Month: June 2022

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FURTHER WEST

In the United States, on the Pacific coast, the congestion of the ports of Los Angeles and Oakland leads to a massive transfer of freight to the ports on the East coast, only shifting the problem from coast to coast that was already deeply affecting the US organization.
 
There is such a big amount of congestion that it is becoming harder and harder to get container in & out of terminals. Some terminals are reporting dwelling of 8 to 12 days.
 
For a long time we have been importing more than we export, the effects of Covid and its economic consequences have led many importers to increase their supply which led to a this situation.
The logistical power being under capacity must respond to a demand that greatly exceeds the supply.
 
– In today’s world, transport capacity from Europe on a DDU bases delivery to California for freight that can be contained in a 40 ‘container loaded at 44,000 lbs.

In all water (via the Panama Canal) we are in average transit time of more than 70 days (after boarding) for a cost exceeding more than 12,000 usd.
 
By air at more than 70,000 USD (conditions noted week 10)
 
By sea via the East Coast (New York or Norfolk) with transload in our warehouses and redelivery by FTL within a maximum of one month at 25,000 usd
 
In view of the capacity of our North American market to have to absorb these increases in import volume over the next few months, tensions on the transatlantic and transpacific are likely to be exacerbated.
“There would be an expected increase of 60% in the number of ships between China and the East Coast in the coming months due to changes in routes” alert Sea-Intelligence.

FUEL, THE LAST STRAW

If we have kept our tariff conditions on road transport, the fuel increase, the health situation, the additional costs linked to port congestion, the intransigence and rigidity of shipping companies policies in the management of franchises on port terminals and ramps have lead us to add into our inland tariffs a Fuel surcharge.
If on the European inlands, the Fuel surcharge (using different calculation methods) remains between 7% and 14%.
In the USA it is fuel surcharge has taken a big rise, depending on the indices it rates from 42 to 52% for the period from March 15 to 22.

For our part and in all fairness, we have decided to pass on all of these surcharges to our domestic transport on March 15.

WHAT IS GENERAL AVERAGE?

General average is a global maritime industry loss mitigation convention whereby ship owners and cargo interests proportionately contribute to fully reimburse those in the venture who sustained loss or damage in preventing the total loss of a vessel, crew and its cargo.

It requires 4 simultaneous conditions:

  1. Sacrifice or expenditure
  2. Decided voluntarily
  3. Consent to avoid danger
  4. Decided for the common good of the vessel and cargo

In this case, all the shippers having cargo on the ship must participate in the expenses, in proportion to the values saved, after a decision of a claim adjuster who will fix the contribution rate of each party.

EMERGENCY AND GLOBAL DISORGANIZATION

As introduced since our 2020 Newsletters, the economic circumstances in global maritime transport remains uncertain and the surge in freight rates in containerized transport sector (multiplied by 10 in the past 18 months) has long been established.

Generally speaking, the weight of demand in the face of increasingly restricted supply causes unavailability of equipment and consequently delays.

Surcharges being imposed on cargo are constantly increasing. However some steamship lines, like CMA CGM and Hapag Lloyd, have announced a first phase freight rate freeze until February 2022 for CMA , with no termination date for Hapag.

Logistics remain severely affected and terminal congestion leads to additional costs.

Due to the unprecedented shortage in drivers, road transport services are also impacted.

It is important to note that these setbacks affect both imports and exports, penalizing international trade through an increase in general costs.

In order to weigh up against the diktat of shipping companies, our professional organization is trying to come together to rebalance trade relations and defend the best interests of their members.