/ By TJ China Freight / China Freight News • sea freight forwarder • Shipping

Everything About Ocean Freight Forwarding You Need to Know

If you are an entrepreneur owner who is doing cross-border business, then you will need send your cargo to your clients or buying goods from other countries, you will need a local freight forwarder to help you process the shipping, paper documents, delivery, and more. Usually, ocean freight is one of the most common ways to ship, and make sure you know things about ocean freight forwarders so that you can select the right freight forwarder to help you arrange everything well. When you are importing or exporting to China, TJ China freight is your prior option for sea freight, air freight, rail freight, amazon fba preps, door to door delivery, and the professional team is committed to shipping your cargo speedy and safer at a lower price. Below, we will list a few questions about ocean freight forwarders. Read on!

  • What is an Ocean Freight Forwarder?
  • What is Ocean Freight Forwarding Services
  • Is Ocean Forwarding Cheaper than Air Forwarding Service?
  • Does an Ocean Forwarder Charge Less than an Air Forwarder?
  • The Globally Top Ocean Forwarders in the World

What is an Ocean Freight Forwarder?

A freight forwarder is a person or company with the know-how to safely and effectively transport your freight from point A to point B. While freight forwarders don’t generally own the trucks, ships, or airplanes necessary to move your cargo, they serve as middlemen who know every step of the complicated shipping process and can ensure that your goods get to their destination. Some forwarders specialize in air freight, while others work exclusively with ocean freight. TJ China freight serves both sea freight forwarding and air freight. You can send an inquiry here to know the rates of shipping from or to China.

An ocean freight forwarder specializes in moving freight via cargo ships. This specialization enables ocean forwarders to know precisely how to complete any shipment and build the relationships necessary to get the best ocean rates, which they can then pass on to their customers.

What is Ocean Freight Forwarding Services

Despite how crucial freight is to the world economy, it’s a pretty difficult field to navigate.That’s why even the most seasoned of shipping professionals rely on a sea freight forwarder’s services for their ocean shipments. An ocean forwarder knows what goods can be shipped, the correct procedures for shipping them, all of the paperwork required for shipping, how to get your cargo on a vessel, and what to do in case something goes wrong.

That means that with the right ocean freight forwarding services, you can be confident that your freight is in good hands and worry about the more important parts of your business.

Does ocean freight forwarding cost less than air freight?

Unsurprisingly, ocean rates are less expensive than air rates. But there are tradeoffs. If speed is a priority, you may want to look elsewhere. Ocean shipments take over one month to be delivered, whereas air shipments take a few days. Reliability is also a factor that should be considered. While air shipments run on a very tight schedule, it’s not uncommon for freight ships to take longer than expected to embark. That said, there is a reason why 90% of cargo is sent via the ocean. It is the most cost effective and environmentally friendly way to send goods internationally. It’s also the best way to send oversized and hazardous items.

Who are the Top and Best Ocean Freight Forwarders?

Ocean freight is a highly fragmented market, with the top ten ocean forwarders dominating only 43% of the market.

  • Kuehne + Nagel. A clear leader, whose ocean freight revenues are estimated to be around 65% larger than its nearest rival. But in a highly fragmented market, its share is estimated at just 9.2%.
  • DHL Global Forwarding. Although coming in second, DHL’s ocean freight revenue is smaller than their air and truck operations. In 2015, DHL Global Forwarding ocean freight revenue reached $3,850M.
  • Sinotrans.  China’s largest freight forwarder is listed on the Hong Kong stock exchange but wholly owned by the government. Much of its ocean freight business takes place in the coastal cities of Eastern China.
  • DB Schenker. Headquartered in Germany, the freight giant employees nearly 100,000 employees around the world. In 2015, it’s ocean freight volumes were 1,942m TEUs.
  • DSV. The Danish company’s acquisition of another leading sea forwarder UTi approximately doubled ocean freight forwarding revenues of DSV a year ago. Their 835,487 TEUs of ocean freight in 2015 brought in $1,7580 m in revenue.

Check the full list of top freight forwarders 2022 here. Need China freight forwarder? Contact us today, and get an instant quote!

/ By tjchinafreight ivy / Shipping

Global Logistics 2022: Is this the new normal?

Global Logistics 2022: Is this the new normal?
Global Logistics 2022: Is this the new normal?

Over the past year, global supply chain disruptions, port congestion, capacity shortages, rising ocean freight rates and the ongoing pandemic have created challenges for shippers, ports, carriers and logistics providers.
Looking ahead to 2022, experts estimate that pressures on global supply chains will continue - with the light at the end of the tunnel not appearing until the second half of the year at the earliest.

On top of that, the consensus is that the pressure on the ocean freight market will persist in 2022, with freight rates unlikely to fall back to pre-pandemic levels. Capacity issues and congestion at ports will continue to be combined with strong demand from the global consumer goods industry.

German economist Monika Schnitzer expects the current Omicron variant to have a further impact on global shipping times in the coming months. "This could exacerbate an already existing delivery bottleneck," she warned. "Transit times from China to the US have increased from 85 days to 100 days due to the Delta variant and may increase again. Europe is also affected by these issues as the situation remains tense."

Meanwhile, the ongoing pandemic has sparked a standoff at major ports on the U.S. West Coast and in China, meaning hundreds of container ships are at sea awaiting berths. Earlier this year, Maersk warned customers that wait times for container ships to unload or pick up at the port of Long Beach near Los Angeles were between 38 and 45 days, with restrictions expected to continue.

/ By tjchinafreight ivy / Shipping

Shipping from China to Mexico

China is one of the world's largest exporters, meeting the needs of different industry sectors around the world. In 2019, China's export sales to Mexico were US$46.6 billion.
These finished goods and raw materials are shipped worldwide using different ocean and air freight services. There are many international freight companies that offer container shipping services and air cargo transportation. However, it is important to work with a freight forwarder who can better suit your needs. Good communication and reliability are essential.

Mexican and Chinese flags amid blue skies
Mexican and Chinese flags amid blue skies

Shipping from China to Mexico

Sea ​​freight

sea freight from china to mexico
sea freight from china to mexico

With our door-to-door service, you will be able to deliver your goods to different inland cities such as Monterrey, Guadalajara, Mexico City, Mexicali, Tijuana, Puebla and more. Depending on the destination city, we will ship your cargo through the most convenient ports in Mexico, such as Manzanillo, Veracruz or Lazaro Cardenas.

FCL Loading - FCL Shipping from China to Mexico

We offer FCL sea freight services for 20ft containers and 40ft containers to Mexico. If the goods being transported require different types of equipment, such as open top containers, flat racks, reefers or other equipment, our specialist equipment department will provide you with the best alternative.

LCL Loading - LCL Shipping from China to Mexico

We always provide LCL service from China to Mexico if the cargo cannot fill the whole container. When using this service, the applicable rate depends on the volume of the shipment. If the weight of the cargo exceeds the maximum allowable weight per cubic meter, the applicable rate is based on the weight.

Air freight

air freight from china to mexico
air freight from china to mexico

It doesn't matter if you are importing from China to Mexico or elsewhere.
Air freight takes much less time compared to other modes of transportation.
Also, your package is much less likely to be lost because the flight is highly reliable and maintains its schedule accurately at all times.
Even if you miss your flight, it won't cause many problems as there are queues of flights every hour.
Because airlines have the most extensive destination network covering most of the world, you can send or receive packages by air cargo in almost every corner of the world.

What is the weight limit for air cargo from China to Mexico?

When your cargo is too heavy for air freight, you must move from air to other transport media.
There are specific weight restrictions when air cargo is shipped from China to Mexico.
Small or standard-sized packages are often transported on passenger or regular cargo aircraft.
These packages are charged by weight when shipped from China to Mexico.
But the plane cannot exceed its limits.
The aircraft with the largest transport space is the Airbus A-380 with a capacity of up to 84,200 kg.

Freight warehousing

Our warehousing facilities in China provide customers with different services when needed, such as loading and unloading, staging, palletizing and boxing.

Customs clearance

Our expert team provides export customs clearance services. They are ready to handle any complex situations and all required customs documents.

Which is better for shipping from China to Mexico, sea or air?

Both ocean and air freight are popular package delivery methods.
Shipping from China to Mexico will give you more space flexibility and lower costs.
Air freight will deliver your goods in a short time.
Anything over 500kg is too expensive to ship by air.
Shipping by sea will provide more space and lower cost for your package.
Air shipping is great if you want fast delivery.
But it will cost you more.
Air freight will give you reliability and all your shipments will be better protected.
Since air freight is a more expensive option, small valuables are often shipped by it.

This list can include electronics, clothing, seasonal trends, pharmaceuticals, samples, documents, perishables, and more.
Air freight is expensive due to some external factors.
Fuel costs, extra protection of cargo, airport transfers and terminal charges are also included in your order.
If your package does not contain the above goods or you are not in a hurry, you can choose by sea.
However, if you want fast delivery and more protection, then air freight is better for you.

Common problem

Who pays for shipping from China to Mexico?

The international rule is that the consignee will pay for shipping from China to Mexico.
Not only shipping costs, but also import duties and home delivery, all of which are the responsibility of the recipient.
Some freight forwarding companies such as FedEx, UPS, DHL have multiple payment methods, such as recipient, sender, and even third parties can also pay customs fees.
If the goods stay longer at customs.
The recipient must also pay an additional penalty for this, and the sender must also notify the recipient of the problem.

How to check tariffs online when shipping from China to Mexico?

When you ship goods from China to Mexico, you or the consignee must pay fees and taxes before the goods arrive.
These fees are paid to protect your shipping and other aspects.
Fees must be paid as a legal necessity and settled before your shipment is delivered.
Tariffs from China to Mexico can be checked online.
You can calculate it by multiplying the taxable value of your goods by the tax and duty percentage in Mexico.

/ By tjchinafreight ivy / Shipping

Container Rental Guide

Why rent a container?

Are you looking for a specific period container? Do you have items or items that you want to store in containers to protect them from damage? Do you want the flexibility to rent containers at different points in time? If the answer is yes, then renting a container is ideal for you. Container leasing gives you flexibility in how you use your containers and how you plan your budget. Buying one, on the other hand, increases your liability and costs.

Here are the different types of container rentals that we will be covering in this blog:

1.Master lease
They are also commonly referred to as short to medium term leases. They fall into the full-service rental category with no cap on the minimum or maximum number of containers. The lease term is variable and the lessor is responsible for the maintenance, repair and relocation of the container. The agreement also involves an accounting system that includes debits and credits between the parties based on the condition of the containers at the time of their return. The lessor must undertake the allocation of the containers to meet the needs of the lessee. Therefore, it is important to ensure a stable supply of empty containers at the pick-up point. The master lease agreement sets out the main conditions such as the rental cost per day, the types of containers that can be disposed of, the number of containers to be used in each warehouse, the collection and delivery centers, payment terms, etc. The lessee has no obligation to use the container before picking up the container from the yard, and the contract takes effect when the lessee picks up the container from the yard. A separate individual contract is signed for each container collected under the Master Lease Agreement.

2.Long-term lease
Far less flexible than a master lease, long-term leases are a favorite of many rental companies. The duration of the contract is fixed. As well as a certain number of containers and delivery schedule. This leaves the leasing company with nothing to do once the container is signed for.

The lessee bears the cost of repairs, maintenance and relocation. Although definitions of terms vary, most leasing companies define long-term leases as 5 to 8 years. For long-term leases, the containers are usually brand new. This is why many long-term rental agreements come with negotiable terms. The clause allows rental rates to be negotiated after a few years based on depreciation and market fluctuations.

3.One way rental
They are also known as one-way rental agreements, and containers can be picked up at one location and dropped off at another. Both parties benefit from such one-way leasing arrangements due to operational rationalization and cost reduction. It is suitable for different regional requirements of customers and has the added benefit of saving on relocation costs.

4.Short-term rental
Also known as spot market leases, they are subject to market conditions dictated by supply and demand dynamics. Such leasing arrangements typically occur during temporary demand surges, which may be cyclical or sudden. Because of this market volatility, leasing companies prefer not to keep large inventories of such containers to meet short-term rental demand, to avoid the possibility of them being underutilized for an extended period of time. But careful planning and forecasting can handle unforeseen surges in demand. Maintenance, repair and relocation tasks are undertaken by the lessee. Aside from the higher cost, the one setback here is that you have to adhere to the minimum time to use the container. Usually leasing companies do not want to rent out containers for less than 6 months.

Transaction speed is another important issue for businesses to consider. Rental companies are also on the platform. Given the unbalanced nature of the world economy and trade, the number of containers is unbalanced.

/ By tjchinafreight ivy / Shipping

Shanghai’s export business has the latest adjustment!

The Shanghai Epidemic Prevention and Control Office issued a notice deciding to carry out a new round of dicing and grid nucleic acid screening across the city. Starting from 5:00 on March 28, Shanghai will implement nucleic acid screening in batches with the Huangpu River as the boundary.

•The first batch, Pudong, Punan and adjacent areas (including the whole area of ​​Pudong New Area, the whole area of ​​Fengxian District, the whole area of ​​Jinshan District, the whole area of ​​Chongming District, Pujin Street, Pujiang Town of Minhang District, Xinbang Town and Shihu Lake of Songjiang District Dang Town, Maogang Town, Yexie Town) first implemented the lockdown and carried out nucleic acid screening, and the lockdown was lifted at 5:00 on April 1.

• For the second batch, starting from 3:00 on April 1st, according to the principle of stubble promotion, the Puxi area will be closed and controlled, and nucleic acid screening will be carried out, and the closure will be lifted at 3:00 on April 5th.
At present, some logistics companies in the first batch of closed and controlled areas have issued a notice to suspend the service of entering warehouses and receiving goods, and will resume at 5:00 on April 1, 2022.

Shanghai Port operates normally and maintains 24-hour operation
In terms of ports, SIPG issued a notice to customers, stating that at present, all production units in Hong Kong will maintain 24-hour operations except for the impact of extreme bad weather.

Shipping company operation adjustment notice

aerial view port at shanghai

From 5:00 on the 28th, Shanghai will implement nucleic acid screening in batches with the Huangpu River as the boundary. All enterprises in the closed area have implemented closed production or work from home. The first batch of logistics enterprises in the closed area have issued a notice to suspend the receipt and delivery of goods into the warehouse. Shipping companies: Maersk, COSCO, Hapag-Lloyd, Evergreen and Mason have issued business adjustment notices one after another.

1. Maersk

Maersk emphasizes:

Some warehouses in Shanghai have been closed since March 28 until further notice. A list of open warehouses is attached to this announcement. As the Pudong and Puxi areas of Shanghai are in full lockdown until April 5, trucking services in and out of Shanghai will be severely affected by 30%. All warehouses in Shanghai will remain closed from March 28 to April 1.
The air freight business of goods from existing warehouses in Shanghai remains normal. However, new cargo acceptance will be affected due to first mile deliveries and human resource constraints. The Shanghai counter will be closed from March 28 until further notice.

2. COSCO Shipping Lines

According to the needs of the new crown pneumonia epidemic prevention and control in Shanghai and surrounding areas, COSCO SHIPPING Lines Shanghai and surrounding service organizations (including: Shanghai area, Wuxi operation area, Jiangsu and Anhui operation area, Suzhou operation area, northern Jiangsu operation area and northern Zhejiang operation area) All of them have adopted remote office methods, and will continue to provide customers with stable and reliable services during the epidemic control period.

Other shipping companies have also released relevant adjustments. If you want to know more, you can check the adjustment notice on the corresponding shipping company platform.

/ By tjchinafreight ivy / Shipping

The country’s truckers have been on strike for two weeks, severely disrupted supply chains, and hit production and manufacturing.

Spanish drivers have been on strike for up to two weeks over rising fuel costs, severely disrupting the country’s supply chain and hitting production and manufacturing in Spain.

 

After more than 12 hours of negotiations on Thursday, March 24, the Spanish government has reached a tentative agreement with a major transport union to provide fuel subsidies for striking truck drivers.
However, as is common in Spanish trade union politics, there were several smaller and different union organisations organising the transport lockout, which rejected the proposal and continued the strike into its third week.

To this end, the Spanish government this week announced a financial package of 500 million euros in direct assistance to the road transport sector, which focuses on reducing taxes on "specialty diesel". The package will be approved by the Spanish Council of Ministers on March 29.

However, the financial package announced by the Spanish government failed to end the drivers' strike.

Three Spanish unions, which mainly represent small businesses, have joined the Platform for Defending the Trucking Industry, an informal association of truck drivers and owner-operators who were the main drivers of the two-week strike.

As the strike action nears its third week, a ripple effect is being felt on roads, supermarkets and restaurants across Spain. Madrid, Valencia region, Basque Country, Andalusia, Navarra, Galicia, Murcia and other parts of Spain have been reported as truckers block major roads, ports, industrial areas and intersections Traffic jams for several kilometers.

Supermarket shelves are empty, with shortages of fruit and vegetables, milk, cheese and other dairy products, especially meat and fish. The dairy industry has been severely affected, with thousands of litres of milk spoiling in factories without trucks moving across the country.

Bars and restaurants across Spain are also feeling the effects of the strike action. Many were forced to change or adjust their menus and even raise prices to make up for some of the losses.

As of Friday morning, the situation remained fluid and it was unclear whether the government would actually negotiate with the striking truck drivers, with demonstrators in Madrid calling for the resignation of Transport Minister Raquel Sanchez as a condition of ending the strike.

This week, food processing multinational Danone warned of "imminent supply disruptions" due to a strike by truckers, and that if a solution cannot be found quickly, it will have to make major decisions and temporarily suspend four of its subsidiaries Activities of a Spanish dairy and three mineral water plants.

Yesterday, it was reported that the company had halted production at one of its breweries, and Dutch brewer Heineken also warned that it may have to cut production due to a lack of some supplies.

The country's truckers have been on strike for two weeks, severely disrupted supply chains, and hit production and manufacturing.

German supermarket chain Lidl has closed two stores in Asturias due to supply difficulties, and other retailers including Aldi have also reported shortages of certain products, such as milk, flour and oil.

The prolonged strike has raised fears that supermarket shelves will be empty and threatens road exports of Spain's fruit and vegetables during a crucial time of the year for the market.

The strike also affected the auto industry, with assembly lines disrupted by strikes by truckers and roadblocks, local media reported. Production at Volkswagen's Pamplona plant has been hampered by a supply shortage and Ford has proposed temporary layoffs for the second quarter as it struggles to secure deliveries of critical components and microchips. Opel and Mercedes were also forced to scale back their operations.

The Spanish government is believed to have mobilized 24,000 police officers to help escort truck drivers who were not involved in the strike.

/ By TJ China Freight / Shipping

The freight rates dropped by more than 13%!

Although the new round of new crown pneumonia in Europe represented by the British mutant virus has generally eased, and the congestion of British ports is also showing signs of easing, it will take some time for the European transportation system to fully recover.

At the same time, the goods hoarded before the Chinese New Year have basically been shipped out, and the demand for transportation after the holiday is still recovering. The overall market volume is insufficient, and some voyages have surplus space. Liner companies cut prices to buy goods.

Under the combined influence of the above-mentioned market factors, the freight rates of Asia-Europe routes after the Spring Festival have been declining.

 

The freight rate dropped by more than 13%! Asia-Europe route after the holiday market declines for three consecutive weeks

 

 

According to the Shanghai Export Container Freight Index (SCFI) released by the Shanghai Aviation Exchange, on March 12, the freight rate (sea and ocean surcharges) for exports from Shanghai to the European basic port market was 3,712 US dollars/TEU, which was higher than that on March 5. Compared with 3966 USD/TEU, it is down 6.4%. Compared with the USD 4,047/TEU on February 26, it was down by 8.3%. Compared with the 4281 USD/TEU on February 19, the drop reached 13.3%.

This is also the rate of the Asia-Europe route, which has declined for three consecutive weeks.

The situation of the Mediterranean route is slightly better than that of the European route. On March 12, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the Mediterranean basic port market was 4,020 USD/TEU, a decrease of 5.4% compared with 4,252 USD/TEU on February 19.

The Ningbo Export Container Freight Index (NCFI) released by the Ningbo Shipping Exchange also showed a similar trend.

From March 5th to 12th, the NCFI European route freight index was 2871.1 points, a decrease of 6.2% from the previous week. Compared with the 3192.2 points on February 20-26, a drop of 10%; compared with the 3323.4 points on February 13-19, a drop of 13.6%.

 

The freight rate dropped by more than 13%! Asia-Europe route after the holiday market declines for three consecutive weeks
The trend of NCFI European route freight index

In the same period, the freight index of the NCFI East-West route was 2354.2 points, and the freight index of the NCFI West-South route was 3007.1 points, a decrease of 7.4% and 9.2% respectively from February 13-19.

Entering 2021, the freight rate of Asia-Europe route has experienced an astonishing price increase of 25.8% overnight, and then gradually dropped.

Previously, industry consulting agency Sea-Intelligence had predicted that in 2021, the uncertainty caused by the epidemic would still be very large, and the historically high freight rates would fall.

Lin Shulai, an analyst at Yihailan, analyzed that the market freight rate after the Spring Festival depends on two factors, the operating strategy of the shipping company and the development of the epidemic. It is expected that after the first quarter of 2021, the market is expected to return to normal.

/ By TJ China Freight / Logistic

Another freight forwarding company was acquired by global logistics giant Rhenus!

German logistics giant Rhenus continues to start crazy "acquisitions"! Following the acquisition of the LOXX Group last month, Rhenus, the harvester in the international freight forwarding market, has taken another move, bringing BLG Logistics Group, a well-known local freight forwarding company in Germany, under its umbrella.

Another freight forwarding company was acquired by global logistics giant Rhenus!

Rhenus Group is a leading logistics service provider in Germany, with operations all over the world, with an annual turnover of 5.5 billion euros. Rhenus has operations in 750 regions around the world and has 33,000 employees. The Rhenus Group provides solutions for different areas in the entire supply chain; including multimodal transportation, warehousing, customs clearance and innovative value-added services.

BLG hopes to focus on its contract, automobile and container businesses, and sell BLG International Forwarding's international freight business to Rhenus. Since 2018, Rhenus has acquired almost all regions of the world; Rhenus will provide its service network for the rest of BLG's business .

Another freight forwarding company was acquired by global logistics giant Rhenus!

Rhenus will take over BLG’s 9 air and sea freight stations in April and integrate these stations with approximately 100 employees into its network of 12 branches in Germany. This new business will enable the company to handle more traffic through its LCL hub in Hilden and the air cargo hub in Frankfurt.

Rhenus said the company also plans to expand its food business, trade fairs and event logistics operations. "In the past few years, we have paved the way for the continuous expansion of air and ocean freight," said Stefan Schwind, general manager of air and ocean freight at Rhenus Germany.

Another freight forwarding company was acquired by global logistics giant Rhenus!

"Due to the addition of business sites, employees and business activities, we are consolidating our network in the German aviation and maritime sectors. We also hope to develop new business areas, such as the use of refrigerated containers to transport food, and in trade fairs and event logistics. Activities."

BLG said it will retain its freight forwarding business in Bremen, focusing on land and sea transportation of heavy and project cargo. Board member Jens Wollesen said: "Even if we no longer have representatives throughout Germany in freight forwarding, we will continue to provide a wide range of international services in our contract, automotive and container sectors."

Last month, Rhenus stated that it would take over the LTL and FTL cross-border specialist LOXX Group and established five business sites in Germany and Poland to strengthen its business in Germany and Europe.

In the past two years, Rhenus has made frantic acquisitions. From Germany, Italy, the United Kingdom to Canada to South Africa and the United States, all freight forwarding companies that Rhenus favors have been acquired.

Recent "acquisition list":

In November 2018, it acquired German freight forwarding SBL;

Acquired the Italian logistics company Cesped in December 2018;

Acquired British freight forwarding Core Management logistics in January 2019;

Acquired Rodair, a Canadian freight forwarder, in early March 2019;

Acquired World Net Logistics, a well-known freight forwarder in South Africa at the end of March 2019;

Acquired LOXX Group in January 2021;

Acquired BLG Logistics Group's freight forwarding in January 2021.

/ By TJ China Freight / Shipping

Why and When Your Ocean Freight Shipment Would Require a Bonded Warehouse

Customs regulations are a necessary, but challenging part of international shipping. Clearing customs increases costs, paperwork, and time-delays. Customs-bonded warehouses help reduce this friction and are an integral part of the global supply chain.

What is a bonded warehouse?

A customs bonded warehouse is a secured building or area where merchandise can be imported and stored for a period of time, without any import taxes (duties) being charged. Duties are only paid when the goods are removed for domestic use.

No duties are charged If the merchandise is re-exported, destroyed by customs, or withdrawn for use on an international vehicle or aircraft. The United States permits eleven types of bonded warehouses, where imported goods can be kept for up to five years.

While in bonded storage, merchandise can be handled and manipulated as long as the processing doesn’t change its essential nature. All types of products can be kept in bonded storage, including animals and restricted materials.

CALCULATE OCEAN FREIGHT

Customs bonded storage is a smart option for long-term financial planning and resource control. Using bonded warehouses to defer taxes on imported items can improve cashflow management, reduce financial liabilities, lower expenditures, and protect against political risk.

Long Term Bonded Storage

Bonded warehouses can be used to manage the financial burden of import taxes. If imported dutiable merchandise will not be sold immediately, inventory can be kept in bonded storage to avoid a large upfront tax payment.

Importers can then retain control over those monies and have them available for other purposes. Since applicable duties are only paid when the goods are removed after being sold, cash-strapped importers can fund their duty payments from the sale of the goods.

Customs bonded warehouses can also be used to hold merchandise that has low or fluctuating demand. If demand increases the merchandise can then be withdrawn for domestic use. If it doesn’t, the products can be re-exported without duty charges.

Right now, the global supply chain is in disarray due to Covid-19. Shutdowns and demand disruptions created supply chain bottlenecks and inventory build-ups. Luxury items like perfume are experiencing much lower demand. Bonded storage is being used to store excess product and let enterprises avoid paying customs on those items.

Restricted Specialty Item Risk Management

Bonded storage can be a preferable choice for storing restricted goods. Since customs bonded warehouses can store imports for up to five years, shorter time regulations for the storage of restricted products do not apply to them.

Importers who need extended time for processing paperwork or legalities to clear customs can use bonded storage to bypass these regulations.

Political and Economic Risk Management

Bonded storage can be used to protect against political instability and policy fluctuations. If merchandise is imported during times of high tariffs, bonded storage gives the chance to wait for more favorable economic conditions. Customs bonded warehousing has proved a highly effective strategy in navigating the tariffs of the Trump administration.

Exporters, importers, and manufacturers sought approval to establish their own bonded warehouses and storage areas. While the nation experienced rapidly changing foreign policy, these facilities became stable domestic zones for production and trade. Manufacturers and retailers were able to continue engaging in commerce while mitigating potential fallout.

Handling and Prepping for Market

If merchandise needs to be immediately prepped for market, this can be done in special customs bonded warehouses. Taxes are then determined on the final product when it is withdrawn from storage. This can prevent extra duties from being charged on material that does not make it to market.

For example, if food is brought in which needs to be sorted or processed, importers can avoid paying tax on discarded product.

Logistical Streamlining

Goods are also imported into customs bonded warehouses, simply to help smooth out the logistical process of clearing customs. Having goods placed in secure, duty-free storage gives peace of mind and more time for paperwork to be done.

How does bonded storage work?

Customs bonded warehouses can be owned either directly by the government or by licensed private enterprises. Some privately run bonded warehouses are for the proprietor’s use only, while others are available for public use.

Merchandise kept in privately operated warehouses, is under the joint supervision and joint custody of Customs Border Patrol and the warehouse proprietor. Customs retains full authority over the goods in the warehouse, but generally maintains control through periodic audits.

Private operators will take out a warehouse bond under which they incur liability for stored merchandise. This liability is discharged when the goods are exported, destroyed by Customs, or withdrawn domestically after duties are paid.

Customs-bonded warehouses are generally located at or near ports. Shipments are received directly to them. Many privately owned, public use warehouses will offer complementing services such as freight forwarding, logistics, distribution, and deliveries.

Certain classes cater to niche needs, such as livestock management, food handling, or receiving regulated products.

Once goods are withdrawn, importers will need to pay merchandise-processing fees in addition to duties. These fees should be negotiated carefully by evaluating different freight-forwarding services to find the best deal.

Supply Chain Resilience

Customs bonded warehouses are a key asset for global economic stability and security. Businesses rely on customs bonded storage as a core resource for financial control and risk management. Beyond cash flow management, this also creates economic confidence for trade to continue in uncertain conditions.

The recent China-USA tariff wars and Covid-19 supply chain chaos have proven their continued relevance as a stabilizing measure for international trade. Bonded storage is well integrated into freight shipping logistics. Enterprises looking to streamline and optimize the process of ocean freight shipping should take advantage of these secure, managed facilities.

Customs bonded warehouses are proven ways of mitigating the costs of heavy tariffs and regulations.

/ By TJ China Freight / Shipping

New high! The freight rate of the US West route rose to 4189 US dollars, three times that of the same period last year. Many shipping companies continue to charge surcharges

After the freight rate in the trans-Pacific market has remained stable for a period of time, it has recently started a rising mode.

According to the Freightos Baltic Daily Index (Freightos Baltic Daily Index), on December 28, 2020, the freight rate of the Asia-US West Coast route reached US$4,189/FEU, a record high, an increase of 8% from December 25, which is the year of 2019. 3 times over the same period.

New high! The freight rate of the US West route rose to 4189 US dollars, three times that of the same period last year. Many shipping companies continue to charge surcharges

At the same time, the freight rate of the Asia-US East Coast route also reached an astonishing US$5397/FEU, a 9% increase from December 25 and twice the rate of the same period in 2019.

New high! The freight rate of the US West route rose to 4189 US dollars, three times that of the same period last year. Many shipping companies continue to charge surcharges

According to data from the Shanghai Shipping Exchange, on December 25, 2020, the freight rates (sea freight and ocean freight surcharges) for exports from Shanghai to the basic port markets of the West and the East of the United States were 4,080 USD/FEU and 4,876 USD/FEU, respectively. The US West route rose 4.6% from the previous week.

Analysts of the Shanghai Shipping Exchange said that the average space utilization rate of ships on the Shanghai Port to the West and East U.S. routes maintained at a level close to full load. However, the U.S. epidemic has blocked the turnover of containers, and a large number of containers are stranded at the local terminal. The congestion of the port is increasing, and the shortage of containers has not been alleviated.

In addition, a number of shipping companies including CMA CGM, Hapag-Lloyd, Evergreen Shipping, HMM, ONE, Yangming Shipping, and Star Shipping have announced that they will start on the trans-Pacific route from January 1, 2021. , Charge a comprehensive rate increase surcharge (GRI) ranging from US$1,000 to US$1,200/FEU.

The market predicts that the upward trend of freight rates will continue until January 2021.

New high! The freight rate of the US West route rose to 4189 US dollars, three times that of the same period last year. Many shipping companies continue to charge surcharges

In contrast to the fast-growing transportation demand, after a fully loaded ship arrived at the US West Port, it faced the dilemma of nowhere to stop.

According to a report released by the Marine Exchange of Southern California on December 28, 2020, a total of 24 container ships are anchored in San Pedro Bay, and another 5 ships are about to arrive.

According to the report, the local conventional anchorages are full of ships, and some emergency anchorages have also been occupied.

Marine Traffic uses an automatic identification system to draw a map that shows the extent of the accumulation of container ships in San Pedro Bay, which has deteriorated in recent weeks.

New high! The freight rate of the US West route rose to 4189 US dollars, three times that of the same period last year. Many shipping companies continue to charge surcharges

According to statistics, 26 additional ships called at the Port of Los Angeles in November and 31 ships in December. A port manager said that it is expected that in January 2021, more additional ships will call.

The loading and unloading capacity of the Port of Los Angeles and Long Beach has already faced serious shortages. The Port of Los Angeles will import 116,500 TEU containers this week, and it is expected to increase significantly to 150,000 TEU per week by January 2021.

The continuous increase in freight rates and the severe congestion at the US West Port have caused shippers’ costs to hit unprecedented highs, and shippers have to reassess their transportation cost budgets for 2021.