While the difficulties at the beginning of the crisis were mainly limited to imports from Asia, today all trade lanes are under pressure: freight companies are struggling with undercapacity, overcrowded ports, congested container terminals and insufficient infrastructure.

Container ships are getting bigger and bigger and can already load up to 23,500 TEU (Twenty-Foot Equivalent Unit; standard container). When several ships of this dimension arrive at a seaport at the same time, it causes major logistical problems - even in "normal" times. The ports of Singapore and Los Angeles/Long Beach, for example, are often heavily congested due to the large volume of containers. Singapore is enormously important as a hub for the Southeast Asian and Australian markets; the two ports on California's south coast handle about 40 per cent of US sea freight and are crucial for transpacific traffic. No wonder, the punctuality of ships has sunk to an all-time low: while 65 per cent of ships worldwide still arrived on time in the spring of 2020, a year later it was less than 35 per cent. Delays of up to six weeks - for example, on the route to China - are unfortunately no longer uncommon.

Pandemic-related cancellations
Due to the Corona pandemic, major terminals have repeatedly been cancelled in recent months. And there seems to be no sign of a turnaround: A fortnight ago, one of the world's largest port facilities, that of Yantian in the southern Chinese city of Shenzen, was summarily closed after new Covid 19 infections were registered. Hundreds of container ships had to be diverted, causing delays of up to 14 days in imports and exports. Countries like India, Pakistan and Bangladesh are currently in a partial lockdown: although the ports are open, there is a lack of staff in the terminals. The situation is also worsening at the companies responsible for road transport because many truck drivers have dropped out. With the rising infection figures in Malaysia and Vietnam, there was bad news from Southeast Asia again this week.

Systemic deficiencies
The Corona pandemic has not only caused acute problems in sea freight, but has also brought to light a whole series of systemic deficiencies. Among the biggest challenges are the lack of container equipment as well as shipping space. In April 2020, 551 ships with a capacity of around 3 million TEU were decommissioned. After the shipowners put these ships back into service, the corresponding capacities were available to the market again in the fourth quarter of last year. But because almost all companies around the globe are expanding their inventories - and because consumption has already picked up strongly again - demand far exceeds the supply of shipping space. As a result, waiting times of four to five weeks often have to be accepted. The major trade lanes to the USA and Asia are particularly affected by these delays. The situation has been further aggravated by the blockade of the Suez Canal, which has led to delivery delays of 20 days. The "Ever Given" of the Evergreen shipping company is still out of service after being seized by the Egyptian authorities; the 20,000 TEU of this ship are missing in imports and exports. 

Rising prices
In the short and medium term, not much will change in terms of capacity - which is why the shipping companies shy away from making clear forecasts. The fact is that the shipping companies regulate the available space better today than ever before. And it is also clear that additional containers or more ships would further strain the already precarious infrastructure of many ports. It is therefore not surprising that freight rates in all trade lanes have climbed to new highs. And prices will continue to rise sharply: Especially for sea freight to the USA and South America, massive increases must be expected in July.

Cautious outlook
The problems mentioned above will accompany international sea freight traffic for some time to come. Experts agree that the situation will not change before the end of the year and may even persist until after the Chinese New Year (1. 2. 2022). The reasons for this less optimistic outlook are manifold:

• Q3 and Q4 are considered the strongest quarters of the year in the retail sector. Not only is Golden Week in China (1-7 October 2021) just around the corner, but also the year-end spurt (imports and exports for the 2021 Christmas trade have already begun).
• Consumer sentiment is already very good again in the USA and Asia and is also picking up in Europe.
• The economic stimulus programmes launched by various countries will tie up large transport capacities.
• The existing overflow of containers to be transported must be reduced in the coming months before conditions return to normal.

There is justified hope that the situation on the labour market will also ease with the progress of the vaccination programmes in the individual countries. As soon as port workers and truck drivers can resume their work and carry it out without major restrictions, the market will gradually return to normal. Meanwhile, prices for sea freight will remain at a high level.

Possible alternatives
Although the Northeast Passage is navigable between June and December, it is not used by international sea freight traffic - with very few exceptions. The main reasons for this are the lack of safety (shallow draught!) and the lack of infrastructure along the route, but mainly considerations of a political and ecological nature. A valid alternative would be rail transport from Asia to Europe - but here, too, capacities are booked up for weeks. In addition, prices in this segment quickly adjust to those of sea freight. Because overseas passenger flights are still rare, there is also a lack of capacity in air freight - although more and more cargo aircraft are being used. While prices for air freight to Asia have more or less settled at pre-Corona levels, rates for shipments to the USA or South America are now around three times higher than before the pandemic.

Key recommendations

• Talk to your customers and suppliers: This will enable you to organise your transports in good time. 
• Plan much longer lead times: Short-term bookings are now practically impossible or a matter of pure luck.
• Talk to your freight forwarder in good time: Good forecasts help them to book the space they need in good time.
• Check possible options: Do not always run your transports via the northern ports - the southern ports are a good alternative.

(This article was published on the webpage of Switzerland Global Enterprise.)

The “ACI” or “Advance Cargo Information” aims to simplify cargo clearance procedures, to ensure verification of the guarantees of importers and the exporters, as well as to accept the import of certain types of cargoes or prohibit same from entering the Egyptian market.

Procedure

• The importer or his agent has to register on the electronic portal of the National Single Window for Foreign Trade Facilitation “NAFEZA”.
• Prior to launch a shipment to Egypt, there is need to upload cargo information to receive the Preliminary Customs Registration Number called “ACID” or “Advance”. The process of uploading the cargo information must be repeated for each shipment separately!
• The exporter will use the dedicated platform of CargoX solution for blockchain document transfer in which he has to create an account. The ACID must be mentioned on each shipping document to comply. This will enable proper traceability.
• Important: Your cargo will not be discharged from the carrying vessel and will be returned to you at your own expenses if you did not comply with the ACID.

The implementation already started on trial basis as of 1^st April, 2021, whereas the system shall be fully in force as of 1^st July, 2021, for all ocean freight shipments.

Your contact at FEAG International Freight Forwarders Ltd. will be happy to answer any questions you may have with regard to this new regulation.

Since Tuesday, March 23rd, 2021, the ship “Ever Given” has been blocking the Suez Canal with around 17,000 containers on board, thus the most important trade route between Asia and Europe. The consequences of this blockade will affect the supply chains of all driving areas.

The rescue work is in full swing - information from the press and social media differ; we are talking about delays of a few days up to possibly several weeks. What are the possible scenarios for all those involved in the flow of goods?

• Bypassing the Suez Canal
  A possible alternative route is the detour via Africa. The longer transit time of approx. 7-12 days further results in massive additional costs for fuel. The next few hours around the progress of the salvage work will decide whether the major shipping companies consider the detour via Africa.
   
• Delays after the blockade
  An average of around 50 vessels pass through the Suez Canal every day. As soon as the free passage is guaranteed again, the reduction of the backlog will take several days, possibly a few weeks.
   
• Port Congestion
  Overloading of the terminals in Europe and Asia must be expected. As soon as the Suez Canal is freely passable, the ships will head for the port terminals at a greatly increased rate. The loading and unloading of the ships will drag on.
   
• Adjustment of the ship timetables
  It is to be expected that the shipping companies will adapt the ships' timetables to the circumstances. Possible scenarios are omitting ports ("port omits") or changing the port sequence.
   
• Blank sailings
  It is very likely that the shipping companies will withdraw ships from other sailing areas and use them for Asia-Europe traffic. This in turn has an impact on the affected trades, in which the vessels will be missing. The consequences are "blank sailings" (interruption of the weekly departures).
   
• Shipments in the coming weeks from Europe and Asia
  The currently blocked vessels are all intended for loading in the coming weeks from Europe and Asia. Long delays and possible failures (“blank sailings”) are to be expected for all routings.

FEAG International Freight Forwarders Ltd. continue to monitor the situation and provides regular updates at this point.

• Primary materials from the EU are considered to be third countries in the manufacture of goods in Switzerland, even if they were previously imported duty-free. For exports to the United Kingdom, these may no longer be considered as originating goods when calculating the origin. We therefore advise Swiss exporters of goods to the United Kingdom to check their preference calculation.
• If Swiss exporters purchase goods from the EU with preferential treatment and send them on to the United Kingdom, no EUR 1 movement certificates / declarations of origin may be issued. Customs duties must be paid by the importer when importing into the UK.

Further information can be found on the webpage of the Federal Customs Administration. 

Over the past week there occurred delays in discharging goods in Sydney, massive congestion surcharges and now vessels have started skipping Sydney altogether. Unfortunately, these challenges are beyond our control.

Please be aware that for cargo to Sydney there may be charged Port Congestion fees.

The recent announcement of vessel omissions at Sydney is impacting both imports and exports.

We apologise for the impact on your consignments and appreciate your understanding. Be assured that our ocean freight teams do their utmost and work hard to care of your business.

If you have concerns about a particular order, please get in  touch with your local ocean freight contact at FEAG International Freight Forwarders Ltd. who will be happy to help.

This is a general strike notification with an indefinite period of time, and will impact many marine terminals in the Port of Montreal.

All involved parties are doing the utmost to minimize delay and extra costs.

For more updates and information, you can always get in touch with your contact at FEAG International Freight Forwarders Ltd.

The governments of Australia and New Zealand have again decided that sea freight shipments with certain categories of goods imported into Australia and New Zealand between September 1, 2020 and May 31, 2021 must be fumigated or heat treated. The marmorated stink bug is to be kept away from Australia and New Zealand, as it could severely affect the agriculture of both countries.

This means that the same rules as last year apply. Further information can be found under the following links: for Australia, for New Zealand.

Link of DSLV (the German Association for Transport and Logistics)

For your upcoming shipments to India we will be pleased to track departure options on full freighters. Contact mailbox@feagint.ch.

FEAG International Freight Forwarders Ltd. is very concerned about the geographical extension of the coronavirus (COVID-19) outbreak, especially about the rising number of cases in Europe and in our home country. Our thoughts are with all affected worldwide!

FEAG is following the World Health Organization’s (WHO) strategy of disease containment. So far, the WHO has not imposed restrictions on the movement of goods across borders and international trade. However, local authorities may impose restrictions for specific areas showing clusters of infections. Of course, we are following such measures strictly.

The health and the safety of our employees has highest priority for us. In this respect, we are adopting the WHO guidelines for all our staff.

We are ordering 14 days self-quarantine for employees returning from specific affected regions. We also prescribe following proper precautions and recommend contacting the local medical services for all employees showing symptoms like fever, cough or difficulty in breathing. Besides those measures we instructed our employees to:

Wash hands frequently with soap and water and use alcohol-based hand sanitizer.

Avoid touching mouth or eyes to limit the risk of infection spread.

Cover their mouth and nose with a tissue, or a sleeve or flexed elbow when coughing or sneezing, throw the used tissue into a closed bin immediately after use; wash hands/skin well afterwards.

Limit physical contact with colleagues and visitors in the workplace: reduce the frequency of face-to-face contact and avoid direct contact, e.g. hand shake. Instead of shaking hands we recommend to welcome visitors with a smile.

We have available hand disinfectants in all our offices and encourage our staff to follow the above WHO recommendations. In order to be effective in this respect, we encourage all our partners to also follow the same guidelines.

We are monitoring the situation very closely and are prepared to adapt further measures if necessary.

The situation does not seem to be calming down. Yet, the effects on world trade and thus logically on the forwarding and logistics industry have intensified:

Labor and infrastructure situation

Labor is only slowly coming back to work but only limited number of employees physically go to office. There is limited connectivity.

Offices in China have restrictions such as health check at entry/exit, no use of public infrastructure such as toilets, shopping for food and drinks. Airconditioning has been switched off.

Truck-drivers are missing. Only approx 30% of the truck dirvers are working.

The infrastructure in most ports  (such as Shanghai) are closed for cargo coming from Mainland China. They accept it, but are putting it into a 14 days quarantine.

Most airlines have already extended their suspension of flights from/to China. As an example, British Airlines is not flying until end of April 2020, Lufthansa and Swiss until end of March 2020.

China outbound business

Production is almost at zero and if cargo has been produced it cannot go out.

Inland transportation to the ports very limited.

Ports have tough security measures in place that will cause delays.

China inbound business

Imports to China to non-critical areas can happen but with massive delays.

No transportation into critical areas, also because drivers will not go there.

Equipment and capacity situation

Worrying shortage of equipment expected in Europe. While Reefers are already sold out, we expect similar situation for Dry Containers very soon.

Carriers are managing their capacity with numerous blank sailings affecting both directions.

Shipping lines advice on some emerging quarantine requirements imposed by regulatory bodies for vessels which have visited or are from China.

For CIF (cost insurance freight) and CIP (carriage insurance paid) the rules of Incoterms® 2020 provide for an adjustment of the necessary insurance coverage.

FCA, DAP, DPU and DDP take into account that the transport can also be handled by one's own means of transport.

DAT (delivered at terminal) was renamed into DPU (delivered at place unloaded).

Please find here an overview of the Incoterms® 2020 for download 

Information on the most important changes in comparison can be found here.

The mostly used fuel for ocean ships (so called "Bunker") is a heavy heating oil which is gained as residue from crude oil distillation. Crude oil contains sulfur which after combustion in the ship’s motor produces emissions. Sulfur oxides (SOx) are damaging to human health, causing respiratory ailments and lung diseases. In the atmosphere SOx can lead to acid rain, can damage plants, forests and water and contributes to acidification of the ocean. It must therefore be attempted to reduce these SOx emissions of ships and thereby improve air quality and better protect the environment.

Concretely this means: from January 1, 2020 the limits for sulfur in crude oil which will be used on board the ships that travel outside of the identified emission control areas will be reduced to 0,50 % m/m (mass per mass). Either the ships as from 2020 will be tanked with low sulfur fuel or they will be furnished themselves with an exhaust gas cleaner, so-called «Scrubbers» on the ship.

This Scrubber comes in three forms: "Closed Loop Filter" (exhaust gases are cleaned and the pollutants are gathered in a tank which is emptied in the harbor for corresponding additional handling), "Open Loop Filter" (exhaust gases are cleaned and the cleaning water together with the pollutants contained therein are discharged into the sea) and "Hybrid Filter“ (that can be adjusted either for operation in an open or closed loop).

Seen as a whole, the most environmentally friendly form is the Closed Loop because such systems do not emit either in the atmosphere nor in the water provided the waste is treated after collection in the harbors. The Open Loop Filter indeed fulfills the requirements of the sulfur guidelines and reduces the emissions from shipping in the atmosphere, its use leads however to heavy metals, sulfur, etc. which land in the sea together with the cleaning water. China, Hong Kong and Singapore have already set forth that no ships with Open Loop Filter systems on board will be allowed in their harbors. It can be assumed from this that other Southeast Asian countries and Japan will likewise follow.

Whether it is equipping ships with filters or the use of low sulfur fuel: in both cases the operating costs for environmental protection will increase significantly. Therefore it has already been clearly signaled by the shipping companies that the introduction of surcharges at the latest from the time of tanking with low sulfur fuel (meaning: already 60 to 90 days before the key date of January 1, 2020) are unavoidable in order to cushion the impact of the additional costs arising which will make the entire transport by sea more expensive as from 2020. Several shipping companies have announced increasing their surcharges already before the key date of January 1, 2020 because they already have higher operational costs in 2019 due to the adjustments.

Due to the re-equipping of ships, first of all the short-term overall capacity on the world seas will be decreased because the installing of Scrubbers will take approx. 60 days per ship. In addition and in the long run the loading capacities of ships after the re-equipping will be smaller than before the adjustments because both the Scrubber and the Low Sulfur Tanks require more space on the ships.

Many experts assume the following consequences from the IMO2020 regulation: Increased use of slow steaming will lead to the increase of the range of ships. In order to be able to preserve the transit times at key harbors and therefore remain competitive, the shipping companies could be forced to leave out individual harbors from their fixed routes.

Additional information can be found directly at IMO.
 

Text source: SPEDLOGSWISS

This stricter emissions regulation will come along with significant additional costs for the ocean carriers. For this reason, Hapag-Lloyd has developed the so-called Marine Fuel Recovery (MFR) mechanism, which will be gradually implemented starting on 1st January, 2019. For additional information…

The certificate ISO 9001:2015 confirms that Lamprecht Transport Ltd. complies with the current international ISO standards and the therein specified quality standards. The certified processes guarantee the high quality of our services and enable a continuous improvement in favour of our customers.

Our quality system is an important tool in our daily work. The operational procedures become thus traceable and transparent.

We are pleased to inform you that the quality of our clearly set processes have been approved again by a neutral assessment company.

Our new certificate in compliance with ISO 9001:2015 will be valid until July, 2021. The certificate for download.