If you are looking to understand how cargo shipping works, you have come to the right place. At Transco Cargo Australia we look at making the cargo shipping process easier. Often the choice of cargo shipping is via sea freight due to the lower costs involved. There are various physical and documentation steps to take when going through the cargo shipping process. When you opt for international shipping, there are processes and costs that must be dealt with at each stage when moving the cargo from the shipper to the consignee. It is essential that these terms are agreed upon before embarking on the cargo shipping process; at Transco Cargo we make it simpler and handle all these factors on your behalf as a total turnkey logistics services provider. In this blog post, we look at the first step; Export Haulage.
What is Export Haulage and What is it?
The definition of Export Haulage includes the transfer of the cargo from the shipper to the freight forwarders warehouses (referred to as the origin warehouse). With Transco Cargo, our Melbourne based custom bonded warehouse offer the added benefits over normal warehouse facilities Export haulage usually occurs through a mix of truck or train transportation, and can occur over a course a few days to weeks depending on the distance and geography that it needs to travel.
With regards to the responsibilities, it is decided upon based on the shipping terms that the shipper has agreed to with the consignee. The IncoTerms (which is the governing set of shipping terms used for international trade), the likes of ExWorks (EXW) or Free Carrier (FCA) refers to export haulage being handled by the consignee (including responsibility). Find more information on IncoTerms through our previously Transco Cargo blog posts.
These IncoTerms will make international transportation easier, and when you choose to ship with Transco Cargo, we will relay the benefits of each to you and explain the cargo shipping process too. As the experts in freight forwarding and international logistics, we can help you decide on what is best suited for your logistics needs.
In the next blog post, we look at and Export Customs Clearance including and Origin Handling.
With freight forwarding companies as does Transco Cargo based in Australia, often the term “Customs Bonded Warehouses” is used when referring to the services offered. But for those who are not in the logistics industry, this may well be an alien term. Thus, in this blog post by your reliable freight forwarding company Transco Cargo, we look at explaining what they are and why customs bonded warehouses are important.
What are Customs Bonded Warehouses?
First and foremost, let’s define a customs bonded warehouse. It is a secure warehouse facility and location that facilitates the storage of imported goods without the importer/exporter or the warehouse needing to pay customs duties and is covered by customs rules & regulations. Whilst the majority of these customs bonded warehouse are owned by the government, private freight forwarding companies have also implemented the use of such customs bonded warehouses such as Transco Cargo which has 3 customs bonded warehouses in Melbourne for the convenience of our customers. Operating our Melbourne customs bonded warehouses means that we are require to carry through a posted customs bond and supervision from the customs authority is also facilitated for transparency.
Why are Customs Bonded Warehouses are Advantageous?
Businesses or persons who utilize customs bonded warehouses take advantage of the optional service that is made available to them in order for their goods and cargo to be stored safely and legally before shipment or delivery takes place.
There are various instances where customs bonded warehouses make for the ideal solution. These include the likes of the following;
- When using a customs bonded warehouse for storage, the payment of duties and taxes are deferred until the goods and/or cargo moves out. The time you choose to store your goods/cargo at the bonded warehouse is based on the bond you agree to with a guarantee.
- The safety of your goods/cargo are guaranteed as the customs bonded warehouses are manned by security personnel with 24 hour CCTV coverage.
- Furthermore, they are also ideal for storing goods/cargo of varying shapes and sizes.
- Transco Cargo, who offers turnkey logistics solutions, also offers the option of shipping and delivery of your goods/cargo, making it an ideal choice due to its offer of being a total logistics and warehousing solution.
- Long term storage can be facilitated against the bond you are opting for, and your goods/cargo will be secure without the need to pay duties/taxes.
- In the event, you have imported goods that fall within the definition of restricted goods, you are able to put to use a customs bonded warehouses until all legal and restrictions can be dealt with whilst the goods/cargo are kept safely within the customs bonded warehouses.
It is a well-known fact that the future of global shipping is heavily reliant on the stability of the global economy which is dependent on the political temperature as well. If we were to look back at the world politics and the state of events, from the turn of events with the US elections, President Trump’s ongoing war of words with North Korea’s Kim Jong-un, and many other unsettling situations around the globe, has unsettled the future of global shipping. With the term for continuing with Brexit in 2019 set upon and the BRICS agreements showing progress, other regions of the world are still moving towards finding a balance especially with the world economy.
As we said previously, the future of global shipping and trade is heavily reliant on the world economy, and the political temperature, trade volumes has seen a dip in growth looking at the trade to GDP ratio on a global scale. 2017 showed a trade flow fluctuations which in turn not only affected developed countries but also those that are developing, whilst marginal performances were observed in some regional areas. The makeup of global demand has in part contributed to how the GDP and investment trade links are moderated with the later deteriorating over the years.
However, based on the last couple years’ worth of data, an evaluation of trade volumes expects a compounded growth of 3.2% in the coming years (from ’17 to ’22). Whilst growth is expected, there will be some difficulties in the future of global shipping. 2017 proved to be a trying year, with increasing freight rates and even higher global demand. Furthermore, there have been many changes in the container shipping industry with the likes of acquisitions, mergers and more. Notable mentions go to 2M (Maersk and MSC), the Ocean Alliance (CMA, CGM, OOCL, Cosco and Evergreen), and THE Alliance (Hapag-Lloyd, MOL, K Line, NYK, and Yang Ming).
Keeping that all this in mind, Transco Cargo is committed to providing the best freight forwarding services out of our Melbourne offices, serving Australia customers in sending their commercial and personal shipments overseas.
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.