In November of last year, reports showed that more and more people were looking to air freight to supply their demands for almost instant delivery or gratification of e-commerce products. With an 8.8% increase against the previous year, compared to the earlier 5.8% rise in the 2015-2015 period. IATA reports that this could indeed changes the way e-commerce supply chain works and puts the air freight industry on the path to being the strongest contender for financial and operational performance. With air freight demands on the rise coinciding despite passing a cyclical peak, it continues to maintain its performance progression.
The increase in air freight demands is based on the fast the e-commerce industries have picked alongside the need for instantaneous delivery of goods, making the global e-commerce industry steady with ongoing customer confidence especially in return purchases based on good buyer-consumer relationships. This correlates to airlines reporting back an year on year rise in demands, making these claims robust, making the year 2017 a record year since 2010. With consumer buyer confidence in mind, the year 2018 is staged to a great year for e-commerce businesses and the industry hand in hand.
Air freight operators in the Asia Pacific region have reported freight volumes increasing by 8.1% as well as a capacity increase of 1.2 per cent in November of 2017 compared to the same period of 2016. Furthermore, Chinese and Japanese exporters have also reported a rise in demand for product exports with the rise in economic stability in Europe as well as continued US economic performance. Having said this, North American air freight demands have also risen to 9.6% in volume, and 3.9% in capacity. European air freight operators have also reported that there was a 9.9% increase in volume, and 4.7% increase in capacity.
In Australia, air freight demands are also on the rise, with August of 2017 reporting a 10.7% hike in air freight demands in volume, and a 5.2% increase in capacity. The air freight demand growth and consistency is hand in hand due to the global trade improvements, with global trade exports out of Australia maintaining a steady 6 year increase in trend. With companies restocking quickly with the help of a healthy global trade economy and maintaining the momentum of process modernization and improving customer-seller-supply chain relations.
Having said so, the year 2018 is paved to being another great year for air fright operators.
When you are looking for solutions for shipping from Australia, there are many options for you to take, however, we at your disposal to help you with all your needs. In this edition of our blog, we look at what to know when shipping from Australian with Transco Cargo.
Firstly, we should explain that there are several types of shipping solutions, and we will look at the methods and types of shipment procedures available. These include the following;
- Door to Door: the favoured type of shipment when shipping from Australian for your personal cargo requirements, such as with personal shipping, moving or overseas relocations. The process is as the name says; Transco Cargo will arrive at the given address, packs and picks up the cargo shipment for shipping from Australia and thereafter once it arrives at the destination, Transco Cargo will also unload and unpack your cargo at the destination address given.
- Door to Port: the option that most commercial exports for shipping from Australia, especially those in higher volumes and have their own fleet of transport vehicles would choose. This option is cheaper but things like Australian port fees would be added.
- Port to Port: Another option for larger companies that have their own fleet of vehicles when shipping from Australia, as well as the country you are shipping to, as well as the inhouse customs experts. For smaller companies, it is better to utilise a reputed shipping company such as Transco Cargo.
- Port to Door: it’s another option for commercial companies that have their own fleet in Australia and are able to deal with the intricacies of shipping from Australia. In other circumstances, you can simply drop off your shipping items at the Transco Cargo Melbourne bonded warehouses so that we can handle the rest on your behalf.
- By Sea: the most cost-effective option for when shipping from Australia; either through FCL (full container load) or LCL (less than container load) for your shipments based on volume, where the latter includes sharing a container with other shippers. Usually shippers utilise LCL when they are not able to justify spending for a full container load and they opt to use consolidate container cargo as the cost of the container is also shared between the x number of shippers.
- By Air: the best option for need fast delivery and best suited for cargo that is not very heavy. Usually air shipping from Australia is done for expensive or urgent items.
As a rule of thumb, we at Transco Cargo Australia let our customers know that they have the option of having us box and pack their packages to send overseas for them. This is so that all the boxing and packaging safety tips when shipping small or large packages are adhered to insure that the package arrives at its destination safe and sound.
The most important factor is of course, choosing the right type of boxing option, you can choose to go with cardboard boxes or wooden crates for your shipments overseas. In a few of out previous blog posts over the years, we have stressed on how important the right box is for the type of content you are planning on shipping overseas. Packing Tips for Shipping Personal Effects in Boxes and Crates was one such blog posts courtesy of the Transco Cargo Australia shipping team.
At Transco Cargo, we give you the option of letting us do the boxing and packaging for your at an added charge, or you are able to tackle it yourself. However, we do recommend that they adhere to packaging safety tips that we relay here. First and foremost, choose the containment option correctly. At Transco Cargo Australia, you are given a few options of boxes and crates that is ever popular. These can be viewed on the Personal Effects Boxes and Crates page on our website. If you are looking for specialized boxes, do let us know what your requirement would be and we will definitely ensure that we meet your needs.
A rule of thumb when partaking in boxing and packaging safety tips when shipping small or large packages is “always use packing materials”. If you do not choose to pack your belonging safely and securely within the box when handed over to ship overseas, we cannot guarantee that the goods will make the passage safely. After all, it is a long journey and if you have taken it on to box and pack your personal effects yourself, that responsibility lies in you. Therefore, speak to us about getting yourself packing peanuts, packing foam, packaging paper, or bubble wrap to ensure that there are no empty pockets that can be easily damaged during movement of your personal cargo during transport. This is especially important with cardboard boxes as they are after all, made out of cardboard.
With the growth of freight volumes rising to meet with demands, Australian transport infrastructure has faced challenges in the past as the authorities and government look for measures to stay afloat. This is by looking at it on the national level to ensure that the Australian transport sector is able to deliver “a streamlined, integrated and multimodal transport and logistics system”.
The Australian transport infrastructure has seen many changes in the last couple of years, especially with this direction towards transforming itself into a multimodal network. With still work underway to connect the north and west regions of Australian with a multi modal system, we look at the current standing of the multimodal terminal currently present that links to the network of road and rail with air and sea ports. In the following image, we can see the green intermodal terminals and the purple road train assembly points which are crucial to the domestic Australia transport infrastructure and supply chain.
The following image features the major air and sea ports that link up to the intermodal terminals and road/train assembly points that link up the international and domestic Australian transport infrastructure together.
A traditional supply chain will look as follows with a shared supply chain and thereafter an international or domestic supply chain with its own sub processes as depicted, which is seemingly complex and becoming longer.
A new proposal by the Australian Post is in the works to facilitate larger scale processing terminals and such that are supported regionally. The new proposal for the Australian infrastructure features a two-tier system that forks the first tier to smaller regional hubs for customer locations and the second tier for larger processing centers as follows.
With plans to overhaul Australian transport infrastructure on a national level, there are also induvial ports developments that are occurring to propel the reginal logistics sector further to ensure that capacities and demand and supply are in line.
As an island nation, Australia’s logistics and transport industry is an important one and has been since its founding. Shipping freight matters as it is an essential commodity to a healthy Australian economy. Whilst it is easy to put it aside, without due freight movements, the quality of life in Australia will take a hit, as shipping freight lines bring in most of the consumables that Australians have in the home.
Not only is the Australian logistics industry responsible for providing over 1 million employment opportunities across an average of 165,000 companies (as per the figures made available by Australian Logistics Council), but also for the generation of 14.5% of the Gross Domestic Product with an approximation of $150bn annually in supply chain. Furthermore, Australian logistics and shipping freight matters as it supports Australian exports and competitive pricing in international markets too.
The way shipping freight works is as a well-oiled machine, with road and rail links working with major ports in all sectors of Australia. The following figure courtesy of the Exports and Infrastructure Taskforce showcases Australia’s nationally significant port, road, and rail networks.
The placement of Australian in the global market is crucial to ensuring that it stays afloat in the ever-changing temperature of international currents. By this, we mean to say that and to quote the Productivity Commissions, “given the size and distance from major overseas markets, an efficient and cost-effective freight transport system is particularly important to the competitiveness of Australia’s manufacturer’s and exporters, and ensuring competitors benefit from the lowest possible prices.”
As we said before, shipping freight matters to Australian quality of life, in the sense of economic, environmental and social factors. Freight lies in the center of all those factors with goals of national interest relying on it. Ensuring efficiencies in the transportation and supply chain, will directly impact consumer pricing; thus making it a crucial element in the economies of scale.
With shipping freight categorized between bulk and non-bulk; forecasts are expecting numbers to increase to 631bn tonne kilometres by the year 2050 for non-bulk, and to 909bn tonne kilometers for bulk. The following figures courtesy of IBIS World, showcase the expected domestic shipping freight growth, and the growth in bulk and non-bulk shipping freight.
With the projections in mind, it is important for Australia to revitalize its shipping freight sector by implementing the likes of a multi-modal system to efficiently make use of the infrastructure and assets available.
When it comes to shipping, be it overseas or locally, you need to take into consideration several aspects of the different processes into mind. The clear distinction that is international shipping has more complex procedures than of national or local shipments. To make life somewhat easier, we have listed 10 things to keep in mind when shipping internationally.
- Understand Customs Regulations – Customs regulations differ from country to country, and Transco Cargo can ensure that you are made aware of them. Transco Cargo can also act as a customs broker to help in clearing the cargo through customs upon arrival at the destination port.
- Knowing the Custom Fees –Customs fees may be charged by the custom authority. This depends on the value of the product being shipped as well as the destination country. If the value of product is high, your customs fees may be too.
- Understanding Shipping Tariffs –These includes the charges levied by the shipping company and any additional freight taxes that are applicable based on the products.
- Knowing Times of Transit – Often when opting for air freight, you will receive your cargo earlier than sea freight. However, this depends on the type of cargo. In the case of heavier cargo, sea freight offers FCL and LCL where FCL offers faster transit times over LCL due to consolidation
- Packaging Correctly – ensuring that the right shipping box or crate is used based on the product(s) at hand is vital. Furthermore you also need to package them correctly and include padding materials so that they are safeguarded during transport. Speak to Transco Cargo about shipping boxes and crates.
- Choosing the Medium of Transport – When shipping internationally, choosing your medium of transport is important for timely delivery and affordability. You can choose between the likes of air freight and sea freight. The type of product also matters when choosing your shipping option too.
- Understanding Restricted Items – Every country has their own list of restricted items that will be held up at customs when clearing. Ensure that you are not held up by reading up lists on the Transco Cargo page.
- Rules for Shipping Perishables – When perishables are being shipped internationally, there are rules that relate to them which you are as the consignee are to follow. thus you should be aware that when shipping internationally when perishable are concerned, you should also consider refrigerated container too, and that rules may differ from one country to another,
- Rules for Shipping Pets and Plants – When you are shipping livestock or pets, as well as plants, there are special procedures and documents that will need to be taken care of. Make sure all these have been accurately filled and nothing has been left unattended.
- Shipping Insurance – In the event a natural disaster may occur, shipping insurance is a great to ensure that you are safeguarded. Transco Cargo is able to assist you wit recommending a shipping insurance agent for your convenience.
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.
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.
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.
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.
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.