/ By tjchinafreight ivy / Cargo • International • Shipping

Maersk Bars on CMA CGM: We Oppose Stopping Plastic Waste

Not long ago, liner giant CMA CGM announced that it has banned all ships from transporting plastic waste, a move that has received support from NGOs.

But Maersk recently expressed a different view. The shipping company, also headquartered in Europe, warned that stopping the transportation of plastic waste will not only not improve the marine environment, but may also prevent the transportation of this waste to recyclable sites.

The NGO Plastic Change has urged Maersk to stop shipping plastic waste after rival CMA CGM announced it would no longer ship plastic waste for environmental reasons. Louise Lerche-Gredal, head of Plastic Change, wrote in an article, “It is time for Maersk to take a stance on whether they will continue to be part of the waste transport issue. Plastic waste not only contributes to pollution, it also contributes to the climate crisis. , and affect the most vulnerable societies in the world.”

Maersk said it would not do what CMA CGM did because banning the transport of plastic waste due to environmental concerns is not a good idea. "We do not think a blanket ban on the transport of plastic waste is feasible because such a ban would prevent us from helping responsible companies and organisations to transport plastic waste and other recycled materials to recycling sites in a responsible manner."

According to a Feb. 11 press release from CMA CGM, the decision to stop shipping plastic waste comes as the French carrier wants to work to prevent plastic waste from being "exported to destinations where sorting, recycling or recycling cannot be guaranteed." “About 10 million tons of plastic waste ends up in the ocean every year. If we don’t take action, this number will triple to 29 million tons per year in the next 20 years, which will cause irreversible damage to marine ecosystems, flora and fauna ."

CMA CGM said it transported around 500,000 tonnes of plastic waste in 2021. Maersk doesn't disclose the volume of veteran plastic waste shipped, but according to Plastic Change, Maersk ranks third.

Maersk emphasizes that it is "a responsible company and we of course take environmental protection seriously. Ensuring compliance with all legal and regulatory procedures regarding the import and export of plastic waste has always been embedded in our business and daily activities."

Maersk also works with an ocean cleanup organization. The organization recycles plastic waste in the Pacific, and stopping the shipment of plastic waste will prevent Maersk from assisting the organization in delivering the collected plastic to recycling sites.

/ By tjchinafreight ivy / Shipping

The difference between virtual overseas warehouse and overseas warehouse

Cross-border e-commerce and cross-border logistics coexist synergistically. Compared with the booming cross-border e-commerce in my country, the shortcomings of cross-border logistics are becoming more and more prominent, which restricts the development of cross-border e-commerce to a certain extent. In addition to using the domestic direct mail mode, traditional cross-border e-commerce can also use the overseas warehouse mode. The virtual overseas warehouse is a mode between domestic only delivery and overseas warehouse delivery.

Virtual Warehouse is an international logistics model that combines the advantages of physical overseas warehouses, and is more intended to make up for its shortcomings. By generating a tracking number in the destination country of the domestic (Shenzhen) system, the centralized goods are directly delivered by high-quality air. In the destination country, the electronic express pre-clearing method is adopted to shorten the delivery time of the express in the destination country.

Overseas warehouse mode

1. Headway transportation
Cross-border e-commerce transports goods to overseas warehouses by sea, air, land or intermodal.

2. Warehouse management
Through the warehouse management system, cross-border e-commerce merchants can effectively view overseas warehoused goods and manage inventory in real time.

3. Local delivery
According to the order information, the overseas warehouse center distributes the goods to customers by local post or express.

Disadvantages: need to stock up, there is inventory risk and increase capital cycle costs, it is inconvenient to operate multiple SKUs at the same time, increase inventory storage costs and operating costs, overseas national policy changes will cause certain losses and troubles

Virtual overseas warehouse mode

1. First of all, the virtual overseas warehouse model does not require sellers to stock up, there is no inventory risk, and there is no financial pressure;

2. The virtual overseas warehouse mode is equivalent to having local overseas warehouse inventory at all sites on any platform;

3. The virtual overseas warehouse model shows local delivery, which improves consumers' purchasing confidence and purchasing experience, increases sales, and increases profits. At the same time, it also prevents buyers from malicious returns and exchanges because the delivery address is displayed in China;

4. The overall logistics cost of the virtual overseas warehouse model will be similar to the local delivery price, but the timeliness will be much faster. After all, it is equivalent to taking a special line to the destination country by yourself;

5. The virtual overseas warehouse model can respond to changes in foreign policies at any time, operate flexibly, reduce risks, and is more suitable for small sellers who are not particularly well-funded. Details (dimensional: ues5588)

Disadvantages: At present, virtual overseas warehouses are not recognized on e-commerce platforms.

Suitable for the crowd: small amount of capital, weak risk tolerance.

/ By tjchinafreight ivy / Shipping

Practical knowledge of export supervision warehouse

What is an export regulated warehouse?

Export supervision warehouse, commonly known as "export warehouse", refers to a warehouse established with the approval of the customs to store, bonded logistics and provide value-added services for goods that have completed customs export procedures. The export supervision warehouse and the bonded warehouse are collectively referred to as "two warehouses", which are the basic form and carrier of bonded logistics.

What are the types of export supervision warehouses?

Export distribution warehouse
A warehouse for storing export goods for physical departure.
Domestic knot transformation warehouse
A warehouse that stores export goods for domestic carry-over.

Which goods can be stored in the export supervision warehouse?

With the approval of the customs, the export supervision warehouse can store the following goods:

  • General trade export goods.
  • Processing trade export goods.
  • Export goods transferred from other areas and places under special customs supervision.
  • Goods imported for assembling export goods, and packaging materials imported for repackaging of goods in export-supervised warehouses.
  • Other goods for which customs export procedures have been completed.

Which goods cannot be stored in export supervision warehouses?

Export supervision warehouses shall not store the following three types of goods:

  • The country prohibits the import and export of goods.
  • Unapproved countries restrict entry and exit of goods.
  • Other goods that are not allowed to be stored by the customs.

What are the practical functions of the export supervision warehouse?

Goods storage, assembly and distribution
Processing trade export goods, general trade export goods, goods imported for assembling export goods, and packaging materials imported for changing the packaging of goods can be stored in the export supervision warehouse at the same time, and can be assembled and distributed according to regulations. In addition, goods can also be transferred between export supervision warehouses and other special customs supervision areas and bonded supervision places.

Carry out value-added services for circulation

With the approval of the competent customs, value-added services such as quality inspection, grading and classification, sorting and packaging, marking, marking, filming, and packaging change can be carried out in the warehouse. The domestic equipment and materials needed to carry out value-added circulation services in the export supervision warehouse can only be transported into the warehouse after being examined and approved by the competent customs, and the customs shall implement registration management for this business.

Some warehouses that meet the conditions can realize warehousing tax rebate
For export supervised warehouses that are approved to enjoy the policy of tax rebate upon entry into the warehouse, the customs will handle the tax rebate certificate procedures for export goods after customs clearance of the goods. For export supervised warehouses that do not enjoy the policy of tax rebate upon entry into the warehouse, the customs will handle the tax rebate certificate procedures for export goods after the goods actually leave the country.

Approved warehousing goods can be distributed and reported
With the approval of the competent customs, for the goods stored in the export supervision warehouse with small batches and frequent batches, the goods can be stored in batches, and then the customs declaration formalities can be handled in a centralized manner within the specified time limit.

Inbound cargo replacement
For the goods that have been stored in the export supervision warehouse and are required to be replaced due to quality and other reasons, the goods can be replaced with the approval of the customs in charge of the warehouse. Before the replaced goods are released from the warehouse, the replacement goods should be put into the warehouse first, and the commodity code, product name, specification, model, quantity and value of the original goods should be the same.

/ By tjchinafreight ivy / Shipping

International air transport knowledge

Eight elements of air freight inquiry:

1. Product name (whether it is dangerous or not)
2. Weight (charges involved), volume (dimensions and whether it's in stock)
3. Packaging (Wooden box or not, with or without pallet)
4. Destination airport (whether it is a basic point or not)
5. Time required (direct flight or transfer flight)
6. Requested flight (different flight services and prices)
7. Types of bills of lading (main and separate orders)
8. Required transportation services (customs declaration method, agency documents, whether customs clearance and delivery, etc.)

Air freight is divided into heavy cargo and bubble cargo.

1CBM=167KG The volume weight is compared with the actual weight. Which one is larger is charged according to which one. Of course, there is a little secret in the air freight bubble, which all colleagues should know, and it is inconvenient to talk about it here. Manufacturers who do not understand can figure it out for themselves.

Air freight structure composition - did you know?

There are many people who do air freight. Do you know how the air freight rates of airlines are calculated? A brief introduction, I hope to help everyone.

Air freight composition:

1. Airfreight freight (charged by the airline)
2.Fuel sur charge fuel surcharge (depending on the airport, the price of the destination point is different, Hong Kong is generally about the first 4 yuan now, before 3.6, last year the highest 4.8, the price is adjusted by the airport, generally 2 yuan to Asia)
3. Security check fee (fixed fee of 1 yuan/kg in Hong Kong)
4. Airport operation fee (HKD283/ticket in Hong Kong, the airport is responsible for transporting goods on the plane, etc.)
5. Terminal fee: 1.72/kg When the goods are handed over to the dealer, the dealer is responsible for the board and other things, and finally handed over to the airport for collection)
6. Air main bill fee: HKD15/bl is the fee for issuing the bill of lading - document of title.

The above is the composition of accounting fees for most airlines, mainly Hong Kong Airport. Because Hong Kong is a super-large free trade port, and Hong Kong Airport is the largest airport in the world, it has fewer restrictions, a wide range, and a large number of cargo aircraft. There are currently 78 airlines. There are more than 100 flights every day, which can be the first choice when the space and service are guaranteed. However, the cost is generally about 2 yuan higher than that in China!

What are the types of air cargo?

When you decide to ship your goods by air, you should know that there are two main types of air freight:

  • Special shipment
  • General shipment

Special cargo allows heavy, hazardous material and temperature managed cargo. It also allows human tissue samples, organs, fragile, value items and animals.
General Crago allows digital machinery, hardware, consumer goods, retail goods, toys, clothing and textiles, and more.
Air cargo is transported using different types of aircraft including passenger, cargo, charter or helicopter.

What are the factors that affect the cost structure of air freight?

Many factors contribute to the cost of air freight, such as:

  • Special event or holiday
  • Traditional/New Regulations
  • Economic situation
  • Technology (robotics, augmented reality, drones, artificial intelligence and big data)
  • Other additional charges such as cargo insurance, airline terminal handling charges, customs clearance and security surcharges are also included in the fee.

Common air freight nouns:

ATA/ATD (Actual Time of Arrival / Actual Time of Departure)
Abbreviation for actual arrival/departure time.

Air Waybill (AWB)
A document issued by or on behalf of the shipper, which is proof of the carriage of goods between the shipper and the carrier.

Unaccompanied Baggage (Baggage, Unaccompanied)
Baggage that is not carry-on but checked in, and luggage that is checked in.

Bonded Warehouse
In this type of warehouse, goods can be stored indefinitely without paying import duties.

Bulk Cargo
Loose shipments that are not palletized and boxed.

CAO (Cargo for Freighter Only)
Abbreviation for "Cargo Aircraft Only", meaning that it can only be carried by cargo aircraft.

Charges Collect
List the charges to the consignee on the air waybill.

Charges Prepaid
List the charges paid by the shipper on the air waybill.

Chargeable Weight
The weight used to calculate air freight. The billable weight can be the volumetric weight, or when the cargo is loaded in the vehicle, the total weight of the load minus the weight of the vehicle.

CIF (Cost, Insurance and Freightage)
Refers to "Cost, Insurance and Freight", which is C&F plus Seller's insurance for loss and damage to the Goods. The seller must sign a contract with the insurer and pay the premium.

Consignee (Consignee)
The person whose name is listed on the air waybill and who receives the goods carried by the carrier.

Consignment
The carrier receives one or more pieces of goods from the shipper at a certain time and place, and carries it to a certain destination with a single air waybill.

Consignor
Equivalent to shipper.

Consolidated ConsignmentA consignment of goods consigned by two or more shippers, each of which has signed an air freight contract with a consolidation agent.

/ By tjchinafreight ivy / Shipping

Inspection Requirements for Limited Quantity Packaging of Hazardous Chemicals

With the release of the "Measures for the Safety Administration of Road Transport of Dangerous Goods" (hereinafter referred to as the "Measures"), the mode of transport in small packages has once again entered the public eye. Small pieces of dangerous goods such as aerosols, 84 disinfectants, daily chemical reagents, etc. The transportation of highly hazardous products has always been a hot topic in the industry.

These dangerous goods themselves are transported in small quantities, and if they are packaged in reliable, strong and durable packaging, or if certain conditions are met, their transport will be much less dangerous.

One of the major features of the "Measures" is the introduction of the exemption of small package transportation, which clarifies the legal and legal transportation behavior of small package transportation in my country from the level of administrative enforcement of laws and regulations.

01 Legal and regulatory basis

In Chapter 3.4 of the International Maritime Dangerous Goods Regulations, it is clarified that a limited quantity of dangerous goods shall be packaged according to the limited quantity and comply with the provisions of this chapter, except for the 7 cases listed (there is no test requirement for relevant packaging testing in 4.1.1.3) , without any other provisions of these Rules.
For this reason, if an enterprise uses a limited quantity of packaging when exporting hazardous chemicals by sea, it is not necessary to provide the "Outbound Cargo Transport Packaging Performance Inspection Result Sheet".

02 Packaging Restriction Requirements

Combination packaging should be used: Dangerous goods should be transported in limited quantities in inner packagings with suitable outer packagings, and intermediate packagings may be used. When transporting items such as aerosols or small gas containers, inner packaging is not required.
With the exception of 1.4 S explosives, shrink-wrapped or stretch-wrapped pallets that meet the specified conditions may be used as outer packaging. If fragile or breakable inner packagings made of glass, porcelain, coarse ceramics or certain plastics are used, they should be placed in qualified intermediate packagings.
Glass or ceramic inner packagings containing liquid corrosives of Class 8 (packing group II) shall be placed in compatible and rigid intermediate packagings as required.
In a word, combined packaging is required when transporting in limited quantities. Inner packaging and outer packaging are necessary, but for intermediate packaging, it can be judged whether it is necessary or not.
However, unlike exception packaging, a limited number of packaging testing requirements are not mandatory.

03 Package Weight

For example, the more common recent alcohol spray, UN No. 1170, is available in a limited quantity of 5L for Group III packaging. That is to say, the maximum volume of each small package cannot exceed 5L. If the small package is fragile or fragile, such as the inner package made of glass, porcelain, coarse ceramics or some plastics, it needs to be placed in an intermediate package that meets certain requirements, and then placed in the outer package. The total gross weight of the package should not exceed 20 kg. If the inner packaging is not fragile or breakable, no intermediate packaging is required, and the total gross weight of the package should not exceed 30 kg.
Notice! Limited quantities do not apply to all dangerous goods.

04 Packaging Marking Requirements

Of course, in addition to the selection requirements of the packaging itself, the packaging marking requirements are also another important feature that distinguishes the limited quantity from other modes of transportation.
After selecting the correct limited quantity packaging mark, you also need to choose the size of the limited quantity packaging mark reasonably according to the size of the actual product packaging.

05 Contents of limited quantity packaging inspection

For the packaging of dangerous chemicals exported in limited quantities, the customs shall comply with Chapter 3.4 of the International Maritime Dangerous Goods Transport Regulations, as well as the "Limited Quantity and Packaging Requirements for Dangerous Goods" (GB 28644.2-2012), and the "Export Dangerous Goods Packaging Inspection Regulations for Limited Quantities" (SN/T 4149-2015) and other requirements for inspection.

/ By tjchinafreight ivy / Shipping

Export documentary collection

What is it?

The exporter (a client of UniCredit Bulbank) ships the goods to the buyer and presents the bank with documents related to the goods and their shipment, such as commercial invoices, bills of lading, cargo insurance, etc., with collection instructions. In the collection instruction, the exporter identifies the foreign buyer (payer), full details of the buyer's bank (collecting bank), a brief description and value of the exported goods, a full description and value of the type and number of documents submitted, and Conditions for handing over documents to the drawee.

UCB processes the documents and forwards them to the collecting bank, usually the buyer's bank, for processing and delivery to the buyer in accordance with the collection instructions. As instructed, the collecting or presenting bank releases the documents to the payer after paying the value of the documents, or according to a written commitment to accept/pay when due, or not to pay.

Under export documentary collection, the bank only receives and transmits documents according to the exporter's instructions on how to handle the documents, without any payment obligation to the exporter. Payment for documents sent on a collection basis depends solely on the goodwill and creditworthiness of the buyer.

A step-by-step guide to understanding export documentary collections

Broadly speaking, from your (as the exporter) perspective, the export documentary collection process can be broken down into five steps:

1. Terms and Conditions:

You and your importer agree to terms of transaction and payment, including the use of export documentary collections. At this point, you should also negotiate whether:

Acceptance Document (DA) – Once the importer agrees to pay later, a document related to the sale of the goods will be provided.
Payment Document (DP) – Once payment is made and finalized, the importer will get the document.

2. Shipment and receipt of documents:

You ship the goods and receive documentation from the carrier or freight forwarder that the shipment has occurred.

3. Submit documents to the bank:

First, fill out the export documentary collection application form and the draft. Next, submit these documents along with your shipping documents to OCBC, which is also known as the remittance bank during the process. Your remittance bank will then proceed to:

Forward these documents to your importer's bank, the collecting bank.
The collecting bank will then notify your importer that the documents have arrived and will release the documents when the payment terms are met (this depends on whether your payment term is DA or DP, as described in step 1 above).

4. Receive payment from importer and own the goods:

Importers will pay their bank and obtain documentation via DA or DP (as above).

5. Payment receipt from OCBC Bank to exporter:

OCBC Bank will deposit funds into your account immediately upon receipt of funds from the importer's bank (in the case of DP) or on the scheduled date when the draft has been accepted (in the case of DA).

Key point

D/C is less complex and less expensive than LC.
Under a D/C transaction, the importer is not obligated to pay for the goods before shipment.
If properly structured, the exporter will retain control of the goods until the importer pays the draft amount at sight or accepts the draft to meet the legal obligation to pay at a later date specified.
Although sea transportation can control the goods, it is more difficult to control air and land transportation. Foreign buyers can receive the goods with or without payment, unless the exporter hires an agent in the importing country to pick up the goods until the goods arrive for payment.
The exporter's bank (the remittance bank) and the importer's bank (the receiving bank) play a vital role in the letter of credit.
Although banks control the flow of documents, they neither verify documents nor take any risk. However, they can affect the mutually satisfactory settlement of D/C transactions.

/ By tjchinafreight ivy / Shipping

What are the types of export risks?

Political risk

Geopolitical risk, also known as political risk, occurs when a country's government unexpectedly changes its policies, which now negatively affects foreign companies. These policy changes may include things like trade barriers that restrict or prevent international trade.

Some governments will demand additional funds or tariffs in exchange for the right to export items into their home countries. Tariffs and quotas are used to protect domestic producers from foreign competition. It can also have a huge impact on an organization's profits, as it either reduces revenue taxed on exports or limits the amount of revenue that can be earned.

Legal Risk

Laws and regulations vary around the world. What is common practice in one country may not be so in another. As a result, exporting companies may face legal issues related to many areas of business, including customs, contracts, currency, and liability and intellectual property rights related to the products they sell.

One of the best ways to mitigate export legal risk is to engage legal counsel located in a particular country jurisdiction or with proven expertise in dealing with local laws. The last thing a company wants to do is get into a protracted legal battle in an unfamiliar country with local legal issues. Relying on trusted legal counsel can largely avoid or even anticipate and proactively handle potential legal issues.

Economic risk

In markets with less stable economies, consider the possibility of economic changes that could affect your export business.

High inflation

High inflation could mean customers can't pay their invoices on time, or potential customers will be interested in extending their credit terms. The worst-case scenario of high inflation could lead to hyperinflation, which in turn could lead to economic collapse. Sold only on safe terms to avoid default.

Exchange rate fluctuations

The exchange rate is the level at which a country's currency can be exchanged for another. It fluctuates continuously throughout the day, with closing prices for buying and selling published at the end of the day. You can eliminate any exchange rate risk by always selling in GBP.

Your customers may insist on paying in foreign currency. Make sure this is a freely convertible major currency. When you invoice in another currency, you can limit your exposure by fixing the exchange rate using forward foreign exchange contracts. This is a process where you basically determine the current exchange rate to use at a future date. You can discuss this with your bank, or read more about export invoice currency.

Foreign exchange control

The government can impose foreign exchange controls on the buying and selling of local currencies. Today, the countries with foreign exchange controls are mostly emerging markets.

The impact on UK exporters could be delayed payments as the country's central bank won't release foreign currency. Often, these controls lead to a black market in currencies, with two exchange rates: an official market rate and an unofficial market rate. The difference from the official exchange rate is known as the black market premium.

A distinction should be made between situations where the country's central bank is only causing delays, and areas where there are local problems leading to export invoicing and widespread smuggling. You should not engage in any conduct that violates the laws of this market or violates bribery, as the penalties can be severe.

Shipping and Logistics Risk

Making an export sale is just the beginning of the process. Goods sold now need to be delivered to customers in a timely and safe manner. This is where exporters may encounter a range of shipping and logistics risks, which may vary depending on the goods being shipped and shipping requirements. Some items require refrigeration, must not be exposed to excessive heat or cold, or have a shelf life. Other items are very fragile and require careful handling or must be assembled before delivery to the customer. All shipments must be tracked. If something goes wrong, the buyer may try to negotiate a price reduction or reject the shipment altogether.

Reducing transport and logistics risks often involves quality control and careful tracking procedures throughout the process. Specialized transportation and logistics companies can also bring expertise to the job, and some insurance companies provide coverage for damages caused by delays and problems in transit.

Language and cultural risk

Doing business with importers and customers in another country requires a certain level of trust. Differences in language, culture, religion and many other aspects of life require careful handling. For example, when exporters and their customers speak different languages, important details and nuances can be lost in translation.

Different cultural practices affect everything from "normal business hours" to ethical behavior to whether customers are willing to buy a product. In many areas, well-meaning exporters can unknowingly create tensions or offend customers, government officials and others important to timely product shipments and other aspects of the business.

The best way to prevent such problems is to have employees who speak the local language or have experience living in a particular culture or region. Additionally, exporters can focus on building local business relationships in the countries where their products are imported to help resolve issues and increase the exporter’s local connections and presence.

Quality risk

Customers may complain about the quality of these products once the goods are shipped. This may be a genuine objection based on the buyer's specific requirements and expectations. It could also be a way for buyers to gain leverage and negotiate discounts on shipped products after the fact.

One way to deal with quality risk is to hire an independent third party to inspect the shipment before it is shipped. If this is not possible, the exporter can send samples to the importer or end customer so that they can inspect the product themselves and determine if the quality is acceptable before any order is shipped.

/ By tjchinafreight ivy / Shipping

FOB Shipping Point vs. FOB Destination

Container ship in the harbor in Asia 

International business terms (incoterms) were designed by the International Chamber of Commerce (ICC) to simplify international trade by creating a common standard language, a globally recognized list of terms related to the international transport and transport of goods.
Importers and exporters need to be proficient and proficient in many terms. Some terms are more common than others, such as Free On Board (FOB), Free Carrier (FCA) and Ex Works (EXW). FOB, while common, is largely misunderstood.
Although their language is largely drafted in legal language, it is the responsibility of all parties involved in a shipment to ensure that they understand all Incoterms, otherwise a simple shipment can turn into a costly accident .

Incoterms are important for several reasons. If you find yourself wondering what FOB means in shipping, be sure to take the time to understand FOB shipping

Free shipping on board

The FOB point of dispatch, also known as the FOB origin, is when title and responsibility for the goods pass from the seller to the buyer when the goods are placed on the delivery vehicle.
Since the FOB shipping point transfers title to the shipment of the goods when they are placed at the shipping point, legal title to those goods passes to the buyer. Therefore, the seller is not responsible for the goods during delivery. FOB Shipping Point is a further limitation or condition of FOB as liability changes hands at the seller's shipping terminal.

For example, suppose that ABC Company in the United States purchases electronic equipment from its supplier in China, and the company has a FOB point-of-ship agreement. If the nominated carrier damages the package during delivery, ABC Company will be solely responsible and cannot claim compensation from the supplier for the loss or damage. Suppliers are solely responsible for bringing electronic equipment to the carrier.

Free destinations on board

Conversely, for FOB destinations, title transfers at the buyer's loading dock, PO box, or office building. Title to the goods passes from the seller to the buyer once the goods have been delivered to the place designated by the buyer. Therefore, the seller legally owns the goods and is responsible for the goods in transit.

Types of free destinations on board

  • FOB freight prepaid and allows the named seller to be obligated to pay the freight and have the goods in transit. The seller bears the risk of loss of or damage to the goods in transit. Title to the goods passes to the buyer at the buyer's place of business.
  • FOB shipping prepaid and adding the specified seller is obligated to pay shipping. However, the seller charges the buyer for shipping. The seller bears the risk of loss of or damage to the goods in transit because the seller owns the goods in transit. Title to the goods transfers to the buyer's place of business.
  • FOB freight collect specifies that the buyer must pay the freight upon receipt of the goods. However, the seller bears the risks associated with shipping the goods because the seller still owns the goods during the shipping process.
  • FOB freight collect specifies that the buyer must pay the freight. However, the buyer deducts the fee from the seller's invoice. The seller is responsible for the goods because the seller still owns the goods during shipping.

Main difference

Another key difference between the two terms is how they are calculated. Since the buyer is liable after the goods are shipped, the company can record an increase in its inventory at this time. Likewise, the seller records the sale at the same time. If the goods are damaged or lost in transit, the buyer can file a claim as the company holds title during delivery.

The accounting rules for FOB destinations have changed. In this case, the seller completes the sale on its records once the goods arrive at the receiving dock. That's when the buyer records the increase in their inventory.

There are also differences in the division of costs. For the FOB shipping point option, the seller bears the shipping costs and charges until the goods arrive at the port of origin.

Once the goods are loaded on the ship, the buyer is responsible for all costs associated with shipping, as well as customs, taxes and other charges. For FOB destinations, the seller bears all costs and expenses until the goods arrive at the destination. Once in port, all costs - including duties, taxes and other charges - are borne by the buyer.

/ By tjchinafreight ivy / Shipping

Shipping companies are buying container ships?

According to Alphaliner, some ocean carriers are turning to buying ships to increase capacity, rather than chartering them, reducing capacity in the containership leasing market by 1.6 million TEU.

In addition, there are concerns in shipbroker circles that this reduction in open capacity will weaken the industry's ability to cope with the normal seasonal peak and low seasons of liner trade.

According to shipbrokers, the loss of capacity controlled by NOOs (non-operating shipowners) began in August 2020, when shipping lines, flush with cash due to soaring freight rates, began to add capacity to their own fleets.

In just 18 months, more than 500 container ships have been sold to liner operators through the secondary market, a massive fleet exodus rooted in high demand for freight post-COVID-19, Alphaliner said.

"The huge demand for container ships has caused container ship rents to soar to levels never seen before in the history of container shipping, almost overnight."

"MSC has been the main buyer so far, buying 169 second-hand container ships with a total capacity of 636,900TEU," Alphaliner said.

CMA CGM was the second most active shipping company in the container ship market, purchasing 62 vessels with a total capacity of 207,000TEU; Maersk ranked third with 27 vessels purchased with a total capacity of 141,600TEU; followed by Wanhai with 23 vessels ship with a total capacity of 139,700TEU.

However, some shipping companies have decided to take advantage of the freight rate gained on newbuildings to increase dividends to shareholders, or to seize opportunities in the charter market for longer-term fixed charters.

According to Alphaliner data, in the past 20 months, non-operating shipowners have ordered 175 ships with a total capacity of 710,321TEU, more than half of which have signed long-term charter contracts with shipping companies.

“The low number of newbuildings relative to the loss of capacity suggests that non-operating owners’ fleets need to order more 1,000-9,000 TEU-sized container ships,” the shipbroker said.

But he added that several factors were preventing owners from ordering new ships, including soaring costs, longer lead times, and uncertainty over environmental regulations and fuel options.

Meanwhile, sources at shipbrokers said they were concerned about the current lack of open container ship capacity in the market, as well as the lack of spare container ships in the future.

"At the moment, the outlook is not very good," said one broker. "However, we think that when the situation returns to some form of normalcy, shipping companies may consider moving some of the excess smaller ships they have purchased. Rent out, that will give us something to sell," he said.

/ By tjchinafreight ivy / Shipping

What is the Low Sulphur Surcharge

The low sulphur surcharge (LSS), low sulphur fuel surcharge or low sulphur fuel surcharge (LSF) is known to be derived from regulations originally agreed by the International Maritime Organization (IMO) in 2012 to reduce sulphur fuel emissions in ports and densely populated The coastline was burnt by cargo ships. Fuels with high sulfur content result in large emissions of sulfur dioxide, which are known to be harmful to public health.
From January 1, 2015, carriers will require ships passing through designated Emission Control Areas (ECAs) to use fuel with a sulphur content of 0.1% or less, a significant reduction from the 1.0% concentration fuel currently used in maritime transport . The Emission Control Area (ECA) to be enforced in 2015 includes the Baltic Sea, the English Channel, the North Sea, and an area 200 nautical miles from the coast of the United States and Canada.

The low sulphur surcharge is a surcharge imposed by the line to cover costs associated with the use of low sulphur fuels compliant with the IMO 2020 sulphur cap.
Despite the use of the term, different shipping lines have referred to it by different names - Low Sulphur Surcharge (LSS), Green Fuel Surcharge (GFS), Emission Control Area Surcharge (ECA), various amounts of low Sulphur Fuel Surcharge (LSF). ! !
All routes are said to be preparing to impose mandatory surcharges in addition to freight and other surcharges in 2019 on all trade routes, especially the ECA area.

Should the low sulphur surcharge be included in the dutiable value?

Article 5 of the "Measures of the Customs of the People's Republic of China on Examination and Approval of the Dutiable Value of Imported and Exported Goods" stipulates that the customs value of imported goods shall be reviewed and determined by the customs on the basis of the transaction value of the goods, and shall include the time from the arrival of the goods to the place of import within the territory of the People's Republic of China. Transportation before unloading and related costs, insurance. Article 35 stipulates that the transportation of imported goods and related expenses shall be calculated according to the expenses actually paid or payable by the buyer.

The low sulphur surcharge is a fee charged by the logistics provider to the relevant parties for the use of low sulphur fuel oil for its ships in the emission control area, which is closely related to the transportation process and is It happened before, so it belongs to the transportation and related expenses described in the "Measures of the Customs of the People's Republic of China on the Verification of the Dutiable Value of Imported and Exported Goods".

Under normal circumstances, if the transaction method of imported goods adopts FOB (free on board) terms, and the low-sulfur surcharge is clearly borne by the consignee of the imported goods, it should be included in the dutiable value of the goods and truthfully declared to the customs. If the transaction method of imported goods is CIF or CNF (cost plus freight) terms, it needs to be determined according to the specific agreement between the buyer and the seller. If it has been included in the freight and related expenses paid by the foreign seller, it will not be included in the customs value; such as If it is not included in the freight and related expenses paid by the foreign seller, and is actually borne by the consignee of the imported goods, it should be included in the dutiable value of the goods and must be truthfully declared to the customs.