Come see Flexport’s shipping container at CES 2016!

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90% of everything you see around you has been carried inside a shipping container like this one. And Flexport is bringing our own shipping container to Las Vegas!

We are very excited about showing some of our coolest clients and their featured products.

Bellabeat – as featured on Forbes, TechCrunch, Wall Street Journal, WIRED.

Nod – as featured on BBC, TechCrunch, TIME.com, WIRED.

Osmo – as featured on Bloomberg Business, Forbes, NBC, Wall Street Journal.

Electric Objects – as featured on Bloomberg Business, Forbes, the New York Times, TIME.com.

Ring – as featured on FORTUNE, Mashable, TechCrunch, Wall Street Journal.

 

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Looking to chat with someone on our team at CES 2016?

We’d be happy to connect at [email protected]!

Looking to learn more cool facts about shipping?

Check out www.flexport.com/blog

Should I ship by LCL or FCL?

Should I ship my freight with FCL (full container load) or LCL (less than container load)? We lay out the different variables to consider in this post to help you make your decision.

LCL lets you keep inventory low

If you don’t have the money or space to accommodate a full container at your warehouse, it makes sense to use LCL. LCL lets you ship in smaller volumes so that you can keep your inventory lean. Instead of purchasing large quantities from suppliers, you can use LCL to keep a steady flow of inventory in smaller quantities. That frees up cash flow for other purchases.

FCL is cheaper than LCL

LCL costs more than FCL per unit of freight. That’s because freight agents prefer a full container load rather than to figure out how to bundle many LCL shipments in a full container. In addition, many importing fees are fixed, which means that you have to pay them regardless of how large your container is.

FCL gets delivered more quickly than LCL

When an FCL shipment arrives at port, it’s unloaded from the vessel and delivered to the buyer. It’s more complicated for LCL: someone has to consolidate different shipments, process multiple documents per container, and then sort goods for each customer. Every point could be delayed. At origin, the cargo has to be grouped together to fill a container. At destination, there’s a greater risk of examination by customs: When one shipment in a container gets flagged, every shipment has to be checked. That can cause delays of days.

LCL increases risk of damaged goods

If you ship LCL, you have no control over the cargo that will be loaded in the same container as your goods. There could be more dangerous objects traveling in the same container, like liquids, heavy weights, smelly objects, etc. Instead of knowing exactly what’s going into a container, you have to prepare for the risk that your shipment will be damaged. In addition, given the additional complexity of going to multiple places, there’s a greater risk that your cargo gets misplaced or lost.

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If you’re able to structure shipments together into an FCL without having too high of inventory costs, it probably makes more sense to ship FCL.

By Brandon Kronitz, operations associate at Flexport.

Schedule Your Shipments Around China’s Golden Week!

Golden Week in China runs from October 1 – 7 this year! Plan to ship by the end of September in order to avoid this national holiday, in which customs is offline and fewer vessels are scheduled, and account for a spike in port congestion as the world’s largest exporter comes back to life.

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Meanwhile, autumn may have just begun but major retailers are already in holiday mode, also known as “peak season” in freight forwarding. Just as you might anticipate for holiday passenger travel, we expect additional delays at the terminals, General Rate Increases and other potential costs associated with increased activity at the already overwhelmed port infrastructure. Chassis shortages, fulfillment center appointment backlogs and more could result in longer transit times.

Please take note of these upcoming events and their potential impact on your supply chain, from a speed, efficiency and cost perspective.

Want to Revolutionize Global Trade? Flexport is Hiring!

Our SoMa-based team of 40 is ramping up sales, operations, finance and HR to take on the $1.1 T (T for trillion!) global freight forwarding industry.

Flexport’s mission is to fix the user experience in global trade and unite the world in a seamless web of commerce. Our team is committed to using technology to create a world where any two businesses can trade without regard for geographic distance, logistical complexity, or regulatory barriers.

We are a new kind of freight forwarder, one focused on long-term value creation for our customers through a combination of technology, expertise, high-integrity service, and an unparalleled worldwide network. Our customers include companies in consumer electronics, robotics, and hardware along with larger e-commerce businesses that each import hundreds of millions in goods.

Positions Open Today:

Engineering – we are looking for Front-End Engineers and Software Engineers to create tools that that make it easier and more efficient for companies of all sizes to participate in global trade

Operationsthe Logistics Consultant, Logistics Manager and Operations Associate positions are the heart of Flexport, managing global logistics with outstanding service. We’re also seeking talented specialists for Project Manager and U.S. Customs Entry Writer roles.

Salesthe Senior Account Executive and Sales Development Representative positions are key for shepherding our high-growth clients through the complexities of international trade, and helping us continue to see incredible growth!

People Operations Round up the brightest minds in logistics and tech to join our rocket ship as our first Recruiting Manager.

FinanceJoin our team as a Finance Analyst and take responsibility for designing and managing key controls around revenue recognition, forecasting and cost-saving opportunities that support our growth.

Paul Graham, founder of Y Combinator says, “Flexport is one of those rare startups that will not merely satisfy its market, but grow it. There will be more international trade because of Flexport, and international trade is a very big thing for there to be more of.”

We are lightyears ahead of traditional freight forwarders in terms of tech, expertise, and network. Working at the intersection of two of the greatest forces for good the world has ever seen–international trade and information technology–we are creating a platform that empowers the next generation of great entrepreneurs to do business on a truly global scale.

Come Join Us Today!

Yet Another Price-Fixing Scandal in Freight Forwarding (YAPSIFF)

Anyone who has shipped products internationally with a typical freight forwarder is familiar with the litany of questionable charges that appear on the invoice at the end of the process–document fees, fuel surcharges, manifest fees, security charges and more.

Therefore, it was not surprising when a class action lawsuit was launched in June 2013 (Precisions Associates, Inc v. Panalpina World Transport) which claimed that many of these “charges” were the result of a sweeping criminal conspiracy allegedly carried out by most of the world’s major freight forwarding companies.

Below is a partial list of the alleged agreements to impose fraudulent line items on freight forwarding invoices.

  • 2001 Security Surcharge Agreement;
  • 2002 Fuel Surcharges Agreement;
  • 2002 New Export System Fee Agreement;
  • U.S. Customs Air “AMS” Charge Agreement (Japanese Defendants’ Conspiracy);
  • 2005 Chinese Currency Adjustment Factor Agreement;
  • 2005, 2006, and 2007 Peak Season Rate Increase Agreement;
  • 2006 Security and Explosives Examination Surcharges Agreement;
  • U.S. Customs Air “AMS” Charge Agreement (European Defendants’ Conspiracy);
  • U.S. Customs Ocean “AMS” Charge Agreement (Japanese Defendants’ Conspiracy);

According to the latest amendment to the class action lawsuit, certain freight forwarder defendants have already pleaded guilty or entered into plea agreements regarding the price-fixing on these surcharges as alleged in the complaint–including Kuehne + Nagel, Nippon Express, and Hankyu-Hanshin Express.

What’s notable is that these global forwarders are just the ones who’ve already admitted to participating in the conspiracy. The complete list of alleged conspirators runs to nearly a full page, accessible at the bottom of this post, and on the class action website link.

The truth is, the impact of these fraudulent charges goes way beyond the customers directly affected. It is safe to say that nearly every single American alive during specific decade purchased at least one product that was manufactured overseas, and therefore bore a share of this fraud in the form of artificially more expensive products.

Are you an existing / past client of one of the defendant freight forwarders?

If you are (or were) working with any of the companies alleged to be involved in this criminal price-fixing conspiracy, access the case website and add your company’s name to the list on the lawsuit to claim the settlement your business is rightfull owed.

Once your company has joined the class action lawsuit, come sign up for Flexport. We are a new kind of freight forwarder; one focused on long-term value creation for our customers through a combination of technology, high-integrity service, and an unparalleled worldwide service provider network.

From the start, Flexport has pledged to be fully upfront and transparent with our clients. Our mission is to make global trade more accessible by empowering businesses with technology–not to make an extra $50 on each shipment.

In a world where every other freight forwarder is allegedly engaged in a criminal conspiracy to defraud their customers, we are working towards becoming the most transparent freight forwarder in the world by earning your trust–one shipment at a time.

As promised, here’s a current list of companies allegedly part of this vast criminal conspiracy against their customers.

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Foreign Trade Zone (FTZ) Basics

In today’s global economy, US manufacturers and importers face heavy competition from international companies in manufacturing and selling goods. To even the playing field, the United States enacted the Foreign Trade Zone (FTZ) Act of 1934. These FTZs are geographical areas “in or adjacent to” U.S. Ports of Entry, designed to allow local manufacturers to compete with foreign enterprises by creating special economic zones that are “outside” of U.S. commerce. Merchandise can be held in these zones without being subject to duties and other taxes. In essence, a Foreign Trade Zone (aka Free Trade Zone) is a highly regulated bonded facility that supports US import and export activities.

 

Who benefits from using FTZs?

  1. United States
    1. Job growth
    2. Increased competitiveness in the global economy
  2. Manufacturers
    1. Inverted tariff rule allows for importing raw materials, components, and/or partially finished goods and then manufacturing/assembling into a final, single tariffed good
    2. When selling this final good domestically, manufacturers declare only one product, thereby potentially reducing duty rate
    3. Ability to export goods in-bond without ever having to pay duty to the United States, bypassing duty drawback
  3. Importers with their own distribution centers
    1. Direct delivery in-bond prevents delays at port
    2. Weekly Customs Entry minimizes MPF (Merchandise Processing Fee) payment
    3. Importing goods in-bond into own warehouse delays duty payment until time of order placement (unlimited storage time)
      1. Re-export or destroy goods without ever paying duty
    4. Importers using a forwarder’s FTZ
      1. Import goods into the U.S through an FTZ warehouse in order to gain Weekly Custom’s Entry benefits. Note: this method slows the movement of freight by adding an extra stop before delivery to the final destination.

Weekly Entry:

One of the more financially interesting benefits of having an FTZ is the ability to declare customs on a weekly basis vs. a per shipment basis. This allows shippers to maximize their MPF payment at $485 on all shipments imported during the zone week, instead of on a per shipment basis.

Thinking about converting your facility to an FTZ?

Companies looking to convert their facilities will need to apply with the FTZ Board. After the board has reviewed your application, you can expect a 9-12 month process before your FTZ is up and running. Having an FTZ comes with the responsibility of running a bonded facility, so Customs will require tight security and robust inventory software to provide real-time accountability of any goods moving in and out of the zone. The “Operator” of the FTZ is liable for any goods that leave the zone and are unaccounted for, and customs needs to ensure that duty is paid on any item leaving the zone for consumption into the United States. Heavy fines are issued by CBP for any unaccounted inventory.

High Temperatures Troublesome for Air Cargo

A heat wave crushed Northern China last week, with temperatures surpassing 105° F in major cities like Beijing and Shanghai. The extreme weather grounded hundreds of flights and led to significant delays for air cargo shippers. Why?

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Air temperature and density have an inverse relationship. Lower air density limits engine performance and aerodynamic capabilities, meaning an aircraft requires a longer runway distance and faster acceleration to attain the same lift when climbing.

In other words, high temps result in weight restrictions, and since the majority of air cargo now travels in the belly of passenger planes, the preferred solution for airlines is to bounce cargo to the next flight. These occurrences are rare and typically don’t add more than a day or two to transit time, but with global temperatures rising across the board it may become an increasingly inconvenient supply chain risk.