2016 was a turbulent year for the container shipping industry. Amongst the top ten global carriers there have been countless alliance reshuffles, an inevitable bankruptcy and poignant mergers.
We take a closer look at the evolution of carriers since 2000 and how last year’s events have left the global container market moving into 2017.
It’s amazing to consider that in January 2000 the three leading shipping lines Maersk Sealand, Evergreen and P&O Nedlloyd held a combined market share of 23.7%, when compared with today’s figures. According to Alphaliner the three leading carriers Maersk, MSC and CMA CGM now hold a total of 39.9% of global capacity. *This figure only set to increase as Maersk’s acquisition of Hamburg Süd completes at the end of 2017, taking the top three to a dominant 42.8% of global capacity share.
Top 3 Combined Market Share Then: January 2000
Top 3 Combined Market Share Now: January 2016*
Maersk have prioritised organic growth through acquisitions, confirmed in a 2016 statement and the recent acquisition of Hamburg Süd, the world’s 7th
largest container line. Ever since running into difficulties after the purchase of Royal P&O Nedlloyd (that saw their market share shrink by 2%) Maersk have only grown their global fleet.
MSC and CMA CGMs growth over the past 16 years has been impressive for different reasons. The CMA CGM group growing through multiple high profile acquisitions and MSC demonstrating consistent organic growth with only two small takeovers.
Merger / acquisitions timeline
Safmarine & Sea-land Service
2002 Torm Liner Service
2005 Royal P&O Nedlloyd
2006 Mercosul Line
2016 Hamburg Süd
2006 HMS services
CMA CGM bought the liner division of ANL
2002 MacAndrews services
2005 Delmas and SudCargos
2007 Cheng Lie Navigation, CoMaNav and US Lines
2016 APL / NOL
Where’d all the liners go?
After revisiting Alphaliner’s report ‘the evolution of carrier fleets 1996-2012’ it’s fascinating to see the ghosts of carriers past, blighted by bankruptcy or absorbed by global leaders.
The trend to consolidations and acquisitions has had a significant impact on the number of container lines on the market. For direct shippers and cargo owners, mergers have not been the only concern when looking for fair market rates. Alliances formed by the leading global carriers have only heightened worries over price fixing and concentrated schedules have dramatically reduced consumer choice.
With the top 3 suppliers operating at a 42% market share the container market is now the definition of an oligopoly. According to Drewry, “this trend will continue as the leading five carriers have the largest order books and, as history has shown, the biggest appetite to acquire other carriers.”
Sources: Alphaliner, Drewry, WSJ
As Britain prepares to leave the EU the importance of our trading relationship with China is set to become ever more crucial. What better time for our team to divulge some insider knowledge on the 7 things every shipper should consider when importing from China to the UK
In 2014, UK Imports from China were reportedly worth £38.3 billion, the 3rd largest source of imports behind Germany and the US. The number of UK companies sourcing products from the manufacturing powerhouse has increased significantly since the start of 2000. Only 1.8% of the UK’s total imports were sourced in China in 2000 and in 2014 the figure stands at 7%.
Table shows Growth in Imports from China 2000 to 2014.
UK Import Regulations: The Basics
When importing goods from China you will need to ask yourself the following questions
1. Have you declared your goods to customs?
This applies to all imports outside of the EU. This can be submitted to HMRC using Single Administration Document (SAD) via processing system called CHIEF (Customs handling of Import and Export Freight).
2. Have you paid the required VAT / duty?
The amount of duty payable is dependent on the types of goods and how they are classified under the UK Trade Tariff. The goods will not be released by customs until the duty and VAT has been paid.
3. Do you know your Commodity Codes?
It is important to find the right commodity code for your goods. This is a ten-digit number for imports from outside of the EU. Without declaring the commodity code on customs paperwork HMRC can impose fines and seize your goods when they arrive at customs, which may cause unnecessary delays in your supply chain.
4. Do your goods need an Import Licence?
Some goods may also require an import licence, typical licence goods include firearms, textile and food. For more information on import licences and to understand if your goods require one visit the gov.uk website.
5. Have you forecast for Seasonal Peaks?
Many of our customers exporting from China prepare months, if not years, in advance for Chinese New Year. Over 200 million people travel home for the celebrations, halting production and reduced manufacturing output is seen from the end of January through to the first half of March. In 2017 Chinese New Year falls on 28th January, put the date in your diary and plan your logistics accordingly!
Not only is it worth considering seasonal peaks, it is also important to keep an eye on manufacturing from major multinationals that have the power to dominate shipping capacity.
Tuscor Lloyds Air Freight team have recently experienced space restrictions from China as a result of the new iPhone 7 launch in September 2016. As the famous iPhone factory is located on the outskirts of Shanghai, Air freight space from China has clearly been dominated by the tech giant. Reports from previous product launches confirm that Apple intentionally buy up all available holiday air freight space out of China.
6. Have you chosen the best mode of Transport?
Deciding on the best mode of transport for your imports from China can be a tricky decision. The main considerations for any logistics manager is the bottom line, the speed in which you can receive the goods and the reliability of the service.
To transport heavier, bulkier goods air freight is far more expensive than sea freight. But the voyage time by sea from China to the UK can take anything up to 35 days. To air freight goods from China may take just 3 days. For more information on whether sea freight or air freight is best for your business take a look at our article here.
7. Do you understand your Incoterms?
One of the big decisions to make when importing from China is agreeing pricing structures as many Chinese manufacturers will include the shipping element.
Incoterms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale.
Whether you are an established international business or importing for the very first time, our China import specialists will provide the very best service to suit to your business needs. Contact our team on +44 (0) 161 868 6000 / email@example.com and we will help to get your cargo moving.
Recently The IMO (International Maritime Organisation) Voted To Tighten The Rules Surrounding Cargo Weight With Mandatory Verification Of The Gross Weight Of Containers Before Loading Onto A Ship
Mis-declared container weight has been identified by the IMO as a risk to operations and has even been described as ‘the most significant risk to modern container shipping’. SOLAS the International Convention for the Safety of Life at Sea is wholly concerned with the safety of merchant ships. It ensures compliance with minimum safety standards for ships construction, design and general operations. Its origins date back to the Titanic disaster in 1914, where the number of lifeboats and emergency equipment needed on board became mandatory. However, keeping up to date with safety precautions on board some of the biggest vessels ever built is a constant challenge.
Problems With Misdeclaring Container Weight
Mis-declaring container weight can create major instability problems, causing damage to ship and cargo, as well as the ships overall stability. The new regulations are intended to make shippers responsible for obtaining container weight.
Over the years, the maritime industry has witnessed many incidents reportedly as the direct result of inaccurate container weights. Incidents such as the Container Ship Deneb in Algeciras 2011. A review after the Deneb incident found that out of 168 containers, 1 in 10 had weights far exceeding those declared. In fact, some industry experts suggest that a third of the 130 million containers shipped every year have misdeclared weights.
What Do You Need To Know For 1 July 2016?
The responsibility for obtaining the verified gross mass (VGM) lies with the shipper and these details must be provided to the carrier before loading.
SOLAS have outlined ways in which the shipper can obtain the verified gross mass of a container:
- The shipper can weigh the pre-packed and sealed container using calibrated and certified equipment.
- The shipper can add the weight of each package, including the packing and other securing material and add the tare weight of the utilized container. The method used to complete this needs to be certified approved by the competent authority of the state in which packing of the container was completed.
Once this information is gathered it will be passed to the carrier and must be stated on the shipping document. Carriers have already issued warnings to shippers that if the VGM information is not received the container will not be loaded onto the vessel.
For more information visit World Shipping Council.
Cost To The Industry
Many have speculated that the changes in SOLAS could cost global shippers an additional £3.13bn every year. At Tuscor Lloyds we are already implementing operational protocols to establish exact weights of all containers we handle. We are committed to safe practice in every element of the supply chain, using only the most highly skilled teams on-site, with years of experience in handling difficult cargoes. The tightening of SOLAS regulations can only improve the safety of operations at sea and so this news is more than welcome to the industry.
If you would like to contact one of our dedicated team to ensure safe, stable sea services then calls us +44 (0) 161 868 6000 or email firstname.lastname@example.org
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Reverse Logistics Is Arguably The Current Buzz Word Of The Logistics Industry. As The Battle To Remain Profitable In A Challenging Economic Climate Rages On, Supply Chain Experts Are Looking At Reverse Logistics Strategies To Reduce Waste, Improve Customer Satisfaction And Reap The Financial Rewards
What Is It?
Reverse logistics can be defined as “the process of planning, implementing and controlling backward flows of raw materials, in-process inventory, packaging and finished goods, from a manufacturing, distribution or use point, to a point of recovery or point of proper disposal” (source: Reverse Logistics Executive Council). Remanufacturing and refurbishing activities can also be included in this field, as well as managing sales of surplus/ returned equipment and machines from the hardware leasing business. With typical logistics practices bringing the product towards the customer, the nature of reverse logistics is aptly named as the product is moved back through the supply chain to gain maximum value.
Why Are People Doing It?
Many companies focus on reverse logistics to enhance customer experience, protecting their brand and retaining customer loyalty. It is becoming increasingly important to keep customers satisfied with products and services not only before and during, but also after the initial delivery. There is relevance also within the projects sector however whereby industrial suppliers provide their goods to a customer, ship the goods back after completion of the project, and then re-use them for another project for another customer. It is worth noting here that this also motivates more cross trade in the project sector.
The increasing demand for businesses to consider the environmental impact of their operations has been another motivation for reverse logistics. As consumers, we are becoming more concerned with corporate energy consumption, emissions and supply chain carbon footprint. Rising public interest in ‘corporate responsibility’ saw M&S implement Plan A in 2007 pledging to ‘help protect the planet by sourcing responsibly, reducing waste and helping communities’.
Many companies overlook reverse logistics due to the perceived cost of managing the process, however, some statistics suggest that reverse logistics costs can be less than 4% of the total supply chain. Refurbishing, repackaging and reselling parts are often untapped revenue opportunities, avoiding excess inventory carrying costs and helping companies to reduce costs.
The environmental benefits of recycling or refurbishing products are obvious. For many supply chain managers, however, the beauty of reverse logistics is that you can not only gain maximum value and increased revenue from every product, but also add some ‘sustainable’ and ‘environmental’ kudos to your corporate image. Win-win?
How Does Tuscor Lloyds Do It?
For Tuscor Lloyds reverse logistics has been an increasing part of the service offered by our projects team. Many of our clients are utilising reverse logistics processes in their supply chain, focusing on the benefits of aftermarket care and complete life cycle support.
Specifically for our oil and gas clients, we offer quotations for delivering the same piece of equipment to different destinations around the globe. We have also been involved in numerous return shipments, at times even transporting cargo to the client and bringing back materials/equipment in the same delivery. This requires Tuscor Lloyds specialist import/ export knowledge in managing hidden costs in the reverse supply chain.
Do you need to discuss reverse logistics solutions for your business? Contact our team today to get your cargo moving:
Telephone: +44 (0) 161 868 6000
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Global Sourcing Is A Complex Process Which Refers To The Sourcing Of Materials Or Products From The Producer To The Buyer
Global sourcing covers packaging, transporting, insurance, inspection and customs clearance. Importing goods from foreign markets can be difficult because of potential issues with cultural barriers, unexpected delays, communication problems and the red tape required for importing.
Understanding Import Laws
When importing goods you need to understand the laws within the country you are importing from and the country you are importing to. Many countries restrict or prohibit certain types of goods from being exported or imported from or to their country.
The UK bans the import of the following products:
- Illicit drugs
- Flick and gravity knives
- Self-defence sprays (e.g. pepper spray)
- Stun guns
- Indecent and obscene material
- Counterfeit, pirated and patent-infringing goods
The following items are also banned but in certain cases can be imported to the UK with relevant licences:
- Firearms, explosives and ammunition
- Imitation firearms (realistic)
- Offensive weapons such as swords exceeding 50cm in length
- Live animals
- Endangered animals or plants
- Certain fur skins and fur skin products
- Certain radio transmitters
- Rough diamonds
Understanding Product Costs
Many first time importers find a product they like at a great price and without much thought, jump in with an order; this is a big mistake when other cost factors have not been considered. It is important to remember that on top of the actual product cost you will have to pay for transportation, tariffs (see below), import VAT, trade restrictions, cargo insurance and packaging for transportation. By working with a trusted shipping agent you can get reasonable price for all transportation costs and safe delivery of your goods.
Understanding Import Tariffs
Tariffs are UK government taxes on the value of the imported goods (also known as import duty). These charges are calculated as a percentage of the customs value of the goods, the customs value is made up of: the price paid for the goods, insurance cost and shipping costs. These charges are collected when the shipment clears customs.
Note: Import Tariffs are not charged for non-commercial goods imported from the E.U.
Understanding Licences, Permits and Documentation
When importing goods to the UK you should check if you need an import licence for your shipment, some goods including: firearms, food and textiles require an import licence and goods imported from certain countries will also require a licence.
If your goods are being imported from within the E.U. then minimal paperwork is required, although it is good practice to ask the supplier to include a copy of the invoice with the shipment.
If you are importing from outside of the E.U. then you generally need an invoice and a copy of the shipping documentation such as the Bill of Lading, for customs clearance. If your goods are worth more than £6,500 then it is recommended that you include a valuation statement with the shipment.
Goods from some countries can be imported with a reduced or zero rate of import duty, in order to apply for this you must include documentation proving the origin and showing that the goods were manufactured or produced in the preference country and in accordance with preferential rules of origin.
A C88 form (or Single Administrative Document – SAD) is used to declare imports to customs, this form must detail the goods using a ‘commodity code’ which determines what the duty import rate will be.
As an experienced international freight forwarder Tuscor Lloyds can handle all required import documentation and help with a swift and hassle free customs clearance.
Understanding Import Timing
When importing goods from abroad you should try and time your orders and find a middle ground between shipping too early (could incur extra costs due to storage) and shipping too late (risk that product won’t arrive in time for your needs). Your source should be able to give you an accurate time scale for production and shipping, this should be used along with possible delay considerations to determine suitable order dates to keep inventory at a healthy level and protect against possible delays or stock issues.
Understanding Shipment Processing
By working with Tuscor Lloyds you can ensure that there is someone ready to take control of the shipment, obtain licences, handle documentation, facilitate communication between you and the country of product origin and calculate duties, taxes and fees. With Tuscor Lloyds acting as your transportation agent and customs broker you can be confident in the safe and timely transportation of your goods whilst removing the headache of international logistics and focusing your time on the rest your business.
Please contact Tuscor Lloyds for a quote or more information on importing goods to the UK: +44 (0) 161 868 6000 / email@example.com – our professional staff can help you with every aspect of importing to the UK.
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Thinking About Exporting Goods Or Services To International Markets? If You Are A UK Company, Here Are 10 Reasons Why, You Should
1. Increase Revenue and Market Growth
By exporting to new markets you can increase your market size and this can lead to massive revenue growth. The UK is currently the 6th largest market in the world and the 3rd largest in Europe (the top 5 markets are: United States, China, Japan, Germany and France) (1). If you decided to start exporting to France then your potential market would double.
2. Increase profit by using full production capacity and bringing costs down
By exporting to larger markets you can increase production, reduce costs and ultimately increase your profits. If you don’t wish to increase capacity straight away then exporting to overseas markets can be a great way to sell excess products.
3. Benefit the UK economy
UK companies which export account for 60% of national productivity growth and more than 70% of UK business research and development (2). By exporting to new markets you can increase your revenue and help the UK economy.
4. Develop new innovative products
Exporting products to new markets often leads to innovation, in many cases you will come across new ideas and opportunities which will kick start you to develop new and modified products to meet international demands. Research shows 48% of companies reported that foreign trade has increased their return on investment from product and service development (3).
5. Grow your brand and become a global presence
Exporting overseas can help you build an international brand name and gain a presence in the global market.
6. Get ahead of the competition
The UK can be a saturated market to work in, by expanding internationally you can get a head of your competitors by accessing untapped markets before they do. Many overseas markets have fewer competitors (especially in emerging markets) and competitors may under value the potential profits of exporting or be overwhelmed by working out the logistics for selling overseas. This leaves you with a fantastic opportunity to start international exporting. You may already be manufacturing at less than capacity and the minimal cost of increasing capacity can allow you to gain market share at a relative bargain.
7. Reduce seasonal and economic downturns
Seasonal products can cause headaches (and more) for many businesses and exporting to overseas markets with different seasonal shifts are a great way to keep revenue coming in and reduce the dreaded ‘seasonal slowdown’. If this is done well you can create a selling schedule which will optimize seasonal market shifts.
8. Extend the product life cycle
Many products (especially clothing and tech products) gradually lose popularity within the market and sales start to drop off, often companies turn to advertising/marketing to try and boost sales but this can be costly and often unsuccessful. By exporting to new markets you can take advantage of delays in the global market, for example, products which lose popularity in the UK could be becoming popular in Latin American markets. Exporting is a great way of selling your product when UK sales have begun to slump.
9. Exporting can be more than great for business
It can be very exciting exporting to new countries: you could visit your overseas distributor, try new foods, make new friends and learn about new cultures. Overseas trade can be good for all parties involved, by establishing friendships, lowering costs and making economies and businesses more productive, competitive and profitable.
10. With Tuscor Lloyds as your shipping agent exporting couldn’t be easier
Tuscor Lloyds has been helping UK (and overseas) companies grow year on year by providing simple, cost effective export solutions. Providing easy access to new markets and working out the best logistics methods for your goods. We can handle everything from warehousing to overseas transportation, cargo insurance, supply chain management, customs clearance and documentation.
If you are thing about exporting goods or services from the UK then contact Tuscor Lloyds today.
Bonus Infographic via Open to Export
Contact us for an export quotation and advice on +44 (0) 161 868 6000 or email firstname.lastname@example.org
1: World Bank – GDP ranking 2013
2: UK Trade & Investment: Export Presentation 2012
3: UK Trade & Investment: International Business Strategies, Barriers &. Awareness Monitoring Survey 2011
Infographic Image: Open to Export – Getting Started
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