India s Hindu Newspaper reported India s exports were on the decline for eight consecutive months in 2012. However, exports started on the upward trend in January 2013. Given the statement that exports grew for the fourth consecutive month , we looked into these claims in the Import Genius international trade database to identify trends for India s rise in exports. What we found was contrary to what we expected.
While Indian exports to the U.S. are growing, the number of shipments received in the U.S. from India are actually decreasing. In 2011, India exported 171,815 shipments to the U.S. but the number of shipments decreased the next year, with just 159,427 shipments from India on record during 2012.
When looking into the first quarter of 2013, we also found that ocean freight shipments this year aren t close to the numbers in 2012. U.S. imports from India spanning from January to March last year totaled 42,575 shipments. Imports from the first quarter this year were half of that, with just 21,650 shipments.
After touching the second highest figure-ever in a month in January to $20 billion, the trade gap came down to $14.9 billion in February and to $10.3 billion in March.
Based on this statement, it s safe to say that exports aren t a real indication of a downward or upward trend, or of the trade gap in this case. The number of shipments clearly does not correlate with the value of the exports.
One product within the Indian database that caught our attention was mangoes. Grown all over the world in tropical and subtropical climates, mangoes are often called the king of the fruits and are rich in vitamins, minerals and potassium. India is the largest grower of mangoes and is expected to export 83,000 tons of the fruit this year, according to another article by The Hindu.
According to a recent study reported in The Economic Times, the price of Indian mangoes is already higher than mangoes imported into the U.S. from South America. A report by the U.S. Department of Agriculture says high shipping charges and profit margins kept by traders account for the price difference. Indian mangoes already cost about five times more than mango exports from other countries and these factors are expected to hike prices even further.
In addition to contradictory numbers when looking at India s overall shipments and export growth, we also see an adverse effect comparing prices of mangoes with demand.
According to The Hindu, increasing shipments of India s alphonso and kesar mangoes have hit the U.S. this year and the increased exports are expected to continue. Mango exports to the U.S. are expected to be between 400-500 tons this year, as stated by an official with the Agricultural and Processed Food Products Export Development. These numbers will mean record highs for Indian mango exports. India has already exported 90 tons of mangoes in 2013. The price of Indian mangoes are clearly inelastic as both demand and exports are steadily rising.
Headford Consulting is at present looking to employ Deep Sea Export Clerk on Thu, 16 May 2013 11:30:36 GMT. Job Title: Deep Sea Export Operator Location: Preston Brook/Runcorn Salary: ‘ 18,000 – ‘ 24,000 We are currently recruiting for an experienced Sea Freight Export Clerk in the Preston Brook area to work for a well established medium sized Freight Forwarder. The candidate we are looking for will be joining a small and friendly team handling a mixture of Sea Freight shipments worldwide covering both…
Location: Runcorn, England Description: Headford Consulting is at present looking to employ Deep Sea Export Clerk right now, this job will be situated in England. Further informations about this job opportunity kindly see the descriptions. Job Title: Deep Sea Export Operator Location: Preston Brook/Runcorn Salary: ‘ 18,000 – ‘ 24,000 We are currently recruiting for an experienced Sea Freight Export ! Clerk in the Preston Brook area to work for a well established medium sized Freight Forwarder. The candidate we are looking for will be joining a small and friendly team handling a mixture of Sea Freight shipments worldwide covering both imports. Duties will include: This is a fast paced role and will require a candidate willing to learn and adapt with the role. A candidate who possesses a strong backgrou! nd in Ocean Freight operations able to hit the ground running.! Previous experience of working for an NVOCC freight forwarder is essential for this role.- .If you were eligible to this job, please give us your resume, with salary requirements and a resume to Headford Consulting.
Location: Runcorn, England
Description: Headford Consulting is at present looking to employ Deep Sea Export Clerk right now, this job will be situated in England. Further informations about this job opportunity kindly see the descriptions. Job Title: Deep Sea Export Operator Location: Preston Brook/Runcorn Salary: ‘ 18,000 – ‘ 24,000
We are currently recruiting for an experienced Sea Freight Export ! Clerk in the Preston Brook area to work for a well established medium sized Freight Forwarder. The candidate we are looking for will be joining a small and friendly team handling a mixture of Sea Freight shipments worldwide covering both imports.
Duties will include:
This is a fast paced role and will require a candidate willing to learn and adapt with the role. A candidate who possesses a strong backgrou! nd in Ocean Freight operations able to hit the ground running.! Previous experience of working for an NVOCC freight forwarder is essential for this role.- .If you were eligible to this job, please give us your resume, with salary requirements and a resume to Headford Consulting.
Interested on this job, just click on the Apply button, you will be redirected to the official website
This job will be started on: Thu, 16 May 2013 11:30:36 GMT
Groupage is the consolidation of cargo into a mixed load. We collate groupage shipments at our depots across Britain for export to our neighbours across the channel in France.
Groupage to France1 can be anything from one carton upwards but generally it is most cost effective over 75 kilos or 0.75m3. Smaller shipments are generally cheaper on a parcel service like DHL, UPS or TNT.
We make collections every day throughout Britain and plan shared cargo deliveries directly to our regional depots in places like Calais, Paris, Rouen, Nantes, Lyon, Marseill, Bordeaux and Toulouse.
Pro-rata groupage shipments to France are much cheaper than sending a dedicated van the whole way to France, cargo shares space on a truck and this spreads the cost.
- ^ Groupage to France (www.barringtonfreight.com)
- ^ +Matt Everard (plus.google.com)
- ^ click here (freight-blog.barringtonfreight.com)
- ^ dedicated van to france (freight-blog.barringtonfreight.com)
- ^ groupage quote (freight-blog.barringtonfreight.com)
- ^ groupage services (freight-blog.barringtonfreight.com)
- ^ groupage shipments (freight-blog.barringtonfreight.com)
- ^ groupage to france (freight-blog.barringtonfreight.com)
Posted on 14, May 2013
According to statistics from ICEX, Idescat, The World Trade Organization and the Export1 Climate survey from ACC1 ‘, over 45,000 Catalan companies were encouraged to export their products in 2012 and of these, approximately 14,000 are regular exporters today. This means that currently, exports represent a 28,1% of the Catalan GDP and it is estimated that this percentage will continue to increase in the coming years so entrepreneurs will increase their interest in sell and promote their products in other countries, especially in emerging markets such as Latin America, where the economic growth is evident.
During 2012 Catalan exports to Latin America increased a 21% being the main recipient countries Argentina, Venezuela, Mexico2, Peru and Colombia. It is also estimated that although most of the exports are from major Catalan companies, Latin America represents a great opportunity for small and medium businesses that intend to extend their export process and can take advantage of the catalan prestige that large enterprises have left in this area.
The main export sectors are chemicals and pharmaceuticals with 25.9%, automotive with 16.5%, agri-food with 11.6%, textile, metallurgical and machinery with a 6.4% each, and finally the electricity sector with 4.7% With the publication of this figures, the Catalan Government seeks to encourage other sector and entrepreneurs to increase their exports.
Tuscor Lloyds is a global freight forwarder and shipping agent specialising in the transportation of project cargoes. Our team of break bulk, out of gauge, abnormal load and multimodal specialists have the skills and resources to transport cargo to some of the worlds most remote destinations.
The amount of different people that have experienced troubles when exporting goods from one country to another is rather sizeable; this is because people are often uneducated in what they need to know to complete the transportation process successfully.
One of the most important factors when it comes to exporting cargo is ensuring that you have all the correct paperwork and documentation. If you find that you do not have the correct documents, then there is a possibility that your goods can be locked away until the relevant documents are produced. This can be a very stressful time for you as you can end up losing vital customers and trust that you have created within your business, so you are never put in this situation; here is the list of paperwork that is essential for sea freight shipment:
Bill of Landing (BoL)
A bill of landing is one of the most common forms of transportation documents that is used today. It is basically a document that outlines the terms of a contract between a shipping company or agent and the exporter (freight forwarder). To ensure everything goes ahead as agreed, the contract will simply state that the freight is to be moved from one specific point to another, for a specified agreed charge.
This paperwork is usually completed by the exporter, but it is important that you discuss this to ensure that the paperwork is produced correctly and on time. Also included in the BoL is the description of the goods being carried, this will include the quantity, the weight and the size.
This type of paperwork is essential whether you are transporting your goods by sea, road, or air.
This document is also usually organised by the exporter, this will ensure that your goods are released on time from shipment. This form will usually state that the cargo will be released automatically upon receipt of a correctly endorsed BoL or when the containers used have been paid for.
When one of these two options has been fulfilled, your cargo will be released automatically on the expected date.
The manifest is a document that lists the amount of cargo, passengers, and crew on the transport for the use of customs and other officials. This transport document will basically include all the information that is needed by authorities, such as a detailed summary of the BoL, destinations, ports, value of cargo, etc.
If there are any dangerous goods on board, then it is essential that a individual manifest is created for these items.
Other documents that will be needed for the sea freight shipment includes;
- Arrival notification
- Delivery orders
- Discharge lists
- Freight invoices
- Delivery invoices
This documentation is usually created at the discharge port when the ship arrives.
About the Author
John owns his own business and regularly exports products around the world. The global freight shipping services that are made available from http://www.thefreightpeople.com1 help him complete the process smoothly.
Consistent with the current macroeconomic trends, railroads started the year on a mixed note. Going by the rail traffic report for the first quarter 2013, growth in automotive and petroleum products shipments was steady while coal and grain shipments continued to cast a shadow over the rail freight industry.
According to the Association of American Railroads (AAR) rail traffic report, cumulative performance of the North American railroads (including U.S., Canadian and Mexican railroads) have fallen 1.5% year over year in the first quarter of the year. The biggest contributor to this decline was grain, which dropped 11%. Coal volumes followed closely, falling around 7%.
Going by the quarterly performance of the class 1 railroad, we see continued lower volumes from most of these carriers. One of the largest class 1 railroads in North America — Union Pacific Corp. ( UNP1 – Analyst Report2 ) — registered first quarter volume decline of 2% year over year. Another major railroad CSX Corp. ( CSX3 – Analyst Report4 ) also reported a similar level of decline in its volumes. Going forward, Canadian counterpart, Canadian Pacific Railway Ltd. ( CP – Analyst Report5 ) also experienced lackluster growth trend with flat volume growth on a year-over-year basis.
However, railroad operators like Kansas City Southern ( KSU6 – Analyst Report7 ) , Norfolk Southern Corp. ( NSC8 – Analyst Report9 ) and Canadian National Railway Company ( CNI10 – Analyst Report11 ) have shown modest volume growth, mainly driven by the emerging automotive business and rising petrochemical shipments.
Notably, despite mixed carload results, these carriers have mostly generated positive earnings in the reported quarter. The primary catalyst to this bottom-line performance was operational efficiency even in times of low market demand. Rising employee productivity, deploying fuel-efficient locomotives and undertaking railroad safety measures are some of the key drivers of profitability even in adverse market conditions.
Rail carriers like Canadian Pacific recorded operating ratio improvement of 430 basis points year over year. Continued focus on maintaining asset efficiencies, safety measures and increased productivity have been the prime contributors to Canadian Pacific s success in the first quarter. There are several other near-term growth catalysts in the railroad industry.
Rising Contribution of Petroleum Product Shipment
According to the AAR report, rail traffic from petroleum products has seen a whopping 46% growth in the three-month period ended Mar 30. According to the Energy Information Administration s (EIA) reports, U.S. crude oil exceeded 7 million barrels per day production, representing record growth since the last two decades. Further, in 2013, long-term projections of EIA suggest that this growth may also go up to 10 million barrels per day over a period of 2020 to 2040.
As a result, this surge represents a potential opportunity for revenue accretion, which the railroads are trying to tap with infrastructural development. According to industry sources, the role of crude oil as a revenue contributor has grown by leaps and bounds in a four-year span from a mere 3% to 30% of the oil and petroleum products shipment by railroads.
Despite the fact that rail-based crude transportation costs five times more ($10 $15 per barrel), crude shippers are compelled to rely on rail-based transport. This is due to the lack of pipeline infrastructural support in key oil and gas fields like Bakken Shale Formation in North Dakota and Montana, Eagle Ford Shale, Barnett Shale and Permian basin in Texas, the Gulf of Mexico and Alberta oil sand fields in Canada.
In 2012, Canadian National Railway, which operates along the Western Canada (Alberta region) to the Gulf Coast, has shipped approximately 30,000 tank cars of volumes of crude oil, while its counterpart Canadian Pacific shipped 53,000 tank cars of crude during the same period. Another giant railroader, BNSF Railroad of Berkshire Hathaway Inc. (BRK-B), which serves the North Dakota region reportedly earned $272 million from crude shipments last year by shipping approximately 100 million barrels of oil.
In the coming days, we expect railroads to accelerate their investment in order to create adequate service capacity for the oil and gas markets. Canadian Pacific projects crude shipment to reach up to 70,000 oil-tank cars by the year-end and move to 140,000 by the end of 2015. This kind of exponential growth in crude oil shipments is taking place across the rail industry. Consequently, we expect petroleum shipments to remain favorable and emerge as a significant revenue contributor in the long term.
Currently, Mexico is a growing market for automotive production and assembly given the lower cost of production there. As a result, markets sources predict that in the coming years, auto manufacturers are expected add capacity to accelerate manufacturing by 600,000 additional vehicles per annum. In the first three months of 2013, auto shipments by rail in Mexico increased 4.6% while in the U.S., auto shipment via rail rose about 2%. This counterbalanced the 1% drop in rail auto shipments in the Canadian market.
We believe upcoming plants by Honda Motor Co., Ltd. (HMC12), Nissan Motor Co. (NSANY13), Mazda and Audi would further boost auto production in Mexico. The facilities would also bode well for automotive shipments. Based on these proposed expansion plans, finished vehicle production in the Mexican market is expected to reach 3.5 million units in 2015, up about 35% from the 2012 production level.
The growth will provide carriers like Kansas City Southern, which operates across the Gulf of Mexico, ample opportunities to ship raw material into Mexico and return the finished products to the domestic market as well as to the U.S. and Canada. The increase in automotive production is also giving rise to new steel plants and processing centers across the company s service networks. These steel plants are likely to bring opportunities for steel shipments and other related products.
However, in the coming year, the growth can be slightly muted by the onslaught of the fiscal cliff. According to market reports, auto sales may see single-digit growth due to a change in consumer behavior owing to the U.S. tax policy changes. If the situation improves on the macro front, there should not be a cyclical downturn in the way of automotives.
The railroad industry is gaining largely from the ongoing conversion of traffic from truckload to rail intermodal. Intermodal is gaining popularity among shippers given its cost effectiveness over truck. On average, railroads are considered 300% more fuel-efficient than trucks, and we believe that intermodal will play an important role in driving the rail industry based on the growing awareness among shippers about its benefits.
Currently, rail intermodal accounts for over 20% of the railroads revenue, second in line after coal. In the coming years, we expect this contribution to only rise given the growing dependence of shippers on intermodal services.
Apart from these positives, other factors likely to have a material impact on Railroads near-term, top and bottom line growth include:
Coal represents important commodities and accounts for over 40% of railroad tonnage. According to EIA reports, coal production hit lows of 9.9 million short tons (MMst) in first quarter 2013, representing a steep decline from 22.7 MMst in the year-ago quarter. As per AAR reports, coal shipments by rail also continued to decline 8% in the U.S. market. The decline was partially offset by 11% and 9% growth in rail shipments in the Mexican and Canadian markets, respectively.
Domestic coal demand, of which utility coal accounts for approximately 93%, is witnessing persistent declines. Lower natural gas prices imply that gas is largely substituting the demand for utility coal. Additionally, higher stockpile levels have resulted in lower utility coal demand. Besides, natural gas prices, another important factor that resulted in the decline of coal-powered plants are the environmental issues associated with coal burning.
However, in 2013, coal consumption in the domestic market is expected to grow 7% year over year to 948 MMst and reach up to 957 MMst in 2014 on the back of rising natural gas prices.
On the export front, the scenario remains entirely different. After reaching highs of coal export in 2012 (126MMst), EIA projects U.S. coal exports to decline 15% year over year to 107 MMst in 2013. However, 2014 may show modest improvement with exports of 109 MMst. Factors like an economic overhang in European markets, lower U.S. coal pricing, higher stockpile levels and increased exports from Indonesia as well as a recovery in the Australian mines are the primary reasons for the expected decline.
Since 2012, the Grain market has been experiencing lows due the drought in the Mid-West markets. The outlook for 2013 is also not encouraging enough to elevate rail freight shipment from its current lull.
According the rail traffic report of AAR, North American grain shipment registered a decline of almost 11% in the first three months of 2013, which was partially offset by 24.6% growth in Mexican grain shipment. In April, the U.S. Department of Agriculture (USDA) released the World Agricultural Supply and Demand Estimates (WASDE) report, which states that total U.S. corn demand, will go down by 11.1% from the year-ago level.
U.S. corn exports will hit a low of 48.2% from last year with use of ethanol decreasing 9.2%. We believe that the impact of lowered estimates would be felt on railroad shipment as rail freight serves the majority of export shipment in the crop market.
Investment in development and expansion plans remain critical when analyzing railroads prospects. These capital investments are a double-edged sword. While the investments put significant stress on margin performance, forgoing these would result in a loss of growth prospects.
Railway investments are paramount given the evolving supply chain management and increasing role of airfreight carriers in offering freight transportation services. These investments build the required infrastructure needed for railways to stay afloat in a competitive environment not only within the railroad industry but also with other modes like truck, barges and cargo airlines.
As a result, investments in infrastructural projects have been an integral part of railroads development. However, this sector, characterized by huge capital influx has been drawing funds primarily through private financing.
As a result, investment plans when undertaken can have a considerable impact on the liquidity position of the company and may lead to a highly leverage balance sheet. According to AAR reports, railroads invest approximately 17% of their annualized revenue, which compares with only 3% of average U.S. manufactures revenue on capital expenditures.
According to the Department of Transportation (DOT), the demand for rail freight transportation will increase approximately 88% by 2035. As a result, Class I carriers would have to expedite their investments to meet this growing demand.
It is estimated that railroads would require $149 billion to improve rail network infrastructure within this stipulated period. In respect of current investment requirements, railroads would invest about $24.5 billion in 2013 according to AAR. This figures project an escalating trend when compared with recorded investment of $23 billion in 2012 and $12 billion in 2011 as per AAR.
Given the growing demand and need to upgrade railroad infrastructure to meet new regulations, deployment of fuel-efficient locomotives, upcoming rules on track sharing, railroad safety and high-speed rail services make it mandatory for railroads to infuse more capital on development projects. According to DOT, almost 90% of the railway capacity needs to be upgraded to meet the expected rise in demand level by 2035. Hence, for railroads it is important to balance profitability levels while investing in infrastructural development projects.
Currently, the U.S. railroad industry dominates less than 50% of total freight in America , indicating a huge opportunity for increasing market share. This opportunity can only be exploited by building railroad infrastructure that caters to the varied requirements of shippers.
The railroad industry as a whole offers a number of opportunities that are difficult to ignore from the standpoint of investors.
Discretionary Pricing Power: The freight railroad operators function in a seller s market and have enjoyed pricing power since 1980, when the U.S. government adopted the Staggers Rail Act. The idea was to allow rail transporters to hike prices on captive shippers like electric utilities, chemical and agricultural companies in order to improve profitability of the struggling railroad industry. As a result, of the Staggers Rail Act, railroads are hiking their freight rates by nearly 5% per annum on average, while maintaining a double-digit profit margin.
Duopolistic Market Structures: Railroads have by and large gained by practicing discretionary pricing in the freight market. In the prevailing duopolistic rail industry, railroad operators will be able to reap maximum benefits from rising prices when the overall demand grows.
This remains evident from the geographic distribution of markets between major railroads. Union Pacific and Burlington Northern Santa Fe control the western part of the U.S., while CSX Corp. and Norfolk Southern control the eastern part. On the other hand, Canadian Pacific and Canadian National control inter country rail shipment between the U.S. and Canada.
Despite the above mentioned positives, the freight railroad industry, like other industries, faces certain external and internal challenges. These are as follows:
Capital Intensive Nature: Railroad is a highly capital intensive industry that requires continued infrastructural improvements and acquisition of capital assets. Moreover, industry players access the credit markets for funds from time to time. Adverse conditions in credit markets could increase overhead costs associated with issuing debt, and may limit the companies ability to sell debt securities on favorable terms.
Positive Train Control Mandate: The Rail Safety Improvement Act 2008 (RSIA) has mandated the installation of PTC (Positive Train Control) by Dec 31, 2015 on main lines that carry certain hazardous materials and on lines that involve passenger operations. The Federal Railroad Administration (FRA) issued its final rule in Jan 2010, on the design, operational requirements and implementation of the new technology. The final rule is expected to impose significant new costs for the rail industry at large.
Price Regulations: The pricing practices of U.S. freight railroads are the major reasons of friction with captive shippers, who move their products through rail and do not have effective alternatives. According to the latest studies by the STB, approximately 35% of the annual freight rail is captive to a single railroad, allowing it monopoly pricing practices.
The unfair pricing power exhibited by the U.S. railroads has attracted congressional intervention for exercising stringent federal regulations on railroads. Congress has discussed railroad price regulation but has not passed any new rule so far.
U.S. Environmental Protection Agency: Railroads remain concerned about the proposed regulation by the U.S. Environmental Protection Agency (EPA) for power plants across 27 states. The proposed guideline Carbon Pollution Standard for New Power Plants aims at restricting emission of carbon dioxide by new power plants under Section 111 of the Clean Air Act. The standard proposes new power plants to limit their carbon-dioxide emission to 1,000 pounds per megawatt-hour.
Power plants fueled by natural gas have already met these standards but the majority of the units using conventional resources like coal are exceeding the set limit, as they emit an average of 1,800 pounds of carbon-dioxide per megawatt-hour. Railroads, which transport nearly two-thirds of the coal shipment, are most likely to be impacted by the implementation of the new regulation that could pose a significant threat to utility coal tonnage.
- ^ UNP (www.zacks.com)
- ^ Analyst Report (www.zacks.com)
- ^ CSX (www.zacks.com)
- ^ Analyst Report (www.zacks.com)
- ^ Analyst Report (www.zacks.com)
- ^ KSU (www.zacks.com)
- ^ Analyst Report (www.zacks.com)
- ^ NSC (www.zacks.com)
- ^ Analyst Report (www.zacks.com)
- ^ CNI (www.zacks.com)
- ^ Analyst Report (www.zacks.com)
- ^ HMC (www.zacks.com)
- ^ NSANY (www.zacks.com)
There are many factors involved when shipping heavy machinery. A key factor is from where its being shipped and where it s going. Countries have different regulations for all types of machineries and at Interworld Freight we specialize in all export procedures of heavy construction, industrial and farm equipment from the United States and Canada to most international destinations. We ship Tractors, Bob Cats, Crawlers, Loaders, Fork Lifts, Excavators, John Deer, Bulldozers, motor grader, rough terrain cranes and any construction machinery that exists.
Shipping heavy machinery can be done in three different ways:
Break bulk: Roll on and roll off machine into the ship. Once this unit is loaded it s strapped and braced into the ship s deck.
Dismantle machine inside a container: Dismantle machine (very important we do not cut). Unit its unscrewed from the parts in order when it arrives at destination it will be easy to put back in place.
Out of gauge containers: Machine loaded into flat rack, it is secured and braced with a tarp on top in order for unit does not get ruined.
We also offer these units to be moved door to port. We have economical inland freight that is safe, secure and very efficient.
Due to these machines being very expensive we always recommend to insure all shipments on a door to door basis.
If you need any other information, please do not hesitate to contact us. It will be a pleasure to answer any questions.
AS airfreight forwarder Asialink Cargo Phils. Inc. marked its 25th anniversary on April 15, the Filipino logistics company could only look back with relief to the past year, which its top executives describe as an unusual year .
The company is still trying to shake off the impact of the rough ride that the logistics players in general witnessed in 2012, when an industry upsurge early in the year gave everyone hope that it was to be the start of a sustained rally, a turnaround from the sluggish business a year earlier.
Yet it turned out to be a dead-cat bounce. The market optimism that the United States budget crisis and the eurozone financial chaos were about to end, and that Japan was starting to rebound from the economic wallop it took from the earthquake-triggered tsunami and nuclear plant meltdown in March 2011, fizzled out when the troubles in those three major markets persisted.
Today, Chris Coching, president of Asialink, has small businesses with CIF freehand accounts to thank for the company surviving a roller-coaster year.
2012 was very unusual for ALC and I assume for the airfreight industry in general, Coching said, reminiscing the air forwarding industry s ups and downs last year.
Business made a spike early in the year which we assumed as the take-off for the industry, only for it to slide down last quarter to almost a halt.
Amid what Coching called a crisis, Asialink, the airfreight arm of the Mercury Freight group that offers global airfreight forwarding and complete logistics services, relied on its leaders business acumen to ward off what would have turned out to be another slow year as in 2011.
Asialink Cargo offers worldwide airfreight service through its international network that arranges door-to-door cargo conveyance from and to all corners of the world. It has a comprehensive range of rate and schedules that ensure on-time arrivals and handling reliability.
The company handles an array of shipments such as bathroom fixtures, decors, handicraft, electronics products, apparels, foodstuff, medical products and perfumes exported by Philippine-based producers to their overseas markets.
The products shipped out from Manila are primarily destined for Canada, Europe, the United States, South America, Australia, the Middle East, and Southeast Asia.
Asialink s higher-value cargoes are made up of electronics products that local assemblers ship to their principals in Europe, a fact that dealt a blow to the Philippines semiconductor/electronics industry, and consequently almost dried up export cargo shipments. Demand for such products in the continent tanked last year as many Europeans lost their jobs and reined in their spending in the wake of the financial crisis.
At about the same time, the US was struggling with poor retail sales as American consumer confidence sank along with jobs losses from business cost-cutting or shutdowns.
The setback in the West and its business repercussions in the Philippine logistics industry took their toll on Asialink s business, prompting its executives to take precaution a tack that has paid off.
Coming from a slow 2011, our target for 2012 was very conservative, which was realized and surpassed by the first half of the year, Coching said.
It served as a blessing when air business slowed down again, (as) the positive variance (from the gains in the first half) gave us the cushion to still end up positive against our targets in both volume and revenue, he said.
The company would not dwell on the volume and revenue details of the past year, with Asialink only saying that 2012 was a good year averaging above budget compared with 2011. The first quarter of 2013 was basically the same, around 70- 80% performance against budget.
Amid the turbulence in the West, it seems that we have benefited from the freehand airfreight selling amidst this crisis, Coching said.
The airfreight industry being majority FOB, we have left out on our past CIF freehand accounts. During this stage where the convenience of nominated business from our network is scarce, we needed to go back to these CIF accounts, Coching said.
Like the rest of the airfreight players, most of Asialink s major trade partners are in economies that are in a downturn the US, Europe and Japan.
This has affected our major trade commodities. China s aggressive approach on manufacturing have also given us a big black eye with investors moving their business out of the Philippines and shifting to the Chinese mainland, said Coching.
The Asialink president is hoping that the Philippine economy s strong growth last year that has been forecast to continue this year would translate to foreign investments and, consequently, business for the country s airfreight forwarders.
We are still waiting for this growth forecast to be converted to foreign investments and eventually business in need of logistics service, Coching said, pointing to those once-shelved CIF accounts as the company s watershed in times of a business drought.
Our main strategy for the meantime is to have a good pool of controlled business working with SMEs (small and medium enterprises), investing on CIF accounts, he said.
Really, the latter (CIF) accounts have higher forms of risk, but while nominated business is low, we need to get cargoes moving to survive, Coching said.
For now, the Asialink executive yearns for more foreign investments into the country, especially now that the Philippines has gained an investment grade rating from Fitch Ratings Service.
Foreign investments will dictate our growth. As most of businesses entail logistics service, realistic improvement in our economy should pull all industries out of this crisis level, Coching said.
Coching expressed relief that the world factory that is China is slowing down, and welcomed reports that some foreign companies are moving their mainland operations elsewhere.
We hope and pray that they choose to move their business to the Philippines, he said.
One other concern for the company is the soaring cost of fuel. Fuel cost affects everything. It will definitely have an impact our operations cost, Coching said.
Asialink was set up in April 15, 1998 as foreign demand for Philippine products grew following the 1986 EDSA revolution. A few years since its founding, the company registered unparalleled growth in its cargo traffic between the Philippines and foreign countries.
Today, the company boasts an 800-square meter warehouse strategically located at the gateway airport and provided with the most modern facilities and 24-hour security service. The company covers all functions from simple storage and release of cargo to inventory control, order fulfillment, pick and pack, and distribution via all modes of transport.
Asialink has full control of land operations at all times with own fleet of vehicles, open trucks and closed vans.
THE drop in the Philippines exports in February should not be a cause for concern, National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan said, with the setback not dampening his outlook for a 6% to 7% growth in the first quarter of the year.
Balisacan, talking to media on the sidelines of the Development Financing Seminar last week, said the decline in exports was temporary and would not affect the economy s performance, especially since other indicators are quite favorable .
Philippine merchandise exports in February dropped 15.6% from the previous year, the steepest fall in 14 months, as shipments of electronic products sank 35.6%.
Exports in February reached $3.74 billion, sharply lower from $4.43 billion in the same month last year.
The February record pulled down cumulative export revenues for the first two months of the year to $7.75 billion, down 9.4% from $8.55 billion in the comparable two months last year.
The inter-agency Development Budget Coordination Committee has set an exports growth target of 12% for the full-year.
We periodically visit our targets, including our export target, but if there s a need to adjust (we will do so), Balisacan said.
The NEDA chief said the government is actually developing a roadmap for the country s major commodities, which will allow exports of other commodities to also improve, and reduce dependence on electronic products.
There s been a lot of diversification. Five years or seven years ago, electronic products comprise about 70 percent of exports. Now it is less than 50 percent, and it will continue to decrease as other sources of exports will grow faster, he added.
For instance, there is so much potential for agro-processed exports, Balisacan said. That will allow us to get more aggressive in the exports side, he added.
The government expects exports growth to help the Philippine economy to grow between 6 to 7% for the full year.
2012 proved to be a mixed year for trucking revenue in Arkansas, though three standout performers two good, one not so much blew by their peers on the list of the largest trucking companies doing business in the state.
Maverick USA of North Little Rock reported a nearly 20 percent increase in revenue last year. And J.B. Hunt Transport Services of Lowell saw revenue rise more than 12 percent.
On the very disappointing end of the sales spectrum stood USA Truck of Van Buren, which reported a revenue drop of almost 43 percent in 2012 compared with 2011.
Largest Trucking Companies: Click here to buy PDF and spreadsheet versions of the list of the state’s largest trucking companies1.
Largest Private Fleets: Click here to PDF and spreadsheet versions of the list of the largest private trucking fleet2.
J.B. Hunt s showing was strong enough to propel it past longtime second-place fixture YRC Worldwide, headquartered in Overland Park, Kan. J.B. Hunt reported just over $5 billion in 2012 revenue compared with $4.5 billion in 2011, putting it within striking distance of FedEx Freight s $5.3 billion first place.
Asked what J.B. Hunt was doing right, Jim Crowell, director of the Supply Chain Management Research Center at the University of Arkansas, provided a series of bullet points for transportation company winners:
- J.B. Hunt is adaptable.
- It knows how to manage the margins.
- It works well with others, such as railroads when implementing the multimodal segment of the business.
- It has a strong leadership team.
- It s forward thinking.
J.B. Hunt started out as a trucking company, Crowell said. If you talk to them today, they will tell you that they are a supply chain service company. The reason for that is their ability to branch out. And they re doing a very good job managing margins.
It s no secret that they are probably one of the premier folks involved in the railroads on the multimodal side, so that has definitely been a very strong suit for them. They have a very strong dedicated fleet group. They also, like a lot of the major carriers, have created a brokerage group, he said.
What you re seeing is a lot of the larger, quote, traditional trucking companies they re evolving in a similar fashion, probably more so in response to the success of J.B. Hunt. That would be my opinion. That and two bucks will buy you coffee.
The self-effacing Crowell, however, hit on the takeaway: Other companies seeking success in what has continued to be a challenging economic environment are modeling themselves after the transport firm headquartered in Lowell, Arkansas.
- ^ Click here to buy PDF and spreadsheet versions of the list of the state’s largest trucking companies (www.arkansasbusiness.com)
- ^ Click here to PDF and spreadsheet versions of the list of the largest private trucking fleet (www.arkansasbusiness.com)
- ^ J.B. Hunt s Origins Offer Lessons for Today (www.arkansasbusiness.com)