Infomail November 2017

Air freight: tight capacities, Hinterland transport: Bremerhaven tight, Ulm-Dornstadt full, Truck and rail combo: price increases, USA: ISPM 15, Thailand: labeling requirements, Hong Kong: batteries

Dear Sir or Madam,

Air Freight: tight capacity

This time of year peak season is normal for everyone involved in air freight. This time it´s not normal. The air freight market in Europe, and particularly in Germany, is virtually flooded with cargo. Stormy times for import and export. Demand exceeds all volumes of previous times.

In the midst of overbooked frequencies, backlogs and significant volume growth as a result of e-commerce,there was a ground handler strike in Frankfurt last weekend. Additional bottleneck. Additional delay.

Most of the year, it is difficult for airline companies to make money just on cargo. Trade lanes between Asia, Europe, North America and South America in particular are too competitive. The market is currently completely different: there is space for more expensive rates only. Another useful criterion: loyalty even during low season may now be rewarded. A supplier’s market in its pure form. Rates are going through the roof.

What helps when faced with bottlenecks? For business with China one option is very obvious: The railway. Here, the duration and price are an attractive alternative to slow ocean freight and to expensive – and currently unpredictable – air freight.

It’s just a shame that there isn’t an overland connection across the Atlantic. The special feature here: SENATOR Atlantic Bridge (SAB) with its own airplane, and its own newly established LCL service.

Hinterland Transport: Bremerhaven tight, Ulm-Dornstadt full

And speaking of rail: while the long trip overland from China to Poland and vice versa is running smoothly, the same cannot always be said of the German rail network. Traffic has resumed to normal after the storm fronts “Xavier” and “Herwart”. Only the supply control from and to Bremerhaven is still disordered.

The inland container terminal in Ulm-Dornstadt is also reporting: “We are full.” Export containers can only be delivered there on loading day. Where this is not possible, loaded containers must be transferred to an interim storage facility for extra fee in order to be delivered on time on fixed day.

Truck and rail Combo: Price increases

In line with bottlenecks, increasing demand and scarce resources, rail providers and truck operators are announcing price increases at the turn of the year. Based on current information, these are between 5 and 8% for rail and 7 to 13% for road traffic.

Reasons for the increase are many and varied:

  • New regulations concerning rest periods for trucks
  • Shortage of drivers and specialists for railways and trucks
  • Europe-wide lack of cargo space
  • Infrastructure bottlenecks, particularly in urban areas
  • Increasing vessel sizes result in higher peaks
  • Increased waiting times at seaport and airport terminals
  • Reduction in railways track charges has not been implemented by politics
  • Significant cost increases owing to reduced productivity
  • Overloaded inland depots

Efficiency increases can only partially compensate for this. The wide array of influences makes conditions more complex, more vulnerable, more expensive.

USA: ISPM15

Authorities in the USA are strengthening measures for violations of the import requirements for timber packaging.

Until now, untreated or incorrectly labelled timber was simply sent back to country of origin. Now, there are additional financial penalties in the event of failure to comply with the Plant Protection Ordinance.

Thailand: labeling requirements

Ocean freight to and from Thailand imperatively must have sufficient labeling on packing unit in future. This labeling must also be indicated in all accompanying documentation (commercial invoice, packing list, bill of lading). In the event of non-compliance, Thai authorities levy fines of up to 50,000 THB.

Hong Kong: batteries

At the airport freight terminal in Hong Kong, there was another incident during loading of batteries just recently. An entire BUP (air freight cargo unit/special container) burned to the ground. Thankfully, it was on the ground and not on an airplane in the air. The batteries ignited spontaneously. The goods were insufficiently secured by the shipper.

Shipper in question, as well as its commissioned forwarder have by now been“black listed” by well-known airline companies. Neither will be able to book any air freight with these airlines in future.

We are happy to continue keeping you informed
Your SENATOR INTERNATIONAL Team