Restructuring of the Chinese economy will force transportation companies to rethink their long-term strategies

Restructuring of the Chinese economy will force transportation companies and many manufacturers in southern China and Hong Kong to rethink their long-term strategies, according to shipper representatives.

A number of analysts have downgraded economic forecasts for China this year as the export outlook has deteriorated. But the latest port statistics illustrate that trade to and from northern and central regions is still growing at relatively brisk rates even though export growth has been running in single figures for most of the year.

Of China’s top 10 container ports, the southern ports of Shenzhen and Guangzhou saw the slowest growth in the first five months of 2013.

Hong Kong, which is likely to be supplanted by Shenzhen this year as the world’s third-largest container port by throughput, has fared even worse. Box volumes were 9.1 percent lower in January-May 2013 than a year earlier. And, although throughput was skewed by a 40-day strike by port workers that started on March 28, the port suffered double-digit year-over-year declines in February and March.

With economic growth slowing after 20 years of rapid expansion, and with the government increasingly focusing on its domestic market, shipping interests see danger signs for logistics demand in Hong Kong and southern China.

“The period of high growth in China many believe has now gone,” Sunny Ho, chief executive of the Hong Kong Shippers’ Council. told The Journal of Commerce. “The government already knows it cannot rely on exports for economic growth as much as before so it doesn’t come as a surprise.”

Rising wages in southern coastal China, meanwhile, has forced shippers to make adjustments, according to John Lu, chairman of the Asian Shippers’ Council. “From the nation’s point of view, wage increases are good, but for shippers, costs are now higher in the traditional manufacturing centers so they are less competitive,” he said. “They have to make major decisions about whether to move factories closer to markets or to the interior of China to bring costs down, or face the cost of high worker turnover.”

“China is looking to reduce its dependency on exports, by growing domestic consumption and that will take a lot of adjustment by manufacturers,” Lu added.

Ho believes shippers and the transportation sector in Hong Kong should plan for a further slowdown in export growth from the Pearl River Delta even though exports via ports in the north such as Tianjin on the Bohai Rim have been performing strongly.

“We are the most hard-hit region because this is where the largest concentration of labor-intensive and low-value production with a strong outward trade concentration is,” he said. “These are the products most seriously impacted by cost increases and the policy changes of central government.”

Hong Kong manufacturers need to upgrade to more premium products, find new markets or explore domestic markets, Ho said. “This is the only way out,” he said. “I think the trend has been continuing for the past seven years, and now it’s having a substantial impact.”

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Please kindly be aware that on 6/7/2013 Maher Terminal will be closed in order all slots casino to complete a system update.

And on 6/6/2013 the receiving of Maher Terminal receiving will be limited, there are absolutely no late gates for any containers!

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Bill of Lading & History

A bill of lading (sometimes abbreviated as B/L or BOL) is a legal document used in the transport of goods by sea between the shipper and the carrier detailing the type, quantity and destination of the good being carried. The bill of lading, also serves as a receipt of shipment when the good is delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

The functions of the bill of lading were gradually created by the practical needs and technical developments of a certain time. It’s necessary to understand how the bill of lading evolved into the instrument that we know today. Bills of “Loading” as they were once called have been around for centuries, the early transportation contracts began to appear in 13th century. Back then it only functioned as a receipt for goods received by master or ship owners. Through the centuries it has developed into a receipt containing the contract of carriage between shipper and carrier, and it acquired the third characteristic later on, negotiable document of title.

Originally merchants in the old days didn’t really have a need for such a document when transporting their goods, because merchants were often also the master of the ship or at least they used to travel at sea with their merchandise. Obviously, this wasn”t a very practical system. With commercial activity increasing in the world and merchants staying at shore, such transportation documents needed to be generated to prevent disputes and to serve as a proof of shipment to protect both shipper and consignee.

Back in old times, masters of the vessels had to be attended with clerks when receiving goods, these clerks were a member of the crew and their most important duty was to accurately record the cargo received in a parchment book or register while the master, shipper and another witness were present. The bill of lading which was originally a copy of the book of lading probably australian casinos online produced to guard against the loss of the only record of the cargo in case a ship was lost. In such case the shipper would often be at the mercy of the master to clarify what the cargo consisted. Since the merchants didn’t accompany the cargo anymore, there was also a need for separate documentation that they could keep with them, and later another copy would also serve as a proof that the party demanding the cargo at destination was in fact the consignee. One of the earliest documents where the bill of lading is mentioned by its modern name was in Europe, in the law of the Hanseatic cities in 1591. It’s also widely accepted that Italy is the birthplace of  the bill of lading, because of the growing economies of the Italian city states due to the sea commerce between Italy and the Roman Empire in Constantinople.

Through the centuries, many protocols and rules shaped the characteristics of today’s modern bill of lading, limitation of the parties, practices of bill of lading exchanges, shipper’s, consignee’s and carrier’s legal rights. Hague Visby protocols, Bill of Lading Act of U.K. Brussels Protocol, Carriage of Goods by Sea Act are some of the most important ones. There are many types of bill of ladings used in shipping industry depending on transportation mode, purpose etc., to summarize shortly we can list Shipped (On Board) B/L and received for shipment B/L, Clean B/L and unclean B/L, Straight, blank and order B/L (which is used widely used in international trade), Direct, transshipment, through bill of lading, Liner B/L, container B/L and combined transport B/L, On Deck B/L, stale B/L, ante-dated B/L and advanced B/L, Non-Negotiable Bill of Lading, House Bill of Lading (also known as forwarder bill of lading).

There have been many efforts to bring into existence negotiable electronic bill of lading that would replicate all the functions of their paper version but the development has been slow so far. Because this concept hasn’t received the full support and confidence of all the participants in international business due to concerns about security and authenticity. Now after mentioning brief history of the bill of lading, I’d like to mention the importance of it. A bill of lading has 3 main characteristics:

1. Receipt for the goods shipped.

2. Evidence of the terms of the contract of carriage

3. Document of title to the goods specified in the Bill of Lading.

The Receipt Function

It indicates the identification of the shipped goods, the number of packages, pieces, quantity, or weight of the goods shipped, and the apparent order or condition of the goods at the time of loading.

Evidence of Contract of Carriage Function

It is evidence about a valid contract of carriage of goods by sea. In short the bill of lading is evidence of the contract of carriage of goods. So, it is not a contract but it is only evidence of the contract between shipper and carrier.

Bill of lading is a document of title

The bill of lading confers title to the goods to the consignee noted on the bill. The bill of lading may also be made out “To Order”, which confers title to the goods to the holder of the ship.

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3PL | Third Party Logistics

A 3PL (third-party logistics) is a provider of outsourced logistics services. Most companies provide logistics services for their client for part, or all of their supply chain management functions. Logistic services encompass anything that involves management of the way resources are moved to the areas where they are required. The term comes from the military.

In business, 3PL has a broad meaning that can be applied to any service contract that involves storing or shipping things. A 3PL service may be a single service such as transportation or warehouse storage or it can be a system-wide bundle of services capable of managing the entire supply chain. Companies may choose to outsource any of these steps of the supply chain to a third-party logistics provider. Outsourcing services to providers may help cut transportation costs, reduce inventory, improve business processes, technology strategy and integration, manage supply level and improve customer service.

The term 3PL was originally coined to differentiate logistic providers who used the Internet to enhance their services from those that did not.

There are four (4) types of 3PL providers and each of them specializes in different services:

Standard 3PL Providers

Standard 3PL providers perform basic logistics function but don’t practice 3PL as a core function. These 3PL companies provide with the most basic activities like warehousing, pick and pack and also distribution. These 3PL providers neither offers a comprehensive, innovative approach to logistics functions, instead offering a small range of services to companies with particular needs and their service usually 9m and mobile up 339% to €5. comes under low rate.

3PL Service Developers

Service Developers offer their customers logistics support of a standard 3PL along with added infrastructure and management. Service developers 3PL are based on a strong IT infrastructure. They provide the clients with many value added services such as tracking, cross docking, specific packing or unique security system etc. Because of these added infrastructure and expertise, companies that hire service developer 3PL can ensure the safety and reliability of their products. But service developers don’t offer the comprehensive, tailored transportation management solutions.

3PL Customer Adapters

Customer adapters exercise complete control over a company’s logistics activities, making them a wiser choice than standard 3PL providers and service developers for companies that desire comprehensive shipping management. They take care of all the company’s logistic activities on the request of their client. Customer Adapter 3PL in essence entirely runs the logistics at the behest of the hiring company. This type of 3PL inherits the logistical operation from the hiring company but it does not create its own operation. Customer adapters also cost significantly more because of their heavy personnel involvement in the logistics function.

3PL Customer Developers

Customer developers offer a comprehensive approach and specialized innovative logistics solutions. Customer developers take complete control of the company’s logistic functions and integrate themselves into the company and exhibit complete control over the logistics function and develop new logistics solutions or might change the process if needed. Similar to the customer adapter, the customer developer takes over the logistics of the hiring company entirely. But, unlike the customer adapter, the customer developer 3PL integrates itself with the hiring business.

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Near-Shore Advantage with Mexico

The winds of manufacturing continue to shift, as companies seek manufacturing sites that offer the best of all worlds: low labor costs, high quality, good infrastructure, access to markets, reduced shipping time and costs and educated, skilled work forces. In the past China excelled at providing low manufacturing and material costs, but always fell short when it came to speed to market (freight and delivery), taxes and customs duties. Mexico’s proximity to the U.S. and Latin American markets reduces freight expense and minimizes supply chain disruptions; ensuring goods make it to the market faster.

Until recently, Mexico’s economy was based on low-paying, labor-intensive industries like textiles. Now Mexico is growing in industries, like autos, aerospace, and technology with the increase in the country’s educated workforce. Manufacturing in Mexico continues to display signs of positive growth; the country posted an increase in their Manufacturing Purchasing Managers Index (PMI) for the final month of 2012.

The U.S. is Mexico’s largest trading partner, The amazing hidden worldThe Beetle Frenzy slot . accounting for approximately 80% of their exports. Mexico’s maquiladora program makes it possible for companies to bring in components and materials duty-free, which can in turn be exported for sale to the U.S. and Canada; even Chinese companies are moving to Mexico to take advantage of the North American Free Trade Agreement (NAFTA) commercial and fiscal benefits. Although the U.S. and Mexican economies have started to recover, it is still sluggish as the growth rate in Mexico is projected to slow down this year but remain at 3.5%.

 Source: Chart taken from the U.S Census Bureau on Foreign Trade

Are you a supplier of goods and services in Mexico? Are you looking to find Mexico-U.S. supply chains and new sources of supply? Allow New Dimension Logistics to share our Cross-border Trade Information. Contact us today to have a NDLX solutions expert show you more.

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