low tariffs after brexit

HMRC outlines phased approach for Entry Summary Declarations

The government has announced plans to phase in for EU imports the pre-arrival forms known as Entry Summary Declarations, if the UK leaves the EU without a deal.

Officials on Monday held a series of meetings with organisations who represent the haulage industry and handle a significant portion of the UK’s cross border trade, to confirm that from 29 March, the status quo will be temporarily maintained as they will not need to submit Entry Summary Declarations on imports for a period of six months.

Currently Entry Summary Declarations are not required when importing goods from the EU. They will continue to apply for trade from the rest of the world.

The measure is designed to give business more time to prepare for changes to EU-UK trade arrangements in the event that the UK leaves without a deal. This builds on the plans that Transitional Simplified Procedures (TSP) can be used for at least 15 months for customs declarations.

Financial Secretary to the Treasury Mel Stride MP said:

We’ve listened to businesses and are responding to their concerns.

We have been adamant that in the event of no deal, trade must continue at our borders, and we will continue to make our borders secure.

Maintaining continuity with the current system for the first six months and phasing Entry Summary Declarations in will ensure we deliver on that promise.

The new rules only apply to goods coming from the EU, and will maintain the status quo for carriers. Importers will still be required to submit import declarations for customs purposes – which are not the same as Entry Summary Declarations. HMRC announced ways of making these import declarations easier, through Transitional Simplified Procedures on 4 February 2019.

After the six-month transitional period, carriers will be legally responsible for ensuring Entry Summary Declarations are submitted pre-arrival to HMRC at the time specified by mode of transport.

The measure will not change the UK’s commitment to ensuring our borders remain secure in the event of a no deal and Border Force will continue to carry out intelligence-led checks. A Readiness Task Force in preparation for EU Exit is being recruited and Border Force is on track to increase staff headcount by 900 at the end of March 2019.

The UK’s approach to dangerous goods coming into the UK is not affected.

Pauline Bastidon, FTA’s Head of Global & European Policy, said:

“Today’s HMRC announcement on the temporary waiver of security and safety declarations for post-Brexit logistics movements is a great response to FTA’s campaigning over the past two years, and a positive step towards minimising disruptions on trade between the UK and EU and integrated supply chains after Brexit. However, it is imperative that the UK government maintains pressure on the EU to ensure that a similar waiver is adopted by the EU. To ensure that Britain can keep trading efficiently, it is vital that the European Commission and UK agree a longer term, more sustainable arrangement to remain in the same security zone, which would make safety and security declarations for UK-EU trade irrelevant.  Above all, it is vital that the UK’s supply chain remains as frictionless as possible – British business needs to be confident that goods and materials will continue to transit the nation’s borders as swiftly and efficiently as possible.

Sources: www.gov.uk / fta.co.uk

maersk

Sea Machines gains financial support to develop autonomous containerships

The prospect of unmanned container vessels serving global container supply chains has taken another step forward.

Sea Machines Robotics, a US developer of autonomous vessels, announced it had raised $10m from venture capital funds.

The investors were led by Accomplice VC and Eniac Ventures, but also include Toyota AI Ventures, TechNexus Venture Collaborative, NextGen VP, Geekdom Fund, Launch Capital and LDV Capital, and brings Sea Machines’ external funding up to $12.5m.

Boston-headquartered Sea Machines, which in April signed up Maersk Line to pilot its “perception and situational awareness technology aboard one of the company’s new-build Winter Palace ice-class containerships”, said it would use the new funds to grow its R&D and engineering teams as well as expand its sales efforts globally.

“We are creating the technology that propels the future of the marine industries and this investment enables us to double down on our commitment to building advanced command and control products that make the industry more capable, productive and profitable,” said Michael Gordon Johnson, founder and chief executive.

Jim Adler, founding managing director of Toyota AI Ventures, added: “We believe autonomous mobility can help improve people’s lives and create new capabilities – whether on land, in the air or at sea.

“Sea Machines’ autonomous technology and advanced perception systems can reduce costs, improve efficiency and enhance safety in the multi-billion dollar commercial shipping industry. This marks our first investment in the maritime industry, and we’re excited to embark on this journey.”

Vic Singh, founding general partner at Eniac Ventures, added: “The level of traction Sea Machines has from the global maritime industry is a tell-tale sign that the industry is the next frontier for autonomy.”

And Michael Rodey, senior manager at AP Møller-Maersk, said: “I think this investment sends a strong signal on the types of technologies that will come to define the maritime industry in the future.”

Source: The Loadstar

milan Maersk

The future of box shipping: less vessel cascading and fewer liner alliances?

Vessel cascading has been an ever-present feature of container shipping since liner executives first understood the benefits of economies of scale and began the box ship capacity arms race.

But over the next few years, there are likely to be only a few arenas where it will take place, according to Drewry Maritime Advisors’ director of ports, Neil Davidson.

Mr Davidson also suggested that, with an outstanding orderbook of some 130 vessels of over 10,000 teu still to be delivered, the main areas that cascading could take place would be the North American Pacific coast.

There the maximum vessel size is expected to grow from 14,500 teu to 18,000 teu, and the west Mediterranean, where it is forecast to grow from 14,000-16,000 teu to the 18,000-22,000 teu range.

Other trades where smaller vessels continue to be deployed – for example, the Australian trades this year saw its first 8,600 teu vessel call – would continue to be constrained by port dimensions, he said.

However, he suggested that the most recent increases in vessel size – the largest ships growing from the 18,000 teu Maersk Triple-E, to the 23,5000 teu vessels currently under construction – could well be the last box ship size increases for a considerable period.

“Our analysis is based on the orderbook, and although there are some units of 23,500 teu under construction, in terms of length and beam, they are not dimensionally larger.

“In fact, the impact of ULCVs on the wider supply chain suggests that the maximum vessel size may have be to large,” he added.

He was referring the widespread belief that one of the causes of the recurrent port congestion over the past few years has been the introduction of ULCVs and the sheer number of containers they can unload in a single call. This has put huge pressure on hinterland supply chains.

Mr Davidson added: “There are also clear commercial reasons for not going bigger – service frequency has had to be reduced to fill those ships, and there has been an impact on market share, and carriers have needed to enter into alliances to maintain market share and fill those ships.” And he believes this this could have a deep impact on how shipping alliances are formed in the future.

“In the long-term, the most interesting thing is that, if we have reached the ceiling of maximum vessel size, and if container volumes in the market continue to grow, operators that currently need alliance partners to help fill their vessels may well find themselves able to fill them on their own and we may begin to see the break-up of alliances,” he said.

Source: The Loadstar

christmas

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maersk

MSC, CMA CGM Present Plans for Fuel Surcharges

Following the footsteps of Maersk Line, the Swiss and French container shipping giants MSC and CMA CGM have unveiled their intention to introduce a new fuel adjustment surcharge ahead of the 2020 sulphur cap.

Mediterranean Shipping Company plans to introduce a new Global Fuel Surcharge as of January 1, 2019. The company expects its operating costs to increase significantly in preparation for the 2020 low-sulphur fuel regime.

MSC said that the cost of the various changes to the fleet and its fuel supply is in excess of USD 2 billion per year, the same as with Maersk Line.

“The new MSC Global Fuel Surcharge will replace existing bunker surcharge mechanisms and will reflect a combination of fuel prices at bunkering ports around the world and specific line costs such as transit times, fuel efficiency and other trade-related factors.”

Separately, CMA CGM informed that it decided to favor the use of 0.5% fuel oil for its fleet, and to invest significantly by using LNG to power some of its future container ships, and by ordering several scrubbers for its ships.

The company said that all these measures represent a major additional cost estimated, based on current conditions, at an average of 160 USD / TEU. The additional cost will be taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis, CMA CGM explained.

“The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry. In line with its commitments, the group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges,” Mathieu Friedberg, Senior Vice President Commercial Agencies Network, said.

The new International Maritime Organization (IMO) Low Sulphur Regulation will be effective from 1 January 2020 and will require all shipping companies to reduce their sulphur emissions by 85%.

Sulphur content in the fuel used for international shipping will have to be limited globally to 0.5%, compared with the current standard of 3.5%, in order to minimize the emissions.

However, Shippers have joined forwarders in condemning Maersk’s plan, pointing out that as the charge is per box, those shipping west with higher charges will end up paying for more collectively than they need to, to compensate for empties returning east. As  a result, the most profitable routes will enjoy higher-than-average surcharges.

In addition, Maersk is introducing the scheme a year before the higher fuel prices come in.

“Asking customers to contribute to new environmental costs is to be expected, but this charge lacks transparency; no data is available to let customers work out how the charge has been calculated,” said James Hookham, secretary general  of the Global Shippers’ Forum.

“Given historical experiences with surcharges, shippers are naturally suspicious over something shipping lines say is ‘fair, transparent and clear’.

“GSF will be taking this piece of financial engineering apart piece by piece, as we suspect this has more to do with rate restoration than environmental conservation.”

He added that Maersk could have chosen to fit scrubbers on all its ships, triggering a one-off expense, as some of its rivals are doing.

“For shippers, this is a better option than paying sulphur surcharges indefinitely.”

But he added that the unilateral manner in which Maersk introduced the change had also upset its customers.

“What also disappoints shippers is the lack of negotiation about the timing and the structure of the charge. It would have been better if Maersk had discussed its plans with individual customers in the course of confidential contract reviews, rather than just publishing something that wouldn’t be out of place in the puzzles section of your daily newspaper.

“We suspect that other shipping lines will be tempted to follow suit, but it would surely be of concern to competition authorities around the world if the same formula were to be used by other shipping lines, especially in the same Alliance.

“GSF would encourage Maersk to consult with customers and reconsider the strategy. These new charges may be all about low-sulphur fuel, but they still stink to us!”

Last week forwarders also revealed their anger over the “very major increases”.

“Rises of this magnitude are unjustified, and could be construed as blatant profiteering by shipping lines determined to exploit the situation,” said BIFA director general Robert Keen.

Source: The Loadstar / World Maritime News

port of felixstowe

Felixstowe productivity improving after implementation of new operating system

The Port of Felixstowe has stated that vessel and rail loading performance remain below target but no new issues have emerged as it works on resolving slow loading and delays caused by problems with its terminal operating system (TOS).

Issues first surfaced last month when the port introduced the TOS but it confirmed in the week beginning Monday 2 July that overall quayside volume was 66,000 teus and productivity was 80% of pre go-live levels. Felixstowe added that nearly 5,000 containers were loaded to rail and over 21,000 road hauliers serviced, while average haulier turnaround times have stabilised at 46 minutes.

Confirming there has been no additional issues since its last report on 5 July and stressing its continued work to improve productivity, the port stated: “Vessel and rail loading performance remain below the targets we need to achieve. We are working to reduce further the number of rail misses and we recognise that performance in all areas is not good enough.”

Improvement initiatives

It said several initiatives have been implemented to improve yard operations and productivity, which are expected to improve vessel, rail and road loading cycles and times.

A new area for empty storage will be opened behind berths eight and nine on 14 July. The new yard will provide capacity for an additional 4,200 teus of empty storage and is designed to facilitate quicker loading of empties to outbound vessels.

“We are continuing to work closely with our shipping line customers to minimise disruption,” the port stated.

Source: Port Strategy

international shipping centre

Shanghai plan to become an International Shipping Centre by 2020

Shanghai are working towards becoming an International Shipping Centre by 2020. To achieve the target and raise the city’s core competitiveness, the local government has drafted a three-year plan.

One goal of the three-year plan is to further consolidate Shanghai’s status as an international shipping hub. In the Chinese mainland, the Port of Shanghai boasts the largest number of container shipping routes, the highest frequency of route operations and the widest network coverage. In 2017, cargo throughput rose 6.9 percent from 2016 to 751 million tons at the Port of Shanghai, while container throughput increased 8.3 percent year-on-year to 40.23 million TEUs, ranking first in the world for the eighth consecutive year.

At the same time, leveraging on the golden waterway along the Yangtze River, the Port of Shanghai is developing its waterway-waterway transport business and proceeding with its renovation project on high-grade inland waterways at a steady pace. Container lines connecting all ports along the Yangtze River are operated on a regular basis and breakthroughs have been made in the two-way navigation for large vessels along the deep-water passage at the mouth of the Yangtze River.

In 2017, waterway-waterway transport accounted for 46.7 percent of total container transfer. Among all, 10.58 million TEUs were handled along the Yangtze River, accounting for 56.4 percent of the total waterway-waterway transport and 26.3 percent of total throughput at the Port of Shanghai.

Another goal of the plan is to generally establish Shanghai’s status as an Asian gateway aviation hub. Shanghai has successfully built a “one city, two airports” system, the first of its kind in the country, whose scale and layout are compatible with their international counterparts.

The city’s two international airports, namely Pudong and Hongqiao, have a total of four terminals, six runways, 1.47 million square meters’ cargo area and an airport bonded zone, with a total designed capacity for 100 million passengers and 5.2 million tons of cargoes. Over 100 airlines have launched services to the city’s airports, which are now connected to 297 cities worldwide.

Transit centers of the three largest logistics companies are all under operation in the international cargo mail and courier service zones at the Pudong airport. In 2017, passenger throughput at Shanghai airports reached 112 million, ranking fourth around the globe. Cargo mail throughput at Pudong airport maintained its No.3 global ranking for the 10th consecutive year. Throughput of international passengers and cargo mail at Pudong airport accounted for one-third and half of the country’s total, respectively, making it the No.1 gateway in the Chinese mainland.

The third aim is to continuously improve Shanghai’s function of modern shipping services. A cluster of shipping service areas such as Waigaoqiao, Yangshan-Lingang, North Bund, Wusongkou, Hongqiao, and Pudong Airport, among which the shipping industry in Hongkou district ranks first in terms of its contribution to the district’s overall financial income, accounting for 19 percent of Hongkou’s public financial income.

A group of international and national shipping functional organizations have gathered in Shanghai. The world’s top 20 liner companies, the top four cruise companies, nine global shipping classification societies, and major State-owned and privately owned shipping companies have all set up headquarters or branches in Shanghai.

Shanghai Shipping Exchange has become the national container liner freight registration center and the China Ship Information Center. The container freight index has become a benchmark for the global container shipping market. The capability of maritime legal services has been continuously improved. The number of maritime arbitration cases in Shanghai accounts for 90 percent of the country’s total number of cases. Shanghai Maritime Court is striving to build an international maritime judicial center.

Source: Hellenic Shipping News / Global Times

China flag

China to ban the recycling of international ships

China plans to stop allowing the recycling of international ships at its yards as of the beginning of 2019.

The decision comes on the back of China’s efforts to crack down on polluter and waste producing industries in the country, which have seen many yards denied their ship recycling licenses.

The Chinese-flagged ships will be allowed to continue to be dismantled at Chinese yards, however, the Government of China will no longer provide subsidies for the branch, as decided last year. Due to such a turn in policy, local owners are likely to look elsewhere to retire their ships, including India.

“In view of this, owners will have to succumb to the fact that, with the exception of Turkey, the H.K Convention approved recycling yards in Alang will have to be taken more seriously following the incredible improvements that have been made at these yards over many years and the fact that these yards now can only offer owners the only alternative at this current time for green recycling,” Clarksons Platou Shipbroking said.

Two years ago, industry leader Maersk committed to investing in Alang yards and boosting their operational standards to comply with the company’s requirements.

Chief Executive Officer of  A.P. Møller – Mærsk A/S, Søren Skou, said recently that some yards in Alang, India, are performing at the same level or better than yards in China and Turkey, “which used to be the only options for economically viable and responsible ship recycling. “

Explaining its approach, Maersk said that the company helps the yards to upgrade their practices while contractually requiring full implementation of its standards controlled by on-site supervision throughout the process as well as quarterly audits by third parties.

Even though the situation is far from perfect, especially when it comes to health hazards at the shipbreaking yards in Alang, Maersk believes that helping the yards to improve their standards is an opportunity to change the industry for the better.

However, for a more sustainable progress to be made more shipowners need to become involved.

From a total of 206 ships, which were broken in the first quarter of 2018, 152 ships were sold to the beaches of South Asia for breaking, according to NGO Shipbreaking Platform.

Despite a considerable improvement made by some shipbreakers, a great majority of south Asian yards are notorious for their poor environmental and healthy and safety practices.

It is quite common for workers to suffer serious injuries or even get killed due to exposure to various types of risks ranging from falling objects to intoxication.

So far this year, 10 workers have lost their lives and 2 workers have been severely injured when breaking ships in Chittagong, Bangladesh. Another two workers were reported dead after an accident at a shipbreaking yard in Alang, India, data from NGO Shipbreaking Platform shows.

Source: World Maritime News

Heathrow Cargo

Record breaking figures for Heathrow

Freight travelling through Heathrow reached record levels for the start of the year, as over 133,000 tonnes made its way through the airport in January, with export volumes growing by 10.6%.

The top destinations for cargo growth were the US (1,214t), Spain (1,070t) and China (966t).

Heathrow CEO John Holland-Kaye said:

“Heathrow is off to a flying start, with record passenger numbers and cargo volumes and the start of our public consultation on the third runway.  Heathrow expansion will provide the global trading routes to super-charge Britain’s economy as we leave the EU.”

Heathrow has now launched one of the largest public planning consultations in the country’s history – the next milestone in the airport’s plans for expansion. The 10-week consultation offers the public the opportunity to shape the airport’s plans, enabling Heathrow to deliver the benefits of expansion while the keeping commitments made to local communities.

Heathrow remains the UK’s busiest port by value with over £100bn of goods travelling through the airport each year.

calm sea

Calmer seas for world Shipping in 2018

The 2018 marine forecast for transpacific and other major shipping trade routes notes that full recovery depends on a number of political, economic and technological factors.

China is also a concern.  “I know analysts have been harping on about it for years,” said Transport Intelligence Ltd. economist David Buckby, “but I think given what the Chinese government has said following the 19th [Communist] Party congress – that it will be switching focus from meeting long-run economic growth targets to other objectives – coupled with recent comments on trying to manage down debt, there is a real chance that Chinese growth will stutter.”

Buckby said the slowdown might not occur in 2018, but it will likely happen over the next few years.

“As the linchpin of so many global supply chains, what affects China is going to impact the rest of the world. I don’t know exactly when that’s coming, but when it does, I think it will adversely impact global port volumes quite significantly.”

McKinsey & Co.’s Container Shipping: The Next 50 Years also points to warning signs about China’s retooled economic development model. It estimates that the swing away from exports of goods to a model based on consumption and services has coincided with a drop in China’s real gross domestic product to between 6% and 7% from more than 10%.

Asia, and China especially, are major containerised-shipping drivers. Asia accounted for 64% of the world’s container throughput in 2016, and McKinsey notes that China imported and exported 52 million 20-foot equivalent units (TEUs) in 2015 compared with 13 million in 2000. It also maintained that China’s dramatic growth and the resultant boom in container trade over the past three decades is unlikely to be repeated elsewhere in the world.

But John Murnane, a partner in McKinsey’s travel, transport and logistics practice, noted in an email response to Business in Vancouver that in the near term, continued growth in container-shipping demand is likely.

“The U.S. and Canada continue to grow strongly, and volumes in 2017 outpaced expectations. This is good news for all ports and terminals. We expect 2018 to continue this strong volume growth.”

Oxford Economics agrees. The U.K.-based economic research company raised its global GDP growth forecast to 3.2% in 2018 from 2.9% in 2017 based on what it sees as a continuing strong performance of the world economy and positive “omens for 2018.” Its December 4 global outlook research briefing pointed to four key reasons for that optimism: strong trade growth, low inflation, robust emerging markets and resilience to political uncertainty.

In a November brief, it also revised its world trade forecast up 0.5 percentage points to 4.2%.

Oxford Economics’ forecast for Canada predicts that exports will rise 2.9% in 2017 and 4% in 2018. It sees imports up 3.7% in 2017 and 2.4% in 2018, but Canada’s GDP growth slipping to 2.1% in 2018 from 3% in 2017.

The International Monetary Fund’s World Economic Outlook, meanwhile, projects global economic growth of 3.6% for 2017 and 3.7% in 2018.

In its 2017 nine-month financials, Hapag-Lloyd (ETR:HLAG), the world’s fifth-largest ocean container company, noted that global container-shipping volume from 2018 through to 2021 is projected to increase between 4.8% and 5.1%.

The United Nations Conference on Trade and Development’s Review of Maritime Transport 2017, meanwhile, pointed to CETA and the economic partnership agreement concluded between Japan and the EU in July as positive developments for global trade and shipping. It added that the growth of cross-border e-commerce could also drive long-term container-shipping demand.

However, it noted that a sustained recovery will require a strong commitment to “coherent and co-ordinated multilateral policies.” It also red-flagged the growing cybersecurity threats to world shipping supply chains.

While Buckby agreed that CETA will benefit port volumes, he doubted that it would significantly increase cargo through Vancouver and other Canadian ports.

“The dirty secret of many free-trade deals is that they don’t tend to have a substantial economic impact, especially if they just address tariffs, which tend to be low anyway, and don’t focus much on breaking down non-tariff barriers.”

Buckby added that port volumes would drop if NAFTA collapses.“And even if it is successfully renegotiated, supply chains still face disruption, thanks to possible changes to rules of origin.”

The newly widened Panama Canal has also opened the way for larger transpacific ships to reach East Coast ports directly. Infrastructure and operations in those ports consequently face similar pressures.

Port productivity suffers because a mega-container ship can take up to five days to unload. “Some ports are rising to the challenge and investing, but smaller ports and constrained ports risk losing some mainline services.”

Source: Hellenic Shipping News