WHAT ARE YOUR FREIGHT OPTIONS? Air Freight Sea Freight Direct - PowerPoint PPT Presentation

WHAT ARE YOUR FREIGHT OPTIONS? Air Freight Sea Freight  Direct Service  Full Container Load (FCL)  Transhipment Service o Direct o Transhipment  Courier Service  Less Than Container Load (LCL)

When to Use Air Freight  Value of your goods o I-pads vs. Plasticware  Stock Cycles o How quickly are they selling?  Size of your Shipment o Under 50 – 100 kgs?  Timing o I need this in a hurry.

Direct Services Shanghai to Sydney Direct Carriers Flying Time of 11 hours

TRANSHIPMENT SERVICE Shanghai to Sydney Via Hong Kong [Cathay Pacific] Shanghai to Hongkong 2hrs 30mins Hongkong to Sydney 9hrs 20mins = 11hours 50mins ???

Air Freight Transit Times  Direct Flights o Hongkong 9-10hours o Shanghai 10-11hours o Beijing 12-14hours  Transhipment o 2-3 days o Can be longer in Peak Season with backlogs

Direct Versus Transhipment Direct Service Transhipment Service  Guaranteed to arrive  Cheaper than direct when loaded service  Quickest possible transit  Slower transit time time  Possibility of getting  More expensive freight stuck in transhipment cost port [especially during peak season]

FREIGHT COSTS OVERSEAS CHARGES LOCAL CHARGES  Inland Freight  Airport Terminal Fees  Export Customs  Breakbulk Charges  Documentation  Documentation  X-ray/Security Screening  Air Cargo Automation  Airport Terminal Fees  Customs Clearance  Air Freight  Delivery  Fuel Surcharge  Fuel Surcharge  Security Surcharge

CONTAINERS • General Purpose Containers (GP) Approximate Internal Specifications: 20ft: 5900mm x 2350 x 2390 33Cbm/21.5T 40ft: 12030mm x 2350 x 2390 67Cbm/19.8T 40ft High Cube 12030mm x 2350 x 2390 77Cbm/19.5T • Open Top Containers (OT) Approximate Internal Specifications: 20ft: 5900mm x 2350 x 2345 33Cbm/21.5T 40ft: 12030mm x 2350 x 2345 66Cbm/19.8T

CONTAINERS • Flat Rack Containers (FR) Approximate Internal Specifications: 20ft: 6040mm x 2230 x 2230 / 20.7T 40ft: 12050mm x 2230 x 2230 / 20.7T • Tank Containers Approximate Internal Specifications: 20ft: 24,000litres/19.8T

IF IT’S TOO BIG FOR A CONTAINER!!!

NOT A PROBLEM Roll On/ Roll Off Vessel Break Bulk Vessel

CHINA PORTS o Direct Sailings to East Coast Australia o Feeder Vessel to Main Port

DIRECT VERSUS TRANSHIPMENT DIRECT SERVICE TRANSHIPMENT SERVICE  Container transferred  Fastest possible transit from one vessel to time another  Guaranteed to arrive  Sometimes, your only when loaded option  Usually more expensive  Potential for delays option during Peak Season  Less Handling – Less Risk  Longer transit time  Cheaper price ?

SEA FREIGHT TRANSIT TIMES  Direct Services o Hong Kong / Shekou / Nansha 10-12 days o Shanghai / Ningbo / Xiamen 14-16 days  Transhipment Services o Huangpu / Shantou Via Shekou 14-16 days o Tianjin / Dalian Via Busan 24-28 days o Hong Kong/ Shanghai Via Singapore 20-25 days

F.C.L. CONTAINER TIMELINE Day 1 Vessel arrives & starts unloading. Day 2 Vessel sails. Day 3 Containers become available. Days 3-5 Free time to pick up containers Day 6 Storage commences. Day 13 Container demurrage commences. Note: Weekends are included in the “days” above.

L.C.L. CARGO TIMELINE Day 1 Vessel arrives & starts unloading. Day 2 Vessel sails. Day 3 Containers become available. Days 3-4 Containers are picked up and unpacked. Day 5 L.C.L. Cargo becomes available at depot. Days 5-7 Free Time to pick up shipment Day 8 Storage commences. Note: Weekends are not included in “Free Time”

Freight Calculations F .C.L Cargo L.C.L Cargo  Freight charges are  L.C.L Cargo is charged paid based on size of per – container – o Cubic Meter o Per 20 Ft Container o 1,000 Kgs o Per 40 Ft Container o Per 20 Ft High Cube  Whatever is the Container greater.

Freight Costs Overseas Charges Local Charges • Inland Freight • Port Charge • Export Customs • Terminal Handling Charge • Documentation • Sea Cargo Automation • Bill of Landing Fee • Delivery Order Fee • Terminal Handling • Terminal Security Fee Charge • Customs Clearance • Ocean Freight • Delivery • Bunker Surcharge

Overloading Containers • Overloading container is illegal & extremely dangerous. • Average guide for container + goods is 23.5 tonnes • R.T.A sits outside gate at Port Botany to check trucks • R.T.A works off axle weights. • Important that load is evenly distributed in the container.

Maximum Weight Of Product Max. Road Weight Cont. Tare weight Max Product Load 20 Ft Container 23,500 Kgs 2,200 Kgs 21,300 Kgs 23,500 Kgs 3,800 Kgs 19,700 Kgs 40 Ft Container 40 Ft High Cube 23,500 Kgs 4.000 Kgs 19,500 Kgs 20 Ft Reefer 23,500 Kgs 3,000 Kgs 20,500 Kgs 40 Ft. Reefer 23,500 Kgs 4,200 Kgs 19,300 Kgs

Weight Distribution In Container  Incorrect load distribution.  Load not evenly distributed.

Weight Distribution In Container  Correct load distribution  Load evenly distributed

WAREHOUSING AND LOGISTICS

OPTIONS FOR NEW IMPORTER  Start your own warehouse.  Rent space in existing warehouse.  Outsource to 3PL company.  Just-in-time Delivery Model

YOUR OWN WAREHOUSE PROs CONs  Master of your own destiny.  Tied to a lease.  Handle goods way you want  Additional costs – forklifts, to. pallet hire, labour, etc.  Extra care – minimise damage  Higher insurance premiums  Provide most flexible service  OH&S / Workcover compliance to your end-customer.

RENT SPACE PROs CONs • All the “PROs” of your own • Some of the “CONs” of your warehouse own warehouse • Possible sharing of costs – • Difficulty in finding right forklift, labour, etc. situation • Potential to take over more • Conflict with resources space as business grows.

3 rd PARTY LOGISTICS PROVIDER PROs CONs • Most cost-effective for start- • Lose control of your cargo up operation. • Less flexibility in servicing • No lease or equipment costs. your customers • No OH&S/Workcover • Increased risk of damage or compliance issues. loss • Piggyback on existing • Increased risk of error? distribution services.

Just-In-Time (Cross Docking) PROs CONs • Least flexible model. • No warehouse, labour, or equipment costs. • No stock on hand for emergencies. • Less handling = less cost in your supply chain. • Need accurate usage forecasts from your customers. • Most cost-effective model.

DISTRIBUTION Air High Fast Truck Cost Speed Rail Low Slow Sea

TRANSIT TIMES TO PERTH PROs CONs • Air • 5-6 hours • Truck • 4-5 days • Rail • 8-10 days • Ship • 12-14 days

DOMESTIC AIR FREIGHT  Can be very expensive compared to international air freight.  Less options, less competitors.  Mainly serviced by narrow-body aircraft.  Only used in emergencies or for high-value cargo  Rates charged on “per kg” basis  Beware volume/weight ratio.

TRUCKING  Most common form of domestic contribution.  Good balance between price, speed, and flexibility.  Plenty of operators and competition  Rates charged on “per kg” basis  Weight/volume ratio either 1cbm : 333kgs or 1cbm per 250kgs  Pallet rates can be obtained for regular business on mainline routes e.g. Sydney / Melbourne.

RAIL  Mainly used for long haul.  More cost effective than trucking  Suitable for large loads i.e. rail containers  Container rates based on weight ---- heavy containers cost more.  Have to get container to rail yard at origin.  Have to collect container from rail yard at destination.

COASTAL SHIPPING  Only suitable for full-container loads  Only viable for long haul e.g. Sydney – Fremantle  Cheapest way to ship goods to western Australia  Still have to deliver container to terminal.  Still have to pick up container on arrival  Container rates charged same as international shipping i.e. per 20ft/40ft/40ft high cube.

INSURANCE

INSURANCE  Should I take out marine insurance for my cargo? YES  Should I let my supplier take out marine insurance on my behalf? NO  Are marine insurance premiums cheaper in Australia? Usually, YES  Will I have less problems if I insure from Australia? YES

AUSTRALIAN INSURANCE CUSTOMS AND QUARANTINE

BASIC QUESTIONS PRE-IMPORT 1. Is the commodity prohibited from importation into Australia? 2. Are there any restrictions from importation into Australia? 3. Do I need an Import Permit for the commodity? 4. Are there any Australian Quarantine restrictions or prohibitions? 5. Do I need any special permissions from Australian quarantine? 6. Does my commodity need any special treatment/s prior to import? 7. Do I have packing that requires treatment prior to import? 8. Do I have all the required documentation / paperwork? 9. Is the documentation/paperwork accurate? 10. If FCL container: does the combined weight comply with the relevant state transport requirements? 11. What is the Duty rate? 12. Are there any Duty concessions available?