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Following Cargo Loss ONE Apus Sets Sail

Following Cargo Loss ONE Apus Sets Sail

Months After Cargo Loss Due to Foul Weather, ONE Apus Embarks on Journey to Long Beach

After departing from Kobe, Japan following a journey to remove hundreds of damaged and dislodged containers, the ONE Apus is expected to arrive in Long Beach, CA on or around March 30th. This journey stems from last year’s cargo loss during the ship’s trip from China to Long Beach, California, when an estimated 1,816 containers were lost overboard due to inclement weather. It was estimated that hundreds more collapsed on deck. 

One Apus

Photo courtesy of Seatrade Maritime

ONE Apus experienced massive swells and extreme winds about 1,600 miles off the coast of Hawaii in November of last year. Instead of continuing on its projected path to California, the 2019-built ship turned around and headed to Japan. ONE Apus arrived in Kobe on December 8th to receive repairs. The insurance claims from this loss of cargo are expected to be greater than $100 million.

Within a series of weather-related cargo losses on the trans-Pacific this past season, this incident was by far the worst. Ships have been packed nearly beyond capacity the last few months, due to the increased shipping demands.

Port Congestion Continues

Along with the increased shipping demands, extreme congestion at the ports of Los Angeles and Long Beach are still hindering the reliability of containerships. These delays will likely affect the arrival of ONE Apus – possibly not reaching the dock until as late as April 7, though expected to arrive much earlier.

The ONE Apus has been receiving repairs since its arrival in Kobe in December. As of February 26th, a total of 940 boxes had been discharged. The original plan was to carry as many of the original containers in good shape as the ship would allow, they have since stated that some of these containers may need to be loaded on different vessels to reach their destinations. 

One Apus

Photo by: W.K. Webster & Co Ltd

Why Cargo Insurance is Important

When situations like this occur, cargo insurance can help protect your shipment while it is in transit, even as it moves through different modes and carriers. Cargo insurance offers door-to-door coverage and will reimburse the full value of cargo lost or damaged due to circumstances outside of the carrier’s control. The two primary types of policies are generally All-Risk or Free of Particular Average (FPA); the policy that is chosen will determine the spectrum of situations covered.

All Risk Insurance is the most common type of policy and covers the broadest range of incidents.  Unless explicitly excluded in the policy, all events are covered.  These commonly excluded situations include nuclear events, strikes, and riots, as well as flaws in the goods such as inadequate packaging or decay.

On the other hand, FPA coverage, or ‘named-perils coverage’ is much more limited and excludes coverage on losses due to common causes such as heavy weather, rough handling, theft, and more. If you are shipping used merchandise or bulk goods this may be the only available option to insure your shipment. FPA coverage is also very common for marine insurance policies. 

Will ONE Apus Declare General Average?

It is not yet known if the ONE Apus will declare General Average.  General Average requires that the shipowner and its customers share a proportionate amount of the costs associated with saving a vessel after a major casualty. When General Average is declared, cargo owners are required to contribute funds even if they did not cause or sustain damage before cargo can be released.  Both FPA and all risk will provide coverage for General Average.

How SiShips Can Help

1,382 containers are lost at sea each year according to the World Shipping Council, making cargo insurance an extremely important part of protecting your business. Through our encompassing shipment-management software SiShips, we will find a policy that works for you.

To learn more about SiShips, or to view a demo of our software, contact us today.

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How Imports Have Been Impacted by COVID-19 in 2020

Understanding How the Pandemic Has Affected Freight Forwarding This Year and Anticipating Future Changes

It’s no surprise that the COVID-19 pandemic has significantly impacted the global supply chain. From transportation to manufacturing to distribution and retail, all industries have experienced new challenges this year – challenges that will likely continue through at least Chinese New Year. To help you understand the factors that may impact your shipment, we’ve broken down how COVID-19 has affected shipping logistics this year so far.

Changes to Production and Demand

As COVID-19 spread around the world, international lockdowns halted production and slowed global economies in an unprecedented way. From April through June, global volumes came to a standstill. The limited products available for shipping experienced slowed journeys as cargo was stopped at origin or destination ports for various quarantining procedures.

By July, however, China had returned to full production, boosting availability and, subsequently, demand. This demand has not slowed: w=While September and October always see large order volumes from China as retailers prepare for the holidays, American imports from the Asia Pacific were 23.7% higher in October of this year than last year, and 10% higher than the month prior.

Globally, output increased in 22 of 26 subsectors in October, with automobiles and parts, banks, chemicals, and machinery and equipment representing the top performers.

Impacts of COVID-19 on Transportation

COVID-19 Impact on Shipping

Sluggish demand in the spring forced ocean carriers to blank sailings to cut losses, while reduced air traffic significantly reduced capacity in the skies as well. However, as sales picked up exponentially, carriers found themselves faced with the opposite problem: A surge of demand outweighing available cargo space.

Workforce shortages and various quarantine regulations slowed the devanning process, lengthening container churn from 1-2 days to 5-7 days. Despite carriers shortening container free time and increasing demurrage and detention charges, this reduced pace still created a build-up on the supply chain. Further fueling the imbalance, carriers struggled to get their equipment back to the origin ports where it was needed.

At the ports, the trucking industry was also impacted by surging volumes. Long lines and road congestion significantly lengthened the time needed to get containers out of and back to ports, generating a chassis shortage and slowing transport times. Able to move fewer containers than normal, trucking companies struggled to cover their costs.

Adjustments to Rates

Motivated by high export rates from Asia, carriers reduced the number of full containers available on the back-haul voyage to China, forcing customers to book more LCL in place of FCL shipments. This has further impacted the capacity shortage, driving up the cost of additional space. Likewise, lack of space on vessels forced cargo owners to pay a premium in spite of FCL contracts.

With all of these factors, shipping rates around the world have significantly increased. From Asia Pacific ports to Los Angeles, many rates doubled. From China to Europe, they tripled, with some containers moving at a rate of more than $8,500 per 40’. Even the typically stable Intra-Asia lanes experienced heavy rate increases.

How SiShips Can Help

We know there are a lot of changes impacting the freight forwarding industry right now. We’re here to help you stay on top of new rates, deadlines, and more, so you can be confident you’re always receiving the best option available for your business.

To learn more about SiShips, or to view a demo of our software, contact us today.

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Using SiShips’s New Deadline Tracking Feature

Managing Holiday Deadlines, Port Congestion With Deadline Tracking

With the holidays quickly approaching, conditions continue to deteriorate at US gateway ports. Congestion has already significantly impacted ports around the country, particularly along the west coast, subsequently driving up trucking rates and drastically slowing delivery times. To be expected around the holidays, surging ocean freight demand is placing the system under even greater stress. This year, however, this has been compounded by equipment shortages, overbooks, blank sailings, and existing port congestion.

To combat these obstacles, we’ve added a new Deadline Tracking feature to our SiShips software. With Deadline Tracking, you can better predict how your shipments will be impacted by potential delays. This knowledge will allow you to make informed decisions for your business during the holidays. Read on to learn more about how to use this new feature.

Holiday Port Congestion

With holiday shoppers choosing e-commerce options over in-person ones, shippers are being tested to keep up with demand. West coast ports, in particular, are experiencing drastic increases in capacity: The Port of Long Beach handled 806,603 TEUs in October, breaking its previous record that had only been set in September.

Unsurprisingly, major online retailers like Amazon are a key factor in driving this surge: last month, 79% of Amazon’s shipments arrived via Los Angeles/Long Beach. Overall, e-commerce sales have increased 19.9% year on year, and experts predict sales in November and December alone will see a 33% year on year surge.

How to Use Deadline Tracking for Your Shipments

Ocean cargo shipments can be complex, particularly with the many added factors currently at play. Our Deadline Tracking was designed to simplify the experience and provide you with valuable knowledge.

Incorporated into your shipment’s timeline, the Deadline Tracking feature will display in red if the ETA will not meet your deadline. Note that if there is no door delivery option, the deadline will use the last port date.

Once your freight has shipped, the deadline will transfer from quotes and bookings into tracking automatically. Once the delivery is completed, the deadline will show the difference (+/-) between delivery and desired deadline.

Don’t have a deadline? Just tick the box next to “Any Deadlines” to skip this step.

Deadline Tracking SiShips Freight Forwarding


We know managing shipments can be difficult. That’s why we used our extensive years in freight forwarding to develop SiShips. With this software, quoting, tracking, and planning are made easy, so you can spend less time worrying about freight forwarding and more time improving your business.

Contact us today to learn more about how SiShips can simplify your shipping experience.

 

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Understanding Harbor Maintenance Fees and Merchandising Processing Fees

Why You May See Additional Fees on Your Shipment Invoice

Harbor Maintenance Fees and Merchandise Processing Fees

Although some imports may be duty-free, this doesn’t mean they’re free of all associated fees. Two small taxes, Harbor Maintenance Fees and Merchandise Processing Fees, are often overlooked and may come as a surprise when you receive your invoice. Though small, it’s important to include these values when running calculations and preparing for shipments. Read on to learn more about what exactly these fees are and how they apply to your products.

Harbor Maintenance Fee

Established in 1987, the Harbor Maintenance Fee (HMF) is assessed by U.S. Customs and Border Protection and is used for exactly what its name suggests: port and harbor maintenance. As such, these fees are applicable only to ocean imports and are equal to 1/800 of the value, or .125 percent of the shipment. There are no exclusions – all imports will be subject to HMF, even if they are part of a trade agreement like USMCA.

The full list of ports and harbors with HMF can be found here.

Merchandise Processing Fee

Unlike the Harbor Maintenance Fee, the Merchandise Processing Fee applies to both air and ocean imports. At .3464 percent, it also has a minimum and maximum: $27.23 and $528.33, respectively. It’s important to note that these two values are accurate as of October 2020 and change annually – SiShips ensures the current values are always used for calculation. Further, be sure to only calculate MPF on the declared value of the shipment. The value of any cargo insurance or additional duty should not be included.

MPF also differs from HMF in that there may be some exceptions. Certain Free Trade Agreements may see these fees waived. Sheltered International is available to help you understand whether the MPF will apply to your shipment.

How SiShips Can Help

Take the worry out of calculating fees for your shipments and let our software do it for you. Built on years of experience in the freight forwarding industry, SiShips streamlines your shipping process at every step. With shipment management, tracking, quoting, and other services, our software saves you valuable time and lets you focus more on growing your business.

Learn more about how SiShips can improve your freight forwarding experience.

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China’s Ministry of Transport Considers Ban on Rate Increases, Blank Sailings for US-China Trade Lanes

How China’s Intervention May Affect Capacity and Rates for Ocean Freight Long-Term

As ocean cargo rates continue to surge, China’s Ministry of Transport is taking steps to prevent any further increases. Last week, Chinese authorities discussed a possible ban on rate increases, which would apply to the GRI planned for mid-September. To boost capacity, they also suggested prohibiting the blanking of any sailings on the transpacific route, significantly impacting the ability of carriers to manage capacity and maintain a profit. Although nothing has been established as of yet, carriers and shippers alike should consider how this could impact their shipments.

China Ocean Freight Rates and Cargo Capacity

Increasing Rates Through Q2

In spite of COVID-19, ocean freight carriers around the world are seeing a year-over-year increase in profit. In fact, demand has made Q2 2020 the most profitable second quarter for carriers since 2010, with a total earned profit of $2.7 billion.

The China-US West Coast trade route has seen a particularly high demand, seeing rates soar by 146% YOY, as compared to the 21% increase seen on Asia-Europe routes. Despite carriers reinstating the majority of blanked sailings, demand is still outpacing capacity and an additional GRI was scheduled for mid-September. This rate increase would have been blocked by China’s ban. While the state-owned China Ocean Shipping Company (COSCO) and OOCL canceled rate increases – and Maersk was rumored to follow suit with rate cuts for both US west coast and east coast – most carriers have moved forward with a GRI. That said, the rate increases are lower than anticipated, suggesting China has had some influence.

Preventing Capacity Management

Adjusting capacity is crucial for freight companies to maintain revenue during times of flux. Although it’s anticipated that spot rates will unlikely to continue rising, thus making China’s ban on rate increases trivial, preventing carriers from adjusting capacity could have a significant impact. As the market slows, the inability for carriers to adjust could prevent them from stemming losses. “This would have an unprecedented impact on the market and, more worryingly, potentially derail the carriers’ ability to manage capacity in the face of extreme demand volatility,” said Lars Jensen of SeaIntelligence.

With so many factors impacting freight rates, it can be difficult to know if you’re getting the best price. That’s where SiShips comes in. Our software gives you instant access to auto quotes and custom quote options, allowing you to tap into our years of experience. That means less time spent worrying about your freight and more time to grow your margins.

To learn more about our software, contact us today.

 

 

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Ocean Cargo Rates Peak as Demand Surges

Covid-19, Limited Capacity, and More Factors Have Driven Freight Rates to Set New Records

Although back-to-school season and holiday preparations consistently make August a peak season for ocean freight, this year is seeing a uniquely high increase – in both rates and capacity. The blanking of sailings earlier in the summer in response to the Covid-19 pandemic, combined with concerns over tariffs as the first trade agreement with China nears expiration, has generated a boom in demand that outpaces capacity. As a result, Asia-US West Coast spot rates have set new records, with Shanghai to US West Coast routes seeing a 167 percent increase from 2019.

Further, analysts are predicting another General Rate Increase (GRI) for trans-Pacific ocean cargo routes this month, marking the fifth since June 1. While earlier in the summer, increased rates were driven by significant numbers of blank sailings (a response to reduced exports from Asia due to Covid-19), these new GRIs are built on a surge of demand as inbound volume sees a year-over-year increase. We explored the factors at play in this increase, as well as potential future events that may impact rates further.

Spot Rates Increase Ocean Cargo

Capacity Versus Demand

Since the start of the year, capacity and demand have been drastically fluctuating. The onset of Covid-19 meant a sudden halt of economies, starting in China and Asia. With fewer imports – and lower consumer demand – carriers cut capacity radically, with 19 percent of total sailings blanked in May and 15 percent in June.

This summer, economies began to move again and US imports from Asia rose by more than 20 percent between June and July. In particular, a significant consumer demand for items like fitness equipment, at-home activities, and furniture, as well as the consistent demand for PPE, drove retailers to increase their imports to satisfy demand. Now, with only 3 West Coast sailings blanked for August and September, capacity is nearly back to normal – yet need for space is outpacing it. To combat this, carriers have added additional sailings from Asia, or “extra-loaders,” with 10 scheduled for August and an extra 5 for September; however, these additional sailings haven’t been enough to eliminate the capacity crunch, maintaining increased spot rates.

External Factors at Play

Beyond Covid-19, additional factors are also at play. Uncertainty surrounding the US-China trade deal has driven importers to bring their goods over from China earlier than normal, hoping to avoid the potential of a large tariff increase. Likewise, as the American election looms, importers and carriers alike are doing their best to anticipate potential shifts in the market.

Seasonal trends have also shifted – consumers are prioritizing furnishings and other goods for at-home use outside of their typical peak seasons and forgoing traditional purchases for this time of year like back-to-school gear or Halloween items.

 

We understand that tracking rates can be difficult. With years of experience in freight forwarding, we build our software SiShips. With this program, you can ensure your business is always receiving the best rate available – and get access to seamless cargo tracking, instant quotes, and more.

Contact us today to learn more about how SiShips can help streamline your import and export experience.

 

 

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3 Things Every Business Should Know About Cargo Insurance

Why Cargo Insurance Policies Are the Best Ways to Protect Your Shipments

It’s vital for your business that your shipments arrive at their destination safely. While it’s true that carriers offer some amount of protection for your shipment, this coverage is very limited. To protect your business and your goods against unexpected events, purchasing cargo, or freight, insurance is crucial. Read on to learn more about the types of policies available, the limitations of carrier liability, and how Sheltered International can help you find the right insurance for your business and your peace of mind.

Cargo Insurance Loss Coverage

Understanding Carrier Liability and Declared Value

Warehouses and carriers will only be required to pay when loss or damage to your goods is proven to be their responsibility – and the burden of proof is usually on the shipper. That means that natural disasters, Acts of God, fire, and numerous other potential problems will leave you without financial protection. Likewise, all carriers have a limit of liability, resulting in a compensation far lower than the actual value of the goods. For example, an ocean carrier is limited to $500 per package.

Declared Value is a means of increasing this potential value; however, it still does not remove the burden of proof placed on the shipper and often still results in compensation less than the shipment value. Though often confused with cargo insurance, Declared Value is not the same and does not offer the same level of protection.

What Cargo Insurance Covers

Cargo insurance protects your shipment while it is in transit, even as it moves through different modes and carriers. While carrier liability is limited, cargo insurance offers door-to-door coverage and will pay for losses that are outside the carrier’s control. Additionally, the shipper will recuperate the full value of the cargo lost or damaged, as well as freight or other associated costs. Coverage is generally either All-Risk or Free of Particular Average (FPA); which of the two primary types of policies is chosen will determine the spectrum of situations covered.

All Risk Insurance is the most common type of policy and covers by far the broadest range of incidents. All events are covered unless explicitly excluded in the policy. Commonly excluded situations include nuclear events, strikes, and riots, as well as innate flaws in the goods like inadequate packaging or decay.

By contrast, FPA coverage, or ‘named-perils coverage’ is more limited and excludes most partial losses of shipments due to common causes such as rough handling or pilferage unless explicitly named in the policy. It also does not cover heavy weather, theft of an entire shipping package, improper stowage, and other more common occurrences. A full coverage comparison can be found at right, via Roanoke Trade. Often, FPA coverage is the only available option for shipments of used merchandise and bulk goods. It is also most common for marine insurance policies, as compared to those covering other methods of transport like air freight or trucks.

What Cargo Insurance Doesn’t Cover

Of course, regardless of the type of policy chosen, it is important to note that cargo insurance only protects physical loss or damage. Customs rejection, cargo abandonment, delays, and other events that could result in financial losses are not covered, even under an All Risk policy.

How Sheltered International Can Help

Cargo insurance is an undeniably important part in protecting your business. Through our shipment-management software SiShips, we offer consultations and support in finding a policy that works for you.

To learn more about how SiShips can help streamline your freight-forwarding process, contact us today.

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COVID-19 Pandemic Continues to Affect Ocean Cargo Capacity

Blank Sailings and Fluctuating Demand Complicate Ocean Freight Forwarding

Lack of demand for ocean freight due to the COVID-19 pandemic has resulted in an increase in blank, or canceled, sailings of cargo ships. Though the number of cancellations peaked in February, major shipping companies are still reducing market capacity in an attempt to maintain freight rates. As carriers and shippers aim to strike a balance between fluctuating demand and capacity, it is more important than ever to be aware of the shifts in ocean freight availability and the impact it might have on your business.

blank sailings covid-19

Blank Sailings Increase in Q2

According to data from Drewry, May saw a total of 85 blank sailings out of 457 scheduled sailings, or a cancellation rate of 18.6 percent. For June, this rate decreases to 13 percent, with 58 of a planned 461 sailings have been canceled. Transpacific trade routes have experienced the greatest capacity reduction, with 47 percent sailings blanked.

Positively, cancellations have decreased month/month and the trend is expected to continue into July. However, Danish shipping company Maersk, part of the 2M Alliance, has still announced that it anticipates blanking more than 100 sailings within the upcoming third quarter. Its shares decreased by 6 percent mid-May as a reaction. 2M saw the second-highest number of suspended sailings in June at 34 percent, closely following THE Alliance’s 40 percent.

An Increase in Ocean Freight Demand

Frustrations with lack of airfreight capacity and high rates have been driving shippers to turn to the ocean, at least for a portion of their freight’s journey. “When rates go up, sea-air becomes a viable alternative for cargo that cannot pay high airfreight rates, nor accept all-ocean transit times,” Morten Bach, global chief commercial officer for Shipco, told FreightWaves.

As shippers adapt to account for available capacity, ocean freight demand is increasing. The American Journal of Transportation attributes this surge to the growth of eCommerce, as well as moves to distribute PPE via ocean to relieve shortages. Combined with a greater number of blank sailings, this has generated an uptick in freight rates. The last week of May saw prices jump by 12 percent.

Managing Ocean Freight with SiShips

Supported by a downward cancellation trend, predictions for July show that container-ship carriers are likely to offer more sailings in July. However, despite signs that industry may be starting to resume, industry experts are remaining realistic about the likelihood of a peak season in 2020. The upcoming back-to-school months should bring about a surge of demand, but most think this is unlikely. “There is concern for the ocean shipping industry that a peak season may not materialize at all this year,” Rachel Shames, director of pricing and procurement at CV International, said in an interview with Furniture/Today.

Without an increase in demand spurred on by a peak season, carriers will need to be cautious about continuing to maintain their rates. As a result, it’s likely that blanking will continue well into Q3.

With many factors influencing ocean freight, importing can quickly grow confusing. SiShips, designed with our years of customs and freight forwarding expertise, can help manage variable rates and shipping options. Plus, you can track your shipment every step of the way, offering transparency and peace of mind.

To learn more about how SiShips can save you time and streamline your shipping experience, contact us today.

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SiShips Introduces Satellite Tracking for Ocean Cargo

What You Should Know About Satellite AIS Tracking and How It Can Help Your Business

satellite ais tracking

From inclement weather to pandemics, there is a myriad of external factors that can affect your shipment. Knowing where your cargo is at all times offers peace of mind. SiShips has integrated with Satellite AIS tracking to expand its freight tracking capabilities, allowing users to check the position of their ocean cargo with accuracy and ease. This update, provided at no additional cost for customers, offers additional transparency throughout the import and export process, along with valuable data that can be used to optimize shipping procedures.

What Is AIS Tracking?

Automatic Identification Systems, or AIS, are used to track ships at sea. While previously, these systems were limited to terrestrial, or T-AIS tracking, satellites, or S-AIS, provide more expansive tracking coverage. The two methods work together to create a complete, global picture of ship locations. This tracking system is vital to preventing collisions on busy marine routes but can also be used as a means of shipment management.

How SiShips Tracks Your Cargo

While your cargo is at sea, SiShips gathers location data from three leading Satellite AIS providers, ORBCOMM, exactEarth, and Spire. These satellites account for a network of 202,848 vessels, allowing you to track your freight anywhere in the world.

The SiShips software automatically checks and updates the ocean freight’s position multiple times per day, providing real-time insights as well as additional information. A report from the satellite includes the ship’s identification number, or MMSI, its current position, and the direction it’s progressing in. It also offers information about the ship’s speed and details about its status, such as whether or not the engine is being used. We put this information together to give you a complete visual picture of your shipment’s journey, as well as its ETA to each checkpoint. Once your freight is near land, the tracking transitions to a terrestrial AIS system, which is more accurate but limited in range.

satellite ais tracking siships

The Value of Data in Shipment Tracking

Because it was implemented in 1974, there are vast amounts of historical AIS data. This detailed information can be used to anticipate problems, optimize plans, and plan future shipment strategies. With the volumes of data transmitted by these systems, combined with SiShips’ extensive customs and shipment management framework, our software can help businesses apply these insights to manage logistics, reduce costs and react more quickly to disruptions or changes. With more data, your business can improve efficiency, saving you money and reducing stress. Ultimately, with less time spent worrying about your freight, you can get back to the bigger picture: building your business and increasing your margins.

 

To learn more about how SiShips can save you valuable time and streamline your freight experience, contact us today.

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