e-Flash No. 219 - 9 March 2020

FIATA AFFAIRS

COVID-19 Cancels 2020 FIATA HQ Session

FIATA members have been advised that the 2020 FIATA Headquarters Sessions intended to be held in Zurich for March 24-28 had been cancelled with no plans for rescheduling.

This decision was being taken because of the recent impact of the COVID-19 contagion in Italy, and now in Switzerland. FIATA is mindful as to its duty of care to its membership and has taken this action due to uncertainty, as governments attempt to contain the continued spread of the COVID-19 in Switzerland and Europe.

FIATA is still scheduled to hold its major event the 2020 FIATA World Congress this autumn in Busan, Korea October 19-24. Details of the FIATA World Congress can be viewed here - http://fiata2020.com/2020/english/main/index_en.asp

FIATA’s Air Freight Chairman participates in the Air Cargo India 2020

Participating on a panel which discussed “Building airports of the future for Special Cargo Commodities”, Mr. Keshav Tanna represented FIATA alongside representatives from Boeing, Air India Cargo and many others.

With more than 70 exhibitors spanning and engagement of more than 2000 people from the air cargo community along with panel discussions covering all the major topics encircling the air freight industry, the Air Cargo India 2020 show was announced as a success.

For more details please visit - https://www.stattimes.com/news/air-cargo-india-2020-on-building-resilience/

WORLD ECONOMY

Logistics firms must start preparing for post-Brexit customs changes

Freight forwarders and hauliers now have enough clarity to start preparing for a post-Brexit business landscape and should begin implementing the systems they will need from the end of December, according Peter MacSwiney, chairman of UK customs clearance solutions provider Agency Sector Management (ASM).

He stressed that there was “limited time to implement the systems needed to tackle trade friction” following the UK government’s announcement this week that import controls would be brought in on European Union (EU) goods at the border from 1 January.

The British International Freight Association has published documentation to help aide freight forwarding members in the transition as the U.K prepares to handle clearance of goods coming from European Union.

For more details, please visit: https://www.lloydsloadinglist.com/freight-directory/adviceandinsight/Logistics-firms-must-start-preparing-for-post-Brexit-customs-changes/76000.htm#.XmDKFD9KiUm

The coronavirus and freight forwarding

Any reduction in goods handled and shipped could have a significant impact on customer revenue. There is also the risk that key customers will lean on forwarders to provide, without a contractual obligation to do so, more expensive "workarounds", such as airfreight and using non-core ocean service providers to perform voyages. 

In general, apart from office closures in China, many companies have implemented restricted travel regimes. As a result, expected business travel related to securing transactions or continuing servicing relationships are likely to be disrupted. Inevitably, remote conferencing technologies provide a measure of continuity. It will be important to maintain clear and open communications.

For more details, please visit: https://www.ttclub.com/resources/coronavirus-guidance/

Indian regulations threaten to curb carrier freight pricing control

Terminal handling charges (THC) that a shipper or merchant pays while sending goods in and out of the port has become the latest target for government scrutiny, leaving a sense of concern for ocean carriers already reeling from the combined effects of weakening demand and falling freight rates.

The larger part of controversy surrounding THC collected by carriers along with ocean freight charges arguably arises because of varied rates from terminal to terminal even within a port itself, and the local freight community – spearheaded by the Federation of Indian Export Organisations (FIEO) – has been pushing the government to create a more transparent, standardised pricing environment.

For more details, please visit: https://dredgingandports.com/news/2020/indian-regulations-threaten-to-curb-carrier-freight-pricing-control/

Retailers now believe sea-air the best way to get their goods out of China

Major retailers awaiting their spring-summer stock are planning to opt for sea-air to get their goods out of China. The garment industry wants its new season launches into shops before Easter, in eight weeks’ time, but “some 70% to 80% of Chinese factories are still not back up to speed,” said Grant Liddell, business development director for Metro Shipping

“Lots of importers don’t want to pay for the expected air freight spike in one or two weeks’ time. It is likely to be $4-$5 per kg, up from about $2 per kg. That makes sea-air a very attractive option, as it would come in at about the $2.80/kg mark.

For more details, please visit: https://theloadstar.com/retailers-now-believe-sea-air-the-best-way-to-get-their-goods-out-of-china/

Market exploration: roll on roll off and containerised freight screening

The Defence and Security Accelerator (DASA) is scoping for an innovation competition exploring novel solutions to screen roll on roll off (RORO) cargo and containerised freight entering the UK.

International trade is a vital component of the UK’s prosperity. More than 481 million tonnes of trade crosses the UK border, annually, in containerised traffic and roll on roll off ferry traffic (RORO). The U.K is looking for solutions that will detect and identify multiple types of illicit content and improve the burden on operators, whilst aiding the flow of commerce.

For more details, please visit: https://theloadstar.com/retailers-now-believe-sea-air-the-best-way-to-get-their-goods-out-of-china/

UNCTAD and TRACIT host Illicit Trade Forum – February 3-4th

Illicit trade significantly endangers achievement all of the United Nations Sustainable Development Goals (SDGs). It creates a triple threat to the financing of development: crowding out legitimate economic activity, depriving governments of revenues for investment in vital public services and increasing the costs of achieving the SDGs by eroding the progress already made.

To address these issues, UNCTAD, in collaboration with TRACIT, hosted the first Illicit Trade Forum. The two-day Forum set out the main reasons why actions to combat illicit trade must be prioritized and why intergovernmental leadership is necessary to coordinate resources, share expertise, establish guidelines and promote international cooperation among UN Member States.

For more details, please visit: https://www.tracit.org/illicit-trade-forum.html

SEA FREIGHT

Ocean cargo shippers still not satisfied with carrier opacity, says AlixPartners study

The report, AlixPartners’ 2020 Global Container Shipping Outlook, finds that public companies in the container-shipping sector have seen their combined debt-to-EBITDA ratio, also known as leverage ratio, rise to 8.7 for the 12-month period ending September 30, 2019, up from 8.4 in calendar-year 2018—nearly a 4% jump.

It also finds that the average Altman Z-score, a commonly used bankruptcy-risk measure, has in that same recent 12-month period deteriorated to a score of 1.16, from 1.35 in 2018—as the industry endured reductions in asset turnover and as industry-wide debt grew by $21 billion. The study also notes that the sector’s finances this year are made even more vulnerable by the current coronavirus epidemic, which has sharply reduced container volumes at Chinese ports.

For more details, please visit: https://www.logisticsmgmt.com/article/ocean_cargo_shippers_still_not_satisfied_with_carrier_opacity_says_alixpart

KRA to collect $200m demurrage back taxes

Shipping companies are foreseeing an increase in fees they charge importers after the High Court sitting in Nairobi ruled in favour of Kenya Revenue Authority (KRA) and the latter will now collect $200 million in back taxes from shipping companies.

The tax, in the form of demurrage, was accrued by cargo containers which have overstayed beyond their free stay period at different KPA-owned container freight stations. Justice Francis Tuiyott held that demurrage is an income tax and that the shipping lines' local agents have an obligation to withhold tax on the demurrage charge when remitting payments.

For more details, please visit: https://www.theeastafrican.co.ke/business/KRA-to-collect-demurrage-back-taxes/2560-5477022-pqpvgh/index.html

Lack of cargo sees carriers forced into last-minute voyage cancellations

Maersk and MSC were obliged to cancel this week’s 2M AE7/Swan loop from China to North Europe at the last minute after they were unable to secure enough cargo. The 19,472 teu MSC Rifaiya commenced its loading programme in Ningbo, China on Monday, but rather than despatch the ship to Europe less than half-full The Loadstar understands it was decided to anchor the vessel.

UK-based forwarder Westbound Logistics has advised customers of a rate reduction in the pipeline valid from 15 February, but also warned that there could be upward pressure on rates next month as carriers deal with the backlog of frustrated orders when production and the logistics industry begins to return to some form of normality.

In the FIATA’s best practice document, we acknowledge that demurrage and detention charges are a valid and important tool for shipping lines to ensure that their equipment is being returned as fast as possible and users exceeding the contractual duration of use should be charged accordingly. However, FIATA does not believe that merchants should be subjected to unjust and unreasonable charges of this nature, especially as delays often occur through no fault of the forwarder / shipper.

For more details, please visit: https://theloadstar.com/lack-of-cargo-sees-carriers-forced-into-last-minute-voyage-cancellations/

AIR FREIGHT

Air Cargo Demand Down 3.3% in January 2020

IATA released data for global air freight markets showing that demand, measured in cargo tonne kilometres (*CTKs), decreased by 3.3% in January 2020, compared to the same period in 2019.

”January marked the tenth consecutive month of year-on-year declines in cargo volumes. The air cargo industry started the year on a weak footing. There was optimism that an easing of US-China trade tensions would give the sector a boost in 2020. But that has been overtaken by the COVID-19 outbreak, which has severely disrupted global supply chains, although it did not have a major impact on January’s cargo performance. Tough times are ahead. The course of future events is unclear, but this is a sector that has proven its resilience time and again,” said Alexandre de Juniac, IATA’s Director General and CEO.

For more details, please visit: https://www.iata.org/en/pressroom/pr/2020-03-04-01/

Lufthansa Cargo follows model toward CO2 reduction

In cooperation with IATA, Lufthansa Cargo has developed a four-pillar model to improve its environmental performance and reach its target of reducing its 2005 level carbon emissions by 25% this year.

The carrier aims to cut its specific CO2 emissions in air freight transport by 25% by 2020, and has to date reduced emissions by approximately 13.5% to 475 grams per tonne-kilometre.

Read more at https://aircargoworld.com/allposts/lufthansa-cargo-follows-four-pillar-model-toward-co2-reduction/

Building an air cargo community: Amsterdam Airport Schiphol

Amsterdam’s Smart Cargo Mainport Programme (SCMP) is a massive undertaking to develop new ways to optimise cargo flows through the airport. It comprises six broad tracks: infrastructure & capacity; logistics means; chain optimisation; digitalisation; compliance; and sustainability.

Each is set to spawn a number of projects and involves a lot of participants, from Amsterdam Airport Schiphol, Dutch Customs and port community service provider Cargonaut, Air Cargo Netherlands (which represents the different stakeholders across the air cargo community) and KLM, to academic institutions.

For more details, please visit: https://theloadstar.com/building-an-air-cargo-community-amsterdam-airport-schiphol/

RAIL AND ROAD FREIGHT

Coronavirus: China reports surprising rail freight growth in February

Rail cargoes in China rose 4.5 per cent in February, despite much of the country’s economy being on lockdown due to coronavirus. Growth comes as factory activity and service sector output plunge to new lows in February, with analysts forecasting an economic contraction in the first quarter.

China Railway, meanwhile, said that China loaded 171,000 railway cars per day on average last month, a daily increase of 4,945 from a year earlier. Container freight on railways surged 39.5 per cent to 26.61 million tonnes, it added, in a surprisingly stable account of China’s rail freight network.

For more details, please visit: https://www.scmp.com/economy/china-economy/article/3064651/coronavirus-china-reports-surprising-rail-freight-growth

Road freight still the mode most vulnerable to crime – parking must be safer

Most cargo theft around the world occurs in the trucking sector, according to new research from supply chain insurer the TT Club. This year’s annual cargo theft report, compiled with supply chain intelligence firm BSI, says road freight – either in transit or parked – accounts for 87% of all cargo thefts in the supply chain.

A further 10% were from facilities, 1% from sea freight and 2% listed as “other”. The most common type of cargo theft was hijacking, which last year accounted for 26% of incidents, compared with 17% in 2018, which reflects its popularity in South America, where hijacking accounts for 53% of all thefts.

FIATA has ongoing discussions around the issue of secured parking with the Transported Asset Protection Association (TAPA) which participates in our World Congresses annually to report on updated standards and programs that help prevent crime and theft throughout the trucking industry. The data from TAPA EMEA’s Incident Information Service (IIS) continues to support the widely-held view that Manufacturers and Logistics Service Providers need more measurable and credible secure parking locations across the region.

For more details, please visit: https://theloadstar.com/road-freight-still-the-mode-most-vulnerable-to-crime-parking-must-be-safer/

The importance of creating a modal shift from road and air to rail

In the UK, transport was the largest emitting sector of greenhouse gas emissions in 2018 at 28 per cent of the total. This is just a three per cent fall since 1990. Yet rail as a whole is a low-carbon transport mode, comprising just 2.4 per cent of total transport emissions. The statistics are impressive. Rail freight emits just 25 per cent of the CO2e (gases with global warming potential) of road freight for the equivalent journey and, in 2017, rail freight removed 8.2 million equivalent road journeys.

While there appears to be a momentum behind modal shift to rail, there are risks. Some in the sector have suggested that road freight will decarbonise more quickly than expected, enabling net zero targets to be met without needing government investment in electrification or infrastructure to increase rail freight capacity. 

For more details, please visit: https://www.globalrailwayreview.com/article/97316/rail-freight-group-modal-shift-road-air-rail/

INNOVATIONS

BluJay buys Aussie customs software company Expedient

The acquisition will strengthen its Asia-Pacific presence, said BluJay. “We continue to strategically invest in technologies that enable frictionless supply chains for our customers,” said Andrew Kirkwood, chief executive.

Headquartered in Melbourne, Expedient’s customers include couriers, multinational logistics companies, and mid-level forwarders. It will be integrated into BluJay’s teams. The companies said customers will “experience no changes”.

For more details, please visit: https://theloadstar.com/blujay-buys-aussie-customs-software-company-expedient/?utm_source=The+Loadstar+daily+email&utm_campaign=edc566dd9f-EMAIL_CAMPAIGN_2020_03_02_12_45&utm_medium=email&utm_term=0_c4570e43d4-edc566dd9f-131854261

Kontainers' digital platform expands to offer air freight and trucking

Freight software-as-a-service (SaaS) provider Kontainers has expanded the modal offering of its flagship Enterprise platform to include trucking and air freight for its largest customers.

The platform, which is designed for the largest freight forwarders and carriers, has been expanded beyond the ocean freight sector to include self-service instant rates, booking, customs, air freight, trucking, FCL/LCL, global schedules, B/Ls [bills of lading], chat support, dashboard analytics, payment system and a full back office application.

For more details, please visit: https://theloadstar.com/kontainers-digital-platform-expands-to-offer-air-freight-and-trucking/

Outrider raises $53 million to develop autonomous truck technology

Driverless vehicle technology has the potential to transform industries — and indeed, it already has. Stockholm, Sweden-based Einride has raised over $32 million for freight systems that transport logs, shipping containers, and other cargo autonomously. Meanwhile, Alphabet’s Waymo has deployed a commercial robo-taxi service in Phoenix, Arizona.

Outrider doesn’t own or operate vehicles itself — instead, it provides a software-as-a-service (SaaS) solution for customer-owned fully and semi-autonomous freight and transportation fleets, as well as a team of technicians to monitor those fleets’ progress remotely. Its stack handles autonomous distribution yard operations at logistics hubs, such as distribution centres, warehouses, and rail yards. Commonly, this entails moving trailers around the yard and to and from loading docks, hitching and unhitching trailers, connecting and disconnecting trailer brake lines, and monitoring trailer locations.

FIATA covered the topic of driverless trucks extensively in the 2018 FIATA World Congress held India. With representatives from driverless truck company Flux Auto and IRU, there was consensus that the longer driverless trucks were permitted to drive on roads, the more data they would collect from drivers to implement the best driving habits in their technology. A further suggestion was made that the technology could replace serious issues of concern around driver fatigue, and would help reduce overall truck accident rates.

For more details, please visit: https://venturebeat.com/2020/02/19/outrider-raises-53-million-to-develop-autonomous-truck-technology/

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