Businesses that engage in international transport most likely prefer freight forwarding, but it is also an applicable method of transport even for personal use. The freight forwarding companies facilitate the shipment of goods to the destinations by using various carriers such as road freight, air freight, railway freight, and ocean freight.
If you don’t have any idea about freight shipping, you’ll find freight forwarding intimidating. Thus, if you engage in a business that involves international transport, it makes sense to understand the facts about freight forwarding.
WHAT ARE FREIGHT FORWARDING FIRMS?
Transporting goods from its origin to another destination is one of the services of freight forwarding firms. The freight forwarder works as a middleman between the transportation services and the shipper. They are responsible for arranging the entire process including the storage and the shipment of the goods. Likewise, they also negotiate the cost of the transport and choose the most reliable, fastest, and economical route.
SERVICES OFFERED BY FREIGHT FORWARDERS
Hiring the services of freight forwarding companies is advantageous to your business. They can help you in transporting the goods to your customers. As they are knowledgeable and expert about shipping of goods, they ensure that the merchandise will be delivered on time and in good condition.
Some of the services that freight forwarders offer are the following:
Customs clearance
Insurance
Packing
International import and export documentation
Inventory management and
Storage
Through the services of freight forwarders, the entire process of importing and exporting of goods becomes less stressful. They can also assist you in the packing of goods, thus reducing the pressure from you.
CHOOSE A RELIABLE FREIGHT FORWARDING COMPANIES
If you’re thinking to hire a freight forwarder, make sure to choose well-established and reliable freight forwarding companies. This gives you the assurance that they have strong experience about the business and good network of contacts. Likewise, experienced freight forwarders can deal and solve any issues about the transport of your goods efficiently and quickly.
As you’ll entrust your goods or merchandise to a freight forwarder, it makes sense to work with them harmoniously. It’s not enough to seek the service of a company that you can rely on and trust, but also with outstanding customer service. This way, you’ll have peace of mind that your shipment will arrive on time and safely.
Before entrusting your goods to freight forwarding firms, make sure that all the documents for transporting the goods are completed.
In the past few months, due to the severe shortage of available empty containers, the global supply chain has been hit, causing exporters to have a headache. However, new research shows that there is an obvious problem in the container supply chain-empty containers stay in warehouses for an average of 45 days, while in China, the average time for each idle container is more than two months.
The research project of German company FraunhoferCML and Container xChange shows that although China and the United States urgently need containers, the average residence time of empty containers in warehouses is 61-66 days, which is much higher than the global average of 45 days.
The east coast of the United States is usually the location of surplus container equipment (the 40DC container availability value was 0.7 last year), but the container availability rate dropped to 0.43, indicating that there are actually fewer containers than needed.
The researchers said that compared with the Middle East (21 days on average) and Europe (23 days on average), the high standard deviations of 85 days in North America and 129 days in Asia indicate that in many cases, containers stay in warehouses longer than average. Much more.
Container xChange is a platform that connects users and suppliers. The platform stated that the availability of containers across China is still at a record low, while the surge in shipping containers from Asia has overwhelmed US ports, and retailers are eager to put their products on the shelves.
Not only is there a serious shortage of 40-foot tall containers (hc) in the shipping market, but there is also a shortage of 40-foot standard containers, and even 20-foot containers are sometimes in short supply.
The container availability rate of 40HCs is only 0.05 CAx (container availability rate) points, compared with 0.63 in the same period last year.
Asia's container manufacturing industry is working overtime to produce, which accounts for 45% of the global container manufacturing market. China International Marine Containers, the world's largest container manufacturer, announced an increase in its orders.
The factory is stepping up container building, and container orders have been scheduled to the first quarter of next year. Even so, the demand for millions of containers has made it impossible for container manufacturing to quench its thirst. The world's three largest container leasing giants have issued a warning that the shortage of containers will continue for four months.
Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.
While the Asian port and shipping industry is desperately desperate for empty containers, although there is a shortage of shipping capacity, price increases can be used to push shipping companies to cancel suspending, refilling, and increase shipping capacity; however, a large number of containers full of cargo are seriously stranded in European and American ports and warehouses. , Unable to move.
In order to alleviate the serious imbalance in equipment, shipping companies have adopted an active strategy for exports to Europe and the United States, suspending orders, and preferring to use as many empty containers as possible to fill return ships.
In fact, in order to prevent all but the most expensive goods, European exporters to Asia are required to pay more than $5,000 per 40-foot container to ensure shipment in December. A British freight forwarder said that many shipping companies now refuse to accept export orders before mid-January. "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to get the boxes away. Some boxes have been on the dock for more than four weeks and still don't know when they will be shipped."
At the same time, the urgently needed empty containers in Asia are scattered in warehouses across Europe, especially in the United Kingdom, where troubled ports have to restrict container delivery to already overcrowded terminals.
The current shortage of containers is a once-in-a-century problem in the history of the global supply chain, and it is basically unsolvable in the short term.
The port is not the boss, the ship is not the boss, and the cargo is the boss. This is a "golden sentence" circulating in the port and shipping industry. However, the freight forwarder who has been busy in the front line of cargo booking may tell you that at this moment of chaos in this industry, the port is not the boss, the ship is not the boss, and the cargo is not the boss. You can't get the empty space if you grab the head. The box is the boss .
In recent weeks, due to a severe shortage of empty containers, some container ships sailing from Asia to Europe cannot even be fully utilized. A shipping source said, “Recently, we have to vacate some spaces because China does not have enough containers to meet freight demand.” Almost all transport companies have reported that they have a serious shortage of 40-foot high containers (hc) and 40 There is also a shortage of standard containers, and even 20-foot containers are sometimes in short supply.
The latest container availability index report from Container xChange shows that the availability of containers in various ports in China is at a record low. From the perspective of the container availability index, the index higher than 0.5 indicates a surplus of empty container inventory, and lower than 0.5 indicates a shortage of empty containers. The current availability of 40-foot containers in China is only 0.05 CAx points, compared with 0.63 points in the same period last year .
Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.
While the Asian port and shipping industry is desperately desperate for empty containers, warehouses across Europe, especially in the UK, are filled with "immobile" boxes in troubled ports and overcrowded docks.
Affected by the epidemic, shipping companies have used methods such as suspension of voyages and port jumps to control capacity and adjust freight rates, but to a certain extent they also broke the balance of empty and heavy containers between routes. With the gradual recovery of the economy, the trade demand of various countries has rebounded, and the exports of Europe and the United States have grown strongly. However, under the continuous epidemic situation, the various quarantine and epidemic prevention measures added by the port customs will inevitably slow down the circulation of containers. Coupled with the gathering of festivals such as "Black Friday" and "Christmas", the port operation capacity will not be able to keep up with the number of boxes. , The result is that a large number of containers are blocked in the port, empty containers can not go out, heavy containers can not enter. In some British ports, the volume of container transportation in recent months has even been 30% higher than normal, resulting in too many empty containers throughout the UK, and even the alarming phenomenon of containers being piled "at your doorstep".
A British freight forwarder said, "Even if customers are prepared to pay close to crazy freight rates to ensure that the goods are shipped, we are still busy trying to transport the empty containers because the port is already full. Some empty containers on the dock are already After being placed for more than four weeks, we still don’t know when they will be loaded."
In order to ensure the smooth operation of global logistics, liner companies have adopted some unconventional container deployment strategies, such as shortening the free container usage period to stimulate and speed up the circulation of containers on key routes; key routes and long-distance base ports give priority to container use and priority Vacant containers are deployed to countries and regions such as China, Southeast Asia, etc.; the monitoring of container return is slow. For example, some areas in Africa cannot receive goods normally, resulting in whether the container is returned or not. The liner company will comprehensively evaluate and reasonably release the container; some shipping companies even suspend it Made export reservations to Europe and the United States in order to fill as many empty containers as possible back to Asia. However, due to the empty container regulation of shipping companies, the freight rates on the Asia-Europe routes have also been increasing, and the market seems to be in a vicious circle of chaos.
At the same time, a survey conducted by xChange and FraunhoferCML, a German maritime research consultant, showed that despite the large-scale progress in global port handling technology, the time that containers remain empty in ports is still surprisingly long. This report unexpectedly shows that the global container vacancy phenomenon is very serious. The vacant time of each container in the port is 45 days on average, while the vacant time of containers in empty container shortage areas such as China and the United States is longer, 61 days and 61 days respectively. 66 days.
Obviously, the circulation of empty containers is a problem that the entire industry needs to face squarely, but it has been ignored by the industry for a long time. In the sudden crisis of the epidemic, the "old problems" have further deteriorated and gradually developed into today's thorny problems.
It is understood that CIMC, which accounts for 45% of the global container manufacturing market, said that the company is currently stepping up container building and container orders have been scheduled to the first quarter of next year. However, waiting for the new containers to leave the factory, after all, "far water can't save the immediate emergency", and the situation of "a box is hard to find" is expected to continue for some time. In addition to working overtime and deploying empty containers, what else can shipping companies and ports do? The structural empty container circulation problem may be difficult to obtain an optimal solution in a short period of time, but "it is not too late to make up for it". It is time to put more resources and efforts on solving the empty container problem.
As shipping companies continue to detain containers in Nordic ports and charge exporters more than US$5,000 per container to ship a container to Asia, there is increasing pressure for regulatory intervention.
British importers are currently facing major challenges. The shipping division of the Ocean Alliance has decided to transfer the other five ships that arrived in Felixstowe in December to Zeebrugge, Belgium.
According to a consultation conducted by the shipping company to its British customers last Friday , the five ships Cosco Shipping Azalea, Ever Goods, Ever Globe, CSCL Jupiter and CSCL Uranus will no longer call Felixstowe, and will unload the British ships at Belgian ports. Imported products.
In addition, the partners of 2M and THE Alliance are also transferring ships from the congested British port, where the former is loading and unloading British cargo in Bremerhaven.
It is understood that due to the lack of open feeder ships and terminal capacity issues, it is almost impossible for British goods to be transferred before January next year. Some shipping companies are discussing not calling Felixstowe throughout January because they worry that the port will be saturated in a few weeks after Christmas.
However, as the terminals in Antwerp and Rotterdam have also become very congested, the choice of liner companies is becoming increasingly limited. However, a source from a shipping company said: "Our first priority is to reduce imports before shipping our container equipment back to Asia."
British export orders have been suspended by a number of shipping companies, and more and more orders can only be booked at other Nordic ports paying additional fees.
MSC said on Friday that it will significantly increase the FAK fee for a 40-foot container from Antwerp to Shanghai in December by 300% to US$5,000. MSC explained that it is facing very serious operational problems that have seriously affected the reliability and regular supply of inventory.
A source at a rival shipping company said the strategy is to block bookings so that MSC can return its empty containers to Asia more quickly.
He added: "If they can indeed get some reservations at this price, it will be a win-win."
At the same time, the European Shippers Council (ESC) and the European freight forwarders association CLECAT have joined forces to lobby the European Commission to intervene in this crisis.
Denis Choumert, president of ESC, said: "Shipping companies have been taking advantage of the tight capacity to increase revenue far beyond cost, which makes customers unhappy."
"The continuous unreliability of service, coupled with the record profits of the shipping company during the crisis, clearly illustrates a severely disturbed market, and shows that the carrier has substantially increased the spot freight and levied higher than the fixed-term contract price The huge surcharge."
A joint communiqué stated that ocean shipping companies serving Europe benefited from “privileges” that were provided to them by the Union’s Prevention of Immunity Regulations (CBER), which was updated in April.
"Such privileges are now too much because they allow shipping companies to use tools to manipulate the market," adding that the European Commission has not responded to the crisis so far, which is "confusing".
After the goods arrive at the port, the customer does not pick up the goods, and the shipping company requests to return the goods and let us bear all the expenses.
At the end of July 2019, two shipments were delivered to Port Klang, Malaysia. The two shipments arrived at the port in mid-August, but the customer did not pick up the goods until mid-September. Before the goods arrive at the port, we have reminded the customer that the goods are about to arrive at the port. After arriving at the port, we remind the customer to pick up the goods.
In mid-August, the freight forwarder told me that the customer still did not pick up the goods. I have been urging the customer to pick up the goods, and the customer always said that he would pick up the goods on the same day, but it was delayed until mid-September. Customers do not communicate with us because they do not pick up the goods for any reason. It will always be "I will pick up the goods today."
At that time, the LCL company was impatient, and gave us an ultimatum. Let us notify the customer one last time. If the customer does not mention it, it will be returned to us, and the demurrage fee and other expenses incurred will be paid by us.
Analysis suggestion
If the foreign customer’s company goes bankrupt or the goods are not picked up after arriving at the port, it has been more than a month since the arrival of the port and incurred a lot of costs. The customer will obviously not pick up the goods. We ask the freight forwarder to explain to the shipping company that we abandon the goods, but the forwarder says at least Only half a year can be abandoned.
So here comes the problem. The port cost in half a year is estimated to be an astronomical figure, and domestic factories will definitely not be able to afford it. The value of the goods is also very low, and the future cost will definitely be much more than the value of the auction. The specific questions are as follows:
1. Will the shipping company pursue these demurrage fees, demurrage fees, and terminal fees?
2. Is it recourse to freight forwarders or foreign customers or domestic factories?
3. If they cannot pay, will the shipping company go through legal procedures?
So, how to deal with export abandonment?
1. Take the initiative to abandon the goods.
First, ask your freight forwarder to seek help from the agent at the port of destination, first change the consignee to the designated agent, and then abandon the goods in the name of the agent. Why has to be this way? Because if the consignee is not changed, it should be difficult for the consignor to abandon the goods unilaterally. But after such a change, the agent at the port of destination will have to bear a lot of responsibilities, including the cost and responsibility of abandoning the goods. This condition must be negotiated with the freight forwarder. People are willing to help you do this. How much you need to bear.
2. Resale.
See if you can find other buyers in the destination country, change the consignee of the bill of lading and then sell them to them, of course, there will be a discount. There are also major constraints in doing so. One is whether the products are customized and difficult to resell, and the other is to find customers who are willing to take over.
3. Ignore it.
Then don't care about anything, and all the liability costs will be borne by your freight forwarder. This is the most embarrassing thing. Maybe you are all right, but the freight forwarder and the company who picked up your shipment are in bad luck. The key is that this matter is not the responsibility of others. Of course, the other party may also go to court with you. According to Article 86-88 of the Maritime Law, if the consignee has a problem, the consignor must bear the cost.
4. Return shipment.
You can return to the domestic bonded area for storage. If there is a new order that is sent abroad or is undergoing inspection and maintenance, replace the package and bonded warehouse for simple processing such as packaging, relabeling, and shell replacement. Sent abroad. The bonded area is equivalent to foreign countries, and the return of goods to the bonded area for inspection and maintenance does not require import declaration, so there is no need to apply for the return of the goods to the customs, and there is no need to pay taxes or pay a deposit to the customs.
Domestic export goods, especially electronic products, small household appliances, etc., have a high repair rate. The traditional way of returning to the factory for repair requires multiple cumbersome procedures such as customs, commodity inspection, and national tax. Using the advantages of the bonded area and outside customs can quickly solve the repair problem.
The bonded area has a policy of "outside customs within the country", that is, it is within the national border but not under the jurisdiction of the domestic customs. Goods entering the bonded area from the country are equal to export, and entering the country from the bonded area is equal to import (import customs declaration). same.
Therefore, returning the goods returned from abroad to the bonded area means that the goods remain abroad and the import declaration has not been processed, so there is no need to apply for the return of the goods to the customs, and the returned goods to the bonded area are tax-free and can be re-exported.
Below we analyze the advantages of returning to bonded warehouse storage for repair:
a. Simple procedures : free deposit, tax exemption, exemption, exemption from commodity inspection, exemption from customs declaration, only need to provide us with the packaging, number of pieces, amount, net gross weight, and then the QP system can apply for entry maintenance and entry maintenance.
b. Fast timeliness : After the goods arrive at the Hong Kong/Shenzhen terminal, our company can arrange transportation and pick up the container and pull it back to the bonded warehouse for repairs. Workers can enter and leave the processing area freely without a visa for repairs. Shenzhen re-export.
c. Low cost : The cost of workers and maintenance site costs are much lower than those in Hong Kong or overseas.
Case two
The customer is bankrupt, the creditor controls the goods, and the freight forwarder asks for storage fees
We have a batch of goods that we did CFR with our customers. The goods arrived in Hong Kong in July last year. Because the customer went bankrupt and disputes with creditors, the goods have not been able to withdraw. Our payment has been received in full. The agent requests for warehousing, detention fees and other fees, and our agent charges us these fees.
The domestic agent has our export tax rebate receipts, and the other party does not deliver the receipts accordingly, and the tax rebate will be declared immediately. This matter has not been resolved yet, which is very difficult. Now foreign agents threaten to auction the goods, do they have this right? Is this legally true?
Analysis suggestion
analysis:
First of all, make it clear that, as SHIPPER, you are indeed obligated to pay the storage fee for the batch of goods (the second responsible person, as long as CONSINEE does not pay, you have to pay);
Second, after the goods arrive at the port, the ownership of the batch of goods belongs to CONSINEE. If the goods are to be abandoned, CONSINEE should write a written statement before SHIPPER’s turn to write;
Third, there is no law that supports that freight forwarders can withhold your verification form. As long as they go to court, they will definitely lose the case;
Fourth, after a certain amount of storage fees are incurred at the terminal, the port of the other party does have the right to auction the goods, but the auction proceeds are paid to other creditors after the storage fees are paid. (Of course, if the auction proceeds are not enough to pay the storage fee, SHIPPER and CONSINEE are obliged to make up for it.)
Finally, if, as you said, the goods have been controlled by the customer's creditor, then the creditor should pay the warehouse rent as CONSINEE's principal. (Theoretically, if your client, as CONSINEE, does not receive the goods first, his creditor has no right to control the goods. If he has received the goods, then the owner of the goods is him instead of you. Of course it may be different. National laws are different, so only your customers will know how the local laws are)
Suggest:
After the goods arrive at the port, how can the customer return the goods or sell them to others without paying?
Most countries in the world have this regulation. When the imported goods arrive at the port, the jurisdiction of the goods will be transferred to the customs. In order to protect the interests of buyers, the customs will not allow anyone other than the consignee to move this. Batch of goods.
This has brought a lot of trouble to the seller. When the seller fails to collect the full payment and wants to control the rights of the goods, he finds that he may face a shortage of money and goods.
Because whether you want to return or resell, you must meet any of the following two conditions:
The original consignee gives a declaration of abandonment;
The original consignee clearly informed the seller to refuse to pay for the goods!
As a result, some buyers will keep dragging, and they will never say that they will not pay, so that you can't get the evidence. Don't even think about it!
As a result, the seller can only watch the time passing day by day until the goods are auctioned by the customs!
So I gave two methods:
1. Find a very capable freight forwarder. I mean the destination port forwarder. They can help solve some problems. I have a friend who has successfully solved the cargo problem in Turkey.
2. Looking for counsellors, some people have succeeded, but most of them can hardly be contacted.
In fact, these are dead horses as horse doctors, because there is hardly any better way.
However, today I want to tell you the good news that another method has proven effective in practice.
I suggested that a friend write this paragraph in the contract:
The payment method of this contract is to pay the balance upon seeing a copy of the bill of lading. If the buyer (specific name) has not paid the balance within 10 days of seeing the copy of the bill of lading, it is deemed that the buyer has voluntarily waived the right to the goods, and the buyer agrees to the shipper to dispose of the goods independently.
or:
If the buyer (specific name) fails to pay the payment within 10 days of seeing the copy of the bill of lading, the clause is automatically activated: the buyer (specific name) voluntarily waives the right to dispose of the goods on the ticket, the shipper is free to dispose of it, can be returned or Resell to any other third party!
Remember, you must ask the customer to sign back!
Many people will say, how can a customer sign it?
If the client is a serious businessman, he is not deliberately deceiving you, he will definitely sign it, because this is a normal contract clause and does not harm any interests of the client.
Therefore, when the customer has not paid for the goods, the contract will work. The friend gave the contract to the local agent, the agent showed it to the customs, and the Turkish customs released it.
I don't know if all customs will recognize this contract model, but since there is hope of success, it must be 100 points.
Someone may have said, why do you have to pay at the copy of the bill of lading? Wouldn't it be better to do 100% TT before? Who doesn't want to do a risk-free business? If you can do the TT before, who will do payment at the copy of the bill of lading, who will do the letter of credit, who will do the DP or even the OA?
Due to competition, helpless! It's like a big brother commenting on my face of slavery, because I said that I must express first, and then ask questions, because I said that even if the customer's information is incomplete, we must first deliver the value, and then ask about the specific configuration, if at the very least Foreign trade business can also be regarded as a minion, so are those who accept these non-former TT payment methods also a minion?
Persevere in self and only do TT; adhere to self and only do high value; adhere to self and wait for customers to take the initiative, and never take the initiative! Maybe this is the real hero, but I can't do it now. Apart from a few top players, how many people can do it?
It is reported that the Port of Colombo has a backlog of 50,000 teu of cargo, causing South Asian transshipment cargo into chaos.
In the past few weeks, the Sri Lankan capital has been locked down due to the epidemic, and since the beginning of October, the city’s container terminal labor shortage has caused serious congestion.
Today, this dilemma is affecting the supply chains of neighboring India and Bangladesh.
According to Rohan Masakorala, CEO of Shippers' Academy Colombo, the Port of Colombo has reduced the number of employees by about 30%, which has dealt a major blow to the efficiency of crane production and trucking between freight stations.
"The backlog of orders and goods is very large, and it may take six to eight weeks to clean up."
"Colombo International Container Terminal (CICT) mainly focuses on transshipment, while the other two terminals are responsible for feeder ships, so there is an urgent need for transshipment between terminals." He said.
"The lack of truck drivers means that containers are starting to accumulate in the storage area of the port. This also means that it affects feeder ships, sometimes waiting for more than a week, and then even the mainline ships have to be delayed by one to two days."
▲Colombo port congestion: a backlog of 50,000 TEUs caused delays and increased freight rates
Masakorala said that given that Colombo handles approximately 600,000 TEUs per month, regional feeders and connectivity are being severely damaged, and carriers are forced to ship containers to India, Singapore and Dubai.
He added: “Of course, Colombo is not the only port affected by the new crown epidemic, but as a transshipment hub, the impact is much greater and the entire region will be affected. Even now, there are still 23 ships waiting for berths, and Usually the port receives 12-16 ships every day, so there are quite a lot of ships waiting at the window."
He explained that it is inevitable that Colombo’s freight has doubled, and shippers need to book eight weeks in advance to get a seat.
Masakorala said: “Some shippers have been waiting in Colombo for four weeks and two weeks in Singapore.” “Freight forwarders have been severely affected, so some urgent cargo must be transported by air or to a third port, which increases Cost and shipping time."
He added that, given that ports in India, Bangladesh and Pakistan are fully operational, there are now concerns that the port’s reputation may be damaged. Sri Lanka is ambitious and hopes to become a global shipping and logistics hub as famous as Dubai and Singapore. However, Mr. Masakorala said that the LCL loading and unloading and customs clearance and consolidation operations of FCL have been "seriously affected."
Recently, foreign trade forwarders who transshipped through this port have mainly paid attention to it, for fear of delays and additional costs.
Colombo handled 7.2 million TEUs in 2019, but Mr. Masakorala believes that the port’s throughput will drop by 10-20% this year.
