Will we make it?
Let’s take a look at how the year has turned out, and see how this affects our chances at shooting past the clouds to reach the stars…
Safety is a growing concern
In February, the IATA banned Li-On (Lithium Ion) batteries as cargo on passenger flights and in July, the SOLAS ruling came into play. While these changes made a huge impact worldwide on pretty much everybody who shipped internationally (and Li-On batteries are in almost every electronic item nowadays…) in terms of cost and convenience, it just goes to show that the industry is seriously taking safety into consideration. Just like in the early days of the construction and manufacturing industries, shipping had been about cost and efficiency, with safety coming in as a far third. As a result, horrific accidents like planes blowing up, explosions in warehouses, ships breaking into half and turning turtle in bad weather due to lopsided cargo loading have been splashed across social media more and more frequently in recent years.
Certain tax structures propel consignees to urge their shippers to manipulate cargo weight data in order to save on taxes which are paid based on cargo weight, to which shippers would comply in order to please their customers since there were no conceivable drawbacks. The ban on the batteries & the VGM ruling bring home the importance of safety to the start of the supply chain which I believe is a good practise, and like any other ruling which is properly enforced, will become a standard industry practice.
However, the issue with policies like these being implemented is that current standard operating procedures are either phased out or have to be amended to cater to the new rulings - and this causes confusion amongst the grassroots, and slows down operations. With these setbacks, how would we be able to strive to end the year on a high note?
Slowing economies, burgeoning freight space
While global economies are cooling off, the paradox for ocean freight seems to be that bigger and bigger vessels are being set free on the seven seas. In 2015, the biggest containership owned & operated by MSC, the Oscar was just one of about 15 large container ships which opened up over 300,000 containers’ space (or TEU – twenty foot equivalent units) on the seas. With such large ships sailing, there is mounting pressure on the shipping lines themselves to fill their ships or run the risk of operating below cost. But with the downturn of the economy and markets buying less, shipping lines are impelled to get creative in optimising their newly launched assets. Some liners have decreased the number of sailings between ports; extending the ports of call or co-sharing vessels with other liners in what they call alliances (some would say cartels!)
While the liners manage their own backyard, geopolitics has created interesting ripples in the global economy. The departure of the UK from the EU in the Brexit episode, the ambitious project by China to unify maritime & land trade via the One Belt One Road are the 2 projects with the most far reaching impacts on international trade & currency rates.
What all this means to shippers and consignees alike is that the cost of shipping would be as dynamic as a five year-old with ants in their pants. And for freight forwarders, a lot of forward planning would be required to secure transport rates & space for clients ahead of liners’ blank sailings and port congestion.
Shooting for the stars and getting there is such a strong ambition that movies with swirling emotions have been made about it – so when real life imitates art, the captain of that ship is deemed a hero. Industry darlings like Jack Ma of Alibaba, and Mark Zuckerberg of Facebook are bright stars which inspire the rest of us to remember that life can be what you make it out to be. The team at Alien Logistics is an inspired one for sure. We are also small and nimble with lofty dreams.
So, for now our journey to the stars encompasses taking advantage of the blue ocean areas which have opened up due to the geopolitical waves and the emphasis on safety. Like pumping rocket fuel into the tanks, we are focused on expanding our service offerings, fine tuning our operations and learning the ropes of the new procedures coming into play… heads up, wings out. Follow our journey through the year, and feel free to join the ride!