PCB Freight Management’s logistics blog is a valuable resource for shippers, carriers, industry professionals and other supply chain partners navigating global trade. With the many regulations governing trade, it aims to help readers lower their freight costs, increase shipping efficiencies, address industry issues and manage their logistics activities. Several leading experts serve as blog columnists covering topics from freight, compliance and transportation to 3PL trends and warehousing.
An underrated aspect of freight management is the temperature of the goods from departure to arrival. Many people take for granted the amount of work and knowledge experienced freight managers have when transporting goods across the world.
Heat Wave Strikes Western Canada
This is evident with the heat wave striking a few of the major cities in Western Canada. Most specifically Calgary, Alberta, where a heat warning was issued on Friday August 10th, 2018. Temperatures are projected to hit 37C (99F). 37C would be a new record temperature for the city of Calgary, Alberta. The previous high was set at 36.1C in 1919 and again in 1933. Almost 100 years later a new maximum temperature could be reached by a city that hosted the Winter Games in 1988.
CN Rail Takes Preventative Action
With the record setting heat levels, CN Rail has taken preventative action to make sure the people and goods aboard their trains are kept safe and away from harm. This is done by implementing heat slows in Alberta and Saskatchewan, where trains are run at slower speeds in order to prevent the rails from buckling.
Buckling Train Tracks Can Be Hazardous
Buckling is when hot temperatures start to curve the steel rails making them hazardous to travel on. Heat will cause rails to expand, and when the rails expand they put a lot of pressure on the ties, ballasts and anchors that keep the rails attached to the ground. When rails buckle they turn from the straight sturdy rail you are accustomed to seeing, to a slithering snake that can be dangerous for a train to travel on, especially at high speeds.
By slowing trains down because of the intense heats, the trains will travel safer, and will also counteract buckling by placing less force on the rails. Less force on the rails will lead to safer operations for the people and goods travelling along the tracks.
Expect Delays With Extreme Temperatures
The downside to the heat slow will be the delay in people and goods arriving at their ports. CN Rail predicts this will cause delays of 24 hours to allow for the slower trains to travel safely along the overheating tracks.
If you need more information on the heat slows or any other freight related question, please contact a Freight Manager at PCB Freight Management for expert insights.
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Ocean Carrier Conferences Encourage Industry Communication
There was a time when ocean carriers could collude on policy, capacity and, yes, even pricing. These conferences were exempt from antitrust laws. Participating carriers would meet regularly to discuss general rate increases, bunker surcharges, emergency surcharges, congestion, etc etc. Carrier conferences had a single purpose, keep the liner industry profitable with stable pricing and control of capacity. In practice, the effectiveness of the conference depended on trading conditions - supply and demand. Poor trading conditions forced carriers to take independent actions. Good trading conditions, of course, led to rate increases.
More importantly, conferences allowed carriers to have an open forum to discuss pricing intentions, something that is not available today. In fact, carriers currently have to signal their intentions in the market by indicating their intent. The most dramatic example of indicating their intent was during the Great Recession in 2009.
How Action Helped The Ocean Carrier Industry Rebound
According to the World Trade Organization, 2009 was the first year global GDP decreased since records were kept. It was also the year ocean carriers collectively lost over $20 billion.
Conferences were all but abolished by 2009 and carriers no longer had a form where they could discuss policy and capacity. By losing the opportunity to communicate at conferences, ocean carriers had to discover a way to continue communication to keep their industry profitable.
Maersk Line was first out of the gate announcing lay up of several ships in their fleet. Others followed. It took most of 2009, but eventually the supply/demand balance was reached. What happened next was unpredictable.
Carriers left ships parked around the world until they could get clear indication the economy had recovered. The result of laying up tonnage, was a collective profit in the industry in 2010 of $15 billion - a dramatic $35 billion swing from 2009 to 2010. By sending the initial signal in 2009, Maersk Line led the industry in removing capacity thus restoring rates and profits without the platform of the conference. Maersk sent a signal to the ocean carrier industry and everyone else followed.
Ocean Carriers Latest Signals
Fast forward to 2018. The container shipping industry has just come off a year of buyouts and consolidation. There are only three global alliances and a handful of carriers, yet the industry continues to struggle. Carriers are losing money, and the signals have already started.
In June of 2018, the 2M liner service operated by Maersk Line and MSC announced the removal of their TP1/Eagle service to the Pacific Northwest. Shortly after, THE Alliance comprised of Hapag Lloyd, Ocean Network Express and Yang Ming announced a merger of their two services - PS8 and PS3 - removing even more capacity from the Port of Vancouver.
Like in 2009, Maersk Line has taken the lead to send a signal to the market that current trading conditions are intolerable, and service capacity will need to be adjusted. In 2010, when global GDP roared back to life, shippers were begging carriers to take their freight, especially during peak season. If the current trend continues, we may indeed see a smaller scale repeat of 2010. For shippers, large or small, expect higher rates and less reliable service for the foreseeable future.
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Warehouse Supply vs. Ecommerce Demand
The rise of ecommerce and the ever growing demand for products has shaped how goods are being treated from manufacturer to consumer. Less and less we rely on brick and mortar retail stores. Now there has been a shift to purchase your goods online and have them delivered straight to your doorstep. This has caused a change in how people are doing business and why we are moving towards a balanced equilibrium of warehouse supply and consumer demand.
Recently stories have surfaced about how the supply for U.S. warehouse space is decreasing. This is good news since warehouse supply has always been greater than consumer demand. In fact, 2018 marks the least amount of empty warehouse space since the year 2000.
Capitalizing On Warehouse Space
Anytime warehouse space is becoming available businesses are capitalizing on the opportunity to use their space. The problem some people are projecting is the demand for products is increasing at a faster rate than the amount of supply available. However, the good news is industrial warehouse space is simple to build, therefore too much demand will only lead to an influx in industrial production.
This change affects business owners the most because they have to decide whether to continue with traditional retail or move to a more modern online purchasing model where industrial warehouse space is at a premium. Business owners have to weigh the costs and benefits associated with both methods to see if one favors the other, or decide on a healthy balance between traditional brick and mortar as well as industrial warehouse space.
PCB Freight Management Can Assist You
When deciding on Freight services it is important to understand the flow of your goods from start to finish. Whether you need assistance shipping your products by air, ocean, highway or rail, PCB Freight Management has the experts who can organize your shipment and get your goods to their destination with care. Please contact us for all of your freight forwarding, warehousing and customs brokerage needs.
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Consistently, PCB Freight Management has built a reputation for getting the job done. As a client you receive a comprehensive range of global logistics services drawing from an experienced team of logistics experts, a world-wide network of freight agents and in-house licensed customs brokers. As a key company within the Pacific Group of Companies, PCB Freight Management has become a major North American link to many trans-ocean shippers and freight forwarders. A single point of contact for international freight movements providing freight and logistic solutions to freight forwarders and shippers.
How You Can Identify Your Freight Needs
With the constant change in global trade regulations, working with an experienced third-party logistics provider makes good business sense. Our logistics specialists can help you identify a mode of transport that fits your timetable, budget and special needs. Whether you are shipping a package across town or commercial cargo around the world, our integrated logistics services enable us to coordinate your shipments from door-to-door to destinations across the world. PCB Freight Management offers a comprehensive package of premium, value-added and specialized logistics services, all of which can be customized for your needs.
When Air Freight Is Right For You
When your cargo needs to be moved quickly, PCB Freight Management’s air freight services will ensure the shortest transit time. Our team of logistics specialists not only have the experience in managing time-sensitive shipments but also have the contacts, associates and vendor networks to deliver a shipment to remote and challenging destinations.
From on-board courier solutions, to the charter of a complete aircraft, our air freight shipping services span the globe from Canada and the United States to worldwide destinations in Africa, Asia, Central America, Eastern Europe, European Union, Middle East, North America, Oceania, South America and the Caribbean.
When Ocean Freight Is Right For You
As a registered and licensed Non-Vessel Operating Common Carrier (NVOCC) and a third-party logistics provider (3PL), you can receive competitive ocean freight rates. Not having to maintain ships or equipment means you can get the best rates, helping you save as much freight cost as possible. Our alliances with major global and regional carriers provide you with multiple, flexible and convenient ocean shipping options to locations around the world. From general merchandise and specialized cargo like automobiles, perishable freight, hazardous goods to oversized and overweight cargo, you can receive the best routing for your shipments.
When Ground Freight Is Right For You
PCB Freight Management’s vast logistics network consists of national, regional and local trucking companies along with major railroad organizations throughout Canada and the United States. This gives you competitive high-volume pricing and the best choice in transportation solutions and specialized equipment. Our industry knowledge enables us to effectively and efficiently manage shipments so you are set up for success.
What Other Freight Services You Can Receive
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Is Your Package Safe?
If you spend enough time in the freight industry, you will see just about everything — including packaging that would not adequately protect cargo for a trip around the block, never mind a trip around the world.
Keep Your Clients Happy
The lack of value that some companies place on packaging is quite astonishing. It is not uncommon to see equipment that is worth tens of thousands of dollars being shipped using twenty dollars worth of packaging materials. Shippers like this are really taking a chance. The first criteria that a carrier will consider when investigating the validity of a freight claim is whether the cargo was properly packaged. Insufficient packaging equals no freight claim!
The leading reason for freight claims is poor packaging. Even if your claim is paid, do you really want to go through the hassle? Your client has to wait to get their product. You have to re-fill and re-ship the order. You are doing twice the work for one sale. This is never a good thing, but in today’s economic climate, it is definitely an unattractive prospect. It is much easier to take a little extra time and money when packaging your product, than to go through the pain of filing a claim.
What is Proper Packaging?
Proper packaging depends on what you are shipping. If you are sending a box of screws across town, you can probably throw them in a cardboard box, slap some tape on it, maybe some plastic or metal banding to help hold it together. If you are shipping an expensive piece of medical research equipment halfway around the world and you want it to arrive intact, don’t cheap out on the packaging.
While it is difficult to address how to package all types of products in one blog post, our recommendation is to:
- Use ISPM 15 compliant pallets and lumber, and secure your cargo to the pallets using bolts, screws or strapping.
- Shrink-wrap cartons on pallets tightly to avoid shifting in transit.
- Stack pallets high enough to maximize shipping capacity but not so high that the cartons on the bottom will be compromised.
- Use additional padding, vapour barrier, shock sensors or “tip and tell” indicators, depending upon the value and sensitivity of your product.
Packaging Your Products
You know your product better than anyone and what it can and cannot withstand. When it comes to packaging, it is far better to safely package your product the first time than to risk damaging your product and having to reship.
One of the main things to remember is that your cargo is probably going to move around a lot more than you expect. Think about how much your sunglasses slide around on the dashboard of your car. Now think about your expensive product hurtling along a curvy and potholed highway, or being tossed around during gale force winds in the middle of the ocean, or just being handled repeatedly as it makes its way from your dock to your client. The packaging has to be solid enough to do its job — or you could find yourself out of one.
If you need assistance with packaging your products or forwarding your freight, PCB Freight Management can help. Click the button below to request a quote for your next shipment.
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E-Commerce Consumer Habits
E-commerce has revolutionized consumer habits.
Years ago I use to travel to the mall to try on shoes. Now I order loafers by the dozen. I try them all on and return the ones that do not fit. I demand that they come the next day so I can wear them to my friend’s wedding. Wash, rinse, repeat for all my online purchases.
Instead of trekking 30 to 60 minutes to a local specialty store, I can read an endless supply of reviews online letting me know what is the best value for my dollar. I can then order the product and know what to expect thanks to a couple of helpful and like-minded consumers.
The benefits and perks are too good as a consumer. Never has it been easier to get the products you want as quickly you want them.
E-commerce success stems from the innovative problem solving skills of freight forwarders and logistic providers.
The reason many people like shopping online is because of how quickly products arrive at their doorsteps. Immediacy is what keeps people coming back, and word of mouth travels fast when a consumer is happy.
Business-to-business air shipments have been commonplace for years. However, with the change in consumer habits, business-to-consumer air shipments are becoming more commonplace. E-commerce truly encourages international trade.
The main benefit of air freight is speed. If you want a product now, just like I wanted my loafers for my friend’s wedding, you can get it now. The biggest detractor for air freight is the cost. I will be able to get those loafers in 48 hours, but it will cost me an extra few pennies.
Let’s say my friend’s wedding is not until next summer. Now I have some time to breathe. I look around for some shoes, but the best loafer is still overseas. I can still get the loafer’s but I will have to wait a few weeks. Ocean freight still allows for international purchases, you are just going to have to wait a little bit longer for your international selection.
With e-commerce a heavy majority of shipments are still delivered by truck. What is worrisome for the ground freight industry is the supply of trucks and drivers. The increase in consumers wanting instant delivery on e-commerce shipments has caused a surge in demand. Supply is having a tough time keeping up. Because the demand for delivery has increased faster than supply can maintain, there is a major shortage of drivers on the horizon. The shortage of drivers will cause an increase in ground freight costs.
The trade-off between rail freight and ground freight is the same as the trade-off between air freight and ocean freight. Rail is less expensive than ground, but it will take longer for your goods to arrive by rail than it will take to arrive by ground.
The motto in logistics is know before you go. As an e-commerce seller or consumer it is important to know all of the costs associated with your shipments, as well as the time it will take for your shipment to arrive.
Freight Forwarding Assistance
If you need assistance with any freight forwarding or customs clearance on your e-commerce shipments feel free to contact us to talk with an experienced freight forwarder or an expert trade advisor.
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