BIFAlink is BIFA's monthly magazine covering issues of importance for the logistics and supply chain industry.
February 2022 The magazine of the British International Freight Association BIFA link Issue: 378 A welcome www.bifa.org
return to live celebrations – Pages 10-13
INSIDE
6: News BIFA goes digital with training course certification 8: Policy & Compliance More bureaucracy facing UK van drivers 14: Policy & Compliance Cool chain diligence
16: Policy & Compliance Concerns about developments in the maritime environment
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Robert Keen’s Column
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Entering stage two of Brexit changes
BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266
One year ago, the freight and logistics sector faced one of the most significant changes to its operations in many years with Brexit heralding fundamental changes in the conduct of EU-GB trade. Twelve months on, we have entered stage two of the phased approach, with the introduction of full Customs control on goods moving between the EU and Britain, which has added to the list of additional declarations and increased the amount of supporting paperwork required. As I wrote this column in mid-January, I think it would be fair to say that however ready BIFA Members were, the new system, and some shippers and carriers, were not; administrative problems brought GVMS issues on day one, causing some congestion, delays and a need for Inland Border Facilities to be utilised.
Web site: www.bifa.org E-mail: bifa@bifa.org
(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
Coincidentally, I have been reading an interesting report issued recently by the consulting firm AECOM. ‘Freight Matters’ examines how the COVID-19 pandemic and the effects of EU Exit are influencing the development of the industry. Our sector has remained in the spotlight throughout 2021 and has been seen as proactive despite driver shortages and the so-called UK fuel crisis. With COVID-19, the report considers that rather than looking to a return to pre-pandemic normality, there are potential opportunities that the pandemic has opened up. The message from BIFA has not changed. In situations such as this, the advantages of using a freight forwarder become more pronounced. With a sole provider handling the goods’ preparation, documentation and transport from door-to-door, the process is seamless and gives the customer greater visibility throughout the shipment. It also alleviates the administrative burden on the customer and, in many cases, can even expedite the shipment where the provider has Authorised Economic Operator full (AEOF) and/or ‘Clearance on Wheels’ status. BIFA has said consistently that our Members will always step up and find ways of keeping goods moving; the headlines that Christmas would be cancelled may have grabbed attention but were proved premature. With EU Exit still dominating political activity, and with the likelihood this will continue for some time, the changing patterns of trade will continue to affect supply chains. The AECOM report concludes that there are many questions remaining unanswered regarding the future of freight and logistics in the UK and calls for a national freight strategy that helps to put in place the required infrastructure. Hopefully, policymakers will provide this, and the skills support needed for the vital role that our Members play Currently the BIFA Policy and Compliance team is ‘locking horns’ with the Department for Transport over the state of competition within the deepsea container shipping market. BIFA members are concerned that certain practices undertaken by the principal shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade. We have expressed your concerns to Robert Courts MP, Under Secretary of State for Transport at the Department for Transport. The well-documented chaos within the container shipping sector is leading to commercial power becoming increasingly concentrated, resulting in diminished market choice and competition, and distorted market conditions. In 2015, there were 27 major container shipping lines carrying global containerised trade, with the largest having a 15.3% market share. Today, there are 15 shipping lines, organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40%. The pandemic has highlighted and accelerated this development, which has also contributed to dreadful service levels and hugely inflated rates, with carriers allocating vessels to the most profitable routes with little regard to the needs of their customers. See pages 16-17 and keep reading BIFAlink to follow our representational activity on your behalf. As you read this, some of you will have had the opportunity to attend our Freight Service Awards luncheon, meeting in person to celebrate excellence across the freight forwarding industry, in an awards scheme that is now in its 33rd year and is justifiably regarded as the most prestigious in the sector. Once again, we were delighted with the range of entries received from BIFA Members that managed to take the time to document their achievements while continuing to manage their businesses through incredibly trying times, which is a testament to their tenacity. See pages 10-13 for a full run-down of the event. All awards entries demonstrated a clear understanding of overcoming last minute challenges to achieve success, which is something I suspect will characterise the year ahead.
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, Nezda Leigh 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
February 2022
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3.3 point drop between September and November, the average has reached its highest level since January 2019. Boxship shortages push up charter rates Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business
The UK government has offered contracts worth £34.5 million to companies to train new lorry drivers as it battles to alleviate an ongoing supply chain squeeze caused by the Covid-19 pandemic and Brexit. The move has been widely welcomed by the industry, which has seen driver numbers shrink by a quarter since 2019, with reports suggesting that the new funding could provide training for up to 11,000 drivers. Maritime Transport has launched a new intermodal service hauled by GB Railfreight (GBRf), connecting its Birmingham Intermodal Freight Terminal (BIFT) with the port of Felixstowe, running five days per week with a capacity of 87 teu in each direction. It is Maritime’s third train to run from Felixstowe to BIFT, increasing the company’s capacity between Felixstowe and the West Midlands by 40%. The Department for Transport (DfT) has announced that it will continue its relaxation of drivers’ hours rules, which will now run until midnight on 10 February 2022. However, any business that made use of the previous relaxation will have had to complete and submit the follow-up notification form by 16 January 2022. IN THE WAREHOUSE Industrial occupiers are in a race for space with the UK experiencing the lowest level of supply ever recorded, according to research from Colliers. Only 18.1 million sq ft are available, due to demand for units continuing to be driven by the structural change in consumer spending patterns. The company added that take-up in 2021 of industrial distribution warehouses greater than 100,000 sq ft in size reached 50.7 million sq ft, up 3.6% year-on-year, a record for the sector.
ON THE OCEAN Containership charter markets entered 2022 on a strong footing with rates firming across the board and long-term charters remaining the order of the day, as a result of a dearth of vessels coming open in 2022. This is forcing container shipping lines to fix several months ahead of delivery in order to secure tonnage. Two major freight indexes, SCFI and Ningbo Containerized Freight Index (NCFI), reached record high figures on the last day of 2021 – a year marked by skyrocketing container freight rates. The SCFI surpassed the US$5,000 per teu mark for the first time in history on 31 December 2021, whilst on the same date, the NCFI reached an all-time record high of US$4,264 per feu. January saw reports of the first container stack collapse at sea in 2022, this time on board Madrid Bridge, a 13,900 teu ship run by Ocean Network Express (ONE) which was on its way to New York across the Northern Atlantic. This follows a chain of box losses at sea in 2021, which reportedly more than doubled in the period from late 2020/2021, compared with an average of 1,382 containers lost annually in 2018 and 2019. The Federal Maritime Commission (FMC) in the USA has taken a more aggressive stance, encouraged by a July 2021 executive order from the White House regarding ‘Competition in the American Economy’. This gave the FMC a remit to look closely at the anti- competitive practices of liner carriers – with “demurrage and detention” practices on containers attracting particular scrutiny. It has
now issued Orders of Investigation into the ONE Alliance and Wan Hai Lines. ON THE QUAYSIDE Containers are now moving in and out of China at record speeds as shippers desperately source capacity. However, port congestion in Europe and the US continues to slow the return of boxes to Asia and is stymying the recovery of global ocean supply chains, according to a joint report conducted by Container xChange and Fraunhofer CML. There was a first for the Port of Tyne when a containership of goods coming directly from China to the UK unloaded at one of the port’s terminals in South Shields. The ship was carrying a range of goods for various retailers, with the arrival marking a ‘turning point’ according to the port authority. IN THE AIR IATA has updated its lithium battery guidance document in line with the 63rd (2022) edition of the IATA Dangerous Goods Regulations (DGR). Its document outlines the
definitions, classification, exceptions and prohibitions, and includes frequently asked questions (FAQ), whilst providing information to manufacturers and users of these active devices, as well as operators that must approve the carriage of active devices in cargo. Data released by IATA in mid- January for global air cargo markets showed slower growth in November 2021, with supply chain disruptions and capacity constraints impacting demand, despite economic conditions remaining favourable for the sector. Global demand, measured in cargo tonne-kilometres (CTK), was up 3.7% compared with November 2019, significantly lower than the 8.2% growth seen in October 2021 (9.2% for international operations) and in previous months. OVERLAND The average price-per-mile for haulage and courier vehicles increased by 5.3 points between November and December 2021,
according to the TEG Road Transport Price Index. After a
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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.
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Promoting logistics for life National Apprenticeship Week (NAW2022) runs from 7 to 13 February with the aim to promote apprenticeships as an alternative to university or college for school-leavers. Apprenticeships provide individuals with a formal learning pathway within the workplace and result in valuable, well- trained team members at the end of the programme. Throughout the week, Carl Hobbis, BIFA Training & Development Manager, will be working alongside Members of the BIFA Young Forwarder Network to promote careers in logistics to students at schools and colleges in London and the East of England. On Friday 11 February at 1100hrs, BIFA Members are invited to attend a one-hour online event detailing the International Freight Forwarding Specialist Apprenticeship, its structure, and the benefits that an apprentice can bring to your organisation. We will also give several practical tips that businesses should consider before taking on an apprentice. With NAW2022 literally upon us, we urge Members to get out there and promote the industry as a career. We have a variety of useful information to help Members, which can be found at https://apprentices.bifa.org/empl oyers The event is free, and you can register via the QR code below.
BIFA goes digital with training course certification
BIFA has changed the certification of live training courses with a move to a modern platform delivering digital badges from January 2022 . Carl Hobbis, BIFA’s Executive Director, who has management responsibility for BIFA’s training and development services, said: “This change is part of our modernisation and more importantly, will provide a better service to delegates and their organisations as they will receive their credentials much faster. “For those completing our BTEC courses, following assessment and submission of all homework, delegates will receive two types of accreditation. “First will be a ‘digital badge’ from BIFA, which will be
graded into Pass, Merit or Distinction. Second, a few weeks later, will be the physical BTEC Level 2 Intermediate Award qualification certificate from Pearson.” The digital system makes it easier for training delegates to share their credentials, which are GDPR compliant, in a totally secure manner via various channels. Hobbis concluded: “The badges are easy to download and if delegates still want a physical copy of their BIFA training certificate, they can download one from the link they will receive and print it.” www.bifa.org/training
Freight-Pay – An online platform for FIATA members
One of the benefits of BIFA membership is that your company is joined as an
individual member of the global forwarders’ representative body, FIATA. FIATA has developed a custom platform called Freight-Pay to
facilitate payments among individual FIATA members.
You can instantly send and receive money worldwide while benefiting from reduced transaction fees. Freight-Pay offers user-friendly features to manage payables and receivables, allowing you to keep track of all transactions through a single tool. Full information and video tutorials can be found at the FIATA
website https://fiata.org/freight- pay.html For general questions about Freight-Pay, please
contact digital@fiata.org For technical questions and support, please contact Pay Cargo at support@paycargo.com
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New apprenticeship standard
Amazon 2022 everywoman in Transport and Logistics Awards
The Institute for Apprenticeships & Technical Education confirmed approval in December 2021 of the new Urban Driver Standard. Recognising that this occupation is found in almost every industry across both private and public sectors, this apprenticeship standard has been developed to ensure that urban drivers understand the safety and critical demands of the role and can gain a transferable qualification. The broad purpose of the occupation is to transport goods by road to an agreed destination, quality and time standard, and in doing so contribute to their organisation’s contracts or services. Urban drivers operate fixed-axle vehicles over 3,500 kg in weight, often serving multiple customers each day in congested areas. This is a very different occupation to large goods vehicle (LGV) drivers who typically operate a point-to-point service, driving a much higher mileage, and using larger and heavier articulated lorries. Among those companies contributing to the development of the Urban Driver Standard were BIFA Members CEVA, DHL and Kuehne + Nagel, alongside representatives from retail, haulage, removals and warehousing.
Centred on the theme ‘Celebrating the women
keeping the country moving’, the Amazon everywoman in Transport and Logistics Awards are now in their 15th year. These awards celebrate the vital contribution women make to transport and logistics showcasing progression, accomplishments and increasing avenues of opportunity within a traditionally male-dominated industry. For more information on how to nominate an individual for one of the 10 categories, go to https://everywomanforum.com/ mpage/everywoman-in- transport-and-logistics-awards-c ategories Nominations close on 7 February.
The new apprenticeship standard is available at Level 2 and has a duration of 12 months with maximum funding of £5,000. Apprentices must hold a valid UK driving licence (at least Cat B, a car licence) in order to access the apprenticeship and must be 18 years old by the time they gain their provisional vocational licence. For further information visit www.instituteforapprenticeships.org/apprenticeship- standards/urban-driver
INDEPENDENT CUSTOMS CLEARANCE SPECIALIST
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Call Nigel to discuss your requirements on sales@universalcustomsclearance.co.uk +44 (0)1304 801087
By air – Warsaw Convention (17 SDR): £17.58 per kg
By sea – Hague Visby rules (2 SDR): £2.07 per kg £689.42 per package
BIFA STC: (2 SDR): £2.07 per kg
By road – CMR (8.33 SDR): £8.61 per kg
(The SDR rate on 21 January 2022,
By air – Montreal Convention (22 SDR): £22.75 per kg
according to the IMF website, was 1.03413)
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More bureaucracy facing UK van drivers travelling to and from the EU
vehicle in the fleet and an extra £800 is required for each additional van or trailer. Regarding personnel, van operators will have to appoint a transport manager who will be legally responsible for all the vehicles on the goods vehicle operator licence, and to ensure the driver follows industry regulations. The transport manager will either have to demonstrate that he or she has run fleets for ten years or has completed a course to qualify for a transport manager qualification. Extra costs It costs £257 to apply for a goods vehicle operator licence and, if the application is successful, a further £401 will have to be paid for the licence. A continuation fee (currently £401) will need to be paid every five years to keep the licence active. More detailed information regarding the application process, the transport manager’s qualifications, and documents that the driver will have to carry are included in the link provided in the second paragraph. If there are any additional questions, the DVSA or Traffic Commissioners should be contacted for clarification.
Drivers of vans and light commercial vehicles will soon need a special licence to transport goods in the EU and some surrounding countries
From 21 May 2022, UK van drivers will be required to obtain a new international goods operating licence in order to travel to and from the EU. According to the GOV.UK website www.gov.uk/guidance/transport-goods-in-and- out-of-the-uk-using-vans-or-car-and-trailers-fro m-21-may-2022, anyone driving a van, a light commercial vehicle or any car towing a trailer will need a standard international goods vehicle operator licence to transport goods in the EU, Iceland, Liechtenstein, Norway and Switzerland. From a commercial viewpoint, the new rules will apply to users of vans with a maximum authorised mass (MAM) over 2.5 tonnes and up to 3.5 tonnes. Also, it applies to vans and cars towing a trailer with a gross train weight (GTW) over 2.5 tonnes up to and including 3.5 tonnes. A goods vehicle operator licence will not be required if vehicles are
used solely in the UK, or goods are transported on a non-commercial basis. If Members already hold a goods vehicle operator licence, details of vans and trailers used in transporting goods to/from the previously mentioned countries/territories will have to be added to the licence. Financial reserves Whilst this may seem a relatively minor change, for those currently without a standard international goods vehicle operator licence, the changes are greater, and perhaps more onerous, than they may first appear. By law, the van operator will have to prove that he or she has a set amount of finance to run their business (‘financial standing’). The amount varies dependent on the number and type of vehicles operated – £8,000 must be available for the first
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A welcome return to live celebrations
BIFA Members and their guests gathered once again at The Brewery in Central London on 20 January to celebrate the finalists and hear the announcement of winners of the BIFA Freight Service Awards 2021. The last time that we were all able to be together was in January 2020, when COVID-19 was something that was happening elsewhere but had yet to make an impact on the UK. We have all now experienced what it is to live through a global pandemic and we continue to learn the best ways to mitigate the effect of this disease on both our personal and professional lives. The massive success of the vaccine roll-out in the UK has at least dented the ability of the virus to cause major illness and this has allowed some return to normality, albeit a new normal. With this reassurance and the support of sponsors, BIFA was eager to return to the in-person awards ceremony and was delighted to welcome rugby star and TV personality Matt Dawson MBE as the host for the 33rd BIFA Freight Service Awards. Guests were welcomed to the ceremony by Robert Keen, BIFA Director General, and Sir Peter Bottomley, BIFA President. They then enjoyed an excellent three-course meal before being regaled with stories of Matt Dawson’s experiences both on and off the rugby pitch. This was followed by the announcement of the 11 category winners and presentation of a special recognition award to an industry stalwart. The categories and their winners were: Air Cargo Services Award – Sponsor: IAG Cargo The achievements of 12 outstanding winners were celebrated at the BIFA Freight Service Awards 2021, held at The Brewery in Central London
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Awards
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THE AWARD WINNERS
The global response to the COVID-19 pandemic threw existing air cargo operations into chaos in 2020-21. The sponsor IAG Cargo wanted to hear case studies involving the movement of goods by air and the challenges that had to be overcome to get the shipment to destination. Winner – Kerry Logistics
All photos: Event host Matt Dawson All pictures © www.philippagedge.com
Other finalists: • Maltacourt • Pentagon • Uniserve Group
Air – Kerry Logistics – David Mallinson – Sponsor: IAG Cargo – Daniel Byrne
European Logistics – Killick Martin & Company – Paul Gallagher – Sponsor: TT Club – Michael Yarwood
European Logistics Award – Sponsor TT Club Aimed at those companies using road, shortsea or rail services to provide logistics solutions to and from Europe. With the changes brought about by EU-exit, the judges were looking to understand what companies have done to ensure continuation of service and customer
compliance with new procedures. Winner – Killick Martin & Company Other finalists: • Espace European • Simarco Worldwide Logistics • Unsworth UK
Ocean – Allseas Global Logistics – Bryn Atherton – Sponsor: Port Express – Adam Dawson
Cool & Special Cargoes – JCS Livestock – Philip Knowles – Sponsor: American Airlines Cargo – Jason Alderton
Ocean Services Award – Sponsor Port Express 2020-21 was a difficult period for ocean freight with schedules and equipment availability impacted by many factors. The category sponsor, Port Express, was interested to learn how forwarders managed customer expectation and mitigated problems while using ocean services either as a standalone service or as part of a multimodal shipment. Winner – Allseas Global Logistics Other finalists: • NNR Global Logistics • Vikstar Cool & Special Cargoes Award – Sponsor: American Airlines Cargo For Members organising specialist cargo and refrigerated freight services where specific arrangements are required to ensure the smooth and timely delivery. Shipments may range from small high-value pharma products through to a large reefer container, livestock transportation or heritage goods, by any mode of transport. Winner – JCS Livestock Other finalists:
Extra Mile – Hemisphere Freight Services – Paul Allen – Sponsor: Descartes – Simon Heath
Apprentice of the Year – Herbie Cobby (Geodis Freight Forwarding) – Sponsor: Seetec Outsource – Karen Palfreyman
Young Freight Forwarder – Laura Hobby (FS MacKenzie) – Sponsor: Virgin Atlantic Cargo – Joe Ellis
Project Forwarding – ACE Forwarding – Sponsor: Peter Lole Insurance Brokers – Ben Butler
Specialist Services – Your Special Delivery Service – Tomasz Helizon – Sponsor: Newage Software & Solutions – Doug Anderson
Staff Development – Unsworth UK – Stephanie Askew – Sponsor: Albacore Systems – Cliff Atkinson
• Evolution Forwarding Ltd • United Worldwide Logistics
Extra Mile Award – Sponsor: Descartes Targeted at companies that can provide specific examples of ‘innovation’ or ‘customer care’ by adding value and exceeding their customers’
expectations in relation to international shipments by any mode of transport.
Supply Chain Management – Brunel European – Mike White – Sponsor: BoxTop Technologies – Paul Richardson
Special Recognition for Services to the Industry & Charitable Activity – Gordon Day – presented by: Robert Keen, BIFA Director General
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Winner – Hemisphere Freight Services Other finalists: • Evolution Forwarding Ltd • Pentagon • Unsworth UK Project Forwarding Award – Sponsor: Peter Lole Insurance Brokers The successful handling of major project shipment requires much planning and a multi- disciplinary team. In this category, sponsored by Peter Lole Insurance Brokers, BIFA invited case studies from Members that have completed an out-of-gauge project or co-ordinated a complex movement that has reached a conclusion in the past 12 months.
Winner: ACE Forwarding Ltd Other finalists: • AsstrA UK Ltd
Winner: Your Special Delivery Service Ltd Other finalists: • B&H Worldwide Ltd • Cargo Overseas Ltd • Kerry Logistics Staff Development Award – Sponsor: Albacore Systems BIFA Members, whatever their size, need comprehensive training programmes to keep abreast of regular changes in regulations, industry practices and general business matters. In this category the judges wanted to understand how Members encourage and develop all personnel to “be their best” and contribute to the success and direction of the business. The Staff Development Award, sponsored by Albacore Systems, is for
• LV Logistics • Ucargo LLP
Specialist Services Award – Sponsor: Newage The services offered by a modern freight forwarder extend far beyond the provision of basic transportation and documentation. This category is for value-added services that enhance the customer experience enabling them to concentrate on their core business. Such services need not be modal specific and could include warehousing, pick and pack, technology service, air or shipping line agency, or express services.
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their employer, the judges interviewed each apprentice before making their final decision. Winner: Herbie Cobby, Geodis Freight Forwarding Special Recognition: Matt Vick, John Good Shipping Other finalists: • Joshua Boswell, Geodis Freight Forwarding • Bobby Lowe, NVO Consolidation • Thomas Low, OIA Global Young Freight Forwarder of the Year Award – Sponsor: Virgin Atlantic Cargo The Young Freight Forwarder of the Year recognises the work and achievement of people under the age of 32 in the freight forwarding industry. Entrants had to present their career achievements to date, and outline their future ambitions. Additionally, they had to submit an article on why they believed they deserved to win the Award, and this was supported by a manager’s reference. Winner: Laura Hobby, FS Mackenzie Special Recognition: Corey Chambers, Ital Logistics Other finalists: • Ronan Kitchin, Aramex UK • Milos Bogovac, ZenCargo • Jamie Halliday, Tudor International Freight Before the ceremony closed, BIFA Director Genral Robert Keen presented an award in special recognition of services to the international freight industry and charitable activity to Gordon Day, previously UK MD of Brittany Ferries and now known to many in the industry for his tireless work for the London Freight Club of which he was chair in 2002/2003. Support for Transaid As in previous years, guests at the ceremony dug deep to support the nominated charity Transaid. An impressive £3,360 was raised through the charity raffle, prizes for which had been donated by BIFA, Headford Group, London Freight Club and Woodland Group. Learn more about the winners Throughout 2022, BIFAlink will publish profiles of the winners and many of them will be exhibiting in the BIFA Village at Multimodal 2022 (14-16 June). The BIFA Awards 2022 will launch in the summer; keep an eye on BIFAlink and our social media for information.
Apprentice Special Recognition – Matt Vick (John Good Logistics) – Sponsor: Seetec Outsource – Karen Palfreyman
Young Freight Forwarder Special Recognition – Corey Chambers (Ital Logistics) – Sponsor: Virgin Atlantic Cargo – Joe Ellis
Winner – Brunel European Other finalists: • Hemisphere Freight Services Ltd • Noatum Logistics Ltd • Uniserve
companies that have implemented, or are in the process of implementing, a comprehensive staff training or education programme. Winner – Unsworth UK Other finalists: • Aramex (UK) Ltd • Espace Europe Ltd • Reliable Shipping Ltd Supply Chain Management Award – Sponsor: BoxTop Technologies The Supply Chain Management Award, sponsored by BoxTop Technologies, is specifically aimed at companies that have worked with their customer to provide an innovative solution enabling them to manage their supply chain more efficiently and cost effectively.
Apprentice of the Year Award – Sponsor: Seetec Outsource Training BIFA Members employing apprentices were invited to nominate individuals for this award. The judges were looking for entries that showcased the difference the named apprentice had made to the organisation. Having shortlisted finalists that showed inspirational qualities, commitment to personal development and an outstanding contribution to
BIFA would like to thank the ceremony sponsors for their support.
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Michael Yarwood, managing director, loss prevention at TT Club, considers the issues involved in cool chain shipments Cool chain diligence
landscape, allowing interested parties the opportunity to mitigate risk, maintain cargo integrity and importantly achieve customer satisfaction. An interesting revelation from the data was the high number of short temperature breaches, either through short periods of power outage or being off power as the container changes modality. On average, such temperature breaches may occur in up to 14% of all cool shipments. In the majority of instances, such short breaches are not catastrophic and may not compromise cargo integrity, but clearly do introduce an increased risk that may result in small attritional losses. In the context of ‘off power’ periods, an emerging risk that actors in the cool supply chain should consider is the availability of equipment. Gensets (portable generators) in some regions are increasingly difficult to source for either the first or final mile leg of the journey; while the thermal efficiency of modern-day reefer CTUs is generally very good, off power periods, however short, introduce risk. Responsible decisions From a liability perspective, much will depend on the underlying sales contract, who the beneficial cargo owner is, who is in care, custody and control of the consignment – and therefore who is making the decision to complete certain legs of the transit off power. A shipper or consignee, the beneficial cargo owner, might for instance be willing to take such risks, certain in the knowledge that the thermal protection of the reefer CTU will maintain the required set point and conditions, safeguarding the integrity of the cargo. For those actors in the supply chain, particularly freight forwarders and NVOCs, who might assume a contractual liability for such decisions, it would be prudent to undertake a thorough risk assessment to understand the sensitivity of the consignment and the availability of necessary equipment to maintain the cargo adequately. Where equipment is not available or instructions are received contrary to expected practice, it might be prudent to seek written confirmation of instructions or a letter of indemnity from your principal in order to protect your position. This article is reproduced from TT Talk and was originally published in November 2021 www.ttclub.com/news-and-resources/news/tt- talk/2021/tt-talk---cool-chain-diligence/?utm_so urce=newsletter&utm_medium=email&utm_cam paign=tttalk&dm_i=2RU,7L3HA,7QOGK,UVX6F,1
The temperature-controlled cargo supply chain can present operational challenges for all stakeholders due to the innate sensitivities of the cargoes transported. Clear, unambiguous and accurate communication is paramount. Analysis of incidents revealed that there are a number of common errors and misconceptions that can result in deterioration or total loss of the cargo, as well as damage to the carrying
equipment. This led to publication of TT’s Temperature Controlled Cargo StopLoss (www.ttclub.com/news-and-
resources/publications/stoploss/stoploss-temper ature-controlled-cargo/) to provide general risk mitigation guidance. Analysis into reported losses indicates a variety of root causes, including poor pre- shipment practices (such as hot stuffing), physical damage to the reefer unit at some point during transit and equipment malfunction or breakdown. The most common thread, however, involved poor communication and clerical errors made by those who handle temperature- controlled shipments. Communication critical TT’s claims data for 2020 suggest that around 35% of the subject incidents resulted from such clerical and communication errors. This ‘cool’ supply chain can be particularly complex, with several actors along the journey handling and taking control of a given shipment; it is at these modal interchanges where risk is elevated. This type of loss typically stems from deficiencies in communication between the contracting parties. There were many instances where the set point temperature of the reefer cargo transport unit (CTU) was not correctly set, resulting most frequently in an elevated temperature for chilled or frozen cargoes, but on occasion the freezing of a chilled cargo. A simple error in communication of a ‘+’ instead of a ‘–’ or ‘Deg F’ instead of ‘Deg C’ can be catastrophic for the cargo being carried. Simple failure to follow instructions to plug the unit in throughout the voyage was also prevalent. Conversely, cargoes being shipped in non-operating reefers suffered damage when operators plugged in the unit, despite the lack of instruction. One of the key lessons taken from the analysis
is the importance of clear, accurate and unambiguous instructions. Leave nothing to doubt and ensure that each contracting party through the entire supply chain receives instructions in sufficient time to act upon them. The integrity of the cool supply chain is paramount, since many of the cargoes shipped are destined for human consumption, whether foodstuffs or medicines. The capability to trace, monitor and manage temperature-controlled cargoes continues to develop. Deploying sensors within the cargo stow provides those in the supply chain the opportunity to understand and record data on a granular level. However, while these serve to provide an audit trail, such technologies are reactionary. TT has recently collaborated with ReeferPulse, a global leader in AI-based predictive maintenance solutions for reefer units, to increase the club’s understanding of the underlying risks through the cool supply chain from the vast volumes of available data. Such data provides insight into the operational performance of the equipment, allowing operators to reduce costs through energy use and emissions, but also identifying anomalies in equipment performance. As a result, it is possible to implement preventative maintenance, saving on costly equipment breakdowns and consequent cargo claims. While recognising the importance of operational efficiency, a data driven solution also draws focus to understanding the cargo risk
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February 2022
Freight Service Awards 2021
The following organisations and individuals have been recognised by the British International Freight Association as the ‘best in industry’ in the BIFA Freight Service Awards 2021 competition The Winners
General Categories
Modal Categories
Individual Categories
Project Forwarding Award Sponsored by: Peter Lole Insurance Brokers
Air Cargo Services Award Sponsored by: IAG Cargo
Young Freight Forwarder Award Sponsored by: Virgin Atlantic Cargo
Laura Hobby, FS Mackenzie
Specialist Services Award Sponsored by: Newage
European Logistics Award Sponsored by: TT Club
Apprentice of the Year Award Sponsored by: Seetec
Herbie Cobby, Geodis Freight Forwarding
Staff Development Award Sponsored by: Albacore Systems
Ocean Services Award Sponsored by: Port Express
Special Recognition For Services To The Industry
Gordon Day
Specialist Categories
Supply Chain Management Award Sponsored by: BoxTop Technologies
Extra Mile Award Sponsored by: Descartes
Cool & Special Cargoes Award Sponsored by: American Airlines Cargo
To view the full list of our winners and finalists visit awards.bifa.org/awards
British International Freight Association T: +44 (0)20 8844 2266 E: eventsoffice@bifa.org W: bifa.org/awards
BIFAlink
Policy & Compliance
www.bifa.org
Concerns about developments in the maritime environment As freight rates soar, shipping lines have been consolidating and also buying up freight forwarders to which they then give favourable rates. Add in the changes coming with digitisation and decarbonisation, and there is much to be concerned about
As an island nation reliant on trade, the UK is heavily dependent on the maritime sector for raw materials, components and finished goods. Although statistics vary, over 85% by volume arrives and departs our shores in vessels of varying descriptions. Given the government’s intention to expand UK trade on a global basis, this mode will become increasingly important. In the traditional maritime model, shipping lines transported goods in their vessels on behalf of larger companies who had sufficient volumes to make a direct contractual arrangement viable for both parties. Shipping lines would also transport fully loaded containers from freight forwarders who, in addition to groupage containers, could make their contract rates for full containers available to clients who did not have sufficient volumes to contract directly with the line. Forwarders provide a wider range of logistics services than the shipping line, such as transport, warehousing, loading/devanning of containers, and facilitated customs entry and compliance activities. Over the years these distinctions have become increasingly blurred as shipping lines have purchased forwarders so
Shipping lines enjoy significant benefits; they are excluded, and will continue to be after 2023, from the rules regarding paying a minimum tax rate of 15% on the profits earned by large multinational enterprises in each jurisdiction where they realise profits. Also, they are excluded from some aspects of competition law, unlike airlines for instance. Under EU block exemption regulations, the lines are exempted from certain elements of EU competition law where there are benefits for the consumer. This permits them to form alliances, plan sailing schedules and share information, etc. These block exemptions were carried forward into UK law. Market consolidation. At the same time, we have seen significant market consolidation. In 2015, there were 27 major shipping lines carrying global trade, with the largest, Maersk, having a 15.3% market share. Today there are 15 lines, organised into three major alliances, carrying this trade. Statistics are difficult to fully analyse, but the 2M Alliance of Maersk and MSC has an estimated 35% market share; some observers highlight that this could be larger on certain key routes. There is a developing consensus that commercial power is becoming increasingly concentrated, resulting in diminished market choice and competition. Many believe that the current pandemic has highlighted and accelerated this development. Against this background we have seen historically low service levels and high rates,
and the lines have to bear some responsibility for these problems. Recently there have been low service levels; during 2021 on average only 35% to 43% of vessels arrived at the destination port within 24 hours of their allocated berthing time. At the same time, we have seen the highest freight rates ever, with US$20,000 being charged for moving a 40 ft container from the Far East to UK. Depending on the baseline, this is between five and ten times the cost of moving the same container in the 2019/2020 period. Due to higher than expected freight rates in the second half of 2021, many carriers have increased their revenue/profit forecast. Drewry’s revised profit forecast for the main ocean carriers in 2021 is now US$150 billion. To put that in perspective, that is more than they have made in the previous 20 years combined (US$109 billion). This is undoubtedly causing resentment amongst forwarders and their customers and leading to consumers paying more at the retailer. IKEA has increased its prices by on average 10% in UK stores, citing increased logistics costs as a factor. Against this background we have seen
that they can provide such services. Particularly over the last 10 years,
representatives of the forwarding sector both domestically and internationally have become increasingly concerned at certain developments that will benefit a relatively small number of carriers but adversely affect the wider maritime community, whether that be freight forwarders or medium and smaller sized traders.
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February 2022
Policy & Compliance
BIFAlink
www.bifa.org
and the Australian Productivity Commission are already publicly looking into these evolving business arrangements. BIFA has written to the UK government on this matter. Whilst BIFA can represent Members’ concerns to the UK regulators and co-ordinate action through its overseas partners, there is another option to consider. Freight forwarders have to highlight the variety and value of the services that they can offer to the client. In many ways, recent events emphasise the importance of our sector and raise questions about whether, in the long term, it is sustainable for shipping lines to provide freight forwarding and logistics services. For instance, would you as a customer want to entrust your logistics services to companies who, in part, have contributed to the recent problems in the supply chain and disrupted it so badly? The other key points to bear in mind are that freight forwarders are traditionally problem solvers and provide good service at a reasonable cost to their customers. In many cases this includes guidance that is freely given in the course of normal business trading. As one colleague observed: “I have never known a shipping line do anything for free.” That comment brings us on to the last fundamental point: the very different commercial approach of the two sectors to commercial matters. Forwarders tend to be rather more flexible and
tolerant of their customers’ financial inconsistencies than shipping lines.
commercial changes within the market that we and others believe will further reduce competition. The three largest carriers – Maersk, CMA CGM and MSC – have been buying logistics companies. Whilst this is not a breach of competition law, from the independent freight viewpoint it is an unwelcome development. However, BIFA, and at a European level CLECAT, and global level FIATA, have become aware of certain developments whereby some shipping lines are adopting policies that favour their in-house forwarders at the expense of the independent ones. It is these developments that potentially could be a breach of competition law. Priority booking slots Over a period of time, we have seen shipping lines give priority booking slots to any customer who uses the shipping line haulage to/from a port when ‘merchant’ haulage could be less expensive, although lines in the latter scenario charge lift on/lift off at ports to nullify the price advantage of using merchant haulage. Recently Members have been advising us that Maersk and Hamburg Sud have been contacting them advising that they are cancelling mutually agreed contract rates. Forwarders are being
informed that they can only book freight on a spot rate basis. These rates are inevitably more expensive than a contract rate and, given the current market position, space is often not available, making it extremely difficult for the forwarder to move the cargo. Forwarders and their national and international representatives believe that this is a distortion of the free market as ‘in-house’ forwarders owned by the shipping lines have access to much more favourable rates and space for the same traffic levels. In effect the shipping lines are breaching their neutrality as a ‘carrier’ to offer such favourable rates to direct customers and their in-house forwarding arms. Previously, traders or forwarders tendering similar traffic levels would have been treated on a broadly similar basis. There is a real concern that these developments will distort the market and independent freight forwarders will find their ability to access the market reduced and only achieved at a higher cost. The question is, what can be done? BIFA has consulted with CLECAT and FIATA and both organisations are voicing their concerns, the former with the European Commission, the latter with other jurisdictions as appropriate. We are aware that the US Federal Maritime Commission
Business impacts Importers and exporters should carefully
consider the impact on their business of, firstly, this market consolidation and, secondly, of the most recent developments initiated by Maersk. Undoubtedly the largest corporations may be beneficiaries of these changes but what about smaller traders with a few boxes per annum or who are reliant on groupage movements? A diminished freight forwarding sector will not help these businesses move the cargoes that they need to in order to survive. There is no doubt that the sector is about to face considerable change because of two specific reasons: the over-hyped word ‘digitisation’, which has never been clearly explained, alongside ‘decarbonisation’. These two forces will change the technology powering ships, communication methods between the different supply chain parties and potentially the documentation and how it moves between these parties. BIFA will represent Members’ views to government and assist them in highlighting the sector’s importance to ensure that the supply chain continues to operate.
February 2022
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