BIFAlink November 2021

BIFAlink is BIFA's monthly magazine covering issues of importance for the logistics and supply chain industry.

November 2021 The magazine of the British International Freight Association BIFA link Issue: 375

Showcasing our industry – Pages 12-13


6: News The use of an EORI number on SPIRE is to be mandatory

8: Policy & Compliance

Revised timetable announced for new Customs and DEFRA procedures

10: Policy & Compliance

Hauliers urged to prepare for new Customs rules from January 2022 16: Policy & Compliance Building a new maritime supply chain

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Robert Keen’s Column


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BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266

Many thanks to those readers that took the time to contact us after last month’s edition of BIFAlink . The article regarding driver shortages and road matters by my colleague Robert Windsor seems to have been received well by many of you. It can be a tough act to generate a magazine every month and generally we receive good feedback, but times change, and many people access more instant information feeds from the daily online newsletters such as The Loadstar. We believe there is still an appetite among readers for longer articles, which are naturally written in a different style to internet updates. However, we are embarking on a review of communications to ensure our newsfeed to BIFA Members remains relevant and useful. More information on our plans in the new year. In the meantime all comments, criticisms and suggestions are welcome.

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Director General Robert Keen Executive Director Robert Windsor

This month in BIFAlink you will see articles about ocean freight, which is the lead topic with the media at present. I have heard the question “why doesn’t somebody do something about it?” many times in October, as after years of being under the radar, logistics and supply chains are the current buzz words in the media (with the occasional mention of crisis). I have had many exchanges with radio, TV and print journalists scrambling to learn the intricacies of shipping and what has caused the current problems. The news reports being made are mainly informative and well researched, but by about 11 October we saw the first ‘will Christmas be cancelled?’ story. As readers who move goods every day will know, there is no overnight solution. Add the driver shortage to the impact of ultra large containerships and related port infrastructure that cannot cope, together with distribution depots full to capacity, and the overworked phrase “perfect storm” becomes an apt description. The causes of the current problems are well known to BIFA Members who are, as usual, finding solutions for customers. Is anyone ready for the Customs Declaration System – CDS? There have been reservations expressed by some BIFA Members about the complexity of the new system that will replace CHIEF. October saw the launch of an online training course developed with Agency Sector Management (ASM), which has already had a significant uptake. Early feedback was that the course makes a complicated subject easier to understand, so my thanks particularly to Carl Hobbis and Pawel Jarza at BIFA, Simon Adams from ASM, and Walkgrove, the external company we used to develop the course. By the time you are reading this, the October 2021 Multimodal exhibition should be a good memory. As I write we are gearing up for our first industry sector face-to-face meeting in the BIFA Forwarders Village. Indications are that attendance should be good and this will be an interesting experience as we assess further interaction. We are also planning physical meetings in Anglia, Essex and Dover where many BIFA Members have been urging us to return for some time. The BIFA Awards competition has now closed, and we have had a great response. We are planning the traditional ceremony at the Brewery as I detailed last month. Of course, COVID-19 is still “out there” so we will be watchful of any winter developments that could impact our planning. I am grateful that so many BIFA Members have taken the time to enter the awards, and to do so ahead of the closing date. Usually at this time of the year I am worrying that nobody has entered but then submissions flood in at the closing date. Talking to BIFA Members, I am aware how busy everyone is so thank you for taking time to support the “industry Oscars”, and good luck in getting to the final shortlists which will be nominated to the sponsors’ judging panel in November. Executive Director Spencer Stevenson Executive Director Carl Hobbis Policy & Compliance Advisor Pawel Jarza Policy & Compliance Advisor David Stroud Editorial Co-ordinator Sharon Hammond Membership Supervisor Sarah Milton Published by Park Lane Publishing Contributors

Robert Keen, Robert Windsor, Pawel Jarza, David Stroud, Spencer Stevenson, Carl Hobbis, Sharon Hammond

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

November 2021



News Desk

If Gatwick’s plan to bring its Northern Runway into routine use is realised, the volume of cargo handled by it could increase to Containerlines set for ‘eyewatering’ earnings Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business

around 350,000 tonnes per year by 2047 — up from 150,000 tonnes in 2019-20. This would be driven primarily by the expected growth in long-haul connectivity, with widebody aircraft to destinations in Asia and the Middle East being used by the additional runway. ON THE QUAYSIDE A new 11.5 acre storage park for empty containers at the port of Southampton will be able to hold additional empty containers to meet customers’ requirements, a critical factor in keeping supply chains moving when dwell times at terminals across the UK have increased, says the port’s owner DP World. The storage park will add 25% more storage capacity for empty containers. DP World has begun work on a new fourth berth at its London Gateway logistics hub to increase supply chain resilience and create more capacity for the world’s largest vessels. IN BUSINESS With careers in logistics not always receiving the most positive press, it is heartening to hear that the logistics sector is among the best at retaining workers. Statistics for 2015-2021, presented by Totaljobs, indicate that 49% of those logistics workers surveyed have remained in the sector, with each spending an average of 10.1 years in the industry and 7.2 years with the same employer. International Cargo Handling Coordination Association (ICHCA) and the International Vessel Operators Dangerous Goods Association (IVODGA) have signed a Memorandum of Understanding (MOU) to assist the dissemination of effective guidance on the correct safety procedures that need to be employed on container packing and declaration.

ON THE OCEAN Shipping consultant Drewry has revised its full year forecasts for the combined liner community. It is now suggesting that the world’s containerlines are on course to post “eye-watering” earnings before interest and tax (EBIT) of USD150 billion, at least five times previous all-time records for the sector. Sale and purchase activity in the containership market declined sharply in the third quarter but prices remain on a rising trend, with owners chasing a smaller pool of available assets. Alphaliner reported that sales volumes fell sharply in the July-September period, with ‘just’ 103 ships of 380,000 teu sold – a significant drop from the 170 ships of 625,000 teu that changed hands in the second quarter. The maritime supply chain disruptions will not normalise before the end of 2022, according to the latest Container Forecaster report published by Drewry in early October. The analyst expects fleet growth will continue to lag behind demand growth this and next year, but the discrepancy will be eased from 2023 onwards when the orders for newbuild vessels come on to the market. The huge increase in container shipping asset values has given investors a rare opportunity to leave the market on a high and with box shipping set to return to normal at

warehouse space in Q3 2021 totalled 15.7 million sq ft, bringing the total amount of space leased this year to 46.9 million sq ft. That is 27% above the Q1-Q3 2020 total and puts the UK industrial and logistics sector on course for a record year as the unprecedented levels of occupier demand look set to ensure that the industry will beat the 51.6 million sq ft of space taken in 2020. IN THE AIR IATA has urged the air cargo industry to continue working together at the same pace, with the same levels of cooperation as during the COVID-19 pandemic to overcome future challenges and build industry resilience. Presenting at the 14th World Cargo Symposium (WCS) in mid-October, it said that sustainability, modernisation and safety are key priorities. Air cargo load factors increased to 68% during the final week of September, surpassing pre-COVID- 19 load factors during even peak season. At the same time, available capacity remained down by more

than 10% from 2019 levels, while chargeable weight was virtually flat, according to the latest analysis from Clive Data Services, released in early October. Media reports suggest that Boeing is poised to introduce an airfreight- only version of its 777X jetliner this month ahead of the passenger version, its first new jet in four years. The move will intensify its fight with Airbus (which is marketing a freighter based on its A350-1000 jet) for supremacy in an aviation segment that is flourishing as sales of passenger jets limp through the COVID-19 pandemic. IATA says the air cargo market is soaring this year and 2022 is looking even better. It estimates that cargo volume for airlines will grow 7.9% in 2021 compared with 2019, and that demand will heat up to 13.2% above pre-pandemic levels next year. Cargo revenues are expected to reach a record US$175 billion in 2021, an upward revision of US$23 billion from April, and stay near that level at US$169 billion in 2022 as cargo yields soften from 15% to 7% growth.

some point, there is little opportunity for speculative acquisitions, analysts say.

IN THE WAREHOUSE Knight Frank’s preliminary data shows that take-up of UK


November 2021

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News Desk

Making the switch to CDS You will have seen the news that HMRC announced that the Customs Declaration Service (CDS) will replace the Customs Handling of Import and Export Freight (CHIEF) system in a phased transition ending in April 2023.

The use of an EORI number on SPIRE is to be mandatory

The Export Control Joint Unit (ECJU) has set out its plan to introduce mandatory Economic Operators Registration and Identification (EORI) numbers on licence applications and registrations in SPIRE. As forwarders know, the EORI number is the unique reference identifying a business, trader or individual, issued by HM Revenue and Customs (HMRC). It is required on the Customs declaration to move goods into or out of the UK. The ECJU will introduce the mandatory inclusion of your EORI number on most licence applications and registrations in late autumn 2021. The mandatory requirement on SPIRE will apply to applications for export control licences where a declaration is made to HMRC’s Customs Handling of Import & Export Freight (CHIEF) or the new Customs Declaration Service (CDS). There is a view that moving forward, with the greater integration of government systems, one day CDS will validate specific export licence numbers against an EORI number. The next step will see it become necessary to

provide the EORI number that has been issued by HMRC. The reference begins with GB followed by 12 digits. It is only necessary to enter the 12 digits in SPIRE. It is important that applicants ensure the correct EORI number is included, as it will be provided as part of the licence information to HMRC. Action for SPIRE users If your company is registered on SPIRE, the ECJU has issued guidance on how to ‘Manage my registration’ within the ‘Organisation details’ option to ensure that the correct EORI is included in all applications. It has been emphasised that there will be no option to add the EORI at site level. BIFA has been advised that any questions regarding the correct EORI number within SPIRE will be raised by the appropriate compliance officer. No action is required on current licences which expire, or may be used, after the commencement of the new procedure.

There are fundamental differences in the two systems and BIFA, in conjunction with Agency Sector Management (UK) Ltd (ASM), has developed a training course that will guide the user through these areas to ensure readiness for the switch to CDS for both export and import declarations. The online self-study course is available now at a cost of £245 + VAT per person to BIFA Members (non-members £295 + VAT per person). Book at procedures/customs-declaration- service-online-cm1cbt/course- detail?l=y&i=858/21 Don’t keep it to yourself Not your copy of BIFAlink? Register for your own copy by contacting Sarah Milton in membership or visit for a digital version. BIFAlink is the magazine of the British International Freight Association and is distributed free to Members.

A reminder to all BIFA Members – BIFA Annual Membership Renewal 2022

BIFA Annual Member Company Declarations – email to Members mid-November 2021. 2022 Membership Renewal VAT Invoices – email to Members early January 2022. This is the second year (first electronic renewal Jan 2021) that BIFA is processing the Membership Renewals electronically. This has been well received by Members as an improved method to renew their BIFA & FIATA membership.

Please note: • Company Declarations need to be returned no later than 10 December 2021 please, • Membership Renewal VAT Invoices – these will be issued early January and payment is required within 30 days, • Members who subscribe to Direct Debit Membership Renewals are reminded that VAT invoices will be emailed upon receipt of payment (applied for in mid-

January and mid-July each year). Should you have any questions, or require any database updates, please contact Sarah Milton – BIFA Membership Don’t forget – It is important that you always let us know of any changes to key contacts, email and location addresses, etc. Please email with any required amendments.Thank you for your subscription and we look forward to supporting you through 2022.


November 2021

News Desk


Book early for 2022 Freight and Customs training

Demand for BIFA Freight and Customs training courses remains high with all dates for the remainder of 2021 virtually fully booked. In 2022, BIFA trainers will continue to present courses live via Zoom giving delegates from all corners of the UK the opportunity to participate. Delegate numbers per course are strictly limited

in order to ensure inclusion and participation, giving individuals the opportunity to discuss topics and ask questions. There are benefits and drawbacks to virtual training and we know that some prefer the in-person option. Where appropriate, classroom courses will be offered at central venues during

2022 for those who find it easier to study away from the workplace or home-office. Course schedules for 2022 are now live and can be viewed at . Additional dates and venues will be added throughout the year, so check regularly for updates.


Contact Universal Customs Clearance today to see how we can assist you with quick and reliable customs clearances

Call Nigel to discuss your requirements on +44 (0)1304 801087

By air – Warsaw Convention (17 SDR): £17.46 per kg

By sea – Hague Visby rules (2 SDR): £2.05 per kg £684.78 per package

BIFA STC: (2 SDR): £2.05 per kg

By road – CMR (8.33 SDR): £8.56 per kg

(The SDR rate on 15 October 2021,

By air – Montreal Convention (22 SDR): £22.60 per kg

according to the IMF website, was 1.02716)

November 2021



Policy & Compliance

Revised timetable for new Customs and DEFRA procedures

On 14 September, one day before an event organised by BIFA and supported by DEFRA, HMRC and French trade representatives, the UK government announced some significant delays to the UK’s timetable for implementing new frontier procedures. The main delays are to the implementation of checks on sanitary and phyto- sanitary (SPS) goods and the requirement for an import safety and security declaration for goods shipped from the EU. The reasons given by government for the delays were that COVID-19 had had greater impact on industry than anticipated. Industry’s view is that government is not fully prepared, noting in particular that in Kent the Border Control Posts (BCPs) had not been finished nor adequate staff recruited. Also, there is anecdotal evidence that EU exporters, particularly of foodstuffs, are struggling to comply with the new regulations. One area that is attracting particular attention is the shortage of vets to inspect Product of Animal Origin (POAO) shipments and complete the Export Health Certificate. Members have expressed concern regarding the availability of vets, particularly in the out-of- hours environment. Members have expressed mixed views on the delays, some noting that they have prepared for the changes in line with the original timetable and that they are being unfairly disadvantaged due to the delay. The reader should note that the initial Stage 1, impacting mainly exports from the EU to the UK, was implemented on 1 January 2021. Stage 2, as detailed below, has now been implemented. Stage 2 – 1 October 2021 The UK government has blamed COVID-19 for delays to the implementation of new Customs and DEFRA procedures, although industry has noted that the government has not finished building and staffing its Border Control Posts

• On 1 October 2021, the requirement for an Export Summary Declaration for goods being exported from the UK to EU under a ‘Contract of Carriage’ is implemented.

It is no coincidence that the most difficult to implement changes have been delayed the longest. On SPS goods, at least, there is an understanding of procedures and responsibilities; the main concerns relate to complexity of shipping such goods within a tight timeframe and release procedures at non- inventory linked ports. The concerns about import Safety and Security declaration run much deeper with fundamental fears regarding the fragmented ro- ro sector’s ability to process such declarations. BIFA will keep Members updated as to developments. Particular attention is drawn to the withdrawal of certain easements such as Delayed Declarations from 1 January 2022. One outcome of this is that all import consignments will have to be declared to Customs at the frontier. In many ways, implementing the import timetable, as detailed in Stages 2 to 4, will be much more difficult than the export controls enacted under Stage 1. Given the wider problems in the UK economy for many, it was a welcome decision; however, implementation of the new procedures cannot be delayed indefinitely.

Details of the revised timetable are: Stage 3 – 1 January 2022

• The requirement for pre-notification of agri- food imports will be introduced on 1 January 2022 as opposed to 1 October 2021. • The Delayed Declaration System ends, and all shipments will require a frontier Customs declaration (full or simplified). • Goods Vehicle Movement Service (GVMS) becomes mandatory for all ro-ro movements via a non-inventory linked port. Stage 4 – 1 July 2022 • The new requirements for Export Health Certificates, which were due to be introduced on 1 October 2021, will now be introduced on 1 July 2022. • Phytosanitary certificates and physical checks on SPS goods at Border Control Posts, due to be introduced on 1 January 2022, will now be introduced on 1 July 2022. • The requirement for Safety and Security declarations on imports will be introduced as of 1 July 2022, as opposed to 1 January 2022.


November 2021









Policy & Compliance

Hauliers urged to prepare for new Customs rules from January 2022

movement-reference • Drivers moving goods via Eurotunnel, the port of Dover or Holyhead may need to take their goods for Customs checks at an Inland Border Facility (IBF), before they depart from or when they arrive in Britain. Drivers will need to check their GMR to find out whether their goods need checks. Drivers can check the GMR before they get off the ferry or shuttle if they have a smartphone with internet access. If they do not, the haulier manager will need to pass this message on to the driver by phone. You can find more information on moving goods through a port that uses GVMS at service • Drivers whose goods require checks should go to an IBF that is local to the port they are using. You can get more information on IBF locations at inland-border-facility Drivers can use HMRC’s ‘Attend an IBF’ service to check how busy IBFs are before they travel and tell HMRC which site they will be going to, to speed up their processing time on arrival. You can find out how to use this service at

The information below has been provided by HMRC and is published here to assist Members in their preparations for forthcoming changes to Customs rules

If you are a haulier that moves goods between Britain and the EU, you need to get ready for new Customs rules being introduced from 1 January 2022. Full Customs controls for all goods moved between Britain and the EU will be required from 1 January 2022. This means that from 1 January: • Businesses will not be able to delay making import declarations. If you move goods from the EU, using ports that operate the pre- lodgement model or the Goods Vehicle Movement Service (GVMS), you will need to make sure the business, whose goods you are moving, make import declarations before you reach the UK Border. • All border locations will need to begin controlling imported and exported goods. This means you will not be able to pass through the port with goods unless they have received Customs clearance at the port, or you have been directed to an Inland Border Facility (IBF) for relevant checks.

• Some UK ports will use GVMS to clear goods through Customs. You should register for GVMS now if you plan to move goods through ports that will use this system. From 1 January, if you use one of these ports, you will not be able to clear your goods through Customs and cross the UK Border if you are not registered. You can register for GVMS now at . To find out which ports use GVMS, go to vehicle-movement-ports. • Ports that use GVMS to control goods will need pre-lodged declaration references to be linked together within a single reference number, called a Goods Movement Reference (GMR). You will need to present a valid GMR to the carrier for check-in. The driver moving the goods would usually create a GMR, but it can be done by the haulier manager, or the trader’s Customs agent or freight forwarder. You must only create one GMR per vehicle. You can find out how to get a GMR at


November 2021

BREXIT. IT’S HERE, IT’S NOW. IMPLEMENT A PROVEN SOLUTION TO MEET YOUR CUSTOMS CHALLENGES. E-CUSTOMS SOLUTIONS The legislation around import and export declarations on goods going to and coming from Europe and Northern Ireland has changed. So have your obligations. As a result of this change many businesses like yours are facing new customs challenges; as one of more than 150,000 businesses in the UK that trade with the EU, you need to keep your business moving. Our tried, tested and trusted e-Customs software solution will help you take control of your import and export declarations, prioritise ! !!!   !    ! with your existing systems and grants you access to your data whenever you need to, wherever you are.




Industry Promotion

Showcasing the industry at Heathrow

At the end of September, as part of our plan to promote the industry better as a career option for young people, we did our first careers day at London Heathrow. On our stand we were supported by DHL Global Forwarding, while Members NNR Global Logistics, DB Schenker, OIA Global and CEVA all had their own stands. The 460 pupils – split over four groups – from years 10-13 attended the event giving them an opportunity to explore different industries and career options. Carl Hobbis, executive director and training development manager, said: “This was the first event with one of our partner schools, with the aim to have a more proactive engagement in key locations around the UK. “What we need now is for Members to do their own thing locally as we believe that schools need better employer engagement and, apart from the blue-chip organisations, many generally do not know where to start or who to approach. “Flipping the situation, Members need to reach out to schools as well; our recently published ‘Schools Guide’ will provide ideas and ways of how to do this.” Lee Griffiths, MD of participating Member NNR Global Logistics UK, said: “Too many people in the industry moan about the lack of young talent in logistics and supply chain but do nothing about it. Let us hope we can make a difference and influence the future. I really appreciate BIFA’s initiative on this and am actively supporting the school.” Hobbis, concluded: “We learnt a lot from the event with our aim to have a dedicated logistics careers day at Heathrow, at the school, when just students genuinely interested in the sector attend, to create real focus and hopefully plenty of apprenticeship opportunities.” One school, a half-day of time and 460 students find out about the logistics sector

If you are interested in participating contact either Nezda Leigh or Carl Hobbis


November 2021

Industry Promotion


BIFA young forwarders channel their inner Olympians for Transaid Members of the BIFA Young Forwarder Network (YFN) completed the Chase the Moon 2021 event around London’s Olympic Park on 13 October. A team of seven completed the 5k in aid of industry charity Transaid. The YFN team – Kyle Lawrence, Laura Hobby, Katie-Louise Thompson-Friend, Kelly Jarrold, Ryan Smith, Ellis Stevens and Josh Clark – passed a number of the Games’ iconic landmarks on their way to completing the run and raising over £1,000. In sub-Saharan Africa, road deaths are the

third biggest killer following HIV/AIDS and Malaria (Source: The World Bank). More than half of all road traffic deaths are among vulnerable road users such as pedestrians, cyclists and motorcyclists.

Carl Hobbis, executive director, commented: “We wanted to find a way of connecting the YFN with our designated charity, Transaid. Hopefully this initiative will be the first of many.”

Get involved with your local School Don’t moan about the lack of young talent, get out there and promote the sector to them

Government support for apprentice recruitment extended

In September, BIFA launched its latest initiative to promote the freight forwarding and logistics industry to young people with its useful Members’ guide to engaging with local schools. It is a lot easier than you may think; all schools must list their careers lead on their website. They will most likely have their careers events planned and just need local employers to take part. We are working with partner

business. Over the space of one to two weeks, the student can get involved in every department and gain a more realistic insight of each role. If they find an area of particular interest, they could focus more time there. • Mock interview events – school careers departments need companies to conduct a series of interviews with students to give them the experience of attending a ‘real life’ interview with someone unfamiliar to them.

Here at BIFA we welcome the news that the government is extending the period of time that companies can access cash incentives for hiring new apprentices. The cash incentives were first introduced in August 2020 and offered businesses £2,000 to take on apprentices aged 16 to 24, while those that employ new apprentices aged 25 and over were to be paid £1,500. They were increased to £3,000 for all apprentices in February with the scheme due to end in September, but the Chancellor Rishi Sunak has prolonged the scheme by four months until the end of January 2022. Carl Hobbis, BIFA’s executive director, who has management responsibility for BIFA’s training and development services, said: “The extension in funding support is a further reason for our Members to consider the apprenticeship pathway as a means of adding fresh talent to the industry.” Having been actively involved in the creation of an International Freight Forwarding Specialist apprenticeship, BIFA has committed to promote its availability since it was introduced in 2018. BIFA Members interested in employing an apprentice should visit to better understand apprenticeship opportunities.

• Careers events – display information and introduce the freight forwarding industry. This is an effective way to engage with students on a one-to-one basis and allow them to gather information. Providing leaflets and freebies for students to take home will allow you to stand out from other employers. BIFA recently attended our London Heathrow partner school’s Career Day along with other BIFA Members (See opposite).

schools close to seven main airports or ports, but we need Members to join us in creating awareness and to engage with their own local schools. This can be done in several ways: • Give a talk or presentation – within a short time, you can give an effective overview of the industry to a classroom or assembly full of students. • Workplace visit – by offering workplace visits, young people can view all areas of your working environment, such as the office, warehouse, port, airport etc, and can hear from different staff members regarding their roles within the company. • Work experience – this is a great way to give a student a more in-depth awareness of the

If you need any guidance, you can get in touch with Nezda Leigh at who will be able to help.

November 2021



Policy & Compliance

August 2021 containerline reliability sinks to new depths

The average delay for late vessel arrivals is continuing to deteriorate, with August seeing a new all-time low

Liner schedule reliability, which has hovered between 35% and 40% for most of the year, in August dropped to 33.6%, according to Sea Intelligence. Its report covers schedule reliability across 34 different trade lanes and more than 60 carriers. Sea Intelligence says that the 33.6% figure is a new all-time low during the 10 years it has tracked global schedule reliability. On a year-on-year basis, reliability in August 2021 was 30.1 percentage points lower than in August 2020, continuing the trend of 30 percentage point declines in each month in 2021 compared with the same period in 2020. The average delay for late vessel arrivals continued to deteriorate, increasing by 0.58 days, month-on- month, to 7.57 days in August. Maersk Line was once again the most reliable top-14 carrier in August, with schedule reliability of 45.6%, followed by Hamburg Süd with 38%. Another three carriers had schedule reliability of 30%-40%, with three other carriers recording schedule reliability of 20%-30%. Six carriers had schedule reliability of under 20%, with Evergreen recording the lowest August 2021 schedule reliability of just 11.5%.

Only HMM recorded a month-on-month improvement in schedule reliability, of 1.6 percentage points.

It is believed that China’s October Golden Week, Christmas and Chinese New Year will bolster strong demand for container shipping for the last quarter of 2021. But port congestion, especially in the US and Europe, and service delays are expected to create headwinds for service schedules. Extra loaders and ad hoc port omissions will be implemented to help improve reliability. Shipping lines expect equipment availability to remain tight in Q4 2021.

Maersk Line was once again the most reliable top-14 carrier in August.


November 2021

We’ve been connecting people and businesses across Europe for the last 21 years. We’ve made friends, built relationships, and we’ve been a backbone to trade and distribution for all sizes of businesses.

We transport freight of all kinds, including the carriage of dangerous goods, and are the forwarder of choice for many of our competitors who offer similar services.

We’ve battled through a pandemic, and emerged from Brexit stronger than ever before. We’ve maintained services throughout, continually learning and adapting to the new regimes, helping our customers and partners navigate the new environments. The aim of Ital Logistics is to provide a quality, reliable and personalised service with openness, honesty and integrity, and to always perform to the very best of our abilities. And we’ll continue to do that, whatever obstacles that may present themselves in the future.


Policy & Compliance

Carriage of containers on bulk carriers

With the shortage of available containerships leading to the growing use of bulk carriers for container transport, Michael Yarwood, managing director loss prevention at the TT Club, considers issues you should be aware of

The global container shipping market is currently experiencing extraordinary demands. In part driven by the ongoing effects of the COVID-19 pandemic, there is extremely high demand along major shipping routes, in particular the transpacific and Asia-Europe trade lanes. Market forces have resulted in container shipping costs reaching unprecedented highs in recent months; the outlook suggests that this trend is set to continue into 2022. Strong demand and high costs have resulted in some large retailers, or beneficial cargo owners (BCOs), along these trade lanes considering radical alternatives, including procuring containers and chartering ships directly themselves. The aspiration being to improve control over their respective supply chains, as well as bringing greater resilience and certainty in terms of both cost and service levels. The heated market conditions have resulted in reduced accessibility to purpose-built containership tonnage. This has led in recent months to a number of bulk carrier ships being chartered to carry containerised cargo, for which they are generally not designed. While such chartering might provide a more cost-effective short-term solution and be favourable to the shipowner, who would otherwise be undertaking a ballast voyage, due care is required. Critical considerations Where the carriage of containers on a bulk carrier is concerned, there are a number of critical safety, statutory, contractual and classification considerations. Standard charter party terms for a bulk carrier might not, for instance, provide for the carriage of cargo on deck. In fact, there might be explicit exclusions of liability for cargo carried on deck, with the associated risks resting with the shipper. Due to the design and intended stowing arrangements of containers, the point load at the corner castings (corners) when placed in the hold or on the deck of a bulk carrier risks damaging

the ship and resulting in container stack collapses. While steel ‘I’ frames can assist in spreading the load across the loading area, complex engineering calculations are required to assess and mitigate the risk. BCOs and those supply chain actors shipping containers in this way should be mindful of the potential liability exposures. Particularly where issuing house bills of lading, it is important to seek back-to-back terms to provide protection in the event of a loss. Recognise that NVOCs will retain a duty of care to carry the cargo safely under their house bills of lading. Where, for instance, a bulk carrier has not been adequately prepared to carry containers, or failed to obtain Class approval for material changes made to accommodate containers, the ship is likely to be considered unseaworthy at the commencement of the voyage. Prior to concluding the charter party, it would be prudent to obtain independent legal advice on this point. Safe stowage As we head into the northern hemisphere’s winter months, which in recent years have witnessed a number of container-overboard losses from containerships, one of the primary concerns for BCOs and freight forwarders will be the safe stowage on board the ship, ensuring that the cargo arrives in the condition it was packed in the origin country. Losing containers overboard is not the only risk in this context for bulk carriers. Container stacks stowed within the hold, if not sufficiently secured, are at significant risk of collapse. Since bulk carriers are designed for the carriage of bulk cargoes, a container stack collapse also risks causing structural damage to the ship, potentially leading to pollution or total loss casualties. Furthermore, lightly loaded bulk carriers generally have larger GMs (metacentric height) than laden containerships, resulting in potentially increased acceleration forces. Shippers should be aware of this and

consequently take additional precautions in securing goods within the containers. The Code of Safe Practice for Cargo Stowage and Securing (CSS Code) provides an international standard for the safe stowage and securing of cargoes promoting the safety of life both at sea, and during loading and discharge. While general guidance exists to secure containers on non-cellular bulk carrier ships, interests engaged in shipping containers in this way should undertake due diligence to ensure that detailed provisions, including lashing plans, are included in the ‘non-standardised cargo’ section of the Cargo Securing Manual (CSM) of the chartered ship. What equipment is available to be used and are the crew sufficiently trained to use, monitor and maintain the equipment during the voyage? A CSM prescribes how cargo onboard a ship should be stowed and secured, and is required on ships engaged in the carriage of all cargoes


November 2021

Policy & Compliance


other than solid and liquid bulk cargoes. One challenge in this context is that bulk carriers will not generally be designed with the required lashing points and gear to secure containers, so potentially significant changes are likely to be required on board, requiring Class or flag state approval. Risk assessment Shippers should also assess risks associated with shipping more specialised cargoes, including those containers requiring power (reefer units) and those carrying dangerous goods. While the IMDG Code would continue to apply whether the cargo is shipped on board a fully cellular containership or a bulk carrier, provisions available on board a bulk carrier to fight a containerised fire, for example, may require further attention. While a bulk carrier will be provided with a ‘Document of Compliance’ by the flag state, which will detail the ‘bulk’ cargoes that may be loaded and those that may not be

loaded, seeking clarity on the carriage of packaged dangerous goods on a bulk carrier would be a prudent step. Shipping sensitive and high value cargoes in this way should also be given greater consideration. The atmosphere in the hold of a bulk carrier is likely to be different to that of a fully cellular containership; the construction of the ship and ventilation provisions could give rise to increased ambient temperatures, resulting in condensation that may lead to damage of sensitive cargoes. Consideration should also be given as to how any applicable shippers’ instructions are passed to the crew. From a supply chain perspective, it is less likely that the voyage will commence and conclude in a traditional container terminal, which in many cases will either be operating at capacity levels or contract bound, preventing them from servicing ad hoc bulk carriers. While clearly advantageous in the context of seeking to

avoid berth congestion, this may result in the need to position and collect containers from other multipurpose port facilities. Such facilities are less likely to operate purpose-built ship to shore crane equipment. This might lead to containers being loaded by either mobile harbour cranes or the ship’s crane equipment. Loading containers this way will certainly be less efficient in terms of time, but arguably also expose the container and cargo within to greater dynamic forces, increasing the likelihood of damage through the loading and discharge phases. All the matters raised here need to be discussed with your insurance provider, since they materially change the nature of the risk. Further, as chartering interests, it would be prudent to ensure that the owner’s P&I cover has not been prejudiced, seeking confirmation of cover for the specific circumstances from the owner’s P&I club.

November 2021



Policy & Compliance

Building a new maritime supply chain With huge and ongoing problems in the deepsea container market, how will the sector evolve over the next few years and what will be the factors that influence it?

flawed. It is believed that a guarantee that freight will be shipped on time by carriers, in return for assurances about traffic volumes from the shipper, will help bring some stability back to the market. However, there are other significant cost pressures at work, not least those stemming from efforts to reduce carbon emissions. The EU has announced its Emissions Trading System (ETS) to be introduced gradually from 2023 and phased in over a three-year period. Shipowners will have to buy permits under the ETS when their ships pollute, or else face possible bans from EU ports. In addition to ships sailing within the EU, the proposals will also cover 50% of emissions from international voyages starting and ending in the bloc. The EU’s proposed emissions trading system for shipping would raise nearly $5.9 billion annually at current carbon costs. Dependent on the type of vessel, the carbon price could amount to $8,660 per day if it trades wholly inside EU waters. That rate would halve to $4,330 daily for an international voyage. Emissions trading The scheme sees shipowners pay 20% for emissions in 2023, rising to 45% in 2024, 70% by 2025 and 100% after that. For those owners moving to less polluting fuels, the rate of taxation will decline, or in certain cases be exempted. The problem is that currently this technology is not readily available nor fully tested. Inevitably carriers will pass these additional costs on to the customer. Also it should be remembered the less-polluting fuels will be more expensive, at least in the short run, to purchase and adjusting bunkering arrangements will add further additional costs. These new pricing

Earlier this year BIFA published a presentation originally made to its Road, Maritime and Rail Policy Group regarding the then current situation in the deepsea container market. We had numerous enquiries about the information contained within it, including from overseas interested parties. Let us be very clear, the carriers have in certain cases failed to provide a reasonable service level to their customers; the main complaints we hear revolve around failures to follow basic instructions, issuing invoices late, failing to release cargoes after payment and/or documents lodged. The main and most significant complaint is regarding the lines’ failure to accept that these failings have caused delays and to re-imburse the affected parties for the additional costs. Carriers argue that they do not charge quay rent, etc, it is the ports – well Members in the maritime field have a pretty good idea that the tariff charged to them [the carriers] by the port is at more favourable rates than that charged by the port to the forwarder or importer. Whilst other trade associations have frequently complained about the rates being charged, at BIFA we have had few significant complaints on this point, but

there seems a weary resignation that pricing reflects high demand relative to supply. Currently shipping lines have about 5.6 million teu of capacity on order – but delivery of these new vessels will not begin for a while yet – some industry experts feel that the market will only rebalance in late 2023 or early 2024. The question is, what will this market look like? The future market There are differing views on this subject, one side believing that it will be broadly similar to what it was pre-pandemic. However, it is pointed out that this view ignores significant changes that are already under way. Ultimately it will be consumers and manufacturers who will determine what the market looks like and what its new shape will be. The pandemic has demonstrated that the maritime supply chain is relatively inflexible and that to increase capacity in the short run, at least, is challenging. There have been calls for greater ‘resilience’ in the maritime supply chain; in effect this means maintaining potentially under-utilised capacity, which is wasteful and expensive. It has been noted by many that the underpinning relationship between carriers and customers is


November 2021

Policy & Compliance


pressures will impact at a time when the maritime industry is already under considerable pressure and at the precise time that recently ordered new ships enter the market, the consequences of which the readers can decide for themselves. Against this backdrop we are already seeing the supply chain adjusting to a post-pandemic era. Manufacturers and producers, if not now then in the future, will have to consider climate change targets when planning where to place orders. We have already seen considerable changes in buying patterns – Turkish manufacturers are reporting much higher orders, with exports increasing by 12% this year. We are hearing similar stories from Egypt, Portugal, Serbia and Croatia. Not only does near-shoring reduce the journey length and thus emissions, it also reduces journey time, offers alternative transport modes and reduces the time taken to ship goods. Freight volumes The last point to be considered is how much freight will actually be shipped? The days of cheap freight are probably over for at least the short term. Longer-term environmental issues look likely to be an influence for higher pricing. This will impact the least expensive end of the market, pushing up prices and to some extent reducing demand. In addition to these factors, we are seeing a move to manufacturing more durable goods and ensuring that they are easier to repair. These factors are leading to serious questions about how much will be produced and where, with some observers believing that a reduction in long haul trades will be one outcome. In all this mix, it should be remembered that China has proved to be a reliable manufacturing base throughout the pandemic compared with some of its southeast Asian neighbours who have been more severely impacted by COVID-19. The belief is that for at least five to ten years China will largely retain its position in global manufacturing, but there will be an increase in near-shoring. How this will impact the market is yet to be seen, particularly in view of the other factors discussed in this article. All that can be said for certain is that the sector will be going through a period of adjustment due to forces largely outside its making and certainly its control. As someone said recently: “Who would want to order a ULCV today, with a working life of 30 years, when we do not know what is going to happen tomorrow”. But actually this uncertainty is in one way the forwarder’s friend, because the sector’s ability to solve problems becomes more important and relevant.

Abandoned cargo: alert to risk escalation With supply chain congestion and widespread delays in the international container trades set to continue, the vexatious challenges of abandoned cargo will remain and probably increase. In its role as risk prevention advisor to the industry, TT Club has issued a StopLoss document to provide practical guidance to stakeholders across the supply chain.

The potential catastrophic impact arising from the deterioration of abandoned cargo cannot be disregarded as a remote risk. However, the considerable costs accruing from container demurrage, detention, storage and disposal regularly result from cargo that, for a variety of reasons, is no longer required by the original receiver or consignee, and is simply abandoned at a port terminal or cargo facility. Increased risks of safety and regulatory infraction are inevitably consequent, as well as significant demand on management and operational resources to resolve individual cases. “Levels of cargo abandonment have always been problematic to forwarders, NVOCs, logistics operators and, of course, container terminals,” commented Peregrine Storrs-Fox, TT’s risk management director. Compounding problems “The surge in container demand over recent months has, however, compounded container ship capacity issues, port congestion and consequent severe transit delays. These factors will do little to alleviate the practice of cargo interests, in circumstances of loss of market for goods or bankruptcy, simply relinquishing ownership of consignments.” Those left with the responsibility of removing and/or disposing of the goods and returning the container to the appropriate carrier are in need of guidance and TT’s StopLoss publication ‘Abandonment of cargo: Avoiding the pitfalls’ is designed to deliver just that. It identifies ‘red flags’ that forwarders, logistics operators and carriers should consider – certain commodities such as waste, scrap,

materials for recycling and personal effects – previously unknown shippers, particularly individuals rather than companies. Enforcement agencies Furthermore, once the cargo is defined as abandoned, the StopLoss outlines the role of enforcement agencies and the responsibilities of others involved in the supply chain. “Above all, the value of our guidance lies in mitigating the risks associated with abandonment and recommended actions outlined in methodical steps and a 10-point checklist,” concluded Storrs-Fox. “There needs to be a greater understanding of why cargo is abandoned and how it is handled in order to restrict the growth of a serious trend leading to increased safety and cost ramifications.” ‘Abandonment of cargo: Avoiding the pitfalls’ is available for download at resources/publications/stoploss/stoploss-aban donment-of-cargo/

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