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We discussed demurrage in the previous week, and went into detail about why you are charged, how much you may be charged and what the process is. But if that is demurrage, what is detention in logistics terms? That is easily explained, read on.

What is Detention?

The process of a container arriving at the destination port or terminal and bring cleared is simple. Upon clearing through customs, the container especially in the event of a FCL container shipment, involves the container being sent to the consignee. In such an event, the consignee is given x number of free days after the container is either picked up or delivered to the desired address to be unloaded and returned to the operator. When the numbers of days have elapsed and if the container (full or empty) has not been returned, detention fees are levied to you.

Detention after Import of Container

In other words, Detention is charged when the consignee is in possession of the container outside of the port/terminal/depot after the allocated or agreed upon free time has lapsed.

Detention for Export Container

In such an event, it is when the container has been dispatched or been picked up for loading of cargo and when the container is only loaded onto the vessel after the agreed or allocated time has lapsed.  Typically, a consigner is allocated 5 days of free time for picking up and loading the cargo, and then returning the container to the port and loaded onto the vessel. If this isn’t done in the allocated time and if the container is still considered in the possession of the consignee, then detention fees will be levied.

What is the difference between Detention and Demurrage?

The different between detention and demurrage in logistics essentially falls in line with whether the container(s) in question are inside or outside the port. If they are inside when the allocated free day expire then it is considered demurrage, whereas if the container(s) falls in the possession of the consignee and is outside the port, then it is considered as detention. Whilst this may be confusing, if you take the scope of the matter as the port in question, you should be decipher which type of charge is relevant.

What is Per Diem?

The term “per diem” is often used interchangeably with “detention”; they are both used when a container is late to be returned to the port.

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The terms demurrage is used greatly in the logistics world. Essentially they are considered fees that are levied for when cargo is held at a terminal or container warehouse for a lengthy period of time. Let us explain.

What does demurrage mean?

Once a shipment arrives at its port (be it rail, air or sea), there are procedures set in place that allows for the shipment to stay in the period that is considered free. The length of this time is denoted by the terminal in question and should never be assumed. Whilst the standard free period is 4-7 days of free storage for the shipment, you need to make sure with the parties involved to avoid fees like demurrage and detention being levied in your final bill. If you are confused as to why they appear on your bill in the first place, its usually because of the different practices based on the port itself, thus if you are unsure when you are liable to pay demurrage and/or detention fees, then its best you are made aware of it before embarking on shipping your cargo.

How are you charged?

How you end up getting charged for demurrage could be due to a number of reasons. You may have filled out your shipping documents incorrectly or they may be incomplete and thus held up at the destination port with paperwork delays. Whilst your containers full of cargo is stuck in in limbo in terms of unloading until the paperwork issues get resolved you are also incurring demurrage fees. Another scenario may be that you have sent your cargo to the terminal to load onto a shipping vessel but due to natural disaster delays, the vessel will not be in port for a number of days, and if you go beyond the free period denote by that terminal, your cargo for exports will also incur demurrage fees.

How would you know?

The fact of the matter is, you may not know when you have to start paying demurrage fees. The first step is to find out. Furthermore you can also try to find out how much you will have to pay per day. As a carrier and terminal may have its own protocols and rates, its always a good rule of thumb to be in the know in each scenario, as you may either be charged per day or per container. At certain ports, if you have exceeded a week in a terminal daily charges may also increase thereafter.

Why are you charged?

Whilst putting blame isn’t always best, demurrage is a very frustrating factor in the logistics world. In the event you have undertaken all likely precautions, there may be delays with shipping vessels and civil unrest that be at the root of it. However, demurrage isn’t present to blindly increase your final bill but as in incentive to clear your cargo as soon as possible. All terminal has their capacities in terms of available resources and facilities and thus the turnover of storage is an important factor to any economy. Thus the need to ensure a smooth running process is in need and it is our duty as individuals of the logistics industry to ensure that we respect this well-oiled machine. Thus by speaking to Transco Cargo, who are experienced freight forwarders, you will be able to make attempts towards ensuring you are not burdened by demurrage fees.

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With globalization and reach of consumerism spreading to all parts of the world, as with people moving to different parts of the world be it for personal or career reasons, the need for overseas shipping has increased. There is a great need for means of transporting goods and/or merchandise via overseas shipping, and ensuring that the requirement documents for shipping overseas is at hand and ready makes the process almost always smooth sailing.

What You Will Need

The type of required documents for overseas shipping greatly relies on the content of the shipment, the place of loading (POL), and the place of discharge (POD). Some shipping documentation is optional in certain countries, whereas you may be required to fill out various documentation and submit them based on the type of cargo being shipped as well.  In other times, you may also be required to complete and submit documentation before the process of shipping has commenced whilst others may be required after the cargo for overseas shipping has reached the place of discharge. We simply mean to say that every form or documentation has its underlying purpose. It is always best to relay with your Transco Cargo shipping representative to ensure everything is order.

Essential Shipping Documents for Overseas Shipping

There are some documents that are across board required for all cargo for overseas shipping. One such document is the Bill of Lading (BoL). The Bill of Lading is used for two main reasons; 1 – it factors the type of cargo and the quantity of the overseas cargo shipments,  and 2- it also acts as a receipts of sorts as a verification of the cargo shipment has reached its destination port.

Another form that is considered necessary would be the Commercial Invoice (CI) especially for overseas shipping of business transactions. This piece of required document for overseas shipping acts as a ‘bill of sale” between the buyer and the seller of the cargo being shipped overseas. If we were to define a Bill of Sale, it is “document that transfers ownership of goods from one person to another, used in situations where the former owner retains possession of the goods.” In any event, it is a necessary document from governments as it is also utilised to calculate tariffs and also regulate imports into the destination country.  A commercial invoice will require a detailed product description, as well as its purpose, the product’s commercial value, as well as the manufactured country.

Required Documents for Overseas Shipping

All required documents for overseas shipping have been given authority by governments as a means of regulation and control when considering traffic of international merchandise. In order to ensure a smooth process, it is important that all documents be accurate and getting the help of your shipping representative at Transco Cargo will go a long way as incomplete or inaccurate forms, also those with missing information will suffer delays or even end in lost or missing cargo.

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The point of the matter is that, almost always, when sending cargo to Sri Lanka or any other destination, originating from the same port, the choice of shipping term makes all the difference in transit time when choosing FCL versus LCL. For instance, when sending cargo to Sri Lanka on FCL basis, you will almost always be able to receive your shipped cargo faster than LCL. Here is why!

Back to the Basics of FCL versus LCL

Down to the shipping terms, we look at FCL which stands for Full Container Load and LCL which stands for Less than Container Load (also known as Groupage). FCL essentially means to say one container (be it a 20ft or 40ft cargo container) is booked and utilized to ship cargo from the origin (Australia) to destination (Sri Lanka). LCL however refers to consolidation of cargo from various shippers and consignees in order to fill a container as one shipper alone may not be sufficient, and that is where the term Groupage comes into light, as the cargo space and costs of shipping is shared with others.

Groupage Shipping

If we were to access why LCL or Groupage shipping takes longer than sending cargo to Sri Lanka via FCL it’s because of the process that must occur during the course of the shipping route based on the shipments on board.  The Groupage shipping container may have taken on cargo shipments from various shippers and consignees, apart from the particular cargo to Sri Lanka.

For instance, if you are sending cargo to Sri Lanka via LCL, but it has a stop at a hub port in Singapore (be it as it is a designated hub port for shipping line or the groupage operator),  the container and its cargo may be reworked. This means to say that, the cargo will be reworked and consolidated based on the destinations from thereon (with all cargo to Sri Lanka, all cargo to India, all Cargo to Mauritius, etc).

The fact of the matter is, as groupage shipping is worked out where both the cargo and costs are shared, in the event that there is not enough LCL bound cargo to Sri Lanka at the port of Singapore (as per this example), there is a possibility that the container will be held up at that port till it fills up considerably.  Whilst the transit time for sending cargo to Sri Lanka via FCL is usually 16 days barring natural disaster occurrences that may delay sea faring, the difference in transit time for LCL may be considerably slower due the reasons outlined.

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In our previous blog post, What Brexit means for Global Trade, we looked at the implications on the United Kingdom leaving the Europe Union referendum. We also looked at how that would ultimately affect trade relations within the EU Member States and its reliance on the Single Market policy established by the EU for hassle free trade and lesser duties, quotas and customs overheads. In today’s blog post, we look at how global supply chain and trade together has been affected since the Brexit decision was made and get a temperature within the economies and industry trends to watch out for in terms of a post-Brexit world.

Supply Chain Defined

Simply defined, supply chain relates to the “sequence of processes leading involved in the production and distribution of a commodity.” When it comes to supply chain management, you are looking at the likes of a “system of organisations, people, activities, information, and resources involved in moving a product or service from the supplier to the end customer.” However, business logistics managerment differs somewhat slightly to that of supply chain, where the former concerns  the “production and distribution process within a company” whereas the latter concerns “suppliers, manufacturers, and retailers required to distribute the product to the end consumer.”

Global Supply Chain

With the competition amping up, supply chain is becoming an important factor in maintaining competitiveness in the global market. By adapting to changing technological and development trends, and finding means to decrease costs with sourcing, production, and delivery, global supply chain processes are becoming more proactive.  Global market companies are not only looking at their supply chain processes, but also formulating measure to exceeds customer expectations and their experiences with delivery in terms of speediness and quality.

EU and Global Supply Chain Post-Brexit

In the post-Brexit setting, with the UK leaving the European Union,  a rebalancing has been called for to steady current global supply chain processes for the EU market, especially without the Single Market trade policies in place, much uncertainty has been noted which in turn may affect the footprint of global supply chain. Decisions and investments concerning warehousing, manufacturing and delivery capabilities will definitely be questioned. In such a sense,  the calibration of cost levels against quality of service will need to be reset and balanced.  The following is a snapshot of the EU Supply Chain with Gross Exports Dividends by Value-Added Exports by Destination from the UK courtesy of the Global Council (Brexit: The Impact on the UK and the EU, 2015).

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Brexit has caused much discussion and deliberation in the recent past between government and countries in global trade with the United Kingdom, investors, and even stock exchanges to name a few. Brexit concerns the United Kingdom’s European Union referendum and it’s exit from the EU, which has affected trade between the United Kingdom and the European Union.  If we are to look at global trade and the consequences of Brexit, we also need to understand the current trade flows that occur between Great Britain and EU countries. In this blogpost, we reflect the past and look to the future of global trade after Brexit.

European Unions’ Single Market and Trade

Countries within the European Union have greatly benefitted from the EU’s Single Market; absence of duty and quotas for all EU member states that also extends to free movement of people for access for workers and services. The Single Market policy also reduces customs procedures for less burdened transactions within the EU.

Global Trade with the EU

The likes of Belgium, Netherlands, and Germany have been impacted the most with regards to Brexit, with its past global trade statistics, as these countries as their exports to UK greatly outweighs their imports from UK. With them included in the top 10 UK trading partners, within the seven EU member state countries, it is evident that a global trade will indeed be impacted. In the year 2015, 44% of the United Kingdom’s export trade was directed within the EU, with 53% of imports also originating with EU Member States.  With Brexit, it is evident of the underlying impact that will be felt by these countries and how opportunities may arise for others in global trade.

The following charts courtesy of PriceWaterCoopers, showcases the statistics of export and import trade with the United Kingdom in 2015. Furthermore, post-Brexit the price elasticity of exports may be privy to trade agreements falling through, which may in turn increase cost of trade between the likes of the UK and the rest of the EU member states.

There are few countries within the EU that looks to the UK for its trade volume, as the below chart states.

  • Ireland : The economy strongly relies on its export trades, and 14% of them are to the UK, with 34% of imports originating from the UK as well. With Brexit, costs will spike with concern to customs clearances, duties and quotas. However, one benefit from Brexit would be the investment opportunities from other foreign markets and locations.
  • Netherlands : Being the United Kingdom’s 2nd largest trading partner within the EU (volumes and ratio of imports/exports), the main factor would be the Euro vs Pound differentials with current investments.
  • Belgium : With 9% of its export going to the United Kingdom, the terms of export in relation to the Belgian economy size will be a factor, especially with 5% of imports originating from the UK.

Germany: Similarly, German exports will take more of a hit than its imports and not to mention the terms that have been facilitated via the Single Market policy.

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If you are an early planner, looking for great deals for your Christmas gifting, and especially when you send gifts overseas, we have some great Christmas gift ideas in store for you! If you have your family’s wish list in hand, that would make your Christmas shopping an easier task. Here are some ideal stocking stuffers and ideas to put under the Christmas tree for when you send gifts overseas.

Sleek Charging Cases

A great choice for tech-savvy teens, young and not-so-young adults too, sleek charging docks/cases/stands are quite the fad when you want to b organised and trendy too.

Fidget Spinners

Taking the world by storms, fidget spinners are on everyone’s wish lists. Their compact sizes makes for a great stocking stuffer for the entire family when you send gifts overseas.

Herb Mincers and Vegetable Choppers

Small and convenient mini food processors that can cut down food prep can definitely make life easier.  An ideal gift for the whole family!

Mini Humifidiers/Dehumidifiers

For those who are all about health-consciousness, these mini desk or bedside companions are perfect!

Fancy Playing Cards

With numerous and elaborate card games being created, the likes of “Cards against Humanity”, and celebrity designed charity focused playing cards are all the rage.

Premium Stationery Sets

There is something special about receiving thank you notes that are pretty, and even more special if they are monogrammed. Add these to your Christmas gifts for your family this year!

Gadgets

Adding a gadget for a Christmas tree gift definitely says “thinking of you”. What about a tablet, a new phone or laptop, or even a trendy camera? You can send gifts overseas to your family with the right shipping partner!

Health Conscious Gifts

What about gym equipment or even a spin or mountain bicycle sets for the entire family signed from yours truly. You can ship these to their doorstep before Christmas comes knocking, making for a wonderful holiday!

Homeware and Tools

Send a vacuuming robot to make tidying up a breeze! The pets will love it too! What about a handheld mini vacuum for a vehicle, or a steam mop! Splurge even into sending a custom Kitchen Aid to make your mom over-the-moon-happy!

 

Check out more ideas from Good Housekeeping too!

Let us at Transco Cargo help you with making your family’s Christmas a splash when you send gifts overseas! With our Christmas shipping scheduling give below, you  can plan to make sure they arrive ahead of Christmas Day!

 

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Instant delivery and gratification has become the cornerstone of e-commerce and with it, the global air cargo industry has been a great facilitator in ensuring that the supply meets demand. Whilst e-commerce is a more recent commodity, the like of global air cargo has helped with the demands and supply of perishable cargo logistics every day.

If you were to take statistics of global air trade, the IATA forecasts that the global air cargo will represent approximately 1% of global trade in terms of volume with over 35% value margins. Timely deliveries are now a way of life, what was once a luxury has now intertwined itself into what is now a necessity. Like we said before, air logistics is an integral part of perishable cargo but that is not the only industry that relies on it. The pharmaceutical companies and medical aid find this mode of transport relies on global air cargo for its benefits of speed and efficiency. This is especially so when you take into consideration the sensitivity of the cargo in question, the value and timeliness of the deliveries.

With the likes of e-commerce and the electronics/gadgets industry, you are looking at a global air cargo strategy set in place where express delivery of samples or parts play a crucial part in the numbers game. With global retail sales alongside express delivery, 7.6% was represented as online sales in 2016. It is slated to rise in the coming years, proving that instant gratification is a reality and global air cargo volumes will rise.

Global air cargo started to show a growing trend in mid 2016 and with the upward momentum has taken hold and this shows promise for the future. Whilst there is a promise for growth, being aware of the industry’s strengths, weaknesses, opportunities, and threats is always recommended. The following features a SWOT analysis carried out on the global air cargo sector by IATA.

By facilitating better means of improving global air cargo strategies, there will be further growth. The IATA has formulated a new strategy that looks at the following to make global air cargo easier, smarter, and better. Another one such means is with electronic air waybills in order to not only improve efficiency but also reducing chance of human error and not to mention increasing quality of service. These goals will take steps toward the right direction ensuring that industry moves with the times, provides transparency whilst meeting its mission milestones.

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The packing symbols that is applied on a cardboard box or shipping crates function as safety and handling guides so that during shipping the contents within are safeguarded. These packing symbols are used universally and are international shipping standards. Let’s look at a few of them!

Let’s take the above six packing symbols first.

  1. Keep in a Cool Place & Dry Place: Store the boxes and crates in a dry and well ventilated are
  2. Fragile: Contents may easily break, and could contain glassware, china, etc and should be handled carefully
  3. Handle with Care: Ensure that Boxes/Crates are not dropped as it may include fragile goods
  4. Avoid Heat and Moisture: Avoid storage in direct sunlight or exposure to water/wet conditions
  5. Keep Away from Water: Keep away from water/wet conditions
  6. Avoid Direct Contact with Floor: Avoid storing the items on the floor, instead use pallets

The following are six more packing symbols.

  1. This Side Up: Package needs to stored with that direction in mind
  2. Do Not Step On It: Avoid stepping/standing on box/crate
  3. Stack is 8 Identical Boxes: advisable stacking recommendations
  4. Stack Weight is 8kg: recommended stacking weight
  5. Do Not Stack: Avoid stacking for box/crate structural integrity
  6. Do Not Roll: Do not roll the box/crate when transporting

Our last six packing symbols are as follows.

  1. First In First Out: Package received first should be removed first and in that order
  2. Avoid Heat and Sunlight: Avoid keeping it in direct sunlight and heat exposure
  3. Avoid Strong Smell: Keep away from strong smelling fumes, such as petrol,etc
  4. Store at 25° C or Below: Store box/crate in recommended temperature parameters to ensure integrity of contents
  5. Do Not Use Hand Hook: Avoid using hand hook during opening of crates
  6. Do Not Use Blade: Avoid using blades when opening cardboard boxes

 

Keeping these packing symbols in mind when shipping & transporting, handling, and opening the respective packages will ensure safe passage for door-to-door delivery of goods.

At Transco Cargo, we are committed to ensuring that you are well informed and that we value your property just as our own. Please utilise these shipping and packing symbols when packing your own cardboard boxes and shipping crates in the future in order to safeguard the contents especially when shipping them overseas and when passing various agencies and hands.

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Taking a quick look at the world merchant fleets in action in the last few years, showcasing a steady 3.3% increase in deadweight tons (dwt) terms. World merchant fleets are classified as those that include ships of 10,000 gross tonnage (gt) or over. If you were to look at mid last year (2016), there were approximately over 42,000 merchant vessels in play with over a approximated total of 1.73 bn dwt.

Country of Control Based World Shipping Fleets

Since the start of the year 2004, the capacity of world merchant fleets has doubled and presently has registrations in 150 nations. However, a point to keep in mind is that the world shipping scene is mostly owned and registered with a limited amount of shipping countries. The following table courtesy of ISL, features the Controlled Fleets of Shipping Nations between 2013 to 2017 in million dwt.

As per the above figures, by mid 2016, 57% of the tonnage movement of the world was controlled by the likes of Greece (19.5 %), Japan (14.1 %), China (12.0 %), Germany (6.8 %) and South Korea (4.7 %)  as per the ISL organisation.

World Merchant Fleets Owning Economies

Presently, 1/5th of the world’s fleet capacity is controlled by Greece when looking at it in terms of dwt. Since the 2010s, Greece has steadfastly become the largest ship-owning nation in the world and has since grown by 80% to the likes of 337mn dwt by mid 2016 (as shown in the table above), with the likes of 4,500 merchant ships under its belt.

 

The top five world merchant fleets as per UNCTAD presently stand as follows.

Furthermore, UNCTAD states the following too;

Top 5 ship owners are Greece, Japan, China, Germany and Singapore. Together they have a market share of 49.5% of dwt.

Only one country from Latin America (Brazil) is among the top 35 ship owning countries, and none from Africa.

Top 5 flag registries are Panama, Liberia, Marshall Islands, China Hong Kong SAR and Singapore. Together they have a market share of 57.8%.

Developing countries flag more than 76% of the world fleet in dwt.

In terms of vessel types, bulk carriers account for 42.8% of dwt, followed by oil tankers (28.7%), Container ships (13.2%), other types (11.3%) and general cargo ships (4%).

Only three countries (Republic of Korea, China and Japan) constructed 91.8% of world tonnage (GT) in 2016. Republic of Korea had the largest share with 38.1%.

Four countries (India, Bangladesh, Pakistan and China) together accounted for 94.9% of ship scrapping in 2016 (GT).

The data confirms a continued trend of industry consolidation, where different countries specialize in different maritime sub-sectors and also confirms the growing participation of developing countries in many maritime sectors.

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