BIFAlink is BIFA's monthly magazine covering issues of importance for the logistics and supply chain industry.
January 2022 The magazine of the British International Freight Association BIFA link Issue: 377 www.bifa.org
Reducing cybercrime: get smart, not lucky – Pages 10-11
INSIDE
6: News UK government sets out path to net zero 8: Training CDS eLearning classroom sessions are to be reintroduced TT Talk on Protecting your cargo from wet damage 17: Policy & Compliance UK launches discussion paper on the Single Trade Window 14: Policy & Compliance
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Robert Keen’s Column
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When uncertainty is the only certainty
BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266
As I wrote my column for this issue of BIFAlink , I had just finished watching the Prime Minister deliver a pre-recorded message to the UK public in which he advised that the “tidal wave” of infections from the new variant of the COVID-19 virus meant that he could not rule out further restrictions being introduced ahead of Christmas. By the time you are reading this column, we will all know for sure whether the measures in place, the so-called Plan B, combined with a hugely ambitious acceleration of the booster campaign, turned out to be the correct approach, or whether new measures did become necessary to protect public health, with Christmas festivities being curtailed or reduced as a result. When I consider the issues facing Members at the moment, either in their private or
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Director General Robert Keen r.keen@bifa.org Executive Director Robert Windsor
business lives, I am reminded of that old saying, “Uncertainty is the only certainty there is”. Clearly BIFA Members continue to face great uncertainties on the business front as we head into 2022. No one knows for certain what the effect will be on cross-border movements of the more stringent rules covering customs processes and declarations from January 2022. It is anyone’s guess how the massive disruption affecting all modes of transport over the last 18 months will pan out in the new year, though plenty of industry experts are giving their opinions. Closer to home in Feltham, the team that puts together the BIFA Freight Service Awards is hoping that we will still be able to hold the annual luncheon, in person, at The Brewery in London on 20 January. However, as a contingency we are preparing to switch to an online format as we did in 2021, but we are keeping our fingers crossed that with a huge number of entries and the event being sold out in early December, that we can finally all get together again. Whilst there is also some uncertainty about the phased roll-out programme that will see CHIEF replaced by CDS in the customs entry processing environment, there can be no doubt about the success of our CDS eLearning training programme, which launched in September 2021 to educate users on the main differences between CHIEF and CDS. Since its introduction, the course has had over 200 enrolments and users have been sharing their valuable positive feedback with us, as you can read in the article on page 8. Other articles in this issue contain some valuable input on matters of uncertainty and risk. On pages10-11, we provide advice on how Members can protect their businesses from the ever-increasing risks of cybercrime. Page 14 brings some information from TT Club on measures Members can take to avoid insurance claims relating to wet damage to cargo, and page 16 offers an overview of the risks, uncertainties and costs that we all face as a result of the ever-growing emphasis on the need to decarbonise global supply chains. One thing that is certain is that in November last year, FIATA held its bi-annual General Meeting (the equivalent of an AGM), and the governance posts for the next two years were voted on. The board is formed of seven non-executive directors (known as the Presidency), and I was honoured to be elected as Secretary General for the next two years. The last time BIFA held a Presidency position was in 1995/1997 when Brian Kelleher, former BIFA National Chairman, was President. BIFA Directors Steve Parker and Mark Bromley were also elected to governance posts with Steve continuing as Customs Affairs Institute Chair and Mark assuming my old role as Multimodal Transport Institute Chair, which should be seen as a testament to BIFA’s active participation in FIATA. The other part of the quote I used in paragraph three above is that “knowing how to live with insecurity is the only security”. And with that thought in mind, I send you my best wishes for 2022 and hope that both your private and business lives are as secure and certain as they possibly can be in the new year that is now upon us.
r.windsor@bifa.org Executive Director Spencer Stevenson s.stevenson@bifa.org Executive Director Carl Hobbis c.hobbis@bifa.org Policy & Compliance Advisor Igor Popovics i.popovics@bifa.org Policy & Compliance Advisor 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, Nezda Leigh Note to media: If you wish to use items in this magazine that are older than 1 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
January 2022
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Ocean carriers enjoy rising revenues Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business
ON THE OCEAN All global ocean carriers have seen revenues increase substantially as a consequence of the record-high freight rates, and in terms of earnings before interest and taxes (EBIT), according to Transport Intelligence. The shipping lines reported US$37.24 billion in operating profit in third quarter of 2021 alone, which adds up to nearly US$80 billion in operating profit so far this year. Alphaliner’s latest survey at the end of November reported a slight drop in the global inactive container fleet, which stood at 161 ships of 523,059 teu, accounting for 2.1% of the global cellular fleet capacity. This totalled 24.83 million teu, with no ‘structural’ idling of ships by the lines. Ahead of World Trade Organization meetings in December, the International Chamber of Shipping (ICS) called for maritime transport to be prioritised during the negotiations on the critical issues and challenges confronting the multilateral trading system and impacting the global economy, including liberalisation of maritime transport services. IN THE AIR As the air cargo sector scrambles to add cargo capacity to meet unprecedented demand, December saw Boeing agree a plan with Taikoo (Shandong) Aircraft Engineering (STAECO) to add two
The Port of Felixstowe achieved a milestone by reaching the 100 million teu mark at the end of 2021, after handling its first container in the 1960s. The milestone box was loaded at berth eight, the port’s newest facility.
IN BUSINESS Various international transport organisations, including IATA, ICS, IRU and ITF, issued a statement in December calling for cross-border transport workers to be allowed to continue to do their jobs without overly restrictive travel rules. They warned that governments’ knee- jerk reactions to the Omicron variant would put supply chains, and the workers that enable them, at risk. According to Transport Intelligence, the global freight forwarding market could report 12% growth for 2021 driven by an especially strong first half, although the pace of growth slowed in the second half of the year. A recent study suggests that global sourcing and supply chains have continued and extended during the COVID-19 crisis, despite some early signs last year that shippers would shorten their supply chains in favour of more regional and local supply. It says that global supply chains have been a major enabler in the recovery of countries from the effects of the pandemic.
shipping demand during the height of the pre-holiday peak shipping season when freight rates jumped higher and aircraft were more full, analytics company Clive Data Services reported in December. It added that the disconnect between a red-hot airfreight market and less cargo moved was due to extreme congestion at major airports, where a shortage of labour among airline service providers is slowing aircraft loading and unloading, as well as freight deconsolidation of imports for pickup. ON THE QUAYSIDE Port and terminal operators are entering a new era with the operational threats they face making a return to ‘business as usual’ increasingly unlikely, post- pandemic, according to Deloitte. It says the transition to new technologies and digitally enabled systems, addressing the impact of climate change, defending against cyberattacks and shifting geopolitics, will couple with traditional supply chain and operational risks to change the face of the sector.
Capacity restoration is key to crisis recovery, says the Global Shippers Forum in a study of the ‘Great Shipping Crisis of 2021’. It says that shippers trapped between record rates and very poor service levels are finding alternative ways of getting their goods to market. The value of goods imported and exported globally hit USD5.6 trillion in the third quarter of 2021, setting a new quarterly record, according to an UNCTAD report published at the end of November. It added that whilst new projections show trade in goods and services would reach USD28 trillion for the year – an increase of 23% on 2020 and 11% compared with pre-COVID-19 levels – trade’s recovery has been uneven across countries and sectors. The UK economy will grow at a slower pace than expected with trade set to lag significantly behind the wider recovery, according to the British Chambers of Commerce’s (BCC) latest economic forecast, which predicts that UK GDP growth in 2021 will be down from the previous forecast of 7.1% to 6.8%.
additional 737-800 Boeing Converted Freighter (BCF) conversion lines at STAECO’s
facility in Jinan, China. These give it seven conversion lines dedicated to the 737-800BCF. The aircraft manufacturer forecasts that 1,720 freighter conversions will be needed over the next 20 years.
Global air cargo volumes declined in November despite intense
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January 2022
Here today
Here tomorrow. ASM have been producing outstanding customs and freight management software and representing your interests with government and industry for the last 25 years. With all the current uncertainty with trading relationships and all the changes about to happen with customs systems and procedures, you can rest assured we will be doing just the same (and more) for the next 25.
Air Ocean Road Imports Exports All customs declarations Worksheet automation Customs Tariff CFSP management Customs Warehousing Duty management NCTS Transit (CT) Guarantee management Import ETSF CCS-UK electronic fallback Export DEP management Job costing and invoicing Air waybills and eAWB Bills of lading Barcoded cargo labels Consignment security declarations Collection and Delivery notes Consolidation management and Manifests eDocument management Limitless integration Limitless automation Archiving
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UK government sets out path to net zero in landmark strategy
Changes to French import VAT rules There are significant changes to French VAT law effective from 1 January 2022. The management and collection of import VAT in France will be transferred from French Customs (DGDDI) to the French Tax Authority (DGFiP). From this date, the declaration and payment of import VAT will be made directly in the French VAT return declaration instead of at the time that goods are entered to customs. The use of the reverse charge for import VAT will be compulsory for all businesses registered for VAT in France (including non- taxable persons who have an intra-community VAT number) and there will be no requirement for prior authorisation to use this postponed import VAT procedure. This change means that VAT will no longer be collected by the French Customs agent but will be automatically reverse charged on the French VAT returns. This reverse charge mechanism is beneficial for businesses as it avoids heavy and costly pre- funding of import VAT. However, all companies that act as the importer of record in France will have to obtain a valid French VAT number and file VAT declarations to be allowed to benefit from this system. For further information see: https://bifa.org/news/articles/2021 /dec/changes-to-french-import- vat-rules-effective-1st-jan-2022 End of an era As this issue of BIFAlink went to press in mid-December, Informa announced the cessation of publication of the 150-year old Lloyd’s Loading List. It stated: “It is with great sadness that we must inform you that Lloyd’s Loading List is to cease publishing permanently at the end of this month. The last daily news bulletin is planned for 24 December, the last print issue will be published on 27 December.”
In a recent press release following COP 26, the government stated: “We are also working to kick-start the commercialisation of sustainable aviation fuel (SAF) made from sustainable materials such as everyday household waste, flue gases from industry, carbon captured from the atmosphere and excess electricity, which produce over 70% fewer carbon emissions than traditional jet fuel on a lifecycle basis. Our ambition is to enable the delivery of 10% SAF by 2030 and we will be supporting UK industry with £180 million in funding to support the development of UK SAF plants.” Reaching those targets, however, comes at a cost. SAF is expensive to produce. Worldwide annual levels of production are currently about 100 million litres; by 2050 it is estimated it will need to be 450 billion litres, an increase of 10,000%. Estimates say the cost of production is anything between three to five times more
expensive than costs involved in producing standard jet fuel. There is no doubt that effective commercialisation of SAF will require government support in ways such as incentives and subsidies for research as well as development of production, supply and distribution. Notwithstanding the economic costs, the ecological
cost to the planet of inaction will unequivocally outweigh the financial burden placed upon its inhabitants. Young Forwarder Network – event updates
Our Young Forwarder Network runs regular events enabling the next generation of talent to come together, share their experiences and learn more about the industry from some of its leaders. Recently, our guest speakers were Alan Platt, chief executive of Good Logistics, and Clare Bottle, chief executive of UKWA and vice-chair of Women in Logistics UK. Alan shared his career journey with us, reminding us of the many avenues of opportunity that exist when working in the industry. Attendees are encouraged to submit their questions to our speakers across various topics. Alan shared his advice to those starting out in the industry, his top hacks for self-motivation, plus the challenges he has faced and how he overcame them. During the event featuring Clare, attendees were keen to hear how she believes technology can support and improve the warehousing sector, and whether she has faced different challenges in her career compared with those faced by male colleagues. BIFA is keen to expand the collective of guest speakers and
welcomes volunteers from all areas of the industry who would like to take part. Please email Natalie Pitts n.pitts@bifa.org The sessions are facilitated by our very own committee of members, with an average of 68 young forwarders taking time out to attend. If you are a young forwarder and would like to join a session, follow us on LinkedIn. There you will find the invites to our latest events and
updates regarding the YFN. Simply scan this QR Code or search for ‘BIFA Young Forwarder Network’ on LinkedIn.
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BIFA supports Transaid’s 2021 Christmas Appeal
Transaid is an international development organisation that transforms lives through safe and sustainable transport. BIFA’s membership of Transaid dates back to 2015 and the association is delighted to have once again supported the charity’s 2021 Christmas Appeal. This delivers much- needed funds to aid its work in improving road safety and driver training, as well as access to vital services, such as healthcare, in sub- Saharan Africa. Throughout 2021, Transaid
several fundraising events to support Transaid. More recently members of the BIFA Young Forwarder Network took part in the ‘Chase the Moon’ 5 km run at the Olympic Park in London. We featured this event in the November edition of Bifalink. The network raised £1,195 to help fund Transaid’s projects in sub-Saharan Africa. BIFA’s gold package support for Transaid’s 2021 Christmas Appeal helped Transaid to exceed its ambitious appeal target of £28,000 before the beginning of December! At the time of writing the appeal had achieved donations just shy of £33,000. BIFA is looking forward to growing its relationship with Transaid further in 2022 and sharing how the organisation’s programmes in driver training and access to healthcare will evolve as a result. Transaid has asked us to wish the readers of BIFAlink a happy new year, and to thank BIFA and its Members for their continued support.
continued to deliver impactful programmes and, despite the
challenging circumstances, it has also incorporated a successful COVID-19 strategy and response into several of its programmes. In the past, BIFA has funded bicycle ambulances, which are used to ensure that rural communities can receive urgent medical treatment when needed. BIFA has also organised
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By air – Warsaw Convention (17 SDR): £17.91 per kg
By sea – Hague Visby rules (2 SDR): £2.11 per kg £702.27 per package
BIFA STC: (2 SDR): £2.11 per kg
By road – CMR (8.33 SDR): £8.77 per kg
(The SDR rate on 13 December 2021), according to the IMF website, was 1.0534)
By air – Montreal Convention (22 SDR): £23.17 per kg
January 2022
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Training
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CDS training update
comfortable with the level that each module goes into. “We understand that setting aside time to upskill ourselves can be a challenge so it was important for us to present the training in the most convenient way possible,” explained Carl Hobbis, BIFA’s Training Development Manager. “As a result, trainees have fed back their appreciation for being able to complete the course online and at their own pace. Face-to-face training “That said, users have also expressed their desire to receive face-to-face training so we would like to assure Members that classroom sessions are being reintroduced on a trial basis and the schedule of face-to-face training will be expanded from Q2 2022.” Our CDS training curriculum will not be limited to eLearning as we would also like to run a series of live events as and when legislation changes occur. The purpose of these sessions will be to ‘top up’ the knowledge gained from the eLearning training. Stay tuned for updates via our LinkedIn page! If you would like to know more about this course, including how to enrol, please visit our website (bifa.org) and head to the Training page.
After plenty of positive feedback about CDS eLearning, classroom sessions will be reintroduced on a trial basis and the schedule of face-to-face training expanded
As Members will be aware, the BIFA ASM eLearning training for the new CDS (Customs Declaration Service) launched in September 2021. The course was developed by BIFA in conjunction with leading Customs software firm Agency Sector Management (ASM) to educate users on the main differences between CHIEF and CDS. Since its introduction, the course has had over 200 enrolments and users have been sharing their valuable feedback with us. A clear highlight noted by delegates is the ‘Test Your Knowledge’ section, which enables them to check their understanding as they complete each topic. Overall, the majority commented on how interactive the course is, making it easy to
follow the content being taught. When learning about any new system the devil is in the detail; we are pleased that our users generally feel
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Reducing cybercrime: get smart, not lucky
With cyber criminals increasingly targeting smaller companies, BIFAlink gives some advice on what to make your staff aware of and how to protect your company
The threat of cybercrime is ever present and it takes many forms, from the rather clumsy “You have won umpteen pounds, please give me your bank details so it can be paid to you”, to major cyber attacks such as that on Maersk in 2017. There have been many similar attacks since 2017, some of which have been directed against transport and other infrastructures. However, they have not been as extensively reported upon. Looking at statistics, approximately one third of all data breach victims are small businesses, and given the fact that attacks are increasing in number Members should consider how best to protect themselves. Many larger organisations and government departments, unfortunately, use older legacy systems that are more difficult to upgrade in order to protect the business. Also, given the nature of forwarding with multiple customers and suppliers and its international nature, the industry is uniquely attractive to cyber criminals. Some will ask what a cyber attack is. The classic definition is, ‘When a cyber criminal launches an attack on a computer, or more than one such device or network(s) with the purpose of disrupting, disabling or maliciously controlling a computer environment or infrastructure; or destroying the integrity of the data or stealing controlled data’. The reasons for such attacks are varied. At one end of the scale are criminal gangs attempting to hold businesses/individuals to ransom; at the other end may be the disgruntled employee seeking revenge. The end result in all cases is usually disruptive and can lead to considerable cost to the business in terms of reduced productivity, reputational damage, repairs to existing systems and the purchase of new equipment. Outside of these impacts, additional ones can include lawsuits and regulatory fines. IT providers and those who work in countering such attacks all have varying views on the best method to protect yourself from attack. Here are a few of the main ones that BIFA has been advised about. Know your network, including what software is used and how many devices are actually connected to the system. In addition, it should be known which devices are running what software packages and especially identify those with access to the internet. Strict protocols should be established to control access to the internet and prohibit staff downloading additional software without approval. More difficult, given the growth of home working, should be
controlling the connection of private equipment to office networks, or business equipment to poorly secured home networks. Closely linked to the above topic is staff training, as the individual employee may inadvertently be responsible for a data breach. Home working has increased that risk. All staff who use the company’s IT network should undergo basic cyber security training. It is important to teach staff the basic principles of protecting the system. This may include: • Training about creating a password and ensuring that it is a strong password, • How to manage the passwords and not use the same one multiple times, • Signs of what constitutes a suspicious e-mail, etc – was I expecting this message? Do I know the sender, either the individual or company? Is the e-mail address suspicious? And be very wary of items from g-mail accounts, etc. Training should match the risk. For instance staff in finance and other more sensitive areas may require additional training. The other piece of advice is to keep software updated; research has indicated that 60% of data breaches were linked to an available but not applied software patch. These patches are usually available only because the software provider has identified a problem and the patch is designed to overcome the issue. For the individual users, passwords can be problematical as they have to be remembered and that causes issues. Staff should be encouraged to use strong passwords for all devices and logins. Every account should have a different and unique password, incorporating upper- and lower-case letters, symbols and numbers. This is a very important element of cyber security and one to which individual employees can contribute. Protocols should be established for the frequency of updating passwords and prohibiting the sharing of such information.
Whilst taking steps to protect the data are very important, it is equally essential to backup and securely store the data on a regular basis. Backups should be securely stored in a way that is not connected to the network, nor easily available to any party attacking the network.
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This may be
a secure external hard drive
or, more frequently
nowadays, a cloud backup service. The crucial point is that conducting regular backups will help a business recover from a cyber attack. Regular backups will ensure that up-to-date information is available and can be quickly restored, thus mitigating the damage done by an attack. All the previously mentioned steps
will assist in protecting networks. However, the correct use of antivirus software to safeguard your devices from specific threats such as malware, as well as ensuring that firewalls are enabled to protect networks, is important. Cyber criminals are often based outside the UK and have highly sophisticated monitoring systems looking for weaknesses – remember they only need to be successful once to do significant damage. Companies need to be vigilant all the time. In effect, what we are looking at is a layered approach to IT security; no one method will be successful all the time. The aim has to be for companies to prevent a successful attack on their system wherever possible. The fallback position is to minimise damage if this fails and to ensure that there are processes in place to allow a speedy recovery should an attack succeed. This is generic guidance, based upon experience, intended to give Members a starting point to safeguarding their systems. For those concerned about these issues, IT security specialist assistance should be sought from software houses and experts with the relevant experience.
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Student Engagement Programme
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Pictured left to right: Mandy O’Reilly, Emma Collier and Marshall Azizi – Bolloré Logistics, Graeme Wilkinson and Carl Hobbis – BIFA, with John Cadogan – Logic Studio School
Student event highlights the attractions of a logistics career
Making the best Impression Finally, Mandy O’Reilly, Learning and
BIFA and Bolloré Logistics led a successful careers event for Year 13 students on 24 November 2021
Development Specialist at Bolloré, gave insights into what the company looks for in prospective apprentices. Mandy’s advice focused on the importance of expressing an interest in the industry and being enthusiastic, not just about the role but the eagerness to learn and develop new and existing skills. Inspiring the next generation The 30+ students attending the session were reminded by vice-principal John Cadogan that a wide range of subjects being studied at Logic are easily transferrable across logistics. Plus, with Heathrow Airport being the biggest provider of employment in the area, the next generation of talent has a considerable opportunity to carve out a successful career in our industry. With the Student Engagement Programme, BIFA is committed to introducing more and more young people to the world of logistics as part of the broader aim to promote the industry to the
As part of our Student Engagement Programme, BIFA recently led a logistics careers event at the Logic Studio School, West London. This was a great opportunity for the school’s Year 13 students to learn more about how apprenticeships work and the many career opportunities that are available in our industry. Joining them for this event were colleagues from BIFA Member Bolloré Logistics, a global freight forwarder based locally to Heathrow. Why Logistics? Kicking off the session was Carl Hobbis, Training Development Manager and Executive Director at BIFA. Carl introduced the students to the world of freight forwarding and cited 10 reasons to consider a career in logistics, before explaining the apprenticeship model and its several
pathways linked to the industry. The students enjoyed getting involved with live quizzes and polls, which really aided their understanding throughout the session. Meeting an apprentice It was then over to one of BIFA’s specialist trainers, Graeme Wilkinson, who interviewed Marshall Azizi and Emma Collier about their career journeys and their experience in completing their industry apprenticeships. Both gained distinctions in their final assessments, while navigating the uncertainties of the COVID-19 pandemic and EU Exit. They shared with the room what a typical day looks like as an apprentice, and when asked how they would sum up their journey in three words they responded: supportive, friendly and rewarding.
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Seven tips for a top talk Give a great presentation at your local school and support our Student Engagement Programme BIFA’s Student Engagement Programme is now building momentum and students in our partner schools and colleges are learning about the logistics and freight forwarding industry and discovering why it could be the best career for them. We still need support from BIFA Members, so why not contact your local school and offer to give a presentation to inspire more students to find out about the importance of our industry and the opportunities that it offers? Here are some top tips to help you on your way: 1. Passion, enthusiasm – the wow factor: Enthusiasm is infectious – bring it with you to generate conversations with students, teachers and parents. 2. Go interactive – you will enjoy it and so will they: If possible, get interactive. Make logistics relevant to young people by asking questions such as, ‘What are you wearing and how did it get here?’ Or, set them a challenge to work out how to move a product, such as a phone, from China to the UK. 3. Provide easy to understand information:
Use plenty of images and do not make anything too word heavy. Avoid using jargon.
4. Take a young member of the team: Young people will respond to other young people, valuing their opinion and insight. If you have a younger member of the team, bring them with you. 5. Invite them over: If practical, invite interested students into your business to take a look around. 6. Share your success stories: Provide case studies of former apprentices who have progressed within the sector and highlight the various career opportunities that could be available to them. 7. Wax lyrical: Refer to our booklet ‘Careers in Freight Forwarding’ (download at apprentices.bifa.org/employers/career-day- kit) to promote all the positive reasons for considering a career in logistics.
potential forwarders of the future. Looking ahead to 2022, there will be more opportunities to engage young people, so we encourage Members to collaborate with us and their local schools to advocate logistics as a
career of choice. If you would like more information on our plans, please reach out to Carl Hobbis – c.hobbis@bifa.org or visit https://apprentices.bifa.org/
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Policy & Compliance
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TT Talk: Protecting your cargo from wet damage
As TT regularly articulates, around 65% of cargo damage incidents are attributable in part to the way that goods are packed within the CTU. The CTU Code, and the more recent ‘CTU Code – a quick guide’ and complementary container packing checklist published by the Cargo Integrity Group, provide invaluable guidance for actors in the supply chain to mitigate such risks. Pre-packing unit condition checks are a critical step in protecting the cargo during its journey. Checks for signs of pests, dust, debris, transferable stains and odours are vitally important. So too are checks for physical damage, holes, evidence of repairs and items such as rust or water trails that might indicate water ingress. What is the main cause? TT claims data for 2020 suggests that 25% of wet cargo damage was caused by water ingress to the CTU through pre-existing damage that probably should have been identified as part of the cargo packing process. Once cargo has entered the intermodal supply chain, TT claims data suggests that a Claims relating to wet damage to cargo are all too frequent. Many of these can be avoided entirely with a robust pre- loading condition checking procedure. While humidity and condensation are inevitable challenges through the supply chain, pre-existing cargo transport unit (CTU) damages should be an easy check
further 17% of wet damage claims stem from impact damage to the unit during transit. Of course, throughout the intermodal transit there are a number of touch points at road, rail and maritime terminals, where damage might occur. It is evident that road traffic accidents may also give rise to cargo being exposed to the elements. Where does the exposure occur? By mode, the TT data indicates that the greatest risk is posed by the maritime mode which accounted for 65% of reported claims. This in part is explained by the length of time that the cargo is in transit – extending the period of exposure – in addition to the different climatic zones through which the cargo is moved. Road transit was the next most prominent mode at 14%, where shorter journeys, fewer intermodal changes and operator-owned units likely
influence the better experience. Wet damage arising under air carriage contracts accounted for only 7% of reported claims in TT data for 2020, reflecting shorter transit periods and different handling parameters. Data suggest that the primary exposure, unsurprisingly, rests in the period between the airside warehouse and physical loading to, or unloading from, the aircraft. Perhaps surprisingly, incidents where cargo was wet damaged while in storage accounted for 13% of reported claims. Causation varied, but included damage occurring to or within the storage facility itself and, with increasing frequency, incidence of flooding. Burst piping or malfunction of a sprinkler system accounted for 42% of storage-related wet damage claims. However, 31% of these incidents followed sudden heavy rainfall that overcame drain provisions. This latter point highlights the
Once cargo has entered the intermodal supply chain, TT claims data suggest that a further 17% of wet damage claims stem from impact damage to the unit during transit.
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importance of routine maintenance to ensure that drains and drain pipes are clear and undamaged, as well as indicating the prudence of carrying out periodic risk assessments to ensure that original building design parameters remain appropriate. Considering operational practices Poor operational practices also attributed to losses, with incidents of cargo temporarily stored entirely unprotected, cargo being transported on flat bed trailers/flat rack containers with insufficient coverings, and cargo being cross-stuffed during periods of rainfall. In too many instances, cargo had been unstuffed from units for the purposes of Customs inspection and laid out on the ground of the facility. Rainfall occurring whilst the goods stood unprotected awaiting inspection inevitably results in damage. The incident data also illustrate that the traditionally wetter summer months in the northern hemisphere are when cargo is at greater risk; recent extreme flooding across broad swathes of continental Europe corroborate this as an emerging (or emerged)
risk exposure. Logisticians and facility operators need to consider this proactively.
damage – regardless of fault; reputational damage can be extremely difficult to repair. An additional factor that is often overlooked is the management time consumed in handling any dispute, claim and strained customer relationship. These claims are often complex, involving multiple parties and incurring costs in inspections, surveying and defence. Anecdotally, the selection and sourcing of CTU equipment may be fraught, but anyone taking contractual responsibility has a clear interest in ensuring that freight arrives undamaged. Undertaking due diligence when appointing local agents and subcontractors and building service level agreements (SLAs) into contracts will clarify your expectations, resulting in greater certainty of outcome, including mitigating the risk of wet damage to cargo. TT Talk | Protecting cargo from wet damage (ttclub.com) www.ttclub.com/news-and-resources/news/tt- talk/2021/tt-talk---protecting-cargo-from-wet-da mage/?utm_source=newsletter&utm_medium=e mail&utm_campaign=tttalk&dm_i=2RU,7JQ7S,7 QOGK,UPS1K,1
Prudent actions While this analysis was limited to 2020 incidents, it was triggered by a deteriorating trend, potentially acting as an indicator of a possible increasing risk exposure. Fortuitous circumstances in many instances resulted in a disproportionate monetary consequence. While the outcomes are necessarily cargo specific, it is noteworthy that numerous consignments were eventually accepted by the beneficial cargo owner (BCO) with an element of re-work, reducing the potential cost of the loss. While such solutions are pragmatic for all concerned, it is clear that all actors in the supply chain need to be mindful of the risks. Further, while there may be contractual defences to wet damage claims, such as where the bill of lading is noted ‘shipper load, stow and count’, there are inevitable consequences when damage is incurred in this way. Having entrusted its cargo into your care, custody and control, the BCO might be expected to be aggrieved when part or all of its valuable cargo has suffered wet
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BIFAlink
Policy & Compliance
www.bifa.org
A computer-generated image of containership powered by liquid hydrogen
The cost of decarbonisation in the maritime environment
There is widespread disagreement about how far and how fast to decarbonise maritime operations. But what is certain is that it will come with considerable costs that someone will have to pick up
would be $173 a tonne on average. It should be noted that many believe that the IMO’s goals are too timid and thus unacceptable. The research indicates that fully decarbonising shipping would require a carbon price of $18 a tonne higher than that needed to halve emissions. These figures are higher than the Marshall Islands’ proposed $100 carbon tax plan, but below the $300 proposed by Trafigure last year. Complex situation Where it becomes particularly interesting is how these charges would be applied. If a flat rate of $194 a tonne was to be imposed it would give certainty; if a phased approach were implemented the initial rate might be $11 per tonne, but could increase to $360 a tonne to achieve the 100% reduction. It is a complex situation and more than one technology will need to be used to achieve decarbonisation, with the monies generated by the surcharge being recycled back into the decarbonising costs. Effectively business, and ultimately the consumer, will be asked to pay for decarbonisation, and they will have little say in how and on what projects it will be spent. However, what is clear is that there will be cost increases and that will have an impact on goods, whatever their nature. Undoubtedly business will look at how to minimise these cost impacts, which could change the type of products available, where they are manufactured and how they are shipped.
Hardly a day goes by without some reference to reducing greenhouse gas (GHG) emissions and decarbonising the environment. It seems that some businesses and their leaders are proposing ever more ambitious targets, on occasion far in advance of what governments are advocating. One area that will prove particularly difficult to reach agreement on is the best way to achieve a substantial reduction or complete decarbonisation of maritime transport. We have already seen bitter exchanges between the EU and International Maritime Organisation (IMO) on this very issue. The EU favours a regional approach, while the IMO believes that to ensure consistency there needs to be a global approach. One of the major differences between the two organisations is the speed at which it is anticipated that decarbonisation will occur. Forwarders tend to be pragmatic people and it has been noted that in many cases we are given the problem and a hypothesis, but nothing concrete on which to start planning, let alone make decisions. In many cases the technology, whilst developing, is simply not available to facilitate these ambitious plans. Headlines may appear that such and such
company has ordered X number of battery- powered vehicles, but buried away from the headline is a comment such as “for delivery between 12 and 24 months from now”. The other thing that many are very quiet about is cost – yes, we have to decarbonise but until technology improves and production costs reduce it is not going to be cheap. We have already seen DP World at Southampton impose a relatively modest surcharge on inbound containers to cover the significant cost difference of moving from fossil-fuelled to electric straddle carriers in the port.
Considerable debate, In the maritime sector, the cost of de-
carbonisation and who pays for it are subject to considerable debate, particularly at a time when rates are at historically high levels. Whilst nobody knows what the final figures will be, financial modelling by various organisations indicates that the cost implications are likely to be significant. According to the University Maritime Advisory Services, an average carbon price of $191 per tonne is needed to reach zero emissions by 2050. To comply with the IMO’s current target of halving emissions from 2008 levels, the cost
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January 2022
Policy & Compliance
BIFAlink
www.bifa.org
UK launches discussion paper about the Single Trade Window
A policy discussion paper on the UK Single Trade Window (STW) was launched by the UK government on 1 December 2021. The government has committed £180 million to build the STW, which aims to streamline trader interactions with border agencies. Currently the programme is at the design stage and government is consulting with trade as to what services and functions the new STW will offer. At its core, the STW offers a single data entry point allowing traders to lodge standardised information to fulfil all import, export and transit-related regulatory requirements. The diagram above on the left represents the current situation, with data (very often the same) being submitted individually to multiple agencies. The second diagram illustrates the proposed situation whereby data is submitted once through the portal and relayed to the appropriate agencies. The STW has certain key principles and features regarding data and its sharing: • The first is as detailed above, that standardised data has to be input only once to the single portal. • The onus is put on government to facilitate sharing of the correct data amongst border authorities and agencies. The discussion paper highlights some quick benefits, but other advantages are likely to take much longer to achieve
• It eliminates the need for the user to submit the same data multiple times.
information which is then re-used by another party, for example a freight forwarder, but is later found to be incorrect – who then is responsible and has legal liability? Looking at the policy discussion paper it is clear that some of the improvements could be implemented relatively quickly. However, there are longer term benefits that will take much longer to achieve, so in all probability a staged approach should be adopted. Whilst BIFA will represent Members’ views to government, we have repeatedly explained to them that it is important to discuss specific technical issues with those who do the job on a daily basis. If you are interested in shaping the UK’s border beyond 2025, you can read the discussion paper at www.gov.uk/government/publications/uk- single-trade-window-discussion-paper
Whilst this programme does provide considerable opportunities to improve the capture and use of data at the frontier, there are potentially complex issues to resolve. As many Members have noted, this will mean that government departments will firstly have to improve how they work together and with trade. Also, the data will have to be submitted in a standardised format; Customs is making additional use of the World Customs Organisations (WCO) data model, but other departments use different data models. Undoubtedly there will be legal complexities, that will require additional legislation and some commercial sensitivities will have to be overcome. Also, there are concerns regarding scenarios where one trader may input some
January 2022
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BIFAlink
Events
www.bifa.org
Ltd, JCS Livestock, and United Worldwide Logistics
Extra Mile Award, sponsored by Descartes – Evolution Forwarding Ltd, Hemisphere Freight Services, Pentagon Freight Services, and Unsworth UK Project Forwarding Award, sponsored by Peter Lole Insurance Brokers – ACE Forwarding Ltd, AsstrA UK Ltd, LV Shipping, and Ucargo LLP Specialist Services Award, sponsored by Newage – B&H Worldwide Ltd, Cargo Overseas Ltd, Kerry Logistics Ltd, and Your Special Delivery Service Ltd Staff Development Award, sponsored by Albacore Systems – Aramex (UK) Ltd, Espace European Ltd, Reliable Shipping Ltd, and Unsworth UK Supply Chain Management Award, sponsored by BoxTop Technologies – Brunel European Ltd, Hemisphere Freight Services Ltd, Noatum Logistics UK Ltd, and Uniserve Group SPONSORS BIFA is grateful to the category sponsors listed below for their continued support in these uncertain times. Also supporting aspects of the Awards ceremony are: ASM (UK) Ltd, CNS, Forward Solutions, MCP plc, Simpex Express and Woodland Group. CEREMONY Tickets to the ceremony luncheon sold out in early December proving an appetite for the live celebration and, while we hope that we will indeed be able to welcome you all to The Brewery later this month, BIFA is making contingency plans for video announcements to be released should further restrictions be introduced leading to the cancellation of the ceremony.
MAKING PLANS – whether live or virtual, the BIFA Freight Service Awards winner announcements take place this month Preparing for anything
The third Thursday in January is the traditional date for the BIFA Freight Service Awards ceremony luncheon and Thursday 20 January 2022 will be no different although, at the time of writing, uncertainties over the form of the ceremony are creeping in with the rapid rise in the spread of the Omicron variant of COVID-19. By the time you receive this issue of BIFAlink , more will be known and a decision whether the live event goes ahead or not is likely to have been taken. As previously detailed, the response from BIFA Members to the Call for Entries in the summer of 2021 was fantastic. Entries were received from forwarders large and small from all corners of the UK detailing projects ranging from the relocation of penguins, air charters to avoid plant shutdown, Brexit preparedness and education
Chambers (Ital Logistics Ltd), Jamie Halliday (Tudor International Freight Ltd), Laura Hobby (F.S. Mackenzie Ltd), Milos Bogovac (ZenCargo), and Ronan Kitchin (Aramex (UK) Ltd) Air Cargo Services Award, sponsored by IAG Cargo – Kerry Logistics (UK) Ltd, Maltacourt, Pentagon Freight Services, and Uniserve. European Logistics Award, sponsored by TT Club – Espace European Ltd, Killick Martin & Co, Simarco International, and Unsworth UK Ocean Services Award, sponsored by Port Express – Allseas Global Logistics, NNR Global Logistics, and Vikstar
Cool & Special Cargoes Award, sponsored by American Airlines Cargo – Evolution Forwarding
for staff and customers, to new freight management software systems and staff development programmes.
FINALISTS On tenterhooks this month awaiting the winner announcements are: Apprentice of the Year Award, sponsored by Seetec Outsource – Bobby Lowe (NVO Consolidation UK), Herbie Cobby (Geodis FF UK Ltd), Josh Boswell (Geodis FF UK Ltd), Matt Vick (Good Logistics), and Thomas Low (OIA Global Ltd)
Young Freight Forwarder of the Year Award, sponsored by Virgin Atlantic Cargo – Corey
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January 2022
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