“These strikes are a stark reminder of the pivotal role labour dynamics play in the smooth functioning of global supply chains,” noted Angela Gambell, our Director of Sales, Marketing and Operations at Stockwells. “We’re witnessing firsthand how localised disputes can have ripple effects globally, impacting everything from delivery schedules to consumer prices.”

In France, a significant development has unfolded: the National Federation of Ports and Docks (FNDP) has temporarily halted nationwide strikes originally scheduled to continue until late June. While this pause provides a brief relief, concerns linger as the FNDP plans to resume strikes on September 26-27. 

“In the midst of these strikes and their broader implications, we are closely monitoring the situation for potential impacts on shipment schedules, costs, and global trade dynamics in the coming months,” Angela Gambell added.

Challenges and vulnerabilities in global shipping networks

The disruptions coincide with existing challenges in global shipping: capacity constraints, logistical bottlenecks, and recent crises like the Red Sea shipping crisis. These factors intensify concerns over delays and inflationary pressures, complicating operations for businesses worldwide.

“Managing these disruptions requires agile responses and proactive planning,” Gambell said. “Every hour of delay at major ports translates into potential setbacks across the supply chain, impacting businesses and consumers alike.”

Already strained, shipping companies must now contend with potential disruptions in global networks, anticipating delays that could affect delivery schedules. This situation underscores the vulnerability of international trade to local labour disputes, highlighting the interconnected nature of the global economy.

Economic implications and strategic responses

“In response to the strikes, carriers are compelled to adjust shipping rates upwards,” explained Gambell. “These adjustments, though necessary, could further drive up prices for imported goods, ultimately affecting consumers globally.”

The strikes coincide with broader labour movements in Germany, where IG Metall, the country’s largest labour union, advocates substantial wage increases for millions of workers in the metal and electrical industries. This push reflects a wider economic climate marked by rising inflation and concerns over wage stagnation relative to cost-of-living increases.

“The labour movements are indicative of larger economic trends,” Gambell observed. “They underscore the need for sustainable wage policies that balance fair compensation with economic stability, critical for long-term growth.”

Navigating uncertainty and future considerations

The repercussions of the European port strikes extend beyond local shores, echoing throughout international trade routes. Concerns about the resilience and adaptability of supply chains in the face of unexpected disruptions are paramount, especially with the strikes preceding the European summer holiday season, amplifying anxieties about potential shortages and logistical gridlocks.

“As governments, businesses, and industry stakeholders navigate these challenges, the ongoing strikes highlight the fragility of global supply chains and the need for robust contingency planning in our interconnected world. Resolving these labour disputes will be pivotal in shaping global trade dynamics and economic recovery efforts in the months ahead.”

“The intensification of market volatility due to strikes and disruptions in the Red Sea calls for heightened vigilance in tracking movements and proactive consideration of extended lead times for shipping,” Gambell added. “Staying ahead of these challenges in planning has never been more critical for businesses reliant on global supply chains.”

With strikes scheduled across France in September, supply chains need to prepare for further disruptions in ports across Europe. If these issues coincide with similar strikes in other major European ports, cargo bound for Northern Europe could be redirected to alternative ports such as Antwerp and Rotterdam. This situation has the potential to exacerbate existing supply chain challenges, leading to heightened shipping delays and increased costs due to elevated spot rates for businesses.

“Given the current demand levels and the possibility of extended strikes, the shipping industry faces heightened uncertainty,” Gambell warned. “We must monitor these developments closely to gauge their impact on global shipping rates, potentially echoing the highs seen during the pandemic.”

Stockwells continues to offer strategic insights and support to businesses navigating these turbulent waters, emphasising the importance of adaptive supply chain management and proactive planning amidst evolving global dynamics. Get in touch with our team today.

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Here’s a look at the key shifts defining the sector: 

Geopolitical tensions and shipping challenges

Red Sea crisis: Ongoing hostilities in the Red Sea region continue to cause ripple effects across global supply chains, leading to increased ocean freight rates and disruptions in shipping schedules. Vessels are rerouting away from affected areas, impacting major trade routes like those between Europe and Australia. Businesses must brace themselves, anticipate longer lead times, and plan meticulously to steer through these turbulent waters.

Increased costs: Escalating shipping costs, largely driven by geopolitical tensions, underscore the importance of cost management and strategic planning. Embracing these challenges head-on and integrating them into financial planning will pave the way for smoother sailing ahead.

Supply chain management strategies

Planning and lead times: Longer lead times necessitate proactive planning to minimise the impact on inventory management and customer satisfaction. Anticipating delays and optimising supply chain processes are critical steps in mitigating disruptions.

Warehousing needs: Amidst unpredictable shipping schedules, there has been a notable rise in the demand for sufficient warehousing space. Many businesses are turning to third-party logistics providers to secure storage and fulfilment capacities, ensuring they can maintain flexibility and scalability in their operations. At Stockwells, we specialise in offering these crucial logistics solutions to support your business needs.

Consumer trends and market dynamics

Direct-to-consumer growth: Embracing the surge towards direct-to-consumer models is crucial, especially in today’s challenging landscape. Driven by consumer demands for seamless shopping and lightning-fast deliveries, businesses must elevate their e-commerce strategies and optimise supply chains for direct distribution channels.

Stock management: Effective stock management strategies are paramount in volatile market conditions. Businesses are encouraged to adopt agile inventory management systems and leverage data analytics to forecast demand accurately and optimise stock levels.

Sustainability initiatives in shipping

Recognising the urgent global need for sustainability, shipping companies are increasingly adopting carbon offsetting measures. These initiatives aim to mitigate the environmental footprint of shipping operations, providing businesses with opportunities to integrate sustainable practices into their logistics strategies. As we enter the new fiscal year and beyond, it’s crucial for businesses to prioritise sustainability, which is rapidly becoming a non-negotiable imperative.

Regulatory updates and economic implications

In response to Budget 2024-25, the Australian Government is eliminating 457 tariffs on essential goods, such as toothbrushes and clothing, to streamline trade and reduce costs by $8.5 billion annually. These changes, detailed in ACN 2024/17 by the Australian Border Force*, aim to enhance affordability and support economic growth. The adjustments in biosecurity and food import fees effective July 1, 2024, by the Department of Agriculture, Fisheries and Forestry**, highlight Australia’s commitment to maintaining rigorous standards. It is important to note this will also influence operational costs for stakeholders.

These updates present both opportunities and challenges for logistics professionals. While tariff removals promise enhanced market access and cost savings, managing increased biosecurity fees requires careful financial planning and operational adjustments. Staying informed and agile will be crucial for navigating these regulatory changes and seizing growth opportunities amidst evolving global trade dynamics in 2024.

Forward thinking

Throughout this financial year, businesses in the logistics sector must remain vigilant and adaptable amidst geopolitical uncertainties, evolving consumer behaviours, and regulatory changes. By prioritising strategic planning, leveraging technology-driven solutions, and embracing sustainable practices, businesses can navigate these challenges effectively and seize opportunities in the dynamic global marketplace.

Stay informed, stay proactive, and stay resilient—these principles will guide logistics professionals in driving success amid the complexities of 2024 and beyond.

Want to learn more? Reach out to our team of experts. 

Sources:

*Australian Border Force (ACN 2024/17)

**DAFF recently completed an annual review and indexation cycle to regulatory fees and charges for biosecurity and imported food regulatory activities. The complete table of Indexed fees and charges can be found here:

Fees and charges for biosecurity regulatory activity from 1 July 2024

Fees and charges for imported food regulatory activity from 1 July 2024

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ESG encompasses critical areas such as emissions reduction, diversity promotion, and transparent decision-making processes. This necessitates a thorough evaluation of a company’s societal and environmental impact, coupled with robust governance practices. 

These considerations are reshaping the shipping landscape, impacting businesses, shipping lines, importers, exporters and freight forwarders alike, driving a shift towards sustainable practices. 

Continue reading to discover how you can incorporate ESG into your supply chain. 

How ESG plays a role in your supply chain

In today’s dynamic landscape, adherence to ESG factors is crucial for maritime success. Shipping, as a capital-intensive sector, leads in sustainability efforts, aiming to meet ambitious environmental targets. To do so, reducing investment risks, advancing green technologies, and embracing sustainable practices are paramount.

Attracting and retaining talent is pivotal for driving this transition. Investors, customers, and stakeholders closely scrutinise company performance, shaping investment decisions and long-term sustainability. Ultimately, the future of the shipping industry hinges on both environmental and social governance factors.

Environmental accountability: 

Recognising the profound environmental impact across the supply chain, from production to delivery, demands collective action beyond just shipping lines. Importers and exporters play pivotal roles in this ecosystem, bearing responsibility for minimising emissions, pollution, and ecological harm. 

Embracing a comprehensive approach, all stakeholders must engage in tailored initiatives to curb their environmental footprint, involving not only reducing greenhouse gas emissions but also implementing strategies for energy and water conservation, and embracing cleaner fuels and responsible recycling practices. By committing to such initiatives, importers, exporters, and shipping lines can collectively advance global sustainability objectives, comply with regulations, and fortify their long-term business resilience, fostering a more environmentally conscious and sustainable future.

Social responsibility: 

Incorporating social aspects into ESG practices is crucial for creating a positive work environment and nurturing strong community relationships. Prioritising factors like employee health, safety, diversity, equality, and inclusion is key. This involves implementing rigorous safety protocols, including regular training, and fostering diversity through mentorship programs and diversity training.

Additionally, companies can opt for eco-friendly shipping solutions, maintain transparent communication about sustainability practices, and ensure fairness throughout their supply chain. Engaging with the local community may include sponsoring educational workshops, partnering with charities for environmental projects, or organising volunteer activities to address community needs.

These initiatives not only improve employee satisfaction and retention but also build trust with stakeholders. This dedication to social responsibility sets them apart in an industry often under scrutiny for its societal impact, enhancing their competitiveness in the market.

Governance integrity: 

Transparent governance practices are crucial for fostering trust and accountability. Compliance with regulatory guidelines and continuous improvement benchmarks ensures operational integrity. Transparency, guided by principles, and adherence to these principles, as well as regular reporting on progress, exemplify strong governance. 

Key performance indicator (KPI) reporting is integral for monitoring progress, while policy reviews ensure continual improvement. Given the industry’s heavy regulation, comprehensive staff training on compliance, risk management, safety, and financial due diligence is essential. Risk management is a critical component of staff and management KPIs, supported by thorough open communication and proactive solutions to mitigate any identified risks.

In practice – how Stockwells is prioritising ESG

Stockwells acknowledges the pivotal role of ESG principles in the shipping sector, driving innovation and advancement towards sustainable business practices that foster mutual benefits for both the industry and the environment. We are dedicated to effecting positive change for our planet and society. 

This includes prioritising: 

• Sustainable operations: We’re continuously improving our business practices to reduce our environmental footprint. This includes conserving energy and water, minimising waste, recycling, and using eco-friendly materials whenever possible.
• People: We value diversity and inclusivity in our workplace. We provide training and development opportunities for our employees and prioritise their health, safety, and wellbeing.
• Governance: We have strong company policies in place to ensure we meet and exceed sustainability and corporate responsibility standards.
• Community engagement: We give back to the communities we operate in through fundraising, donations, sponsorships, and volunteer programs for our staff.
• Environmental partnerships: We’ve partnered with Greenfleet to support the regeneration of a protected forest in Ngulambarra, VIC. Greenfleet is a nonprofit organisation dedicated to restoring forests and protecting the climate by planting native trees and shrubs.

We maintain our dedication to leveraging technology for operational efficiency, prioritising logistics solutions, fostering inclusivity, giving back to the community, and reducing environmental impact through robust sustainability policies.

Central to our ethos is transparency and accountability. Our annual report serves as a cornerstone in upholding these principles, providing clients with the necessary insights to make informed choices when selecting a freight forwarder. 

We extend our support to other stakeholders in the shipping industry, encouraging them to advance ESG principles by investing in sustainable technologies, enhancing supply chain transparency, ensuring ethical sourcing, promoting leadership diversity, and fostering a culture of compliance. 

By collectively prioritising ESG, the shipping industry can cultivate a more resilient, responsible, and future-proof ecosystem, addressing societal and environmental challenges while securing long-term profitability and stability for all.

Want to discuss ESG further? Reach out to our team. 

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Previously steady shipping channels now face uncertainty due to increased attacks, compromising access to the Suez Canal. Container traffic, representing 30% of global shipments, is particularly affected as vessels navigate additional miles, straining the agricultural shipping sector, causing ripple effects across the supply chain, and impacting trade volumes and economic stability.

As importers and exporters grapple with market uncertainties, meeting delivery deadlines and controlling costs become daunting tasks, especially amidst challenges beyond the industry’s control. Stakeholders within the shipping industry must collaborate to explore alternative routes and enhance security measures. Such efforts are crucial to safeguarding global trade integrity and ensuring the uninterrupted flow of essential goods.

Impact on supply chain

The redirection of Red Sea shipping routes has led to longer sailing times, resulting in containers spending more time at sea, necessitating an increase in both containers and ships. The absence of direct coverage through the Suez Transit has caused a significant buildup of containers in West Mediterranean ports, leading to congestion. This congestion, in turn, delays the return of empty containers, creating a shortage in Asia and further exacerbating congestion there. Combined with an early peak season prompted by impending ocean freight price hikes, potential US port strikes, and adverse weather in Asia, the shipping industry finds itself trapped in a perpetual cycle of imbalance. Consequently, delays in schedules, full capacities, and forwarders scrambling for containers are symptomatic of these systemic challenges.

Implications on shipping costs

The Red Sea shipping crisis, along with other concurrent issues in the industry, is exerting pressure on shipping costs. Much like the stock exchange, where geopolitical, situational, and environmental factors influence demand and subsequently prices, the maritime trade is similarly impacted. The disruption in shipping routes can lead to increased demand for alternative routes, thereby driving up prices. 

Inflationary pressures

The Red Sea shipping crisis is set to heighten inflationary pressures by disrupting the global supply chain. With significant challenges in shipping, including delays and reroutings, certain sectors may face price hikes due to scarcity and increased transportation costs. This presents significant challenges for exporters and underscores the necessity for proactive measures to stabilise international trade and alleviate economic repercussions.

Considerations for exporters

While the challenges posed by the Red Sea shipping crisis are out of the industry’s control, exporters can adapt their strategies to navigate the evolving landscape of global trade. Longer sailing times, difficulty in securing containers, space shortages on vessels, and extended booking lead times are critical factors that exporters need to account for. 

Planning ahead and proactively managing logistics can help mitigate the impact of these challenges. Fostering agility and flexibility in supply chain operations is essential to respond effectively to changing circumstances. By staying informed about industry developments and collaborating closely with logistics partners, exporters can minimise disruptions and ensure the timely delivery of agricultural goods to markets worldwide.

Where to from here?

Amid the challenges of the Red Sea crisis, our top priorities at Stockwells are collaboration, transparency, and keeping our clients informed. We streamline order processing to minimise disruptions and ensure clients have advance notice. Our approach involves using past data to make smart decisions and adjusting quickly to current needs. Internally, we assess container distribution to make ports run efficiently. By sticking to these principles, we aim to navigate the challenges diligently and transparently, ensuring our clients are well-supported throughout.

Should you require assistance, our team of specialised experts are available to support you. You can reach out today. 

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While the initial steps towards greener operations may entail added costs, the long-term dividends in terms of cost savings, heightened brand reputation, and access to eco-conscious markets are undeniable. Embracing sustainable shipping is not just a matter of corporate responsibility; it’s increasingly becoming a strategic imperative in the face of escalating environmental concerns.

Some of the short-term financial impacts include: 

• Adjustment costs in supply chain for eco-friendly practices.
• Expenses for training staff on new procedures and regulations.
• Compliance costs for meeting environmental standards.
• Research and development expenditures for sustainable innovations.
• Higher initial investment in green technologies.
• Increased costs for sustainable fuels.

Amidst these considerations, importers and exporters can adopt various strategies to mitigate the financial burden associated with the transition to green shipping, and reap the benefits. 

Here are five ways they can navigate these costs effectively:

1. Foster industry collaboration

Explore collaboration with suppliers and logistics partners to identify opportunities for joint initiatives like shared transportation and collaborative warehousing. Consider exploring joint investments in green technology research and development, pooling resources for staff training, and seeking advice from experts who can offer compliance guidance, help in making informed decisions, and support with optimising green initiatives for long-term benefits.

2. Optimise packaging efficiency

Transitioning to lightweight, recyclable, or biodegradable packaging materials not only minimises environmental impact but also reduces shipping costs by lowering overall package weight and volume. Additionally, implementing innovative packaging designs that maximise space utilisation can lead to fewer shipments and decreased transportation expenses.

3. Streamline transportation routes

Optimise transportation routes to reduce costs and environmental impact by leveraging route optimisation techniques. By integrating different modes of transportation like rail, sea, and road, businesses can maximise efficiency while minimising emissions and operational expenses. When utilising road transport, consider employing electric vehicles to further reduce carbon footprint.

Select environmentally friendly carriers committed to sustainability practices. Look for carriers using fuel-efficient vehicles, renewable energy sources, implementing recycling programs, and participating in carbon offset initiatives. Prioritise detailed route planning to minimise distance travelled and fuel consumption, resulting in reduced costs and emissions.

4. Assess supplier sustainability 

Selecting environmentally friendly carriers is just one aspect of ensuring sustainability in shipping operations. Equally important is assessing the sustainability practices of all suppliers involved in the supply chain. Beyond carriers, businesses should evaluate the sustainability commitments of raw material suppliers, manufacturers, and also look beyond warehouse suppliers. 

Implementing cost-saving measures internally like an ‘essential print only’ policy and switching to low-energy light bulbs can yield both environmental and financial benefits. By aligning with suppliers committed to eco-friendliness, businesses not only contribute to sustainability but also potentially negotiate better pricing, easing the financial burden of green shipping initiatives.

5. Harness data analytics for efficiency

Invest in cost-effective data analytics tools that enable you to track and analyse energy consumption, emissions, and other key sustainability metrics. By examining this data, you can pinpoint areas for enhancement, allowing for targeted cost reductions and operational streamlining.

In the journey towards sustainable shipping, importers and exporters can effectively balance short-term costs with long-term gains. By fostering collaboration, optimising operations, and leveraging data analytics, businesses can mitigate financial burdens while embracing eco-friendly practices, ensuring a resilient and competitive position in the global market.

Want to learn more? Reach out to our team of experts. 

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We consulted with our pricing analysis expert, Mathew Grundy, to help you understand the contributing factors behind these freight increases. Grundy asserts that the escalation is primarily due to shipping lines reallocating high-capacity vessels from the China-Australia trade lane to the USA and Mexico, responding to the heightened demand for Chinese imports in those regions. Consequently, vessels serving the Australian market have been downsized significantly, exacerbating supply issues for Australian importers.

Here’s what you need to know:

Capacity crunch in the Australian market:

The Australian market is grappling with severe capacity constraints. Larger vessels, typically servicing routes to Australian ports, are being redirected to more profitable trade lines, notably North and South America. These vessels, capable of accommodating up to 6000 containers, are being replaced by smaller counterparts, some with half the capacity at around 3000 containers. This reduction in capacity has created a bottleneck effect, intensifying demand for shipping services to Australia and propelling freight rates to levels not seen since the global pandemic of 2020-2021. 

Impact of global trade dynamics:

The surge in demand for shipping services to Australia reflects broader shifts in global trade dynamics. Increased trade between China and South America, driven by robust demand, has resulted in insufficient shipping capacity, exacerbating the situation. Additionally, speculation surrounding the 2024 US presidential election, particularly former President Trump’s proposed tariff increases on Chinese goods, has injected uncertainty into global trade flows, further amplifying the influx of goods directed to the USA and thus increasing demand in that area.

The Red Sea crisis effect:

The Red Sea, which facilitates 30% of global container traffic, is grappling with an unprecedented shipping crisis. Escalating tensions in the region, particularly the Yemeni Civil War, piracy threats, and geopolitical rivalries, are wreaking havoc on maritime operations. This crucial waterway, connecting Europe, Asia, and Africa, is indispensable for global trade. However, concerns regarding safety, trade disruptions, and soaring insurance costs are casting a pall over its significance.

Following the conflict in the Gaza Strip, the Houthis, an Iranian-backed rebel group, initiated a series of drone and missile strikes toward Israel. While the majority of these attacks have been intercepted, the group has subsequently launched numerous missile and drone assaults targeting commercial vessels.

The conflict involving the Houthis has prompted extensive rerouting of ships, increased port fees, and congestion along traditional routes, disrupting the delicate balance of container supply and demand. Shipping giants are responding with price hikes, reflecting both heightened demand and operational challenges arising from the Red Sea crisis.

Outlook for Australian importers:

Australian importers are navigating a challenging landscape characterised by soaring freight rates and constrained shipping capacity. The timing of these price increases, occurring during what is typically a quieter period of the year, compounds the strain on businesses. With the possibility of further price hikes as the peak season approaches, Australian importers must prepare for continued challenges in securing affordable shipping options and managing supply chain disruptions.

The surge in ocean freight rates from China to Australian ports presents a significant hurdle for importers, with capacity constraints and global trade dynamics driving prices to unprecedented levels. Stockwells remains committed to supporting you in understanding the market dynamics, assisting businesses in navigating these turbulent waters, and implementing proactive measures and strategic planning to mitigate the impact of rising freight costs and ensure the smooth flow of goods into Australia.


Looking for support? Get in touch with us today.

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Delays and Disruptions

Delays and disruptions continue into 2024 with further Protection Industrial Action planned for the first half of January. 

The industrial action at DP World has transcended the company and the Maritime Union of Australia, sending shockwaves through countless supply chains. A staggering backlog of over 50,000 containers and delays ranging from 15 to 20 days have been reverberating across the logistics landscape during the busiest period of the 2023 year.

Compounding these challenges, a cyber-attack in early November 2023 paralysed DP World’s operations, leading to a standstill and fuelling fears of price hikes due to shortages in essential goods. This cyber-attack has compounded the impact of ongoing industrial action, creating a perfect storm for the ports operator.

Shipping Australia, a peak shipping body, estimates that the combined harm caused by the cyber-attack and ongoing industrial action is draining approximately $20 million from the wider economy every day.

Client Concerns and Flow-On Effects

For clients reliant on timely freight movements, industrial action poses a severe threat to their supply chains. The potential for flow-on delay effects looms large, amplifying challenges for businesses during a peak period of prosperity. The disruptions extend beyond the immediate aftermath of the strikes, creating a web of complications that could resonate through the entire supply chain, impacting timelines and commitments.

Brisbane Terminal Update (January 2024)

Adding to the complexity, DP World’s Brisbane Terminal has experienced additional challenges through December of 2023 and into the new year. Notified Protected Industrial Actions coincided with equipment and IT outages, causing significant delays and disruptions for container transport operators. 

Equipment outages and maintenance of Automated Stacking Cranes (ASCs) during the Christmas-New Year period, along with a systems outage on December 29, have further strained operations. Truck turnaround times at DP World Brisbane have exceeded 5 hours, leading transport operators to incur additional labour expenses over the long weekend.

Stockwell’s Client Guidance

In light of the evolving situation, Stockwell understands the concerns and challenges faced by its clients. As a trusted partner in logistics, Stockwell is committed to providing updates and guidance to help clients navigate the complexities arising from DP World’s industrial setbacks.

Clients apprehensive about potential delays affecting their freight are encouraged to reach out to their Key Account Manager. We are ready to assist and address any queries or concerns related to your freight forwarding needs.

As we move into 2024, the operational conditions at DP World Terminals, especially in Brisbane, remain a focal point, and we are dedicated to keeping you informed and supported throughout these dynamic circumstances.

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All of this happening at a time when the global economy is meant to be quite flat, the WTO announced in late October that it had halved its forecast for growth in global trade due to factors including high-interest rates, persistent inflation, a slowing CN economy and the continued War in Ukraine and Israel.  Any ongoing escalation in the wider regions of Ukraine and Israel will have significant impacts on trade, the Red Sea situation is one of many impacts that we are likely to see over the next year.

The lesson from all of this if we didn’t already learn it from COVID is that JIT shipping while seeming like an efficient strategy goes out the window with chaos, and given chaos is now a norm here, forward planning that is making room for flexibility and adaptation is a way more sensible approach in the current geopolitical climate.

Supply chains need to be robust in the way they deal with conflict, international freight price hikes because of conflicts, delays, congestion and more delays including sudden weather events.  Educating the end user is even more important as it is their wrath, we all bear in times like this. 

You may think it impossible to plan for these events, and whilst you’d be spot on if we were to try and pin down a specific date for each occurrence, you would be wrong in thinking you could not build the impact of these events into your supply chains.  It is not enough to just simply build in CPI to pricing, it needs to reflect the origin it comes from and all the challenges those origins present.  Timeframes for delivery should reflect the same the expectation that a Direct sailing arrives within a certain timeframe has pretty much gone out the window, so a more flexible approach is required.

Quick Wrap up of other regions;

Europe; Ukraine and Israel Wars, Red Sea situation which, in a double blow to importers, will increase transit times and freight costs as shipping lines route all vessels away from the Suez Canal, Introduction of CO2 emissions surcharge for all vessels calling EU Ports.

North Asia; GRI’s have been announced for January for the CNY but there is so much backlog from the DP World MUA industrial action that schedules are being disrupted. The situation at the terminals is the only thing supporting the GRI currently.

South East Asia; GRI’s have been announced on the SEA trade lane but it does remain quite stable so this may affect the quantum advertised.

North America; The Panama Canal is the driest it has been in 73 years and as a result movement through the canals is expensive.  There are very limited slots available, so some carriers are choosing alternative routes through the Suez Canal, making transit times blow out more than usual. There have also been anti-mining protests affecting operations.  The Panama Canal Authority introduced Reserve Slots for Nov to Feb, which severely affected the number of vessels permitted to transit.  These slots are being auctioned and the winners are generally the LNG or LPG vessels where carriers are prepared to pay up to $1m for a slot.

With all of this going on carriers are switching the destination port to the West Coast as their preference hub and we all know that means congestion.

New Zealand: The fuel subsidy that was supporting the shipping sector has been revoked as of 1 January 24 so the knock-on effect with increases to NZ Fuel Surcharge for all imports and exports.

DP World Cyber Attack – Taught us all to be more vigilant in protecting ourselves against cyber threats.  If DP World can be affected by the robust cyber security they have in place, we are all open to attack.  Consequently, we immediately had an audit of our own protocols and are tightening up our processes to ensure we are protected above and beyond what is required.

In summary, all we can do as partners as we ride the waves together, is know that we are always here to assist in whatever you may need, be it data, analysis, coaching etc, we are open to understanding what you need and helping where possible. The world is a crazy place and the supply chain is like trying to tame chaos itself, and to tame chaos we need business friends and business partners and a lot of planning.

So planning and taming chaos is our theme for 2024! Welcome aboard!

Angela Gambell

Director

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Your must know freight terms and phrases

Consignor and Consignee

The Consignor, also known commonly as the shipper, is the original owner or the sender of the goods and prepares the goods for shipment. The Consignee is the individual that receives them once the shipment arrives. They’re responsible for the receipt of the goods.

The point of transfer or ownership of the shipped goods can vary at different stages of the shipment, depending on the agreed terms.

Bill of Lading (BoL or B/L)

A Bill of Lading (BoL), serves as a crucial document in the intricate dance of shipping logistics. Issued by the Carrier to the Consignor, this document acts as a confirmation that the goods have been received in satisfactory condition and are ready for their journey to the Consignee.

Effectively a contract of carriage, the Bill of Lading outlines the terms and conditions that govern the transportation of these goods. It also functions as a receipt upon the goods’ commencement of travel and later transforms into a title upon reaching their destination. 

This essential document also plays a financial role, allowing the Consignor to retain control by withholding the original Bill of Lading until payment is received, ensuring a seamless and secure exchange in the intricate world of global freight forwarding.

Incoterms

International Commercial Terms are a set of pre-defined terms set by the International Chamber of Commerce (ICC) that define tasks, costs, and risks in delivering goods. Choosing the correct terms impacts costs, risk management, and logistics, if you’re unsure you can speak to the team at Stockwell to understand the best terms for your shipment scenario.

CIF (Cost, Insurance, and Freight) & FOB (Free On Board) 

If your freight is forwarding internationally, it must belong to someone. CIF and FOB are the two Incoterms that determine exactly who is responsible for goods in transit.

CIF (Cost, Insurance, and Freight)

CIF requires the Consignor to cover shipping costs and insurance. It ensures the Consignee that, from departure to arrival, any mishap is the seller’s liability. However, in CIF the Consignee has less control over costs, modes, and transit times.

An advantage of CIF is the convenience for buyers, as the Consignor manages all shipping arrangements, providing peace of mind to the Consignee.

FOB (Free On Board):

FOB ceases the seller’s responsibility when goods are loaded onto the ship. The Consignee takes over, bearing risks and costs. This offers more control over freight costs, transparency, and risk management for the Consignee.

The advantage of FOB is that it provides control over freight costs, transparency, and efficient risk management for the Consignee.

Terms to get your freight moving

LCL and FCL Freight Forwarding

When it comes to shipments, there are two main categories: Less than Container Load (LCL) and Full Container Load (FCL). It’s important to note that choosing between LCL and FCL is not just about the quantity of goods you’re shipping, it can also impact handling and delivery times.

LCL is economical for smaller shipments but may face longer customs clearance times as it’s shared container space with other shippers

FCL is efficient for larger volumes, providing quicker processing times as the container is from one shipper.

Demurrage and Detention

These terms represent penalties, highlighting the importance of efficiency in busy ports. Delays can cause cascading effects, emphasising the need for timely pick-ups and returns, that’s were penalties come in, acting as a deterrent for late pick-ups.

Cargo Manifest

This document aids customs in identifying high-risk shipments, ensuring safety and streamlining the processing of low-risk goods. It’s a complete breakdown of all the goods being carried on board a vessel.

Customs Duty

Customs Duty is a tax imposed by customs authorities for goods imported or exported. Customs Duty can also include tariffs on certain goods, often imposed by governments to protect domestic industries. To ensure the smooth flow of your freight, the Stockwells team can help you navigate customs brokerage.

Free Trade Agreement

A free trade agreement is an international agreement between two or more countries that eliminates certain barriers to trade, services and investment. Australia currently has eighteen agreements and partnerships in place to benefit exporters and importers.

Dunnage

A less common term, it refers to the material used to secure cargo during transportation, ensuring the integrity of goods. There’s a growing focus on using more eco-friendly and sustainable materials in dunnage to ensure goods arrive in pristine condition with less impact to the environment.

Quarantine Inspection

Goods arriving into Australia are subject to Australia’s strict biosecurity measures that involve inspections by the Department of Agriculture, Fisheries, and Forestry to prevent the introduction of pests and diseases.

Chain of Responsibility (CoR) Law

This Australian law holds everyone in the transport supply chain accountable for road safety, promoting a holistic approach to road safety.

In case you missed it, some more common terms covered

ETA (Estimated Time of Arrival) and ETD (Estimated Time of Departure)

ETA and ETD are pivotal timestamps in shipping, representing commitments and aiding in planning. They provide stakeholders with an expected timeline for a shipment’s movements.

Domestic Linehaul

Domestic Linehaul is commonly known as interstate transport and can help move your good from it’s arrival port to your warehouse destination. Stockwell is proud to offer linehaul and interstate transport services Australia-wide.

Transhipment

Transhipment involves transferring cargo from one vessel to another, often to capitalise on efficiencies or manage port capabilities. It’s a logistical decision based on factors like port capacities, vessel sizes, or cost and time efficiencies.

CBM (Cubic Metre)

CBM is a standardised volume measure crucial for understanding how much space cargo will occupy. Efficient space management is essential for cost-effective shipping.

Deadweight

Deadweight covers cargo and all aspects of a loaded ship, from crew provisions to fuel. It’s a comprehensive term reflecting the total weight a ship can carry.

TEU (Twenty-Foot Equivalent Unit)

TEU is a globally recognised measure that offers a uniform approach to gauging a ship’s cargo capacity. It aids communication between shipping companies, port authorities, and shippers.

Pallet

Pallets, usually made of wood, plastic, or metal, play a pivotal role in ensuring goods are securely stacked and easily lifted and moved by machinery like forklifts.

CFS (Container Freight Station)

CFSs are backstage hubs where goods are readied for shipment or unloaded from containers after arrival. They play a vital role in facilitating the efficient movement of goods.

Still feeling confused with logistics lingo?

The team at Stockwell International are here to help! Our friendly customer service-focused team lives and breathes logistics, and we can speak to you in terms you understand.

Speak to our team about getting your freight moving forward!

The post Logistics Lingo: The freight terms you need to know appeared first on webfx.

Her diverse career path started with two freight forwarders, providing her valuable insights into the industry’s intricacies. Lauren then ventured into arranging exports for a copper tube manufacturer before finding her way to Stockwell, where her impact has been significant.

“My diverse background gave me valuable insights into the intricacies of the industry”

As a Key Account Manager, Lauren wears many hats, undertaking responsibilities that are crucial to maintaining Stockwell’s reputation for excellent service and support.

“I serve as the linchpin between the company and its key clients, resolving issues, visiting clients’ premises for enhanced engagement, and diligently conducting Quarterly Business Reviews (QBRs)”

Lauren’s role is not without its challenges, given the ever-evolving nature of the freight industry. From strikes at terminals, such as the ongoing situation with DP World, to the potential of a global recession, and the unpredictable disruptions caused by weather or port rotations of vessels, she navigates these challenges with adaptability and a proactive mindset.

“Staying adaptable and proactive is crucial in such a dynamic industry”

Despite the hurdles, Lauren sees vast opportunities for growth and improvement within the freight industry. As Stockwell continues to evolve and adapt to the dynamic landscape, clients benefit from innovative solutions and services.

Lauren’s journey at Stockwell is a continuous learning process, but her wealth of experience uniquely positions her to provide valuable insights. Her advice underscores the importance of dedication, adaptability, and a willingness to embrace new challenges.

For Lauren, the most fulfilling aspect of her role lies in personal interactions with clients. Building relationships and rapport with clients she has been speaking to for years is incredibly rewarding, adding a human touch to an industry often defined by logistics and numbers.

“One of the most fulfilling parts of my role is meeting customers in person that I have been speaking to for years and growing my relationship with them.”

Looking ahead, Lauren envisions her future at Stockwell International as an Account Manager, leveraging her dedication and industry experience to propel her career forward. Lauren is an asset to the Stockwell team, contributing to the organisation’s success and making a positive impact on clients.

We look forward to witnessing her continued success.

The post Meet Lauren, our dynamic Key Account Manager appeared first on webfx.