Archives For March 2013

Triple E - Picture courtesy: Mearsk

Triple E – Picture courtesy: Maersk

 

A TV channel is to broadcast a series of six programmes showing how the world’s largest vessels – Maersk Line’s 18,000teu Triple-E containerships were built.

Maersk has given the Discovery Channel access to every stage of the Triple-E build; from the design of the vessel’s unique hull to the construction of the enormous engines and propellers, from the environmental improvements and safety systems to the ship’s naming ceremony and maiden voyage on the Asia-Europe route.

The series will also focus on lives of some of the people involved, including the naval architect, the site team supervising the build and the captain as he prepares for the maiden voyage.

“The Triple-E is an exceptional ship, in terms of its size as well as its energy saving technology and design. We’re excited about these vessels and proud to have Discovery Channel as a partner for showing how it is built and the people and passion behind it,” says Morten Engelstoft, Chief Operating Officer, Maersk Line.

The World’s Largest Ship will air on Discovery Channel in November, but to save you waiting all that time, Maersk Line has made available a time lapse video of the building of the Triple-E, that consists of 50,000 photos taken over a three-month period. Click here to watch video clip!

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The coin is made of copper and silver and has a square hole in the center so it could be worn on a belt. Scientists say it was issued by Emperor Yongle of China who reigned from 1403-1425 during the Ming Dynasty (AP Photo/Courtesy The Field Museum, John Weinstein)

The coin is made of copper and silver and has a square hole in the center so it could be worn on a belt. Scientists say it was issued by Emperor Yongle of China who reigned from 1403-1425 during the Ming Dynasty (AP Photo/Courtesy The Field Museum, John Weinstein)

Scientists have found a rare, 600-year-old Chinese coin on the Kenyan island of Manda that rewrites the history books on international trading. Researchers say the copper coin, which has a square hole in the center so it could be worn on a belt, proves trade existed between China and eastern Africa decades before European explorers set sail. Scientists say it was issued by Emperor Yongle of China who reigned from 1403-1425 during the Ming Dynasty, and his name is written on the coin.

The island of Manda, off the northern coast of Kenya (marked with a red dot, below), was home to an advanced civilization from about 200AD to 1430AD, when it was abandoned and never inhabited again. Trade played an important role in the development of Manda, and this coin may show trade’s importance on the island dating back to much earlier than previously thought.

A joint expedition of scientists led by Chapurukha Kusimba of The Field Museum and Sloan Williams of the University of Illinois at Chicago found the  600-year-old Chinese coin on the Kenyan island of Manda. Scientists from Kenya, Pennsylvania and Ohio also participated in the expedition. They also found human remains and other artifacts predating the coin.

Manda in Kenya, now a popular holiday destination, was home to an advanced civilization from about 200AD to 1430AD, when it was abandoned and never inhabited again - Image by © Keith Levit/Design Pics/Corbis

Manda in Kenya, now a popular holiday destination, was home to an advanced civilization from about 200AD to 1430AD, when it was abandoned and never inhabited again – Image by © Keith Levit/Design Pics/Corbis

Emperor Yongle, who started construction of China’s Forbidden City, was interested in political and trade missions to the lands that ring the Indian Ocean and sent Admiral Zheng He, also known as Cheng Ho, to explore those shores. That relationship stopped soon after Emperor Yongle’s death when later Chinese rulers banned foreign expeditions, allowing European explorers to dominate the Age of Discovery and expand their countries’ empires, the researchers say.

The Portuguese were the first Europeans to explore the region of current-day Kenya, Vasco da Gama having visited Mombasa in 1498. The coast of East Africa was a valuable foothold in the eastern trade routes, and Mombasa was a key port for ivory. Modern European exploration of Kenya wasn’t initiated until 1844 when two German missionaries, Johan Ludwig Krapf and Joahnnes Rebmann ventured into the interior from Mombasa in an attempt to introduce Christianity.

The island of Manda, off the northern coast of Kenya, was home to an advanced civilization from about 200AD to 1430AD, when it was abandoned and never inhabited again. Trade played an important role in the development of Manda, and this coin may show trade’s importance on the island dating back to much earlier than previously thought. Source: dailymail.co.uk

e-Invoicing INTTRA

Rod Agona, Managing Director, Electronic Invoicing, INTTRA explains three reasons why it is time for ocean carriers and shippers to say goodbye to paper. This follows the recent announcement by IATA on the introduction of its eAWB initiative.

In a digital age where a delay of seconds or one human error can be the cause of lost revenue, wasted resources or unhappy customers, good technology becomes critical to run a business.

Twelve years after the ocean shipping industry adopted e-commerce tools that resulted in an average savings of $100,000 per year and hundreds of thousands of labor hours per week, the final step in the shipping process – invoicing and payment – are still catching up. Surprisingly, invoices are still largely processed by hand in the ocean shipping sector. Considered the most tedious and costly step in the shipping process, manual invoicing can take days to complete and is often riddled with disputes and errors. And the amount of time it takes to manage disputes is more than anyone is comfortable admitting – knowing each delayed payment impacts carrier cash flow and creates dissatisfied shipping customers.

With electronic invoicing (e-Invoicing), there is a potential 50-80 percent cost savings according to the E-Invoicing/E-Billing 2012 Report from the international e-billing firm, Billentis, and the payment process is significantly shortened with DSO (days sales outstanding) typically decreasing by up to 10 days. Error rates are also greatly reduced, and customer satisfaction increased.

Although e-Invoicing as a trend has picked up rapidly in government and commercial sectors in the past three years (growing at a rate of 20 percent last year, according to the Billentis report), many in the ocean shipping sector are just catching wind of the benefits. Popularity among players is expected to grow this year – both on the biller and payer sides. Three reasons for the industry’s recent e-Invoicing surge are:

1. Demand Is at a Record High

At least 81 percent of the world’s largest shippers are requesting electronic invoices from their carriers in 2013, says a 2012 global shipping study conducted by INTTRA, the world’s largest ocean shipping network. The demand to move away from paper invoicing has never been greater, with shippers claiming to be “ready now and actively seeking e-Invoicing from their business partners.”

2. Proven to Lower Costs and Speed Internal Operations

Shippers’ biggest complaints with paper invoicing are 1) managing disputes, 2) the time and costs required to process invoices, and 3) correcting invoice inaccuracies. e-Invoicing is proven to alleviate these concerns by streamlining the entire settlement process, improving accuracy, and reducing the costs and labor required to process manual invoices. Payers end up happier as a result, receiving faster and improved communications and lowering the true total cost of doing business. For carriers, e-Invoicing is proven to cut costs and improve cash flow and working capital – and investments are often gained back within six months.

Both shippers and carriers want a solution to better manage high-volume transactions. Imagine spending millions of dollars on a global SAP (or equivalent) rollout and still manually keying in a half-million invoices per year. There is a better way.

3. It May Soon Be Mandatory (if it isn’t already)

Shipping companies are trying to keep up with rapidly changing local and international trade regulations, and e-commerce shipping is the smart way to stay compliant. Countries like Mexico, Brazil, Norway, Sweden, Finland and Denmark have already made electronic invoicing mandatory for all business-to-government transactions. Most others in Europe, North America and Australia are increasingly adopting electronic invoicing due to its cost-saving benefits.

Companies that act today put themselves at a competitive advantage as they are able to put their savings back to work and redirect employees engaged in manual processing to higher value tasks.

Looking Forward – 2013 and Beyond

The tipping point for when a technology ‘best practice’ becomes a ‘must have’ is never clear-cut – until an industry struggles as much as ours has. Change is hard, but for an industry with few proven solutions to remove costs, e-Invoicing is a viable, must-have solution.

2013 is a critical year for the ocean shipping industry. It is expected to be a year of major change in the way carriers and shippers do business. Competition is growing fiercer, and the industry continues to consolidate. e-Invoicing is one way to cut costs and reallocate dollars to where they are needed most in today’s challenging environment. Source: Maritime-Executive.com

For information, visit http://www.inttra.com/e-invoicing.

warehousingThere is growing evidence that HM Revenue & Customs (HMRC) has begun a campaign to target warehouse keepers and hauliers who may unknowingly be handling excise goods on which the duty has yet to be paid.

And the United Kingdom Warehousing Association (UKWA) is warning that any company found guilty of storing goods on which duty is outstanding could face ‘financial ruin’ – even if the storage company was unaware that duty had not been paid.

“While HMRC has had the authority to assess anyone for duty on goods illegally diverted from bonded movements who was ‘aware or should reasonably have been aware’ of the diversion at any point in the supply chain since 2010, action has been spasmodic,” says Alan Powell of Alan Powell Associates, UKWA’s honorary adviser on Customs & Excise Matters.

“However,” he continues, “HMRC is deploying more officers to investigate excise goods supply chains. As a result, we are now increasingly seeing third party service providers, including hauliers, warehouse keepers and lessors of property, such as barns and outbuildings, being penalised by HMRC as a result of their involvement with businesses that have evaded duty on alcohol and have absconded – so called ‘missing traders’.”

Anyone found to have held or dealt in duty-unpaid excise goods, can be fined up to 100% of the duty evaded, as Alan Powell explains: “HMRC had been slow to apply what are called ‘excise wrong-doing penalties’ but are now vigorously applying them.  As a result, many small and medium companies are facing unexpected bills and penalties from HMRC of hundreds of thousands of pounds.”

Allan Powell continues: “In simple terms, if an organisation has been involved at any stage in the supply of goods that have been illicitly diverted from a bonded supply chain, that  organisation could be liable for duty – even if that organisation is not directly responsible for the diversion.

“Essentially, anyone handling duty-unpaid product is classed as being ‘contaminated’ within the supply chain and assessed for the duty.”

In one particular instance, a storage company is facing a duty bill alone for nearly £100,000 after HMRC inspectors found duty-unpaid alcohol stored at the company’s site.

“The storage company was simply unaware about the risks involved in handling loads of duty un-paid alcohol and the director of the company to whom they leased the space has disappeared,” says UKWA’s chief executive officer, Roger Williams.

The message from Alan Powell and UKWA is that if you offer third party logistical services of any kind, you must check what is being handled or stored – do not take storage requirements on face value.

Alan Powell says: “Always be wary and query the business need, checking out with HMRC if possible.  If in any doubt, do NOT become involved – it could end very badly.” Source: www.ukwa.org.uk.

Read a followup article by – UKWA :Don’t be fazed by HMRC move (Lloyds List)

NigerianCustoms-BadgeAs part of plans to consolidate on its modernisation efforts for eventual take-over from the service providers at the expiration of the extended contract by June 2013, the Nigeria Customs Service (NCS) says it has developed a web-based application to provide information and guidance for international trade business processors in the areas of import, export and transit trade.

The portal is a non-restrictive online medium and an intuitive and interactive platform for classifying goods, a statement from the Customs spokesman, Wale Adeniyi said yesterday. The portal was developed by the service’s technical partners, nominated officers as well as other stakeholders, it said.

Through the platform, trade processors are enabled to find exact Harmonized System Codes (HS Codes) required for related tariffs and duties. It is expected that the platform will enhance compliance by traders and avail them the required information on tariff, prohibited items as well as taxes/levies due for payment upon importation.

Adeniyi explained also that the application has been designed to boost trade facilitation by granting trade processors access to information from all related government agencies. “Guidelines and procedures for obtaining permits, licences and certificates of specified commodity and country of origin that a trade will require for business processing is available on the portal,”he said. He added that the portal further allows traders to convert currencies to exchange rates set by the Central Bank of Nigeria on a monthly basis, make payments and simulate tax. Source: The Daily Trust

ura-logo-fireworks-advertisingA goods-laden vehicle arrives at a Uganda border where a declaration is made for transit to another country. But after clearance by customs officials, it disappears before exiting and the goods are sold on the local market. This causes undue competition as such goods are often low priced. And if that status quo does not change, local industries are affected gradually. Although such practices have occurred in the past, the future is bright owing to the introduction of a system that can track the movement of goods and give real-time updates.

Costing $5.2m, the Electronic Cargo Tracking System (ECTS) has been introduced by URA to improve efficiency and reduce the cost of doing business. The government, World Bank and Trade Mark East Africa, a trade facilitation organization, have supported the project, which is expected to be ready for testing by the end of August, and be fully implemented by end of November. URA Commissioner General Allen Kagina and BSMART Technology boss Stephen Teang this week signed a memorandum of understanding regarding the plan. This was at the URA head office in Nakawa, Kampala.

Kagina, who referred to it as a “landmark initiative”, praised the fact that customs officers would have regular updates regarding merchandise. She also hailed the fact that the provider would train staff, giving them much-needed skills.

The system will facilitate trade through timely execution and cancellation of customs bond guarantees for cargo in transit, making the transit process faster, more efficient and secure. Furthermore, this will enhance trade facilitation and business competitiveness countrywide.

How it works – ECTS relies on a control centre and automatic devices. The devices are attached onto a truck and constantly give feedback to the team at the control centre. Among others, the feedback includes include location of a vehicle, speed and status of the container (truck tampered with or not). If the device gives information that is contrary to that declared earlier, for example, goods being dumped here instead of being exported, customs officials make a decision accordingly. The system will be pioneered on high-risk goods like sugar, wines and spirits, textiles, explosives, and cigarettes. Thereafter, it will be rolled out to other types of merchandise.

Advantages – The system enables parties like customs officials and transporters to receive fulltime and real-time updates. URA has over the years introduced initiatives such as One-Stop Border processes and 24-hour operations at the major entry/exit points but the business community has sometimes not realized the benefits due to the numerous unwarranted stopovers. ECTS makes this a thing of the past. Source: The Observer (Kampala)

To reap the benefits of its recent membership of BRICS, South African businesses are looking at gaining a competitive edge through achieving global-standard supply chain performance, according to Supply Chain Junction, Manhattan Associates' Geo Partner in South Africa.

To reap the benefits of its recent membership of BRICS, South African businesses are looking at gaining a competitive edge through achieving global-standard supply chain performance, according to Supply Chain Junction, Manhattan Associates‘ Geo Partner in South Africa.

To reap the benefits of its recent membership of BRICS, South African businesses are looking at gaining a competitive edge through achieving global-standard supply chain performance, reports Supply Chain Junction, Manhattan Associates’ Geo Partner in South Africa. Unlike many other countries, South Africa was cushioned from the full impact of the world financial crisis thanks to the strict pre-existing credit controls it had in place. There were some knock on affects from close trading economies but over the last 15 months South Africa has enjoyed a growth economy. The International Monetary Fund (IMF) say this group will account for 61 per cent of global growth in three years time.

While South Africa’s economy (£506.91bn GDP) is dwarfed by those of the original BRIC constituents, the country is seen as the gateway to the continent of Africa, which as a whole has an equivalent sized economy ($2,763bn GDP), a population of one billion and rich resources. This has all made it a valued investment region for China in particular.

However, there are many cultural, logistical and geographical challenges the further one travels North from South Africa towards the Sahara. As an example, while there is 24,487 km of rail track in South Africa, there is just 259 km in Uganda; there are 92 mobile phones per 100 people in South Africa but just two per 100 in Eritrea. However, there is a great deal of raw potential, especially in countries such as Angola and Nigeria.

Participation in BRICS will drive a new competitiveness for South Africa and a key factor will be developing world-class supply chain management. Unlike in Europe, the US and Australia, few supply chain directors in South Africa sit on the board, which makes it harder for them to demonstrate how effective management of the supply chain can deliver competitive advantage. But this is likely to change as companies realise that they must align their supply chain and business strategies. If the recession failed to drive home the need for this, then the presence of Chinese companies in Africa will create significant pressure to do so.

This was an observation of the 2011 Supply Chain Foresight survey, conducted by Frost & Sullivan, which annually samples the opinions of South African supply chain executives. It found that while over three quarters of the respondents feel that the supply chain and business strategies of their companies are aligned, less than a third felt that the supply chain and logistics operations are fully optimised. Businesses are looking at how to optimise their distribution networks through building new facilities, streamlining existing processes or collaboration between trading partners. This has seen a lot of current activity surrounding warehouse management systems, forecasting, planning, replenishment and collaboration technologies, in particular.

Two thirds of respondents are considering investment in technology to enable collaboration with service providers. With the recession claiming many key suppliers the environment is changing from one where major companies squeeze suppliers on cost to one where they adopt a more collaborative approach. Cost reduction was the focus of the past recession, but now the objective is to satisfy customer expectations and to deliver value. Just over half of respondents to the Supply Chain Foresight survey cited customer service as the top supply chain objective. Reducing waste and improving efficiency in the supply chain are the perennial shorter term challenges with companies looking for better forecasting and planning tools to bring down inventory and shorten lean times. One interesting aspect of South African supply chain technology is the large number of in-house designed legacy systems, which is a consequence of the country’s isolation during the times of Apartheid. A propensity towards in-house designed systems remains today.

In terms of industry sectors, retail dominates but it remains firmly entrenched in the traditional channels. While some retailers have online retail websites, online and multi-channel is by no means a significant part of the current retail picture. Internet use is still quite low compared to other countries there are 4.42 million internet users in a population of 49 million and this figure is expected to remain low for some time yet. A further obstacle to the expansion of online sales is a high crime rate which leads to security issues in delivering goods to customers.

Wholesale distribution is quite small in size and complexity so the supply chain challenges tend not to be too complicated. There remain companies that feel they have been reasonably successful – being self-sufficient – and want to maintain that approach, along with a general tendency to look within, when it comes to benchmarking supply chains. However, a growing number of companies in South Africa recognise that there are other organizations across the globe doing similar things, but perhaps, a lot more efficiently.

Supply chain managers within these businesses are evolving a mindset focused on global best practice and the means of achieving it. These South African companies want to be best in their class. By building knowledge, benchmarking and improving against those benchmarks the win for this retailer is a supply chain that gives competitive advantage. As in other countries, companies looking to benefit from external expertise and a reduction in their capital costs will often outsource their logistics to third party logistics (3PL) operators. South Africa has numerous small local players and a handful of large lead logistics providers who tend to drive innovation. It is a small but highly competitive market. Logistics infrastructure and skills shortage in the supply chain continue to be huge issues in South Africa. The Supply Chain Foresight survey found that to deal with the skills shortage, in almost all areas companies either expose employees to new jobs through rotation, or development programs, or mentoring. These are generally in-house driven schemes. South Africa is an emerging market that is growing fast and offers a tremendous wealth of opportunities. In fact, the country has a great many successful businesses, and while many talk about becoming world class, many have already achieved it. Source: Supply Chain Junction

2012 World's Container Ports With Most Potential (Mercator)

2012 World’s Container Ports With Most Potential (Mercator)

According to the Shanghai International Shipping Institute’s (SISI) ‘Global Port Development Report 2012’, rapid growth in throughput has been pushing Chinese ports up the global ranking in terms of development potential.

The report also revealed that throughput in China’s ports was stable, with a growth rate of around 3% to 10%, affected by the worsening economic environment, growth in international shipping and a decrease in trade volume.

But, with global economic, trade and shipping centres moving eastward, some small and medium sized ports have recorded double digit growth (over 20% in some cases). As a result, Chinese ports, including Hong Kong, have taken up five positions among SISI’s Top 10 2012 World’s Most Potential Container Ports, nine positions among the Top 20 global container ports and 13 positions among the Top 20 global ports in terms of cargo throughput.

The report says that European ports are likely to see a return in stability, with a limited growth of less than 3%, while American and African ports may see some growth in throughput following the slow recovery of international trade volume and stronger cargo handling capacity.

In 2013, the prospects for trade for the BRIC economies (Brazil, Russia, India and China) will diverge. While the BRIC economies have been at the forefront of emerging market growth for the past decade, weaker export demand from the developed world since 2012 is impacting the trade balances of each BRIC country, reports Euromonitor International.

The widening trade deficit for India in particular, the only BRIC member in which imports outstrip exports, is threatening the country’s growth prospects for the year. India’s trade deficit widened in 2012 to 10.3% of GDP, as high oil prices further increased the cost of the country’s imports, while export growth slowed, leading the imbalance to worsen. This is compared to 2.9% surplus in China, 9.9% surplus in Russia and a 0.9% surplus in Brazil in 2012.  Both Russia and Brazil’s exports are buoyed significantly by primary resources, such as oil and gas. Euromonitor International expects India’s trade deficit to widen to 12.3% in 2013.

GREENEARTH INDIA 3India’s situation is unique. The country has not posted an annual trade surplus since at least 1977, primarily due to two key factors. First of all the country is highly dependent on imports of energy to maintain the country’s energy consumption. For example, the country imports 75.2% of the crude oil that it consumes, as a result, in 2012, imports of mineral fuels accounted for 33.9% of the country’s import bill. The rising costs of fossil fuels after 2010, as well as the low levels of energy efficiency have exacerbated India’s trade deficit issues;

Secondly, the economy’s external sector remains comparatively small in comparison with the other BRIC economies. The Indian economy has maintained growth through rising domestic spending and a burgeoning services sector, which in 2012 made up 53.4% of the economy. As a result, India’s exports made up just 15.7% of the country’s GDP in 2012, compared to 25.3% in China and 27.2% in Russia, Brazil is the exception with exports making up just 10.8% of GDP in the year;

However, over the majority of the period studied, the trade deficit has been offset by capital accumulation in India from FDI inflows into the country. Since 2006, a rapid acceleration in imports has led to a much larger trade deficit, while the financial crisis of 2007-2008 has meant FDI flows have tightened across the world. The trade deficit is therefore, a growing burden for India, as capital is diverted from India’s economy to fund rising import costs.

Although there are challenges for India’s external sector in 2013, the economy has seen very high trade growth, the fastest of the BRIC economies. Between 2007 and 2012, exports increased by 103.6% in US$ terms, while imports increased by 123.2%. Growth will continue in 2013, with 15.2% increase in exports and a 22.2% increase in imports. The rapid growth is a result of a burgeoning middle class and the development of export industries in the country. The long term prospects for India remain bright as a result, as the growing population and continued economic development offer considerable opportunities for investment. However, the trade deficit will continue to drag on economic growth until investor confidence in India returns. Source: Euromonitor International

Trucks at Transnet Freight Rail's City Deep Terminal (Engineering News)

Trucks at Transnet Freight Rail’s City Deep Terminal (Engineering News)

Following up on last year’s meeting (click here!) of the minds, convened by the JCCI, a recent meeting in Johannesburg placed fresh emphasis on the dilemma which impending changes contemplated in Customs Draft Control Bill will have for the import and logistics industry in particular. The following report carried by Engineering News highlights trade’s concerns which are by no means light weight and should be addressed with some consideration before the Bills come into effect. Gauging from the content below, there is a clear disconnect between business and policy makers.

The closure of Johannesburg’s inland port seemed to be a “done deal” as Parliament deliberated the recently tabled Customs Control Bill that would leave the City Deep container depot invalid, Chamber of Commerce and Industry Johannesburg (JCCI) former president Patrick Corbin said on Friday.

The promulgation of the South African Revenue Services’ (Sars’) newly drafted Customs Control Bill, which, in conjunction with the Customs Duty Bill, would replace the current legislation governing customs operations, would have a far-reaching impact on the cost and efficiencies of doing business in South Africa and other fellow Southern African Customs Union (Sacu) countries, he added.

The Bill, which was the product of a three-year development process within the National Economic Development and Labour Council, declared that all imported goods be cleared and released at first port of entry. This was part of efforts by customs officials and government to root out any diversion and smuggling of goods, ensure greater control of goods moving across borders and eliminate risks to national security.

Speaking at the City Deep Forum, held at the JCCI’s offices in Johannesburg, Corbin noted, however, that City Deep had operated as an inland port for the past 35 years, easing the load on the country’s coastal ports, which were already strained to capacity. Despite customs officials assuring the chamber that the operations and facilities in City Deep/Kaserne would retain its licence as a container depot, he believed customs had failed to recognise the critical role City Deep had played in lowering the cost of business, easing the burden on South Africa’s ports and ensuring ease of movement of goods to neighbouring countries. As customs moved full responsibility of container clearances to the ports, port congestion, inefficiencies, shipping delays and costs would rise, and jobs would be lost and import rail volumes decreased, he noted.

Economist Mike Schussler added that the closure of the City Deep inland port operations would add costs, increase unreliability and induce “hassles”, as the Durban port did not have the capacity to handle the extra volumes and its productivity and efficiencies were “questionable” compared with other ports.

“The volume of containers going to overstay or being stopped for examination in City Deep [will] need to be handled by [the coastal] ports. If they can’t cope with the volume at the moment, how are they going to handle increased volumes,” Iprop director Dennis Trotter questioned. He noted that only the containers cleared 72 hours prior to arrival would be allocated to rail transport. Those not cleared three days before arrival would be pushed onto road transport to prevent blocking and delaying rail operations.

This, Schussler said, would also contribute – along with port tariffs and the cost of delays – to higher costs, as road transport was more expensive than rail.

He pointed out that South Africa was deemed third-highest globally in terms of transport pricing. It would also result in less rail capacity returning for export from Johannesburg, further leading to increased volumes moving by road from City Deep to Durban.

Sacu countries, such as Botswana, would also be burdened with higher costs as they relied on City Deep as an inland port. Trotter noted that the region would experience loss of revenue and resultant job losses. Over 50% of South Africa’s economy was located closer to Gauteng than the coastal ports. Johannesburg alone accounted for 34% of the economy, said Schussler, questioning the viability of removing the option of City Deep as a dry port.

However, unfazed by the impending regulations, Transnet continued to inject over R1-billion into expansion and development opportunities at City Deep/Kaserne. Corbin commented that Transnet had accepted the assurances from customs that “nothing would change and the boxes would still be able to move seamlessly once cleared.” The City of Johannesburg’s manager of transport planning Daisy Dwango said the State-owned freight group was ramping up to meet forecast demand of the City Deep/Kaserne depot.

The terminal’s capacity would be increased from the current 280 000 twenty-foot equivalent units (TEUs) a year, to 400 000 TEUs a year by 2016, increasing to 700 000 TEUs a year by 2019. Transnet aimed to eventually move to “overcapacity” of up to 1.2-million TEUs a year. Dwango said projections have indicated that by 2021, the City Deep/Kaserne terminals would handle between 900 000 and one-million TEUs a year. Source: Engineering News

sea_freight_trackingCargo traditionally sent by air is increasingly switching to sea as shippers capitalise on the mode’s lower transport costs – a trend expected to continue over the coming years.

Lloyds List reports that several leading freight forwarders reported in their full-year results that certain cargo types — particularly hi-tech and telecoms — switched from air freight to sea freight last year.

DHL Global Forwarding CEO Roger Crook said the switch was the result of a price difference of 10 times between the two modes of transport. He said: “Obviously many companies are under cost pressure and looking to reduce total supply chain costs. Therefore, they are buying and moving by ocean freight, and particularly it is happening in the technology sector.”

Panalpina chief operating officer Karl Weyeneth said he expected the trend to continue. “There is a maximum shift you can achieve, depending on what industry you are talking about,” he said.

“But I believe that now supply chains are used to working with more ocean freight, this impact will stay for at least a couple of years, until the economy has really recovered, then it will start to shift back again.”

“We really see this as an important factor in our market for the next two to three years.”

Kuehne+Nagel (KN) chief executive Reinhard Lange said the decision on whether cargo was suitable to be switched from air to sea partly came down to the weight of the shipment. He said that if two products had the same market value, but one weighed less than the other, the overall cost impact of flying was less for the lighter cargo because air cargo costs were based on weight. He said this explained why hi-tech products had transferred to ocean freight while lighter products, such as pharmaceuticals, had, in the main, continued to utilise air freight.

The forwarders said the impact of the switch from air to ocean freight was partly to blame for a decline in air freight volumes last year, while container volumes continued to grow. In its full-year results, Panalpina saw air freight volumes decline 6% last year while ocean freight volumes grew by the same amount. Meanwhile, DHL Global Forwarding’s air freight volumes slipped 5.3% in 2012 with ocean freight increasing 4.3%, while KN saw its air freight volumes grow by 2% while ocean freight increased 6% year on year. Source: LloydsList

freightStandardization of the format for the e-AWB is expected to accelerate the industry’s move toward paperless transportation. Before this, Leger says, carriers were confronted with signing hundreds or even thousands of separate bilateral agreements with individual forwarders. He went on to describe e-AWB “the biggest achievement in standard-setting in air freight in 20 years.”

Following a year-long development process culminating in three months of trials that involved 15 carriers and eight forwarders, the IATA/FIATA Consultative Council (IFCC) endorsed the multilateral e-AWB agreement in February with some minor amendments. IATA formally adopted the agreement as its new Resolution 672 at the 35th Cargo Services Conference (CSC/35) in Doha, immediately ahead of the World Cargo Symposium. Click Here! to view the new Resolution.

The agreement was this week filed with governments, from whom IATA is seeking expedited approval in 30 days. “We hope to go live before mid-year,” Leger says. “We see e-Freight as essential for the future competitiveness of air cargo, and the e-AWB is the cornerstone of e-Freight. Agreeing the multilateral e-AWB is a game changer, and should go a long way toward reaching our target of the 20 percent e-AWB adoption rate we have set as our target for 2013.”

While early adopters in the airline community, including Cathay Pacific, Singapore Airlines, Korean Air and Singapore Airlines, overcame the logistical obstacles, they commented that having to draft separate bilaterals with forwarders would prevent wider implementation and delay the e-Freight objective.

“The standard bilateral that we initially developed, which allowed forwarders to make their own amendments, still left the industry facing extra costs but rapidly proved the concept,” Leger says. “Cathay adopted it in 2011 and then, in the middle of last year, we started work on the multilateral agreement.

“There were long discussions between carriers and forwarders as we tried to come up with an acceptable formula. This did not concern technical or operational aspects, but was more to do with what the governing law should be. Each nationality wanted to follow its own jurisdiction and consensus was necessary.”

As soon as trials began in October, Leger says the participants could see the value of the multilateral agreement. IATA hopes it will acts as the springboard for its ultimate target of 100 percent conversion to e-AWB by 2015. Source: Air Cargo World News

black-rhino-2Rampant poaching in Africa is a cause of major concern to wildlife organizations. Many rhinos are killed every year mainly for Asian markets. In Vietnam, rhino horn is believed to be miraculous, able to heal cancer.

A total of 158 rhino have been poached since the beginning of the year, according to the South African Department of Environmental Affairs. Over 630 rhino were killed by poachers in South Africa during 2012.

If the killing of rhinos continues to increase, African wild rhinos could disappear within a few years. The best protected rhinos live in Kenya. Four of them, known as northern white rhinos, are the last of their kind. Each one of them has four bodyguards to guarantee its survival. But most of the other 25,000 rhinos in Africa do not enjoy such protection. The trade in rhino horn is illegal. However it is flourishing, most of the horn coming from South Africa, where most rhinos live. Hunters are willing to pay up to 20,000 euros ($26,000) to shoot a rhino and take the trophy home.

Rhino poaching on the rise

Rhino poaching has increased tenfold in the last five years, according to the nature and animal protection organization World Wide Fund for Nature (WWF). The conference singled out Vietnam as the main importing country and Mozambique as a major transit country for rhino trafficking. This is the first time that countries were named at CITES.

Vietnamese believe that rhino horn powder can cure cancer

The two countries now have a few months’ time to address the problem constructively. Mozambique is poor but CITES’ regulations are also valid there. To learn how to fight against poachers effectively, the country may seek advice from environmental and conservation organizations. In the case of Vietnam, lack of political will seems to be the major problem. Even Vietnamese embassy staff were involved in the illegal horn trade. Vietnam is now under pressure. By January 2014, Vietnam as well as Mozambique have to prove that they are able to fight against horn trafficking from southern Africa, or else sanctions will be imposed.

Superstition hikes the price

In addition to stricter controls, the WWF and other animal welfare organizations are implementing awareness campaigns. In Vietnam there is a belief that the powder from the horn of the rhinoceros can help against fever, prevent a hangover or even cure cancer. These claims however, are dismissed by scientists. The horn consists of the same material as fingernails and hair. Nevertheless, Vietnamese are willing to pay more than 40,000 euros per kilogram, more than the price of gold.

Thousands of wild rhinos have been killed and their horns trafficked to Asia

South African biologist Duan Biggs says awareness campaigns and banning illegal trade control will not help to solve the problem. Shortly before the CITES conference, Biggs, together with three other scientists, wrote in the journal “Science”, calling for the legalization of the horn trade. “We have a buffer of a very healthy population of rhinos to work with,” Biggs said. He is convinced legalization is the right course to take. If that doesn’t work, it can always be stopped again. “If we wait longer and the current situation continues, we will lose the opportunity to try an alternative strategy.”

Legal breeding instead of illegal slaughter

Since horn grows like fingernails, rhinos should be bred specifically for the horn trade. The horn could be cut off when the animal is under anaesthetic. That way the animal doesn’t suffer pain. This is done to a quarter of the animals living in South African private game reserves, where dead animals’ horns are not allowed to be sold. If these horns are legally harvested and put on the market, prices and poaching would decrease, argues Biggs.

The WWF and many other organizations vehemently opposed the legalization theory. A boom in demand and even worse poaching could result if horns are on the market in large quantities and at cheaper prices. “A change from the elite-trend to mass-trend will be like lighting a fire that will be difficult to extinguish”, said a WWF spokesperson.

The dynamics of illegal rhino poaching paint a vivid reality. Is this really any different of narcotics and money-laundering, human-trafficking and counterfeiting? I think not. In many instances its the same ‘operators’ at play preying on weak human instinct and a complete lack of morals!  On the other hand I suppose, based on the reasoning of scientist Biggs, one could say legalising narcotics and prostitution would be the ‘right thing to do’ since we have a “buffer of healthy unemployed woman and youth” ???

BackhanderTwo Japanese freight forwarders have agreed to pay a total of $18.9 million in criminal fines for their role in a price-fixing scheme, according to the Department of Justice (DOJ).

Over the course of at least five years, Yusen Logistics Co. and “K” Line Logistics Ltd. conspired to fix freight forwarding fees, including security fees and fuel surcharges, on air cargo shipments from Japan to the U.S., the Department of Justice (DOJ) said. The two are just the latest in a string of 16 freight forwarding companies that have agreed to plead guilty to price-fixing and pay criminal fines totaling more than $120 million.

“Consumers were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive service fees charged by these companies,” Bill Baer, Assistant Attorney General of the DOJ’s Antitrust Division said in a statement. “Prosecuting these kinds of global, price-fixing conspiracies continues to be a top priority of the Antitrust Division.”

The DOJ seems to have been successful in pursuing that priority. In the 2012 fiscal year, the antitrust division collected a record-breaking $1.35 billion in criminal fines, nearly 60 percent of which came from Asia-Pacific-based companies. Source: Insidecounsel.com

Delegates who attended the first BRICS Customs Heads of Customs Meeting [SARS]

Delegates who attended the first BRICS Customs Heads of Customs Meeting [SARS]

At a meeting hosted by the Commissioner near Bela Bela, South Africa from 7 to 8 March 2013, delegations from the Customs Administrations of Brazil, Russia, India, China and South Africa (BRICS) met for the first time. The BRICS Customs administrations exchanged experience and ideas in a spirit of openness so as to identify areas for cooperation so that they can most effectively and efficiently facilitate legitimate trade and combat illicit trade and Customs fraud. From 27 to 28 March, South Africa will also host the BRICS Summit in Durban, to be attended by various Ministers and the BRICS Heads of State.

Key points of discussion, focus and future cooperation –

Customs cooperation
The Heads of Customs committed themselves to consolidating and building on the cooperation that has already been established so that they can collectively curb Customs offences, safeguard the international supply chain and achieve effective enforcement of Customs legislation, while facilitating legitimate trade,both among BRICS countries and also globally.

Capacity building
As part of their cooperation to build Customs capacity in relation to human resources, technologies and procedures,the administrations would look into various practical and innovative solutions and endeavour to share their resources, knowledge and best practices with each other.

Cooperation at multilateral forums
A BRICS Customs mechanism will be established, including attachés networks based in Brussels and other strategic places, to identify issues of common interest, develop common responses and ensure regular engagement and interaction, including before important multilateral meetings.

Customs Mutual Administrative Assistance and the Exchange of Customs Information
The administrations also agreed to ensure that there is an enabling legal basis between them to support intra-BRICS Customs mutual administrative assistance and the exchange of Customs information. Such assistance and exchange will assist in combating illicit trade and protecting revenues and societies.

Facilitation of legitimate trade between BRICS countries
To further facilitate trade and reduce the Customs administrative burden on both trade and the administrations themselves, the administrations will exchange information in various areas of common interest and concern, including on the simplification of Customs procedures and the use of modern technologies and techniques.

The administrations will also work towards possible solutions for achieving mutual recognition of Customs controls and of trader management programs aligned to the Authorised Economic Operator (AEO) concept of the World Customs Organization (WCO), establishing Customs interconnectivity and supporting the WCO’s work on developing the Globally Networked Customs (GNC) model.

Opportunities for enforcement cooperation will also be explored, including possible joint actions, information sharing and other enforcement assistance. The use of international instruments developed by the WCO, including Conventions, Recommendations, Decisions and Declarations that support Customs trade facilitation, compliance and enforcement will be actively promoted.

Governance issues
A Governance Framework aligned to the overall BRICS commitments will be established. An annual BRICS Customs Heads meeting has been proposed whose deliberations would be informed to other BRICS forums, including in particular the Summit. Such a BRICS Customs Heads Meeting would be supported by a Customs working group under the guidance of the BRICS Heads of Customs. Source: SARS