Planning to buy a vehicle soon via auctions? Unsure of how best to get your vehicle to you? Here’s a brief guide to help you save on shipping costs.
When purchasing vehicles for export to Africa, there are a number of things to consider if you wish to avoid hiccups in the process. From the available car title to the level of damage on the vehicle and the shipping type. All have to be in consideration to avoid high shipping costs and delay shipping.
The COVID-19 pandemic came as a shocker to the world and disrupted our daily routines including vehicle exports. For the first time ever the world agreed to a lockdown of their borders to help mitigate the impact of the virus. This had an adverse effect on many businesses and disrupted the supply chain of many industries including the automobile and shipping industries. Though maritime export for both goods and vehicles were not affected, there were unavoidable delays that led to heavy demurrage at ports of arrival.
Post COVID-19 the world is still trying to get all systems back to normal – but it seems to take more time than anticipated. For the shipping industry which includes vehicles, we see congestion in many ports, increasing cost of shipping, changes in policies, and lots more.
Let us delve into these issues in detail…
1. Effect of COVID-19 on the Transportation Industry
COVID-19 had an impact on global trade and many industries including the auto and transportation industry. It led to a drop in demand because factories were forced to close down due to the global lockdown. The disruption in the supply chain led to surplus goods which resulted in a drop in ocean freight rates. The resulting effect was that shipping companies began to cancel and delay orders.
The trucking industry was not left out of the crisis – there were high turnover rates, fewer drivers available to truck purchased auction vehicles to the port, and drivers who were not satisfied with working long hours away from home turning down pickup requests were some of the effects of the pandemic. The crisis led to many truckers being forced into retirement because of health reasons which escalated the transportation industry crisis.
2. The Logjam
A logjam is created when containers unloaded at a port are placed on top of each other and are not able to reach their destination. The logjam created by a fleet of containers makes it difficult for new consignments to get to their destination. The congestion can be attributed to labor issues, quarantine measures, and an increasing number of containers.
There is also a lack of warehouse space due to many shipping companies ordering a large number of containers. This is to address the issue of the lack of containers during the COVID-19 pandemic. There is now the challenge of where to store them – which further leads to goods not being transported in time due to the congestion.
Even post covid, in container shipping ports like California, there is a logjam that is causing serious delays and is yet to be cleared off. This, of course, is increasing the export time of container vehicles and as such makes it a bad idea to export vehicles by container shipping method at this time.
3. Proper title for export
Bill of sale, salvage acquisition title and Junk title are some titles that won’t be allowed to export. Those allowed are, clean titles, rebuilt salvage titles, etc. Confirm with a broker or professional in the field before making your purchase to avoid shipping issues.
4. Random Custom Inspection on Containers
After checking and loading containers on a ship, including vehicle containers, US customs has the right to randomly request containers be re-presented for inspection and this happens to 3% of containers on any vessel.
The added cost of transporting to the inspection facility, offloading, re-loading, and redelivery to the port for export is put on the consignees of the vehicles in the container and this will increase the cost of shipping.
5. Shipping Line Receiving Policies
The regular RORO lines, Grimaldi and Sallaum, from time to time update their receiving criteria for RORO for vehicles. That a vehicle runs and drives does not mean it will be accepted for RORO.
Factors like cracked or broken windscreen, driver’s side door not opening or closing, flat tires, etc can lead to non-runner RORO where additional costs of between $300 – $700 are added to the overall cost of shipping.
6. Loading Priority for Non-Runners
Vehicles that are not regular RORO, that is, non-runner ROROs are loaded as space is available and are not shipped on priority by either of the shipping lines.
This may cause added delays for export. So the cleaner and less damage your car is/has, the faster you can be sure of exportation. As long as there is no congestion.
7. Ports At Capacity
Ports from time to time provide updates on if they are receiving vehicles or not and what type of vehicles and destinations they may be receiving for export processing or not. Knowing this can help you avoid buying vehicles in these locations
8. Ongoing Russia – Ukraine Crisis
There is an increase in ocean freight rates due to the ongoing crisis between Russia and Ukraine. This happened because many countries levied embargos on Russia’s oil increasing the cost of the remaining available fuel for purchase. The ongoing crisis is affecting oil prices and the cost of shipping and transportation.
Many African shippers still struggle with port congestion which puts a strain on supply and hikes freight costs. The local clearing cost of cars has also been a cause for concern in many African ports. Which when combined with freight costs skyrockets the price of used vehicles in lots of African countries.
For instance in Nigeria, import duty tariffs have skyrocketed due to new policies and charges. There is a revision of the E-valuation fees in the country. So importers have to pay an increasing amount for clearing – especially older model vehicles.
Shipping Line Policies and How They Affect Shipping
Post COVID-19 many shipping lines have new policies and rates that have affected shipping. We see high prices, congestion in ports, and a lack of personnel and labor. There is also the problem of rising container prices and wait time for goods to arrive at their destination.
We are not sure if these prices will ever go down – but many shipping lines have increased their freight rates in the last couple of months. There is also inflation in many parts of the world and the Russia-Ukraine conflict which may attribute to the increasing rates. As shipping lines continue to adjust and revise their policies, we can only hope for the best in all this.
How to Avoid Shipping Issues and Hiccups
When purchasing a vehicle for exports, there are some things to consider to avoid hiccups on the way. These challenges can cost you more money or lose your vehicle altogether because it cannot be exported out of the country.
Before making your purchase, we recommend getting a vehicle history report or requesting a physical inspection (if you have the funds). This will tell what state or condition the vehicle is in as well as the history of the vehicle. The vehicle history report has records of the title, previous owners, damage/accident history, maintenance history, etc.
Secondly, check the listing to confirm that the vehicle you are purchasing has an exportable title. Also, it doesn’t have flood or fire damage or is not a hybrid or electric vehicle if shipping via RORO. Many shipping lines reject these types of vehicles as RORO shipments and must be containerized.
Before shipping or purchasing any vehicle for export – we recommend speaking with an Auto Auction Mall representative. they will help you confirm port and shipping line criteria to avoid hiccups.
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Source: Foley, Xchange