A shipment’s sea journey

Using a forklift, it took Tyrone Sedgwick less than an hour to load more than 42,000 pounds of silicone products into two steel shipping containers destined for Bridgwater, England. That short burst of manpower provides only a glimpse into the intricate long-term planning behind international shipping.

Sedgwick, a warehouse employee with Chesterfield County-based Quantum Sili­cones LLC (QSi), arranged 55-gallon drums of silicone, placed on pallets and bound in groups of three or four, in rows on the bottom of the containers. With the drums and pails used to hold the silicone, the total shipment weighed almost 48,000 pounds.

Twenty-three pallets were braced against the sides of the containers to protect the products from the road vibrations and the ocean’s waves on their journey from Norfolk to QSi’s sister company, ACC Silicones Ltd., in Bridgwater.

Jerry Pifer, warehouse supervisor with QSi, had to ensure the weights were distributed between the two trucks to meet weight limits on Virginia roads.

The size of the purchase order required the use of one standard 40-foot container and one 20-foot container. Let’s call them SUDU and SUDU Jr., respectively — nicknames derived from the 11-digit unique alphabet and number identifier found in all ocean containers.

SUDU and SUDU Jr. were hauled via truck from Chesterfield County to Norfolk. Then they were loaded onto an ocean carrier and shipped to the Port of Southampton in England. From there, the pallets were transferred to a lorry (the British term for a truck), which took them to Bridgwater.  There, ACC Silicones will re-blend and decant the products, distributing it to the high-end European automotive industry.

The shipment’s journey illustrates the agility required by companies handling international logistics.

But also it highlights the financial enormity of an industry that is out of the limelight but heavily used to transport commonplace goods. At least 14 different businesses,  ranging from the motor carriers to the shipping lines to the sea pilots guiding the vessels into ports, were involved in the shipment.

At any given time, there are 5 million to 6 million colorful containers traversing the oceans on massive ships.

This is the story of two of them, which made the trip across the Atlantic in May.

Planning for the trip
Shipping ocean freight takes a lot of forethought and some guesswork.

Typically, containers will spend about two weeks at sea heading to Europe and four weeks heading to Asia. Then of course there’s the planning and hauling required to get to and from the ports.

In this case, ACC Silicones in England was supplying needs of high-end European automakers, which use silicone elastomers to protect cars’ electronic components from vibrations, heat and water.

ACC Silicones filed a purchase order with QSi, its American counterpart, on March 18.  The silicone was delivered to ACC Silicones in Bridgwater on May 21 — a nine-week turnaround. “These containers are coming a very long way,” says Chris Hayden, purchasing and planning manager with ACC Silicones. That requires importers to do a little guessing as to how much product they will need to meet their customers’ demands.

Although the journey of SUDU and SUDU Jr. was delayed just a few days (more on that later), ACC Silicones’ planning made the delay inconsequential. ACC Silicones said in May that it had enough stock to last two to three weeks before the shipment would be used.

The travel agents of ocean freight
Companies exporting and importing goods turn to freight forwarders to help them navigate the complexities of international shipping.

Much like travel agents, freight forwarders handle travel plans for cargo. They research potential ship schedules and availability based on service agreements with shipping lines, and they provide a handful of options to the customer.

In choosing routes, businesses typically are weighing cost versus time. “They’re looking at the transit time and the cost, and they’re weighing their business needs and the commercial needs that they’re trying to satisfy for their customer,” says Ryan Eaves, sales executive of CV International (CVI).

More often than not, businesses need to choose a faster route rather than a cheaper one, says Ann Cummings, export manager at CVI. “In today’s market, ‘Just in Time’ [JIT] is the buzz word,” she says. “They’re paying to get [their products] out the door. So we’re moving extremely fast 90 percent of the time.”

Norfolk-based CVI, which also has offices in Atlanta, Charlotte, Baltimore and Wilmingon, Del., is the freight forwarder that arranges QSi’s international shipments.

Once QSi in Chesterfield received the purchase order from ACC Silicones, it asked CVI to investigate its options. In just a couple hours, CVI’s Michele Sutton, who handles QSi’s account, sent quotes to QSi, which booked SUDU and SUDU Jr. on Hapag-Lloyd’s Philadelphia Express. The ship was scheduled to sail from Norfolk on April 28.

A motor carrier then was scheduled to bring two containers to QSi to be loaded with the drums of silicone and transported to the port on April 22.

Vessel delayed
Increases in cargo volumes are taxing port terminals around the country, causing  more frequent delays in the supply chain.  It was no surprise then that delays affected the journey of SUDU and SUDU Jr.

To reduce the number of containers waiting to be shipped at its terminals, the Port of Virginia earlier this year narrowed the time a loaded container can sit on the port. The tighter timeframe therefore requires more meticulous planning.

When Sutton checked in with Sharon Deans, agent for motor carrier Freightmaster USA in Portsmouth,  a few days before the trucks were scheduled to visit QSi, they realized the vessel’s schedule had slipped.

Vessel delays are common in international shipping and constantly cause scheduling changes. This delay meant the containers couldn’t be loaded until April 28. 
Logistics experts cope with obstacles like these on a daily basis. 

Every day is replete with unexpected challenges. Maybe a truck broke down. Or a ship was delayed because of port congestion. Maybe a vessel skipped a scheduled port of call to make up for lost time or changed its course based on bad weather. Labor strikes could close a port. The possibilities are almost endless.

For myriad reasons — such as weight limits and hazardous cargo or even a simple mistake — a container simply could get left behind.

These hurdles require freight forwarders to react. The situation could require finding a new sailing, working with government agencies, or negotiating with marine terminals to allow a container that was left to remain at a port until its new ship arrives.

In this case study, what if the motor carrier hadn’t noticed a change in the vessel schedule?

If the containers already had been loaded “they couldn’t have turned [them] into the port,” says Sutton of CVI. The shipper could have faced fees for the extended use of chassis (the carriage trucks use to haul containers), “detention demurrage” charges from having containers out longer than a certain period of the time, storage fees and other costs for having motor carriers take the containers to and from the port terminal again.

“International shipping can be very chaotic,” says Mike Coleman, CVI’s president, “and the chaos is difficult to predict. What a client is asking us to do … is to navigate them through that chaos, take on that responsibility, and get them through it as quickly and cost efficiently as possible.”

Logistics managers also deal with an avalanche of paperwork.  To get a product from point A to point Z, there are commercial invoices, bills of lading, export declarations or special declarations required by government agencies, such as Customs and Border Protection.

For imports, logistics companies employ licensed customs brokers and compliance officers to help customers understand any special customs requirements, informing them if the container has been detained for examination.

If a container is pulled out for one of these searches — requiring removal of all goods at a special warehouse — the cost of this inspection is borne by the importer. “We work with accounts to know the rules about what they’re bringing in,” says Coleman of CVI. “Containers can be held for inspection … where they pull the container for an examination … It can be very difficult to predict costs, but we’re here to anticipate all we can.”

Loading SUDU and SUDU Jr.
Deans, the agent with Freightmaster USA, handles schedules for 45 to 50 drivers who are owner-operators and have a contract with the company.

Like the freight forwarders, Deans handles hurdles as they arise. On any given day, she could be tracking 50 shipments, making sure there are enough chassis, evaluating changing vessel schedules, ensuring truck drivers don’t reach the legal limits on how long they can work and checking whether the right container inventory is available.

It was during this process — checking on inventory at the port’s yards for empty containers — that Deans figured out that the Philadelphia Express’ schedule had changed. “I do have to be on top of [the vessel] schedule,” says Deans. “I have to pay attention because there’s nothing worse than the driver getting to the port and being turned away.”

Congestion at port terminals is making the journey more complicated. Truckers can be waiting hours for chassis or the right-size containers, or they can get stuck for hours waiting to be serviced at port terminals.

Before retrieving SUDU and SUDU Jr., Deans was concerned about the available inventory of empty containers from Hamburg Sud — the shipping line booked for this shipment.

On a Friday, four days before the containers were scheduled to be loaded, Deans, using the Port of Virginia’s online inventory system, saw that only one standard Hamburg Sud 40-foot container was available.

She recommended to CVI that the booking order be changed to a “high cube” 40-foot container — a foot higher than standard containers — of which there were plenty.
On Monday, Deans checked the vessel’s sailing schedule again. She found it the same, and dispatched her drivers to pick up the chassis and two containers  — SUDU and SUDU Jr. — to prepare for the drive to the Richmond area the next morning.

Port terminal congestion
The congestion plaguing marine terminals throughout the country affects the entire logistics chain, but no one is affected as badly as the truckers, who are paid by the load.

Record-level container cargo volume at the Port of Virginia (it handled 2.3 million TEUs, or 20-foot equivalent containers, in 2014) has taxed the capacity of its marine terminals. That situation has left some truckers with hours-long line waits and unpredictability.

A common trend today is for bigger and bigger vessels, to visit the port, and anywhere from 800 upward to 4,000 containers can be loaded and discharged at each port of call.

Congestion also has made it difficult to ensure enough equipment is available, and truckers are often left waiting for chassis.

The drivers who hauled SUDU and SUDU Jr., Kirk Armistead and Cornelius Kee, respectively, experience these difficulties frequently. “Bottom line is that if the wheels aren’t turning, we’re not earning,” says Armistead.

To ensure chassis are available, sometimes Armistead picks up one for a Monday delivery over the weekend.  “Sometimes I come on Saturday to get a chassis, and you hope and pray it’s ok,” he says.

Even though they don’t own the chassis, drivers are legally responsible to ensure they are in good condition.

The port is taking a number of steps to relieve congestion. It has extended hours for its truck gates, purchased more container-handling equipment and chassis, and is planning projects to expand the terminals’ capacity. “We are refining our operation every day,” says Joe Harris, spokesman for the Port of Virginia. “Our focus is on providing better service to  motor carriers. We have done so, but we have not done that with consistency. That is the effort right now.”

The Virginia Port Authority Board of Commissioners recently approved its fiscal year 2016 budget, which includes $70 million to increase truck flow throughout the port, including $44.6 million for more container-handling equipment.

For all the potential hurdles, SUDU and SUDU Jr.’s 100-mile trip from Chesterfield to Norfolk International Terminals went smoothly.

With a heavy load — 45,401 pounds including both the container and his portion of the silicone — Armistead needed to stop for fuel along the way.

The drivers rolled into the gates at the Port of Virginia shortly before 1 p.m.

Port of Virginia
Marine terminals are the epicenter of international shipping. Containers are loaded and offloaded constantly. Trucks and rail cars bring containers to and from the port. All containers must be organized and stacked so that they can be found easily.

Terminal congestion wasn’t a problem for this shipment.

It took Armistead and Kee less than an hour to drop off SUDU and SUDU Jr. on April 28. After they came through the gate, straddle carriers, which move containers around the terminals, removed SUDU and SUDU Jr. from their chassis and took them to the export yard. They remained there for the next four days. “We are constantly grooming the stacks, making sure the containers that are scheduled to go the next day are in an easy position to move to the berth,” says Harris.

The port also must handle vessels’ constantly changing schedules to ensure there is a berth ready for its ships.

Philadelphia Express and ocean carriers
SUDU and SUDU Jr. now must prepare their sea legs. They’ll spend the next two weeks on their ocean journey to England.

So, first of all, why are two Hamburg Sud containers riding on a Hapag-Lloyd-operated ship?

Because of the increasing use of vessel-sharing agreements, SUDU and SUDU Jr. are able to catch a ride on another shipping line’s vessel.

For example, this AX3 service, which visits ports in the U.S. and Europe, allows Hapag-Lloyd, Atlantic Container Lines and Hamburg Sud, to book containers on each other’s vessels. Agreements vary on each service or trade route.

Hapag-Lloyd’s Philadelphia Express carries 3,237 TEUs, making it smaller than some of the new massive ships calling from Asia, which reach above 10,000 TEUs. The Philadelphia Express was built in 2003 and sails under the U.S. flag.

Before its arrival in Norfolk, a Hapag-Lloyd planner labored over specific cell positions on the ship for SUDU and SUDU Jr.  Cell positions are arranged in multiple hatches, which protect the containers underneath. There are spaces both under and on top of the deck.

Planners are busy weighing a variety of competing factors when assigning cell positions. First of all, they must take into account what containers are coming off and going on in Norfolk, as well as the containers’ final destinations. Containers aren’t moved once loaded, so containers being offloaded in Antwerp, Belgium, for example, must be loaded on top of containers heading to Southampton, England, a later port on the service route.

The goal is to open as few hatches as possible at each port. Other factors include weight of the vessel — which needs to be especially even for its trip across the ocean — and whether “dangerous cargos” are loaded near each other. “Everything has to be looked at from the planner’s perspective,” says Raymond Newlon, senior manager for Hapag-Lloyd’s port/terminal operations for Baltimore and Norfolk. “The planner has worked it all out so we’re not moving containers to get to containers.”

The Philadelphia Express arrived at the Port of Virginia at 6 a.m. Saturday, May 2. Even its arrival was an exercise in logistics and an indicator of how many industries are involved in the industry, says Newlon.

It takes about two to 2½ hours for a cargo ship to enter a harbor and dock at a berth. A sea pilot guides a ship until it almost reaches the terminal. Then a tugboat operator takes hold of the ship, and a docking pilot boards and brings the vessel to its assigned berth, where line handlers employed by the Port of Virginia will moor the ship beside the pier.

That’s when the stevedores take over — the companies that employ longshoremen to off load some containers and load others onto the vessel based on cell positions provided by the planner. When finished, line handlers, tugboat operators and sea pilots help the vessel leave the port.

The Philadelphia Express left Norfolk at 7 p.m. headed to the Atlantic. From Norfolk, the ship crossed the ocean, reaching Antwerp nine days later. From there it visited the Port of Bremerhaven in Germany before reaching the Port of Southampton on Saturday, May 16.
 
The journey continues in England
ACC Shipping, a customs broker in the United Kingdom, handled the customs clearance and final delivery for ACC Silicones. (The similarity in name is a coincidence.)

The process reversed itself there: the containers were offloaded and moved to a container yard where they waited to be transported by truck.

According to ACC Shipping, on May 19 SUDU and SUDU Jr. were taken from the port by truck to a warehouse, where the 48,000 pounds of silicone and its packaging were transferred to a curtain-sided lorry. “We can’t handle the containers directly on site,” says Hayden with ACC Silicones. “We don’t have a ramp, so we have to transfer them to a truck to get the materials into our warehouse.”

Despite the complexities in the logistics chain, ACC Silicones has found international shipping to be smooth from the customer’s perspective. The lessons they’ve learned? Use agents who can work together for all their delivery needs. “If there’s good communication between all parts of the supply chain,” says Keith Jones, finance director for ACC Silicones, “then it’s never a problem.”

SUDU and SUDU Jr.’s story continues
Where are the containers SUDU and SUDU Jr. now?

Their destinies are now separate and neither spent much time at the Port of Southampton.

SUDU was quickly refilled with another product and was loaded onto the  vessel CPO Miami. In early June, SUDU was heading for the Port of New York and New Jersey.

SUDU Jr. was filled by an importer but returned to the Port of London, where the container was loaded onto PUCON, a vessel owned by Greece-based Diana Containerships Inc., heading to Port of Jebel Ali in the United Arab Emirates, where it was scheduled to be offloaded June 22. 

Of course by now, they’re probably carrying another load, heading to another part of the world, carrying another story in international commerce.