Documenting Multi-Port Movements

When cargo passes through multiple ports, forwarders must keep records of various types of transport documents that segment a shipment’s journey. These include transshipment records, stevedore logs that capture interactions and movements at each port, and cargo condition reports that detail the state of the cargo at each transfer point. These records are not only kept for the forwarder’s reference but must be readily available to provide to customs authorities, insurance companies, and clients upon request.

Identifying Point of Damage

In the event of cargo damage, European logistics operators must trace responsibility by reconstructing the movement timeline and identifying where the damage or loss likely occurred. This process starts with examining the handover points where the cargo changed hands, including ports and terminals. At these points, forwarders focus on the specifics of cargo handling and storage conditions. They may initiate inquiries into the procedures followed during the cargo’s loading, assess whether appropriate equipment was used, and request access to CCTV footage to visually confirm the sequence of events reported by ground staff. Additionally, forwarders might assess the staffing levels during the cargo handling to see if there was adequate supervision and enough experienced personnel present.

In situations where the timeline indicates the cargo was damaged during a specific leg of the journey, forwarders must work to ascertain the operational conditions at that time. This might include reviewing weather reports to check if adverse conditions could have contributed to the damage or assessing if the cargo was scheduled during a particularly busy period at a port which might have led to hurried handling practices.

Lodging Claims

Forwarders are required to lodge claims against the responsible party under the appropriate liability regime, which, in the case of sea freight in Europe, typically involves the Hague-Visby Rules or the Rotterdam Rules. Under the Hague-Visby Rules, forwarders notify the carrier in writing of any visible damage or loss immediately upon cargo discharge or within three days if the damage is not apparent at the time of discharge. This notification should include all pertinent details of the claim, along with any supporting documentation. If the claim is acknowledged by the carrier, negotiations for compensation based on the liability limitations set by the rules (which are often calculated per package or per kilogram) will follow. If a resolution is not reached, legal action may be required and claims must be brought within one year of the delivery date or the date the goods should have been delivered.

In contrast, under the Rotterdam Rules which cover more than just the sea leg and apply to the entire door-to-door shipment, the claim process is broader. Forwarders must still document and notify the carrier of any losses or damage within seven days for non-apparent damage. However, these rules allow for a longer period for legal claims to be made—up to two years from the day the goods were delivered or should have been delivered.

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Increased Storm Frequency

Due to the warming of the Earth’s atmosphere, more water evaporates, and this increased moisture in the air fuels more powerful and frequent storms and hurricanes. This can increase the risk of maritime accidents such as collisions, groundings, and capsizing.

Changes in Ocean Currents

Near the poles, surface water becomes heavier as lower temperatures cause the water molecules to pack tightly together. Due to its increased weight, this cold surface water sinks which displaces the deeper, warmer water and pushes it upward or along horizontal paths. When this cold water warms due to climate change, however, it becomes lighter and less able to sink effectively to drive the movement of deeper waters along upward paths. As a result, currents move more slowly and provide less forward momentum for ships. They need to use more of their own power to maintain speeds which results in higher fuel usage.

Shifting Marine Populations

Changes in ocean temperature and chemistry can shift fishing areas. Therefore, ships may need to navigate new areas where a higher number of smaller, potentially less predictable fishing vessels gather. This increased density of boats raises the likelihood of close encounters or even collisions and requires ships to spend more time maneuvering to avoid them. Additionally, these temperature changes can drive migrations of protected species into areas frequented by ships. Consequently, vessels may face speed limits in these areas or need to avoid restricted zones altogether which can alter usual shipping routes, extend travel times, and impact the supply chain.

Reduced Visibility Due to Fog

As the rate of evaporation increases due to global warming, more water vapor enters the atmosphere. When this warm, moist air comes into contact with cold ocean water, it loses heat and cools down. Because colder air has less ability to keep water molecules in vapor form, vapor condenses and turns into tiny droplets known as fog.

This increase in fog occurrences reduces visibility and increases the risk of navigational hazards such as collisions, grounding, and near-misses with other vessels or obstacles. Additionally, dense fog can complicate docking and undocking operations because it obscures the visual cues and landmarks that pilots and ship crews rely on to maneuver safely in and out of ports.

Rising Sea Levels

As sea levels rise, the embankments and seawalls that ports rely on for protection against the sea become less effective. This is because these structures were designed with height and strength that may no longer be sufficient to hold back the increased volumes of water. Moreover, they may not be able to withstand the more powerful storm surges that accompany higher sea levels.

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Heavy Lift Vessels

Heavy lift ships are used for transporting exceptionally large items such as industrial machinery, oversized vehicles, and construction components that exceed the capabilities of standard shipping methods.

These ships are designed with cranes that have a lifting capacity of up to 3,000 tons. This capability allows them to lift extremely heavy loads that standard port equipment cannot handle. Moreover, heavy-duty cranes can move cargo directly from the pier onto the ship which eliminates the need for intermediate handling. Such ships may also feature hatches or openings on the deck that are larger and allow for large items to be smoothly moved in and out of the ship. Additionally, heavy lift ships have large, unobstructed deck areas to ship oversized cargo that cannot fit into standard container dimensions.

Some ships also have several permanent decks stacked vertically. Each deck can be used for a specific type of cargo to enable specialized securing methods tailored to the requirements of each item. Distributing different cargo types across separate decks also allows the ship to optimize space usage and maintain proper weight distribution.

In addition to multiple decks, heavy lift ships also use interlocking steel platforms or panels to set up temporary decks. These can be stacked on top of each other and come with adjustable features like hydraulic lifts or sliding systems for raising and lowering. This setup helps to fit cargo of various sizes.

Wind Turbine Installation Vessels

These vessels are engineered to transport and install components of offshore wind farms, including turbine blades, nacelles, and towers.

Like heavy lift ships, they are equipped with specialized cranes with a lifting capacity of up to 3,000 tons. However, they often feature enhanced precision controls for precise installation tasks such as accurately placing turbine components onto their designated foundations within the wind farm site. Additionally, these vessels are equipped with jack-up legs or stabilizing pontoons to reduce movement when positioned for installation. Some ships also come with subsea tools and remotely operated vehicles to help install foundations and underwater infrastructure like monopiles, transition pieces, and anchoring systems which are necessary for the stable foundation of wind turbines.

Open-Top Container Vessels

Open-top container ships have the flexibility to carry both standard shipping containers and oversized cargo. They are well-suited for transporting large equipment such as construction machinery and tall industrial components, alongside containerized cargo like electronics, manufactured goods, and perishables.

On these ships, standard containers are stacked in the cell guides located in the hold and on specific areas of the main deck, typically toward the center and rear to balance the ship’s load. Oversized cargo is placed in the mid to forward areas of the deck where the roof opens and allows bulky items to extend vertically without obstruction.

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Heightened Security Protocolled Follow Incendiary Parcel Incidents

This updated protocol comes in the wake of incidents where two incendiary devices were ignited in packages within Europe’s parcel delivery networks. In July, a reported incident in Germany involved a parcel originating from the Baltic region which was equipped with an incendiary mechanism and ignited. The resulting fire briefly spread to the entire freight container housing multiple packages but the flames were swiftly put out.

Such incidents prompted German officials to believe the acts were intended to damage infrastructure. In response, the German authorities have issued a letter to businesses that cautions them about the possibility that additional parcels containing incendiary devices may be in circulation.

New Regulations for Shippers’ Business Compliance

Under the new regulations, freight forwarders are required to ensure that all cargo originates from shippers that comply with the new criteria. For every master waybill, European logistics operators must confirm that relevant shippers adhere to one or more of the Established Business Relationship standards. The criteria specify that either the shipper is recognized by an official agency or security program as a known consigner or has maintained an account with the operator, set up no later than September 2, 2024. This account should include at least one of the specified details: transaction logs showing events or interactions, a track record of credit or payments, confirmed billing and shipping information, or various verified business documents or interactions.

For shippers who established their accounts after September 2, the operator must maintain detailed records that include a variety of details. These details encompass business licensing, registration certificates, or similar formal record. Additionally, the forwarder needs to have on file complete business information such as company’s name, physical and electronic contact addresses, and telephone number. Payment information, such as details associated with a corporate credit card, should also be documented. Additionally, freight forwarders are required to hold contact details for a representative who is authorized to handle the account. Lastly, there must be a signed contract in place between the logistic operator and shipper to ensure all agreements are formally recorded.

Affected Cargo

All commercial shipments, regardless of whether they are listed on an airway bill, are considered cargo and must adhere to the regulations. Exceptions to these rules include shipments labeled as human remains and live animals, diplomatic pouches, and any shipments made by the U.S. government that are accompanied by air waybill or Government Bill of Lading where the shipper is identified as a government body.

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Impact on Routes, Rates, and Port Activities

Significant interruptions in Red Sea navigation have pushed carriers to reroute their ships around Africa’s southern cape. This detour has led to increases in travel distances for tankers and cargo by more than 50%. As a result, as per the Drewry World Container Index, shipping rates have climbed by 270% following the onset of the broader conflict in the Middle East. Prices increased to US$5,182 in August 2024 from US$1,389.5 in October 2023. Additional increases are expected as experts anticipate that shipping demand will continue to be strong until after the Chinese New Year in February 2025.

The crisis has also led to bottlenecks at ports in Barcelona, Shanghai, Malaysia, and Singapore. This is because detours have increased the number of ships arriving at these ports outside their usual operational window. Congestion, in turn, has resulted in canceled and postponed sailings as ships fail to depart on schedule.

Such delays due to the Red Sea crisis can lead to increased storage and handling costs at congested ports which could ultimately raise prices for freight forwarders and consumers. Additionally, as vessels reroute, distances from ports to inland destinations often increase for freight forwarders. This requires more extensive pre-carriage (transport from the initial loading point to the port) and on-carriage (transport from the final port to the destination), which raises transportation costs but these might not always be fully passed to the clients.

What Freight Forwarders Can Do

One way freight forwarders can mitigate the challenges of turbulent shipping conditions is by entering into block-space agreements. In such arrangements, forwarders and carriers agree on a fixed price for a specific weight or volume of cargo to be shipped in the future. This strategy offers forwarders some capacity and cost certainty and can serve as an effective hedge against fluctuating prices. Moreover, utilizing block-space agreements can yield cost savings compared to current spot rates. This holds particularly for Asia – Northern Europe routes and may offer even greater savings on routes across the Atlantic.

Additionally, European logistics companies can establish agreements with niche regional carriers which often have untapped capacity and are more open to negotiating lower rates or guaranteeing space. These carriers typically operate outside larger shipping alliances which tend to prioritize high-volume clients over smaller forwarders, especially during peak demand periods.

Finally, forwarders can work with cargo insurance providers to establish tailored rate protection products. These financial instruments allow forwarders to hedge against significant price increases by locking in coverage for the difference between a contracted rate and any unforeseen market surge. Some products focus specifically on certain components of the shipping cost, such as bunker fuel surcharges, while others provide broader protection against rate increases.

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Industry Consolidation and Expansion

Today, carriers are actively investing in cargo airlines, establishing their own fleets of cargo planes, and acquiring stakes in port management entities. Additionally, these carriers have expanded into railway transport and are purchasing e-commerce and automotive logistics businesses.

While sea freight remains the primary focus, shipowners are expanding beyond their traditional operations to provide comprehensive services throughout the supply chain. Now they can manage the entire logistics chain, from collecting products at manufacturing sites in Asia, moving them to ports, distributing them globally, warehousing cargo, and providing direct-to-door delivery services.

Before long, a single carrier might oversee every mode of transport and every phase of cargo transit. Additionally, as shipowners transform into comprehensive logistics operators, they can offer customs services and added value, including inventory management, supply chain optimization and consulting, along with cross-docking and consolidation services. They might also provide reverse logistics and returns management, value-added processing, and services related to demand forecasting and planning.

Potential Consequences of Consolidation

This consolidation of power can lead to serious repercussions. First, dominance by a few large entities can limit competition which could result in higher prices and fewer choices for consumers. Second, when a few players control the entire supply chain, there is less competitive pressure to innovate. These large entities may become complacent as they face little threat from smaller or new competitors who could introduce innovative solutions. Moreover, concentrated power in the hands of a few can result in a focus on maintaining control rather than pursuing innovative ideas. Third, this increased power can undermine the bargaining position of smaller businesses and clients which can lead to unfair terms of service and pricing. Lastly, centralizing control over various modes of transport and logistics functions into a few entities can create supply chain vulnerabilities. Any disruption affecting the dominant player, whether due to operational issues, financial instability, or geopolitical factors, can have widespread impacts on the entire supply chain.

The Realistic Outlook

That said, is this scenario realistic where customers choose to work directly with these larger carriers and bypass forwarders? In reality, logistics companies provide unique advantages that larger players may struggle to match, including bespoke solutions, personalized service, and deep local knowledge. Additionally, European logistics companies specialize in niche areas such as luxury yacht and submarine equipment transport, experimental research logistics, and government and diplomatic shipments. Last but not least, forwarders serve customers by selecting appropriate carriers, securing favorable terms and shipping rates, and representing clients in disputes. After all, it is challenging to expect a carrier advocating for a client’s interests in a conflict involving itself. The advantage of using forwarders comes from their ability to navigate these situations.

The post How Major Shipowners Are Reshaping the Global Logistics Landscape appeared first on International Forwarding Association Blog.

Alternative Routes

Small cargo ships can choose alternative routes such as smaller channels, rivers, and shallow coastal waters. In Europe, such routes include navigating through the narrow canals of the Netherlands, along the Elbe and Rhine rivers in Germany, and the coastal waters along the Adriatic and Aegean Seas. Since navigation is restricted for larger vessels and traffic is lighter on such routes, smaller ships can move more freely and maintain consistent transit times.

This regularity in scheduling enables forwarders to receive shipments more consistently and quickly and allows them to offer more reliable services.

Navigation and Equipment Requirements

Large container ships and bulk carriers typically require water channels maintained at sufficient depth to allow them to safely approach ports, along with berths that provide ample clearance for ships to moor securely. They also require extensive resources such as heavy-duty cranes and container handling equipment like spreaders, twistlocks, and lifting beams.

Small ships, in contrast, can navigate through shallower waterways and use berths with lesser depth because less of their hull is submerged in water. They may also use smaller cranes or davits for loading and unloading operations and basic handling equipment like pallet jacks and forklifts for moving cargo within the port area. This type of equipment is quicker to operate and allows for faster turnaround times.

As small ships require shallower channels and berths, they can dock at smaller ports within major hubs and thus bypass the congestion typically found at main terminals. Additionally, because they need less complex equipment, which smaller ports possess, this streamlines the loading and unloading process and reduces waiting times. These factors enable freight forwarders to expedite cargo turnover, meet tight schedules, and improve the reliability of deliveries.

Port Fees

Small ships occupy less space at the dock, which results in lower fees based on the area they use. Their faster loading and unloading processes decrease the time spent in port, which leads to lower daily or hourly dockage fees. Additionally, they use fewer port resources such as water, electricity, and waste disposal services, which further lowers associated costs. In terms of maintenance, because small ships have simpler systems and fewer components, their upkeep is less complicated and less expensive at ports.

Lastly, smaller vessels are considered lower safety risks because they carry fewer crew members and less cargo, which results in reduced impact in the event of an accident. For this reason, they undergo less frequent and stringent inspections focused on basic safety, including hull integrity and the availability of safety equipment, rather than detailed checks. This lowers inspection and compliance fees.

For ground freight forwarders, these cost efficiencies lead to more economical logistics operations. This enables them to provide competitive shipping rates and attract additional business from clients who value cost-effective solutions.

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Weather Conditions

Coastal shipping routes are more directly affected by land weather patterns compared to deep-sea or open ocean routes. Inland geographic features impact weather in coastal waters, with valleys causing winds to accelerate and change direction rapidly and mountains forcing moist air to rise and condense, leading to increased rainfall. These geographical influences result in more frequent and intense weather events such as sudden storms, heavy rainfall, and strong winds. Such conditions can complicate loading and unloading operations at ports, disrupt shipping schedules, and cause significant delays in delivery that affect the supply chain.

Frequent Port Calls

Unlike deep-sea shipping routes which often involve long, uninterrupted journeys, short sea shipping requires vessels to make multiple stops at various ports along the way. This frequent port activity introduces several logistical complexities. First, if a vessel faces an unexpected delay at one port, it might miss its allocated slot in another. This can lead to further delays and disrupted schedules. Second, when ships maneuver in and out of ports, they must adjust speed which leads to increased fuel usage compared to maintaining a steady speed on open waters. Third, due to the multiple stops along the route, transit times can be considerably longer which can be a disadvantage for time-sensitive cargo.

Navigational Challenges

Coastal waters frequently present navigational challenges on shorter routes. These areas often have shallower water depths which contain underwater hazards like rocks, reefs, or sandbanks. Additionally, due to the close proximity to land, ships frequently encounter land-based obstacles such as piers, jetties, and other maritime infrastructure. To mitigate the risk of collision with these hazards, ships are required to navigate at reduced speeds that allow for enhanced maneuverability but extend travel times.

Limited Night-Time Operations

Limited visibility after dark restricts a ship’s ability to clearly identify and respond to hazards. This is why coastal regions often implement curfews or restrict night-time entry into and exit from ports. This often means that vessels have to adjust their speeds or wait offshore until permissible operating hours commence, which can lead to delays.

Small-Size Ships

Small vessels are commonly used on short sea routes because they are more maneuverable and can navigate shallower waters and narrower channels along coastlines more easily. However, their smaller size makes them less stable in rough waters, which can necessitate reducing speeds to maintain safety. This can lead to delays and disruptions in schedules. Additionally, smaller vessels typically have slower transit speeds compared to larger vessels which can extend transit times and pose risks for time-sensitive cargo. Furthermore, smaller vessels often have limited flexibility in terms of the types of cargo they can accommodate. Due to their size constraints, they may not be able to handle heavy or oversized cargo that requires more space. Moreover, they often lack specialized equipment like cranes for containers or bulk cargo loaders, which limits their ability to manage a variety of cargo types.

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Tampering

During inspections, security teams inspect for signs of hampering, which can include discrepancies in cargo weights, irregularities in packaging, and inconsistent stocking patterns. Other indicators might be broken seals, unauthorized modifications to container structures, and the presence of unusual odors or residues that suggest hidden or prohibited items.

These rigorous inspections ultimately benefit ground forwarders, whether the issue is minor or a serious security breach. If a minor issue is confirmed by the port authority or the ship’s security team, forwarders may be allowed to address it under supervision. Examples of minor issues include misaligned barcodes that could interfere with scanning processes, small discrepancies in weight for non-regulated items that require re-verification, and minor dents in container exteriors that need documenting but do not affect the cargo’s integrity.

If the investigation uncovers serious security breaches, forwarders are shielded from direct involvement in the complex resolution process, which minimizes their legal entanglement.

Unauthorized Access

During vessel inspections, security teams are particularly vigilant about signs of unauthorized access, including overridden electronic entry logs, use of duplicate or counterfeit access cards, and evidence of bypassed security systems. In some cases, security teams might uncover unauthorized access points, such as makeshift entry points cut into the hull or modifications to ventilation systems used as entry conduits.

When security teams detect unauthorized access, they document each instance along with details such as the time of the breach, the tools, and methods used to gain unauthorized access, entry points, and potential motives. By capturing these details, security teams can trace the breech back to the responsible party. This shields freight forwarders from unwarranted blame in situations where they have authorized access to the ship.

For example, forwarders may be onboard to supervise the loading or unloading of specialized equipment that requires specific handling procedures according to the client’s standards. They might also be present to facilitate customs clearances and manage the documentation and inspections required by government regulations. Additionally, in scenarios involving the transport of hazardous goods, forwarders could be needed onboard to oversee the correct handling and stowage of these materials.

Stowaways

During vessel inspections, security teams also focus on detecting signs of stowaways, another serious security issue. Inspections for stowaways include examining less accessible areas of the ship, such as engine rooms, service ducts, and cargo holds where unauthorized persons might hide. Security measures may involve the use of motion detectors, thermal imaging cameras, and regular patrols by the crew to ensure no one has boarded the ship without permission.

In case stowaways are discovered, their hiding spots, duration of presence, and methods of access are meticulously documented. This thorough approach helps protect forwarders from being wrongly implicated in security lapses. For instance, identifying specific hiding spots helps prove that breaches occurred in areas forwarders do not access while detailing the methods used can show these breaches involved specific onboard vulnerabilities unrelated to the forwarders’ duties.

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Ice Formations

In the Baltic Sea, winter often results in harsh conditions where portions of the sea are covered by thick ice packs that immobilize vessels. To combat these challenges, ports in Finland and Sweden deploy fleets of icebreakers – ships with reinforced hulls that break ice into pieces. These icebreakers help maintain clear paths along commonly used shipping routes such as the Gulf of Bothnia and the Gulf of Finland and approaches to major Baltic ports. While icebreakers create navigable paths, they still leave behind substantial chunks of ice, and ships need to travel at lower speeds of 5 to 10 knots compared to normal cruising speeds of 20 to 25 knots.

These reduced navigation speeds can lead to ships arriving late at ports where cargo is waiting to be shipped. As a result, forwarders may need to use heated storage facilities to prevent goods from degrading, given the challenging weather at these northern ports. Heated storage is especially important for temperature-sensitive goods like insulin and biotech enzymes, which are sensitive to temperature fluctuations, as well as exotic plant seeds that could lose germination capability if exposed to frost.

Fog

Fog is a common maritime challenge, particularly prevalent in high-traffic areas like the English Channel and the North Sea. It poses significant risks to ships because dense fog drastically reduces visibility and impairs a ship captain’s ability to see other vessels and navigational markers. Additionally, the reduced visibility makes it difficult to detect hazards in the water, such as submerged rocks, floating debris, shallow reefs, and wildlife.

In such conditions, ships must navigate at significantly reduced speeds which can disrupt scheduled arrivals. Moreover, the dense fog can also hinder the operations of harbor pilots and tugboats that guide ships safely into ports, which further compounds delays.

Additionally, port authorities may implement stricter protocols during foggy conditions, which also slow down activities. For instance, the use of additional spotters becomes mandatory to guide crane operators when lifting and positioning containers.

Another measure is the requirement for all communication to be conducted over dedicated radio channels, with operators confirming receipt and understanding of all instructions before proceeding. This protocol reduces the likelihood of miscommunication but also adds time to every operation.

To further enhance safety, port authorities might extend the mandatory distance between moving vehicles and equipment within the port. This increased separation distance helps prevent collisions but requires operators to cover more ground at slower speeds, which further delays operations.

To mitigate such delays, forwarders can sign contingency contracts with local transport companies for immediate cargo pickup and distribution. These contracts specify that a fleet of pre-arranged trucks is always available within a specific response time, such as within two hours of a ship’s arrival. They may also detail expedited routes for high-value electronics and perishables and negotiate priority access to local roads to avoid congestion and streamline transport.

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