SiShips has made it easy for all of our clients to determine chargeable weight with a Volume Weight Calculator in our Resource Center.

If you need to convert from United States customary units to metric, for international freight forwarding, you can divide the mass value in pounds by 2.205 for the equivalent in kilograms. (Multiply kilograms by 2.205 to do the calculation in reverse.)

We’ll use a riddle you might remember from elementary school to explain why air carriers use this formula to calculate chargeable weight.

What weighs more: a pound of bricks or a pound of feathers?

The answer is they both weigh the same. However, the amount of space a pound of bricks will take up is significantly less than the space needed for a pound of feathers. This is important because space is always at a premium on shipping vessels, especially on an airplane where you can’t stack dozens of shipping containers on top of each other.

Put another way, if you are shipping a pallet full of balloons that weighs 10 KG, the carrier is going to use the dimensions and assign a new weight based on the space you’re taking up on the place. In this example, 1 pallet of balloons would be 40 x 48 x 70 inches totaling 367 KG volume weight. The carrier will charge the greater number, so the chargeable weight for the pallet of balloons is 367 KG.

Still confused? Let’s walk through an example of how carriers determine chargeable weight.

Seaside Taffy is going to ship 10 boxes of delicious treats from their headquarters in Jacksonville, Florida to New York City, New York. The candy shop in New York City wants them delivered tomorrow, so we’ll have to ship the taffy by air. Each box weighs 15 pounds and measures 20 x 20 x 18 inches. 

The actual weight of this shipment is 150 pounds (10 boxes multiplied by 15 pounds each). 

Using the SiShips Weight Calculator, we know the dimensional weight of this shipment is 197 pounds.

The chargeable weight for the taffy shipment will be 197 pounds, the larger number between the actual weight and the volume weight.

It may seem like air carriers are trying to “rip you off” with this system, but it does serve an important purpose. Chargeable weight is considered the equilibrium point between actual weight and volume weight so freight forwarders can balance out the airplane. While you might pay more than you were expecting to ship lighter goods, you can rest assured this formula makes sure your shipments arrive safely.

The Francis Scott Key Bridge in Baltimore, Maryland collapsed early on the morning of Tuesday, March 26th. The Dali, operated by Synergy Group, departed the Port of Baltimore and headed southeast down the Patapsco River. The ship lost power and put out a distress call at 1:27AM, before striking a support column on the bridge at the mouth of the port at 1:30AM. CBS News reported the Dali was approximately 100 yards, the equivalent of a football field off course at the time of the collision. 

The bridge was almost completely destroyed leading emergency and first responders halting vessel traffic to and from the port and vehicles traveling over the bridge. They also began a search-and-rescue operation for six individuals, a crew of construction workers on the bridge during the collapse, believed to have fallen into the water. That operation has become a recovery mission.

As a major thoroughfare and artery for the city of Baltimore and the Delaware-Maryland-Virginia area, the incident has significant implications for shipping companies and locals alike. Maryland has declared a state of emergency to facilitate federal aid.

Governor Wes Moore of Maryland gave an update on the situation during a news conference on April 1. The priorities of response crews are twofold. First, a recovery operation is underway for the (as of this writing) four remaining bodies. Second, the main focus of the effort is to clear shipping lanes to the Port of Baltimore. There is an urgency to the efforts, but crews are putting extra emphasis on safety as they negotiate the tangled mess of steel and concrete above- and below-water.

A temporary channel is open and accessible to vessels involved with the cleanup. Select barges and boats that have been stuck since the incident, including a Department of Defense barge delivering jet fuel to Dover Air Force Base, are able to use the channel. An effort is underway to open a second channel on the southern side of the Patapsco River to allow deeper draft vessels to pass.

Rebuilding the Francis Scott Key Bridge will take several years with early estimates forecasting a cost of $2 billion. Engineers are looking at other options to restore the shipping channel in a shorter time frame. 

The Bureau of Transportation Statistics notes the Port of Baltimore is in the top 20 United States ports by tonnage and the 10th largest port for dry bulk. Additionally, it “is a major hub for the import and export of motorized vehicles.” 

On a local level, the Francis Scott Key Bridge saw 12.5 million vehicles last year. That translates to 15 percent of the total traffic for harbor crossings which will need to be shifted to the Fort McHenry and Harbor Tunnels. This will lead to increased traffic and congestion for the foreseeable future. 

The Francis Scott Key Bridge carried 12.5 million vehicles in 2023, averaging more than 34,000 vehicles a day over the year. This is 15 percent of the total traffic for all 3 harbor crossings, and the diverted traffic would add 18 percent to the combined volumes for the Fort McHenry and Harbor Tunnels. Trucks carrying hazardous cargo (i.e., flammable liquids, corrosive substances) are not allowed to use the tunnels and must take more circuitous and costly routes around the Baltimore beltway.

Sheltered International will continue to monitor the situation in Baltimore. We will update clients if their shipments are affected in any way.

The east continues to vie for supremacy on the high seas—metaphorically speaking. Japan’s commercial fleet grew by 5% since the last report in November 2022. It needed every inch of that growth to outpace China, whose commercial fleet is valued at $204 billion. Japan claims the largest fleet of vehicle carriers, by value and size, with 334 vessels valued at $22.9 billion.

China slightly edges out Japan in bulker, tanker and container value, but is vastly outperformed in LNG and LPG value. It is possible that Japan could surpass the size of China’s tanker fleet in the near future. The Land of the Rising Sun have added nearly 100 vessels to their tanker fleet, in total value of a 15% increase in total value.

The only other areas where Japan fails to lead the pack are in renewable energy (United Kingdom tops the category with $446 million) and cruising (United States is miles ahead of the rest of the world with $49.2 billion). Nearly half of the total United States fleet value comes from the cruising sector, thanks to Carnival and Royal Caribbean—both headquartered in Miami.

The ongoing conflicts in Eastern Europe and the Middle East continue to heavily impact the global shipping industry. Russian sanctions have raised the value of tankers, as exporters and importers look to deliver gas and energy to Europe. Vessel Values cites this as the reason Tanker values are rising to “the highest levels since 2010…values of 15 year-old Suezmaxes of 160,000 DWT are up 20% from the same period last year.”

Additionally, Yemeni Houthi attacks in the Red Sea have boosted short term earnings for shippers. Through this upheaval, Greece has stayed strong as the third-ranked country by total vessels and value. With 143 liquefied natural gas (LNG) vessels, Greece owns the second largest fleet, only lagging behind Japan (202 ships).

The bottom end of the list has seen the most shuffling in recent history. The gap between the 10th to the 6th largest fleet is under $25 billion, while the gap between the 5th and the 1st is $120 billion. Norway and the United Kingdom leapfrogged Germany, which fell to 9th place on the list. Germany is putting more investment in LNG ships, nearly doubling the value of their fleet from $625 million to $1 billion. 

Hong Kong made its first appearance amongst the big boys thanks in large part to their investment in bulkers. Similar to the United States’ value being dominated by cruising, 29% of Hong Kong’s value comes from a sole sector. In this case, the bulking sector value has grown 30% year-over-year.

On February 1st, the Houthis claimed responsibility for attacks on three vessels: a U.S. navy warship in the Red Sea, a U.S. commercial vessel in the Gulf of Aden and a British commercial vessel in the Red Sea. The BBC has confirmed with maritime authorities that these claims are false, but interested parties remain on high alert.

The Houthis in Yemen are not the only group in the Middle East showing signs of aggression towards the United States and its allies. A militia group with support from Iran launched a drone strike that killed three American soldiers in Jordan at the end of January. President Joe Biden has been careful in his remarks about the ongoing situation and made it clear he did not want a “wider war in the Middle East”.

After the start of the war in Ukraine, bookings via rail through Russia fell. While there are few restrictions on train shipments outside of military goods, firms were and remain concerned about heightened security issues. 

Shipping rates and volume are on the rise now that the Red Sea, home to the Suez Canal and access to Europe beyond, has become a hotbed for military conflict.

For cautious minded freight forwarders, there is a possibility of circumventing Russia and Yemen with an alternative rail route through Kazakhstan known as the “Middle Corridor”. Freight on this path to Europe from China, Vietnam and other Asian countries is slower, but more secure at the moment. Bookings have increased by 37% over the past month.

It can feel like every day there is a new story that turns the global supply chain on its head. With the extreme amount of uncertainty in the Middle East, not to mention the weather-related delays in Latin America, it might be overwhelming trying to craft a freight forwarding plan. 

Remember to book shipments as far in advance as possible. Routes may be disrupted, but there are often alternative ways to get your goods where they need to go. For example, shipments destined for the Suez Canal can be rerouted around the Cape of Good Hope in South Africa. Orders will get where they need to go, but it is important to allocate sufficient time and budget for potential additional cost. As with the Lunar New Year in China, a proper plan will put you and your business in a strong position in the event of unexpected delays.

Carriers will be applying a $1,000 General Rate Increase (GRI) for TP Trade due to the attacks on ships in the Red Sea on January 1. Please note that the attacks are not limited to Israeli ships, leading to an increase for all shipments. Europe and Latin American trade would see a $2,000 GRI from the same date with extremely full vessels, which are also affected by the dry season “traffic jam” in the Panama Canal.

It is important to budget for this GRI in January, especially with Chinese New Year only a few short weeks away.

There are four main reasons for this GRI.

1. The continued delay through Panama due to drought is resulting in vessels not returning on time for their next shipments.

2. Black Friday and Christmas cleared a large volume of inventory and merchants are looking to refresh their stock.

3. Factories will close 1-2 weeks ahead of the Chinese New Year. Festivities are planned from February 9th, 2024-February 17th, 2024, leading to a cargo rush the first three weeks of January 2024.

4. Finally, the most prominent reason for the price increase is the continued Houthi attacks on commercial vessels in the Red Sea. Carriers are not providing service through the Red Sea and the Suez Canal. This results in a 1-2 week delay as shipments must bypass South Africa’s Cape of Good Hope.

Despite the Red Sea being 170,000 square miles in size, less than ⅕ the size of the Mediterranean, it is an incredibly important part of the global supply chain that connects Asia to Europe. Practically every good produced in Asia that is sold in Europe will pass through the Suez Canal.

Lack of access to the Red Sea creates a chain reaction leading to shipping delays around the glove.

1. Transit time for shipments originally planned for the Suez Canal need 1-2 weeks or even longer to travel around the Cape of Good Hope.

2. Capacity is reduced, due to fleets not returning on time, which lead to blank sailings.

3. Lack of space on shipments results in time sensitive cargo paying extra to reduce wait time.

4. The Cape of Good Hope can potentially see congestion as more vessels are diverted through it.

Enabling ACH payments is simple for importers of record that hold a continuous bond.

1. Sheltered International will request periodic monthly statement (PMS) approval from US Customs and Border Protection. This allows duty to be paid monthly.

2. Once PMS is approved, Sheltered International sends the client’s application to US Customs and Border Protection. Click here for the application.

3. Once the payer unit number (PUN) is received by the client, it should be forwarded to Sheltered International.

4. Once approved, any duty will be deducted from the client’s account directly each month by US Customs and Border Protection.

5. Sheltered International will provide an entry summary for each import alongside monthly statements.

PMS track entry activities throughout the month to provide a monthly statement. This structure also extends the payment window and is where ACH payments really start to shine. 

Normally, when paying per shipment, the importer must pay duties within 10 business days. However, PMS offers the importer 15 business days after the end of each cycle to pay. For example, the duties on goods imported between January 1 and January 31 will be summed at the end of the month. The monthly payment is then not due until the fifteenth business day of the following month—in this example, February 21. 

With this additional time, your business can extend cash flow by up to 54 days. The single payment not only makes it much easier to track your finances, but also offers significantly more control over your working capital.

As we can see, ACH payments can save you time and money in the short and long term. Unlike credit card transactions, which often come with high processing fees, or international wire transfers that can be prohibitively expensive, ACH transactions typically have much lower fees. For an importer dealing with large volumes of transactions, these savings can be significant, directly impacting the bottom line. Over time, the reduction in transaction costs can amount to a considerable sum, making it a financially prudent choice.

The predictability of ACH payments is a game-changer in terms of cash flow management. Unlike checks, which can have variable processing times, or wire transfers that may get delayed, ACH payments have a consistent processing schedule. This predictability allows for precise cash flow forecasting, enabling better financial planning and stability. 

Another added benefit of ACH payments is their security. ACH payments are governed by strict regulations, providing a secure framework that significantly reduces the risk of fraud. Each transaction is encrypted and monitored, offering a level of security that is hard to match with other payment methods. 

To streamline the process even further, our software SiShips generates a duty summary (7501) for each entry throughout the month for accounting and record-keeping. Once the month has closed, a final statement will be provided to review before US Customs and Border Protection pulls the duty on the 15th business day the following month. These reports can all be easily accessed through our software. That’s less time that you have to spend on accounting and more time you can devote to supporting your customers and growing your business.

It was announced at the 15th BRICS Summit in August 2024 that six additional countries had been invited to join the intergovernmental organization. Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates are scheduled to join BRICS on January 1, 2024. With a total of $3.1 trillion in GDP, the expansion will increase the collective GDP of BRICS by 10%. Now, all that’s left is to find a new acronym.

Expectations remain that the sixth country, Argentina, will join BRICS in January, but the election of Liberty Advances coalition leader Javier Milei as president may complicate procedures. Milei rose to prominence as an economist with extreme right wing tendencies, including flirtation with anarcho-capitalism. Additionally, President-elect Milei ran on the platform of replacing the Argentinian peso with the U.S. dollar. This move would come into direct contradiction to the creation of a BRICS currency while moving away from the dollar, an idea openly suggested by Brazilian President Luiz Inacio Lula da Silva in August.

Fourteen more countries have applied for BRICS membership, including political lightning rods Cuba and Palestine.

While the size of BRICS may double in early 2024, there is no question where the true power of the group lies. With $19.4 trillion in GDP, and growing every day, China represents almost two thirds of the economic weight of the union. Second place is held by India with $3.7 trillion. 

The world is more dependent than ever on China’s economic engine. The Middle Kingdom leads the way with $3.6 trillion in exports, annually. G7 countries, the United States, Germany and Japan, follow behind to take up three of the five top spots. It’s worth noting that new BRICS member, the United Arab Emirates, charts at #11 with $600 billion in annual global exports, thanks in large part to oil production.

Youth unemployment has hit staggeringly high levels in China. 20% of people aged 16-24 are jobless, more than double the 9% of the same age group without work in the United States. That is not the only worrying data point. In 2023, Mexico surpassed China as the United States’ largest trading partner; the proximity of the two American nations can explain this in part. While China’s economy may be falling short of previous expectations, their ability to produce electronics ranging from phones to computers to semiconductors will keep the Chinese economy as a power player for decades to come.

According to Jose Gonzalez, President of the National Customs Brokers and Forwarders Association of America (NCBFAA), “[a] shutdown of the US government could cost American shippers millions of dollars in sudden supply chain delays at the nation’s ports of entry.” Customs and Border Protection (CBP) employees would be required to continue working without pay. This applies to agents and officers at over 300 ports of entry. 

While ports of entry would remain open, the process of importing goods will become significantly slower as workers feel the strain of the shutdown. Apart from a lack of pay, CBP would not be able to onboard new agents and fill vital roles. Not only does this impact operations in the short-term, it becomes an obstacle for hiring and support in the long-term. 

Although ports are technically operational, a government shutdown would make it imperative for freight forwarders to plan ahead. Importers shipping hazardous materials or seeking tariff-exclusions should be prepared for increased wait times due to operations of the Environmental Protection Agency (EPA) and the Office of Tariff Affairs and Trade Agreements (TATA) being affected by the government shutdown.

We are in the peak of the holiday shopping season. Fortunately, most goods and products have already arrived in warehouses and stores, but those last minute items and restocks could be affected by a government shutdown.

Representative Mike Johnson (R-LA) emerged out of the woodwork to become the new Speaker of the House in October. The four-term representative is still relatively unknown in Washington circles, and has aligned himself with a number of Christian groups and was part of the bloc of Republicans who voted to overturn the 2020 presidential election results, providing him with support from the extreme right-wing representatives that removed former speaker Kevin McCarthy.

Regarding government funding, Johnson has suggested a “laddered approach”. This would be a two-pronged approach that would fund military construction, Veterans Affairs, transportation, housing and the Energy Department until January 19, 2024 and the rest of the government until February 2, 2024. Johnson has made it clear that he does not like the omnibus bills traditionally passed in the hectic weeks before the holiday recess. Democrats are against this plan, fearing a drawn out and protracted fight over spending in the new year. As of November 14, 2023, reporters at CNN have independently identified eight House Republicans opposed to the laddered approach, meaning Johnson would need bipartisan assistance to get his spending bill over the finish line.

President Biden has been noncommittal, recognizing that negotiations are ongoing and he will not make a judgment about what type of bill he would sign or veto until it has passed the House.

The effect on the bottom line varies greatly by shipping sector. The three major U.S. courier companies, FedEx, UPS and DHL Express are still operating in Tel Aviv and Israel, with only UPS issuing an official statement that they have temporarily suspended operations in southern Israel. Container ships are hardly affected, whereas crude oil and natural gas are seeing a more immediate impact. 

Breaking it down into simple terms: energy prices are rising, leaving air cargo in a vulnerable position, on top of the security concerns for air travel. 

“The major fear,” according to Edward Hardy of Air Cargo Week, “is that the conflict could lead to a similar situation to that of 50 years ago, when the Yom Kippur War sparked an unprecedented global oil crisis that lasted for months.” The average price for a barrel of crude oil has jumped $20 since July, hovering at $92 at the time of writing. A perfect storm of oil prices could be brewing, as we noted last year following Russia’s invasion of Ukraine. Saudi Arabia was voluntarily cutting their oil production even before Hamas’ October 7 attack.

There are questions on everyone’s mind, but few linger larger for international trade than the status of the Suez Canal. The 120-mile long waterway connects the Mediterranean Sea to the Red Sea, essentially Europe to the Middle East. The Suez Canal is also in the unique position where, as integral as it is to global commerce, the less you hear about it, the better. 

Egypt fully controls the Suez Canal and, at the moment, it would be unlikely for service to be stopped. The Egyptian border has been in many discussions, culminating when it briefly opened to bring in humanitarian aid to Gaza on October 21. While all parties have little interest in closing the canal at the moment, there is precedence for disruption. In 1956, Israel, France and the United Kingdom invaded Egypt following the nationalization of the Suez Canal Company, leading to the canal being closed for five months. The Suez Canal would be closed again from 1967-1975 in response to Israel’s incursion into Egypt during the Six-Day War.

Any stoppage in the Suez Canal would have a major effect on oil prices. 9% of global seaborne crude travels through the canal. Vessels have the option to travel around the southern tip of Africa, but this would raise costs and extend timelines.

China is looking to bounce back from their extreme methods of dealing with the coronavirus pandemic. However, recovery is significantly slower and, in some places, virtually non-existent. This is due to numerous factors; some external and some of their own design.

The first red flag, as noted by Visual Capitalist, is GDP growth. Previously averaging 9% annual growth over the past four decades, GDP expanded by a minuscule 0.8% during Q2. This was down from the already low 2.2% in Q1. Exports have diminished for several months in a row, an unsurprising result of a tight global economy created by inflation and slowed consumer spending. There is always hope for a strong end of year performance brought on by the holiday season. A miracle Q4 that could pump fresh life into the Chinese economy seems more unlikely by the day.

As always, with China, it is worth noting the cloudiness that surrounds numbers coming out of the Middle Kingdom. In June, youth unemployment (ages 16-24) hit a record high of 21.3%. Though there is no evidence, it can be presumed that that number has risen even further as the Chinese government has suspended reporting of this data under the guise of re-evaluating their collection methods.

The global markets are reacting quickly to China’s misfortunes. The yuan conversion rate to the U.S. dollar reached a 16-year-low in August. This is surprising to some economists who recently theorized that BRICS currency could rise to threaten the dollar. While China is still projected to outpace the United States, they will not be leading the charge in speed of GDP growth. That honor will lie with India, the world’s most populous country and one that is expected to climb the global rankings to third largest GDP by 2050.

There is significant optimism surrounding the future of India. Fears of a recession have rescinded slightly since the start of the year and, despite economic uncertainty and rising oil prices, the Indian economy is expected to steadily rise in both the short- and long-term. While not emerging as a dominant force, India grew by 6.1% last quarter. When compared to China’s sluggish growth, mentioned earlier, it is easy to see why there is confidence in India.

India’s demographics also give economists confidence. The median age in India is 28 years, versus 38 in the United States and 39 in China. Other countries, like Bangladesh and the Philippines, have lower median ages, indicating a larger workforce for years to come.