Thursday, August 28, 2008

Supercharging Your Chinese Supply Chain

Managing an efficient supply chain is critical for global success. Whether you are sourcing products from China or managing export operations, Supercharging Your Chinese Supply Chain focuses on the Chinese side of your import/export transaction and will deliver the tools and information you need to successfully manage your supply chain.

Presented by Shawn Levsen, UPS International Account Executive, this session will cover the key players in the Chinese supply chain including how to choose the right service provider, a review of Chinese export regulations and customs procedures and a detailed overview of the flow of goods and documents. This session will help you improve efficiency, lower risk and increase the profitability of your global supply chain.

Join us on Thursday, September 18th at the Plaza Club San Antonio. Register now!
Next Session - Global Marketing: Managing Your Global Distributor
Developing a win-win relationship with your global distributor is critical to successfully expanding into new markets and growing your company's international sales. Managing Your Global Distributor covers all the important factors that you need to consider while selecting and working with an international sales and marketing partner.

Presented by Jacob Nammar, International Sales Executive, this seminar will guide you through the process of choosing the right distributor, creating a solid contract, complying with legal requirements, and establishing the different methods of monitoring your agreement. This session will help you successfully manage your global distributor in a way that will lower risk, improve relationships and increase sales for your company.

Join us on Thursday, October 16th at the Plaza Club San Antonio. Register Now!

Schedule of Events
09.18.08 Supercharging Your Chinese Supply Chain
10.16.08 Global Marketing: Managing Your Global Distributor
11.13.08 Using Letters of Credit in China
01.22.09 Doing Business in Vietnam
02.12.09 Discovering Business Opportunities in Colombia
03.12.09 International Trade & Protecting Your Intellectual Property
04.16.09 Importing Food Products into the U.S.
06.11.09 Doing Business with Korea

For more information, please visit our website at
Become a Sponsor!

www.texastrade.org11:30 am to 1:00 pmIndividual Rate: $25
Seminar Location
Plaza Club San Antonio 100 W Houston St. #2100 San Antonio, TX 78205

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E-mail: Phone: 210.458.2470Web:

Wednesday, August 27, 2008

Deficit Shrinks as Exports Surge

August 25, 2008 Shippers Digest

The U.S. trade deficit dropped 4.1 percent in June despite soaring prices for imported oil. Goods exports increased 5.1 percent to $118.6 billion, compared to $114.3 billion in May and $99.1 billion in June 2007.

Exports of manufactured goods were 17 percent higher than in June 2007, according to the National Association of Manufacturers.

“Manufactured goods exports are growing more than twice as fast as imports of manufactured goods, and as a result the manufactured goods trade deficit is falling,” said Frank Vargo, NAM’s vice president for international economic affairs. “June’s manufactured goods trade deficit in fact was 9 percent lower than it was a year ago.”

Exports of automobiles, parts and engines grew by $576 million, while imports grew by $60 million. U.S. exports of food, feeds and beverages rose by $853 million, while U.S. imports of the same products fell by $144 million. Exports of capital goods excluding autos rose by $1.2 billion in June, while imports fell $1.4 billion.

Goods imports were up 2 percent because of the increase in oil prices, which averaged $117.3 billion. Non-oil imports fell.

Including services, the deficit shrank to $56.8 billion, according to the Commerce Department. However, when adjusted for inflation, including oil prices, the real trade deficit fell by 10.3 percent in June to $39.1 billion, the lowest level since December 2001.The trade deficit with OPEC countries grew to a record $18.1 billion, while the politically sensitive U.S. trade gap with China rose to $21.4 billion, up from $21 billion in May, but not up much from the $21.2 billion deficit in June 2007.

The total U.S. deficit with all countries in the first half of the year was $394 billion, up from $376.2 billion in the first six months of 2007.

Friday, August 22, 2008

Close Relations with EU Boost Export Opportunities


Despite growing economic integration, U.S. companies still face some entry barriers Europe is often an afterthought in many trade circles. It shouldn’t be. The U.S. relationship with the European Union is a partnership between equals, with enormous amounts of trade and investment that bring substantial economic benefits to people on both sides of the Atlantic.
For example, U.S. merchandise trade last year with the 27 members of the European Union totaled $600 billion, a 47 percent increase over the $409 billion in two-way trans-Atlantic trade in 2003.

Much of that trade is between parent companies and subsidiaries on the other side of the pond. That’s largely because of the huge levels of foreign direct investment — an even bigger indicator of economic integration than trade statistics alone would indicate. As of the end of 2006, U.S. companies had invested about $1.1 trillion in the European Union’s 27 member states, while EU companies had invested about the same amount in the United States. U.S. companies employ about 7 million people in the EU, while European companies employ about the same number in the U.S.

For example, Siemens, the German conglomerate, employs about 70,000 people in the U.S., according to Kathryn Hauser, executive director of the Trans-Atlantic Business Dialogue.
“The similarities (between the U.S. and EU) are obvious. The U.S. and Europe are very large markets, have people with very similar values, high quality standards and regulations on things that matter to consumers, such as food safety,” Hauser said.

The TABD is a private-sector group that seeks to establish a trans-Atlantic market with the freest possible exchange of goods, capital and people between the U.S. and EU.
A barrier-free market would make it easier for all companies, especially small and medium-sized enterprises that don’t have a lot of resources, she said. The cost of complying with some current regulations is “really, really high” for them, she added.

Hauser cited mutual recognition of security programs and accounting standards, and a task force aimed at easing restrictions on business travel, as examples of cooperative steps that will benefit companies on both sides of the Atlantic.

The EU’s creation of a single market means that U.S. exporters no longer need to tailor a product to meet regulations and standards in each country. Rather, said Gary Litman of the U.S. Chamber of Commerce, “it’s the EU market. That reduces the cost of entry for American companies tremendously.”

Litman, the chamber’s vice president for Europe and Eurasia, said the adoption of the euro by 15 EU members — the U.K. is the most notable exception — has helped U.S. companies. The euro is “simple, uniform and transparent,” he said.

Calculating costs and pricing was far more challenging before the introduction of the euro.
Without the euro, the dollar would be overpriced relative to the individual currencies of some eurozone countries, such as the Spanish real, he said.

The strong euro — the flip side of the weak dollar — has boosted U.S. exports by making them more price-competitive in the EU. Last year, they totaled $247 billion up from $214 billion in 2006, a 15 percent increase. The pace has been slightly less robust thus far this year, perhaps reflecting the spread of the U.S. economic slowdown across the Atlantic. Still, U.S. exports in the first five months of 2008 were up 14 percent, totaling $117.3 billion, compared with $103 billion in the same period last year.

Paul Dyck, the Commerce Department’s deputy assistant secretary for Europe, said he expects U.S. exports to Europe to continue to grow at double-digit rates next year.

The strong euro has taken its toll on European exports in other markets, such as Asia and Latin America, because European goods are too expensive compared to U.S. goods.

Meanwhile, the weakening of the dollar has led to a surge in acquisitions of U.S. businesses by bargain-hungry foreign companies. In a blockbuster deal last month, InBev, a Belgian brewery whose brands include Bass and Beck’s, bought Anheuser Busch, maker of Budweiser, the icon of the U.S. beer industry.

Besides acquiring U.S. companies, European companies, including IKEA, BMW and Michelin, have been busy building U.S. factories or expanding their existing manufacturing operations to take advantage of lower costs in the U.S., as well as to be closer to their customers and to cut transportation costs.

“I think there has been an amazing number of advances in terms of economic integration,” said Kimberly McLaughlin, director of EU affairs for the U.S. Council for International Business.
The size and wealth of the EU member states, which have a combined population of about 500 million, make Europe an attractive market for U.S. entrepreneurs, Litman said. “If you have a new idea, a new product, energy and passion, you are no longer confined to the U.S. market. You can count on a very sophisticated, very deep European market with high expectations of value, quality, product safety, and with very substantial purchasing power,” Litman said.

U.S. exporters will also benefit from the EU’s new customs code, a step that will simplify various procedures and introduce a paperless environment. Some of the code’s provisions took effect on June 24, while others will be phased in over the next several years. The provision regarding customs charges, for example, will not take effect until Jan. 1, 2011.

Overall, the best opportunities for U.S. companies in the EU are at the upper end of the technology scale, according to the U.S. Department of Commerce. “U.S. goods are well regarded, and demand is driven more by quality and performance than by price,” the department said in its country guide for the EU.

The guide warns, however, that the single market is not a uniform one. “The market of the European Union is a differentiated one, with each member state market having supply, distribution, demand, cultural and legal characteristics that merit individual attention. Specific tactics for market entry or expansion should be considered for each country,” the guide observed.

Moreover, implementation of many European Commission directives is up to individual countries.

The EU country guide contains a wealth of information and can be found on the Web site for the U.S. Commercial Service, Commerce’s export arm. The Web site,, also has country guides for each member state, detailing the best prospects, the investment climate and other economic, political and commercial information for the country or countries of interest.
The EU is currently facing an economic slowdown, although it may not be as severe as in the United States. Growth in the eurozone was probably flat in the second quarter, but is expected to rise to 1 percent in the second half of the year, said Michael Andrews, chief economist for PIERS, a sister company of Shipping Digest.

Andrews attributes the slowdown to the spillover effects of the U.S. housing and credit crises, in addition to surging oil and food prices. Moreover, the European Central Bank has been raising interest rates in an effort to curb inflation — a move that also has a depressing effect on economic growth.

The slowdown in the U.S. may limit the growth in EU exports to the U.S. Surprisingly, however, in dollar terms, EU exports to the U.S. grew in 2007 and in the first five months of this year. Exports to the U.S. last year totaled $354 billion, up from $330 billion in 2006. And in the period from January through May 2008, imports totaled $154 billion, compared with $141.8 billion in the same months last year. As a result, the U.S. deficit with the EU fell by a relatively small amount, dropping from $38.6 billion to $36.8 billion. The deficit last year was $107 billion.

Wednesday, August 20, 2008

Drayage Drivers - endangered species

Over the past few months, many of our customers have seen delays in getting their cargo out of the port facilities after the ship finally arrives. So we thought that this article might make for some interesting reading.
endangered species

Economic and regulatory pressures are making it tough for port drayage drivers to earn a living. If they turn in their keys, who will haul the containers? By Toby GooleyFrom the June 2008 issue

Drayage drivers are the unsung heroes of our nation's import-dependent economy. They wait in long lines to pick up and drop off the millions of ocean containers that pass through U.S. ports each year. They spend long days shuttling containers between ports, intermodal terminals, and shippers' premises.

Most are owner-operators who work as independent contractors for small, locally owned trucking companies. Typically, they bear the cost of operating and maintaining their tractors, and they have no health insurance or pensions. Many are immigrants whose legal status is not always clear. And if anecdotal evidence is correct, more and more of them are turning in their keys, parking their trucks, and walking away from what has become a pretty shaky way to make a living.

These hardworking drivers are becoming an endangered species. If enough of them decide to get out of the business, something else will become endangered: ready availability of service at prices exporters and importers are willing to pay.

Hard timesLike everyone else who buys or sells transportation services these days, drayage drivers are trying to cope with unfavorable economic conditions and regulatory changes. One of their biggest worries is the cost of diesel fuel. An early 2007 survey of drayage drivers serving the ports of Los Angeles and Long Beach found that fuel costs ate up more than one-third of independent owner-operators' gross incomes. At the time of the survey, diesel was $2.87 a gallon; with prices now exceeding $4 a gallon in Southern California, that percentage unquestionably is far higher now.

Because drivers typically are paid by the trip, port congestion can be an enormous drain on income. A 2007 study of drivers at the Port of Seattle found that a local one-way haul paid $40 to $50 on average, and round trips were about $80. To make any sort of living at those rates, drivers need to make at least a couple of round trips daily. But just a few years ago, drivers in LA/Long Beach were lucky to make two turns in a day.

The situation has improved considerably, thanks in part to the PierPass appointment system, and night and weekend hours at container terminals. "Productivity has improved by approximately 50 percent since PierPass and extended gate hours went into effect," said Rick Wen, vice president, business development for Hong Kong-based container line OOCL, in a recent address at the Coalition of New England Companies for Trade (CONECT) Annual Northeast Trade and Transportation Conference. At that event, which was held in Newport, R.I., in March, he predicted that port congestion was likely to ameliorate even further as the U.S. economy slows down and import volumes decline. But long wait times could return if LA/Long Beach dockworkers and management continue to disagree over proposed changes in labor scheduling, or if they fail to sign the next labor contract by the July 1 deadline.

Port congestion has had other consequences for companies that hire drayage drivers. When container traffic shifts away from congested ports and spikes in other parts of the country—as it has at East and Gulf Coast ports and inland intermodal parks in the past few years—there may not be enough drivers ready to go to work when shippers and carriers need them.

In rural Chambersburg, Pa., for example, carriers are desperate for drayage drivers at the intermodal rail terminal that opened there last year, said Ken Kellaway, executive vice president of RoadLink USA, North America's largest intermodal company. Speaking on a panel with Wen, Kellaway said that carriers are trying to get people off their farm tractors and into trucks. Shifts in port usage patterns have made planning and scheduling difficult for drayage companies, he added. "Where do we need more trucks and drivers? The East Coast or the West Coast? We don't really know because [demand] keeps changing."

Regulatory burdensFederal, state, and local regulations are adding to drayage drivers' frustrations. The Transportation Security Administration's Transportation Worker Identification Credential (TWIC) program, now being rolled out at ports nationwide, is almost certain to push thousands of drivers off the docks. TWIC is designed to limit port access by requiring anyone who works at or conducts business at a port to have a biometric identification card that includes detailed information about the holder. Only U.S. citizens are eligible for the IDs, which require a background check and fingerprinting.

So far, said Kellaway, the TWIC acceptance rate for drayage drivers is 96.7 percent. That sounds good—until you learn that an estimated 20 percent won't even apply because they know they won't pass. He and many other industry observers predict that upwards of 200,000 drivers nationwide will drop out of the business for that reason alone.

The regulatory pressures just won't let up. In California, current and proposed clean air regulations are likely to burden owner-operators and small trucking companies with so much additional cost that they may not be able to afford to stay in business. The Clean Truck Program, included in the San Pedro Bay Ports Clean Air Action Plan (CAAP), requires a phased implementation of new or retrofitted low-emission tractors by Jan. 1, 2012. Few owner-operators— or small truckers, for that matter— can afford to pay or borrow $50,000-plus for a new tractor or even $15,000 to retrofit their current vehicles. Although grants and loan programs are being developed to help defray the cost of updating an estimated 16,000 vehicles, they may not be enough to bridge the gap.

The clean air plan also requires drivers who do business at Long Beach to be either employees or contractors of port-approved trucking companies, known as "Licensed Motor Carriers" (LMCs). The Port of Los Angeles will adopt an even more restrictive policy. LA will require all drivers to be employees of approved carriers that own the tractors—no contractors allowed. Port of LA officials say their approach will ensure a more stable, more economically viable workforce with compliant vehicles. But there's a potential fly in that ointment: An economic impact analysis of the Clean Truck Program found that so many owneroperators would quit if forced to give up their independence that a significant capacity shortage could result.

To someone who often doesn't make a whole lot more than minimum wage and typically has neither health insurance nor a pension, the costs and hassles involved in hauling containers simply aren't worth it. By Kellaway's estimate, the average drayage truck generates $100,000 annually, but the driver clears just $7 an hour. The 2007 Port of Seattle survey bears that out: Respondents worked 11 hours per day to earn an average annual income of $31,340 per year, after deducting truck-related expenses. A similar survey of drivers in Southern California came up with an even lower figure. (See the sidebar titled "portrait of a drayage driver.")

Struggle for survivalAlthough the pressures and problems are greatest in Southern California, similar scenarios are playing out nationwide. Is there any remedy? It's difficult for even technologically sophisticated companies with strong service networks to get premium rates, so raising drivers' per-trip rates is not an option, Kellaway said. RoadLink, which formed its network by consolidating many of the larger regional intermodal companies around the country (including Kellaway's own Boston-based company), is instead trying to help drivers reduce their costs. Those initiatives include help with vehicle financing, using RoadLink's technology to reduce empty miles, and creating a buying cooperative for fuel, tires, and parts. All together, he estimates, those initiatives cut drivers' annual costs by anywhere from $2,000 to $5,000. Whether such programs will be enough to keep drivers in their cabs for the long term is uncertain.

And it's not just the drivers who are an endangered species. The small trucking companies whose employees and independent contractors serve importers and exporters also are disappearing. Most of them, Kellaway said, are "mom and pops" that have no succession plans—"their kids don't want to take over the business."

The potential loss of drayage capacity as small truckers close up shop and independent drivers park their trucks permanently is a genuine threat to international supply chains, Kellaway argued. "Intermodal drayage companies [do business with] multibillion-dollar companies, and every single one is dependent on small local drayage companies that don't have long-term prospects for survival," he said. "We've got to figure out how to correct this ... or the current business environment could force their extinction."

portrait of a drayage driver
The drivers who shuttle ocean containers to and from ports work hard for their money, as a March 2007 report on truckers serving the ports of Los Angeles and Long Beach attests. The report, prepared by CGR Management Consultants for the Gateway Cities Council of Government, includes these statistics:
The vast majority of port drayage drivers are independent owner-operators (IOOs). Some IOOs work as contractors for local trucking companies.
The average tractor operated by IOOs is a 1994 model purchased for $21,500.
The average IOO survey respondent grosses $73,900 per year. Fuel costs eat up more than one-third of that revenue—more than $25,000 on average. (Note: These figures were based on a cost of $2.87 per gallon, the price of diesel at the time the report was prepared. Diesel currently exceeds $4 per gallon.)
The average net income reported by IOOs is $29,600, a figure the researchers believe may be overstated.
IOOs worked 50.7 hours per week on average.
Port drayage drivers who are full-time employees of local trucking companies earn an average hourly rate of $16.13 and receive limited benefits.
Nearly 90 percent of the interviews with IOOs who contract with trucking firms were conducted either partially or entirely in Spanish.
To read the report, Survey of Drayage Drivers Serving the San Pedro Bay Ports, go to

Another report on drayage drivers is Big Rig, Short Haul: A Study of Port Truckers in Seattle, which was based on a 2007 study conducted by the nonprofit organization Port Jobs. The report is written in a very accessible, nonacademic style. Especially interesting are the personal profiles of individual drivers and the challenges they face. The full report can be found at
E. Hunter Harrison, President and Chief Executive Officer of CN, to deliver keynote address at
3rd Annual Canada Maritime Conference

NEWARK, N.J. (Aug. 18, 2008) — E. Hunter Harrison, considered one of the leading transportation visionaries of modern times, will deliver the keynote address at the 3rd Annual Canada Maritime Conference that takes place Sept. 30-Oct.1, 2008, at the Sheraton Wall Centre in Vancouver, B.C. Harrison, who became president and CEO of CN on Jan.1, 2003, will discuss his vision for the future of rail in North America during his keynote address on Oct. 1, 2008. Credited with accelerating CN's turnaround by focusing on performance and cost control, Harrison joined CN in 1998 after five years as President and Chief Executive Officer of Illinois Central Corp. and its subsidiary, Illinois Central Railroad Co. CN completed its acquisition of the IC in July 1999. During his career with IC, Harrison devised the concept of scheduled railroading service for freight shipments, maintaining a sharp focus on operational efficiency and asset utilization. By 1996, he succeeded in driving the railroad's operating ratio down by some 30 points to the low 60s – the best in the North American rail industry at the time. Named CEO of the Year in 2007 by Canada's Report on Business magazine, Harrison's watch at CN has seen the company's revenues increase by one-third, profits double and the company become the hands-down most-efficient railroad in North America. Rail companies across the continent have begun copying Harrison's "precision railroading model" by running freight trains on a schedule. The Canada Maritime Conference is produced by The Journal of Commerce Conferences and Canadian Sailings magazine, both divisions of Commonwealth Business Media. "Supply Chain Transparencies" is the theme of this year's conference, which is hosted by Port Metro Vancouver. Panels will feature industry leaders discussing issues and trends impacting Canadian trade lanes, such as port capacity, export trends, and issues with the U.S./Canadian border. To register for the 3rd Annual Canada Maritime Conference, contact JoC Conferences at (760) 294-5563 or by email at or go to For exhibiting and sponsorship information, contact Julie Wallner at (209) 451-4870 or by email at

About Commonwealth Business Media Commonwealth Business Media Inc., a subsidiary of United Business Media Limited, is the leading information provider to the global trade, transportation and travel market with comprehensive proprietary data, news and analytical content. Its leading brands include The Journal of Commerce, PIERS Global Intelligence Solutions, OAG (Official Airline Guide), Air Cargo World, Traffic World, and Aviation Industry Group, plus a number of directory databases covering the international trade, railroad and trucking markets. The company also produces more than 30 conferences serving the international trade, aviation and maritime markets. For more information, visit
About CN CN – Canadian National Railway Company and its operating railway subsidiaries – spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with connections to all points in North America.

Thursday, August 07, 2008

Global Trade Talks Collapse

Free Trade After Doha's Collapse

For U.S. trade negotiators, the breakdown of the Doha round of talks adds urgency to bilateral pacts with South Korea, Colombia, and Panama
by Peter Coy Business Week

The collapse of global trade talks on July 29 proves Voltaire's aphorism that the perfect is the enemy of the good. In pursuit of the perfect—an international trade deal agreed upon by some 150 countries with vastly different goals—negotiators wound up with nothing. The way forward is likely to be via bilateral and regional agreements. A global deal, if one can be reached, may be a package of smaller agreements between subsets of the full body.

Excessive ambition may have doomed the Doha Round of trade talks, which began in November 2001. Under the World Trade Organization (WTO), the intention was to get all nations to agree to all parts of the final deal. That proved impossible, as China and India insisted on their right to protect their fragile farming sectors.

Previous trade rounds were conducted among wealthy, industrialized countries with similar interests. As the rounds grew, countries were allowed to opt out of parts of deals. The Uruguay Round, started in 1986, reached a universal agreement, but that was partly because nations that signed the deal could call themselves founding members of the WTO. That incentive was not available for the Doha Round, says Philip I. Levy, a scholar at the American Enterprise Institute and an adviser to presumptive GOP Presidential nominee Senator John McCain (R-Ariz.).

What's next? U.S. trade negotiators will shift to winning congressional approval for pending bilateral free-trade deals with Colombia, Panama, and South Korea. Levy says such pacts can be "proving grounds" for a global deal by demonstrating the economic potential of various kinds of trade liberalization.

Not that bilateral deals are a piece of cake, either. Congress has refused to act on free-trade agreements sought by President George W. Bush. And while McCain is a free trader, his Democratic rival, Senator Barack Obama (D-Ill.), has been more skeptical.
Still, the U.S. can secure better terms in bilateral deals by promising access to its vast domestic market. Such small agreements aren't perfect, but they're better than nothing.

The collapse of global trade talks on July 29 proves Voltaire's aphorism that the perfect is the enemy of the good. In pursuit of the perfect—an international trade deal agreed upon by some 150 countries with vastly different goals—negotiators wound up with nothing. The way forward is likely to be via bilateral and regional agreements. A global deal, if one can be reached, may be a package of smaller agreements between subsets of the full body.

Coy is BusinessWeek's Economics editor.

Tuesday, August 05, 2008

More Containers are falling Overboard

Over the years we have seen an increase in the number of containers that come to our facility with shifted cargo. In turn we've also seen many of our customers come to us asking that we recenter the cargo before shipment.

Having seen all this we take great care to be sure that everything leaving our warehouse facilities is loaded with weight distributed as evenly as possible then blocked and properly secured.

Many times we've been asked by a customer, can't you just stick it in the container and let it go. . . . don't bother blocking it. We stick to our guns as we want to give your cargo a fighting chance to arrive at it's final destination in good condition.

July 28, 2008 from Shippers Digest PETER T. LEACH AND WILLIAM ARMBRUSTER

The P&O Nedlloyd Mondriaan was steaming off the coast of the Netherlands with its decks stacked high with containers from the Far East on Feb. 9, 2006, when it was hit from astern with waves driven by winds of force 8 to 9 on the Beaufort scale. As the vessel rolled with the waves, 59 loaded containers tumbled overboard.

Ten days later, as the 7,500-TEU vessel was returning to the Far East with a cargo of empty containers, it ran into another storm in the Bay of Biscay, with headwinds of the same gale force. The ship lost another 50 containers. On the same day in the same storm in about the same location, the CMA CGM Otello, a vessel of approximately the same capacity but of a different design, lost 50 boxes.

These incidents were among the first of a mounting tally of containers lost overboard during the last two years. In 2006 and 2007, there were “significant” incidents where at least 36 ships lost a total of more than 1,600 boxes overboard. The full extent of the problem is unclear because there’s no central repository for the data, and many ship lines understandably aren’t eager to publicize lost containers.

“There appears to be a trend of near-catastrophic losses of containers stowed on deck of container ships,” said James Craig, president of the American Institute of Marine Underwriters.
One reason for that trend is the practice of loading heavier containers on top of lighter boxes. That has become more common as ships get larger and carry ever more containers.
Container stacks above deck can vary in height between four to 10 or more high and it’s usually just the lower boxes that are cross-braced, leaving the top containers at the mercy of the pin locks on the four corners of the can holding it to the next, said Rick Bridges, vice president of Roanoke Trade Services, an insurance broker.

Unfortunately, shippers really can’t do much to prevent their cargo from going overboard, he said. In most cases, the carriers decide where the container is placed, he said. “Considerations such as commodity, weight, destination or transship points all are taken into account. So in short, the shipper cannot choose whether he is above or below deck,” he said.

As far as anything shippers can do to be proactive in preventing damage due to rolling and pitching of the vessel, Bridges suggests that they hire a surveyor to show them how to properly block and brace cargo.

“This goes a long way, especially if there is a claim where the suitability of packing is brought into question by the insurance company or steamship line. If the shipper can go back and prove that packing was performed as recommended by an accredited surveyor, then they stand a much better chance of getting their claim settled without issues,” he said.