment in the U.K.’s shipping industry has grown despite recession and increased by 100% since 2004.

While they met to launch the week long event, London International Shipping Week is still a couple weeks away, running from September 9-13 according to the MarineLink article.

There is an official website for the London International Shipping Week. The website describes it in this way:

Seen as the ‘must attend’ event in 2013 for the global shipping industry, London International Shipping Week will bring world shipping together for one week.

With a wealth of industry functions planned for the week, London International Shipping Week will be the high level networking opportunity of the year for leaders across all sectors of the international shipping industry – regulators, charterers, ship owners, ship managers, lawyers, brokers, bankers, insurers, ship suppliers, ports and shipping service providers and all involved in the shipping world.

Events during the London International Shipping Week cover a wide range international shipping related topics and activities.

There will be maritime law and shipping policy meetings, a piracy briefing, shipping technology showcase, a conference on enhancing maritime security, and much more. One thing during the London International Shipping Week that I know Universal Cargo Management’s own CEO, Devin Burke would be interested in is a charity golf day.

Back to that MarineLinnk article, Mr. Baker pledged that the U.K.’s Coalition Government “is keen to foster a closer and more coordinated partnership with both shipping and the wider maritime industry.”

Mr. Baker revealed, according to the article, “that [the government] has established a maritime strategic partnership to bring together key government departments and industry champions to focus on maximizing growth and opportunities while maintaining a stable fiscal and regulatory environment.”

With the strength of U.S. international shipping and all that it brings to the economy here, it would be nice to hear similar words from leaders of the U.S. government. And of course, even nicer to see action with it.

The Obama administration has been criticized for a lack of strong maritime support, specifically in the area of short sea shipping funding. There is no Obamaritime like there’s an Obamacare(Shout out to Annie Eshleman who jokingly suggested today’s blog breakdown Obamacare through a facebook comment).

Comparing the size of U.S. shipping to U.K. shipping, perhaps it would be appropriate to have an International Shipping Month here, rather than a week. At this point, I would settle for an International Shipping Day.

Or maybe hearing President Obama say of the U.S. government what Mr. Baker said of the U.K. government would be enough:

“The contribution of the maritime industry to the life and economy of the U.K. is fully appreciated at the highest levels of government.”

Sources:

http://www.marinelink.com/news/international-shipping357205.aspx

http://www.londoninternationalshippingweek.com

Source: Export

The post U.K. Government Gathers to Launch London International Shipping Week appeared first on Universal Cargo.

China’s new Value Added Tax (VAT) policy is now officially in effect throughout all of the People’s Republic of China.

In previous Universal Cargo Management blogs, we covered the basics of what the Value Added Tax (VAT) reform in China is and how the new VAT policy affects the international shipping industry.

Pursuant to Tax Circular Caishui No. 37 (Circular 37), the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) in China have jointly implemented a VAT on many specified services or industries including transportation services and logistics-related services throughout the whole of China.

Ocean carriers with shipping lines in China sent out letters, emails, and announcements that they will be in compliance with China’s Circular 37 and a 6% VAT will be levied on all freight charges in China. A carrier collects the 6% VAT from shippers and then pays that to China.

The easiest thing to compare the VAT to is a sales tax. When you buy that tool kit from the hardware store, the hardware store adds sales tax that they turn around and pay to the government. When you import from China, the carrier will add a 6% VAT that will then go to China.

It is important for shippers to realize that the VAT does not only apply to ocean freight. Air cargo in China is also subject to China’s new VAT policy.

U.S. importers who primarily ship via air from China will especially be affected by China’s new VAT. This is because air freight is traditionally prepaid at origin.

Industry players from ocean carriers to airliners to NVOCCs have been seeking clarification on the new rules and their application from China’s MOF and SAT as there has been some uncertainty according to an email on the VAT situation from Tommy Chan, Global Product Compliance Manager of Toll/Seamaster.

Perhaps some of this reaching out to the MOF and SAT is just clutching at straws for a possibility at avoiding a 6% increase to shipping costs from China.

Different types of deals between sellers in China and buyers from the U.S. could affect who actually pays the VAT.

Different types of deals involving international shipping are labeled by incoterms. Buyers may start looking for deals that would fall under FOB or CIF incoterms where sellers handle clearing goods and port fees or loading and transporting goods up to the destination port to try to let the 6% VAT in China fall on the sellers.

Of course, sellers in China could as easily try to avoid such deals or simply raise their prices on those deals to cover the increased cost hitting transportation and logistics-related services.

Trying to find a way to avoid the 6% VAT is probably not worth the efforts. After all, the only thing as certain as taxes is death.

However, if we are clutching at straws, I’ll give you this lead to grab onto.

According to a post from Taxation International News & Information, “In a statement issued on July 24th the State Council of China announced that from August 1st all businesses with monthly turnovers below RMB 20 000 will not be required to pay Value Added Tax (VAT) or business tax.”

This is a tax cut China is doing to stimulate small businesses and through them, the country’s economy.

If you’re buying goods from a small enough business in China and doing deals like FOB or CIF in nature where shipping logistics fall on them, perhaps the 6% VAT will not factor into your costs.

Again, this is really grasping for those straws. We’re talking about businesses doing less than 20,000 yuan or about $3,263 a month who are now going to benefit from this VAT and business tax cut. And even if you do find a business that size which fits as a supplier of the goods you’re looking for, there’s no guarantee the VAT of Circular 37 wouldn’t have to be paid when they get transportation or logistics-related services.

Perhaps the reaching out to the MOF and SAT will clarify if deals with small Chinese companies hold the possibility of avoiding the new VAT.

In the mean time, it seems like a good idea to settle into the fact that shipping from China has increased by 6%.

Source: Incoterms

The post China's VAT Affects Air Freight, But What About All China Shipping? appeared first on Universal Cargo.

Tuesday’s blog covered China’s new value added tax (VAT) reform going nationwide on August 1^st. For the basics on what a VAT is and background on China’s VAT reform, check out that blog.

Tuesday’s blog is great for the inquisitive ones out there, wanting educational background on the VAT.

For those of you who are more pragmatic and want to know what this all means for you, today’s blog is what you want.

Today’s blog looks at how the implementation of the VAT replacing business tax (BT) across many industries and service types, including transportation services and logistics-related services, throughout the whole of China affects international shippers importing from or exporting to China.

Phew! That was a mouthful. To put it simply, here’s how China’s new VAT affects you.

Reading through the VAT reform material released by China can be a little cumbersome and confusing. There are all these different percentages as to what VATs will be for different services and it’s easy to feel if you’re not an accountant with a background in international finance you’re in over your head on figuring out what it all means.

Luckily for you (and me too), there’s no need to stress yourself trying to figure it all out. The big carriers like Maersk, Hamburg Süd, and MSC who operate shipping lines in China are on it.

VAT basically means tax incentives for them. Rather than paying a BT, they charge a VAT to their customers. VAT is good news for the carriers so they’re going to make sure they get it right.

As Maersk, Hamburg Süd, and MSC sent out notices that all said basically the same thing to their customers about China’s VAT program, you can be pretty sure the carriers are correct about how the VAT system works.

You’ve waited long enough. Here’s what China’s August 1^st VAT implementation means to shippers:

• 6% rise in shipping costs for international shippers importing and exporting from and to China.

Hamburg Süd put it this way, “In compliance with the… policy, an additional 6% Value- Added Tax (VAT) will be levied on top of the freight and charges payable at China starting from 1 August 2013, based on the issuance date of the VAT invoice.”

MSC’s letter to their customers reads similarly, “In compliance with the… policy, an additional 6% Value-Added Tax (VAT) will be levied by MSC on top of all charges payable at China starting from 1 August 2013, based on the issuance date of the VAT invoice.”

To complete the trilogy, here’s Maersk’s version: “With the implementation of the Cai Shui [2013] No. 37 Notice, Maersk Line would like to announce that from 1 August 2013, a value added tax of 6% is applicable for all charges pay at PRC [People’s Republic of China] only.”

The message is clear, perhaps it’s even sounding like a broken record at this point: VAT means an additional 6% cost in China shipping for shippers.

• What impact will China’s VAT have on the international shipping industry in general?

That’s a harder question to answer.

The international shipping industry is already a volatile one when it comes to freight rates.

For example, a few years back, we had a blog titled Freight Rates and Container Shipping Costs up 350% from China. Compared to that, 6% is nothing.

But to a small business doing international shipping between China and the U.S., 6% could be a significant figure.

It’s possible the new VAT policy’s cost increase to shippers could affect China’s import and export numbers. If affected negatively with any significance, carriers could see revenue losses and even overcapacity issues that have plagued their ability to maintain healthy freight rates instead of benefitting from having BT replaced by VAT.

On the other hand, if the program goes as China intends, shippers paying VAT instead of carriers paying BT could significantly help carriers’ bottom lines as they are still working on recovery from huge losses in 2011.

Sometimes a feeling of carriers vs. shippers exists; however, healthy cargo container carrier companies are better for the international shipping industry than carriers struggling and sinking, so to speak.

With all the factors affecting the costs of international shipping, I’m of a mind to predict China’s VAT reform will have little affect on the nation’s import and export numbers. This should mean a better bottom line for carriers shipping in China.

For shippers, there are enough factors from market demand to fuel bunkers to terminal costs and dockworker strikes affecting freight rates that VAT raising shipping costs in China by 6% will have ample opportunity to be balanced out.

Source: China

The post What Effect Does China's Value Added Tax (VAT) Have on Shippers? appeared first on Universal Cargo.

by Jared Vineyard

He’s ba-aaaack.

Back in November of 2011, I posted a blog on Tony Munoz, editor-in-chief of The Maritime Executive Magazine and MarEx e-Newsletter, calling President Obama out on his maritime policy.

Scratch that.

Munoz called Obama out on his lack of maritime policy. There is no Obamaritime.

Nailed it!

Okay, I didn’t nail it. Obamaritime wasn’t that clever when I first wrote in 2011 either.

What had Munoz riled up back then was the lack of a short sea shipping network in the US and Obama’s 447 billion dollar infrastructure plan. The plan put billions of dollars toward getting surface transportation projects off the ground, focusing on highways, rail, and air while ignoring maritime. Dwarfing the $50 billion budget the US normally spent on all forms of transportation, the plan was to put over $70 billion toward highways, over $22 billion toward transit, close to $19 billion toward aviation, over $8 billion toward railroad, and only $357.8 million toward maritime to assist the military.

If I remember correctly, republicans were successful in blocking that particular plan of Obama’s.  So things worked out as Munoz hoped, right?

Wrong.

In a recent article, Munoz points out:

Unfortunately, the U.S. does not have an effective maritime policy beyond general rulemaking for its EEZ [exclusive economic zone]. Recently, the Department of Transportation was awarded an additional $1.4 billion to its $98.5 billion budget for 2013. The Obama Administration provided an additional $492 billion over five years (2014-2018) for planes, trucks and rail. Unfortunately, when it came to shipping, the Administration gave the Maritime Administration (MARAD) a paltry $433 million for its 2013 budget.

That’s right, Munoz is back to calling out Obama’s administration, and the U.S. government in general, on its lack of funding for maritime. In particular, he wants to see funding for a short sea shipping system, creating a marine highway with America’s 96,000 miles of coastline and 22,000 miles of inland waterways.

These are tough times for the government’s budget; why should they give more money to maritime?

Munoz argues:

…there are more than 15.5 million trucks on the nation’s highways that log more than 450 billion miles a year. Gridlock annually costs the U.S. economy about $80 billion, and Americans spend 4.5 billion hours stuck in traffic each year. Most urban areas have failing grades for smog, and another 60,000 people will die this year due to illnesses brought on by pollution.… One small freighter or barge can displace hundreds of trucks and the attendant pollution and congestion.

Munoz also points out that the money is there for the big project of developing a short sea shipping program/marine highway in the US. His article laments Capitol Hill being gridlocked with policies on spending to develop maritime infrastructure on hold:

Today, the Inland Waterways Trust Fund – funded by a user tax on fuel oil – has about $100 million sitting idle because Congress will not release it to rehabilitate the 191 locks and 238 lock chambers that support about 11,000 miles of inland waterways. Furthermore, there is over $7 billion sitting in the Harbor Maintenance Tax Fund, paid for by a user fee on the value of a ship’s cargo and intended for dredging and maintaining the 360 commercial ports in the U.S.

Munoz says that the US can’t wait on taking action in this area, but “the [Obama] Administration has tabled discussions about maritime initiatives until 2017, which essentially means maritime policies will wait until the next administration takes office.”

Pointing to the EU, Munoz says there’s an example of what the US should be doing when it comes to maritime:

The European short sea shipping network has been an enormous catalyst in building the world’s most efficient and environmentally friendly transportation infrastructure over the last two decades. The vision and foresight – not to mention the political will it took to move the project forward – was unprecedented, and the commitment of stakeholders from across the EU countries will provide benefits for generations to come.

Today, the Motorways of the Sea, as it is known in the EU-27, is a major component of the transportation infrastructure supporting a huge and diverse economy, second only to the U.S. The unified effort of eliminating borders, dealing with regional congestion and environmental issues, and integrating the various economies and cultures of the EU serves as a powerful example of what can be done through co-ordinated and centralized government policy to strengthen long-term prosperity.

Thinking about all the jobs that would be created by developing a short sea shipping network in the US and imagining less congestion from import and export cargo being moved along such a maritime system, I tend to think Munoz might be right.

Maybe living with the daily traffic congestion of Los Angeles makes me eager to jump on board with any idea that says it could reduce that congestion.

But billions upon billions of dollars are pumped into the US economy through import and export of ocean freight cargo. Doesn’t maritime seem like a strategically sound place to invest?

What do you think? Do you think Munoz is right that the government has been short sighted when it comes to short sea shipping in the US? Let us know in the comments section below.

—

Main Sources:

http://www.maritime-executive.com/article/The-US-Could-Learn-from-the-EUs-Short-Sea-Policies-2013-04-24/

https://www.universalcargo.com/blog/bid/78268/Tony-Munoz-Calls-President-Obama-Out-on-Zero-Bucks-for-Maritime

Source: Economy

The post Tony Munoz Thinks Obama is Short Sighted on Short Sea Shipping appeared first on Universal Cargo.

The last few years have been tough on carriers in the international shipping industry.

Rate wars and overcapacity were large factors for hurting the bottom line of the companies that own and operate the ocean freight ships which handle the transport of import and export shipping containers.

The debt crisis in Europe and the fragile recovery of the U.S. economy from our great recession caused the big shipping companies to face serious demand challenges in a major market downturn.

It doesn’t help that while the markets were booming, carriers were investing in megaships, costing large amounts of money and increasing capacity. Now as these huge ships hit the water, booming is certainly not a description of the market and filling the ships is a major problem.

Largely due to problems of overcapacity (yes, there’s that concept again), carriers lost billions of dollars in 2011.

In 2012, they were able to fare better largely due to several coordinated freight rate increases they placed upon the market. It was a major turnaround that carriers were able to see profits at all, slim though those profits might have been.

“The global container shipping industry barely broke even last year with an operating profit of $280 million,” according to the Journal of Commerce. “… after a profitable third quarter, many carriers lost money again in the fourth quarter. [1]

That doesn’t exactly sound like the kind of momentum that would bolster confidence for 2013 to be a profitable year.

Momentum is hugely important in sports, as you know if you watched March Madness last month. Momentum is also important in business, though it doesn’t work quite the same way. However, just like in sports, sudden momentum shifts do happen in international business, which can change the game.

NCAA basketball wasn’t the only madness of March.

Unexpectedly, China posted a trade deficit in March. Being the exporting juggernaut China is, we’re used to seeing month after month of trade surplus in the billions of dollars from the country.

There is much talk about what this sudden deficit means. I expect you’ll see their normal type of surplus reported for this month so I wouldn’t read too much into the talk of this being a turning point in China’s economy. However, this does spark great hope for carriers’ 2013 bottom lines.

“China’s imports jumped by 14 percent from a year earlier in March,” says Hellenic Shipping News and say that’s what led to the $577 million trade deficit for the country.[2]

Often, China has a month early in the year when they post a deficit due to stocking up on raw materials and having a slowdown from the Chinese New Year when many businesses shutdown to celebrate.

In 2012, February saw a $31.48 billion deficit in China’s trade. Then, of course, it bounced back to having a surplus in the billions every month until here in March, a year and a month later.[3]

Still, China IS increasing its imports.

Economists say the Chinese government plans to develop its economy by increasing domestic consumption according to Hellenic Shipping News.[4]

More imports to China could be a big piece of the solution for carriers to end up with a profitable 2013.

Certainly, countries are making moves to increase their trade with China. For example, Vietnam is working on decreasing the trade deficit they have with China by upping trade with their neighbor.

In fact, “Vietnam and China are aiming to boost annual two-way trade to $60 billion by 2015 from $41 billion in 2012,” according to the Vietnamese government.[5]

We just posted a blog on Australia making a currency deal with China that would allow them to directly convert Yuan to Australian dollars (and vice-versa) which could have a serious impact on their exports to China, not just their imports from China.

Yes, increased imports in China is big for carriers. It certainly may be the difference from a year of financial loss and a year of marked profit increase. However, it’s all going to come down to how the carriers manage their business.

Rate wars, introduction of megaships, overcapacity… We’ll have to watch and see how well the big shipping companies do at keeping their costs below their take.

How do you think the carriers will fare? Share your thoughts in the comments below.

[1] http://www.joc.com/maritime-news/container-lines/drewry-forecasts-container-industry-profit-2013_20130408.html

[2] http://www.hellenicshippingnews.com/News.aspx?ElementId=415ec340-ce0c-4ceb-a848-36bcbd55609f

[3] http://online.wsj.com/article/SB10001424127887323550604578413462672017082.html – articleTabs=article

[4] http://www.hellenicshippingnews.com/News.aspx?ElementId=415ec340-ce0c-4ceb-a848-36bcbd55609f

[5] http://www.4-traders.com/news/Vietnam-Government-Seeks-to-Boost-Trade-Cut-Deficit-with-China–16767976

Source: China

The post Sudden China Trade Deficit Gives Shipping Companies Profit Outlook appeared first on Universal Cargo.

Imagine your workday was a little different than it is. Imagine spending twelve-hour shifts in a cramped space. You don’t get to leave for breaks to eat or even use the bathroom.  You have to urinate out a window, defecate on a newspaper and roll it up so you can take it with you to throw away later. No sink to wash up. If you’re hungry, you’d better have brought a sandwich with you to that human-waste smelling workplace. Imagine.

The dockworkers at the Kwai Tsing dock in Hong Kong don’t have to imagine. That’s a description of the work conditions of their crane operators. That’s why they’re trying to slow the import and export operations at the Kwai Tsing dock.

And those are just some of the reasons dockworkers at the Kwai Tsing dock went on strike on March 28^th.

The striking workers’ grievances also include over a decade of dedicated, hard work with barely a rise in pay. They are demanding a 17 to 24 percent pay rise.

On the 11^th, talks with the contractors who hire the dockworkers broke down after an offer of only a 7 percent rise (with 2 percent of that being in benefits like buying meals) was offered.[1]

The representatives of Global Stevedoring Service, one of the contractors, walked out on the negotiations while the strikers were on a bathroom break. I guess they’re serious about not allowing their workers the right to use a toilet.

It’s like they’re saying you can’t have a toilet break at work or in negotiations.

That’s a negotiations fail.

But the strikers are serious too. Seeing that their demands are not being taken seriously, the dockworkers who are on strike say they will take further action.

“We will escalate our action if there is no meaningful outcome from the next meeting with the subcontractors,” said Stanley Ho Wai-hong of the Confederation of Trade Unions.[2]

60 of the strikers took their protest directly to the offices of billionaire Li Ka-shing. Li owns Hongkong International Terminals (HIT); it’s the subsidiary of Li’s Hutchison Whampoa conglomerate and operates the Kwai Chung cargo terminal.[3]

HIT doesn’t employ the striking workers directly. In fact, the direct employees of HIT who work on the docks are not on strike.

Still, most feel—and properly so, I would think—that HIT has a responsibility to the dockworkers/employees hired by the subcontracting companies they’ve hired, which employ the dockworkers.

The hope in raising banners and chanting at the Cheung Kong Centre in Central will get Li and HIT’s attention to do something about the situation.

HIT has sent a representative as an observer to the negotiations, but has not stepped in as of yet.

The working conditions of the dockworkers have garnered sympathy globally and gotten unions to step in from other countries.

Try imagining the working conditions described above happening in the United States. Try imagining workers in the U.S. allowing this to go on for years and years. Preposterous, right?

Shoot, at the docks of Los Angeles and Long Beach, we had the Office Clerical Unit (OCU) workers, who are the highest paid clerical workers in the whole country, go on strike last year.

However, the strongest union support from outside of China for the striking workers in Hong Kong is not coming from American unions, but from the British and Australian unions.

But more on the global support Hong Kong dockworkers are receiving in Thursday’s blog…

[1] http://www.scmp.com/news/hong-kong/article/1212497/contractors-offer-7-pc-pay-rise

[2] http://www.scmp.com/news/hong-kong/article/1214711/dock-strikers-threaten-more-action

[3] http://www.scmp.com/news/hong-kong/article/1212947/dockers-take-their-protest-port-owners-office

Source: China

The post Striking Hong Kong Dockworkers Can't Use Toilet During Negotiations appeared first on Universal Cargo.

Where do cholera, international shipping, and the spread of invasive aquatic species all intersect? In the water that carriers use as ballast on voyages between international shipping destinations.

Ballast water is actually a huge “need for green” international shipping issue. As well as one that could have a serious impact on freight rates for ocean freight importers and exporters.

The International Maritime Organization (IMO) convened a conference back in 2004 to address the issue of environmental pollutants such as cholera and jelly fish caused by ships emptying their ballast at the end of a long shipping voyage. 

When ocean freighters jettison ballast water at the end of their voyages that they took on at a distant international port they often transfer non-native and sometimes very aggressive aquatic species into foreign waters. The destructive impact of this seemingly harmless practice has long been recognized by marine biologists and oceanographers. The question more recently has been how to solve the problem.

The international meeting of those involved in the shipping industry resulted in the drafting of a document called the Ballast Water Management (BWM) Convention to work to eliminate further environmental damage caused by ballast water. 

This document set up guidelines for installing water purification systems on commercial carriers with a view toward eliminating the introduction of invasive species at international ports through the jettisoning of ballast water.[1]

Recently however the International Chamber of Shipping (ICS) wants to adjust the deadlines for the installation of these purification systems.  Currently, the agreement was to install the purification systems within 2-3 years, but it is already 2012 and the Convention has yet to be enforced. The ICS is arguing that there will be a huge bottleneck if all cargo ships attempted the extensive retrofitting required to filter out invasive micro-organisms from their ships’ ballast within the next 2 years, when the BWM Convention is scheduled to finally be enforced by the IMO.

Also, the ship owners are challenging the requirement for older ships with limited time expected on the water before retirement. They want these ships which won’t be on the water too much longer to be exempt from installing the purification systems. They argue that the expensive (between $1 and $5 million USD) retrofitting is too much of an investment in ships which are over 18 years old and nearing the end of their life expectancy. 

Much as classic cars are exempt from meeting low-smog emissions requirements in California, shipping companies are lobbying the IMO to make an exception for older vessels. They say the significant investment required to make older ships (which will likely only be on the water another 2-3 years) compliant would be economically crippling for them. 

An alternate solution has been proposed for older ships. Instead of installing expensive purification systems, aged vessels could be required to jettison their ballast far out at sea instead of in port, thus reducing the negative environmental impact at busy international ports and those who live near them of ballast water elimination.

Having considered the proposal for an extension, I have a few reactions. First, while it seems reasonable to allow sufficient time for the retrofitting, 7 years have already passed since the BMW Convention was agreed upon.  It seem like companies are dragging their feet to install the filtration systems. You may ask, what’s the big deal?

Having read about the damage invasive species had done years ago when scientists were first realizing the impact of emptying ships’ ballast in foreign ports, I was shocked by what more recent research has revealed are even greater dangers than first realized. While the negative impact on native fish and broader damage to ecosystems was familiar to me, I learned about the deadly impact ballast water can have on human populations.

I knew cholera was a water-borne disease, but I did not know that it could survive in ballast seawater for long trans-oceanic voyages.  Strains of this deadly disease have been introduced to South America and the Gulf of Mexico due to ocean freight ballast.   

Aside from water-borne diseases, other microscopic organisms such as toxic algae have bloomed in the Black Sea and set up a chain reaction of devastation at the very foundation of the food chain. In addition, shellfish grown amidst these toxic algal blooms can poison people who consume them. [2]

Considering that invasive species have already destroyed whole eco systems, including the Great Lakes, it seems worth it to enforce the convention and expect compliance within 3 years. The environment can’t afford further delays.

The problem seems to be carriers’ ability to afford these needed green changes in shipping practices. Meeting these green shipping requirements is one more cost carriers that are already struggling to be profitable need to undertake. The implementation of these changes is one more thing that would increase international shipping rates for ocean freight.

Source: Green

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Last summer, Alaska attracted 1,556,800 visitors according to the Alaska Office of Tourism Development. Largely, it is the beautiful landscapes of Alaska that draws tourism–a hugely important piece of the state’s economy. Why wouldn’t Alaska want to protect those landscapes?
Of course Alaska wants to protect its landscapes. And the health of its population too. Fighting the anti-pollution rules that went into effect at the beginning of this month is an attempt to maintain tourism levels and prevent an increase in the cost of living to Alaskans.

The worry with the new anti-pollution rules are an increase in ticket prices for Alaskan cruises and an increase in freight rates to the state.

The new rules require cargo carriers and cruise ships to use a low-sulfur fuel within 200 miles of U.S. and Canadian shores.

The U.S. initiated these new rules and they’ve been agreed to by countries around the world by international treaty; but, because of their potential economic effects, they have not been agreed to by Alaska.

According to an article from the Huffington Post,

About 90 percent of the commodities entering Alaska are delivered through a single port — the Port of Anchorage — and many southeast Alaska communities rely heavily on revenues from the cruise trade to survive. The state, relying on industry estimates, said the rules could increase shipping costs to the state by 8 percent and cruise passenger costs up to $18 a day, potentially leading to a 15 percent decline in visitors.

Alaska’s move was to file a lawsuit in the U.S. District Court in Anchorage to block the enforcement of the new rules. Not everywhere. Just in Alaska.

Best case scenario that Alaska hopes for is to be removed from the Emission Control Area, which is the area in which these new cargo and cruise ship fuel regulations developed by the EPA apply.

“… EPA lacks the scientific basis and legal authority to extend the control area to Alaska,” Alaska argues according to the Huffington Post article.
But the main argument of Alaska is that the higher freight rates and more expensive cruise prices that would be caused by the new rules would have a disproportionate effect on the state.

According to an article from the Washington Post, container and vehicle shipping industry firms that serve Alaska, including one of Alaska’s largest shipping companies–Totem Ocean Trailer Express, predict their fuel costs to eventually rise by 25% because of the new rules.

Such cost increases would surely be passed on to shippers and then consumers. Seeing an increase in the prices of 90% of commodities would surely be devastating to many Alaskans’ budgets.

The Washington Post article says,

The EPA estimates that when fully implemented the program will add $18 to the cost of shipping a 20-foot container and about $7 per day to the cost of a passenger’s cruise ticket. Cruise industry analysts, however, say it could add as much as $19.46 a day per passenger. The total annual cost of implementing the rule in 2020 will be $3.2 billion, according to the EPA, weighed against between $47 billion and $110 billion in benefits.

The benefits spoken of by the EPA is an estimated amount of money saved in health care costs by the decrease of pollution the new rules will cause.

As of August 1st, the federal government had made no response to Alaska’s law suit and no hearing date had yet to be set, according to Anchorage Daily News.

An agreement has been reached between Totem and the EPA concerning the emissions of the shipping company’s ocean carriers servicing Alaska, according to Fairbanks Daily News-Miner.

This news is apparently helping alleviate Alaska’s fears about the consequences of the anti-pollution fuel rules they’ve been fighting. The Fairbanks Daily News-Miner article said, “Sen. Mark Begich, D-Alaska, who said he helped bring the EPA, U.S. Coast Guard and TOTE together to come up with the waiver, was optimistic in a news release Friday.”

The agreement gives Totem Ocean Trailer Express a waiver that lets them continue burning high-sulfur fuel as the company converts its two Alaska-serving ships to using “cheap, clean-burning liquefied natural gas within four years.”

The Fairbanks Daily News-Miner article goes on to question what effect that will have on shipping freight rates in Alaska. After all, it argues, converting a ship sounds expensive.

Time will tell if shipping rates see major increases in Alaska that will affect Alaskans’ wallets.

You can get a free rate quote on imports to Alaska or anywhere else in the U.S. as well as quotes for exporting around the world right here at UniversalCargo.com.

Source: Green

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After a year of exceptionally low freight rates where ocean carriers lost billions in 2011 largely due to overcapacity, they have spent 2012 working on raising rates for ocean freight in 2012.

On the popular trade routes from Asia to the U.S. West Coast, general rate increases have especially been felt. But these freight rate increases have not been felt equally across the market. Those feeling the freight rate increases most acutely are non-vessel operating common carriers (NVOCCs).

A recent Journal of Commerce (JOC) article calls the current situation a “two-tier pricing market”. The article sources Alphaliner with saying NVOCCs are paying $600 to $1,000 more than beneficial cargo owners (BCOs) on a 40-foot container shipment from Asia to the U.S. West Coast.

Since January of 2012, carriers have imposed a series of general rate increases that have raised ocean freight rates from Asia to the West Coast of the U.S. from around $1,400 in December of 2011 to around $2,700 here in June of 2012.

Source: Shipping

The post Peak-Season Freight Surcharges Hit NVOCCs as BCOs Sail Smoothly appeared first on Universal Cargo.

The Commerce Department is looking to place a 31% tariff on solar panel imports from China.

The complaint has been raised that China is “dumping” solar panels into the U.S. market. In other words, Chinese companies are undercutting U.S. producers of solar panels by selling the product unfairly under production costs.

A Fox News article reports, “The Commerce Department found Chinese companies are guilty of dumping panels on average 31 percent below fair market value.”

A Kansas City Star editorial says that Washington figured China’s production costs of solar panels by using “data from solar producers in Thailand – a method nobody could describe as precise.”

The solar industry in the U.S. has seen substantial growth recently. Much of that is due to the lower costs of solar panels imported from China. SBP is Australia’s stockist for Victron who supplies best quality of solar associated products worldwide since they are well known for their durability and on time supply of products.

Some think the Obama Administration moving toward this tariff on solar panels from China is a political move in an election year to show the president is taking a stance on unfair trade practices from China.

On the campaign trail in 2007 and 2008, Obama had a tough stance on China that dissolved after he became president.

Of course, China is always a hot button topic for candidates in the presidential election and the reality of needing to deal with China usually changes their tone once they are elected to the position.

There’s also the fact that the Obama administration could really use some success when it comes to the solar panel industry.

The Obama administration awarded a $535 million dollar loan guarantee in 2009 to Solyndra, an American solar panel producer, only to see the company go bankrupt in 2011 and layoff nearly all of its employees.

The government giving breaks to solar companies doesn’t stop at Solyndra. The Fox News article mentioned above states that “Solar World has reportedly received close to $100 million in state and federal tax breaks.”

That article also points out rebates that states like Washington pay residents to buy from instate solar panel manufacturers–rebates that have cost Washington state taxpayers $1 million.

These things certainly sound like the government stepping in to give U.S. solar panel companies an advantage.

Maybe it’s not the same as “dumping” practices that seem to be perpetrated by China, but maybe manipulating the market is only unfair trade practice when it is done by China.

Considering the Obama adminstration’s Solyndra debacle, maybe China is just better at it than we are.

Then again, President Obama did just sign legislation reauthorizing the Export-Import Bank of the United States helping U.S. companies make export deals in a world market that they might not otherwise be able to compete in.

Maybe we can manipulate the world market as well as anybody else.

The final question is will this tariff actually help U.S. solar industry and economy. Some think it may initially help the U.S. companies in solar panels increase their market share and hire more employees. However, they also think the higher priced solar panels resulting from the tariff will hinder the industry’s growth and lead to declines in jobs such as solar panel installations and decrease those companies’ sales.

The Kansas City Star editorial mentioned above certainly thinks the tariff would hurt the U.S. solar industry.

It may be premature to worry about the results of the tariff now. A final ruling on the subject isn’t scheduled to happen until later this year. Perhaps that’ll happen just in time to give Obama fodder for the presidential debates as China will surely continue to be a hot-button topic in the election.

Ring in with your opinions on the subject by commenting below.

Source: Economy

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So you want to make money by selling products imported from China. Where do you start?

Product.

Many have found success in international business by importing a product from China and selling it here in the U.S., but they didn’t just luck into importing success. Careful planning goes into businesses that make money.

Businesses make money by selling products. If you’re going to be a successful importer from China, the first thing you have to do is choose the correct product to import and sell.

Here are 3 tips for choosing that product.

1 – Find a Product You Can Ship in Large Quantities

You want to ship your product in high quantities. This cuts your costs. If you have to ship your products one at a time from China, you’re operating at a high cost.

The more you can get in a single shipment, the more it cuts down on your costs and increases your profits per sale.

2 – Find a Product You Can Sell at a High Price

I can speak from experience on this one. Before writing blogs for Universal Cargo Management, I had an upstart business where I sold books.

The number of books I sold was in the hundreds. The books didn’t sell at high prices. The money that came in from them managed to break into the thousands, but it was hardly enough to cover what I paid for the books plus my operating costs.

Now if I sold hundreds of a product at the price of $1,000 or even $500, the money coming in would have been in the hundred thousands. I would have had to sell tens of thousands of books to do that.

Big difference.

Look for a product that gives you a payoff selling less quantity.

3 – Find a Product You’re Passionate About

You are much more likely to be successful if you’re passionate about the product you are selling.

Passion is infectious. You don’t have to be the world’s greatest salesman; when you’re passionate about something, your passion helps you sell it.

If you’re importing something you don’t care about, it will probably be difficult for you to get others to care about it and buy from you.

Passion will keep you motivated to work on your business, give you a leg up on your competition, and make you more attractive to potential customers.

If you’re ready to import your product from China now, contact us here at Universal Cargo Management for a free freight rate quote.

If you want to read more on the topic of international shipping, we post two blogs a week here at UniversalCargo.com. And Janey from Jingsourcing recommended her company’s blog post “Revealing Secrets of Best Products to Import from China” as more reading to help you pick products to import from China

Source: Economy

The post 3 Tips for Choosing a Product to Import from China for Making Money appeared first on Universal Cargo.

Mega-ships are the latest rage in ocean freight shipping.

Mega-ships or mega-vessels as they’re also referred to are giant carrier ships that look like small islands if you watch them appear over the horizon.

It seems that all the major carrier lines have been ordering these Goliath-sized ships. But there have been a few hold-outs.

According to an article from American Shipper, “Among the world’s top 20 lines, only Evergreen, ‘K’ Line and Yang Ming have refrained from operating, ordering or planning to charter such vessels.”

Evergreen has been criticized for not jumping on the bandwagon and ordering such giant ships. These enormous ships can carry loads like 13,000 TEUs or 14,000 TEUs of cargo across the ocean. As oil bunkers continue to increase, being one of the only major carrier lines without mega-ships could be a competitive disadvantage.

But now Evergreen Line is joining the mega-ship ordering trend and their patience in doing so may turn out to be a competitive advantage.

A BSAA blog states, “As Evergreen hammers out the final terms with the shipyard and investor from which it will charter the ships, the world’s sixth-largest container line may pull off a considerable coup.”

The BSAA blog goes on to highlight how much cheaper these giant vessels are now than when most of the carrier lines were ordering them up a few years ago and how the ones being ordered now also burn less fuel.

The American Shipper article mentioned above–which is a “newsflash” about Evergreen making a deal to charter mega-ships–quotes Alphaliner executive consultant Tan Hua Joo as saying, “Large ships are 30 to 40 percent cheaper than a few years ago.”

While this move looks like a good one on the part of Evergreen, there are some that question how good these mega-ships really are for the carrier lines. The worry is that these behemoth ships are adding to overcapacity causing pressure on the carriers to lower freight rates.

In 2011, carriers lost money due to lower freight rates largely caused by overcapacity. Carriers will now have to be strategic in utilizing their mega-ships to avoid the overcapacity problem.

Of course, international shippers importing and exporting cargo around the world would love to see another period of falling freight rates from overcapacity. However, if several of the major carriers went out of business from freight rates too low to generate profit, freight rates would quickly move away from shippers’ favor as the surviving carrier lines face less competition.

I wouldn’t worry about that though. Evergreen Line just showed they can compete and the rest of the carriers are not about to give in and turn belly up in the water.

Source: Economy

The post Evergreen’s Strategic Mega-Ship Ordering for Ocean Freight Services appeared first on Universal Cargo.

“The economy is moving in the right direction, without a doubt,” are the opening words from
economist Mario O. Moreno in the JOC Insights March issue.

It’s good to hear positive words again about the economy. A more hopeful attitude can be felt around the country after years of recession and anxiety. Yet it’s hard to shake the doubt that still looms under positive headlines.

It only takes a couple paragraphs for Moreno’s tone to shift with, “I do, however, remain cautious on my outlook for the economy and imports.”

Data in Motion, the PIERS Industry Blog jumped on the positive growth in containerized imports the U.S. has experienced over 3 consecutive months.

“Steady sales growth in both automobiles and existing homes over the last few months drove U.S. container import volumes up 4.1% in January to 1,475,608 million TEUs. This marks the 3rd consecutive month of year-over-year imports increase, and a month-over-month climb of 11%,” PIERS reported.

However, the PIERS blog too quickly shifts to Moreno’s cautions: “The overall employment market is modestly improving, but real consumer spending has remained flat in the last 3 months through January. Higher gasoline prices are a major risk to the import trade as lower disposable income will adversely affect spending…”

Reading Moreno kind of sounds like, “The economy is moving in the right direction, without a doubt; but, I have doubts.” Reading PIERS sounds like, “Imports are up; but wait, they might be heading down.”

How do we as importers, exporters, and businesspeople react?

Imports are up. That sounds good, but as we read homes and automobiles driving U.S. imports up, do we think back to how the latter industry got bailed out and the former crapped out as the country fell into recession and hold our breath?

Quickly spins are put on any news about the economy and American imports and exports, especially in an election year.

Conspiracists on one side say all the good headlines spreading about the economy and our importing and exporting are to make Obama look good and increase his approval rating for the election. Conspiracists on the other side are saying bad news about the economy and U.S. imports and exports are to make Obama look bad and get a Republican elected.

Do we listen to all the spins and conspirators? Do we worry that the home and auto industries are just driving up imports for a crash? Do we freeze at the uncertainty in the news?

Not completely sure about everything that’s happening and not knowing what will happen, too many have frozen in their tracks, just holding their breath.

What do we do?

Stop holding our breath and import, export, do business.

Let the news spin. Allow economists to analyze and walk the line of prophesying good or bad for the economy. In it all find opportunity to strengthen your business.

Imports are up? Good. How do your importing and exporting practices fit into that?

Imports are down for your particular product or industry? Good. Does that mean you can find lower costs on those shoes you import to increase your profits or lower your price to go after a larger share of the market?

Whatever the news, whatever the outlook, there’s business to be done. And doing business is something the U.S. has always thrived on. Let’s get to business.

Source: Economy

The post Imports Are Up, Reporting is Sideways, Let's Get Down to Work! appeared first on Universal Cargo.

Imagine your business having Jesus level success. Everywhere Jesus went, He was sought after. His reputation spread from city to city. 2,000 years after walking the earth, Jesus is an international household name.

We generally wouldn’t think of Jesus as a businessman. He didn’t walk around in a suit and tie, but Jesus did often speak of work and money.

There’s plenty we could learn from Jesus’ life that could help make us more successful in business, whether international business importing and exporting cargo around the world or small local business.

In 7 Tips For Your Business From Jesus Christ Part 1, we saw examples from Jesus’ success that pertain to our own selves in business and our teams or employees. Now in part 2, we move on to industry and customers.

Remember, for the sake of this blog, we’ll refer to Jesus’ life in terms more relatable to business. For example, we’ll call Jesus’ ministry His “business” and His disciples His “team” or “employees”.

5. Jesus thought outside of the box of the way things were done in his “industry”.

To be successful, your business needs to stand out from the rest in your industry.

What do you do that’s different than the way everyone else is doing things in your industry?

Jesus was not the first to claim to be the messiah. But while others came with political ambitions or a military arm, Jesus spoke of the Kingdom of God instead of earthly kingdoms.

Why was Jesus so sought after as a religious leader? There were many other rabbis of Jesus time and place.

One reason is Jesus reached out to people the other “industry leaders” did not. Jesus was often criticized for eating and drinking with sinners. Yet Jesus saw these as the true potential for “customers” to His “business”. “It is not those who are healthy who need a physician, but those who are sick,” Jesus said.

He also reached out to and taught women, like in the story of the woman at the well or Mary who is described as learning at Jesus’ feet, which simply wasn’t done by rabbis and religious leaders of Jesus’ time.

There’s a whole sea of potential customers for your business that your industry isn’t reaching. A great resource for reaching them is the Blue Ocean Strategy.

6. Jesus gave personal attention to individuals.

Excelling in personal relationships and customer service is a great way to earn new and repeat business.

Jesus did not treat people like numbers or ignore them as many businesses do. Jesus gave individuals personal attention.

Blind Bartimaeus called out to Jesus. Jesus stopped and asked Bartimaeus, “What would you have me do?” Jesus was able to hear what Barimeaus needed and wanted from Jesus and then Jesus was able to meet the need of His “customer”. Then Bartimaeus followed Jesus down the road, showing customer loyalty.

In the story of the woman at the well mentioned above, Jesus talked with the woman about her life. That relationship resulted in the woman telling everyone in town about Jesus’ “business”.

Taking time out for customers makes a huge difference in business. Simply by stopping and listening to them, maybe asking what they need, makes it possible for businesses to provide positive experiences for customers. It could also help us see potential services and business opportunities that could take our businesses to the next level.

Positive experiences and forming relationships with customers brings in repeat business and new business. But negative experiences and treating customers like something less than a person can quickly hurt a business. With the internet, every customer has the potential to reach the world with positive and negative messages about your business instantly.

7. Jesus offered a spectacular product.

Jesus had a spectacular product that drew in people. He healed people of all sorts of sicknesses.

Ultimately, your business needs a great product or service to thrive. A business can last for a while with a shabby but well advertised product. People will buy at first. But if you ship out a bad product, it won’t take long for customers to figure out what they’re purchasing isn’t worth the price.

People flocked to Jesus because of His ability to make them well. The blind could see, the lame could walk… and the word spread.

Make sure you have a focus on quality. If you have a great product, the word will spread. Even better is if you can couple one great product with another.

As incredible a product as healing is, Jesus offered a second product that was even better–forgiveness of sin. Jesus offered forgiveness for any bad thing a person had ever done for a restored relationship with God. This product came with an eternal guarantee that keeps people flocking to church 2,000 years later.

Source: Shipping

The post 7 Tips For Your Business From Jesus Christ Part 2 appeared first on Universal Cargo.

When Cortez entered Tenochtitlan in 1520, he found half the people living there infected with smallpox. Smallpox was a disease that didn’t even exist in the New World before Europeans arrived. The army Cortez shipped over the ocean could never have brought the inhabitants of the Americas to their knees as effectively as diseases like smallpox that were imported from Europe. But Europeans were not loading ports with diseases to export to the Americas.

You certainly wouldn’t call diseases an export commodity of Europe. Diseases simply traveled on ships carrying goods and people across the ocean to the Americas and the results were disasterous for the original inhabitants of the land and beneficial to those with designs to invade. This kind of danger still exists today in the importing and exporting process.

It does not have to be a disease that travels unintentionally with an imported or exported product that can be harmful or even disasterous. Pests that are common and seem like no big deal in one region could easily travel in an export to another region in the world and be disasterous, destroying plants, spreading disease, and affecting the ecosystem.

In 2005, imports from China to the U.S. of wooden handicrafts was suspended because of the pest risks that came with these items. This was after “more than 300 emergency action notices for pest interceptions on wooden handicrafts from China” during the 3 years pripor according to a news release from the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS).

But the news release was not about 7 years old news. USDA announced a final rule to allow importation of Chinese Wooden Handicrafts to the United States again.

Don’t freak out, at the same time, they are protecting American agriculture from harmful pests that might have bored into wooden handicrafts from China.

This final rule from USDA’s APHIS creates conditions for wooden handicrafts to be imported from China. These conditions, including special treatments for the wooden handicrafts and paperwork requirements, create “sufficient safeguards against incursions of wood-boring pests based on conclusions drawn from the pest risk analysis” according to the news release.

The rule also makes sure wooden handicrafts are clearly defined. For those of you wondering what imports from China would be considered wooden handicrafts, APHIS defines as follows:

“A wooden handicraft is defined as a commodity class of regulated articles derived or made from natural components of wood, twigs and vines, and including bamboo poles and garden stakes. Handicrafts include carvings, baskets, boxes, garden and lawn/patio furniture (rustic), potpourri, artificial trees (typically artificial ficus trees), garden fencing and edging, and other items composed of wood.”

April 30th is when this action from APHIS becomes active. Get a freight rate quote for your imports from China now!

Universal Cargo Management would love to use our 25+ years of experience to benefit you.

Source: Economy

The post China Import Risks Assessed & Suspension of Handiworks Removed appeared first on Universal Cargo.

APL has joined the bandwagon of ocean freight carriers to stop carrying their own chassis for truckers to use in transporting the ocean freight shipping containers.

While this is not the case around the world, ocean freight carriers in the U.S. tend to have owned and provided chassis to truckers for transporting shipping containers until a trend to no longer own and manage this equipment spread across the ocean freight carrier community.

What sparked this change in operations from the ocean freight carriers?

According to a Waterfront Coalition report from June of 2011 about change in intermodal chassis ownership, it was Maersk.

No big surprise there. Maersk is the big dog when it comes to ocean freight carriers. You’d expect the big dog to be the trend setter. But it’s not quite as simple as everyone doing what Maersk did. Of course, that is how it initially appears Maersk got this trend started?

That Waterfront report stated, “Several years ago, Maersk announced its decision to end its ownership of chassis. As of 2010, the steamship line no longer provides equipment to truckers.”

That seems like “as the big dog does, so does the whole pack.” Starting with Maersk, chassis are commonly no longer provided for truckers/shippers in the U.S. ports by ocean carriers.

This is a big change, causing truckers, or sometimes the international shippers themselves, to need to rent chassis. Of course, this translates into some cost increase for shippers importing and exporting goods.

The result I see for Maersk is more profit, including money being put in their pocket by the other ocean carriers deciding to stop providing chassis as well.

Maersk hadn’t actually gotten rid of their chassis.

The quote above says Maersk announced a decision to give up ownership of their chassis and no longer provided the equipment for truckers as of 2010. What Maersk did was formed the Direct Chassis Link (DCLI) to rent Maersk’s chassis to truckers.

Now Maersk makes money through DCLI to rent their chassis to truckers not only servicing international shippers using Maersk lines, but transporting shipping containers from any ocean freight carrier.

I don’t want to say Maersk pulled a fast one on the other ocean carriers or were misleading by saying they’d decided to give up ownership of their chassis. Maersk is now in the process of relinquishing ownership of their chassis by selling DCLI to Littlejohn & Co., LLC.

I’m sure selling it all off was likely Maersk’s plan from the start–once they made their chassis more valuable. I just couldn’t help but wonder about it all as APL’s announcement to join the bandwagon by phasing out their managing and owning of chassis.

I also wonder how that bandwagon could hold all those ocean carriers without a chassis. Oh, I’m sure Maersk Equipment Services Company, Inc. (d.b.a. DCLI) must have rented them one.

Source: Economy

The post Where Did All the Chassis Go, Ocean Freight Carriers? appeared first on Universal Cargo.

Is this really it? The long awaited rebound…?

Having visited a few of this year’s round of furniture shows in the U.S. (as Universal Cargo Management takes care of international shipping for many companies in the furniture business), a common sentiment has emerged. Hopefulness. “We don’t know how long it will hold, but…” 

While exhibiters report that the number of orders are up at the Atlanta, Dallas, New York, and Las Vegas shows, according to our informal polling, we still ask, “What does it really mean?” The economic turnaround so many, not just importers and exporters, have been hoping for? Or is it a brief respite from painfully slow growth experienced by most in the industry over the last couple of years?

Some of the numbers economists like to review when evaluating economic strength are also moving in a favorable direction—or so it seems. Joblessness seems to be dropping, the stock market is up, and the media is once again promoting these positive developments.

Yet it is important to note that some of this happened as a result of the European debt crisis. Investors who abandoned the U.S. shores and dollar in recent years found it more favorable to return to the green back and the NYSE litter of stocks than to ride the waves of the Greek lead EU debt debacle. The multiplied trillions (some estimate up to 15 trillion) pumped into the U.S. and world economy via the U.S. Fed and the saturation of newly printed money has to deliver a buoyant effect at some point. Many decried the last 18 months of inflation experienced by the rest of the world, and in the U.S. if you count fuel and food, is also a result of the printing press strategy. So, finally the FED’s printing presses seemed to have engineered the administration’s desired effect: borrow, spend, and print your way to prosperity (with a little help from the EU).

Also the business community, including U.S. manufacturing, is beginning to feel more optimistic. Ford, Caterpillar, and others are beginning to spend some of their stashed cash on expansion—yes, even hiring. More Americans Borrowed money last month than the month before, signaling an increase in consumer based optimism. Few note that a large measure of that new borrowing was for education and training. But let’s trust that this will broaden and strengthen the skills of those expanding their horizons so they will provide more at work, get paid more, and spend more. This new consumer willingness to borrow, then spend that newly borrowed money, may be the basis on which things move forward—but how far? 

Does this mean it’s time for the champagne, party hats, and ticker tape parades? Conventional wisdom for stock market trading is to sell into a rising market. All indications are that we are experiencing a rise in our market economy. If you are one who supplies retailers or are a retailer yourself, especially furniture, it may be time to ramp up fast and sell fast. This rise may not last that long.

Why? More Economy Shaping Up Or Shipping Out Part 2….

Dave Stover, who wrote this blog, is an account executive for Universal Cargo Management. He or any of Universal Cargo Management’s great sales team would be happy to give you a fast and free freight rate quote and help you import or export whether by ocean freight or air cargo.

Source: Economy

The post Economy Shaping Up Or Shipping Out? (Part 1 of 2) appeared first on Universal Cargo.

Get prepared for more increases in ocean freight rates from Asia to the U.S.

As an international shipper importing from places like China to the U.S., the last thing you want to see is a blog title like the recent Journal of Commerce article that reads, “Eastbound Trans-Pacific Carriers Seek $800 in Rate Increases”.

Didn’t we just see rate increases from carriers on the eastbound trans-Pacific trade routes as 2012 started? Yes (see UCM blog Carriers Impose Freight Rate Increases From China to United States). And carriers are looking to build on that ocean freight rate increasing momentum.

To quickly summarize the Journal of Commerce article, there are two proposed rate increases that carriers are looking to impose that would add $800 per FEU increase in eastbound trans-Pacific trade lanes.

The first would be a $300 rate increase effective March 15th. The second is a $500 per FEU increase to West Coast ports. Of course, it would be even more expensive for other parts of the U.S. The Journal of Commerce article reports that second proposed increase to be “$700 per FEU on intermodal services to interior destinations and on all-water services from Asia to the East Coast.”

You can click here to read the Journal of Commerce article for more details. This blog is more concerned with the good that could come out of these freight rate increases.

Of course, as an international shipper, freight rate increases sound like nothing but bad news. Spending more to import increases costs and cuts into profit. How could that possibly good?

In 2011, we were spoiled by dramatic decreases in freight rates from Asia because of increased capacity from carriers. This made for a great year for freight forwarders like Universal Cargo Management and importers from Asia to the U.S., but carriers were seeing losses.

No business can last long selling under its costs; however with the capacity increases last year, carriers moved shipping containers at less than profitable rates, fiercely trying to compete for ocean freight business. Something would have to give.

Certainly this was not a good situation for carriers, but the really big carriers were able to let a smile creep on their faces. If things continued on with low freight rates causing carriers to lose money, bankruptcy would surely take out much of the competition.

Maersk even voiced that they were prepared to outlast the competition (See UCM blog Maersk to Outlast Competitors in Face of Lower Freight Rates).

As we look at this bigger picture, these new proposed freight rate increases have a benefit. International shipping must be profitable for carriers or, like in any industry, they’ll go out of business. Imagine all but a couple of the biggest carriers being gone. Now imagine what would happen to freight rates then.

Considering the freight rate drops of 2011, freight rate increases in 2012 only brings the cost of shipping back to more “normal” levels. Of course, the costs of shipping containers over the ocean are always volatile. Ups and downs in freight rates are to be expected. Take advantage of freight rates when they’re low, but know that increases are sometimes beneficial too.

While price is important, we all know that it is not the only factor to consider in business. Sometimes we pay more for reliability, speed, quality, and so on. In this case, we could pay more to avoid paying much more later.

So as we expect to see increases in ocean freight rates to continue in 2012, we know it isn’t all bad news or the end of the world (unless all the Mayan calendar hype is true). Still, importing now to beat some of the increases is certainly not a bad idea.

For freight rate quotes, click here.

Source: Economy

The post More Carrier Imposed Freight Rate Increases Could Be Good for Shippers? appeared first on Universal Cargo.

Perhaps you have products you want to export to China’s massive markets. Maybe you want to import from China in order to lower costs on the parts for a product you manufacture.

The simple fact is, especially with today’s global market, China is a great place to do business.

With over 25 years of experience as a trusted freight forwarder, Universal Cargo Management helps shippers all over the United States import from and export to China. But we don’t just want to ship to and from China; we want to help businesses succeed.

“A friend to your business” is not just a tag we put on our website. Universal Cargo Management is committed to our vision of enriching the lives of those within our company as well as those we do business with.

Friends share their knowledge and experience. That’s exactly what Universal Cargo Management’s white papers are for.

UCM’s very own CEO, Devin Burke has over 26 years experience doing business with Chinese and 17 years experience doing business with the country of China. Pair that experience with Mr. Burke’s avid reading, especially on the subject of China, and his is an excellent mind to pick on the subject of doing business in China.

You don’t have to pick Mr. Burke’s mind; he’s already done it for you. Go to our White Papers page and click on the China White Paper to read great insights from CEO, Devin Burke. This white paper was highly influenced by CHINA UNCOVERED by Jonathan Story and CHINA INSIDE OUT by Bill Dodson–books we recommend.

We believe reading this white paper could help you in achieving your business goals in China. And we’re always here to help you with your international shipping to and from China or elsewhere around the world!

Source: Economy

The post Want to Do Business in China? appeared first on Universal Cargo.

Recently it has almost seemed as if all the ocean carrier lines have been acting in congruity, even unison, to affect prices of shipping cargo containers internationally. However, in a shrewd move opposite of the pack, Evergreen Line increased its market share by capacity in the trade route that includes shipping from China to the United States. 

In 2011, ocean freight rates were dropping as carriers faced issues of overcapacity. The trade route from East Asia to the West Coast of North America especially saw falling freight rates.

For shippers who import from China to the U.S., this was great news. Lower freight rates meant lower costs and more opportunity for profit.

Lower freight rates meant the opposite for carriers. Their fleets of cargo container vessels dropped in value by billions of dollars.

Heading into 2012, carriers made moves to cause pricing trends to increase in their favor for ocean freight rates on shipping cargo containers internationally, especially from China and the Far East to the United States and North America.

A couple weeks ago, Universal Cargo Management posted a blog about carriers imposing freight rate increases from China to the United States. The blog focused on fees and general rate increases that went into effect at the start of 2012 from carriers across the board; however, the blog also mentioned carriers removing capacity from the trade route.

As a freight forwarding company, Universal Cargo Management pays close attention to trends and data of international shipping to help us give our customers the best possible freight rates for importing and exporting cargo. One excellent source of data is ComPair Data and their quarterly World Liner Supply Reports. In ComPair Data’s most recent report, it’s easy to spot the fast one Evergreen Line just pulled on the rest of the carriers.

ComPair Data’s World Liner Supply Report Quarter Four 2011 revealed just over 10% of the weekly capacity was removed from the trade route running from East Asia to the West Coast of North America as carriers removed services.

Weekly capacity dropped from 292,315 TEUs at the end of 2011’s 3rd quarter to 260,702 TEUs at the end of the 4th quarter.

While it looked like all the carriers were removing TEU capacity, Evergreen Line – UAM sailed against the wind and added TEU capacity, increasing Evergreen Line’s market share by capacity in the East Asia to North America West Coast trade route from 6.76% in 2011 Q3 to 8.22% in 2011 Q4.

While most carriers saw small drops in their market share by capacity in the last quarter of 2011, there was one other shrewd player whose market share increased similarly to Evergreen. No surprise, it was Maersk. Simply by not removing any services on the trade route, Maersk increased from 9.34% to 10.54% of the trade route’s market share by capacity.

For a free rate quote from China to anywhere in the U.S., click here.

Source: Economy

The post Evergreen Pulls Fast One to Up China to U.S. Shipping Market Share appeared first on Universal Cargo.

The U.S. auto industry has certainly seen rough times recently. While the Big 3–GM, Chrysler, and Ford–try to recover from the Automotive Industry Crisis of 2008-2010, China’s ambition to dominate emerging car markets is a threat to the future health of American auto manufacturers.

Source: Economy

The post Are Chinese Exports Shipping Out to Take Over the Auto Industry? appeared first on Universal Cargo.

Last weekend the wrecked cargo ship Rena split in two, leaving two miles of “a light sheen of oil” on the water according to an MSNBC.com article.

Universal Cargo Management first posted a blog on Rena back in October after the cargo vessel ran aground on the Astrolabe Reef in New Zealand’s Bay of Plenty.

MSNBC reports that 400 tons of fuel oil was spilled into the waters when the Rena ran aground. This, the worst maritime environmental disaster New Zealand has ever had, caused authorities to find 2,000 dead birds and estimate 20,000 were killed.

Editorial Photo © Brian Scantlebury | Dreamstime.com

Environmentalists are now fearing that the cargo dumped from shipping containers that were on the Rena will increase the animal death toll caused by the oil spill.

An article from Stuff.co.nz reports that 150 shipping containers fell into the sea when Rena broke in two. A shipping container of polymer beads washed up on the beach of Matakana, having spilled some of its contents.

The small beads are being eaten by shorebirds that feed on fish eggs of similar size to the beads. Work is being done to clean the beads, but there are more containers of these beads that were on board the Rena in danger of dumping in the sea as well.

It is not only wildlife at risk from the cargo spilled from the Rena.

Bags of milk powder, among other cargo items, have washed up on Waihi Beach. People have grabbed bags of the milk powder and taken off with them. Authorities say that these items could be health hazardous.

The popular Waihi Beach has been closed down in an attempt to protect public health.

Excellent photos of the Rena split in half can be seen by clicking here.

During the months between the Rena running aground and it splitting in two, teams have been working on emptying it of fuel and salvaging the shipping containers on board.

Obviously, the tasks are not easy to complete. The cargo vessel’s breaking in two makes such tasks even harder.

Hopefully, the teams working to clean up this disaster are successful in returning the formerly pristine waters and beaches of New Zealand’s Bay of Plenty to safe and beautiful places for people and wildlife.

And hopefully, shippers who were importing or exporting cargo on the Rena had marine insurance. It’s always a good idea to protect yourself from such unexpected cargo loss or damage when you import or export.

Source: Green

The post Rena Splits, More Oil Spills, and Shipping Containers Dump in Sea appeared first on Universal Cargo.

These GRIs and PSSs were implemented by carriers on January 1^st, 2012 and have been successful in applying to both BCOs and NVOs.

While rates are increasing for both BCOs and NVOs, we are seeing the gap between BCO direct carrier s/c rates and NVO benchmark (spot) rates shrinking.

While carriers are succeeding at increasing rates–and assumingly their profits–with GRIs and PSSs, they have not succeeded in making increases happen in every single freight rate circumstance from the Far East to the United States.

For a few carriers, like Maersk and OOCL, a little snag has come up. Some of their small to mid-sized BCOs would not accept the new deal with rate increases due to the January 1^st GRIs and PSSs the carriers have imposed.

Carriers cannot force BCOs to agree to the new increases/deal and have to allow these BCOs to keep their rates unadjusted. However, such BCOs are likely to find themselves facing booking restrictions from the carriers. When space is tight, as the case is right now, these restrictions will hit the hardest.

What’s this about space being tight now? Haven’t the carriers been struggling with overcapacity? Isn’t that what had freight rates on a downward trend in 2011 that carriers are fighting against with these increases in 2012?

The Chinese New Year is fast approaching. It hits on January 23^rd. Many vendors and factories
in China plan to stop production before then so their workers can return home for the holidays. This creates a cargo rush happening right now as shippers want to get their cargo freight out before the shutdowns happen.

There are other factors making space very tight at the moment as well.

One factor is rollovers. Over Christmas and New Year, some carriers were overbooked, and have had to allocate space during this busy time for the overflow.

The other factor is carriers shrinking capacity. Yes, the container vessels still exist and are still being built, but carriers have suspended operations of some cargo freight vessels from the Far East to the United States to fight freight rates being pushed down by overcapacity.

In November, suspension of CKYH’s AWE5 and GA/Zim’s SCE2 strings was implemented. These two services being removed created an aggregate total of 5,300 fewer FEU per week or 9.9% of ECAW capacity removed from this market.

Water capacities from China to the United States, despite the general overcapacity issue that’s been happening, were actually very well optimized before the capacity cut. It’s not hard to imagine why ships would be so full now.

The all-water space utilization ratio for this market has reached 110-120%. Uswc/Ipi utilization is at 95-105%.

Of course, as we come upon the Chinese New Year, booking will drop. There are carriers predicting that booking will remain good, but none pretend it will be as crazy as things are now in this peak season.

To get a rate quote, click here.

Source: Economy

The post Carriers Impose Freight Rate Increases From China to United States appeared first on Universal Cargo.

The Coalition for American Hardwood Parity (CAHP) scored a major victory as 2011 drew to a close. The U.S. International Trade Commision ordered antidumping and countervailing duty on imports of multilayered wood flooring from China.

The CAHP claimed the multilayered wood flooring industry in the U.S. was being unfairly threatened by multilayered wood flooring manufactured in China and called for antidumping and countervailing duty investigations back in 2010.

An antidumping investigation looks into whether or not an imported product is being sold in the U.S. market at a value that is less than fair by a foreign manufacturer.

Countervailing duty investigations look into whether or not government subsidies are giving a foreign manufacturer an unfair competitive advantage.

The CAHP claimed multilayered wood flooring import from China was running against U.S. fair trade law in both areas and are thrilled that the final determination of the U.S. International Trade Commission agrees.

Made in China products have certainly increased in the United States. Some research indicates that, for the most part, the increase of imports from China has not come at the cost of American jobs. However, in the industry of multilayered wood flooring, Chinese manufactured products have taken over a large portion of the U.S. market at a great cost to American manufacturers.

This decision “represents an important win for American manufacturing, and the fight to keep honest paying manufacturing jobs in this country” according to lead counsel for the CAHP, Jeff Levin as quoted in a press release about the U.S. International Trade Commision’s determination.

Perhaps this wil cause a trend of looking into U.S. imports from China and other countries with more scrutiny. Or perhaps it will be an isolated decision.

Here in 2012 and the years to follow, we’ll see if Levin is correct in saying, “This also represents a substantial step towards redressing the harmful impact of unfair trading in the U.S. market.”

For a free rate quote on imports from or exports to China, click here.

Source: Economy

The post China Unfair Trade Ruling on Import of Multilayered Wood Flooring appeared first on Universal Cargo.

Some claim that capitalism is to blame for the woes facing Main Street America. High unemployment; wage stagnation; and increases in living costs, food, fuel, and energy all impinge on the normal American’s life and the efforts to improve our existence while making sure the next generation will have things better than we do.

Source: Economy

The post The Soft Sell of Communism Starts with Mislabeling appeared first on Universal Cargo.

China manufacturing costs have been on the rise during the last several years. One of the biggest causes for this increase in manufacturing costs is a rise of labor rates in China.

As manufacturing costs change, business adapts. Manufacturing has been moving in China to find less expensive labor so products exported from China will result in greater profit.

An excellent article from Venture Outsource outlines information from a 2011 report the U.S. Bureau of Labor Statistics published on manufacturing labor rates in China.

The article quotes Michael Palma, research manager for the market research firm IDC as saying, “to avoid paying higher labor rates due to a scarcity of workers, many… are moving operations inland to tap new sources of labor.”

According to an article from the Journal of Commerce (JOC), the manufacturing movement trend has been going both inland and north. For many, this manufacturing movement is not new news.

“People have been talking about a move to the center and north, but in 2011 it has happened,” the article quoted Thomas Knudsen, Maersk Line CEO in the Asia-Pacific as saying.

As labor costs have been on the rise in China, the movement of manufacturing inland and north is not a sudden 2011 development. But it is increasing and affecting the activity in the ports of China.

2011 has seen falling shipping container rates, especially out of China due largely to overcapacity factors. Combine that with slowing growth in export from China “due to lower sales to Europe and general economic uncertainty” as reported in the JOC article and Maersk is bound to be especially aware of Chinese manufacturing and international shipping trends affecting the ports in China in 2011.

The JOC article outlined the growth that northern ports in China have seen versus that of southern China ports.

Of course, with the slowing growth of export in China during the last months as stated above, growth has slowed both in the north and south of China. However, the growth slowing hit the southern ports much harder than the northern.

While northern ports were seeing double-digit percentage growth in 2011, southern ports were seeing very small growth comparatively and even some reductions.

As we move into 2012, it is likely that we will continue to see more rapid growth from northern ports like Tianjin/Xingang and Yingkou than from southern ports such as Shenzhen and even Hong Kong.

Click here for a rate quote on importing from China.

Source: Economy

The post China Manufacturing Shifts Export Growth Trends of Ports appeared first on Universal Cargo.

Occupy Strikes Back: 12.12.11—It reads like a movie poster. The people who wrote the slogan, probably going for an epic sound with the Star Wars title reference, probably wouldn’t compare the Occupy Movement to the evil Empire in George Lucas’ famous films. They would be much more likely to relate to the Rebel Alliance if they were to use a Star Wars metaphor for the movement. Yet the most recent plans of the Occupy Movement is a much more ominous sound to some than the Imperial March could ever be.

The Occupy Movement plans to shut down the U.S. West Coast ports this upcoming Monday, December 12th.

Can they do it? The logistics involved in disrupting some ports would be more difficult than others. The Long Beach-Los Angeles Port, for example, stretches over miles with many different gateways and terminals and would require a large show of people to shut down. Of course, it wouldn’t take even close to 99% of Los Angeles’ nearly 10 million population showing up and forming picket lines to affect the import and export operations.

On November 2nd, Occupy Oakland protestors stopped the night operations at the Port of Oakland.

With the growing momentum of the Occupy Movement, port shutdowns are very possible.

The Port of Oakland is certainly taking the Occupy Movement’s plan to shutdown ports seriously. The Board of Port Commissioners for the Port of Oakland sent a letter to the community on December 4th imploring the people to help keep the port open. The letter’s opening line reads, “From dockworkers to engineers, truckers to office workers—
the Port of Oakland is where the 99% work.”

They are also directing anyone who will listen to a Keep the Port Open website. The stance of the Board of Port Commissioners is that shutting down the port will accomplish nothing but hurting working families and community.

The Port of Oakland plea may be falling on deaf ears as the Occupy Movement’s resolve does not seem to be shaken.

Among the Occupy Movement’s normal stance against the role and power held by multinational corporations, major banks, and Wall Street over the democratic process, the Occupy Movement says that shutting down the West Coast ports is also standing in solidarity with The International Longshore and Warehouse Union (ILWU). The ILWU says the opposite.

Officially, the ILWU is against the shutdown of west coast ports by the Occupy Movement.

According to an article from the Journal of Commerce, “the ILWU said although the union shares Occupy Wall Street’s concerns about corporate abuses and the future of the middle class, the call by Occupy forces to shut down West Coast ports was made without any consultation with the union.

“’Only ILWU members or their elected representatives can authorize job actions on behalf of the union, and any decisions made by groups outside of the union’s democratic process do not hold water, regardless of the intent,’ said ILWU President Robert McEllrath.”

Since the protest is not planned by the union, the union will not recognize people with signs standing in front of shipping gateways at ports to be a picket line. The plan is that as long as it is deemed safe for the workers, they will go to work at the docks on Monday.

However, the official stance of the ILWU may not be a full picture of the union’s attitude toward the situation.

“If ILWU members don’t honor the community picket lines, it will cause an irreparable breach with the community. If the ILWU can’t support the community, why should the community support the ILWU…” said Clarence Thomas, third-generation longshoreman in Oakland and past secretary-treasurer of ILWU Local 10 in a Workers World interview with reporter Cheryl LaBash.

Interviewed at the same time was Leo Robinson. He’s retired, but is a former member of the ILWU Local 10 executive board. Mr. Robinson said the union has observed community picket lines “any number of times” and sited a 1977 community picket line at Pier 27 against South African cargo because of apartheid which was not authorized by the union as an example.

Clarence Thomas could not have stated it much stronger than as he was quoted at the end of the interview, “The ILWU is not some special interest group. We are a rank-and-file militant, democratic union that has a long history of being in the vanguard of the social justice and labor movement.

“We don’t cross community picket lines.”

It will be seen on Monday if the Occupy Movement protests will stop workers from going to their jobs and disrupt ocean freight import and export operations at U.S. West Coast ports.

Source: Economy

The post Will Shutdown Ports Disrupt Import and Export Ops December 12th? appeared first on Universal Cargo.

Everyone loves lower freight rates. Right? Wrong.

While they’re great for shippers doing international business and importing and exporting goods, lower freight rates mean smaller profit margins for carriers/containership owners.

In fact, low freight rates can even cause no profit and loss for carriers.
In a recent Universal Cargo blog, we spotlighted the falling freight rates for shipping from China.

But it is not only importing from China where freight rates have fallen.

There are many factors that affect freight rates, but one of the top factors is capacity.

Right now, carriers face overcapacity. Major overcapacity.

More on capacity exceeding demand.

It would appear this major overcapacity will continue for at least a few years.

AP Møller-Maersk (Maersk), the world’s largest containership company with a fleet of 222 container vessels is showing a cool demeanor at the sight of plummeting profits.

According to an IFW article by Kizzi Nkwocha, “Maersk says it is prepared to outlast its rivals.”

The article says the industry could be facing four years of overcapacity and that in just the last year the value of Maersk’s fleet of containerships has fallen from $12 billion to $9.1 billion.

Could Maersk really handle four years like that?

As all carriers are facing the same problem of lower freight rates and falling value of ships because of overcapacity, this situation could actually turn out well for Maersk.

Out on the junkyard, sometimes the bigger dog eats the smaller dogs.

Maersk is certainly the big dog of the shipping industry.

I can almost see a sneer full of K-9s as the IFW article quotes Maersk CEO Nils Smedegaard Andersen saying, “It would be natural if the smaller players in this business, or their banks, start questioning whether it’s a good idea to keep competing.”

While overcapacity and lower freight rates are good news for freight forwarders and international shippers right now, what kind of price jumps might we expect if Maersk is right about being able to outlast its competitors?

Freight rates are always volatile and I wouldn’t have you fretting over the future. Therefore, do not worry about tomorrow, for tomorrow will worry about its own things. Sufficient for the day is its own trouble.

Instead, shippers, get while the getting’s good. For a rate quote while overcapacity is in your favor, click here.

Source: Economy

The post Maersk to Outlast Competitors in Face of Lower Freight Rates? appeared first on Universal Cargo.

Universal Cargo Management’s last blog looked at how the next phase of the Clean Truck Plan at the ports of Los Angeles and Long Beach could cause shippers to see an increase in trucking costs for goods being imported and exported through the Los Angeles area.

As we head into 2012, trucking costs look to be ready to increase all over the country with the dock requirement changes at the ports of Long Beach and Los Angeles being just one factor affecting ground shipments in the U.S.

The big problem shippers will have to face is a supply scarcity of commercial trucks.

This shortage of trucks has been predicted for the last two years, according to an article from American Shipper, and is now becoming a reality. The article goes on to quote freight industry economist Noël Perry as saying, “Sometime in 2012 there is a reasonable probability of sporadic supply chain failures based on capacity.”

No one likes to see their costs increase in business, but much worse is a supply chain failure. Imagine importing goods but not being able to get them on the shelves or to your customers. If you have a deal where you’re exporting goods, your global business partners won’t be happy if you can’t get the goods to the port in time to make your ocean freight cut off.

To help you avoid supply chain failures, here are tips on how to prepare for the trucking scarcity faced by the logistics industry.

TIP # 1 – NURTURE RELATIONSHIPS WITH TRUCKING COMPANIES

Whether you’re doing local or global business, business is about relationships. Truckers and trucking companies will be in the power seat, choosing with whom they do business. Forming strong relationships with them will make it more likely they choose you when they are presented with more opportunities than they have trucks to handle.

TIP # 2 – SHIP OUTSIDE OF PEAK SEASON

If you can manage it, plan your shipments outside of peak shipping seasons. Obviously, shipping when less people are trying to move their goods decreases your risk of not being able to procure trucking.

TIP # 3 – LET UCM HANDLE THE TRUCKING WITH YOUR IMPORTS AND EXPORTS

With over 25 years in the business, Universal Cargo Management has the relationships and know-how to make your importing and exporting run smoothly from ocean freight and air shipments to customs and trucking.

For a rate quote that includes trucking, click here.

Source: Shipping

The post 3 Tips to Overcome Truck Scarcity Impeding U.S. Import & Export Logistics appeared first on Universal Cargo.

If you do international business and have used the ports of Los Angeles and Long Beach for your importing and exporting, the title of a recent post from Pier Pass may sound exciting to you.

“Ports of Los Angeles and Long Beach to Discontinue Clean Truck Fee,” reads the title.

The Clean Truck Fee at the ports of Los Angeles and Long Beach is part of the Clean Truck Plan, a green initiative to lower port truck emissions. The Pier Pass post announces that the ports of Los Angeles and Long Beach “will no longer be assessing a Clean Truck Fee on trucks with an engine year of 2006 and older.”

Fee gone means Universal Cargo’s great freight rate quotes will look even better, right? If possible.

Fewer fees mean less costs, right? In theory.

This fee gone should mean nothing but good news for international shippers, right? Not necessarily.

The post goes on to say, “Trucks with an engine year of 2006 and older will be banned from port marine terminals.” So trucking companies taking cargo to and from the ports could have extremely large costs in upgrading their trucks.

These costs to trucking companies could lead to an increase in trucking costs for shippers exporting and importing goods through Los Angeles.

Fortunately, it is not as though the trucking companies should be caught off guard by this. Pier Pass’ post was not out of the blue. The clean truck plan is part of the Clean Air Action Plan that was approved in November of 2006.

In fact, this is not even the first banning of trucks from the port terminals. A Port of Los Angeles blog reports, “October 1, 2008: All pre-1989 trucks were banned from entering the port.”

With years to plan and adjust for the costs, hopefully trucking companies have prepared for a smooth transition and we won’t see a sudden hike in prices.

The good news is the plan seems to be effective. According to the Port of Los Angeles blog mentioned above, “In its first year, the program reduced the rate of port truck emissions by an estimated 70 percent. When fully implemented in 2012, port truck emissions will be reduced by more than 80 percent.”

To get a freight rate quote that includes trucking, click here.

Source: Green

The post Fee Removal Could Increase Costs to Shippers Importing & Exporting Thru L.A. appeared first on Universal Cargo.

You don’t often hear the words “Obama” and “maritime” in the same sentence. Maybe that’s because “Obamaritime” doesn’t quite have the right marketing ring.  With the country’s long coast lines and hundreds of ports pumping trillions of dollars into the economy through the importing and exporting of ocean freight, the president of the United States must have a policy when it comes to maritime. Or does he?

There are some maritime experts and international trade professionals who say President Obama is overlooking this sector in his policies.

It’s no secret the popularity that won President Obama the election has not carried through his presidency. Many of his policies have met staunch opposition. Two key issues President Obama has had to face are healthcare and economic difficulties. His controversial “Obamacare” addressed the  former and faced no shortage of criticism. Now the plan he announced in September to address the latter has aroused critics from, among other places, the cargo freight industry.

Tony Munoz, editor-in-chief of The Maritime Executive Magazine and MarEx e-Newsletter, wrote an article that calls President Obama out on the plan.

The president’s plan is a 447 billion dollar infrastructure plan meant to quickly pump money into the economy and create jobs. What has Tony Munoz and others maritime and ocean freight professionals upset? The U.S. maritime sector is not part of the plan.

According to Munoz’ article, approximately $50 billion is spent annually by the U.S. government on all forms of transportation, yet somehow the U.S. maritime sector receives nothing annually.   

President Obama’s plan puts billions of dollars toward getting surface transportation projects off the ground, focusing on highways, rail, and air. The president’s plan actually dwarfs that annual number of $50 billion, putting over $70 billion toward highways, over $22 billion toward transit, close to $19 billion toward aviation, and over $8 billion toward railroad?

How much money toward maritime? $357.8 million to assist the military.

It’s not hard to see why Munoz scoffs, calling the amount toward maritime a pittance and says, “If a nation is judged by its policies and budgets, then the Obama Administration’s 2012 budget for the Maritime Administration shows an absolute disregard for the U.S. maritime sector.”

Munoz suggests that shifting focus to the maritime sector could actually give Obama’s administration a budget surplus to work with and help ease freeway congestion and urban pollution all while creating jobs.

Munoz does not fail to point out Obama’s transport infrastructure support increases the Department of Transportation’s 2012 by $129 billion or 12% and that this increase is actually 66% since fiscal year 2010. Considering a national debt in the trillions, creating jobs while spending less seems worth considering.

While the Senate GOP has blocked the plan, no focus toward maritime seems to be emerging. Of course, that doesn’t stop international business from carrying on, importing and exporting ocean freight and pumping money into the economy.

To get a rate quote on your imports or exports, click here.

Source: Economy

The post Tony Munoz Calls President Obama Out on “Zero Bucks for Maritime” appeared first on Universal Cargo.

Universal Cargo Management’s own CEO, Devin Burke and Managing Director, Kamy Eliassi were on hand in Miami for 2011’s HD Boutique Exposition & Conference (HD Boutique).

Mr. Burke, Mr. Eliassi, and other members of the Universal Cargo team are no strangers to trade shows. In fact, just last month they attended a furniture trade show in Las Vegas. While the HD Boutique featured many fine pieces of furniture, Hospitality Design focuses this event toward the Hospitality Industry. “Although it is similar to the Home Furnishings trade shows in exhibitors, it has a different clientele,” says Burke.

Hotels, restaurants, and real estate companies are a few of the kinds of businesses that fall inside of the Hospitality Industry’s umbrella. There’s much that can be learned about industries from attending their trade shows. Burke notes, “This industry typically has done slightly better than the Furniture industry I have noticed as I speak to various exhibitors, but is less consistent.”

Events like the HD Boutique are great places for the Universal Cargo team to catch up with existing customers, establish new business relations, and see trends in industries that frequently utilize import and export services offered by freight forwarding companies like Universal Cargo.

The HD Boutique is smaller than many trade shows, but that does not mean it is inferior. “… this show was the smallest I have seen in terms of exhibitors, but it has decent traffic,” says Burke. “It is much smaller than the one in Vegas in May, but I personally spoke with several exhibitors that were having better than expected years in terms of orders than in Vegas where there was a lot downward expectation.”

According to Burke, trade shows educate expectations concerning the economy. “I think these types of trade shows are a pretty good barometer of where the economy is headed,” he says.

What kind of forecast can be gathered from the HD Boutique barometer?

Burke says, “The indication so far is that at least in the Hospitality Industry there is reason for optimism, along with the overall fear that is everywhere. But I saw quite a lot of innovation and businesses that are weathering the storm quite well.”

Do you have an optimistic outlook for the economy? Share your economic forecast and how you determined it in the comments section below.

Source: Economy

The post Devin Burke Reads Economic Barometer at the HD Boutique appeared first on Universal Cargo.

The post What the Freight!?! Gold Not Money? appeared first on Universal Cargo.

Guest Blog by Nathan Gladwin

This short piece illustrates how clever foresight and business ingenuity combined, in this instance, with the right lifting equipment can be highly effective in creating profitable business opportunities and relationships, which better a country’s economy and international trade prospects.

In the United Kingdom the Teesport container terminals along the River Tees in Middlesbrough have recently been upgraded with four huge brand spanking new industrial overhead gantry cranes to the sum of 5 million pounds. (7.8 million US dollars)

The move was in response to the predicted growth and the subsequent demand for better logistics along the river’s various container ports. The purchase of the new cranes includes benefits of improved speed, handling, efficiency, and overall capacity.

For example, more containers will now be able to occupy the same space due to the ability to place wider stacks than previously, also allowing them to be made taller. The new cranes also have a faster operational speed—that means more ships will be able to load and offload within the same time.

Last year alone, total volumes of shipping increased by over 45%, which is largely due to the presence of distribution warehouses for consumer supermarket retail giants Tesco and Asda who have sizeable operations in the area.

It’s believed that up to 4,000 new jobs will be created and that the current infrastructure needs to be ready to cope with the new demand ahead of time. The Thai steel company Sahaviriya Steel  plans to ship 3.5 million tonnes of steel each year out of the port when a local blast furnace begins fresh production at nearby Redcar.

These operations are all part of a 16.7 million (25 million US dollars) expansion taking place at Teesport’s container ports. It is hoped that this will establish an internationally leading and recognised UK based logistics hub.

Written by:

Nathan Gladwin
Business Development Manager

Harold Potter sells cranes and industrial lifting equipment to commercial customers.

Contact raymond@universalcargo.com to participate in our guest blogging series.

Source: Economy

The post Crane Infrastructure Driving Business Opportunity appeared first on Universal Cargo.

Not a lot of people have heard of the relatively simple, yet not so often discussed theory in economics called “The Bathtub Theorem”.

The bathtub analogy in discussing economics was first put forth by British professor Kenneth Boulding in his book The Economics of Peace.  He explained
a number of different economic phenomena simply as the incoming flow of water into a bathtub and the outgoing flow of water via leakage or the drain from the bathtub. The incoming and outgoing flow of water ultimately determines the water level and stability of the bathtub.

The analogy cleverly helps put so many difficult economic concepts to easy use. It has been used not only to explain different economic concepts, but social and life phenomena as well.

The post The Bathtub Theory of Economics and Life appeared first on Universal Cargo.

Nearly 1 billion people do not have access to clean drinking water. 9,800 people die every day from water related diseases. Every 20 seconds a child dies from a water related illness. And all of this is preventable.

Imagine carrying a giant container for miles in hundred degree heat. You reach your destination. It’s a dirty, animal watering hole. It’s also your source of water. You fill your container with brown, parasite-filled, bacteria infested water and lug the heavy thing the miles back home, hoping not to be attacked on this daily journey. Now imagine this is your childhood.

For too many people, this is a reality. It would take great imagination for them to envision a world where childhood can be spent playing games and going to school. A world where all it takes to get water is turning a knob. Getting up in the morning and stepping into a shower? Who could be showered with clean water when there isn’t even clean water to drink?

You can help change this.

One of Universal Cargo Management’s values is a spirit of generosity. It is no surprise that Devin and Shirley Burke, CEO and President of UCM respectively, helped Generosity Water build a water well for a village in Thailand.

Generosity Water is an organization dedicated to ending the clean water crisis in developing countries, one community at a time.

In three years, Generosity Water has funded 242 water wells and 8 cisterns in 17 countries to give over 100,000 people clean, safe drinking water with the help of people like Devin, Shirley, and you.

One water well provides a community of 200 people with water for 20 years. This is life for a community. It allows children to go to school instead of walk for hours collecting dirty water. It provides people with the basic human right and dignity of clean water to drink.

If you have an import or export aspect to your business, the odds are you already think globally. But maybe you never realized you could be part of solving one of today’s largest global problems. Giving clean water to those who don’t have it is easier than you think.

Visit GenerosityWater.org to see how you can help bring water and life to those in need.

To check out more ways Universal Cargo is making a difference in the world, go to UCM’s mission page.

Source: Economy

The post Export Generosity to People in Need of Water appeared first on Universal Cargo.

Working on blogs like this one, I often squeeze a little, smiley-faced stress reliever I call Red. On the bottom of Red are the words, “MADE IN CHINA.” You’ve seen
these words on merchandise.

There has been much talk and worrying during the last few years about how China-made-products have infiltrated American stores.

The perception of many is that the majority of American spending is going to China, making that country richer and richer while leaving the U.S. poorer and poorer.

The United States does have a record trade deficit with China and the U.S. has been experiencing recession while China seems to be growing as an economic world power. The assumption that a majority of U.S. spending is going to China seems reasonable. However, research from the Federal Reserve Bank of San Francisco (FRBSF) paints a very different picture.

Those who say all the action is in China should pay attention.

More and more it is recognized that we live in a global economy. People are trading and selling all around the world, not merely in local markets. It is because we live in this world of international trade that freight forwarding companies like Universal Cargo exist, helping you import and export to countries like China all over the world.

Despite growing globalization and the United State’s international presence, FRBSF reports that the U.S. has a relatively closed economy. “The vast majority of goods and services sold in the United States is [sic] produced here,” says FRBSF. 88.5% of U.S. consumer spending is on U.S. made items. Of the 11.5% of spending on imported, foreign made products, 36% of the money goes to U.S. workers and companies.

Here’s the breakdown of the personal consumption expenditures (PCE) in the U.S. reported by the FRBSF. In other words, this is where American spending is going:

81.9% – Made in U.S. from U.S. parts

5.9% – Made in U.S. from imported parts from countries other than China

0.7% – Made in U.S. from parts imported from China

6.1% – Final goods imported from countries other than China

1.2% – Final goods imported from China

2.7% – U.S. content of imports “Made in” countries other than China

1.5% – U.S. content of imports “Made in” China

Chinese exports to the U.S. have about doubled over the last decade. However, the total of U.S. imported products from all over the world, including China, has been pretty constant. This means that the increase of Chinese products on American shelves comes largely at the expense of other countries’ products, not American made items.

Don’t give into the hype that China has taken over American spending. American produced products from American workers in American companies are still going strong in this country. All the action is not in China.

Even with all the growth that China’s economy has experienced, the United States still has the world’s largest economy. Now, China’s expanding economy is showing signs of slowing down.

The New York Times reports that China’s economy during the 2^nd quarter increased at an annual rate of 9.5%. This is a strong number, but less growth than their economy saw during previous quarters. China is tightening up on lending and experiencing high inflation. It doesn’t seem China can maintain the kind of economic growth they’ve been experiencing and keep inflation under control.

The U.S. struggles with inflation problems of its own. Many fear inflation in China will increase American inflation. Perhaps many of these have an overblown idea of Chinese products in the U.S.

Because of how small the actual percentage of American spending is that goes to Chinese products, FRBSF says that Chinese inflation will not cause broad inflationary pressure on the United States.

Do you agree with FRBSF? Comment below on how you think Chinese inflation might affect the U.S. economy.

Source: Economy

The post Made in China: U.S. Import and Spending appeared first on Universal Cargo.

Before you get too excited that shipping freight rates will finally settle and be steady, consider the following lingering issues. There are many factors that contribute to the volatile freight rates of the sea shipping industry; however, none more so than the basics of supply and demand.  Demand on U.S.imports is expected to pick up during the traditional peak season of June to November; however, this year things have gotten to a slower start. Most carriers postponed their peak season to the end of July or early August, 2011. This is no doubt partly because of less than expected volume during this season and the carrier overcapacity caused by increased vessel space. Ocean capacity is increasing by 8.8% in 2011 while there is only about 4.4% trade growth.

Massive ships, with significantly greater capacity have already hit and are hitting the seas during the next several years. Routes between Asia and Europe have increased capacity by 15% while demand is only predicted to grow by 7.5% there. Despite all this, the carriers can still manipulate their capacity by sidelining ships to control supply and drive prices up.  This they haven’t done so far in 2011 as they did in 2010.  But if they get together to pull this off again it could wreack havoc on freight rates once again.  Will the carrier losses prompt them to tighten capacity once more later during the year?  That is what will remain to be seen.

Air carriers have already begun removing capacity to boost rates and maintain their freight profit. Sea carriers have been known to do the same. In 2009, when the supply of carrier ships far outweighed the demand of shipped goods, hundreds of sea carriers were docked. This strategy of removing capacity reduced costs and pushed ocean rates back up, turning things back in the favor of the ocean carriers very quickly.  This is a strategy they used last year which helped the ocean carriers have one of their most profitable years. Although this is less likely in 2011 due to the significant increase in capacity, its potential is there and could cause significant price hikes if implemented. Of course, any industry’s market is more complicated than supply and demand. Fuel prices have also increased this year and the fuel bunker’s continued uncertainty and volatility will keep the freight rate roller coaster an unpredictable and nauseating ride for shippers.

So before getting too excited about the unusual calm in freight rates, be ready for more swings up and down. At least 2011 is more likely to give a less volatile ride than 2010.

To get a rate quote, click here.

For more on capacity overtaking demand, click here.

Source: Economy

The post Pressure on Container Rates in Freight Rate Roller Coaster appeared first on Universal Cargo.

In response to the thwarted Yemen cargo bombing plot that happened on October, 29 2010 the US Department of Homeland Security (DHS) is quickly enacting new security regulations related to Air Freight cargo shipments.  

Immediately following the discovered plot the US DHS put a ban on all air cargo coming from Yemen. This ban has now been extended to Somalia and cargo being shipped to the US from other high risk countries will undergo enhanced inspection.

Additionally, the DHS has enacted a ban on all “high risk” cargo being shipped into the US via air freight. High risk cargo includes:

• Any shipment described on the Master Air Waybill (MAWB) or the House Air Waybill (HAWB) as ‘household goods’ or ‘personal effects’
• Shipments paid in cash or cashiers check
• Shipments from a company that does not have an preexisting account with the shipper
• Cargo forwarded by a foreign carrier

Since the explosives in the plot were disguised as printer toner cartridges, toner and ink cartridges over 16 ounces are now prohibited on passenger aircraft in both carry-on bags and checked bags on domestic and international flights in-bound to the United States. 

These new regulations are meant as a temporary security measure but the DHS has not said when these measures will be lifted. However, they will be in place for a minimum of 30 days. These enhanced security measures will likely cause substantial delays to shipments, reduce cargo capacity and increase associated costs.

Source: Air

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