The Shipping Bloke

Australian shipping revitalisation...It's desirable but unachievable.

noreply@blogger.com (Brad Skelton) — Sun, 03 Jun 2012 03:04:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

The Australian Government wants to revitalise the shipping industry to help with what the transport minister describes as an immense freight task with the resources boom. Currently there are five bills making their way through the parliamentary process. These bills include substantial changes to existing coastal shipping legislation and tax incentives for Australian ship owners and operators.

As an island continent I would personally love to see Australia's shipping industry revitalised however I believe the governments efforts are focused on the wrong things and with the shipping industry struggling financially, they are completely mistimed.

As a consequence of the governments reforms, on Friday night Hoegh Autoliners announced to the market they are suspending their Australian coastal service. They are not the first carrier to do so however Hoegh were one of the largest RoRo operators providing this extremely important service. To my clients, who ship heavy and wide mining and construction machinery, which is difficult and extremely expensive to move via road and impossible to rail, this is a real blow and I suggest creates another cost impost on the mining industry. For the road using public, this means that suddenly much more wide, heavy and slow moving freight will be hitting our highways creating even more pressure on the road network.

In essence the government is wanting to create a broad range of incentives to companies willing to invest in rebuilding the shipping industry. They are also making it more costly and difficult for foreign owned carriers like Hoegh, to participate in coastal trade. So to any Australian company brave enough, in competitive terms and in theory, you should have a pretty good chance of building a viable business with government legislative support.

That is of course if as a ship owner you can overcome a few other obstacles to operating in Australia such as:
-Financing the purchase of suitable multi-purpose ships. Currently shipping financiers globally are simply not lending much. This is because global charter rates are very low and the value of ships in general terms has dropped about 30% thus weakening any financiers security position.
-Stevedoring in Australia is still currently far less efficient than other countries and in itself creates a significant cost burden on any operator. Recently MISC, the Malaysian owned shipping line, withdrew services from Australia citing inefficient waterfront practices as one the main reasons for making their Australian service unviable.
-Very high salaries and wages for Australian seamen compared with labour from other countries.
-The market being able to accept what will need to be very high ocean freight rates as coastal traders will not have the benefit of revenue from international cargo like foreign operators do which effectively subsidises coast freight rates.

We seem to have a short memory. Australian National Line (ANL) used to be our national carrier and in it's day, owned and operated good multi-purpose vessels internationally and coast-ally but some years ago it was sold by the government to the French owned CMA CGM. It was sold because financially it couldn't deal with these very factors. Apart from some intended tax and depreciation relief the legislation contemplates, I can't see that anything has really changed or changed enough to allow an Australian shipping industry to take root successfully again.

From my perspective to achieve the governments goal of shipping helping Australia with it's freight task they should be making it easier, not harder, for foreign operators. Australians need to face the reality that our labour costs here are prohibitive and will remain so to the shipping industry. Further waterfront labour reform is needed to help make our stevedores deliver worlds best efficiency thus making servicing this country more attractive.

If these things are done then shipping will be able to greatly help the Australian freight task but if not, then this humble shipping bloke really can't see anything changing except for there being alot more heavy traffic taking to our roadways.

All for now,

Brad Skelton

The Shipping Bloke

The new protectionism - EPA

noreply@blogger.com (Brad Skelton) — Wed, 02 May 2012 12:31:00 +0000

(You are getting this note because you subscribed to the Shipping Blokes Blog by Brad Skelton)

I met with a client today who is a major shipper of earthmoving, mining and construction machinery. Apart from the usual conversation about freight rates, shipping lines and quarantine compliance, our conversation turned to the EPA(Environmental Protection Authority) rules around diesel engines that powers equipment.

While I think we agree that reducing emissions is desirable and important, the hypocrisy and lack of fairness starts when you have different EPA agencies around the world producing their own rules on what engines will comply for their country. This has resulted in manufacturers building multiple engine types depending on what rules apply in the country the machine is destined for. There are differing "tiers" of engines for various countries.

Most manufacturers have realised that in the name of saving the environment, they can conveniently use this EPA legislation to protect their markets from imported machinery which may be fitted with engines that do not comply. They are building machines so that once exported, they can never come back or be sold into other markets with different EPA compliance requirements.

When I studied as a customs broker and freight forwarder there was a world trade agreement called GATT. The General Agreement on Tariffs and Trade. GATT existed as the World Trade Organisation tried to moderate and control protectionism to keep trade relatively fair.

Protectionist policy is essentially countries using import duties and tariffs to protect their local manufacturers and markets from cheaper imports. As globalisation and free trade agreements between countries gained momentum GATT was abandoned and protectionism has fallen out of favor and is now considered archaic and politically incorrect. As an aside, try telling that to workers in the western world who are losing their jobs in manufacturing to Asian competitors right now though! This might be a somewhat wild idea but protectionism, in this current tough global economy, might even make a come back as countries try and save whole industries and jobs. It would also raise government revenue to pay down sovereign debt. Anyway perhaps there is a future blog in that topic for another day!

During the conversation with my client today I said to him that clever manufacturers are leveraging EPA rules as effectively "protectionism" under a different name. He agreed. Therefore EPA rules are already impacting "fair trade" and will gradually and ultimately lead to less global trade of heavy machinery unless something changes. In the old days of GATT, someone would have been shouting "not fair" and the WTO would be stepping in but who would dare do this now and then be seen to not be environmentally responsible?

So what would be environmentally responsible then? To me there should only be one standard of engine produced. That being the one with the lowest emissions. Why bother even building anything else? Forget the rest. That's what environmental responsibility looks like to me. Now I am just a humble shipping bloke, not an engineer or mechanic, and I suspect differing fuel quality in some places may present a challenge to this idea. I don't know but the whole planet breathes the same air ultimately so this situation seems ridiculous and irresponsible to me.

This reminds me of another absurd situation in the name of protecting the environment in my own country, Australia. Here the Department of Environment and Heritage is wanting to ensure that air conditioning gas in machinery is of a type that is non-ozone depleting. Fair enough but this caused the department to institute an import permit regime on all imported machinery and vehicles that have air conditioners. As yet most countries don't even have any rules on this so consequently many machines air conditioners are still filled with ozone depleting gases.

To avoid having to apply for import permits nearly all of our clients elect to get their supplier to evacuate the gas overseas before the machine is loaded on the ship to Australia. This takes me back too a point already made in this blog that the whole planet is sharing the same air ultimately so this is stupid.

My company has pointed out to the department that effectively the import permit system is actually counter-productive not only for Australia, but the ozone layer no matter what country you live in. The response:- "That's okay, here in Australia we are doing the right thing and the rest of the world needs to catch up". Meantime somewhere in the world more ozone depleting gases are getting released into the same atmosphere we all share.

The sooner the whole world converges on truly uniform standards on EPA rules the better off global trade and the environment we live in will be.

All for now,

Brad Skelton

The Shipping Bloke

Would you live and work in a shipping container?

noreply@blogger.com (Brad Skelton) — Sun, 29 Apr 2012 06:54:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

Since containerisation started in the shipping industry in 1956, the question has exisited of what to do with them when they are no longer fit for the rigors the sea throws at them? The average container has a life span on the ocean of between fifteen and twenty years and potentially much longer than that back on dry land.

Well, how would you like to use them for your home or office?

They are cheap ($1000-$3000 each depending on the age, type and condition), easy and cost effective to transport to site or re-locate, stackable, secure, incredibly durable, fast to errect with minimal foundations required, easy to plumb, easy to wire and are eco-friendly and can actually look ok.

Alright.....I only said "ok" not "great". There are now dedicated architects for shipping container buildings doing some incredible things with them. Offices, multi-storey hotels, homes, cafes can all be successfully built from them.

I can visualise the funky beach house in the future for the Skelton clan already. Maybe...

All for now,

Brad Skelton

The Shipping Bloke

Staggering overcapacity in the global shipping fleet.

noreply@blogger.com (Brad Skelton) — Sat, 14 Apr 2012 12:15:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)
I recently received a commentary from Ferrier Hodgson with some amazing facts I thought I'd share on the global shipping fleet and cargo volumes.

In January 2011 there were 103,392 cargo ships operating globally. This number of ships grew an amazing 54% from 2005 in order to meet a pre-GFC high demand.

In this period the number of container ships grew by 83% and bulk carrier numbers grew by 63%. The growth in shipping capacity completed outstripped the growth in seaborne cargo which for the same period was only up 27% to 8879 million tonnes and.....the global fleet is still growing. About 16% more new ships are being added in 2012 from orders placed by ship owners years ago.

A massive imbalance in supply and demand in shipping has been created. Bulk carriers have been the worst affected with current charter rates dropping to the lowest levels in about 30 years.

The value of ships has dropped by about 30% which is causing financiers to get nervous about their security position.

For shippers and freight forwarders this situation is mostly benefiting them. It is leading to some very keen freight rates in some trade lanes as a result of carriers lowering their profit margins in an attempt to maintain or capture greater cargo volume.

The downside is that some ship owners are in a very precarious financial position and cannot withstand much more stress from ongoing operating losses and devalutions of their fleet. Most carriers are continuing to adopt cost cutting measures by dropping port calls and steaming more slowly to save fuel costs.

A consolidation of operators looks inevitable unless cargo volumes really pick up soon. With a lethargic global economy in general, I can't see that sort of growth in trade happening for a while.

All for now,

Brad Skelton

The Shipping Bloke

Sir Richard Branson's, Virgin Oceanic, and Maersk Line join forces to go down. Waaaay down!

noreply@blogger.com (Brad Skelton) — Tue, 19 Apr 2011 10:41:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

To boldly go where no man has gone before, Virgin and Maersk Lines are sponsoring the Virgin Oceanic Expedition. The goal is to have Sir Richard Branson and Chris Welsh, an American sailor, pilot the "DeepFlight Challenger" to the very bottom of all of the worlds five oceans over a period of two years.

The deepest dive they hope to achieve will occur in the Mariana Trench in the Pacific Ocean and will take the specially designed submarine down 11,034 metres(36,000 feet) feet into the trench and then they plan to fly along the trench floor for six miles. Incredible!

They depart from Seattle later this year and have a scientific mission as well to explore and collect samples from the greatest depths of the planet Earth's oceans.

To help you appreciate the depth of these dives you can view an animation of this bold undertaking by clicking here.

Undoubtedly these dives will make world news however I will update you on their progress from time to time in my blog.

All for now,
Brad Skelton
The Shipping Bloke

Check out JUMPSHIFT !

noreply@blogger.com (Brad Skelton) — Mon, 18 Apr 2011 10:37:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

One of my friends and mentors, Alan Anderson, has just co-authored a book with Michael Sherlock who was one of the founders of Brumby's in Australia. The book is called "JUMPSHIFT" and it is packed with ideas, tools and resources to help any business owner or manager create alignment and direction for their business and team.

I particularly love their ideas about staff members who have what they call "the owners eye". By this they mean people that approach every aspect of their role with the company in the same manner as if they owned the business themselves. Alan and Michael contend that these are the people you really need to reward very well and promote and retain.

I wholeheartedly agree and reading the book prompted me to think about who on my team has "the owners eye". Then I asked myself "Am I looking after them well enough?". To be blunt, those that don't have the owners eye, can go down the road to our competitors if they like and become their problem. They are usually the same team members that you constantly have to ride to comply our customer service standards and company procedures anyway thus taking up precious manangement time and energy. The team members that have it, I am making sure that they know they are sincerely appreciated and valued. Those people are like part of the family almost. JUMPSHIFT has reminded me that having and developing the right team and a high performance culture is EVERYTHING.

This is one example of the type of thinking and great experience that Alan and Michael share. All of their ideas can be easily and quickly applied by anyone.

JUMPSHIFT is a fun, light and informative read. You can order JUMPSHIFT direct from their website HERE . Alan and Michael are also supporters of Care Australia so $2 from the sale of each book goes to this wonderful charity and serves as a testament to the good blokes that they both are.

If you would like to be personally connected to the authors then leave a comment on this blog and I am sure they will respond.

All for now,

Brad Skelton

The Shipping Bloke

New Incoterms come into force on 1 January 2011.

noreply@blogger.com (Brad Skelton) — Thu, 09 Dec 2010 08:06:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

The International Chamber of Commerce has recently overhauled the Incoterms used in world trade and there are some substantial changes coming into effect on 1 January 2011. About every ten years the ICC reviews and attempts to make sure Incoterms align with current trends and methods of world transport.

Rather than attempting to explain all the new terms in this blog, you can get a short overview by watching a 4min 28sec presentation on this by clicking here.

For more information please feel free to post a question on this blog or alternatively you can order the ICC's Incoterms 2010 book detailing them all, online by clicking here.

Undoubtedly there will be some short term confusion until everyone involved in world trade gets used to using the new terms. Old habits die hard sometimes...

All for now,

Brad Skelton

The Shipping Bloke

ACT for kids

noreply@blogger.com (Brad Skelton) — Fri, 03 Sep 2010 02:34:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

ACT for kids is the charity that my company and I support and they launched their appeal today. This organisation works to treat and protect children from child abuse and is very worthy of support.

Quite a few of my Brisbane based team were at Central Railway Station this morning shaking a can trying to get some donations from the commuters. From all reports they did quite well and enjoyed the experience. Thanks gang!

If you'd like to make a donation you can do so online by clicking here.

Thanks for your support if you click through!

All for now,

Brad Skelton

The Shipping Bloke

Who you gonna call?

noreply@blogger.com (Brad Skelton) — Mon, 23 Aug 2010 11:16:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

I have noticed a significant shift in the market recently with many large, high volume shippers who have previously had direct deals with shipping lines gravitating back toward freight forwarders.

Shipping lines have been fighting to stay profitable and as a result are frequently changing ships, retrenching staff, dropping port calls or still have some fleet laid up resulting in lack of capacity and short shipments. The reality is that many shipping lines service levels have been faltering. I think I can say without exception every client is fed up with dealing with so called "Customer Service" centres on 1800 numbers.

So who you gonna call? Freight forwarders!

Shrewd shippers are using forwarders to help overcome these things. The forwarders are generally better positioned and resourced in meeting the needs of shippers right now and will offer a broader range of options rather than just one carrier. The range of services is usually broader too and in the volatile freight market we have had for quite a while, the forwarders are more attuned to where the deals are.

Best of all...you don't sit on hold in a phone queue waiting for ages to talk to someone and then being told "Go to www." to do that!

All for now,

Brad Skelton

The Shipping Bloke.

Far East shipping industry recovery is well underway!

noreply@blogger.com (Brad Skelton) — Sat, 07 Aug 2010 14:11:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

I have been travelling the last week or so in the Middle East and Far East visiting clients and shipping lines and some of my agents in these places. Recovery from the global economic downturn, particularly with shipping lines in the Far East, is now well underway with some carriers forecasting things should be back to normal by the end of the year.

An example is Singapore owned, Neptune Orient Lines(NOL). NOL is the fifth largest container carrier in the world. After reporting a US$741m loss last year NOL expects to deliver a US$70m profit for the full year this year. Furthermore all vessels that NOL laid up to ride out the downturn are now back in service and they intend to start acquiring more. Similarly an even more spectacular turnaround is being delivered by Orient Overseas International who posted a US$1.28b profit for the first half compared with a loss for the same period last year of US$232m.

Maersk Lines, the worlds largest container carrier, has forecast they expect to return to profit this year after seven terrible consecutive loss making quarters.

Most carriers I have spoken to are hoping to be able to gradually increase rates later this year by 10-15% as space contracts on their ships again.

I am really getting the sense now that the pulse of global industry is shifting to Asia with more companies focusing on this region and the extraordinary opportunities and growth that exists here. Some are even shifting their head offices from Europe and the US to the Far East. Obtaining finance from banks and doing business in general, is easier than alot of other places in the world and the economies are less credit driven.

For my industry something that punctuates this for me is that there is a challenger to the Baltic Shipping Index coming out of China that is getting more prominent. It is called the China Containerised Freight Index and provides a benchmark index for container freight rates. At the end of June it had risen to 1171 points compared with 763 a year ago.

All in all things are looking very positive again and I think we'll be back to battling for space on ships again very soon....in fact in a few tradelanes we already are.

All for now,

Brad Skelton

The Shipping Bloke

If you have never Googled yourself...do it now!

noreply@blogger.com (Brad Skelton) — Sat, 12 Jun 2010 02:40:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

This is a classic "Don't let this happen to you" story that I wanted to share with you.

I recently Googled myself and my company to check how we were being ranked.

I was surprised to find that another company popped on the first page of my search because they were using my name, Brad Skelton, and my company's buyline, the Choice of Heavy Industry, in their own website's page address without my permission. I have no association whatsoever with this company.

They obviously thought they could leverage my name and company's reputation to throw peoples hunt for us off track with internet search engines. They were effectively mis-representing themselves in an effort steal our web traffic and some business that was destined for us in the first place.

I am flattered that another company thinks so highly of mine that they would blatently leverage our name and good reputation for their own gain. Such must be their own realisation of their increasing irrelevance to the market and their inability to innovate themselves.

Well, Skelton Sherborne and I are the REAL DEAL and won't do unethical things to grow our business. I promise you now if I ever feel I need too, then I'll know it's time for me to find another gig.

All for now,

Brad Skelton

The Shipping Bloke

The Japanese car carriers are back..cars sales must be down.

noreply@blogger.com (Brad Skelton) — Thu, 06 May 2010 10:38:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

You can always tell car sales globally are down when the Japanese car carriers start chasing business for high and heavy cargo, like earth moving machinery, that usually holds little or no interest for them. You have to try and fill those ships somehow in a downturn.

From my perspective the GFC has had both positive and negative impacts on the RoRo (roll on/roll off) shipping market.

One of positives includes rates coming back to earth. Probably too low to be brutally honest as we are still seeing rates in the market at levels I haven't seen since the 1980's. The carriers cannot sustain these levels for much longer so I firmly believe increases are just around the corner.

Carriers have been scrapping older ships which are less fuel efficient, and operationally constrained with their lower ramp capacities and speeds. This is a double edge sword though. While it is actually good to move the older girls on, with fewer vessels working it has meant that sailing frequency has dropped in many trade lanes and this combined with slower steaming speeds, to save fuel, means that you may have to wait longer than usual for your cargo to arrive.

In an effort to fill their vessels RoRo carriers have been calling at more out ports. In other words, calling at ports that are normally not scheduled and going where the spot packages of cargo are. Prior to the financial crisis it was simply not possible for carriers to even consider a deviation from the main ports. With demand strong, they were under too much pressure from their big customers to get that cargo to market. NOW!

Out of adversity there is always opportunity for enterprising people. We have seen some new carriers enter the market such as Partner Shipping's NAPA service which has brought real competition to the market between North America and Australia. We have also seen other carriers, like Wallenius Wilhelmsen, enhance their USWC transhipment services via Manzanillo. both of these things are a win for shippers.

So, what's next?

I think it depends a fair bit on what is happening economically in Europe right now however assuming cargo volumes continue improving, then freight rate restoration will soon be inevitable. As global demand for cars comes back, then if they run true to past form, we'll be saying "sayonara" to the Japanese car carriers again until the next downturn.

All for now,

Brad Skelton

The Shipping Bloke

Customer loyalty... going, going, gone?

noreply@blogger.com (Brad Skelton) — Sat, 24 Apr 2010 23:43:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

Has anybody else noticed that customer loyalty seems to be dying a slow death as the forces of the internet gain more momentum? Now todays customers are better informed than ever in making their buying decisions and realise they are the ones holding all of the aces.

Courtesy of the internet today's customers can quickly search and find vast numbers of alternative suppliers of virtually any product or service and get real-time price comparisons. They don't really care anymore how long you have been in business or how big you are or how many offices you have or what great marketing promise you have come up with. The business climate has changed forever and the balance has tipped firmly toward the buyer and not the seller. Any company that thinks they can force customer loyalty somehow is now completely out of touch. In fact todays buyers can and probably will rebel against them.

If you think it is about price and price and price, then you are wrong. Sure it is a major factor in any buyers decision and every company needs to be competitive to survive however recent research suggests that in this fast paced world we live in people value their time and benefits more than their money.

This is the topic my good friend and mentor, Bob Bloom, has based his latest book "The New Experts" on. Bob has had a lifetime in marketing working for customers such as BMW, L'Oreal, Nestle, Southwest Airlines and little old Skelton Sherborne. Before retirement he was CEO of Publicis Worldwide. His immense experience is second to none and I always enjoy his no nonsense, cut through the crap style. Bob's common sense or perhaps "uncommon sense" approach has been dynamite for my business in helping me attract and retain the worlds leading shippers of heavy equipment and machinery.

I was sincerely honoured when Bob chose to write about some of the initiatives in freight forwarding we have come up with for our clients and even more honoured when he asked me to write an endorsement for "The New Experts".

This book is relevant, enjoyable and a compulsory read for anybody trying to come to terms with the thinking and habits of the new customer.

Bob has been kind enough to give me ten copies of his book. I will send a free copy to the first ten readers that leave a comment at www.TheShippingBloke.com offering a personal experience to the readers of this blog in dealing with the attitudes of todays customers.

If you miss out then you can buy a copy of "The New Experts" here.

All for now,

Brad Skelton

The Shipping Bloke

Volatile freight rates as shipping recovers from the GFC.

noreply@blogger.com (Brad Skelton) — Wed, 21 Apr 2010 19:31:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

HSBC, the worlds largest bank, hosted a shipping conference on the 29th of March and I thought I'd share some of the information and ideas raised there by ship operators, ship yards, ship brokers and financiers that might be pertinent to followers of this blog. Freight Forwarders, like yours truly, seemed to be absent. The source of this information is HSBC's Shipping Day report.

Overall there was consensus that a slow recovery is underway however many operators are still delivering substantial losses and freight rates, particularly in the container sector, are likely to be very volatile in some trade lanes. I have personally seen this volatility and you have to be right on your game!

The volatility is being caused by carriers who have been hiking rates in order to try and get back into profitability and fluctuations in shipping capacity. Rate hikes the past 6 to 8 months has been due to carriers cutting their capacity as they have laid up vessels to ride out the downturn. The rules of "supply and demand" have kicked in.

Capacity is now growing again though. Some carriers have started reactivating some of the ships they have laid up while at the same time there are new container ships being delivered from the ship yards that were ordered years ago(pre GFC) which are increasing capacity. HSBC report that most of these vessels are destined for Europe/Asia tradelanes. Rates have already dropped by about 10% as a result. Good news for shippers and freight forwarders. Overall it is concerning that there is still massive over-capacity in shipping globally.

We are also seeing the RoRo carriers contemplating bringing more vessels out of "lay up" so I suggest we will see similar volatility in freight rates in this sector soon which is likely to continue until demand and capacity stabilises.

Recovery in the bulker and tanker trades seems be happening faster and in fact the ship yards reported a preference to work in these sectors. The ship yards received almost no orders in 2009 and suffered from substantial deferments of orders as well.

So, all in all, still interesting times for shipping but I am heartened that recovery seems to be slowly underway even if there are still some rough seas ahead for a while.

All for now,

Brad Skelton

The Shipping Bloke.

The Generosity Gene.

noreply@blogger.com (Brad Skelton) — Thu, 15 Apr 2010 10:06:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

I am fortunate to have some incredible friends in Naomi and Peter Simson who founded RedBalloon. Their company is easily the largest online supplier of experienced based gifts. More on RedBallon.

Naomi is a marketing genius, a former Telstra Businesswoman of the year, a Mum and one of the most innovative and out of the box business thinkers I have ever known.

She has recently had the great honour of being invited to speak at a TEDx event in Sydney. Tedx is invites some of the worlds greatest minds in their respective fields to do presentations which are recorded and then uploaded to the net. The thrust of Tedx is to capture amazing ideas and spread them.

So while Naomi's presentation, "The Generosity Gene", has nothing at all to do with shipping, I thought I'd share it with you. I hope you find it as thought provoking and enjoyable as I did.

Congratulations Naomi!

Click here to "The Generosity Gene".

All for now.

Brad Skelton

The Shipping Bloke

What happened to "My word, is my bond"?

noreply@blogger.com (Brad Skelton) — Sat, 10 Apr 2010 00:12:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

For centuries in shipping, a person or company's word has been something that can be relied upon absolutely. It is an industry foundation stone but I fear it is getting lost. A reputation for honouring your word is hard earned but easy to lose. It's not rocket science. Simply do what you say you will do and it keeps customers happily coming back.

So lets relate that to some of the worlds major RoRo and container lines right now. Sadly many still have substantial portions of their fleets mothballed and out of service and are losing money due to declines in cargo volumes with the GFC. It's a bad predicament the industry is in yet short shipment of cargo is on the rise again even when shipping capacity massively outweighs cargo volumes. For a shipping line to give a booking confirmation on a particular vessel to move cargo is in effect to give their word or a promise to perform.

Recently one good client of mine with a RoRo carrier suffered three consecutive short shipments in a row for his bulldozer. To be clear, this was with bookings being CONFIRMED by the shipping line in writing and yet vessel after vessel his cargo was left behind. Similarly a client moving full container loads ex Europe had virtually the same experience. The commercial impacts on these clients was massive but the shipping lines didn't seem to care.

These occurences were commonplace just prior to the GFC rolling through as cargo volumes globally were at all time highs and there was a shortage of ships. Not that this excuses short shipments. Either way you look at it, the shipping line shouldn't accept the booking if they cannot be relied upon to upift the cargo AS BOOKED! It's their "word" after all.

Perhaps I am over-simplifying it but I don't think so. To my businessmind I'd be trying hard to deliver a damned good and above all reliable service and carrying everything I could to grow profits and revenues. Particularly in challenging business times.

Now I am sure that some executives of shipping lines are reading this blog and thinking Skelton just doesn't understand. "He's been around long enough to know it's about maximising the utilisation of the ships we have in service to make a profit. Sometimes this means we have to leave cargo behind." I realise delivering a profit is a business imperative but in some circumstances is it worth the long term cost of abandoning your word and thus losing customer focus?

Lets get back to basics. I think to abandon your word is short sighted. Long term success in business means taking long term views of the business relationships you enter into and realising there will be highs and lows but because you have given your word, you stick by your customer through thick and thin.

It's about being committed enough to the relationship to take the good with the bad. Lets not forget that many ship owners have enjoyed incredible boom times prior to the GFC. The likes of which had never been seen before.

So now times are pretty tough and some of these carriers, while delivering appalling booking reliability, are arrogant enough to still think they deserve and can demand 100% loyalty from shippers and forwarders while at the same time not offer anything in damages when they leave cargo behind. To be frank they don't deserve loyalty because they haven't earned it.

My customers have long memories for bad service and many of them will go out of their way to avoid and punish carriers who have inconvenienced and cost them money before. Right now with times being tough for them too, they are less forgiving than ever. We are fortunate that most of our customers are understanding enough to know that because we, as freight forwarders, don't own the ships we are reliant on the shipping lines to perform.

In previous blog posts I have referred to three great mates of mine that I get together with a few times a year to discuss business and life over a long lunch. One of the boys coined a phrase that resonated with us all and I think is relevant to share in light of peoples abilities to keep their word.

It is, "Tough times don't build character. They reveal character".

I invite you to comment on this blog and share any short shipment war stories you may have by going to http://www.theshippingbloke.com/ .If you are one of the offending shipping lines, then I am sure my readers would like to hear your perspective too.

All for now,

Brad Skelton

The Shipping Bloke

The collapsible shipping container..a reality?

noreply@blogger.com (Brad Skelton) — Sat, 27 Mar 2010 23:28:00 +0000

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

For as long as I have been in the shipping industry the pursuit of the collapsible shipping container has been on. Numerous designs and prototypes have been tried and they haven't really proved practical or financially viable. Well this latest design from a Dutch designer called Cargoshell might just be the one that will make the break through.

Why make a shipping container collapsible anyway?

Approximately 90% of all cargo shipped in the world these days is done so by containerisation. There is estimated to be about 200 million shipments per annum. The pinch point on the current standard design is the costs involved to deliver and return the empty containers or frequently re-position them back to export markets. The costs to do this, regardless of the mode of transport, are virtually the same as moving a full container.

So if you can find a way to collapse a container for the empty transport then you can stack them together and return or deliver a few for the same cost of returning one. Cargoshell accomplishes this with a massive volume reduction of 75% and a weight reduction per container of 25% by using composites rather than stell for their construction!

With the world chasing carbon emission reductions, a lighter container equates to significant savings on fuel and therefore emissions.

The other pinch point of past collapsable container designs has been the ease at which you physically erect them and fold them down. Once again, Cargoshell has come up with a design that can be easily errected in about 30 seconds. To see this in action click here.

For this project to ultimately succeed it will depend on the scale of adoption of this design globally. This is because currently the cost of a Cargoshell container to manufacture in fewer quantities is about three times that of a steel container. So it might take a while for shipping lines to gain reductions in their operating cost and then hopefully pass that on.

If I was in the business of operating empty container parks then I'd be worried. This innovation could lead to a 75% revenue hit.

All for now,

Brad Skelton

The Shipping Bloke

Ever wondered exactly where the ship is with your cargo?

noreply@blogger.com (Brad Skelton) — Sun, 21 Feb 2010 07:32:00 +0000

(You are getting this note because you subscribed to Brad Skelton's blog-The Shipping Bloke)

GPS technology seems to get better and better and the shipping industry has been an early adopter of this for navigation purposes originally.

Now a significant leap has been made which enables anyone to track all types of ships from cargo ships and tugs to passenger liners via the internet in realtime.

Marinetraffic.com has an incredible website where you can track the ship your cargo is on, see it's speed and even some pictures of her.

I value truth and transparency and in years gone by who would have really known if the vessels agents were telling me the truth on where the ship was or even if they knew exactly themselves. I swear the shipping industry has a massive book of excuses. Well, it just got alot thinner with this great tool.

I am currently working on the integrating this technology into Skelton Sherborne's myCargo realtime tracking facility so my clients have this info available to them on the cargo they entrust to us constantly. It's in a test mode now.

All for now,

Brad Skelton

The Shipping Bloke

This will put hair on your chest.

noreply@blogger.com (Brad Skelton) — Thu, 31 Dec 2009 10:51:00 +0000

(You are getting this note because you subscribed to my blog-The Shipping Blokes Blog)

Seeing it is new year and depending on what part of the world you are in, you are probably either partying hard or nursing a hangover right now.

Have you ever tried a Scandanavian drink called "Aquavit" or otherwise known as "Linie Aquavit"? I remember fondly quite a few nights on board Wallenius vessels in Brisbane docked at Hamilton Wharf with the ships Captain and their local agents serving up shot after shot of this flavoured rocket fuel. Aquavit is distilled from potatoes or grain mash and packs about 45% alcoholic volume punch. In the distilling process different flavours are produced by adding orange peel, lemon, cardamom, cumin seed and various other ingredients.

Every drop makes an interesting journey by sea before it is ultimately sold.

All Aquavit is shipped from Norway across the Equator (hence "Linie") to Australia and back. This tradition started in the 1800's when the owner of a distillery, Jorgen Lysholm, shipped a consignment to Asia that for some reason wasn't accepted and was returned. Upon inspection of the barrels back in Norway he noticed that his Aquavit had developed a richer flavour for it's travels through warmer climates. Hence the tradition was established and continues to this day as a critical part of the process of producing Aquavit. More on Aquavit including a map of it's journey.

So next time you feel like a shot, try some Aquavit. Always a good idea at the time!

Happy new year!

Brad Skelton

The Shipping Bloke

Where does a shipping container go in a year?

noreply@blogger.com (Brad Skelton) — Sun, 06 Dec 2009 04:53:00 +0000

(You are getting this note because you subscribed to my blog-The Shipping Blokes Blog)

The BBC undertook a quirky project this past year that I thought you might find interesting.

They tracked a 40' shipping container for a full year on it's journey around the world carrying numerous different types of cargo. During the year it covered about about 50,000 miles by sea, road and rail. It is completing it's final voyage now to South Africa where it will be retired from service and turned into a soup kitchen.

This is fascinating and well worth a look. For more on this project including videos of it's journey and an interactive map of it's travels click here to go to the BBC's "The Box" website.

All for now,
Brad Skelton
The Shipping Bloke

A public "Thank you" to my team.

noreply@blogger.com (Brad Skelton) — Mon, 30 Nov 2009 03:13:00 +0000

(You are getting this note because you subscribed to my blog-The Shipping Bloke's Blog)

Last Thursday night I attended the equivalent of the Academy Awards for the shipping industry in Australia. The Lloyds List Australian Shipping and Transport awards. The aim of the awards is to recognise the achievements of the industry's finest practitioners.

Thanks to the innovative thinking, safe practices and hard work of my team, Skelton Sherborne, was nominated as finalists in two of the fourteen categories. Namley; Freight Forwarder of the Year and the Safe Transport category.

I am very proud we made the final as the competition is fierce and stacked with huge multi-national players and public companies.

While sadly we didn't win either category we did get runner up in the Freight Forwarder of the Year which we are still very pleased about.

So, to my team. Thank you! Your commitment to our customers, the company and I during what has been a challenging year in shipping has been and remains inspiring to me.

We'll hopefully bring it home next year!

All for now,
Brad Skelton
The Shipping Bloke

Reassuringly Expensive.

noreply@blogger.com (Brad Skelton) — Sat, 21 Nov 2009 23:21:00 +0000

I caught up with a few good mates of mine for a few beers recently who all run their own businesses in diverse industries. I consider these blokes very business enlightened and I really enjoy drawing on their collective knowledge and experience.

We were talking about the large number of requests for tender we are getting across our desks lately, particularly since the GFC kicked it, and the pros and cons of tendering for new business versus the business that comes to you through marketing efforts or exisiting customer referrals.

While we agreed we all generally have won more tenders than we have probably lost, the time and effort invested in them is absolutely massive and sometimes makes you question the commercial sensibility of participating in the exhaustive processes that some companies want to run.

My experience suggests that decisions are driven nearly always by three factors. Namely: PRICE, PRICE and PRICE.

Sure the tender always says that quality of service, expertise, safety record blah blah blah will be prime considerations in the decision making process however when we win tenders and sit down with our new client we are usually told "Congratulations. You had the cheapest price".

It's the classic business paradox of price versus service. It is pysically impossible in most industry's to be the cheapest and also the best. The two are diametrically opposed to each other and to delivering your business it's imperative. A profit!

After about the fourth or maybe fifth beer, one of the guys said in his own business he always looks for the "Reassuringly Expensive" option ahead of the cheapest option and he would usually go with this as this is where the reliability and professionalism is usually found. I have to agree. You really do get what you pay for.

So for me even in tighter times, like my mate, I will usually go with the "Reassuringly Expensive" supplier who will be there for me in the long run with a consistently good quality product or service. Hence the reassurance I feel in making this decision.

Whether you are a builder, a lawyer or a candlestick maker....nearly all industries have become commoditised in someway so there will always be someone promising to do it cheaper and better and more willing to lose money than you to land the deal. Now with the internet and the plethora of companies trying to get noticed, "FREE" is the catch cry of the net. Where to from there? Well you don't go broke on the deals you miss out on so "Let them go" I say. These companies just won't be there at the finish line.

Do you remember the scene from the movie "Armageddon" with Bruce Willis and Steve Buscemi about the lowest bidder? If you are in the process of sending out a tender for new suppliers then I'll let the boys have the final word. Check This Out!

All for now.
Brad Skelton
The Shipping Bloke

Some shipping trivia on plimsoll lines?

noreply@blogger.com (Brad Skelton) — Tue, 13 Oct 2009 01:36:00 +0000

(You are getting this note because you subscribed to Brad Skelton's Blog-The Shipping Bloke)

Firstly what is the plimsoll line? It is the horizontal line and marks that you may have seen painted around the hull of the ship near the waterline. It dates back as far as 2500BC in Crete!

Why is it there? It is effectively the safe load line calculated for the ship. As more cargo is loaded on board the weight forces the hull of the vessel deeper underwater. The plimsoll line is therefore effectively the maximum point a vessel may be loaded too to ensure a safe level of buoyancy is maintained for it's voyage. If the plimsoll line can't be seen as it is underwater...then you have an overloaded ship.

There are more than one mark on ships as the depth a hull will float in water will vary depending on a range of factors such as salinity and water temperature.

The letters on the Load line marks have the following meanings:
TF – Tropical Fresh Water
F – Fresh Water
T – Tropical Seawater
S – Summer Temperate Seawater
W – Winter Temperate Seawater
WNA – Winter North Atlantic

The plimsoll line tells the master of the vessel and the vessel underwriters make sure that the ship is operating within safe working limits for seas it will sail through. In fact it is not allowed to sail if the plimsoll line is not visible.

This is why it is so important to have the most accurate cargo weights possible so that the ships planners can keep the vessel inside it's safe working limits and also trim the vessel so it floats evenly in the water.

Dial 1800WESUCK at customer service!

noreply@blogger.com (Brad Skelton) — Tue, 29 Sep 2009 00:25:00 +0000

(You are getting this note because you subscribed to Brad Skelton's blog-The Shipping Bloke)

The exasperation of my freight team in dealing with MEGA shipping companies and their so called "customer service" through centralised 1800 numbers and websites is getting overwhelming. It is to the point where we are actually avoiding doing business with them because it's near impossible anyway and it affects our ability to deliver the standard of service our customers are used to from us.

Here's an example from one carrier on a recent import shipment to Australia.

- We receive a computer generated email telling us the freight charges are available online at their website. What the??? If the computer can generate an email to us telling us the charges are available online then why can't the computer just email them to us in the first place? Stupid!

-So we go the website we are directed too from the email. But of course for security reasons you need to register as a user. Fair enough.

-The registration process is completed but the access doesn't come through within a few minutes as promised.

-So we call their 1800 number and say "We received an email directing us to your website but then we had to register and we still don't have access". Then we are told that they have no IT people working in Australia anymore (apparently this is run from overseas now because labor is cheaper) and we are given an email address to send a message to their IT dept to get them to complete the registration process that they should have done by now anyway. Before sending this message we ask the customer service operator on the phone if they have the charges and if they could just give them to us over the phone or email them to us directly. The operator says she does have them but she can't do this anymore and we have to use their website. Arggh!

-So we email IT trying to get the registration to their website through. That was in the morning and by late afternoon we have no reply and still no access to help our client get their cargo tomorrow.

-So back to the "Dial 1800ZEROCAREFACTOR customer service team". We explain that we have done everthing they ask and we still don't have the charges and access to the website and the ship is in tomorrow. We need them now so we can pay them and they can then release the cargo when our truck goes to the wharf.

-That customer service person finds all this too hard and transfers us to another operator who ask's "What port this is for?". "Pt Kembla" we say. "Oh that's not me that someone else...I'll put you through" Arggh!! &^%*%!!!

-We speak to the next person who says "No worries, I'll email them to you now". Simple as that. What the? Why could that person do it and nobody else could or would? Stupid!

-We are still waiting on the IT dept to come back to give us access to the website but the cargo picked up on time. Unbelievable!!

This is a real example and I fail to see how these businesses function at all or have any customers. I am really tempted to name them however then I'll probably hear from their legal dept. Then again, it has probably been sent offshore too and maybe I don't have to worry?

This reminds of an experience a good mate of mine, Troy Hazard, had with a bank in America recently. Troy has recently moved to the States and is on the corporate speaking circuit there. Here is his rant to me by email...

"Troy – I’m here to find out why I have been charged $175 overdraft fee when I don’t have an overdraft?
Bank – Yes?
Troy – I’d like you to refund that please.
Bank – Well, I can’t do that here sir you’ll have to call customer service.
Troy – Call customer service? But I am standing here… In the outlet… At the bank… In person… Talking to you…In your office…With my statements in hand… The branch where I opened the accounts.
Bank – Yes I know Mr Hazard but I don’t have that authority here.
Troy – So you’re saying that someone I don’t know, that’s never spoken to me, and has no idea about my account other than what comes up on their screen has more authority to deal with me than you do, my local banker, at my local branch?
Bank – Yes sir.
Troy – You’re kidding right?
Bank – No sir, I do not have the authority to talk to you about that. (as my card is handed back)
Troy – So I need to go and call this number then.
Bank – Yes sir, that’s what you will have to do.

(Not even, let me call them for you now and tell them what you are seeking to sort out, OR, let me dial the number for you and put it through to that courtesy phone over there so you can talk to them while you are here, OR, let me talk to them first and give you a reference number so you wont have to go through all of the explanation when you do call, OR let me find someone at customer service that can help you so you wont have to waste time on the phone….. nope… here’s your card, go call them, good luck, don’t let the door hit you on the backside on the way out)"

So I sympathise with Troy as we are basically in the same boat with some of the larger shipping lines. Pardon the pun!

All for now,
Brad Skelton
The Shipping Bloke

Greener shipping.

noreply@blogger.com (Brad Skelton) — Thu, 24 Sep 2009 03:22:00 +0000

(You are getting this note because you subscribed to Brad Skelton's blog-The Shipping Bloke)

NYK is one carrier that is really looking well ahead into the future with it's concept of the NYK Super Eco Ship. This project they hope will be delivered by 2030 and will radically improve carbon emissions by about 69% compared to a cargo ships as we currently know them. The vessel is planned to be able to carry about 8000 TEU's (twenty foot equivalent units).

This bold project and leap into the future will potentially see ships powered by a combination of LNG-based fuel cells, solar cells, and wind power. The main power unit is planned to be a 40,000kw LNG fuel cell.

The hull design also comes in for a major overhaul with reducing friction through the water being the goal followed by weight reduction. The design of hull means it is longer and wider but it has a shallower draft than most vessels currently operating now. This draft will also assist the Eco Ships with getting into ports with draft restrictions.

I'm not sure what happens to those sails when the containers are being loaded and discharged. I know some wharfies would see them as a prime target for the gantry crane.

Full marks to NYK for their investment, innovation and effort to drive change in the industry.

All for now,

Brad Skelton

The Shipping Bloke