Robert Keen’s Column
BIFAlink
www.bifa.org
WTO warns of ‘strong headwinds’
BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266
In early October, a report released by the World Trade Organization (WTO) predicted that global merchandise trade will grow next year at a much more subdued pace than previously expected, with “strong headwinds” battering the world’s major economies while poorer nations face food insecurity and debt problems. Those points, and others, prompted the WTO to revise its forecasts for global commerce for this year and next. While the WTO raised its projection for global goods trade growth to 3.5% this year from a previous estimate of 3%, the figure next year will be just 1%. That is a big downward revision from its previous estimate for global goods trade in 2023 to expand 3.4%, and will not be welcome news to BIFA Members who are, to a large extent, responsible for managing the supply chains that underpin global goods trade.
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(A company limited by guarantee. Registered in England: 391973. VAT Registration: 216476363) Director General Robert Keen r.keen@bifa.org Executive Director Robert Windsor, Policy & Compliance – Surface & Legal
Among the potential drags on activity that the WTO foresees are the fact that major central banks are already raising interest rates in a bid to tame inflation, but overshooting on tightening could trigger recessions in some countries, which would weigh on imports. The WTO also said that risks to the forecast remain “numerous”, including an escalation of the Russia- Ukraine war, and an “under-appreciated risk” of a decoupling of the USA and China. The Ukraine war increased prices for energy by 78% and food by 15% in August versus the same period a year prior, noted the WTO, although it also said that container throughput improved this year as port congestion and supply disruptions in the USA and China eased. Certainly, the container shipping sector continues to focus minds. The October edition of BIFAlink brought a report on how the UK Competition and Markets Authority is set to review and consult on the liner shipping Consortia Block Exemption Regulation (CBER), as the European Commission considers renewing the regulation that enables current container shipping alliances to operate, ahead of the expiry of the existing CBER on 25 April 2024. Last month saw container shipping operators once again locking horns with shippers and forwarders, with the World Shipping Council (WSC), which represents liner operators, saying in a statement that the CBER is an essential regulatory tool that yields significant benefits to the EU, with no downside from competition or consumer welfare perspective. The WSC and the International Chamber of Shipping (ICS) opined that the CBER should be upheld to ensure continued efficient and competitive ocean transport for European shippers and consumers, while meeting climate goals. “The frustration that shippers have understandably experienced from service delays and increased cost has been channelled towards carriers, their vessel sharing arrangements, and the regulatory tools that facilitate such arrangements, including the CBER. But data shows, and regulators concur, that the problems were caused by factors outside carriers’ control and not by vessel sharing,” said John Butler, president and chief executive of WSC. Shipper and freight forwarding bodies, including BIFA, however, disagree. Coincidental to the WSC and ICS statement, the European Shippers’ Council, CLECAT, Federation of European Private Port Companies & Terminals (FEPORT), Global Shippers’ Forum (GSF) and several others, wrote to EC competition commissioner Margrethe Vestager urging that liner operators be allowed to cooperate without extending the block exemption. The letter stated: “As consumers or suppliers to the container shipping sector, we have lost confidence that the benefits of the Block Exemption are being fairly shared and that it is meeting its intended purpose. The purpose of competition policy is to protect the interests of customers and consumers from the predatory effects of dominant suppliers and the establishment of cartelised operations. “The experiences, frustrations and dissatisfaction of large swathes of European business with the behavior of global shipping lines demands a change in approach as a means of restoring trust and confidence in the container shipping industry, which is vital to the economies of member states and meeting the needs of European consumers and businesses.” This debate, which seems to have been raging since the dawn of containerisation, shows no sign of ending soon. Finally, BIFA wishes to extend our condolences to Brian Kelleher on the recent passing of his wife Nickey. Brian was Chair of the Institute of Freight Forwarders from 1982 to 1983 and he was also FIATA President from 1995 to 1997. Brian and Nickey were prominent in many industry circles during his long association with the Institute, BIFA and FIATA.
r.windsor@bifa.org Executive Director Spencer Stevenson s.stevenson@bifa.org Executive Director Carl Hobbis c.hobbis@bifa.org Policy & Compliance Advisor – Customs Igor Popovics i.popovics@bifa.org Policy & Compliance Advisor – Air David Stroud d.stroud@bifa.org Editorial Co-ordinator Sharon Hammond s.hammond@bifa.org Communications Manager Natalie Pitts n.pitts@bifa.org Membership Supervisor Sarah Milton s.milton@bifa.org
Published by Park Lane Publishing peter@parklanepublishingltd.com Contributors
Robert Keen, Robert Windsor, David Stroud, Spencer Stevenson, Carl Hobbis, Sharon Hammond, Natalie Pitts, Brooke Neilson Nezda Leigh, Igor Popovics Note to media: If you wish to use items in this magazine that are older than one month, please contact the editor to ensure that the item in question still reflects the current circumstances. Please be advised that BIFA DOES NOT OFFER LEGAL ADVICE. BIFA is not a law firm and the authors of this publication are not legally qualified and do not have any legal training. The guidance and assistance set out herein are based on BIFA’s own experience with the issues concerned and should not be in any circumstances regarded or relied upon as legal advice. It is strongly recommended that anyone considering further action based on the information contained in this publication should seek the advice of a qualified professional.
Robert Keen Director General
November 2022
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