Ford Field has been a source of excitement for Detroit recently as the city's NFL football team, the Lions just made it to the playoffs for the first time in 12 years.
But the name Ford has more to offer Detroit than football.
Ford, the automotive company, seems to be making strong decisions lately, including exporting cars made in Detroit to South Korea.
The American auto industry has certainly had some rough years recently. Detroit, the Motor City itself, has seen many, many rough years. © Olivér Svéd | Dreamstime.com
Yet the people of Detroit are tough and hard working. They've held on through years of economic downturn. However, 2012 could be a year to bring new glimmers of hope to go along with their travails. Their beloved, but for many years embarrassingly bad, Lions are rising to be among the top teams in the NFL. More important are possibilities for Detroit's economy.
Detroit's, and much of Michigan's, economy has risen and fallen on the tides of the American automotive industry. Growing up in Michigan, I was one of very few who didn't really know that much about cars. But one thing I did know... You don't drive an imported car. That was treason punishable by getting keyed, having your tires slashed, or even being towed.
As GM and Ford struggled through the years and moved jobs out of Michigan, driving a car imported from a manufacturer of another country became less and less of a treasonous act. Still, Detroit has never fully lost its pride in being a city where cars are made.
A piece of that pride could be felt in the Chrysler Super Bowl commercial of last year which featured Eminem and ended with the tag, "Imported from Detroit."
While Chrysler ended strong in the fourth quarter of 2011 and seems to be carrying that momentum into 2012, so does Ford. It's Ford's exporting cars from Detroit to Korea that was featured in a blog from the Port of Portland.
Not only are Ford's car export operations good news for Detroit, they're good for creating jobs for dockworkers in Portland loading the cars for RORO shipping and others in transportation and shipping.
It is looking good for Ford to continue exporting vehicles from Detroit based on the strength of their last few years.
There is good reason to hope in Detroit. A recent Detroit Free Press article quotes Rod Lache of Deutsche Bank as saying, "Ford has potential to be one of the strongest individual stock performers in '12."
Maybe we're only a year away from seeing serious economic growth in Detroit and its team's first ever Super Bowl championship.
If you're like millions of Americans, you have plans this Sunday. I know I'll be racing out of church to a friend's house where I'll enjoy an annual tradition of watching giant men violently smash into each other. It's Super Bowl Sunday! But what does this sports spectacle have to do with international shipping or importing and exporting?
This time of year, as the Super Bowl draws closer and closer, the temptation to become an illegal shipper and import knock-off NFL jerseys overtakes many.
There are some that get duped into importing illegal jerseys and other imitation NFL gear, not realizing their import is illegitimate. Somehow, I doubt this is the case for most.
The enticement to import illegal jerseys is not hard to understand.
According to an article from The Online Seller by its assistant editor Olga Munoz, "An estimated 173 million Americans will watch the big game, and shoppers will spend an average of $63.87 on team apparel, snacks and other goodies... Super Bowl spending should total $11 billion."
That's a big market. It's no surprise people would come up with schemes to have cheap knock-off jerseys imported from China and other big manufacturing countries to sell at a profit here.
It's even easy to imagine the justifications people probably make. I'm not hurting anyone. It isn't like I'm importing and selling drugs. The NFL makes billions, who's going to worry about cheap knock-offs being imported by me?
The U.S. Customs and Border Control is.
According to a short blog from American Shipper, since the beginning of the NFL's regular season U.S. Customs and Border Control "has impounded 304 parcels containing 10,710 fake NFL jerseys at Los Angeles International Airport and nearby Ontario airport."
Whether people import by air or import by ocean freight, U.S. Customs and Border Control is on the lookout for counterfeit NFL gear at the approach of the biggest U.S. sporting event.
While some counterfeit items are bound to get through, international shippers would be wise to stick to products they have licenses for when it comes to importing and exporting than breaking trademark regulations.
If you have a copyrighted or trademarked product that is imported to the U.S., it is a good idea to protect your investment by registering it with the U.S. Customs and Border Control.
Recently it has almost seemed as if all the ocean carrier lines have been acting in congruity, even unison, to affect prices of shipping cargo containers internationally. However, in a shrewd move opposite of the pack, Evergreen Line increased its market share by capacity in the trade route that includes shipping from China to the United States.
In 2011, ocean freight rates were dropping as carriers faced issues of overcapacity. The trade route from East Asia to the West Coast of North America especially saw falling freight rates.
For shippers who import from China to the U.S., this was great news. Lower freight rates meant lower costs and more opportunity for profit.
Lower freight rates meant the opposite for carriers. Their fleets of cargo container vessels dropped in value by billions of dollars.
Heading into 2012, carriers made moves to cause pricing trends to increase in their favor for ocean freight rates on shipping cargo containers internationally, especially from China and the Far East to the United States and North America.
A couple weeks ago, Universal Cargo Management posted a blog about carriers imposing freight rate increases from China to the United States. The blog focused on fees and general rate increases that went into effect at the start of 2012 from carriers across the board; however, the blog also mentioned carriers removing capacity from the trade route.
As a freight forwarding company, Universal Cargo Management pays close attention to trends and data of international shipping to help us give our customers the best possible freight rates for importing and exporting cargo. One excellent source of data is ComPair Data and their quarterly World Liner Supply Reports. In ComPair Data's most recent report, it's easy to spot the fast one Evergreen Line just pulled on the rest of the carriers.
ComPair Data's World Liner Supply Report Quarter Four 2011 revealed just over 10% of the
weekly capacity was removed from the trade route running from East Asia to the West Coast of North America as carriers removed services.
Weekly capacity dropped from 292,315 TEUs at the end of 2011's 3rd quarter to 260,702 TEUs at the end of the 4th quarter.
While it looked like all the carriers were removing TEU capacity, Evergreen Line - UAM sailed against the wind and added TEU capacity, increasing Evergreen Line's market share by capacity in the East Asia to North America West Coast trade route from 6.76% in 2011 Q3 to 8.22% in 2011 Q4.
While most carriers saw small drops in their market share by capacity in the last quarter of 2011, there was one other shrewd player whose market share increased similarly to Evergreen. No surprise, it was Maersk. Simply by not removing any services on the trade route, Maersk increased from 9.34% to 10.54% of the trade route's market share by capacity.
For a free rate quote from China to anywhere in the U.S., click here.
The U.S. auto industry has certainly seen rough times recently. While the Big 3--GM, Chrysler, and Ford--try to recover from the Automotive Industry Crisis of 2008-2010, China's ambition to dominate emerging car markets is a threat to the future health of American auto manufacturers.
China's booming economy has made the world familiar with the words "made in China." Yet one industry Chinese exports have not been able to dominate is the automotive industry according to an article from The National Conversation.
According to the article, with "a modest 31 per cent share of sales" in their own country, Chinese auto manufacturers are turning their focus to emerging markets.
Even so, China has not yet become the new world juggernaut of automobile exports.
The National Conversation article goes on to report, "Last year, China exported 544,900 cars, a figure dwarfed by the 813,600 that were imported. Moreover, the cars imported tended [to] be of higher value than those exported."
Just as China has seen explosive economic growth with manufacturing and exporting in other industries, China's automotive market share around the world is likely to grow in leaps and bounds over the next few years.
The Globe and Mail blogged an article saying that China's production of cars this last year was much higher than they were able to sell domestically and China prepares to export the surplus in 2012 without stopping production.
The Globe and Mail article goes on to report that "China had a 6 million units’ worth of unutilized capacity in 2011" and "is set to build two-thirds of the world’s new capacity in the next five years."
That's a lot of cars with which China will hit the markets.
While China's cars shouldn't be highly competitive in established markets yet ("yet" being the key word), China is likely to be able to make a big impact in emerging markets where low-cost cars will be very welcome.
And it probably won't be very many years before China's automotive exports will be able to compete in more established markets.
Perhaps the salvation for U.S. automotive companies is Indonesia. A Bloomburg Businessweek article details the huge growth expected in the Indonesian auto market and how GM is working to get a share of that. Of course, to be successful there, the American auto manufacturer will have its work cut out for it in a market dominated by the Japanese auto giant Toyota.
For a rate quote on shipping your car or other vehicle internationally, click here.
Last weekend the wrecked cargo ship Rena split in two, leaving two miles of "a light sheen of oil" on the water according to an MSNBC.com article.
Universal Cargo Management first posted a blog on Rena back in October after the cargo vessel ran aground on the Astrolabe Reef in New Zealand’s Bay of Plenty.
MSNBC reports that 400 tons of fuel oil was spilled into the waters when the Rena ran aground. This, the worst maritime environmental disaster New Zealand has ever had, caused authorities to find 2,000 dead birds and estimate 20,000 were killed.
Editorial Photo © Brian Scantlebury | Dreamstime.com
Environmentalists are now fearing that the cargo dumped from shipping containers that were on the Rena will increase the animal death toll caused by the oil spill.
An article from Stuff.co.nz reports that 150 shipping containers fell into the sea when Rena broke in two. A shipping container of polymer beads washed up on the beach of Matakana, having spilled some of its contents.
The small beads are being eaten by shorebirds that feed on fish eggs of similar size to the beads. Work is being done to clean the beads, but there are more containers of these beads that were on board the Rena in danger of dumping in the sea as well.
It is not only wildlife at risk from the cargo spilled from the Rena.
Bags of milk powder, among other cargo items, have washed up on Waihi Beach. People have grabbed bags of the milk powder and taken off with them. Authorities say that these items could be health hazardous.
The popular Waihi Beach has been closed down in an attempt to protect public health.
Excellent photos of the Rena split in half can be seen by clicking here.
During the months between the Rena running aground and it splitting in two, teams have been working on emptying it of fuel and salvaging the shipping containers on board.
Obviously, the tasks are not easy to complete. The cargo vessel's breaking in two makes such tasks even harder.
Hopefully, the teams working to clean up this disaster are successful in returning the formerly pristine waters and beaches of New Zealand's Bay of Plenty to safe and beautiful places for people and wildlife.
And hopefully, shippers who were importing or exporting cargo on the Rena had marine insurance. It's always a good idea to protect yourself from such unexpected cargo loss or damage when you import or export.
With the end of 2011 came the end of the Clean Truck Fee for shippers importing and exporting through the ports of Los Angeles and Long Beach. Or did it?
A previous Universal Cargo Management blog looked at how the removal of the fee could coincide with increased costs for shippers importing and exporting through the ports of Los Angeles and Long Beach because with the fee removal came banning trucks with an engine year of 2006 or older from terminals.
While the clean truck fee has stopped being assessed by the ports, such fees continue to come from draymen.
For laymen, draymen are truck drivers or companies who deliver shipping containers to and from ports.
Originally, a drayman was someone who drove a flatbed wagon called a dray which was pulled
by horse or mule for transporting goods. Logistics has changed through the years. The dray basically doesn't exist anymore nor does horse-drawn deliveries.
However, some breweries still keep horses and a dray that they'll pull out for parades, festivals, and unveilings. This quaint practice is spotlighted in popular Budweiser Superbowl commercials if you want an idealized and humorous image of the classic draymen.
Ocean freight shipping has changed over the years too; but, since transporting goods in ships over the seas is an old practice, it makes sense that it would hold on to old terms like draymen for those delivering containers to and from ports.
The Clean Truck Fee was part of an initiative to reduce pollution at the ports of Long Beach and Los Angeles. The initiative has been very successful in reducing pollution. A large part of pollution at the ports came from trucks so the regulations created for having "clean trucks" played an important role in decreasing L.A. port pollution.
Of course, the largest cost of the clean truck part of the initiative went to the draymen who had to buy new trucks.
We all know how business works; at least a portion of those costs to the draymen would be passed on to the shippers who hire them. Draymen began charging a clean truck fee of their own, although not necessarily always under that name, so they could cover the costs of buying new trucks.
Now the ports of Los Angeles and Long Beach have dropped their clean port fee, but the fee remains from the draymen to continue to recoup the costs of the new "clean trucks" purchased to lower fuel emissions and be in compliance with port policy.
The good news is the fees from the draymen are not new while the fees from the ports of Los Angeles and Long Beach have ended. So while carriers are making moves to increase ocean freight rates in 2012, there is a slight fee drop happening on the trucking side of the equation.
We should not see a new spike in trucking costs due to 2006 and older engined trucks no longer being allowed at the Los Angeles and Long Beach ports.
For a free ocean freaight rate quote including trucking, click here.
Universal Cargo Management’s last blog of 2011 was about carriers using a General Rate Increase (GRI) or Peak Season Surcharge (PSS) to raise container rates for international shipping from the Far East to the United States.
These GRIs and PSSs were implemented by carriers on January 1st, 2012 and have been successful in applying to both BCOs and NVOs.
While rates are increasing for both BCOs and NVOs, we are seeing the gap between BCO direct carrier s/c rates and NVO benchmark (spot) rates shrinking.
While carriers are succeeding at increasing rates--and assumingly their profits--with GRIs and PSSs, they have not succeeded in making increases happen in every single freight rate circumstance from the Far East to the United States.
For a few carriers, like Maersk and OOCL, a little snag has come up. Some of their small to mid-sized BCOs would not accept the new deal with rate increases due to the January 1st GRIs and PSSs the carriers have imposed.
Carriers cannot force BCOs to agree to the new increases/deal and have to allow these BCOs to keep their rates unadjusted. However, such BCOs are likely to find themselves facing booking restrictions from the carriers. When space is tight, as the case is right now, these restrictions will hit the hardest.
What’s this about space being tight now? Haven’t the carriers been struggling with overcapacity? Isn’t that what had freight rates on a downward trend in 2011 that carriers are fighting against with these increases in 2012?
The Chinese New Year is fast approaching. It hits on January 23rd. Many vendors and factories
in China plan to stop production before then so their workers can return home for the holidays. This creates a cargo rush happening right now as shippers want to get their cargo freight out before the shutdowns happen.
There are other factors making space very tight at the moment as well.
One factor is rollovers. Over Christmas and New Year, some carriers were overbooked, and have had to allocate space during this busy time for the overflow.
The other factor is carriers shrinking capacity. Yes, the container vessels still exist and are still being built, but carriers have suspended operations of some cargo freight vessels from the Far East to the United States to fight freight rates being pushed down by overcapacity.
In November, suspension of CKYH's AWE5 and GA/Zim's SCE2 strings was implemented. These two services being removed created an aggregate total of 5,300 fewer FEU per week or 9.9% of ECAW capacity removed from this market.
Water capacities from China to the United States, despite the general overcapacity issue that’s been happening, were actually very well optimized before the capacity cut. It’s not hard to imagine why ships would be so full now.
The all-water space utilization ratio for this market has reached 110-120%. Uswc/Ipi utilization is at 95-105%.
Of course, as we come upon the Chinese New Year, booking will drop. There are carriers predicting that booking will remain good, but none pretend it will be as crazy as things are now in this peak season.
To get a rate quote, click here.
The Coalition for American Hardwood Parity (CAHP) scored a major victory as 2011 drew to a close. The U.S. International Trade Commision ordered antidumping and countervailing duty on imports of multilayered wood flooring from China.
The CAHP claimed the multilayered wood flooring industry in the U.S. was being unfairly threatened by multilayered wood flooring manufactured in China and called for antidumping and countervailing duty investigations back in 2010.
An antidumping investigation looks into whether or not an imported product is being sold in the U.S. market at a value that is less than fair by a foreign manufacturer.
Countervailing duty investigations look into whether or not government subsidies are giving a foreign manufacturer an unfair competitive advantage.
The CAHP claimed multilayered wood flooring import from China was running against U.S. fair trade law in both areas and are thrilled that the final determination of the U.S. International Trade Commission agrees.
Made in China products have certainly increased in the United States. Some research indicates that, for the most part, the increase of imports from China has not come at the cost of American jobs. However, in the industry of multilayered wood flooring, Chinese manufactured products have taken over a large portion of the U.S. market at a great cost to American manufacturers.
This decision "represents an important win for American manufacturing, and the fight to keep honest paying manufacturing jobs in this country” according to lead counsel for the CAHP, Jeff Levin as quoted in a press release about the U.S. International Trade Commision's determination.
Perhaps this wil cause a trend of looking into U.S. imports from China and other countries with more scrutiny. Or perhaps it will be an isolated decision.
Here in 2012 and the years to follow, we'll see if Levin is correct in saying, “This also represents a substantial step towards redressing the harmful impact of unfair trading in the U.S. market.”
For a free rate quote on imports from or exports to China, click here.
Some claim that capitalism is to blame for the woes facing Main Street America. High unemployment; wage stagnation; and increases in living costs, food, fuel, and energy all impinge on the normal American’s life and the efforts to improve our existence while making sure the next generation will have things better than we do.
A struggle ensues against the back drop of a message we are told again and again: “It’s not fair. The rich are getting richer; the top 1% are earning, controlling, or amassing 30% - 40% of the nation’s wealth; and life is getting more difficult for everyone else.”
This dichotomy is juxtaposed with the end message being, “It’s the fault of the failed system called ‘capitalism.’” There is so much to deal with here that we must remain focused.
Capitalism. What? Since when has the bailing out of big banks with tax dollars by big government become the description of capitalism? Since when is it that banks are told, by big government, that they must make loans against the shareholders’ and tax payers’ best interests in violation of every lending principle since time immemorial? After banks yield to the pressure the predictable catastrophe is produced. And this is labeled “a failure of capitalism”?
As we saw in ’08, no bank wanted to lend to any other bank, nor could they--their balance sheets were discovered to be filled with holes. Mortgages defaulted at an unprecedented pace, and the prices of the assets collateralizing loans on balance sheets were tumbling faster than boulders over a mountainside cliff.
The truth is to this day, though many banks think they have the problem of non-performing loans, defaults, and foreclosures quantified and properly counted, the true depth of the crisis remains fluid and unfathomed. The entire system is still exceedingly vulnerable. Any untimely or unexpected event could sideswipe our nation’s economy and total the banks, leaving politicians with the same easy way out--another tax payer funded lifeline.
And this is what some want to call capitalism? NO.
It’s a system that is laced with the arsenic-laden policies and programs of socialism, and when those programs and policies live out their natural life cycles, destruction is the result.
So why would these consequences be labeled, “a failure of capitalism”? Is it possible an attempt is being made to deceive… by mislabeling...?
David Stover is an Account Executive at Universal Cargo Management's Atlanta office.
2011 was a good year in terms of ocean freight rates for shippers. Carriers have prepared to turn the 2012 freight rates in their favor.
Recent Universal Cargo Management blogs highlighted overcapacity causing lower ocean freight rates and the 2011 trend of falling freight rates from China.
While Maersk said they were poised to outlast their competitors in an overcapacity market, not them or any other carrier is willing to sit and do nothing as prices, and therefore profits, fall on the shipping of cargo containers.
With 2012, we’ll see increases in 20’ and 40’ dry containers, reefers, and more.
Carriers are jumping up prices as the new year hits with fees and/or surcharges.
The New Year’s present shippers get from Maersk is a General Rate Increase (GRI) effective on January 1st. This GRI will add hundreds of dollars to shipping containers from the Far East to the United States.
From Hapag-Lloyd, shippers get a Peak Season Surcharge (PSS) on shipping containers from East Asia to Canada and the United States. Hapag-Lloyd’s PSS runs in the hundreds of dollars and goes into effect January 1st, 2012 as Maersk’s GRI does.
It is not only these two big container shipping lines whose freight rates will be affected by GRI and PSS. All the carriers are launching 2012 with GRIs or PSSs. Some are even imposing both.
Carriers increasing prices as 2012 begins is absolutely no surprise.
We knew as we looked at the downward trend of freight rates in 2011 that those prices would start climbing again because of the volatile nature of the international shipping industry and that carriers would be working on strategies to turn freight rate trends back in their favor.
Don’t let these surcharges and rate increases turn your outlook for 2012 shipping to doom and gloom. GRI and PSS are not magical cures to the overcapacity problem carriers face. There are many factors that keep ocean freight rates volatile in the international shipping industry.
Freight rates will shift back and forth between increasing in favor of the carriers and decreasing in the favor of shippers.
For an ocean freight rate, click here now!