The line has recently announced the addition of a Jakarta call on their Boomerang service which connects Australia and South East Asia.

The service upgrade will create faster transit times and the most reliable way of moving cargo between Australia and Indonesia.

The Boomerang service provides improved space availability and the largest vessels to stop at Indonesia. With Indonesia’s economy on the rise, and now a member of the regional FTA with New Zealand, this new service will be an asset to exporters.

The new rotation will be Brisbane – Sydney – Melbourne – Fremantle – Jakarta – Singapore – Tanjung Pelepas – Fremantle – Melbourne – Sydney – Brisbane

Maersk Line will begin the new Jakarta call on their service rotations at the end of January.

The terminal, in the Port of Gladstone, Queensland, is being developed by a consortium of coal companies to provide additional export port infrastructure to meet the demand for coal primarily from Asia.

Eight coal companies – Xstrata Coal (on behalf of the Rolleston Joint Venture), Bandanna Energy, Yancoal Australia, Caledon Resources, Cockatoo Coal, Aquila Resources, Northern Energy Corporation and Wesfarmers Curragh – will be the owners of WICET.

A total of 19 domestic and international financial institutions are due to provide finance to the project under the senior secured loan facilities. In addition to its participation in financing, Sumitomo Mitsui Banking Corporation (SMBC) will provide additional funding with the benefit of a US$100 million export finance guarantee from EFIC.

According to EFIC Origination and Portfolio Management executive director Peter Field, this is an opportunity for EFIC to fill a gap in the financing of an Australian based export infrastructure project in support of the development of the Queensland coal export industry.

“Where previously EFIC has not been called upon to support domestic projects, continued constraints in the credit markets have led to EFIC being asked to work with a consortium of commercial financiers and other export credit agencies to support this transaction.”

New South Wales based TTG has developed train management software that focuses on fuel consumption efficiency and timetable achievement.

After winning a competitive tender for train optimisation in the UK, TTG will install 119 of its Energymiser systems in First Rail Holdings inter-urban trains. The contract includes hardware design and installation, project management, support and ongoing management.

To enable it to deliver on the contract, TTG needed to buy raw materials, and fund manufacture and installation costs. However, the company needed finance to fulfil their contractual obligations – so it was introduced to EFIC.

EFIC provided a £379,000 export working capital guarantee to TTG’s bank, Westpac, enabling the bank to then lend funds to TTG to meet the required costs associated with the delivery on their contract.

“EFIC’s support for this project, through the provision of this guarantee to our bank, has enabled us to satisfy our contract requirements while focussing our attention and finances on our core business – delivering on this contract as well as developing further business opportunities,” TTG managing director Dale Coleman said.

EFIC SME and Mid-Market director Robert Dravers said that while many SMEs are fully capable of delivering on major international contracts, the offshore buyer’s demand for guarantees can be a financial barrier to success.

“To obtain funds from a bank, an SME is usually required to provide full cash collateral to secure the loan. But doing so would mean diverting working capital from other opportunities, which puts an SME in the difficult position of having to choose between delivering on current contracts and continuing to grow its business.”

While some pressure comes from regulations imposed by the International Maritime Organisation (IMO), the majority is coming from businesses focused on reducing the carbon footprint of their supply chain.

Shipping by sea is the most energy-efficient mode of transport, performing far better on CO2 emissions per tonne of cargo carried than by rail, truck or air. In fact, the world’s fleet of container vessels is estimated to contribute 3.3 percent of all CO2 emissions worldwide—a figure that some may argue is small considering the scope of container shipping, but one that nonetheless is putting container carriers in the environmental impact spotlight.

This pressure has driven R&D investment from carriers to find solutions to reduce the impact. The list includes everything from improved engine design, optimisation of ventilation systems and efficient hull and propeller maintenance, to research projects involving the application of fuel cells and alternative energy sources.

Generating power from heat

An example of early innovation is the Waste Heat Recovery (WHR) system, which utilises heat contained in engine exhaust gases to generate steam. On a ship, that steam is channelled to the turbo generator that powers the vessel, adding energy without using more fuel.

Maersk, one of the world’s leading shipping companies, installed its first WHR system in 1988 and has since reduced fuel consumption by nine percent. WHR research is undergoing a revival as Maersk continues to install systems on all large container vessels ordered, and using knowledge gained in tackling the balance between Slow Steaming and WHR because in general, the faster a vessel sails, the more exhaust, and recoverable heat, it produces.

Every day millions of containers are trucked, shipped and flown across the world. Sometimes their contents are a little out of the ordinary.

Since their first large-scale sporting event appointment for the Sydney Olympic Games in 1999, global freight conglomerate DB Schenker has become a world leader in specialist operations, looking after major sporting tournaments, international exhibitions, artworks, museum pieces and events including the Catholic World Youth Day in 2008. Sabine Schlosser manages specialist logistics in Australia and New Zealand for the company. Her advice for exporters moving an unusual cargo is to consult the experts.

Freight involves a web of international regulations, protocols, documentation, permit applications and cargo agreements, and it can be hard for a novice to negotiate. “If it’s anything that is not just a normal pallet which you can send with normal cargo in the normal freight section, just give specialists a call,” Schlosser advises. “The advice costs you nothing.”

Basically, special operations logistics is “nothing fancy”, Schlosser says. “The principle of sending freight (by sea, air or road) and looking after pick and pack is fairly straightforward.” What sets special logistics apart is the planning and negotiation that goes on before and afterwards, making sure everything runs smoothly in a complex operation.

Planning routes and handling protocols, negotiating legalities, ensuring documentation and paperwork is correct, making deadlines and ensuring safe and timely transit are the hard parts. That’s where specialists like DB Schenker can help.

A holy commission

Things get more complicated when the client is the global Catholic Church. This took the special logistics department of DB Schenker into uncharted territory. While familiar with the transport of human remains, in the lead-up to World Youth Day 2008, Schlosser’s department was confronted with a new logistical challenge. How do you move the relics of a saint, dead for more than 85 years?

Pier Giorgio Frassati was never embalmed but his remains lie uncorrupted in a tomb in Turin. DB Schenker was asked to freight the relics to Sydney for the pilgrimage. “I believe in miracles,” Schlosser says, but she was determined to have a chemist involved in the process of freight. “There’s a reason why that body is not decaying.”

A chemist assisted DB Schenker to recreate the conditions in Frassati’s tomb for a special crate, and DB Schenker freighted Frassati to and from Sydney with no incident. “We’ve never moved a saint. And a saint doesn’t have a passport to start off with. The whole paperwork side of it was quite interesting.”

Terms for delivering freight are covered by guidelines first formalised by the International Chamber of Commerce in 1936 and called incoterms (short for international commercial terms). Many of these were based on expressions used since the 1800s, with the result that some of them are out of date and no longer legally meaningful.

For example, did you know that ‘free on board’ (FOB) is an expression that refers to cargo carried loose, on men’s shoulders and backs, across the rail of a sailing ship? What it doesn’t refer to is containerised transport, even by sea, and what it means is that the buyer is responsible for the goods up until they are onboard ship.

Incoterms themselves are not legally binding but they become so when they are used in a contract of sale where they are used to specify at what point the responsibility for the goods transfers from the seller to the buyer. Since incoterms define the limits of the seller’s responsibility, and the costs involved, it’s important to use them correctly when brokering a contract that covers delivery of the goods.

“Ninety-nine point nine percent of people haven’t got a clue about incoterms and don’t even know there is any sort of written definition of those terms,” says Bob Ronai, director of Import-Export Services, NSW and member of the ICC’s incoterms advisory committee. “They just take a punt and use a term because somebody told them that’s the one to use.”

Ronai attended the launch of the updated Incoterms 2010 held in Paris on 27 September, along with delegates from 49 other countries. The updated terms come into effect from 1 January 2011, with some of the old terms disappearing and others melded into a single more appropriate term. Ronai believes this is long overdue. “When containers came into use in international freight in the late sixties it changed the whole concept, but everybody is still using outdated terms,” he says.

Incoterms decoded

Incoterms can be divided into four groups: E terms which cover departure, F terms where the main carrying is not paid by the seller, C terms where the main carrying is paid by the seller and D terms which relate to delivery.

EXW stands for ex works and is only really appropriate for intra country or trading block freight.

FCA (free carrier), FAS (free alongside ship) and FOB (free on board) define where the seller’s responsibilities end in the seller’s country.

CFR (cost and freight), CIF (cost insurance freight), CPT (carriage paid) and CIP (carriage insurance paid to) refer to the limit of the seller’s financial liability for transport to destination.

DAF (delivered at frontier), DES (delivered ex ship), DEQ (delivered ex quay), DDU (delivered duty unpaid) and DDP (delivered duty paid) are where the seller is financially liable for risk and transport to the destined country.

Incoterms (short for ‘International Commercial Terms’ ) have been a boon to international trade in goods by simplifying and clarifying which of the buyer and seller carry the risk of loss or damage to the goods,  when the risk passes and who will pay for carriage and insurance of the goods as well as customs clearance.

First introduced in 1936, this is the first revision of the Incoterms since 2000. It’s useful to remember that before Incoterms were introduced, different rules and interpretations as to terms used in international contracts applied in different countries. Forum shopping was all the go resulting in unnecessary litigation and costs. Incoterms are now widely accepted as the standard and are used in the vast majority of international trade contracts and have helped simplify an otherwise difficult task.

The aim of the Incoterms 2010 is to adapt to changes in international trade since 2000, changes reflecting new security concerns especially since 9/11 and the growing trend to replace paper documents with electronic documents. It is designed to be more user friendly with an expanded list of explanations to assist users and to more accurately reflect current trading practice.

The most obvious changes are:

• Instead of the four categories of E,F,C and D, Incoterms will now be broken up into two groups reflecting ‘Sea and Inland Waterways’ and ‘Any Mode of Transport’;
• The deletion of Incoterms DDU (delivered duty unpaid), DEQ (delivered ex quay), DES (delivered ex ship)  and DAF (delivered at frontier) and the addition of two new terms DAT (Delivered at Terminal) and DAP (Delivered at Place).
• FOB has been amended to now shift a bit of the risk to the seller by clearly providing that risk no longer passes “at the rail of the ship” but when the goods are set down on the ship. In container shipping, it is now recommended that trade terms CPT or CIP be used (where the transfer of risk on surrendering the goods to the carrier).

We’ll all have to buy our own copies of the new Incoterms from the ICC to be fully aware of the breakup of risk, cost and responsibilities between the buyer and seller in the new terms DAT and DAP. So far there have been some master classes in Europe and the USA but, as far as I can ascertain, none yet in Australia.

If you are not conversant with the terms and you are confronted with a contract with Incoterms, whether Incoterms 2000 or Incoterms 2010, it is wise to see a lawyer experienced in international trade.

Making sure you have the right documentation is a vital part of international trade. Thorough, accurate paperwork minimises the risk of problems and delays. There should be a clear written contract between buyer and seller, including details of exactly where goods will be delivered.

Specific documents may be needed to get the goods through customs and to work out the right duty and tax charges. There may be requirements both for the country the goods are being exported from and the country they are being imported into.

Documentation is needed to cover the transport of the goods and insurance during the journey. The right paperwork can be an important part of the payment mechanism, so it is important to cooperate with your counterpart on getting the paperwork right. For example, if you’re shipping goods to a customer overseas, they should tell you what paperwork they require at their end.

You may want to get help with handling paperwork, however, you should remember that you are ultimately responsible for what is submitted.

Key documentation for international trade

1. International trade contracts and Incoterms
Different countries have different business cultures and even languages. It’s a good idea to make sure you have a clear written contract to minimise the risk of misunderstandings. The contract should set out where the goods are being delivered. It should cover who is responsible for every stage of the journey, including customs clearance, and what insurance is required. It should also make it clear who pays for each different cost.

To avoid confusion, internationally agreed Incoterms should be used to spell out exactly what delivery terms are being agreed, such as:

• where the goods will be delivered
• who arranges transport
• who is responsible for insuring the goods, and who pays for insurance; and
• who handles customs procedures, and who pays any duties and taxes.

For example, an exporter might agree to deliver goods, at the exporter’s expense, to a port in the customer’s country. The customer might then take over responsibility, arranging and paying for customs clearance and delivery to their premises. The exporter might also be responsible for arranging insurance for the goods until they reach the port, but pass this cost on to the customer.

As well as including delivery details, the contract should cover payment. This should include what currency payment will be made in, how much will be paid, when payment is due and what payment method will be used.

For trade in services: With no physical delivery of the product, contracts in services cannot use Incoterms. Instead, the key issue tends to be defining exactly what services are being provided and to what standards.

2. Import documentation
The documents and data required by each of the customs authorities in markets throughout the world are the keys to international trade. For moving goods from one country to or through another, it is imperative that you correctly complete the required documents, or input the right computerised information online.

3. Export documentation
You may need an export licence to export goods, for example there are controls on exports of chemicals and military technology. Licence requirements may also depend on the country to which you are exporting.

4. International transport documentation
Transport documentation is needed to provide instructions to the carrier on what should be done with the goods. They can be used to pass responsibility for, and sometimes ownership of, the goods during their journey. Transport documents are also an essential part of some payment procedures.

As far as freight mistakes go, Ross Gluer, general manager for the International division at TNT, says he’s seen some disasters stem due to exporters failing to follow simple precautions. One of the most common mistakes concerns boxes stacked crookedly on a pallet. “If they’re not stacked straight, the sides start to collapse, and if they’re too high it breaks its own back,” he says.

Unfortunately, many exporters think the plastic shrinkwrap that covers the pallet will prevent their cargo from suffering this fate, but in fact misaligned boxes will cause the wrap to tear, which leads to the boxes becoming exposed to the elements and at risk of collapse. And if a box does become separated from its peers, you’d better make sure it has been labelled. “If the customer doesn’t have a label on each box in a pallet and they separate, they take those cartons to an unrecognisable, unsendable, unprocessable area and they can just sit there,” explains Gluer.

While the experience of losing a couple of boxes in transit doesn’t sound too bad, Gluer adds that product shrinkage can be catastrophic. “A lot of receivers will only accept goods if they’re all present, they will not accept part delivery. If the other bit can’t be found then the question is, what happens to stuff you still have? Do you send it back, do you hold it? Do customs hold it? Will it incur storage charges? And if a pallet does collapse it’s not only going to be damaged, it’s going to be late,” he says.

It’s the exporter’s inability to deliver the products as promised that has the most significant effect on business, he believes. “People have insurance against damage and you can recover costs one way or another but, as a rule, you can’t recover your reputation.”

Gluer recommends exporters use standard pallets certified for export use, and keep the cargo to a manageable height; a 1.2 x 1.2-metre pallet should only be stacked to 1.2 metres to form a cube. “Keeping a fairly even height to width ratio means it is most likely not to get damaged, and it’s likely to stay dry because the shrinkwrap won’t be pulled around or torn,” Gluer explains.

And invest in decent packaging, don’t have it as an afterthought. “Don’t get skimpy,” says Gluer. “Build it in on day one. Don’t think, ‘I’ve done all my costings, gosh, I need another two to three percent for packaging’. Get it right from day one in the commercial considerations.”

Part and parcel

Another risk in packaging involves legal compliance and suitable marketing, which is especially important for people who sell to consumers in the international market. Exporters should firstly ensure that the physical packaging meets the requirements of the destination country; for example, food packaging needs to meet food grade standards of the market, which may be different from Australia’s.

Additionally, labels need to meet market requirements, says Ian Harrison, CEO of the Australian Made, Australian Grown (AMAG) Campaign: “You just need to be aware of the labelling claim requirements in the country where the product is being sold.”

Having the packaging and labelling right before entering a market is a key part of becoming export-ready, he advises. “All these things—packaging, compliance matters, costings, distribution arrangements, logistical arrangements—really do need to be considered and done properly before a business simply starts to spend money or export product.”

Exporters thus need to be aware of any difference in terminology between Australian indicators and other markets. Harrison gives the example of the USA, where ‘Product of’ and ‘Made in’ do not correspond to their Australian counterparts: “‘Made in America’ is a very high level of compliance similar to that of ‘Product of Australia’, whereas ‘Product of America’ is a lower category much the same as when we use ‘Made in Australia’, where there can be something like 50 percent of imported product,” he says. “The most important thing for an exporter to have in mind is that when they’re selling product in another country it’s the laws in that other country that apply.”

The chamber of commerce network handles the paperwork for country of origin certification for the customs system, which will ensure that the correct tariffs apply. “Those documents are important, particularly where we have free-trade agreements with other countries,” adds Harrison.

However, country of origin labelling can have a marketing aspect to it as well, which is where AMAG comes in. As a certification trademark registered with IP Australia, ‘Australian Made’ or ‘Australian Grown’ must be used according to a set of rules under the Australian Competition & Consumer Commission, which administers the Trade Practices Act. But exporters shouldn’t simply apply for the logo and slap it on, it needs to form part of a marketing strategy, says Harrison.

“An important question that all exporters need to ask themselves in the market they’re trying to sell to is, is there an advantage in the product being recognised as Australian? If there is, they should be aggressive about packaging their goods in a way that consumers can recognise or associate the product with being Australian,” Harrison advises. “If it doesn’t help the sale, then it’s in the exporter’s interest to downplay the fact. The use of AMAG can also be a marketing tool.”

The physical, legal and marketing risks in packaging can seem small, but all have the potential to ruin your exports if you fail to plan properly or heed the requirements, so make sure you check the boxes before you export.

]]> http://www.dynamicexport.com.au/export/starting/risks-in-freight/feed/ 0 http://www.dynamicexport.com.au/articles/markets/christmas-deliveries-made-easy/ http://www.dynamicexport.com.au/articles/markets/christmas-deliveries-made-easy/#comments Thu, 10 Dec 2009 22:15:15 +0000 Gary Edstein http://www.dynamicexport.com.au/?p=3957 It is that time of year. For those of us with loved ones around the world, the challenge comes not only in choosing an appropriate Christmas gift, but in packing it and sending it to ensure it gets there on time. Make sure your Christmas freight is as safe as Santa’s by following these packaging tips:

Check the customs requirements

This is especially important. At this time of year, lots of people will ship to countries they don’t usually ship to, and will most likely be sending goods they don’t normally send as well. Yummy Christmas treats such as foods, wines and other raw materials may actually not be accepted in the country you’re sending to.

Personal alcohol to the US is actually banned and customs and quarantine regulations will prevent the entry of most foodstuffs to the UK and Japan. The religious beliefs of the country you’re sending to may also mean certain gifts aren’t allowed. To avoid disappointment, the best thing to do is to check with your logistics provider about the customs requirements of the country before you seal the box.

Check the transit time

Transit times can vary between 24-72 hours, depending on the customs requirements of the country you’re sending to. The best thing to do is check with your shipper the transit time between your postcode and the postcode you are delivering to.

Never send a ‘gift’

Of course when we’re sending a Christmas gift, it is natural to want to keep the contents a surprise for the recipients. However, when you’re completing the airway bill, it isn’t acceptable to describe the contents as a ‘gift’. You do have to provide a full breakdown of what is being sent. If you’re sending a Christmas hamper and the full breakdown of goods won’t fit on the airway bill, you can put ‘Christmas hamper’ as the description and then state ‘see attached invoice’. On the proforma invoice, you must detail exactly what you are sending, for example; one cotton shirt, three DVD movies, five music CDs, two comic magazines, etc.

Consider duties and taxes

Countries around the world will charge differing duties and taxes depending on what is entering the country. As the shipper, it is imperative that you state on the airway bill whether you wish to send the shipment as ‘Deliveries Taxes Paid’ (DTP) or ‘Delivery Taxes Unpaid’ (DTU). If you send your gifts as DTU, the person you are sending to will have to pay duties and taxes on the shipment. In most cases, your logistics provider will be unable to advise on what the duties and taxes will be in differing countries.

Pack your gifts properly

Choose the size of the package according to its content. Under-filled boxes could collapse. Also, if the package is under-filled, your shipments may volume out and end up costing you more to send. Overloaded boxes may burst.

You should always use high quality materials to pack your shipments. Although the Christmas wrapping you had done in the store may look pretty, it may not be suitable for shipping. Your gift will go through auto-sort machines, re-weight machines and will be packed with other shipments in containers before it reaches your loved ones. You want to pack it in such a way (with cushioning material) to give it the best chance of reaching the recipient in perfect condition.

Write the address clearly

This may sound obvious, but you would be surprised how often this can be overlooked. The address must be written on the airway bill in English and in full. Include the street number, street name, suburb, province, state, country and postcode. When sending gifts, bulky items that need to be signed for, it is easier to send to a business address to ensure delivery.

Some Don’ts

When packing your gifts this year, please don’t:

• Use fabric bags or cloth to pack your gifts; use durable cushioning material durable.
• Over-seal your package. All packages can be opened by Customs, they are authorised to inspect if they see fit to do so.
• Use cellophane or rope to seal your shipment – it won’t hold in transit. Instead use industrial type tape
• Consider ‘fragile’ or ‘handle with care’ labels as substitutes for careful packing. Most automated machinery utilised to transport your gifts won’t pick this up. Instead, please ensure your gifts are appropriately packed to protect against damage.

By following these simple tips, you can ensure all of your family, wherever they are, have a very Merry Christmas.

—Gary Edstein is the  senior vice president of DHL Express

]]> http://www.dynamicexport.com.au/articles/markets/christmas-deliveries-made-easy/feed/ 0