Following on from my last blog on this topic on 30 Dec, as expected, the rates spiked in the lead up to Chinese New Year (3rd-9th February 2014). The index jumped USD 250/TEU (USD 500/40GP) in early January which was a big increase, especially as there'd been a USD 600/TEU increase (USD 1200/40GP)in mid-December 2013.
So, as we went into Chinese New Year, and as we predicted, rates were in the USD 3500-3900 per 40 foot range from base ports such as Shanghai, Hong Kong etc and not only that space on vessels was incredibly tight.
The reason for my blog today is, have you checked what your current freight costs are today, as they could still be in this range, and depending on which forwarder you are working with, your February rates are most likely the same as January.
Given that the Jan-Feb rates are almost double the November level, I'd suggest you take action because you could be burning cash unnecessarily.
If you don't know what you're paying, do check, because you'll be hit with a cost which can't be challenged in about 5-6 weeks from now, as the rate is set when the container is booked.
We've already begun negotiations with our partner forwarders from Asia and have already seen significant reductions for our growing Asia-UK portfolio.
Kind Regards
Andy Cliff
Straightforward Consultancy Ltdwww.straightforwardconsultancy.co.uk
Monday, 23 December 2013
Latest news on Asia-Europe ocean freight rate increases & space issues
Good afternoon All
Many of you may know from the bulletins in the logistics press that the shipping lines who operate services from Asia to Europe and the UK were planning a hefty USD 950-1000/TEU (20 foot container equivalent) increase on Asia-Europe for December 15th which has actually settled in at USD 600/TEU, so in terms of the big picture, we have moved from a cost of around USD 600/TEU in the low point June 2013 to a market rate now of over USD 1500 (3 x June level), so we're talking about USD 3000 for a 40 foot container - big money.
To add to the woes of UK importers, not only have they suffered large rate increaes, but the lines have withdrawn sailings (i.e. capacity) to help their rate increases to "stick" but the result of this is a big increase in what's called "rollovers".
These are when a container, booked to sail on a certain vessel, is re-booked on a later sailing, naturally causing delays and inconvenience for the importer, who will still be expected to pay the full rate!
From our perspective, we have been either very fortunate, or our customers' containers are treated with some priority as we have only seen one rollover in 2013 (1 x 40HC from of Jakarta, transhipment via Singapore) which I believe is also related to our close monitoring of service (and rate) levels and we step in early with any service issue to get to the root cause.
As always, we're only too happy to speak with any companies who would like to make their import supply chain leaner, more responsive and more customer centric (and let someone else manage it for them!). We have just had two more clients renew for 2014 and have also been appointed to two brand new clients for 2014 so we're really pleased that we're offering a service which is truly valued by existing and new clients.
Merry Christmas to All and have a great Christmas break with your families and put logistics to the back of your mind for a few days!
Kind Regards
Andy Cliff
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Many of you may know from the bulletins in the logistics press that the shipping lines who operate services from Asia to Europe and the UK were planning a hefty USD 950-1000/TEU (20 foot container equivalent) increase on Asia-Europe for December 15th which has actually settled in at USD 600/TEU, so in terms of the big picture, we have moved from a cost of around USD 600/TEU in the low point June 2013 to a market rate now of over USD 1500 (3 x June level), so we're talking about USD 3000 for a 40 foot container - big money.
To add to the woes of UK importers, not only have they suffered large rate increaes, but the lines have withdrawn sailings (i.e. capacity) to help their rate increases to "stick" but the result of this is a big increase in what's called "rollovers".
These are when a container, booked to sail on a certain vessel, is re-booked on a later sailing, naturally causing delays and inconvenience for the importer, who will still be expected to pay the full rate!
From our perspective, we have been either very fortunate, or our customers' containers are treated with some priority as we have only seen one rollover in 2013 (1 x 40HC from of Jakarta, transhipment via Singapore) which I believe is also related to our close monitoring of service (and rate) levels and we step in early with any service issue to get to the root cause.
As always, we're only too happy to speak with any companies who would like to make their import supply chain leaner, more responsive and more customer centric (and let someone else manage it for them!). We have just had two more clients renew for 2014 and have also been appointed to two brand new clients for 2014 so we're really pleased that we're offering a service which is truly valued by existing and new clients.
Merry Christmas to All and have a great Christmas break with your families and put logistics to the back of your mind for a few days!
Kind Regards
Andy Cliff
Thursday, 28 November 2013
So tell me, what is Import Customs Compliance exactly?
Thought I'd drop this one into the blog. If you're a UK importer, you have responsibilities to HMRC as the importer. 99% of UK importers will use a freight forwarder or Customs clearance agent to get their air and ocean shipments cleared through Customs so they can take delivery and either get it into production, or out to their customers - job done!
Just a word of advice. When you use a freight forwarder to carry out the Customs clearance for you, they're (99 times out of a 100) acting as a Direct Representative. So what the heck is that? It means that although they declare the goods to Customs and sign the Customs Entry (C88), you're liable as the importer for the accuracy of the entry.
That means some fundamental things such as:-
1 - Correct tariff classification (which affects the duty rate payable)
2 - Correct value declaration
3 - Correct currency code
4 - Declaration of marine insurance (dutiable)
5- Declaration of correct freight charges (dutiable)
6 - Correct/appropriate Customs regime (home use/IPR/OPR)
7 - Value declaration (is the value on suppliers invoice correct)
8 - Application of any duty concession which may be applicable
There are others too but these are the main ones.
HMRC have issued leaflets to remind customers of their responsibilities in this area (see below photo) however they're not well publicised and the wording inside may be confusing to the average UK importer (who has most likely never completed a Customs entry in their life!).
We carry out Customs Compliance work for many of our import customers so they know they're compliant, they're paying the right amount of duty, the correct tariff codes are being applied for the different products they import and they're taking advantage of any Customs duty reliefs which are available. The other big benefit is the obvious one - peace of mind, it's being managed, if we get a Customs visit, we can show we carry out a compliance process to ensure any errors are picked up and corrected.
http://www.straightforwardconsultancy.co.uk/
This was how we uncovered a £ 26,000 duty overpayment for a Warrington customer earlier this year, importing catering equipment from the US. The mistake went back 7 years but we can only reclaim 3 years worth of overpaid duty (127 Customs entries).
Please let us know if you need any advice regarding compliance as well as any general freight or logistics advice it's what we do (and what we're really good at).
Kind Regards
Andy
Just a word of advice. When you use a freight forwarder to carry out the Customs clearance for you, they're (99 times out of a 100) acting as a Direct Representative. So what the heck is that? It means that although they declare the goods to Customs and sign the Customs Entry (C88), you're liable as the importer for the accuracy of the entry.
That means some fundamental things such as:-
1 - Correct tariff classification (which affects the duty rate payable)
2 - Correct value declaration
3 - Correct currency code
4 - Declaration of marine insurance (dutiable)
5- Declaration of correct freight charges (dutiable)
6 - Correct/appropriate Customs regime (home use/IPR/OPR)
7 - Value declaration (is the value on suppliers invoice correct)
8 - Application of any duty concession which may be applicable
There are others too but these are the main ones.
HMRC have issued leaflets to remind customers of their responsibilities in this area (see below photo) however they're not well publicised and the wording inside may be confusing to the average UK importer (who has most likely never completed a Customs entry in their life!).
We carry out Customs Compliance work for many of our import customers so they know they're compliant, they're paying the right amount of duty, the correct tariff codes are being applied for the different products they import and they're taking advantage of any Customs duty reliefs which are available. The other big benefit is the obvious one - peace of mind, it's being managed, if we get a Customs visit, we can show we carry out a compliance process to ensure any errors are picked up and corrected.
http://www.straightforwardconsultancy.co.uk/
This was how we uncovered a £ 26,000 duty overpayment for a Warrington customer earlier this year, importing catering equipment from the US. The mistake went back 7 years but we can only reclaim 3 years worth of overpaid duty (127 Customs entries).
Please let us know if you need any advice regarding compliance as well as any general freight or logistics advice it's what we do (and what we're really good at).
Kind Regards
Andy
Friday, 22 November 2013
Stop Press - EU launches anti-trust investigation into ocean carriers regarding collusion on GRIs
Good afternoon All
It seems that the EU have finally decided to act on concerns in the European logistics marketplace that ocean carriers have been colluding regarding the level of General Rate Increases (GRIs).
I think this is long overdue, because many would agree that these increases seem to be timed to take effect on the same dates and at remarkably similar levels. An example would be the November 2013 GRI from Asia to Europe, where the increases were all in the USD 950-1000/TEU (20 foot equivalent unit) and previous increases over the past 2 years have followed a similar vein.
It will be more than interesting to see how this evolves and also, how the lines handle the latest proposed increase of around USD 750/TEU due to be implemented from Dec 1st. It will be a really interesting one to watch!
See below link.http://theloadstar.co.uk/ec-opens-formal-container-shipping-antitrust-investigation/
Andy
Andy Cliff
Director
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492 begin_of_the_skype_highlighting
07934 443492 FREE end_of_the_skype_highlighting
Email : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
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I think this is long overdue, because many would agree that these increases seem to be timed to take effect on the same dates and at remarkably similar levels. An example would be the November 2013 GRI from Asia to Europe, where the increases were all in the USD 950-1000/TEU (20 foot equivalent unit) and previous increases over the past 2 years have followed a similar vein.
It will be more than interesting to see how this evolves and also, how the lines handle the latest proposed increase of around USD 750/TEU due to be implemented from Dec 1st. It will be a really interesting one to watch!
See below link.http://theloadstar.co.uk/ec-opens-formal-container-shipping-antitrust-investigation/
Kind Regards
Andy
Andy Cliff
Director
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492 begin_of_the_skype_highlighting
07934 443492 FREE end_of_the_skype_highlightingEmail : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
Thursday, 21 November 2013
International Festival for Business 2014 - Liverpool - Latest
Good afternoon All
Just saw this and thought it was worth sharing.
This event has major UK government backing and of course the Rt Hon Mr David Cameron
http://www.ifb2014.com/Downing-Street-reception-marks-200-days-until-start-of-IFB-n49.html
Andy Cliff
Director
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492 begin_of_the_skype_highlighting07934 443492 FREE end_of_the_skype_highlighting
Email : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
T
Just saw this and thought it was worth sharing.
This event has major UK government backing and of course the Rt Hon Mr David Cameron
http://www.ifb2014.com/Downing-Street-reception-marks-200-days-until-start-of-IFB-n49.html
Kind Regards
Andy Cliff
Director
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492 begin_of_the_skype_highlighting
07934 443492 FREE end_of_the_skype_highlightingEmail : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
T
Friday, 15 November 2013
As John McEnroe once said "You cannot be serious!!!
Good afternoon All
We're just recovering from the November GRI of USD 1000/TEU (20 foot container) and now several carriers are lining up for a USD 750/TEU increase for December....clearly they're trying to keep rates up until the next peak in demand - the run up to Chinese New Year 2013 (Jan 31, 2014).
Mind you, we did negotiate very a low GRI for November and I'm sure we can do it again - the question is - are you in control of your ocean freight costs from Asia? Do you even know what your rates are for November sailings?
http://www.youtube.com/watch?v=ekQ_Ja02gTY
http://theloadstar.co.uk/turbulent-waters-ahead-as-lines-float-new-gri-in-bid-to-balance-supply-and-demand/
Andy Cliff
Director
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492 begin_of_the_skype_highlighting07934 443492 FREE end_of_the_skype_highlighting
Email : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
We're just recovering from the November GRI of USD 1000/TEU (20 foot container) and now several carriers are lining up for a USD 750/TEU increase for December....clearly they're trying to keep rates up until the next peak in demand - the run up to Chinese New Year 2013 (Jan 31, 2014).
Mind you, we did negotiate very a low GRI for November and I'm sure we can do it again - the question is - are you in control of your ocean freight costs from Asia? Do you even know what your rates are for November sailings?
http://www.youtube.com/watch?v=ekQ_Ja02gTY
http://theloadstar.co.uk/turbulent-waters-ahead-as-lines-float-new-gri-in-bid-to-balance-supply-and-demand/
Andy Cliff
Director
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492 begin_of_the_skype_highlighting
07934 443492 FREE end_of_the_skype_highlightingEmail : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
