8. The procedure of Special Cargo Transportation
Transporting Special Cargo requires the highest amount of expertise in the market. Therefore, not just the sales team needs to learn the knowledge, but also the operators must know how to manage the safety when transporting the special cargo. For example, Break bulk cargo is usually stowed on flat racks and platforms. It is important to confirm that the break bulk cargo itself is properly secured onto the Flat rack or Platform prior loading on board. If additional lashing or tightening of existing lashing is required, this must be done by the terminal staff to the vessels satisfaction. If not, vessel operator shall be advised of situation and in any case such shipment posing serious danger to vessels safety shall not be accepted for carriage.
Next, I am going to briefly introduce what the sales team needs to do after we create the new department. First, the sales team will try to look for the clients who might have special cargo need to export. Once the sales team gets the information, they will provide competitive rates base on the dimensions and check the space on the target vessel. If the client decides to choose Evergreen, we will first have the sales team to visit the client face to face and discuss the most appropriate way to transport the cargo. Second, we will have our trucking company to help the client to lash the cargo on the special equipment then send to the port for loading, the air chassis will also be provided if necessary. Third, we will provide professional broker for the Customs declaration and our sales team will monitor the cargo be loaded on board safety by the operator.
Meanwhile, we also have the logistics department that can provide door-to-door service and release credit term to the client for they can turnover more easily. Besides, on-line container tracing system will help the client to monitor the cargo just by one clicked.
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Our branch in Vancouver, Canada has received a special cargo requirement from Montreal to Taiwan in February. The commodity of this special cargo was flight compartment simulator for Eva Air. Although the consignee belongs to Evergreen Group, Evergreen Marine still need to offer best rates in the market as well as being able to leverage the greatest service to accommodate their customer. After several rounds discussion with carriers, Eva Air decided to leave the business to Evergreen Marine. Our sales in Vancouver first went to the factory and decide which type of the special equipment was fitted, and then contacted the equipment department to prepare enough containers for use. The shipper of this shipment was BNSF Logistics Inc., which helped to load the parts into standardized containers and lash the special cargo on two flat rack containers. After that, all the cargos were trucked from Montreal to Vanterm Terminal, Vancouver. Our sales team in Vancouver started to monitor the process and keep updating the news to the client while trucking. When the cargos almost arrived at Vanterm Terminal, the sales checked with the operation department about the schedule of the vessel and make sure the space was available for these cargos. When the vessel arrived at Vanterm Terminal, the sales first contact with the surveyor company and asks for a report of inspection to make sure the cargos were good to go. After the cargos been loaded on the vessel safely, the sales contacted with the import department at destination and make sure everything will be treated well after the vessel arrived at discharging port.
According to this case, the freight rate with the surcharge included is USD 11,050. Compare with standard cargo export from the same place, the freight rate with the surcharge included is USD 2,000. You can easily find out the huge difference between special cargo and standard
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cargo is USD 9,050 under the similar cost.
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expense, which including employer training, customer visiting (entertainment), new business advertising and promotion and also the traveling expense to handling those international shipping cargos. Besides, we need to have a new meeting room to communicate and intergrade all relevant departments for each special case to ensure safety and secure on-time transportation for each special cargo. In the very first year, the said Special Cargo team will only be set up in Taiwan headquarter to handle all worldwide business. However, if our sale performs prior than estimated volume and earn more revenue, we may also adjust the plan to set up more division in oversea office to catch up with the market trend.Start-up Requirements USD
Total Start-up Expenses 47,800
Assets
Other Current Assets (office facility) 21,900
Long-term Assets 30,300
Total Assets 52,200
Total Requirements 100,000
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Other Current Assets (office facility) Units USD Depreciation/year
Furniture (desk, chair) 5,000.00 500.00
Long-term Assets Units USD Depreciation/year
Meeting room 1 15,000.00 1,500.00
PROJECTOR 1 300.00 30.00
Laptop 8 15,000.00 1,500.00
30,300.00 3,030.00
10.1. Projected Profit and Loss
The following is the estimated yearly profit projection for 4 years since 2015. We plan to achieve our 1st year (2015) sales volume as USD 3,500,000 to get the net profit after tax as USD 1,200,000. The start-up investment (USD 100,000) will be back in the very 1st year due to such new business for special cargo is set up under existed company with original employer and office facility. Also, we plan to spend more on training to strength our team with knowledgeable sense to provide the best service to our customers. Further, since it is our Evergreen’s first time to set up a special team for dealing such business, we plan to do more advertising and promoting comparing with future years. In 2nd Year (2016), our business will be steadily growth due to more and more customers are aware of our service for their special cargo transportation.
However, we spend quite a big portion in ‘Traveling’ part due to our sales have to travel to worldwide terminal/yard to ensure the safety and on-time delivery. Hence, in 2017, we plan to open a division of such special cargo team in New York to take care of all special cargo business in North and South America. Hence the ‘Travel expense’ may drop from 6% to 3.2% but the
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training expense may increase due to new member’s joining. In year 4 (2018), we plan to open another division in London to be responsible for all special cargo affairs in Europe area. Not only the traveling expenses can be decreased and saved but also provide the better and customized service to our worldwide customer to meet their require and local customs regulations. At the same time, the training expense in 2018 will also remain higher ratio due to more new members’ join.
＊ COGS(Cost of goods sold): Shipping cost (fuel, transit charge, port calling charge…)
＊ Equipment: chassis, lashing charges…
＊ Depreciation: We assume all depreciable assets with 10 years of use, so the depreciation per year is 10% of properties' value = USD 21,900*10%=USD 2,190.
＊ Income Taxes: Corporate income tax rate is 17% if the annual taxable income (net profit before tax) is more than NT$120,000 (USD 4,000).
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【1】 BIMCO – The world’s largest international shipping association https://www.bimco.org/About/About_BIMCO.aspx
【2】 Wikipedia – Intermodal container
http://en.wikipedia.org/wiki/Intermodal_container
【3】 Evergreen Marine Corporation http://www.evergreen-marine.com/
【4】 Alphaliner – The worldwide reference in liner shipping http://www.alphaliner.com/