30 years ago a new transport company opened for business in Northwich. K&L Freight’s business at the time was based around UK deliveries using the company’s trucks from its base in Northwich. The owners soon realised that K&L Freight’s key customers had started to sell their products into Europe. In response to this demand the company started to send its trucks into Europe fully loaded with customer deliveries.
Nothing in the world of transport stands still and after several years of trading owners Martin Kidd &
We have been asked this question many times over in the last few months.
The answer is there’s no need to panic as the UK’s biggest port for container traffic is Felixstowe and it handles a small amount of EU origin cargo so the effect should be minimal, furthermore there are no planned changes to the import customs processes and procedures for non EU goods entering the UK through the whole Brexit process.
IATA who are the worldwide trade association for airlines are advising that they reducing the growth predictions to 2% for 2019. This is almost a halving of their previous predictions.
There are a number of reasons for this decline. As will come a s no surprise the China / USA trade dispute initiated by Donald Trump has created a fundamental distortion in the market. Many companies built up stock through 2018 in order to avoid a 25% increase in duty rates into the USA.
Now that Liverpool port can handle the biggest ships after its recent expansion at Liverpool 2 terminal it is making increasing sense to import through the Port of Liverpool. It’s not just the congestion at Felixstowe, and Southampton but also container haulage prices. These are increasing each year well ahead of inflation as the shortage of drivers continues to bite and there is not sign of them reducing any time soon.
Big Importers such as B&M Bargains with their 600 shops are at the forefront of this change to importing into the North of England directly and they have given themselves a target of 80% of their imports through the Port of Liverpool for 2019.
Many of our customer are asking what will be the effects of Brexit on non EU imports and exports, China, or India for example?
The main point to consider is how or if this business will be caught up in the near certain short-term chaos that may drastically trade with the UK and EU countries.
Our view is that this will be limited – ports used for deep sea trade have only small amounts of EU business.
It seems there has been a ceasefire from the USA side on escalating the duty surcharge from China to 25% from 1 January 2019.
The idea, as announced at the Argentine G20 summit over the weekend is that this will allow talks to proceed between President Xi of China and president Trump.
The US are stating that China will agree to purchase a very substantial amount of agriculture, energy, industrial and other products from the USA.
US container imports to the USA are at record levels at the present time. This comes as no surprise and is a direct consequence of the ‘Trump Tariff’, the threat of 25% surcharges on Chinese origin goods entering the United States after 1 January 2019.
The consequence, unsurprisingly, is a surge in rates into the USA as well as container ‘roll overs’, where bookings are postponed to a following weekly service due to overbooking.
With the introduction of the fuel surcharge of around $ 60.00 per 20 foot container earlier this month it may seem that container freight rates are at an all time high.
The reality is somewhat different. If we go all the way back to 1998 and adjust for inflation freight rates are in fact around a half what they were back then. Even as recently as 2013 rate were 50% higher than they are now.
The fire on the Maersk Honam earlier this month which sadly cost the life of four of the crew on route from Singapore to Suez has again drawn attention to what happens when a ship owner declares ‘General Average’.
Many companies transporting goods by sea to and from China, India, the USA and all other parts of the world for that matter often do not appreciate that should a ship be in danger that will cause a ship owner or cargo owner loss,
Freight rates in the container shipping industry have declined over recent years as the world economy stagnated and the industry became clogged with over-capacity. Typically rates have decreased by 40% in real terms over a four year period on major world trade lanes.
One of the big causes of over capacity has been the increase in the size of ships, with all major carriers ordering ships in the 18000 – 22000 TEU unit size (TEU = twenty foot equivalent unit).