International Forwarding Association Blog » Sea freight in Europe
Sea freight in Europe
Ocean freight accounts for about 90 percent of global shipping, which makes it the main mode of transportation. It is also the preferred mode due to efficiency, cost-competitiveness, and heavy cargo capability. There is also a degree of flexibility in how freight rates are calculated. In some cases, rates cover shipping, stowage, and unloading at the port of arrival but not loading and stowage at the port of origin. In other cases, carriers are not responsible for trimming, stowage, unloading, and loading. Other factors that affect rates include season, distance to destination, type and amount of cargo, fuel costs, and… Read more
There is a significant decline in consumer demand, with logistics CEOs noting a 20 percent decrease in ocean freight orders for the last two months. The pullback is evident across a wide range of products, ranging from some types of apparel to industrial, housing, and machinery. The main reasons for the drop in orders are lack of clarity on demand, combined with excessive inventory. CEOs share the opinion that the number of waiting cargo ships is expected to drop. Outbound tender rejections are also signaling a decline in orders. Inventory Issues Demand for expensive items is still strong,… Read more
Green corridors are routes that are exclusively used by ships running on alternative fuels. Recently, their feasibility has been widely debated by industry players. Most agree that green corridors can help de-carbonize the shipping industry but there are still some uncertainties about implementing them. But first comes first – what are green corridors and what are the different types that industry players can use? The Logic behind Green Corridors Broadly speaking, green corridors are specific routes that make zero- and low-emission shipping more feasible. They correspond to economic zones where industry players can implement new business models and… Read more
Ocean carriers are increasingly offering air cargo services as customers are looking for an intermodal logistics solution to ship freight around the globe. According to experts, it is more than just simplifying logistics but also about making it effective, efficient, and optimized. Some of the largest shipping companies have already added aircraft to their fleet while others have opened an air cargo division. This is because global supply chain disruptions have created a demand for cargo to be flown. Why Customers Choose Air Freight In the majority of cases, air is only part of the solution. Some customers… Read more
The drive towards sustainability is transforming the shipping industry. Innovative business models, next-generation technology, and changing regulations will have a profound effect on both carriers and forwarders. Business as usual is no longer acceptable because societies and consumers are increasingly aware of the importance of sustainable practices. Today, consumers demand more transparency and new policies aimed at reducing the impact of pollution on nature and human health. Changing Focus and Landscape Changing trading patterns and regulations, together with a growing focus on decarbonization and climate change are set to transform the shipping industry in the years to come…. Read more
Apart from the Suez Canal blockage in March, 2021, many big commercial vessels shipping cargo were stranded outside ports last year, from South Carolina to Europe and Singapore. Why all this happened? Covid-19 Pandemic When lockdowns and travel restrictions were imposed in 2020, many started ordering gym equipment and office furniture, setting up work from home and turning their basements into gyms. There has been a surge in orders globally. Not surprisingly, this translated into a 48 percent increase in retail purchases while online sales increased by 24 percent. Yet, the bulk of this trade (90 percent) is… Read more
Shortage of expert workforce, environmental regulations, demand and supply imbalances, and supply chain bottlenecks are some of the main challenges facing the shipping industry. Emerging innovations and trends help reduce the negative impact on carriers and forwarders. Blockchain, robotics and automation, the Internet of Things, big data and analytics, and artificial intelligence are successfully integrated in different segments to improve safety and efficiency. Also, cybersecurity and 5G, mixed reality, and augmented and virtual reality are paired up with data-sensitive technologies to minimize safety risks and ensure continuous operations and robust functioning. Maritime Operations AI There are numerous applications for… Read more
The crew change crisis seem to have stabilized despite a shortage of Ukrainian and Russian mariners and the restrictions imposed in Japan. Figures show that the number of crews stranded onboard ships beyond contract expiry is down to 4.3 percent in June, compared to 4.5 percent in May, 2022. The number of mariners onboard ships for 11 months or longer has remained steady at 0.3 percent. According to ship managers, there are both negative and positive crew change trends. Positive Trends The number of confirmed cases onboard ships has declined while China is easing restrictions on crew changes, which have… Read more
Recent Covid-19 outbreaks and the sanctions against Russia are causing crew shortages and pushing wages up. Outbreaks in the Far East have prevented Chinese seafarers from boarding ships while Russian crews are unable to join ships due to travel limitations and visa restrictions. This has resulted in reduced availability on a global scale and a serious manning and recruitment crisis. Wage increases can be seen across all ship types and ranks and for some ranks, remuneration increases are quite steep. Causes for Crew Shortages In addition to new Covid-19 outbreaks and the sanctions against Russia, favorable charter markets across… Read more
The war in Ukraine has caused a serious supply chain disruption which is likely to exacerbate the crew crisis, port congestion, and supply chain disruption caused by the prolonged pandemic. International freight forwarding has been hard hit, with the burden of sanctions, the disruption of trade with Ukraine and Russia, and the loss of vessels and life in high-risk areas in the Black Sea. Carriers face multiple challenges such as cyber risk, availability and cost of fuel, and crews stranded in Ukraine waters. Implications for Global Trade According to the International Monetary Fund, the ongoing conflict is likely to… Read more
Illicit shipping practices are often used by countries that seek to evade economic sanctions. Such practices include flag hopping and false flags, voyage irregularities, altering vessel identification, manipulating or disabling vessel automatic system identification, and falsifying ship-to-ship transfers and vessel and cargo documents, among others. Flag Hopping and False Flags A false flag operation is where a carrier pretends that a ship is sailing under a flag state without the knowledge, permission, or consent of that state. Flap hopping, on the other hand, involves changing the flag state of a ship with the goal of avoiding identification by the… Read more
The liquid and dry bulk markets will be affected this year due to the ongoing conflict in Ukraine and the supply chain disruptions that are expected to continue through 2022. Experts predict trade growth to be 1 – 2 percent based on type of cargo. While trade growth has lost momentum due to the war, there are mitigating factors such as route changes and cargo flows being redirected. To what extent carriers will be impacted depends on contracting and specific markets. Types of Cargo Most Affected According to analysts, coal is the main dry bulk flow that is expected… Read more
Four UN organizations recently released a joined statement urging carriers, governments, local and national authorities, and other stakeholders to ramp up efforts to deal with the crew change crisis that has affected over 400,000 mariners since the onset of the pandemic. The statement issued by WHO, UNSTAD, IMO, and ILO notes that more efforts are needed to protect crew safety and health and minimize the risk of supply chain disruptions. The four organizations also stress on the fact that due to increased vaccination rates among crews and the gradual easing of travel restrictions, the situation shows signs of improvement. Developments… Read more
The ongoing health crisis has affected shipping in many ways, from the medical handling of suspect Covid-19 cases and crew repatriation to vessel attendance for statutory purposes and certification and delayed repairs and retrofits. Handling of Suspect Cases Medical handling of suspect cases can be a challenge due to shortage of equipment and supplies such as hand gloves, face masks, chlorine, hand sanitizer, sodium lactate solution, and pain and fever medications. Transferring crew ashore has also proven a challenge, given that in many countries crew is not allowed to disembark for treatment. Crew Changes and Repatriation The global crisis… Read more
Commercial vessels can be generally divided into wet and dry cargo ships and vary in dimensions /width and length/. Draft or water depth is a limitation that determines the minimum water depth a boat or cargo ship can navigate. Beam or a vessel’s widest point determines the canal locks a commercial ship can fit. Based on size, dry cargo ships can be sub-divided into handymax, handy size, seawaymax, small handy size, etc. Example of wet cargo ships are ULCC, VLCC, and Q-Max. In addition, ships also fall in several major categories based on type of cargo, including reefer, multi-purpose, dry… Read more
A year and a half into the pandemic, the global shipping crisis is getting worse, with shortages of goods and rising prices. This year consumers are likely to face fewer choices during the holiday season. Giants such as Hasbro, Crocs, and Adidas already warned of disruptions due to the fact that supply chains are not expected to ease before next year. The cost of shipping cargo from China to Europe and North America has been climbing over the last couple of months, the main reason being unmet demand. Why Port Congestions Cause Product Shortages? Terminal shutdowns due to coronavirus outbreaks… Read more
The 2021 Seafarer Workforce Report released by the International Chamber of Shipping and the Baltic and International Maritime Council on Wednesday warns about a possible shortage of sailors to staff commercial vessels over a five years period. Steps should be taken to increase numbers and ensure the smooth movement of cargo across the globe. The proposed measures are increased recruitment and training to boost the supply of maritime crew by 2026. The Crisis Is Looming At present, demand for maritime crew is estimated at about 1.45 million, including some 790,500 officers. There is a supply shortage of about 16,500 officers… Read more
2020 was a difficult year for most sectors, and the shipping industry is not an exception. A year and a half into a global health and economic crisis, freight forwarders face a number of challenges, from marine insurance claims and risk of cargo damage to machinery breakdown and delays of servicing of equipment and vessels. Servicing of Merchant Ships With physical distancing protocols and lockdown measures still in place, delays of servicing of emergency equipment and merchant ships could endanger crew and offshore staff safety. Ship yards and ports already face delays due to staff in quarantine and shortage of… Read more
Global vaccinations of crews are not going fast enough to prevent outbreaks onboard vessels, resulting in trade and supply chain disruptions and endangering the life of seafarers. The fact that vaccinations are going too slowly is potentially slowing economic recovery for countries trying to pull out of a deep, pandemic-induced recession. Effect on Supply Chains Outbreaks onboard ships could have a significant negative impact on global supply chains now that Europe and the U.S. are heading for recovery and businesses are stocking up for the holiday season. Industry experts warn that supply chain disruptions are likely to occur as some… Read more
The slow circulation of containers, together with increased cargo volumes, has led to supply chain disruptions and reduced capacity, resulting in significant delays and rate increases. Box shipping rates have spiked due to strong demand and container shortages and are projected to continue going up. Reasons for Slowdown in Circulation The slow circulation of containers is due to multiple factors, including higher volumes, increased demand, and reduced labor productivity at marine terminals and warehouses. While some are blaming carriers for reducing capacity to match demand with supply, the main issues seem to be service reliability and labor productivity, combined with… Read more
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