In late 2016, USA Freight Forwarders were approached to offer its forwarding services for an ‘out of the ordinary’ project from Guayaquil, Ecuador.  This project was complicated in that the equipment (a large, plastic machine) had to be dismantled, packed in 6 x 40’ open top containers, shipped to Johannesburg, South Africa and reassembled.  The equipment in Guayaquil was to be replaced by other machinery imported from Italy which would be shipped in 13 x 40’ open tops.  Dealing with ‘open tops’ are a particular challenge, irrespective of origin.

After many enquiries to locate a reputable Agent, we teamed up with Blu Logistics in Ecuador. The red-tape involved and the subsequent approval required by the Ecuadorian Embassy that our company was legitimate, was a time consuming process.  However, by February 2017 we were ready to proceed with the shipment. Fortunately, our customer stayed with us, albeit, becoming frustrated by the long process.

The importer established the Letter of Credit and one of the clauses was,  “6 x40’ open tops, no partial shipments allowed” … The reason for this was simply that the machine in Johannesburg had to be assembled in the same sequence that the machine had been dismantled at origin. A delayed unit would have huge implications and down time for the riggers at site would have been costly.

Open top containers were not readily available and an intensive search commenced by our agent in Ecuador. Fortunately, these were finally located and secured. (The L/C had to be amended for later sailing while we tried to locate the open tops).

The dismantling of the machine commenced in June. All units were passed for inspection at port, barring two, which were customs-stopped. Finally the containers left on 20 June 2017 for the 7-week journey to South Africa.

Despite the challenges of this extra-ordinary project, our communication (at times very difficult because of the language barrier and time zone), common shipping knowledge and enthusiasm between ourselves and Blu Logistics was extremely rewarding.

The plastic plant in Johannesburg is fully operational and we wouldn’t hesitate to undertake a similar project again.

Visit to Carotrans International, USA

On a recent trip to the USA, I visited our USA principals, Carotrans International (Seafreight) and Navigational Logistics (airfreight). I met with Matt Spartz, Head of Operations in New Jersey, as well as the Atlanta office. Chris Wilson (previously a regular visitor to SA) has been appointed the new President of Carotrans Intl, based in Los Angeles.

Key developments are that the nearest Carotrans office to the exporter will handle all LCL and FCL bookings. This makes sense in that the exporter is in close proximity to the office, as well as working in the same time zone.

Growth in most of Carotrans markets has increased by 10% year-on-year both on the Full and Part-Load product, attributed mainly to the favorable dollar.

The major carriers have seen an increase in volume, but a reduction in freight rates. This remains a mystery, despite the regularity of mergers and slot chartering and I can only attribute this to all parties wanting to operate independently. Rates to SA have remained stable which I am sure is due to the majority of cargo being shipped on the direct service to SA due to time sensitivity.

Carotrans Intl offer weekly LCL services from Charleston and New Jersey into Durban. Johannesburg cargo is unpacked in Durban and road-hauled to Johannesburg on the same day. A weekly LCL service is offered from New Jersey to Cape Town.

Our FCL service remains weekly.

One of the interesting projects USA Freight Forwarders has been involved with recently is a cross trade movement of golf carts and parts from Charleston – Port Louis for the launch of two golf courses being launched in Mauritius.

In the last two months we have shipped in excess of 200 carts. The cargo has been transshipped in Valencia and the feeder vessel on-carries the cargo to Port Louis via Oman. This takes an average of 6 weeks.

Article written by Alistair Heald : 3 October 2017

The freight forwarding and customs industry worldwide will not look upon 2016 as a particularly good year. You only had to read the Baltic Exchange reports to highlight this, where cargo volumes seemed to be at an all-time low. The global economic outlook remains shaky despite recent pockets of resilience, according to polls by Reuters.  This is an about-turn from those economists who just 3 months ago cited a pickup in international trade as essential for improvement in the world economy. [Baltic Exchange Report, Carly Fields & Lara Shingles, January 25, 2017]

In the world of International transport, the movement of FCLs (Full Container Load), LCLs (Less/part Container Load) and Airfreight gives an indication of market trends. USA Freight Forwarders are privileged to work with freight forwarders and customs agents where it was apparent that there was no pattern to the industry in 2016.  Dominant FCL movers did not change their buying patterns to LCL, but shipped FCL’S less frequently. Traditional LCL and airfreight importers moved less cargo.  In a nutshell, none of these modes of transport grew.

In the South African context, there were the normal events of acquisitions, e.g. DSV and UTI, Vanguard and ILA. More shipping lines centralised their administration, finances and operations to their Head Offices, with the branches merely performing the sales function.

The industry certainly did see some growth towards the latter part of 2016 due to the SA Rand stabilizing, but there was not the usual “peak season rush”, as in previous years. Our Vice President, Cyril Ramaphosa, stated at the recent World Economic Forum in Davos, that there would be more stability on the political front in South Africa this year.  These comments, together with a relatively stable Rand should bode well for importers.

The new Trump administration will be making all the noises of promoting domestic and international growth in the USA. President Trump recently stated that the dollar was too strong.  With China’s anticipated growth, it would make sense for the US to increase its international exports.

In conjunction with our USA seafreight partner, CaroTrans  Inc., USA Freight Forwarders will continue offering a weekly LCL/FCL into all major ports in South Africa. Having completed our budgets for 2017 we are projecting a 20% growth for the year.

 

The worldwide downturn in cargo volumes has seen rate reductions becoming more prevalent. At the same time, recent announcements that shipping lines are proposing rate increases of $500.00/$1,000.00 for 20’ and 40’ containers from the Far East, respectively, has caused volatility in the shipping industry. Rates from the Far East have been very low for the past few years, so these proposed increases are not surprising. The ripple effect, however, will see LCL rates increasing. As such, we must emphasize the importance of the importer taking control of their LCL freighting requirements. Recently, one of our customers allowed their supplier to handle the freight of a 1.7cbm shipment, “because their freight rate was better”. The result was that the supplier’s local agent charged R9,800.00 for destination charges which was highly inflated.

In contrast, LCL rates from the USA have softened, which may have some implications in importers’ buying patterns. For example, if the freight rate is ‘a deal breaker’ for the importer, you may see them weighing up their options as to where they will source in future. Fortunately, our partners, Carotrans USA, have been proactive in on-forwarding these LCL rates to our customers.

There have been some staff changes at Carotrans. Michael Forkenbrock, a regular visitor to South Africa, has taken on a new role within the group. He has been replaced by Joe Zeno as National Sales Director who will be responsible for South Africa trade-lane development.
Chris Wilson has been appointed as Vice President Sales for Carotrans, having recently completed a 3-year stint in Europe as Carotrans Owners Representative.

Import volumes into South Africa have been negatively affected owing to declining market circumstances, coupled with the volatility of SA Rand. Fortunately, in the past few months we have seen the Rand strengthen somewhat against major currencies, which should see an upturn in imports, if it stabilizes. With the Christmas season rapidly approaching and the stronger SA Rand, we have seen more enquiries for quotes resulting in business.

USA Freight Forwarders, in partnership with Carotrans USA, continue to offer a weekly LCL/FCL service into all major ports in South Africa.