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As we approach the end of the decade, preparations to introduce a revised set of Incoterms are starting to intensify. Come January 1st, 2020, industries dealing with the international transportation such as the ocean freight industry will bid farewell to the current version of Incoterms, and ring in the new. Incoterms 2020 will see significant changes that will affect importers and exporters across the globe. In this article, we’ll discuss the main changes that are reportedly being deliberated.
Like all other industries, ocean freight too has its shipping season. During this time, container shipping rates increase and for a few months, it gets substantially harder to secure cargo space on shipping vessels. The shipping peak season runs from around July/August to October every year. During this time, shippers and importers are likely to either have had their cargo prepared and booking secured in advance, or prepare to pay a copious amount of money to make sure their merchandise is shipped.
Trade war impact on shipping Over the past few months, the world has witnessed a war of words and trade tariffs flying across the Pacific and Atlantic oceans, as well across north American borders. As the US threatens full-scale tariffs on all imports from China, if you haven’t already done so, it’s probably a good time to think about how these can and will ultimately filter down to the different parties in the ocean freight industry.
When talking about the digitalization of the ocean freight industry, one common sentiment held by both the media and industry experts is that the race towards the digitalization of the sector has begun. Slowly (in comparison with other industries) but surely, technology has permeated the industry’s main processes and is a key focus of important players. There are, however, differences in opinions regarding certain aspects of digitalization, such as its advantages and disadvantages, the opportunities and challenges the sector faces upon full adaptation, and how digitalization will redefine the sector over the next five or ten years.
Shipping carriers implement Emergency Bunker Surcharge Several of the world’s top shipping lines have announced they will be imposing Emergency Bunker Surcharges (EBS) in response to rising fuel costs in recent months. These include the three-largest carriers Maersk, MSC, and CMA CGM, whose total box capacities make up over 45% of the global market. The latest round of EBS have already come into effect (from 1 June) on several trade lanes around the world, whereas FMC-controlled routes get a 30-day cushion and will come into effect on 1 July.
The Federal Maritime Commission has launched a formal investigation into port demurrage, detention, and free time practices. As part of the investigation, terminal operators and ocean common carriers will be called on to submit relevant data and information. The investigation, launched last month, is in response to a petition filed by a coalition of shippers, associations and trucking organizations in January. The coalition claims some of these fees are unfair because certain circumstances mean their ability to retrieve their cargo and return equipment is out of their control.
Ocean Network Express The world’s newest shipping line officially began operations on April 1st, 2018. As new as it is, the members of which it’s made up are foreign to none in the shipping industry. The Ocean Network Express, or ONE, is a result of the merger of Japan’s formerly-three largest shipping lines, Nippon Yusen Kaisha (NYK), Mitsui OSK Lines (MOL), and Kawasaki Kisen Kaisha (K Line). The start of container shipping operations this month is in line with the initial schedule laid out when the company was officially established on July 7, 2017.
The importance of cargo insurance In under one month, the maritime shipping industry has seen three accidents. First, a major fire that broke out on the Maersk Honam in the Arabian Sea, which serves as a stark reminder of the perils shipping crews face out in the middle of the ocean. The Singapore-flagged vessel was on enroute from Singapore to Suez with 12,416TEUs on board when the fire erupted. At the time of writing, the fire, which had raged for five days, has been brought under control but four crew members have been reported dead from the blaze.
Following a wave of an unprecedented number liner consolidations over the past number of years, there have been indications that this trend is likely to persist in the shipping industry in 2018. However, whether this applies to liners or other players involved in the immense ocean freight industry is debatable. According to iContainers, the mergers and acquisition activities for shipping lines are likely to lose steam and slow down this year.
What’s causing the US trucking shortage problem? Even as autonomous trucking tests and trials advance, getting them fully implemented remains very much a thing of the future. Focusing on today, the current trucking situation as such appears to be heading backwards, with a nationwide shortage of truck drivers threatening to throw the entire country’s ocean freight services logistics chain into disarray. Truck driver shortage in itself is something we’ve been seeing in the US for decades so it isn’t exactly a new problem.