Tag Archives: Shipping

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Coronavirus sparks possible force majeure

 

Force majeure is a rarely invoked clause in many contracts. It frees all parties from obligations during the time of some major catastrophe beyond their control, such as war, strikes, riots, crimes, or so-called acts of God (earthquakes, hurricanes, volcanic eruptions, epidemics, and so on).  It seems that some Chinese shipyards and ports are applying for papers from The China Council for the Promotion of International Trade stipulating force majeure conditions.

This would potentially allow ocean carriers to cancel ship runs, lengthening supply chain transit times for cargoes.  There are already long delays. The extension of Chinese New Year to give more time to adjust to the Coronavirus outbreak also introduces delays.

It’s hard to say how such a clause would affect IMO2020 compliance. Shipyards will be closed, preventing scrubber installations, and so there will be long delays in fitting out ships with required scrubbers.  This may go on a lot longer than anyone thinks, since backlogs were already long on scrubber installations.  I doubt that IMO2020 rules on low-sulfur fuel use will be changed to accommodate force majeure, so carriers will simply have to do with fewer ships than they planned for. Shippers, their customers, will take the hit.

Splash-logo-Feb-Aug-e1519814055424    FEBRUARY 4TH, 2020 Jason Jiang JASON JIANG

via Coronavirus sparks force majeure conjecture – Splash 247

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Posted on February 4, 2020 by in Shipping, Supply Chains

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New index to improve liner reliability

 mentions that the Shanghai Shipping Exchange (SSE) and Cargosmart are defining a new index of carrier reliability.   Current reliability is around 80%. That means 1 in 5 ships are not arriving on time.

A good reliability index should prove useful to shippers trying to choose a carrier for their cargo.  If you need it on time, you need to pick a high reliability carrier.  Forwarders and NVOOCs, who buy blocks of slots on carriers’ ships for resale, will be moved to choose carriers who won’t cancel and who won’t delay the ships.  The index should also be useful to them.

I’ve been complaining for a while that carriers are not addressing the problem of erratic timing of shipments, and it’s a serious customer service issue for them. It’s time they started addressing it.  True, the larger ships made it more of a problem, but that is of their own doing. Customer service improvement costs money, but you make it up by holding onto good customers longer term.

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via Shippers welcome plan for new index to improve liner reliability – The Loadstar

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Posted on September 6, 2019 by in Logistics, Service Management, Shipping, Supply Chains

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Online port community system ‘game-changer’ for India’s shipping industry

, has written an interesting piece about a new port communication and collaboration system that is revolutionizing how Indian p[orts operate. It’s called PC51x, and it connects port users via secure messaging to exchange paperwork, financial info, and other messages.  In trials, it reduced cost and time for interaction drastically.

And it did NOT involve blockchain. In fact, it uses only technology developed years ago and tested severely by those years of practice.  It seems that for the user it operates like one of those doctor portals we have all become accustomed to in the US; annoying, but much faster and less annoying than waiting for her to call back (!@?^%$#!).  And capable of much faster integration if those communicating have a desire to make it better and faster.

They have announced a portal type interface.  This type of function is like what we used to call ‘middleware’, connecting systems with different data specifications and requirements, and letting them work out how to use the data.  It makes a lot of sense to me.

I think any port could copy this with a little hard nose bargaining with those it collaborates with.   Getting truckers on board might be more difficult without a good look at the systems they use every day.   But for many others it makes sense.

But should the port be the driver?  I think there is potential for 3PLs to usurp the role for their cargoes.  Then we’d have to link in their systems. Hard, but not impractical, and easier than forcing all their shippers to use the port’s message portal.  Everyone would benefit.  And more players such as banks and customs could participate as well.  Better that this should be driven by a lot of smaller players (if ports can be thought of as smaller) than by a national or global standards initiative, especially one from a single source.  Let it evolve, I say.

logo  via Online port community system a ‘game-changer’ for India’s shipping industry – The Loadstar

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Posted on May 30, 2019 by in Advanced Computing, Leadership, Logistics, Ports, Shipping, Strategy, Supply Chains

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