4fold 1

Foldable containers may be cure. Just not yet…

Nov 25, 2021 | , ,

The bulk of the world’s trade is shipped in intermodal shipping containers, which have remained largely unchanged since IMO standardisation 50 years ago, but innovation may be the key to reducing supply chain congestion. Is this a new era of global container shipping?

Few tools of the global economy have survived without major innovations as long as the shipping container and the continuing pandemic-linked supply chain disruption is presenting a significant opportunity to address that.

As ports, terminals and warehouses get congested with containers, both empty and full, the conditions are increasingly favourable for a product innovation that failed to catch on before the pandemic. Shipping containers that collapse to as much as one-fifth their usual size.

The cost of repositioning empty containers to places where they’ll be loaded is about $20 billion, according to the Boston Consulting Group and many will spend days and weeks taking up space in already-jammed holding areas and depots, compounding delays along supply chains.

In 2013, the Dutch container company 4Fold’s 40-foot metal boxes became the first foldable units to get certification from the Container Safety Convention and International Organisation for Standardisation, meeting standards required by shipping lines, terminals and rail companies.

Today more than 15 carriers, shipping via 60 ports worldwide are testing the Delft, Netherlands-based company’s environmentally friendly containers that can be folded into a quarter of their volume, taking up less space on trucks, ships and docks.

The world’s largest shipping line, Maersk, has referred to foldable containers as the “dream of the shipping industry” and leading consumer-goods producers, including Procter & Gamble, are also testing the technology.

Despite sparking hope among carriers and shippers, as the answer to making equipment available more quickly, higher upfront costs and hesitancy to turn to a new business model have so far kept foldable containers from becoming mainstream.

As companies find themselves more pressed to find answers to supply-chain congestion, the trade-offs of investing in a new technology might become smaller. The US-based foldable-container company Staxxon LLC gained full certification for its 20’ product at the height of the pandemic and is planning to put them on the market next year, suggesting it has dozens of potential buyers who’ve indicated interest.

Carriers could save up to 57% in inland transportation costs by relying on foldable containers, according to Singapore University. And despite higher purchase and annual maintenance costs, foldable units would still be a more cost-beneficial option, their research found.

The challenge is defining the optimal mix of foldable and regular containers that carriers should maintain in their inventory.

Too many and the purchase costs could offset the benefits. Too few and you would struggle to find three other foldable containers to create the single unit, that generates efficiency and cost-savings.

Metro are innovators and we will be watching the development of this story with interest. And ready to actively participate in testing, evaluating or investing, in the best interests of our customers. 

We also own many of thousands of containers ourselves within our group of businesses – so know what we are talking about. Please direct any questions or requests for creative solutions to Elliot Carlile who is heading up the programme for Metro clients.

Header image courtesy of HOLLAND CONTAINER INNOVATIONS NEDERLAND B.V.

Brexit red line

Shippers risk falling foul of post-Brexit origin rules

Nov 10, 2021 | , , , ,

Many British companies trading with the EU are still failing to understand the extent of their legal obligations to comply with the origin rules of the EU-UK trade deal and could face disruptive enforcement action by customs authorities, when a ‘grace’ period for UK imports ends on the 1st January 2022.

Under the terms of the Trade and Cooperation Agreement that took effect at the start of the year, EU exporters can send goods to the UK tariff-free, but only if they can prove their products are sufficiently “made in the EU” to qualify for preferential access to the bloc’s single market.

These certification requirements on local content also apply to UK exporters wanting to send goods to the EU without incurring tariffs.

The “rules of origin certification process, was deemed so complex that EU and UK exporters were given a one-year grace period that reduced the required documentation, but this will expire on the 1st January 2022, with many companies facing a paperwork challenge.

UK importers found to have brought in goods tariff-free that are later found not to have complied with the rules of origin must pay full duties, and vice versa.

During the one-year grace period, British and EU companies have been allowed to certify their goods did qualify for zero-tariff access under the rules of origin, without supporting evidence from their suppliers.

Rules of origin and the way “originating content” is calculated vary from one product to another, but typically an item must be about 50% British or EU made in order to qualify for zero-tariff access under the terms of the trade deal.

To date, many British businesses have simply been attaching declarations stating they met the rules of origin to their invoices, even when they have no idea if the product is compliant or not.

Other companies have been working to better understand their origin situation, but with the potential for hundreds and thousands of components and complex and far-reaching tiers of supply, the situation is challenging.

The extent of any disruption from January will depend on how strictly EU and UK customs authorities carry out rules of origin checks. Inspections are expected to increase, particularly on the UK side, with more customs officers in place to ensure accuracy in terms of origin classification, as they will be collecting duty on behalf of the government rather than Brussels as was the case pre-Brexit.

If goods do not meet the rules of origin requirements or, more critically if origin cannot be proven, the importers will need to pay applicable Customs Duty.

The requirement to obtain preferential duty lies with the UK importer, who will need to provide either a statement of origin from the exporter or evidence they obtained about the originating status of the product.

Statement on origin that the product is originating made out by the exporter:

When exporting from the EU a statement of origin can be made out by any exporter where the value of the consignment is under €6,000 (£5,700). Above this, the EU exporter must have a Registered Exporter number (REX) and include it in the statement.

The statement on origin can be provided on any commercial document, describing the product in sufficient detail to enable its identification.

Importer’s knowledge that the product is originating:

‘Importers knowledge’ allows the importer to claim preferential tariff treatment based on evidence in their possession, that they obtained about the originating status of imported products. This evidence may be provided by the exporter or producer and provide evidence that the product qualifies as originating. As the importer is making a claim using their own knowledge, no statement on origin has to be provided by the exporter or producer.

If the UK exporter is subject to a request for verification and cannot provide evidence to show that the goods exported to the EU originate in the UK, the EU importer will be liable to pay the full rate of Customs Duty.

Now available to new customers, our CuDoS customs brokerage platform is optimised continuously, in line with the regimes in force on both sides of the Channel. Automating and submitting customs declarations, CuDoS simplifies compliant border processing, in either direction. 

We simplify declaration submission and safeguard our customers EU supply chains from the potential fallout of easement and regime changes, which means that their EU/UK movements will not be interrupted when full UK/EU border controls are implemented on the 1st January 2022.

To discuss your situation and to learn how we automate customs declarations for businesses of all sizes, please contact Elliot Carlile or Grant Liddell who can talk you through the options.

ECO globe 2021

Supporting environmental transparency

Nov 10, 2021 | , , , ,

Environmental reporting standards for business have been high on the agenda at the UN’s Climate Change Conference – COP26 – currently underway in Glasgow and Metro support the drive for businesses to be open about their impact on the planet, as transparency is an essential precursor for reaching global solutions to a global problem.

Companies’ response to climate change is arguably the most pressing issue facing society, which is why the UK government has joined 38 international partners to welcome the establishment of new international sustainability reporting standards at COP26. 

As a disclosing company, Metro is among the 13,000 corporations that have committed to environmental transparency, by disclosing our environmental impact and working to reduce greenhouse gas emissions, safeguard water resources and protect forests.

While world leaders gathered to discuss the future of climate change and their negotiating teams are hard at work at #COP26, we hope that our customers, and the wider industry, will also take action on climate change, because it poses a present and future risk to supply chains. 

It is only by measuring our environmental impact, that companies can understand and mitigate now, to prepare for the future and ultimately remain competitive – especially as there is increasing demand for goods, services and suppliers with a reduced environmental impact. 

Metro’s MVT Eco module monitors the energy emissions, emission costs and CO2 equivalent emissions, of each consignment we move, by every mode, which means that Metro customers can monitor the environmental impact of their supply chains and participate in offset projects that will eradicate their CO2 footprint.

The MVT ECO module is a cloud-based solution, that is available, free-of-charge, to all our shippers on their MVT dashboard, where they can view key eco statistics related to their movements, to see which areas will benefit most from emissions offsetting and where efforts can have the most impact.

To request a demo or discuss your requirements, please contact Simon George, who leads our technical solution team, or Claus Rasmussen to discuss carbon reduction strategies and the availability of offset projects.

VIEW MVT ECO WEB PAGE

Coronavirus highlights need for visibility

Why some supply chains fail in the current environment

Oct 7, 2021 | ,

Brexit and the COVID pandemic has put global supply chains, and the people who work in them, into the public consciousness for probably the first time. As disruptions impact supplies of consumer goods, leaving empty shelves and fears grow for Christmas stock availability, people are asking ‘what’s gone wrong’.

Supply chains almost never operate perfectly. There’s too many processes, participants and ‘spinning plates’, to throw a spanner in the works. The reality is supply chains have  always had issues, but freight forwarders put them right and because the thing consumers wanted always turned up, no one was really paying attention. That is part of the value we have traditionally added to the global movement of your products – making issues logistics invisible so that you can get on with your own core business functions.

Weather, economics, capacity, pricing, labour disputes, strikes, regulatory changes and accidents are just some of the issues impacting trade and overcoming them is part of managing cargo flows for forwarder and supply chain executives. But the pandemic and its after-effects are much more profound. Why is that?

The simple answer is that the sudden, unexpected and massive surge of demand that followed the lifting of lockdowns, far exceeds the market’s capacity and ability to cope with the consequences. Supply versus demand dynamics were, and continue, to not be matched.

The existing global supply chain infrastructure simply can’t handle the volume of products flowing through the economy, as consumer demand shifted from purchasing services to purchasing physical products.

For another insight on this critical subject we recommend you view this excellent report on ‘Global supply disruption’ by the BBC journalist Ros Atkins - WATCH VIDEO – it gives a simple but comprehensive overview of what has and is happening in The UK and globally within the logistics arena.

With inventory limited, by domestic and global production shut downs, businesses pushed hard for more stock, as production came back online.

Suppliers across Asia, starting in China, ramped up manufacturing and products started to flow again and the volumes were much bigger than before. Many of them PPE related and totally unplanned as governments bought stock in the early phases of the Covid pandemic.

Before long, with all the passenger aircraft grounded, the shipping lines were employing all their fleets and every container ship that could be bought or hired was put to work moving cargo across the oceans.

However, ports were built to handle relatively consistent volumes and each port is constrained by the number of cranes that can service ships and the available space to store containers.

When the ports became flooded with cargo, they simply didn’t have the capacity to handle it and the lack of labour, trucks, storage capacity and rail infrastructure all started to create significant supply chain challenges as congestion worsened. 

Once a cargo shipment reaches the arrival port, it may go from truck to rail to warehouse to truck to distribution centre and any number of sorting facilities before it reaches a store or eCommerce customer. Many of the capacity constraints have been labour-related, i.e. COVID-safe working restricts port worker volumes, quarantine means under strength shifts at the distribution centres or simply not enough HGV drivers. Some of these issues are taking time to resolve, or may never be resolved.

Will the supply chain issues end soon? Very unlikely

Even if we can resolve bottlenecks, congestion and disruption to meet the current demand on the oceans, at the ports and in the trucks, any further significant increase in demand could undo any progress.

Businesses that don’t soon have enough inventory on hand are going to sell out prior to Christmas because lead times are so extended. We may see, after Lunar New Year, a very strong focus on inventory replenishment and with inventory-to-sales ratios so low, restocking may continue through the second quarter into the summertime and maybe all the way up to the peak season next year.

So, even if demand for services returns, we have a long way to go before the market catches up with anticipated demand. New vessel orders will not start to arrive until next year and will not add any significant volume before 2023-24 and, likewise, any infrastructure investments by ports or other participants, will take 12-36 months to plan and execute. 

It is anticipated and widely accepted that the issues we see currently within the logistics sector and the high freight rates across all modes will continue next year without much compromise until the second half - hopefully.

Managing supply chains can no longer be a back-office function, largely ignored and taken for granted. More than ever, business survival will require a highly functioning supply chain run by professionals with the experience and critical support of partners. 

Metro will always provide you with the alternatives and options available in the current market surrounded by proactive value added services, technology, communication and an overall solution throughout your own supply chains that is designed and created on a bespoke basis. 

We encourage engagement and a collaborative partnership approach with all of our customers, and suppliers for that matter. For further information and to discuss your ongoing requirements please contact Elliot Carlile or Grant Liddell and let us visit you and demonstrate what we do and how we do it…….

Category: Technology

Metro | Supply Chain | Technology

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