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Monday, 29 April 2019
A DATA-sharing initiative is under way to monitor perishable shipments on trade lanes from Latin America to Europe, and from the USA to the Middle East.
Cool Chain Association (CCA) members are participating in a bid to improve supply chain management and reduce food loss.
The pilot involves tracking shipments of commodities such as avocados and berries from grower to consignee, with all members of the supply chain sharing data to identify ‘temperature excursions’ and ‘pinch points’ and working together to find solutions.
The data will be analysed and the results made available to the industry to demonstrate how collaboration can tangibly improve the cool supply chain.
Initial results will be discussed at the CCA’s Global Perishables event at Fresh Park Venlo, The Netherlands, 14-15 May 2019.
“As we move along the supply chain, we will use the information in a proactive way so that everyone within the value chain can adjust their procedures to improve the cool chain together,” said Eric Mauroux, (pictured) global head of Perishables at Air France KLM Martinair Cargo and the CCA treasurer.
“We all have pieces of information but there is no platform so far for sharing - yet data sharing not only helps us improve but also helps create value.”
Growers and importers also are taking part to track the consignments.
“The data sharing will be based on information from recorders in the shipments and we will have full coverage from the producer to the importer so that we can reconcile the temperature curve with the time line of handling,” said Mauroux.
Three month study
“You can spend hours writing processes, but when it comes to making it happen on the ground, the best way to assess if it is working is looking at time, temperature, and tolerance.
“Moving forward, we can test and suggest the platforms on which data is shared.”
The shipments will be monitored over a period of three months to give a sizeable body of data, which will be analysed to provide ideas for collaborative work flows to improve the cool chain.
The CCA is focused on reducing wastage and improving the quality, efficiency and value of the temperature sensitive supply chain and has already worked on templates for global standards and certification projects for both perishables and pharmaceuticals.
“With a third of the world’s food going to waste, it is important that from grower to consumer, we all contribute to taking action,” said Stavros Evangelakakis, global product manager, Healthcare and Perishables, Cargolux.
“The freight industry can do its part, ensuring proper handling, and respecting temperature during storage, build up, and transportation.
“We can create value and have an impact on shelf life.”
The CCA holds two events a year, one focused on perishables, which this year takes place in the Netherlands, and one on pharmaceuticals, which this year takes place in Paris, France, 24-25 September.
To attend the events or joining the Cool Chain Association, visit http://coolchain.org/
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Monday, 29 April 2019
THE AIRFREIGHT Institute (AFI) of the International Federation of Freight Forwarders Associations (FIATA) has reached a milestone – 50 years representing the interests of airfreight forwarders world wide.
AFI has come a long way since its founding in 1969 and so has the industry. AFI held its first meeting on 17 June 1970, the same year the B747 ‘Jumbo jet’ made its first commercial flight.
While only 540 747s remain in service today, AFI is still flying high and representing members’ interests.
FIATA president Babar Badat said: “In the past half century, AFI has been following the market development of air freight, addressing its members’ concerns and safeguarding the interests of air forwarders.”
Under the FIATA umbrella are the IATA FIATA Consultative Council, the IATA FIATA Governing Board, ICAO – FIATA DGR Training Program, currently in its eighth year, e-initiatives, safety/security issues, and the IATA FIATA Air Cargo Program (IFACP). The current IATA Cargo
Agency/Intermediary programs will be replaced soon by the new IATA-FIATA Air Cargo Program (IFACP) under the governance of IATA-FIATA Governance Board (IFGB). Once it is implemented, the Cargo Agency/Intermediary Program Rules will be suspended.
Stephen Morris, FIATA acting director general and the chair of AFI Keshav Tanna provided the following perspective on the role of AFI within FIATA and its success in representing its members interests when it comes to air freight.
Over the 50 years of FIATA’s Air Freight Institute (AFI), there have been monumental shifts in freight handling, including the recent introduction of AI and predictive analytics for improved visibility, efficiency and security. How has it affected the role of the forwarder?
One major evolution that we have witnessed over the years is a clear shift in the role of the forwarder from the ‘agent’ of the airline to a ‘customer’ of the airline. This demanded not only a change in commercial dealings but also enhanced responsibilities, as the erstwhile agent now stepped into the shoes of a virtual ‘shipper’.
By doing so, the forwarders took on more accountability in terms of security and transparency of airfreight shipments. The forwarder assumed increased responsibilities not only towards the airlines in terms of security and transparency, but also towards his shippers, who were now his direct customers, rather than that of the airline. Liability regimes changed in such instances, as did the commercials.
What are some of the major achievements of the AFI?
One of the major projects AFI currently is working on is the IATA FIATA Air Cargo Program.
Under the new environment where the agent/forwarder acts as a customer of the airline, it was seen to be appropriate that there be one single Global program, rather than the legacy agency programs which are rather fragmented and governed differently in various parts of the world. This is still under discussion.
How important is reducing shipment idle times?
It is a well known fact that airfreight spends more than 90 per cent of its time on the ground even today.
AFI realises this and advocates to its constituents that digital transformation is one of the best ways to address this anomaly.
The difficulty is that different regions have different challenges and it becomes impossible to adopt a single or common outlook. Some advanced regions are further ahead than others in addressing dwell time issues, but we believe it is only a matter of time before this evolves within all regions as time is of the essence in airfreight.
What impact has the IoT, with sensors on shipments and so on, had on freight performance?
No doubt this is the way of things to come – as mentioned above, transparency and accountability in today’s electronic age is important to all industry partners. Our customers today demand not only performance standards, but also tracking capabilities via access to our internal systems. They insist on knowing the exact position and condition of their shipments from end to end and we are obliged to provide this to them. Technology will continue to be the key driver of the logistics industry and automated processes will play a key role in the supply chain business. The moving parts in the business of logistics are not just the goods, but also the data, which plays a dynamic role in today’s electronic environment.
Cargo distribution processes are moving away from traditional phone and paper procedures. Are changes taking place fast enough?
Not quite. Bookings are on line, AWB execution is on the e-platform for most airlines, tracking and tracing is available on line and many airlines offer rates on line - however, ours is a people business and there’s only so much one can do without a face on the other side – particularly if something goes wrong! E-trade will move ahead, no doubt, but it will definitely not all be about robotics. The human touch will always be important.
How has cybercrime impacted freight delivery and what is being done to combat its growth?
There have been many cyber-related incidents reported in the past five years, with a small number of very high-profile cases within the logistics and freight forwarding sector.
Cyber incidents vary from unsophisticated fraud through ransomware attacks to targeted attacks on specific IT infrastructure. Businesses in the 21st Century are heavily reliant on their IT infrastructure. Many personnel have never known the former manual operation and so are entirely reliant upon the automation and efficiencies that IT infrastructure brings. The logistics and freight forwarding sector is a potentially vulnerable target given its service-based global nature and reliance on IT systems.
Organisations involved in freight delivery should adopt general prevention measures. This can be done by implementing layers of defence, starting with the outermost layer of physical security, followed by management-level procedures and policies, firewalls and architecture, computer policies, account management, security updates and antivirus solutions.
Examples of prevention measures that should be adopted:
• Operating a least-privileged principle, where information and access is limited to a need-to-know basis.
• Employing network-hardening measures, ensuring patch management is adequate and pro-actively reviewed.
• Employing segregation and protocol-aware filtering techniques to protect against cyber threats that might affect critical systems.
• Employing a sound removable device (USBs, laptops) policy with provisions to ensure all USBs are encrypted and tested for viruses prior to being used with other devices.
• Developing business continuity plans, identifying key personnel and establishing processes from both technical and commercial perspectives to prevent the negative impact of a cyber attack from further expanding.
• Organising frequent awareness briefings and training programs to educate all employees on best practice. These can cover installation and maintenance software while avoiding infection and propagation, safeguarding user information and the treatment of cyber physical threats such as the presence of any third party.
• Vetting third-party providers to ensure cyber security compliance.
What is FIATA’s major concern going forward?
We are quite convinced that the forwarder is not really going anywhere, at least in the near future. As mentioned, ours is a people business and our customers wish to speak to us, so there is no real concern in terms of our continued existence. The digital transformation in our industry, however, does pose challenges. We need to keep pace with it, because if we are not geared up, we could lose out.
How do you see air freight growing over the next 50 years?
Airfreight is extremely volatile and a 50-year prediction is out of the question. On the one hand, we see the e-commerce boom and on the other, looming changes through 3D printing, drones and robotics.
The logistics business in the future is going to remind us of the Battle of the Universe in Star Wars – and it will be just as interesting to watch.
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Monday, 29 April 2019
LEGISLATION enacted last year in New Zealand introduced infringement notices to manage minor offending.
NZ Customs www.customs.govt.nz has until now taken a relaxed approach to allow the new arrangements to bed in.
But from the beginning of April, officers have issued notices that carry an instant fine of NZ$400 for an individual or NZ$800 for a business. There are 70 potential offences, all outlined on the service’s web site.
To issue a notice a Customs officer needs to have reasonable grounds to believe an offence has been committed. There is scope for issuing a warning notice instead, if deemed appropriate.
These are strict liability offences, which means an individual or company has committed an offence even with no intention of doing so. There is no criminal conviction.
If a duty payer makes an error in an entry and there is a revenue implication for Customs, they will also be charged compensatory interest.
Recipients can pay the fee immediately or within 28 days. If no effort is made to pay, a reminder notice will be issued, giving a further 28 days’ leeway. When this period expires the fee will be referred to the Ministry of Justice for fines collection and court costs added.
The notice can also be disputed in writing, using forms available on the web site. Options are asking for the fine to be waived or requesting an internal hearing and/or court hearing.
Valuation rulings
Legislation in effect from late last year also introduced a valuation rulings service which NZ Customs is implementing.
Anthony Davis, its manager Trade Assurance, says valuation rulings help provide a level of assurance to businesses that they are compliant and, in some ways, are a safeguard to potential issues that could arise in future.
“A valuation ruling doesn’t mean you’re less likely to get audited as part of Customs’ standard process. However, if you have relied on a ruling when valuing imported goods, the potential financial impact resulting from such Customs activity is greatly reduced.
“As this is a new service, we’re more than happy to have a discussion in the first instance to explain the benefits and process. Obtaining a valuation ruling is a cost-recovered service, but for the first two years this is at a rate of 80 per cent recovery.”
A valuation ruling is a NZ Customs decision - based on information provided by the importer - that explains which method should be used to establish the Customs value of goods or how a specific aspect of the available valuation methods should be interpreted and applied.
It is a binding legal document that includes a summary and a detailed report on how the decision was reached. A ruling is generally valid for three years and will be honoured at all ports of entry within New Zealand.
As the ruling is binding on NZ Customs as well as the importer, any debt due to the crown, or penalty, or seizure of goods cannot be imposed if an importer has relied on a ruling (provided all the relevant facts were disclosed with the application).
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Monday, 29 April 2019
FACED with the prospect of a no deal Brexit on 12 April 2019, the EU and the UK put into place a compromise that is referred to as a ‘flextension’ because it delays Brexit until 31 October 2019, subject to a number of conditions.
The first condition is that the UK must take part in the European Parliamentary elections on 23 to 26 May 2019 if a Brexit deal is not agreed by the UK parliament and the EU before the European elections cutoff date. Also, if the UK does not participate in the European elections, then a no-deal Brexit will take place on 1 June 2019.
Another condition is that the EU will review the UK’s Brexit negotiations progress at the European Council summit in Brussels on 20 June 2019. Presumably if the EU believes that the UK has not engaged in meaningful negotiations, it could declare the flextension to be over and mandate an earlier (than October 31) no-deal Brexit.
Options but no certainty
However, the agreement (such as it is) has not brought any certainty as to the basis on which Brexit may be achieved, which may only continue the confusion for those affected whether in the EU, the UK or elsewhere in the world.
There are a number of possible outcomes including:
- An agreement is reached on a deal allowing Britain to leave before 31 October.
- There is no agreement and the UK would, again, face a no-deal Brexit on 31 October. Usefully, the BBC has set out a number of those outcomes in a comprehensive article (with diagrams) foundat https://www.bbc.com/news/uk-politics-46393399
Whichever outcome is achieved (and there may be other alternatives yet to be developed), there currently is little more than a sense of relief that the early deadlines have been avoided. Any positive outcome will still require the parties to overcome multiple issues (the Irish border, UK prime minister Theresa May’s ‘red lines’ including the Customs union and free movement of people) and it is difficult to see how the fractured political landscape in the UK will deliver a positive outcome even with the deadline extension.
If there is an agreement, then it will probably require a different deal to that previously negotiated by the UK with the EU (a deal which has already been rejected by the UK Parliament on a number of occasions). That may lead to a further referendum in the UK or even elections for a new parliament with a clear mandate for a revised exit.
Of course, that only relates to the UK side of the equation. Any revision to the existing deal would also require the approval of all 27 EU countries, many of which may want to give no more ground than previously was negotiated.
One certainty is that the delay will further delay Australia’s negotiations with the UK on a Free Trade Agreement (FTA), which is dependent on the UK’s departure from the EU. Although there is a comprehensive ‘scoping study’ in place, formal negotiations need to wait for Brexit. The UK also has been moving to complete FTAs with other partners (including Pacific nations Fiji and PNG) but otherwise it is some distance from replicating the 40 deals to which the EU is a party and to which the UK will lose access when it leaves the EU.
There could even be a total reversal, with the UK changing its position and seeking to stay in the EU. This may be possible, but presumably would only follow some other event in the UK such as a second referendum or an election.
Preparations among uncertainty
In large part, those involved in trade with the UK have no ability to influence the outcomes. In those circumstances, the best that parties can do is to prepare for the worst and hope for the best. Such preparations could include the following:
• Remain alert to developments, including steps taken by governments to address the issue for their importers and exporters. Some examples are as follows:
• The Australian Government has entered into agreements with the UK Government designed to ‘protect’ existing trade. One agreement replicates the existing EU-Australia Wine Agreement so that the UK Government will accept Australian labelling standards, certification procedures and winemaking practices.
• A second agreement is the new ‘Australia - Britain Mutual Recognition Agreement on Conformity Assessment’ that provides that a drug, car or medical device can be certified against British Standards before leaving Australia for export to Britain and vice versa. That allows pre-shipment testing and approval. New Zealand reportedly has a similar agreement.
• In the UK on 4 February 2019, the HMRC issued a letter to companies registered for VAT in the UK announcing ‘Transitional Simplified Procedures’ (TSP). The TSP will allow those companies to move goods into the UK from the EU with deferral of full documentation and payment of duty until the following month.
• Map out which goods being exported to the UK rely on EU standards or approvals as they may now require an entirely new approval regime. It will be important to ensure that whenever those border issues are resolved that compliance takes place as soon as possible.
• Carefully review material and advice being provided by Governments. For example, NZ has appointed a representative in the UK to deal with Brexit. Further, the UK, New Zealand and Australian Governments already provide significant guidance on their web sites.
• Move more goods now into the UK for stockpiling - although storage space in the UK is becoming more limited.
• Review agreements - would Brexit constitute a ‘Force Majeure’ to terminate or renegotiate existing agreements?
• Get good advice - in Australia, in the UK and the EU as to developments and what can be done to preserve the legal position and to facilitate trade. I am already working with a variety of colleagues overseas to assist where possible.
Remain calm
There is no question that the current impasse is not an ideal situation. The international supply chain relies on certainty and predictability and the move towards Brexit appears chaotic. Hopefully, some form of accommodation is achieved quickly even if that denies us some of the entertainment value of the UK Parliament.
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Monday, 29 April 2019
The Australian air cargo sector’s health is heavily dependent on economic wellbeing, both domestically and internationally, with cross-border trade having a huge effect.
So it is pleasing that Austrade www.austrade.gov.au is able to point to a report from a respected UK-based research company that indicates Australia is on course to celebrate 30 years of growth.
The report, from researchers at Oxford Economics www.oxfordeconomics.com, suggests that Australia’s economy will remain solid thanks to sound policy, labour mobility and, well, a sizeable dollop of good luck.
This means Australia is likely to outperform other major advanced economies, including the G7 group of industrialised countries.
Oxford Economics has offices around the world, including two in Australia.
Austrade’s Edmund Tang says the report endorses Austrade analysis, which shows that trade with China and Southeast Asia is supporting export growth in commodities, education, tourism and services.
Economist Tang is himself regarded as a leader in Australian trade research, including as editor of Austrade’s annual Why Australia benchmark report.
Gabriel Sterne, global head of macro research at Oxford Economics, says Australia’s 28 years of uninterrupted growth is changing economists’ view on the potential for mature economies to sustain healthy growth over multiple decades.
“Australia’s record-breaking expansion is a positive beacon for other advanced economies,” Sterne said.
Tang notes the International Monetary Fund www.imf.org shares the positive outlook: “In its latest assessment the IMF forecasts that Australia’s real GDP will grow by an average rate of 2.7 per cent per year until 2023, up from an average 2.6 per cent per year from 2014 to 2018.”
The latest Australian trade figures add further evidence.
Recent data from the Australian Bureau of Statistics www.abs.gov.au show the country registered a record A$4.8 billion monthly trade surplus for February 2019, highlighting the ongoing strength and competitiveness of Australia’s export sector.
The February surplus was up some A$450 million on the January surplus. The previous largest surplus - $4.6 billion – was in December 2016.
“Sterne says Australia’s growth is partly due to the country’s counter-cyclical fiscal policy. In 2009, the government stepped in with a massive infrastructure spending program, but has recently run surpluses in response to stronger growth,” Tang said.
“Sterne acknowledges warnings about a recession in Australia, given falling house prices and the potential impact on consumption.
“He argues, however, that Australia’s mature economy is better poised to responsibly manage household debt levels compared to many other developed economies,” observes Tang.
“He notes that financial regulation strengthened by regular stress tests since the early 2000s has allowed for policy-cooled lending growth without causing bank stress.”
A second driver is the more flexible goods and labour markets.
“Another key structural feature is high, 1.7 per cent per year employment growth, which is more than twice the average for major advanced economies.”
As for good luck, the report points out that China’s role as a global shock absorber has disproportionately helped Australia.
Tang warns that the situation is not totally positive, however: “Oxford Economics warns that Australia may face some challenges: Its economists estimate a 25 per cent chance of a global recession within the next two years.
“In support of its view, the research institute says there is a potential weakening of China’s growth. This may impact global trade and slow the Australian economy.”
But in this event, notes Tang, the report remains confident of Australia’s prospects. “It estimates that global downside risks are lower than during previous shocks, including events such as the GFC and the Eurozone crisis.”
Bottom line from the report: ‘Australia could get dragged down by a global recession, but the most likely outcome is the expansion surviving a while longer.’