COSCO adapts its bulker / pulp carrier to ship cars amid capacity shortage

COSCO adapts its bulker / pulp carrier to ship cars amid capacity shortage

In the unprecedented shipping markets witnessed during the pandemic, cargo types have migrated to all manner of alternate vessels, a new phenomenon which has seen boxes taken on bulk carriers, logs on newcastlemaxes and now cars in a pulp carrier.

China’s largest maritime conglomerate, state-run COSCO has developed a foldable car frame (pictured), where vehicles can then be stacked into ships not traditionally associated with the movement of automobiles.

COSCO Shipping’s newest bulk carrier departed China on August 10th on its maiden voyage to South America, but instead of the normal operations sailing empty outbound to get the pulp cargo, the company has come up with a novel application to transport new cars aboard bulk carriers. According to COSCO, the adaptations were developed during the construction of the vessel to make it multi-purpose and fill the shortage for vehicle transport vessels.

  

The 62,500 dwt vessel named COSCO Shipping Wisdom was built at China’s Dalian Shipyard as the fifteenth vessel in the class. She measures 662 feet in length with a 106-foot beam. Her six cargo holds which give the vessel hold capacity of 72,5000 cubic meters are outfitted with a dehumidification system to meet the strict quality requirements for pulp cargo during transportation.

The shipping company reports that modifications were made to the floor of the six holds to accommodate the feet for specially designed racks. The alterations do not affect the vessel’s loading capacity but permit them to place specially designed folding racks standing up to eight levels high into the holds on which cars will be loaded. The vessel can accommodate approximately 1,000 cars, which gives it a capacity similar to a smaller vehicle carrier. When the vessel reaches South America, the cars will be offloaded and the racks can then be folded and stowed so that vessel will load its normal pulp cargo for the return voyage.

COSCO reports that it has received strong demand for the new service and that it will permit them to increase the efficiency of the vessel which otherwise would have made the outbound voyage with no cargo. The company has signed agreements with major Chinese car manufacturers and plans to maintain outbound car transport as an ongoing service. They are also exploring fitting the racks to other vessels of the class.

The shipping line reports working with Dalian Shipyard and that they were able to increase the efficiency of the ship and complete the construction despite the pandemic. In addition to the novel cargo arrangements, the COSCO Shipping Wisdom’s main and auxiliary engines are equipped with SCR systems, which meet the NOxTIERIII emission requirements. The ship was classed by the China Classification Society and also obtained additional notations such as smart ships and green ecological ships. 

The delivery and naming ceremony for the new ship was conducted on August 10. She departed August 18 from the Taicang Port near Shanghai. She is bound for Valparaiso before proceeding to Lirquen where she will load the cargo of pulp for the return trip to China.

Logistics disruption with the 8 day Strike at Felixstowe Port

Logistics disruption with the planned Felixstowe Port Strike

Around 1,900 members of the Unite Union are set to go on a 8 day strike over pay (from 21 – 28 August) at the Port of Felixstowe after talks between employers and the union broke down a week ago. In late July 92% of union members voted for strike action over Felixstowe Dock and Railway Company offering a 5% pay increase to its workers.

With workers now set to walk out of the UK’s largest port on 21 August Russell Group has used its ALPS Marine analysis to calculate the value of goods that will be impacted by the strike action. The total impact was put at $800m in trade, with clothing accounting for some $82.8m of that figure, and electronic components a further $32.3m. The figures are based on analysis of previous August trade flows at the Port of Felixstowe.

The disruption at Felixstowe spells more uncertainty for businesses, consumers and governments alike. Ports across the globe are facing congestion, due to a large backlog caused by the pandemic.

“As our analysis has shown today, these strikes could increase the backlog and in doing so, create even more delays, and the effects of this will only be registered in the coming weeks and months."

Disruption has dogged the global supply chain since the onset of the Covid pandemic over two years ago and this year in Europe has been exacerbated by port worker strikes in major ports such as Hamburg.

Felixstowe not only handles large volumes of UK imports but also exports with $108m moved to Rotterdam and $138m to Hamburg. Smaller ports in the UK are seen as potentially benefitting from the strike with volumes and services diverted to other terminals in the country!

Why is everyone going on strike?

Around half of containers brought in to the UK are transported via the port. A spokesperson for Felixstowe Dock and Railway Company said that the port has not had a strike since 1989.

Workers in other industries have also announced industrial action, most notably in the transport sector, over pay as well as terms and conditions.

Negotiations over wages has led to several rail strikes over summer, as workers seek higher salaries to keep up with sharp price rises for goods and services. The Bank of England has warned the UK will fall into recession in the final three months of this year when inflation is set to hit more than 13%. It announced the largest interest rate rise in 27 years - up 0.5% - to 1.75% in an effort to calm inflation.

Upcoming strikes include those on Saturday, 13 August by train drivers from nine rail companies, and further rail staff walkouts on 18 and 20 August by members of the RMT union.

Customers will face disruption to train services as 6,500 train drivers are expected to join Saturday's walkout.

All About the 3.5-km-long freight train, Super Vasuki

The Indian Railways recently conducted a test run of the 3.5-km-long freight train, Super Vasuki, with 295 loaded wagons carrying over 27,000 tonnes of coal between Korba in Chhattisgarh and Rajnandgao in Nagpur, making it the India's longest and heaviest train. 

The video of the train passing through the Kothari Road station was shared by Railways Minister Ashwini Vaishnaw on his Twitter handle. In comparison, Australia's BHP Iron Ore has a length of 7.352 km, making it the longest freight train in the world (also the longest train overall). 

The train run by the South East Central Railway left Korba at 13:50 on August 15 and took 11.20 hours to cover the distance of 267 km. This is the longest and heaviest freight train ever run by the Railways, the national transporter said, adding the train takes about four minutes to cross a station.

The amount of coal carried by Super Vasuki is enough to fire 3000 MW of power plant for one full day, officials said. This is three times the capacity of existing railway rakes (90 cars with 100 tonnes in each) which carries about 9,000 tonnes of coal in one journey.

The train was formed by amalgamating five rakes of goods trains as one unit. The Railways plans to use this arrangement (longer freight trains) more frequently, especially to transport coal in peak demand season to prevent fuel shortages of power stations, the officials said.

Earlier this year, coal shortages had pushed the country into a severe power crisis.

Stop Using Spreadsheets to Manage Your Global Supply Chain

Your ocean shipping and international logistics processes & your overseas supplier collaborations, are still run on spreadsheets and email. In our globally connected economy, with viral marketing events, volatile consumer demand, spontaneous geo-political developments and increasingly tangled freight networks, maintaining your organization’s dependence on collecting, tracking and sharing supply chain data with Excel is perhaps the biggest threat to agility, resilience, visibility and profitability.

Every supply chain and logistics professional is already an expert with spreadsheets. The logistics field and even the procurement fields tend to attract people with strong planning and problem-solving skills, with industrial engineering backgrounds or project management strengths. In other words, people who are good with numbers.

For all these rational-minded professionals, the appeal of the spreadsheet, with its tabular layout, integral calculation capabilities, and data manipulation and visualization options, is clear. We rely on Excel to sort, rank and filter large volumes of information. We love that sense of order and control we get when a complex supply chain process or product flow is neatly captured in a list of steps and a matrix of stakeholders and a KPI chart of useful metrics. Spreadsheets help us identify the outliers and exceptions that threaten our carefully calibrated supply chain plans. They are a great way to share information across our business because their efficient file sizes make them easy to attach to email!

Wait…Spreadsheets were never intended to model or manage the real-time complexity and multi-dimensional inter-dependencies of today’s turbulent global supply chain operations.

Spreadsheets are not suitable for complex, n-dimensional problem spaces with lots of moving parts and fast-changing decision-support scenarios. They’re especially poor at handling multi-party business collaboration; the undeniable hallmarks of our global supply chain operations today.

Advantage supply chain management solutions 

There are several supply chain management solutions offering the benefits of cloud access and connectivity today. These offer the ability to manage widely dispersed supplier networks, multi-enterprise trade collaboration. They include a canonical data model to harmonize and standardize data, and global implementation resources to onboard and educate your community of suppliers and logistics service providers so they can benefit from more efficient, digitalized workflows with you, the buyer.

In fact, the analyst community now recognizes a unique category of supply chain network technology that has quietly been growing for the past two decades. This technology has emerged in reaction to the many limitations of legacy, on-premise software from traditional categories of supply chain planning, international logistics, transportation management, direct procurement and global supplier management. This solution category of trade network platforms or commerce network platforms has emerged as the approach of choice for leading supply chain organizations. They use them every day to help move their multi-national partner ecosystems toward a Supply Chain 4.0 level of business alignment, transparency and frictionless collaboration.

So why haven’t more companies actively moved to replace those slow and brittle Excel-based workflows with multi-enterprise supply chain business networks?

Building a strong business case

The “digital transformation” that every chief supply chain officer claims as a top priority (and has for years) comes with a significant price tag. SaaS fees for the technology itself often pale in comparison with the heavy lift in change-management effort, both for internal stakeholders and external trading partners. And, if all parties are to begin realizing the full benefits of digitalization, change is unavoidable. The necessary investments and global project-management resources must compete for funding and approval with other business opportunities and needs. Building the complex business case to navigate that project and funding approval process can be daunting enough to drive many organizations back to their familiar-but-flawed spreadsheet processes.

A major hurdle to business case development for supply chain digital transformation involves the fragmented nature of most supply chain operations. Functional silos like transportation, warehousing, procurement, planning and inventory management often aim for different goals and work with limited alignment.

But consider who in the business owns a multinational supply chain. Suppliers/contract manufacturers fall under procurement. Inland consolidation or trans-ship facilities may fall under inventory control. Ports of origin and departure probably fall under transportation or even trade compliance.  Upfit or final assembly is managed by manufacturing. Free Trade Zones or distribution center operations might be inventory control again.

How difficult is it to build a business case for a foundation of end-to-end digital visibility that crosses all these departments and functional responsibilities, while clearly reflecting the benefits and the required change and investment proportionately for key stakeholders?

Major Benefit Areas

For almost any supply chain project investment, the major benefit areas fall in to five categories:

•    Product velocity

•    Assurance of supply

•    Worker productivity

•    Spend efficiency

•    Cash Conversion

 

These are business-wide performance categories that impact the balance sheet and the bottom line. Identifying target improvement areas across your supply chain operations where spreadsheets currently reign, then tying them back to these high-level concepts can help you see beyond internal departmental boundaries and build a robust financial model for net value from a new technology investment. That research and analysis and the financial model will help evaluate and test your value hypothesis across many scenarios. Then you can feel prepared to gain the senior leadership support required for successful transformational projects.

If your company is currently risk-averse or cash-constrained, a supply chain technology upgrade may only be approved for discrete functions, or for one or two business units as pilots, rather than as an end-to-end solution. Still, the effort to consider the full scope of potential benefits from a more extensive digital transformation in your business case offers many benefits.

Your analysis can help you choose the right technology approaches even for limited-scope projects that won’t leave you stuck with a dead-end point solution. Set your functional improvements on a path where successive but incremental phases of new technology adoption can build on previously realized value, in order to lower total-cost-of-ownership and time-to-value for subsequent phases.  

There is a truism in engineering circles: focus on local optimization and you’ll never find the globally optimal solution. In other words, limiting your supply chain improvement goals or steps to benefitting only one department or function at a time can completely miss the really big benefits that transformation across functional silos has to offer.

Global supply chain operations—the inbound or first-mile of the product journey—have chugged along behind the scenes during a decade of global economic and shipping stability. We were lulled into complacency about the first mile, and technology investment seemed a much higher priority in final mile and end-customer fulfillment.

COVID and post COVID 

Now we all understand that if we don’t get our goods and materials in from overseas in a reliable and cost-effective way, we will have nothing to make or to sell to our end customers.

The urgency to upgrade our supply chain technologies to connect with growing networks of suppliers, logistics service providers, international and domestic carriers has never been so high. We need to integrate those data and collaboration streams with more continual supply chain planning and nimble “sense and respond” processes that recognize demand trends faster, so that we can right-size inventory, optimize our working capital and seize market opportunities if they suddenly appear.

We know that our ERP systems, and now our spreadsheet applications, can’t deliver the agility and supply chain visibility needed to protect our company’s profitability. It’s time for supply chain network technology. The need is clear for multi-enterprise collaboration and coordination, for financial supply chain enablement and oversight, for converging strategic and tactical decision-support based on higher quality, real-time data.

Spreadsheets are holding your supply chain operations back. The best and fastest way forward lies with multi-enterprise supply chain business networks, the digital platforms that can help your business thrive in even the most turbulent future.

Visibility Technology & Real Time Tracking could be a Game Changer: Hapag starts installation of sensors in dry container fleet

Visibility Technology & Real Time Tracking could be a Game Changer: Hapag starts installation of sensors in dry container fleet

Hapag-Lloyd will equip its fleet of 3 million dry containers with sensor devices by 2023 in order to track its box inventory and provide better shipment visibility to customers. After successfully introducing real-time monitoring for its reefer container fleet in 2019 with the IoT product Hapag-Lloyd LIVE, the company will start to install newly developed devices to all standard containers of its three million TEU fleet. Hapag-Lloyd continues to further digitalize container shipping and Hapag-Lloyd LIVE will become available for customers of its standard containers during 2023.

About the Smart IoT tracking device

The devices will be able to transmit data on a real-time basis from each container and by this make the supply chain more transparent and efficient. They can supply location data based on GPS, measure temperature and monitor any sudden shocks to the container. In future, additional sensors could be added through Bluetooth. To ensure safety for crews, cargo, and vessels the devices are designed and certified to the ATEX Zone 2 explosion proof standard. The company will continue to work together with key customers to develop and expand the product and its features based on their feedback.

The shipping container monitoring device integrates the latest energy harvesting technology and low-power consumption techniques to ensure ultra-long lifetimes with high-frequency data sending. The container fleet will be equipped with devices both from established TradeTech partner Nexxiot AG starting this summer as well as with devices from ORBCOMM, a global leader in Internet-of-Things solutions, starting later this year. The installation of tracking devices follows a move by the carrier in 2019 to equip its reefer container fleet with devices from a third provider, Globe Tracker, part of its Hapag-Lloyd LIVE platform.

The move by Hapag-Lloyd to make each container in its fleet trackable via a device lays down a marker in an industry that has been hesitant to bear the cost to install physical sensors on dry containers. Shipping lines have largely feared they would struggle to recoup that investment by passing on incremental costs to shippers.

New dynamics and the Need for Visibility

The dynamics have changed. The need for visibility from shippers is higher due to longer and more volatile transit times during global supply chain disruptions, the cost of devices has come down, and freight rates have risen, making each shipment inherently more valuable.

Neither Hapag-Lloyd nor the sensor providers immediately responded to requests for clarification on the container line’s capital outlay for equipping its box fleet with hardware.

“Going forward, we will be able to provide all our customers with real-time track and trace data, giving them full visibility of any container movement worldwide,” Hapag-Lloyd Chief Operating Officer Maximilian Rothkopf said in the statement. “We will be able to detect delays earlier, inform impacted customers automatically, and initiate counteractions at an early stage.”

Real-time tracking will be “a game changer 

Hapag-Lloyd Chief Operating Officer Maximilian Rothkopf added the carrier’s approach to real-time tracking will be “a game changer for the entire container shipping industry.”

Hapag-Lloyd rivals CMA CGM and Mediterranean Shipping Co. (MSC) have made their own investments in container sensors, using devices from Marseilles-based Traxens, but none have committed to equip their entire dry box fleet.

Aside from the ability to offer customers visibility into the location and condition of goods via the tracking devices, such hardware also enables Hapag-Lloyd to have more real-time and predictive insight into its fleet of containers.

Grain Exports from Ukraine Restart, might ease the developing Global Food Crisis

Grain Exports from Ukraine Restart, might ease the developing Global Food Crisis

The first ship carrying Ukrainian grain sailed on August 1st from the port of Odesa, after a deal was brokered by the United Nations (UN) and Turkey. This move is likely to release large supplies of Ukrainian crops to foreign markets and ease a developing food crisis.

The Sierra Leone-flagged cargo ship Razoni left Odesa carrying over 26,000 tons of corn meant for Lebanon. Russia and Ukraine signed individual agreements with Turkey and the UN, clearing the way for Ukraine — one of the world’s key “breadbaskets” — to export 22 million tons of grain and other agricultural goods that have been stuck in Black Sea ports because of Russia’s invasion.

The infrastructure ministry of Ukraine said that 16 more ships filled with grain are waiting in the ports of Odesa. All these ships have been blocked since the beginning of Russia’s full-scale invasion of Ukraine in February.

If things go as per plan, unlocking of ports in the Black Sea will ease the food shortage in many countries and generate much-needed foreign exchange for Ukraine.

Ukraine: A Key Component of Global Food Supply

Many countries across the Middle East and North Africa rely heavily on wheat and maize imports from Ukraine. In 2021, Ukraine boasted a record-high grain harvest of 84.5 million tons and a record-high harvest of oilseeds at 22.6 million tons. Overall, Ukraine’s food and agriculture exports comprised over 40% of total Ukraine’s merchandise exports in 2021, or nearly 15% of GDP.

India is among the top buyers of sunflower oil from Ukraine. In the past few months, a large component of inflation in India has been import-driven. 

Food and Agricultural Organization’s Focus on Ukraine

To address the impacts of the war in Ukraine on the global agricultural sector, the Food and Agriculture Organization of the United Nations (FAO) has launched a new $17 million project to help Ukrainian farmers save the upcoming harvest in July-August while ensuring the export of critical agricultural goods to international markets.

The project is funded by Japan, and it aims to restore grain storage capacity and functionality of supply chains from harvest to export as well as maintain the productive capacity of Ukrainian farmers to enable continued future productions.

“Ukraine’s farmers are feeding themselves, their communities, and millions more people around the world. Ensuring they can continue production, safely store, and access alternative markets to sell their produce is vital to secure food availability, protect livelihoods, strengthen food security within Ukraine and ensure other import-dependent countries have a steady and sufficient supply of grain at a manageable cost,” said Rein Paulsen, Director of the FAO Office of Emergencies and Resilience.

This season Ukraine is expecting to harvest up to 60 million tons of grain. But the lack of export does not allow for the opening of available storage space for the new harvest since 30 per cent of the available capacity of granaries remains filled with last year’s harvest. 

“Within the new Japan-funded project, FAO will address storage deficit by providing the polyethylene grain sleeves, grain loading and unloading machinery to the smallholders and a variety of modular storage containers to the medium-sized producers and associations. Support will be provided to the farmers from ten oblasts of Ukraine: in the east, center, south and north of the country,” said Pierre Vauthier, Head of FAO Ukraine Country Office.

Changes in Indian Logistics related policies could power Tremendous Growth in the industry

Changes in Indian Logistics related policies could power Tremendous Growth in the industry

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. 

Delivering, warehousing, dispatch administrations, road/rail transportation, and air / ship freight are all subsets of transportation. Certain advancements in logistics policy can greatly benefit the logistics industry.

Govt. of India initiatives in the logistics sector could power Tremendous Growth

The government of India initiatives will lead to tremendous growth, adoption of improved technology, more supportive infrastructure development, increase in investments and trade in the logistics sector. India aims at improving its position in the Logistics Performance Index by introducing the National Logistics Policy. The goal of the policy is growth of the E-Commerce sector simultaneously increasing the GDP and investment and further developments in the coming years in the logistics sector of India. Effective and efficient implementation of this policy will address and improve all the shortcomings in the industry and make movement of goods across the country smooth and hassle free and increase the revenue generation in the coming years.

Omnichannel shipping

The system of picking, bundling, and conveying orders as they are set by clients through different deals channels is known as omnichannel shipping. These can include physical storefronts, internet marketplaces, and e-commerce sites. With increased digitalization, no one-way logistics is enough to fulfill customers’ demand. The in-stores are also introducing online options due to competitiveness and for customers’ demand fulfillment and loyalty. The corona pandemic changed the shopping and movement of goods in a significant manner. This is where omnichannel shipping plays an important role in acquiring goods and their first, mid and/or last mile delivery according to the demand of the customers and retail industry. The logistics sector is evolving and opting for creative approaches and methods to reduce complications within the supply chain. There are various ways in which goods are transported to and from (purchasing and returning of goods) the customers, some of them are- from warehouse/supplier/store/ distribution center to the purchaser’s address and return of goods from them. The increased digitization process, demands and fast delivery of goods require omnichannel shipping because of the movements all across the country where the goods are transported from different places of manufacturing, warehousing and storage to facilitate last mile deliveries.

PM Gati Shakti- Logistics division

Prime Minister Narendra Modi launched the 100 lakh crore project, Gati Shakti NMP in October 2021 with the aim to achieve growth in the logistics sector by increasing the multimodal connectivity and decreasing logistics cost. In the logistics division, the focus is mainly on seamless transportation of goods by smoothing the process and supply chain connectivity that is driven by airports, roads, railways, mass transport, logistics infrastructure and waterways providing efficient and effective deliveries.

New warehouse policy

The pandemic disrupted the supply chain at global level. This led to adoption of efficient methods in the logistics sector. The New Warehouse Policy is introduced to meet the demands of consumers, address the shortcomings in the supply chain and smoothen the last mile delivery services. The New Warehouse Policy is a Public Private Partnership initiative that focuses on ease of transportation, streamlining the process and logistics cost reduction by developing exclusive warehousing zones across the country in order to make the storage, supply and delivery of goods hassle free.

Technology in logistics

The logistics industry is technologically evolving leading to innovative and efficient supply chains. Due to increasing last mile delivery demands, the technology has made the process right from ordering of goods to final delivery at the doorstep and automated, less time consuming and cost effective process. Artificial intelligence, real time supply chain visibility, advanced analytics and operations are a few examples of how technology is playing an important role in the logistics sector to keep up with the demands in the rapidly evolving technological world.

Advantage Electric Vehicles over fossil fuel vehicles

The companies are being mindful of their conduct and are trying to work according to the Responsible Business Conduct (RBC) Standards. These standards also mean that the companies should opt for ways in which there is minimum carbon emission. Transportation sector is one of the major contributors of greenhouse gasses. Thus, to comply with the RBC Standards, companies are replacing fossil fuel consuming vehicles with the EVs, which is also an appreciated move by the government. The EVs are cost effective, automated, require low maintenance and eco-friendly to carry out hours consuming, everyday activities.

The Way Forward

The logistics sector is all set to boom. Spurred by policy changes and infra upgrade, the logistics industry is expected to grow at 10-12% CAGR in the near term, improving India’s competitiveness. With a pick-up in demand, the logistics market, pegged at ~$250 bn, is expected to grow at 10- 12% CAGR, to $380 bn by FY25. As years pass, the consumer spends will increase directly proportional to the per capita income, which shows immense potential for the industry to grow onwards and upwards.

Taiwan Turmoil prompts detours, Troubles and Delays for global shipping

Taiwan Turmoil prompts detours, Troubles and Delays for global shipping

Chinese military exercises around Taiwan are set to disrupt one of the world's busiest shipping zones causing detours and delaying energy supplies. The drills, China's largest-ever around Taiwan, are a major show of strength after US House Speaker Nancy Pelosi infuriated Beijing by visiting the island.

Analysts say the development highlight the island's critical position in already stretched global supply chains.

Where is this happening?

The manoeuvres kicked off Thursday and will take place along some of the busiest shipping routes on the planet used to supply vital semiconductors and electronic equipment produced in East Asian factory hubs to global markets.

As per Wall Street Journal, the exercises are occurring in six zones delineated by the Chinese military. Several are facing the island’s biggest commercial ports and infringe on what Taiwan claims as its territorial waters, as per the report.

The exercise zones are encircling Taiwan and the Taiwan Strait, a main ocean route for vessels sailing to or from China, Taiwan, Japan and South Korea.

As per Bloomberg, local branches of China’s maritime safety administration have already issued multiple warnings for ships to avoid certain territories. The Fujian regulator warned ships are banned from sailing into the areas where exercises will be conducted from Thursday to Sunday.

Taiwan’s Maritime and Port Bureau warned ships to find alternative routes to access and depart from seven major ports on the island during China’s drills, according to the Apple Daily.

What’s the IMPACT on GLOBAL SHIPPING?

Taiwan says the exercises could disrupt 18 international routes.

Explained How Chinese military drills around Taiwan will disrupt global shipping

Even a small disruption in global supply chains, already battered by the COVID-19 pandemic and Russia's invasion of Ukraine, could prove costly.

Nearly half the world's container ships passed through the narrow Taiwan Strait, which separates the island from the Chinese mainland, in the first seven months of this year, according to data compiled by Bloomberg.

The routes are also a key artery for natural gas.  Suppliers are rerouting or reducing speed on some liquefied natural gas vessels currently en route to North Asia, people familiar with the matter told Bloomberg. They added that shipments to Taiwan and Japan this weekend would be affected.

Those in the shipping industry told Bloomberg a delay of up to three days could be created as vessels may need to be rerouted around the eastern side of the island, rather than through the busy waterway between mainland China and Taiwan.

“Taiwan’s ports are open,” Soren Skou, chief executive of Danish container ship company AP Moller-Maersk told Wall Street Journal. “We just have to move around the areas of the exercises.”

Some cargo ships and oil tankers are re-routing around the island to avoid confrontation with the Chinese military, adding around half a day to voyages, analysts and ship owners told Reuters.

“Shanghai, the world’s busiest port, is literally next door and any major disruption will affect the Chinese merchant fleet as well,” Peter Sand, chief analyst of maritime data provider Xeneta told Wall Street Journal. “It’s in no one’s interest to escalate the tension and the expectation is for a return to normal, starting next week.”

"Given that much of the world's container fleet passes through that waterway, there will inevitably be disruptions to global supply chains due to the rerouting," said James Char, an associate research fellow at Singapore's S. Rajaratnam School of International Studies.

"China's planned live-fire exercises are occurring in an incredibly busy waterway," Nick Marro, the Economist Intelligence Unit's lead analyst for global trade, wrote in a note.

"The shutting down of these transport routes -- even temporarily -- has consequences not only for Taiwan, but also trade flows tied to Japan and South Korea."

Several cargo companies are waiting to see the drill’s impacts, while others claiming its business as usual, Sky News reported.

Explained How Chinese military drills around Taiwan will disrupt global shipping

The uncertainty dragged the Taiwan Taiex Shipping and Transportation Index, which tracks major shipping and airline stocks, down 1.05 percent on Thursday.

The index was down 4.6 per cent since the beginning of the week.

Taiwan's Maritime and Port Bureau has warned ships in northern, eastern and southern areas to avoid the areas being used for the drills.

Several shipping companies contacted by AFP said they were waiting to see the impact of the drills before rerouting. The ongoing typhoon season made it riskier to divert ships around the eastern coast of Taiwan through the Philippine Sea, some added.

Others said they would stick to their schedules. "We don't see any impact during (this) period and we don't have any plan on re-routing our vessels," said Bonnie Huang, a spokesman for Maersk China.

IMPACT ON AIR FREIGHT 

Over the last two days, more than 400 flights were cancelled at major airports in Fujian, the Chinese province closest to Taiwan, signalling that the airspace could be used by the military.

Taiwan's cabinet meanwhile, has said the exercises would disrupt 18 international routes passing through its flight information region (FIR).

Aggressive posturing

During the previous Taiwan Strait Crisis in the 1990s, China conducted military exercises for months, including lobbing missiles into waters off Taiwan and rehearsing amphibious assaults on the island.

"The Chinese undoubtedly wanted to demonstrate resolve in ways that went beyond what they did in 1996," said Bonnie Glaser, director of the Asia programme at the US-based German Marshall Fund think tank.

China's Global Times newspaper said Wednesday the drills were aimed at showing that China's military is "capable of blockading the entire island".

Disruptions can hurt Chinese Economy

China's ongoing economic challenges mean it is unlikely to risk a major disruption and would limit itself to aggressive posturing, analysts said.

"Closing off traffic through the Strait for any extended period of time will also hurt the Chinese economy," Char said.

"It's not in Beijing's interest to interrupt civilian travel and trade in the region," said Natasha Kassam of the Lowy Institute, an Australian think tank.

The extent to which China will escalate its response to the Pelosi visit -- flexing its military muscle, cyber attacks and economic sanctions -- will be seen.

Given its military advances, "China very likely has the ability to enforce an air and maritime blockade against Taiwan," said Thomas Shugart, an expert at US think tank the Center for a New American Security.

"Whether China will choose to attempt such a blockade... is largely a matter of how much political and economic risk the Chinese Communist Party's leaders are willing to incur."

Bill of Lading : The Most Important Document for International Shipping

Bill of Lading :  The Most Important Document for International Shipping  

Bill of Lading (B/L)

Bill of Lading is a document issued by the carrier, sometimes freight forwarder (in case of HBL) to the shipper/exporter. Bill of lading contains the details of goods, consignee, notify parties, port of loading, port of discharge, details of vessel/vehicle, details of containers, number of packages, weight etc.

Important functions of Bill of Lading 

There are three main functions of Bill of Lading:

1. Receipt of the goods : Bill of Lading acts as a receipt of goods, where carrier confirms that the goods are loaded onto vessel/vehicle.

2. Contract of carriage between carrier and exporter/shipper: Bill of Lading acts as a contract between the carrier and the shipper, the contract says that the described goods will be shipped from one point to another.

3. Document of title to the goods: Bill of Lading is the document of title to the goods, which decides the ownership of the goods. That means the name of receiver mentioned in the Bill of Lading at the time of issuance and the goods are handed over to the same party at the destination after receipt of all receivables (if any).

Bill of lading also known as BOL, BL, or B/L.

Who are the Parties involved in Bill of Lading?

1. Shipper

2. Consignee

3. Notify party

4. Buyer (if other than consignee)

5. Carrier/ shipping line

6. Agent

Important information  on Bill of Lading 

Bill of Lading contains lots of information about the shipment; let us know what are those information.

Fields of Bill of Lading:

1. BL Number

2. Shipper

3. Consignee

4. Notify party

5. Vessel name & voyage number

6. Place of receipt (In case of multimodal transport BL)

7. Port of loading

8. Port of discharge

9. Place of delivery (In case of multimodal transport BL)

10. Description of goods

11. Marks and nos.

12. No of packages

13. Container numbers

14. Seal numbers

15. Gross weight

16. Measurement

17. Details of charges

18. Freight prepaid/ freight collect

19. Place and date of issue of BL

20. Date of issue

21. Shipped on Board date

21. Number of original BL

22. Carrier's signature

Bill of lading is the most important document for international shipments. Without it goods cannot be released the receiver.

Who is allowed to receive the goods at destination?

It’s consignee, who is always allowed to receive the goods from the carrier.

 

Who is Notify party?

Notify party is the person or the company that needs to be notified along with the consignee on arrival of the vessel. This information is shared by the carrier.

In most of the cases consignee or notify party is same but in few cases they are different, and in these cases notify party can be the buyer, consignee's clearing agent, trader or the agent or the broker who finalized the business.

Always consignee is only one but there can be multiple notify parties.

Types of consignee:

1. Consignee is same as Notify party: If consignee and Notify party are same, then the process is very simple, carrier will release the goods to the consignee after completion of formalities and receipt of local charges (THC and other charges).

2. Consignee and Notify party both are not same: If consignee and Notify party are different organizations there should be different reasons for that, we shall cover those cases one by one.

In this case, Notify party/parties may be the clearing agent, final buyer, agent (mediator), trader or financer.

If Notify party is one of these: clearing agent, agent (mediator), trader or financer, that means their name is mentioned in BL so that they get notification from the carrier or liner on vessel arrival so that they could be ready for the next step.

If Notify party is the final buyer, this is may be due to buyer is one time importer and they do not have import license (in this case consignee is buyer's agent) or the goods to be delivered to the third party (in case of resale).

In this case all documentation will be done in the name of consignee and in back side of BL consignee has to mention "Deliver the goods to ABC Limited", after that the consignee puts the seal and signature, by doing this consignee give their consent to Han over the goods to ABC Limited who is the final buyer.

3. Consignee is "To the order of Bank":

In case the Bill of lading is consigned to the bank and the consignee is shown as "TO THE ORDER OF XYZ BANK LIMITED" that means that particular bank is involved in the transaction, here XYZ BANK has to endorse on the back side of the BL and mention "Deliver the goods to ABC Limited", ABC Limited is final buyer. Without bank's instruction, cargo cannot be released to the buyer. This is mainly used when shipment is done under Letter of credit.

4. Consignee is "To order" or "To the order":

If "To order" or "To the order" is mentioned as consignee in BL, and BL is blank endorsed  by the shipper, that means the BL is consigned to the order of shipper and the shipper decides who will take delivery of the goods. Once shipper puts it's stamp and sign on the back side of the BL, that means whoever have the original BL can take delivery of the goods from shipping line by surrendering original BL at destination.

What are the Functions of Bill of Lading?

Bill of Lading is the most important document to execute an export or import shipments. Carrier (shipping line) issues Bill of Lading to the shipper at port of origin once customs formalities for export clearance are completed and vessel is sailed. Shipper collects the Bill of Lading from carrier and sends it along with other documents to the buyer as per the contracted terms.

Once buyer/consignee receive documents (from their bank or by courier as per the payment terms), they approach to the office of carrier or their agent at destination. Consignee submits one copy of original Bill of Lading at carrier’s office, pays the destination charges (Destination terminal handling Charges, Documentation charges, Detention / Demurrage if any etc.). Carrier issues a Delivery order (D.O.) to the consignee upon receipts of original Bill of Lading and the receivable charges. Once the consignee receive Delivery order, they can take delivery of the goods after completion of import custom clearance.