Freight News from Lloyds Loading List

Latest News headlines from BIFA

Posted on Monday December 10, 2018

For the first time this year the headhaul Asia to North Europe container trade in October was able to string together two consecutive months with positive year-on-year growth. Westbound demand increased by 7.8% in September, followed by a 5.4% rise in October, according to data derived from CTS.

The most recent figures are putting on some gloss to what has otherwise been a very depressing year for Asia-Europe carriers. After 10 months of the year the westbound trade was up by just 1.2% to approximately 8.3 million teu and the late-year rally could well see it approach Drewry’s annual forecast rate of 2.1% made three months ago.

Read more >

Posted on Friday December 07, 2018

Two-year spot freight rate trend for the World Container Index:

World Container Index assessed by Drewry

Our detailed assessment for Thursday, 06 December 2018

View our more detailed weekly analysis, including our freight rate assessment on eight major East-West trades

Read more >

Posted on Friday December 07, 2018

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 5.4% year-on-year in October 2018. This was the eighth month in a row that capacity growth outstripped demand.

Growing international e-commerce and an upturn in the global investment cycle are supporting the growth. However, demand continues to be negatively impacted by:

  • A contraction in export order books in all major exporting nations in October;
  • Longer supplier delivery times in Asia and Europe;
  • Weakened consumer confidence compared to very high levels at the beginning of 2018.

“Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018. Slow but steady growth continues despite trade tensions. The growth of e-commerce is more than making up for sluggishness in more traditional markets. And yields are strengthening in the traditionally busy fourth quarter. We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note,” said Alexandre de Juniac, IATA's Director General and CEO.

October 2018
  (% year-on-year)

World share1

FTK

AFTK

FLF
(%-pt)2

FLF
(level)3

Total Market

100.0%

3.1%

5.4%

-1.1%

50.4%

Africa

1.7%

-4.2%

5.4%

-3.7%

36.8%

Asia Pacific

36.1%

1.9%

4.2%

-1.3%

56.9%

Europe

23.4%

1.4%

1.9%

-0.3%

55.8%

Latin America

2.6%

0.3%

3.3%

-1.1%

35.7%

Middle East

13.2%

5.0%

8.8%

-1.8%

50.6%

North America

23.0%

6.6%

8.2%

-0.6%

42.0%

¹% of industry FTKs in 2017   ²Year-on-year change in load factor   ³Load factor level 

Regional Performance

All regions reported year-on-year demand growth in October 2018, except Africa which contracted.

  • Asia-Pacific airlines saw demand for air freight grow by 1.9% in October 2018, compared to the same period last year. This pace of growth was relatively unchanged from the previous month. Weaker manufacturing conditions for exporters, and longer supplier delivery times particularly in China and Korea impacted the demand. As the largest freight-flying region, carrying more than one-third of the total, the risks from rising trade tensions are disproportionately high. Capacity increased by 4.2%.

  • North American airlines posted the fastest growth of any region in October 2018, with an increase in demand of 6.6% compared to the same period a year earlier. Capacity increased by 8.2% over the same period. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.

  • European airlines experienced a 1.4% increase in freight demand in October 2018 compared to the same period a year earlier. Capacity increased by 1.9% year-on-year. Weaker manufacturing conditions for exporters, and longer supplier delivery times particularly in Germany, Europe’s largest freight flying country, impacted demand. Seasonally-adjusted international air cargo demand remained deflated in October, which could indicate the start of a broader weakening in demand.

  • Middle Eastern airlines’ freight volumes expanded 5.0% in October 2018 compared to the same period a year earlier. Capacity increased by 8.8% over the same period. There are signs of a pick-up in seasonally-adjusted international air cargo demand helped by more trade to/from Europe and Asia.

  • Latin American airlines’ freight demand rose 0.3% in October 2018 compared to the same period last year and capacity increased by 3.3%. International demand slipped by 0.9%, marking the first contraction in 11months. International freight volumes have fallen month-on-month in four of the past five months, reflecting broad weakness in the region’s key markets.

  • African carriers saw freight demand decrease by 4.2% in October 2018, compared to the same month last year. This was the seventh time in eight months that demand shrank. Capacity increased by 5.4% year-on-year. Demand conditions on all key markets to and from Africa remain weak. Nonetheless, seasonally-adjusted international freight volumes have stopped declining and recovered sharply in recent months.

View full October freight traffic analysis

Posted on Tuesday December 04, 2018

From 4 December 2018, customs intermediaries and traders who complete, or intend to complete customs declarations can apply for funding for training and IT. This will help to increase capacity in preparation for the UK leaving the EU on 29 March 2019.

The government recognises the challenges facing the customs intermediaries sector in supporting existing and new clients when the UK leaves the EU. It has engaged extensively with industry bodies and key providers of customs broker services – including freight forwarders, fast parcel operators and independent customs brokers – to better understand this challenge.

Based on this useful engagement, in September HM Treasury and HMRC announced a one-off investment of £8 million to support broker training and increased automation.

Since then HMRC has engaged Knowledge Pool, a managed learning service provider, to increase the training available in this area. This includes working with training providers to increase the number of courses available in the short term, as well as investing in the development of new courses which will be available over the coming months.

Financial Secretary to the Treasury, Mel Stride, said:

“Following extensive engagement with the customs intermediaries sector, we have listened to their concerns about how they will satisfy the extra demand for customs broker services.

“We are pleased to make available this £8m investment to support the customs intermediaries sector to expand capacity in preparation for the UK to leave the EU on 29 March 2019.”

As part of this investment, funding is now available to help businesses, based in, or with a branch in, the UK to meet the costs of employee training and IT improvements. Businesses who will benefit from the funding are encouraged to apply early. Applications will close on 5 April 2019, or earlier once all the funding is allocated.

Businesses can apply for one or both grants:

  • There is £2 million available to fund training funding for intermediaries and traders completing customs declarations (or intending to complete customs declarations in the future). The grant will provide funding for up to 50% of the cost of training staff.

  • There is £3 million available in IT improvement funding, available to SMEs in the customs intermediaries sector currently completing customs declarations on behalf of importers and exporters. The grant will fund investment in packaged software that increases the automation and productivity of completing customs declarations.

PwC is administering the grants on behalf of HMRC as an accredited grant administrator. Businesses who wish to apply for funding should not contact HMRC and can apply on online. More information, and a link to the online application page are available on GOV.UK.

Frequently asked questions

 

I’m not a customs intermediary, but my business imports and/or exports   to the EU. Can I apply for a grant?

Yes. If your business is based in, or has   a branch in the UK, and is currently importing and/or exporting to the EU   then you can apply for funding for up to 50% of the cost of training yourself   or your staff to complete customs declarations and handle other customs   procedures. A higher limit applies to Small and Medium-sized Enterprises. You   won’t be eligible for the IT improvements grant.

I’m   a self-employed UK trader who imports/exports to the EU. Can I apply for a   grant?

Yes. If you are currently importing and/or   exporting then you can apply for funding for up to 50% of the cost of   training to complete customs declarations. A higher limit applies to Small   and Medium-sized Enterprises. You won’t be eligible for the IT improvements   grant.

Are   these grants available to businesses based in Northern Ireland?

Yes. Both the IT improvements grant and   the training grant are available to business which are based in, or have a   branch anywhere in the UK.

What type of training will the grant fund?

 

The training grant will provide funding   for up to 50% of the cost of training that provides you or your employees   with skills to complete customs declarations and carry out the technical   processes of customs procedures. A higher limit applies to Small and Medium-sized   Enterprises.

The training does not have to lead to a   formal qualification.

It cannot be used towards the existing costs   of current training or for other unrelated training.

I’m not currently a customs intermediary but I’d like to invest in IT   improvements, can I apply for a grant?

No. The IT improvements grant is only   available to customs intermediaries who currently complete customs   declarations on behalf of importers and exporters. Your business must be   based in, or have a branch in the UK, have 250 employees or less and an   annual turnover of €50 million or less.

What type of IT improvements will the grant fund?

 

The IT improvements grant must be used to   acquire packaged software that increases the automation and productivity of   completing customs declarations and will cover the first year licence. The   funding can also be used to buy hardware needed to run the software,   installation and configuration, and related software training. It cannot be   used to commission bespoke software or unrelated networking costs.

Can I apply for both grants?

 

Yes, if you are a customs intermediary   you can apply for both the training and the IT improvements grants, provided   you meet the eligibility criteria for each grant.

Can I apply more than once?

 

Yes. You may decide to train more staff   than requested in their original application, or an employee may wish to go   on additional training courses. There is a personal training limit of £750   per person, or £1,050 per person if your business has 250 employees or less   and an annual turnover of €50 million or less.

Applications will close on 5 April 2019,   or earlier once all the funding is allocated.

When is the deadline and how do I apply?

 

You can find details of how to apply   online at customsintermediarygrant.co.uk. Do not contact HMRC.

Applications will close on 5 April 2019,   or earlier once all the funding is allocated.

If you would prefer to apply offline, an application   form can be downloaded from customsintermediarygrant.co.uk and submitted by   post. A Welsh language form is also available.

When will I know if my application has been successful?

 

All applications will go through a review   process to check eligibility and complete due diligence checks. Processing   times will vary depending on demand but we expect you to be informed within   two to three weeks from the date of application.

What happens if my application is rejected?

You will be advised if your application   is incomplete or we require further information. You will have the   opportunity to submit any additional information online. If your application   is rejected, you can ask for the decision to be reviewed.

When will I receive the funding?

The grants will be paid following receipt   of proof of payment for either training or IT improvements depending on the   grant you applied for. Reimbursements will be made 30 days from the end of   the month the proof of payment is submitted.

How will I receive the funding?

Payment will be made by BACs transfer to   a UK bank account in the name of the applicant.

How will you use the information I give you?

 

In line with General Data Protection   Regulation (GDPR) PwC is strongly committed to protecting individuals’   personal information, including personal data that we hold or process about   our clients, employees, vendors or other stakeholders.

We protect your personal information by   only collecting applicant data that is essential for deciding on the   allocation of funding, erasing data that is not relevant in the application   process, and limiting the data that we share. Relevant information will be   shared with HMRC. 

 

Posted on Monday December 03, 2018

In a report released this week, European Road Freight Transport 2018, the supply chain analyst shows that in just six countries – the UK, Germany, France, Denmark Sweden and Norway – the shortage of drivers adds up to 127,500.

The UK leads the way with a shortage of 52,000 drivers, but is closely followed by Germany at 45,000 vacancies – with predictions that this could increase by a staggering 28,000 each year.

The report says: “In Germany, the DSLV transport union reports that in the next 15 years, two-thirds of drivers will retire. Germany is facing a shortage of 45,000 truck drivers, with around 30,000 leaving the profession every year. This compares with only 2,000 people receiving truck-driving qualifications each year.”

France has a shortage of 20,000 drivers, while road freight associations in Sweden, Denmark and Norway report shortages of 5,000, 2,500 and 3,000, respectively.

This, of course, leaves out more than 20 countries in Europe where numbers have not been collected – although it is safe to assume that similar trends are likely across western countries, where driver numbers have been on the decline for the past two decades.

This gap in the labour market has been partly filled by an influx of East Europeans, but the report warns there is a limit as to how much this will ease the driver shortage.

One problem is the increasing appetite among global manufacturers to site production facilities in central and eastern Europe, which has provided an alternative source of jobs for many would-be drivers.

“As explained by some of the European LSP’s Ti interviewed, while multiple factors are behind driver shortages, the relocation of production to Eastern Europe has further exacerbated the problem, as nationals of these countries prefer to work in factories over being truck drivers,” the report says.

Meanwhile, Tim Philips, director of Duma Consulting and former chief executive of Freightex, wrote, in a commentary in the report, that simply bringing in drivers from East Europe has, in turn, created a similar gap in the markets they left.

“This is currently being partially filled by drivers from further afield, such as Ukraine. However this is not an inexhaustible supply and there are trucks parked up with no drivers,” he adds.

Source: The Loadstar

Posted on Monday December 03, 2018

Although the SIs are partly based on the UCC you will find a number of provisions which diverge from the UCC e.g. guarantee requirements, establishment criteria etc.   

Please let BIFA know your thoughts/concerns and we will pass this on to the relevant departments to Pawel Jarza at p.jarza@bifa.org.

Link:

The Customs (Import Duty) (EU Exit) Regulations 2018

Posted on Monday December 03, 2018

The publication introduces a basic explanation of the Blockchain technology and goes on to analyse the relevance of its relevance for trade facilitation by reviewing its current and potential application in the various areas covered by WTO rules. The publication provides an insight into the extent to which the Blockchain technology could affect cross-border trade in goods and services and in intellectual property rights. The possibility of reducing trade costs and enhancing supply chain transparency is addressed, as well as the opportunities Blockchain provides for micro, small and medium-sized enterprises.

The publication also discusses various challenges to the wider and more significant impact of Blockchain on international trade. Such challenges include whether the technology can be scaled up for large or complex applications, how immune it is to security threats, to what extent various Blockchain platforms can be used in an integrated manner, and which legal issues need to be ironed out to increase mainstream use of the technology.

The publication argues that the transportation and logistics sector constitutes a fertile ground for Blockchain implementation due to the high number of actors involved and could be deeply transformed. It is noted that the potential benefits that Blockchain offers to the sector are arguably wide-ranging, with the key benefit being the possibility of enhancing collaboration between the various companies involved, while at the same time allowing them to retain control of sensitive information and of who knows what and when.

Click here to read the full publication.

Source: CLECAT

Posted on Monday December 03, 2018

It has been said that differentiation is impossible in the container shipping industry, more so in an age of large scale vessel sharing agreements when lines are all aboard the same ship, and that carriers can only really compete on price.

Even to long-time industry watchers such as Drewry it has often been hard to distinguish one carrier from another with few observable unique selling points aside from obvious regional affiliations and size. However, things may be about to change as there is growing evidence of a divergence in corporate strategies among carriers that could drastically alter the shape of the industry.

Broadly speaking, we see three main types of strategy being presented by lines at the moment. They indicate that a company either wants to break free from its traditional confines of port to port services and expand its reach into other links in the supply chain, or consolidate its core sea product, or finally enhance its liner scale. Each approach has its own risks associated, but if the seekers of global supply chain integration are successful the future liner playing field will be far from level.

Read More >

Source: Drewry

Posted on Monday December 03, 2018

This item is intended to provide guidance to those companies currently using CHIEF who are planning to migrate to the Customs Declaration Service.

HMRC have sent out several communications to Trade explaining that the Customs Declaration Service (CDS) became operational in August.

Currently CDS has very limited functionality and can only be used by a small number of traders who undertake non-inventory declarations out of ‘Customs Warehouse’.  Further import functionality is expected to be made available in CDS ‘Release 2’.

Export functionality is not expected to be available before March 2019. Community Service Providers are currently developing and testing their systems for implementation during 2019. The CSPs are required to upgrade their systems in order to connect to CDS.

It should be noted that it is not only new software that is required in order for a trader to migrate to CDS. There is a need for Traders to provide additional data in their declarations. This is required in order to meet UCC standards (see link to Guidance below). It is also necessary to understand the changes introduced and published in the new UK Tariff.

Any staff involved in undertaking Customs Declarations to CDS will be required to understand the legislative and Tariff changes. This will necessitate training for staff involved in both import and export declarations.

In order to assist Trade in their move to CDS, it has been designed to work concurrently with CHIEF during a period of Dual Running, thus giving the opportunity for companies to migrate to CDS at a time which is most appropriate to their operational needs. The Trader together with their Software house needs to ensure that not only have their staff been adequately trained, but that all their systems are ready.

Whilst it is important that Trade move to CDS as early as possible, the first objective to both the trader and their Software Provider is that the CDS system has released the functionality required for their business. Secondly the Trader must be confident that all testing has been completed to their satisfaction with both their Software Supplier and CSPs.

BIFA and AFSS together with the major Trade Associations, are working in partnership with HMRC to ensure that the move to CDS will result in minimal disruption to the Trader and HMRC. Continuity of Service and Contingency planning are major elements to consider in planning the migration to CDS.

Links:

Guidance note for CDS import data requirements

CDS data requirements form

Posted on Thursday November 29, 2018

It was announced on the GOV.UK website that applications for ECMT permits, which can be obtained from the Driver Vehicle Standards Agency (DVSA), opened on the 26th November. BIFA suggest that members, who act as  commercial vehicle operators wanting to transport goods into EU-27 countries post-Brexit, to apply as soon as possible.  In addition to the EU Member Stares the permits are valid in the EEA countries (excluding Cyprus) plus 15 other countries. However, it should be noted that the UK Government has stated it does not expect that permits will be required for Northern Irish trucks wishing to drive to or through Ireland. 

Despite the recent progress in Brexit negotiations, including the signing of the draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the publication of the Political Declaration, setting out the Framework for the Future Relationship between the European Union and the United Kingdom,  a ‘No Deal’ exit from the European Union remains a possibility, the Government is still encouraging UK businesses to prepare for this eventuality. 

The application process for 2019’s annual permits opened on 26 November 2018 and will close at 23.59 hours on  Sunday 21 December 2018. With the expected allocation of permits likely to cover only 5% of the current vehicle journeys made between the UK and EU, operators are being urged to apply now or risk being unable to travel in the event of a ‘No Deal’ outcome.  The Department for Transport (DfT) expects the number of applications for ECMT permits will exceed the number of permits available. British operators will only have access to 984 annual permits for 2019, which will be restricted to the most modern vehicles (EURO VI), so the DVSA will allocate permits based on a certain set of criteria.

In addition to the application process the guidance sets out the fee structure of £10 per application plus £123.00 if you are allocated a permit, each permit being valid until 21st December 2019.  In addition, there is information regarding the rules for both using the permits, and for what they cannot be used for.  Also, there is guidance relating to the correct procedures relative to completing documentation prior to a journey and submitting the completed paperwork to the DVSA when it is completed.