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Category Archives: Freight

12 signs you’re suffering from freight & logistics stress

How do you know if your Freight Forwarder is giving you the best possible service? There are a number of symptoms of freight & logistics stress. To get to the bottom of them you need only ask a few simple questions:

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Q: What is a good freight rate?

Getting the right deal is based on your point of view and the importance you place on your supply chain. It depends on the nature of your supply chain, what type of service you need and the focus and attention you place on supply chain optimisation.   In short, it depends on you.

The saying “you get what you pay for” has never been more relevant than in the current market conditions. The costs and business consequences of something going wrong can far outweigh a minor saving in rates.

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8 TIPS TO GET YOU THROUGH PEAK SEASON – IN ONE PIECE!

It’s that time of year again – Peak Season and I thought I’d share some of the tips and strategies we use at Magellan to get through it.

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Patrick – Port Infrastructure Surcharge – from 10 July 2017

Further to our advice in April of DP World’s introduction of a Port Infrastructure Surcharge, we have now received advice from Patrick of their intention to also apply a surcharge. Patrick is the other major container terminal operator in Australia.

Whilst the amount is not exactly the same as DP World applied, it is of a similar magnitude and will be applied on all containers (export and import) passing through their terminals in Melbourne, Sydney, Brisbane and Fremantle.

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China’s Comeback: Destination Hong Kong

As fashion executives around the world reported in the first BoF- McKinsey Global Fashion Survey, the year 2016 can be summarised in three words: uncertain, changing, and challenging. But in spite of this, fashion remains one of the key value-creating industries for the world economy.

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Safety Of Life At Sea (SOLAS) – Verified Gross Mass (VGM) shipper’s declaration – Compliance date 1st July 2016.

Effective for vessels sailing on or after 1st July 2016 from most export ports globally, all containerised seafreight shipments submitted for export will need to have a Verified Weight Declaration (VGM) submitted by Shippers.

For Australian exports, Verified Gross Mass (VGM) compliance actually starts on 22nd June 2016, which is the opening of the wharf terminal window for receivals for vessels sailing on/after 1st July 2016.

This is an International Maritime Organisation (IMO) global regulation, that in Australia is covered under Federal Government legislation administered through the Australian Maritime Safety Authority (AMSA), it requires shippers of containerised seafreight cargo to make a lawful weight declaration.

Attached to this email is both an explanatory fact sheet from Shipping Australia Limited (SAL), and a Magellan presentation which gives a more detailed explanation of the new Shipper responsibilities. In these documents you will see references and an explanation to the only 2 methods which can be used to identify the “gross mass” of a container, or its contents. Should you need further information, clarification or advice on utilising either of these methods, please feel free to contact myself, or any member of our Export Team.

We have also updated our Shipper’s Letter of Instruction (SLI) to include a Verified Gross Mass Shipper’s declaration. For FCLs, a separate declaration is required for each packed container. Any shipments departing on or after 1st July 2016 will need to have the shipment details submitted via this updated SLI.

The SLI and VGM weight declaration must be submitted to us prior to any FCL or LCL cargo being received at the wharf terminal and/or depot. Please note the process for us to receive that declaration from the shipper, then retransmit it in the prescribed manner to the parties receiving the cargo at the terminal/depot can take at least 2 hours during normal working hours (Monday to Friday).

FCL Cargo:

For FCL the document that needs to be submitted to the wharf terminals is the PRA, which cannot be completed or transmitted without the compliant weight declaration. No containers will be accepted at any of the wharf terminals in any Australian port without a PRA having been submitted and accepted prior to any container arriving at the terminal gate.

LCL Cargo:

For LCL cargo, there is an allowance at some receiving depots to weigh the shipment upon arrival in the depot, however this is not the case for all depots, and does come at a significant cost.

Should method 1 be used by a Shipper to declare the weight, we need to make sure that adequate time is allowed for the container to go via a compliant weighing facility.

As the verified gross mass is now a lawful declaration of weight, estimations of weight are not permitted.

  • We can receive the Verified Gross Mass (VGM) Shipper’s declaration via any of the following means;
  • Original signed document via post/courier
  • Scanned signed document via email (PDF format).
  • Faxed signed document.
  • Transmitted XLS document, where the name of the person declaring the weight, is the same as the email address that the SLI/VGM is submitted to us on.

Should you need to discuss this process, get clarification on this new responsibility as a shipper, or just need advice on the options for getting your cargo weighed, please do not hesitate to give meor any of our Export Team a call on 1300 651 888.

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Containerisation makes the world go round

The brief and transformational history of containerisation

In the late 1930s, Malcolm McLean, a North Carolina truck driver was becoming more and more frustrated by constantly having to load, unload, repackage and store his bales of cotton as they were transported from plantation to port. He thought there must be a better way.

What if he could pack the cotton once into large containers that could be easily loaded on trucks and ships?

In 1956, around 20 years later his original spark of invention was realised, and McLean’s first container ship set sail from New York and the universal shipping container began to replace the myriad ways that food and other cargo was shipped around the world. The entrepreneur’s invention solved the many problems that long distance shipping had endured for centuries would eventually go on to change international shipping forever.

Since the early 17th century shipping had been a difficult and labor intensive business. Goods from overseas were loaded on and off ships individually, by barrels, crates and burlap sacks. The process required many workers, around week for every ship, and lots of cargo was lost due to spoilage and damaged packaging.  McLean’s innovation, allowed for goods to be packed into large and sturdy containers at their source – farm, factory or warehouse. These intermodal containers, designed to be moved by various forms of transit, were able to be easily picked up from trucks or trains and transferred directly onto ships and back again without the need to unpack and repack the contents.  This significantly reduced transport costs. If a team of 18 men once needed eight hours to move 80 tonnes, containers allow nine people working in a row to load 2,000 tonnes in the same amount of time.

This outrageously simple new way of shipping, using one container that would fit on many modes of transport allowing goods to be transported from sender to recipient unopened, was not without early opposition from unions, ship owners and ports who were concerned for their jobs and the cost of the new port infrastructure.  In Europe, the idea was not taken seriously and many saw McLean as a fanatical American.  But no-one could argue with the numbers; McLean’s cost/benefit analysis won the day.

intermodal shipping containers

Containerisation of shipping

Initially used only along the east coast of the USA for dry goods, the standard intermodal shipping container was swiftly adopted internationally. In 1961, the International Organization for Standardization (ISO) established worldwide standards for containers. While many different sizes are used today, the standard for transporting goods is still the 20-foot container, “Twenty-foot Equivalent Unit,” or TEU. In 1966 the first international shipment of 110 containers from the US arrived safely in Germany.

For products such as fruit and vegetables, flowers and fish however, this new procedure needed a bit more work and early refrigerated containers yielded mixed results – some shipments arrived in perfect condition while others were opened to reveal cargo that was either partially or completely spoiled or frozen solid.

Shipping companies began working with scientists and came up with mobile laboratories that monitored perishable items while they were in transit. Barbara Pratt, now the head of “reefer services” at Maersk Line Shipping Services worked for seven years on a project that led to the development of sophisticated shipping container technology that allows control of airflow, humidity and the way the treated air is dispersed inside the container. This new technology can even control the ripening of fruit to ensure it arrives at it estimation port in peak condition.

Containerisation, as the technology is known today, has changed the entire face of the shipping industry in a brief 60 years. McLean’s invention is seen on the back of semi-trailers, on trains and the decks of ships and barges all over the world. Today around 129 million standard container loads of goods (TEUs) flow freely across time zones around the globe each year ready to be delivered to stores in every city and town. And just as the volume of cargo continues to grow, so too does the size of container ships and their ports of origin and destination.

While there is no doubt that containerisation has changed the way we ship and consume our goods, for many containers that is not the end of the story.

An emerging global fondness for industrial design and upcycling has seen the intermodal shipping container used in a variety of construction applications – from schools, to pop-up bars and swimming pools to apartment complexes.  See more in our earlier post about uses for retired containers.

The modern shipping container is such a ubiquitous feature of our modern landscape it is hard to image that a few short decades ago it was merely twinkle in the eye of one entrepreneurial American.

If you have any questions about how we can help you with the movement of your cargo, please get in touch with Magellan on 1300 651 888.

containerisation infographic

 

Sources:
http://www.slate.com/blogs/the_eye/2015/09/09/reefers_the_temperature_controlled_shipping_containers_that_transport_our.html
http://www.worldshipping.org/about-the-industry/history-of-containerization
http://www.maerskline.com/en-us/
http://www.dw.com/en/the-whole-world-in-boxes/g-19231681
http://www.joc.com/maritime-news/container-lines/how-container-changed-world-infographic_20150430.html

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Bangladesh air cargo prohibition – new arrangements

The following advice regarding the Bangladesh air cargo prohibition has been received from the Air Cargo Security Taskforce, Office of Transport Security.

The Australian Government has modified the restrictions (originally introduced in December 2015) placed on air cargo originating from or transiting through Bangladesh.

Under the new arrangements air cargo that has originated from, or transited through, Bangladesh will be prohibited; unless it has undergone an appropriate security examination at an approved last port of call before travelling to Australia or is otherwise exempt from examination under Australian regulations.
• The approved examination methods are: X-ray; explosive trace detection; or physical examination.
• The approved last ports of call are: Dubai; Abu Dhabi; Doha; Singapore; Kuala Lumpur; Bangkok; Hong Kong; or Guangzhou.
• The exempt items are: mail items under 500 grams; cargo under 250 grams and shorter than 5 mm; live animals; human remains; biological tissues; legitimately prepared dangerous goods; Commonwealth Government articles; and diplomatic bags.

The new arrangements will take effect from 11 May 2016.

Failure to comply with the instruments
Non-compliance with the instrument (or restrictions set out in the instruments) is an offence of strict liability under the Aviation Transport Security Act 2004.

Review of the prohibition
The Australian Government, through the Office of Transport Security, will continue to monitor aviation security developments, in cooperation with our international partners. OTS will provide advice to the Government on adjustments to our air cargo security measures as necessary.

Should you need further clarification on this prohibition, or to arrange alternative movement of goods from Bangladesh to Australia, please do not hesitate to contact your Magellan Representative on 1300 651 888.

Links: https://infrastructure.gov.au/security/air-cargo/

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Tips for avoiding customs delays due to late Chinese Certificates of Origin.

As we work through some of the new processes associated with ChAFTA we are experiencing a spate of late Certificates of Origin.  Our focus is always on avoiding delays at customs and not receiving these certificates in a timely manner has knock-on effects for our clients that include avoidable delays to customs clearance and in some instances paying duty unnecessarily and incurring professional services fees for refund processing once the certificate is received.

We are doing everything in our control to minimise or avoid delays completely and we would like to alert you to some steps you can take to facilitate the receipt of the Certificate of Origin in a timely manner.

1). Remind your supplier not to delay applying for the Certificate of Origin on the basis of unknown means of transport or routing;
2) Changes to vessel or flight details will not affect the eligibility of the consignment to obtain reduced duty rates provided the goods are still destined for direct shipment to Australia;
3). Advise your supplier to forward the certificate ASAP. There is no need to forward the original certificate as copies are acceptable.

A couple of refresher points that will also help with avoiding customs delays by ensuring certificates are issued as quickly as possible and are valid for use:

Origin criteria

The origin criterion listed on the certificate indicates how the goods listed on the certificate comply with the regulations of the ChAFTA.  The criteria indicate how much of the raw materials or manufactured goods was obtained or manufactured within Australia and or China.  Some goods will be ineligible to use some origin criterion due to their nature, for example manufactured goods would be unlikely to qualify for reduced duty rates under ChAFTA via the Wholly Obtained criterion as this is intended for use for raw materials such as minerals.

Whereas, manufactured goods which are entirely produced from components made within Australia or China or a combination of both would more than likely qualify via the Wholly Produced (WP) criterion; and manufactured goods that are made in China from components made within Australia and or China and other countries would more than likely qualify via the Product Specific Rule (PSR).

  • WO (Wholly Obtained) – for goods such as minerals, agricultural products and animals born in China. Would not apply to products that are further manufactured.
  • WP (Wholly Produced) – for goods that are produced entirely from Australian or Chinese originating materials.
  • PSR (Product Specific Rules) – for goods produced from Australian and/or Chinese goods and goods that have been manufactured in other countries and satisfy the applicable product specific rules relating to the classification of the good to be exported.

 

Should you need clarification on this or another freight movement or customs clearance question please contact me via email or on 1300 651 888; or your usual Magellan Customer Service Rep.

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Triangles, Handovers and 3rd party shipments: What are they and why you need one?

It’s not hard to think of a product made up of components sourced from multiple locations, assembled offshore and sold in a local Australian shop.  An elegant suit made in Hong Kong from Italian wool cloth, and sold in Collins Street?  A sofa manufactured in Indonesia to a Sydney customer’s precise specification covered in fabric milled in China’s Shandong province, perhaps? You’ve probably got a house full of items just like these.

But did you ever consider the logistical procedures that make it happen?

Time from order to delivery into store, handling costs, import duties and the protection of the manufacturer’s and consignee’s intellectual property are some of the main factors that need to be considered when arranging for the importation and delivery of goods with complex supply chains.  There are countless others, but that’s for another day.

Triangle shipments - traditional method

Traditional method:

Using the Italian wool suit as an example, the consignee imports fabric from Italy and arranges for it to be delivered to their warehouse in Melbourne.  From there it is shipped to the factory (3rd party) in Hong Kong to be manufactured into a suit.  While this is great way to protect the consignee’s intellectual property and ensure the details of the supplier of fine Italian wool fabric remains a trade secret, it also effectively means the goods are double handled, there is additional duty to be paid and considerably more time and cost is added in the supply chain.

The alternative is to use Triangle Shipments (sometimes known as handovers or third party shipments).

 

Triangle2.png

Triangle Shipments:

Using the same example, the consignee would order the fabric from the supplier in Italy and arrange for it to be shipped directly to the 3rd party – factory in Hong Kong.  On the face of it is clear that this will reduce handling, time and costs, but the question of protecting the consignee’s trade secrets still remains.

The answer to this lies in the concept of the Switch Bill.  In traditional forwarding, a Bill of Lading is produced by the carrier and notes the goods, the consignee and the destination (among other things) and is effectively the contract for the transportation of the goods.

In a Triangle Shipment, 2 Bills of Lading are produced – the first one details the original consignee and true supplier of the goods.  The second BoL is prepared to travel with the goods from origin (supplier) to the 3rd party that shows the original consignee as the supplier of the goods and the 3rd party as the consignee.  The effect of this is to render the supplier of the goods (Italian wool fabric) anonymous, thus protecting the IP of the original consignee.

Sound complicated?

Triangle Shipments are a specialist freight forwarding service.  While the concept is pretty well known and most forwarders do it, it is a boutique offering.  Critical to a forwarder’s success with Triangles are strong relationships with both clients and overseas agents alike.

To ensure the triangles go to plan, a forwarder will have a thorough understanding of their client’s requirements developed as up to date and clear SOPs, combined with regular communication with shipping agents.  Instructions may include the stripping of documentation, repackaging of goods and in some instances, the removal of labels and tags.  Getting this right, every time, is the only way to ensure that clients’ relationships are protected.

Magellan has a solid track record with Triangle Shipments – some of our customer service team members estimate that up to 80% of their work involves Triangles.

If you think a Triangle Shipment is the perfect solution to your freight forwarding needs, then don’t hesitate to get in touch with us on 1300 651 888, or visit www.magellanlogistics.com.au.

Resources:
http://shippingandfreightresource.com/about/shipping-and-freight-resource/
http://www.austrade.gov.au/australian/how-austrade-can-help

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