Definition

Harmonized Tariff Schedule of the United States (HTSUS)

An organized listing of goods and their duty rates which is used as the basis for classifying imported products and identifying the rates of duty to be charged on them. It is based on the international Harmonized System Convention.

New Orleans Port Update

It’s been quite sometime since we provided an update regarding the Port of New Orleans recovery efforts. The fifth largest U.S. port in terms of tonnage is now operating at 50% of capacity, however there are still many obstacles to overcome including finding enough drayage companies to haul and deliver the containers and finding enough longshoreman to handle bulk loads.

Katrina decimated 30% of the port.

“It all came out as kind of a joke when someone told me, ‘You won’t have a ship in this port for six months,’” port chief Gary LaGrange recalled. “My response, with a lot of bravado, was we’ll be back at 70 percent within six months.”

So far, so good. The port, a major entry point for imported steel, natural rubber and coffee, received its first post-storm ship Sept. 12, two weeks after Katrina. Just over three months later, the port is running at about half capacity, LaGrange said in an interview.

Read the whole article from the AP here.

logistics

Incoterms : EXW – Ex Works

EXW

The first incoterm we are going to discuss in detail is also one of the simplest. Most trading companies do business on EXW terms without even knowing it. They have a product for sale, they sell it, receive payment, and instruct the buyer to make their own arrangements to pick up the goods from the seller’s facility. This method of selling, where the buyer has to arrange their own transportation and clearance of the goods from the seller’s door, is the simplest and least risky term of sale for the seller. The seller assumes no risk or responsibility beyond his/her own “named place” or factory door.

First off, EXW stands for Ex Works. It is also sometimes referred to as Ex-Factory. Simply put, under EXW terms the seller/manufacturer simply makes the goods available to the buyer at the seller’s named place of business. For example, ABC Exporters could simply make the goods available at their factory, i.e. “EXW-ABC Exporters Factory, Shenzhen, China”.

Under EXW terms, the seller’s risk and responsibility end the moment the goods are picked up by the buyer’s carrier :

Seller’s responsibilities:

1) Produces the goods and commercial documents as required by the sales contract.
2) Makes the goods available to the buyer – unloaded – at the named place in the sales contract. For example, EXW-3plwire.com Factory, Los Angeles, CA.
3) Assumes all risk to the goods (loss or damage) only up to the point they have been made available to the buyer, which is usually the seller’s door.
4) Seller must advise the buyer of the location and time of availability of the goods to the buyer.
5) Seller has no obligation to provide the buyer with proof of delivery or transport documents.

Buyer’s responsibilities:

1) Buyer must pay for the goods as per the sale contract
2) Buyer must obtain all commercial documentation, licenses, authorizations, and export/import formalities at own risk and cost.
3) Buyer must take delivery of the goods when they have been made available by the seller and at the place nominated by the seller in the sale contract, if it is not the seller’s door.
4) Buyer must assume all risk and responsibility for the goods from the moment they are picked up from the seller’s door or name place to arrival into the buyer’s warehouse or other specified location.
5) Buyer pays for all costs of transportation, insurance, export and import customs and duty fees, and all other formalities and charges related to the transportation of the shipment. This includes all costs relating to loss or damage of goods or non-delivery.
6) Buyer provides the seller with proof of delivery.

EXW is commonly used by sellers/exporters in the U.S. when dealing with overseas buyers. They produce the goods and once payment is received will release the goods from their named location to the overseas buyer’s transportation company. Many European companies also use EXW, but FOB and CIF are common as well (we’ll go into more detail with those incoterms later).

Basically, EXW carries the lowest risk for the seller and is the easiest way for the seller to trade his goods. EXW carries the most risk and responsibility for the buyer, but many buyers prefer the control factor of handling their own cargo from point of origin to their own warehouse.

This interpretation is provided as a guide only.

Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2000″. For a complete and official overview please refer to the ICC’s publication.

Quick News : Tuesday 27 Dec 2005

Not too much going on news-wise with Christmas just ending. A couple of news items from China caught my eye : In an effort to encourage more air routes within and to-and-from China, the Chinese government will allow more domestic private and foreign joint venture airlines into the market :

China will further lower the threshold of its aviation market so as to allow more domestic private and Sino-foreign joint-stock air companies to enter the arena, said sources with the national aviation conference Tuesday.

Yang Yuanyuan, director general of the General Administration of Civil Aviation of China (CAAC), told the annual conference that China will go on pursuing its open policy in the aviation sector in a bid to attract more investment in the year 2006.
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In 2006, the CAAC will also encourage Chinese air companies to open more air routes to Latin America, the east of the United States, the Caribbean, western Asia, the middle east and Africa, said Yang.

Take it with a grain of salt, coming from the official state media, but China’s air passenger and cargo growth is expected to slow in 2006.

UPS and FedEx are seeing new and rising profits in the home delivery segment, thanks to increased growth in internet shopping:

When Webvan, HomeGrocer and other start-ups invaded U.S. suburbs during the Internet boom of the late 1990s, they lost their shirts.

Delivery drivers covered many miles between stops, and the experimental enterprises couldn’t, or didn’t, charge enough to cover their costs.

This week, UPS and FedEx trucks have crisscrossed America’s vast residential areas until late each evening, rushing to deliver a flood of last-minute holiday gifts bought online.

And they’re making money doing it.

“UPS and FedEx have figured out how to make the delivery of online purchases profitable,” said Satish Jindel, a transportation analyst. “With a combination of surcharges and increased delivery density in the suburbs, they’re definitely making money. In fact, their margins are rising.”
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“Online deliveries command a higher yield for UPS and FedEx than store or warehouse deliveries,” Jindel said. “They’re much more profitable on a per-package basis. And as delivery density in residential areas goes up, the costs per package are going down.”
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Steve Holmes, a UPS spokesman, said the 98-year-old company’s mature delivery network allows it to absorb seasonal peaks and valleys in Internet commerce.

“Our delivery network is built out,” he said. “We’ve had the delivery density we need to make online deliveries profitable for some time. We’ve been going to every address in the country for years.”

The company typically delivers about 14 million packages a day, and this week that number surged to more than 20 million. FedEx deliveries peaked at 8.9 million on Dec. 19.

“We’re not in the business of running loss-leader accounts,” Holmes said. “Our home deliveries are profitable.”

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