Month / June 2013

by Mike Poverello

Uganda says it’s time to talk in Africa

Africa-mombasa-mct-aerial

Port of Mombasa (Credit – Port Strategy)

Not for the first time a landlocked country in Africa is attempting to have a say in a remote port operation which functions as a major gateway for its import and export trade. This time it is Uganda proposing that it has a say in the management of Kenya’s major port, the port of Mombasa. In the recent past it was Ethiopia attempting to secure a dedicated terminal in Djibouti.

The Ugandan initiative surfaced at a recent ‘Validation Workshop on Uganda’s Position on the Single Customs Territory for the East African Community. The Permanent Secretary Ministry of EAC Affairs, Edith Mwanje said that Uganda should have a say in the management of gateway ports because of “the many delays that negatively impacted trade”. Ugandan cargo accounts for the largest body of traffic handled by the port of Mombasa for the landlocked countries surrounding Kenya.

It is unlikely, of course, that any country will give up even partial control of a national asset to another country. It is akin to relinquishing sovereignty in the minds of countries owning port assets and being asked to participate in some form of power sharing. Djibouti fought hard to prevent Ethiopian Shipping Lines gaining control of dedicated terminal assets in the old port of Djibouti and won this battle. It is very unlikely that Kenya will even consider the idea of a foreign power participating in the management of its number one port.

It may, however, be a wise course of action for countries such as Djibouti and Kenya to consider establishing some sort of regular stakeholder dialogue. This is the path to a long and sustainable relationship as opposed to a short opportunistic one.

It is known, for example, that in the past Ethiopia has been frustrated by the high price of gateway container and general cargo operations in Djibouti and this has led to tensions. Since these days, however, Djibouti has put considerable effort into having a sensible dialogue with Ethiopia and this has matured into new projects such as the signing of an agreement with Ethiopia and Djibouti to build an oil pipeline that will reduce South Sudan’s dependence on crude shipments via neighbouring Sudan, and plans for a $2.6bn liquefied natural gas terminal in Djibouti, including a liquefaction plant and a pipeline, that will enable the export of 10m cubic meters of gas from Ethiopia to China annually from 2016.

Source and Picture credit: Portstrategy.com

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by Mike Poverello

FDI – Nigeria First in Africa for a Second Year

TCredit - Photobuckethe United Nations Conference on Trade and Development (UNTAD) yesterday ranked Nigeria Africa’s number one destination for Foreign Direct Investment (FDI) in Africa for the second time in two years. The latest UNCTAD report, entitled, “Global Value Chains: Investment and Trade for Development”, put Nigeria’s FDI inflows at $7.03billion while South Africa recorded $4.572bn; Ghana, $3.295bn; Egypt, $2.798bn and Angola, 6.898bn; among others.

According to the report, FDI inflows to African countries went up by five per cent to $50bn in 2012, though global FDI declined by 18 per cent. The report noted that most of the FDIs into Africa mainly driven by the extractive industry, but said there was an increase in investments in consumer-oriented manufacturing and services.

Global FDI fell by 18 per cent to $1.35 trillion in 2012. This sharp decline was in stark contrast to other key economic indicators such as GDP, international trade and employment, which all registered positive growth at the global level,” which was attributed to economic fragility and policy uncertainty in a number of major economies, giving rise to caution among investors.

It added that developing countries take the lead in 2012 for the first time ever, accounting for 52 per cent of global FDI flows. This is partly because the biggest fall in FDI inflows occurred in developed countries, which now account for only 42 per cent of global flows. In 2011, Nigeria was ranked Africa’s biggest destination for FDI, with total inflows of $8.92bn, South Africa followed with $5.81bn, while Ghana received $3.22bn. Source: AllAfrica.com

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by Mike Poverello

Ready for Another 24-Hour Rule?

logoLast month (May 2013), the Nippon Automated Cargo and Port Consolidated System (NACCS) released an updated version of guidelines for filing under the Japan 24-hour rule. As the main system for the online processing and procedures related to the new 24-hour rule, NACCS has been updating the guidelines and holding informational sessions across Europe, North America and China since early 2013.

Scheduled to go into force March 2014, Japan Customs and NACCS is encouraging shippers to begin looking at requirements and working towards compliance now. Penalties include Do Not Loads (DNLs) and fines up to 500 thousand JPY.

The NACCS has provided several good resources for the trade to use in familiarizing themselves with the Japan 24-hour Rule:

Therefore, South African shippers, exporters, and carriers of goods to Japan have a few more months to get their systems and processes in order to meet Japanese advance reporting requirements. For those already meeting US, Canadian and EU advance manifest reporting requirements this should not pose too much of a problem.

Source: Integrationpoint.com

by Mike Poverello

Uganda joins COMESA

COMESAUganda has become the 15th member of the Free Trade Area (“FTA”) established by COMESA. Under the membership, the tariff on Ugandan goods will be reduced to 0 percent when exported to other signees, compared to the two percent levy on goods to and from non-member states.

The COMESA FTA began in 2000, and its other member states are Burundi, Comoros, Djibouti, Egypt, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Sudan, Swaziland, Zambia and Zimbabwe. Uganda was a founding member of COMESA in 1994 but until now was excluded from the FTA. As the Democratic Republic of Congo and South Sudan are Uganda’s biggest trading partners, there is speculation that they will be the next two states to be granted membership.

Sub-Saharan Africa, which includes many of the FTA’s member states, has one of the strongest growth rates in the world, and its regional growth is expected to exceed five percent this year. The opportunity for infrastructural development will continue to grow in line with this, creating a wealth of investment opportunities for banks and lenders. Analysts have identified a particular need for infrastructure in energy and oil and gas-related sectors, as well as transport. Source: Lexology.com

by Mike Poverello

Study into the cooperation of border management agencies in Zimbabwe

tralacZimbabwe is a landlocked developing country with a population of 14 million, sharing common borders with Botswana, Mozambique, South Africa and Zambia. Zimbabwe has 14 border posts, varying in size in accordance with the volume of traffic passing through them. Beitbridge, the only border post with South Africa, is the largest and busiest, owing to the fact that it is the gateway to the sea for most countries along the North-South Corridor. Zimbabwe thus provides a critical trade link between several countries in the southern African regions. The need for the country, especially its border posts, to play a trade facilitative role can therefore not be over-emphasised.

Trade facilitation has become an important issue on the multilateral, regional and Zimbabwean trade agendas, and with it, border management efficiency. Border management concerns the administration of borders. Border agencies are responsible for the processing of people and goods at points of entry and exit, as well as for the detection and regulation of people and goods attempting to cross borders illegally. Efficient border management requires the cooperation of all border management agencies and such cooperation can only be achieved if proper coordination mechanisms, legal framework and institutions are established.

This study explores how border agencies in Zimbabwe operate and cooperate in border management. The objectives of the study were to:

  • Identify agencies involved in border management in Zimbabwe;
  • Analyse the scope of their role/involvement in border management; and
  • Review domestic policy and legislation (statutes of these agencies) specifically to identify the legal provisions that facilitate cooperation among them.

Visit the Tralac Trade Law website to download the study.

Source: TRALAC

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by Mike Poverello

A critical view in support of East African Land Locked Countries – Lessons for the South?

UNCTAD - The Way to the OceanThis paper looks at selected East African transit corridors which provide access to seaports as gateways to link landlocked developing countries (LLDCs) with overseas trading partners. The report suggests three complementary courses of action to improve transit transport efficiency and sustainability:

  • Building institutional capacity through corridor management arrangements, including formal agreements, where and as appropriate; 
  • Improving the reliability and predictability of transit operations by trust-building measures between public regulators and private operators, such as risk-management customs systems, which allow for fewer en route checks, shorter delays and smaller convoys; 
  • Developing and operating transport nodes, or freight hubs, with a particular focus on the consolidation of small flows, to create critical masses required to achieve economies of scale, higher return on investment on both infrastructure and transport services, and lead to the development of effective intermodal transit operations. 

These actions are to be viewed as precursors to an economically viable and environmentally sustainable operation of the transit corridor. They will bring on a “change of culture” that encourages the confidence of shippers and carriers, operating in a setting that rewards compliant behaviour, builds trust and attracts investment, promotes larger-scale trade operations, improves transport service quality and reliability, and enables strong cooperation among stakeholders along transit corridors, including ports, serving transit trade to and from landlocked countries.

This report may be, in this context, considered as an early contribution to the analysis of the recent progress in the field of transit transport for the trade of LLDCs, in the context of the preparation for the Almaty Programme of Action review process taking place in 2013. Source: UNCTAD

Southern African states need also take heed of this study. While its goods to seek organic change within the region, it helps if individual states have a notion of what regional integration, and transit movement entails.

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by Mike Poverello

MOL Comfort’s Stern Sinks

Mitsui O.S.K. Lines (MOL) has just reported that the aft section of the MOL Comfort has sunk near 14’26”N 66’26”E at 16:48 JST (11:48 Dubai time) on June 27. With a water depth of 4,000 meters, no further salvage of the ship will be possible due to the extreme ocean depth. About 1,700 containers and 1,500 metric tons of fuel oil sank with this section of the vessel. Some containers are confirmed floating near the site. gCaptain has been told that the stern began sinking at 1000 hrs (local time) when hatch 7 was breached. The vessel made a quick list and trim forward and to her starboard. Bright pink/ yellow and black clouds were observed coming from hold number 7 and, as a precaution, both vessels – including MV Karar- moved upwind away from the vessel. For more striking photos visit http://gcaptain.com/comfort-images/. Source and Photo Credits: gCaptain.com

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by Mike Poverello

Customs and Nigeria’s Trade Hub Portal

Nigeria Trade Hub 2Anyone familiar with the import and export business in Nigeria will recall how tedious the process used to be. It could take days or even weeks to complete due to ceaseless documentation that importers, exporters and their agents had to endure with the various regulatory agencies. Now, the Nigeria Customs Service (NCS) has developed a web-based application known as the Nigeria Trade Hub Portal, simplifying the entire process and providing information and guidance for international trade business processors in the areas of import, export and transit trade.

The www.nigeriatradehub.gov.ng portal, a non-restrictive and is an intuitive and interactive platform for classifying goods. Through it, trade processors are enabled to find exact Harmonised System Codes (HS Codes) required for related tariffs and duties.

This latest technology is expected to enhance compliance by traders and avail them the required information on tariff in areas like the prohibited items and taxes/levies due for payment upon importation. The application is also designed to touch on the aspect of trade facilitation such that trade processors can access 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 are also available on the portal.

The Nigeria Trade Hub portal allows traders to convert currencies to exchange rates set by the Central Bank of Nigeria (CBN) on a monthly basis, make payments, simulate tax and access the CPC Code. The application goes further to provide the tax and duties payable on any particular item, whilst presenting the user with the documents, i.e., the named permits or certificates required for the product, the issuing agency, the processing cost as well as the duration (no of days) for processing. This empowers the trader and provides them with sound information to assist them in competing on the international market.

A mobile Android App is also available on the Google Play store, and other platforms are to be rolled out soon. Source: Nigeria Trade Hub, Suleiman Uba Gaya and Valentina Minta (West Blue Consulting).

by Mike Poverello

New Ressano Garcia Cargo Terminal Operational By December

Mozambique flagA new cargo terminal will be opened at the Ressano Garcia – Lebombo border crossing before the end of the year to speed up the processing of customs clearance for goods moving between Mozambique and South Africa.

To further the project an agreement has been reached between the Mozambique Tax Authority (ATM) and a consortium composed of the Matola Cargo Terminal (Frigo), Matrix and the “Zambian Border Crossing Company”.

The 15 year concession contract was signed on 14 June in Ressano Garcia by the chairperson of ATM, Rosario Fernandes, and by the managing director of Frigo, Filipe Franco.

Filipe Franco told AIM that a new truck terminal is being built where facilities will be available for all the necessary services including customs, migration, and officials dealing with health and agriculture.

He pointed out that “our objective is to ensure that the terminal will be completed and operational by December”, adding that the consortium is composed of companies with a great deal of experience in managing cargo terminals.

Rosario Fernandes said that the cargo terminal project will facilitate trade by speeding up customs clearance at the border post through a one stop system and the single electronic window system which is being implemented throughout Mozambique. Source: AIM (Mozambique News Agency)

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by Mike Poverello

CBP initiation date for liquidated damages for 10+2 non-compliance

isfU.S. Customs and Border Protection (CBP) has announced that on July 9, 2013, it will begin full enforcement of Importer Security Filing (ISF or 10+2), and will start issuing liquidated damages against ISF importers and carriers for ISF non-compliance.

According to the CBP release, “in order to achieve the most compliance with the least disruption to the trade and to domestic port operations, it has been applying a “measured and commonsense approach” to Importer Security Filing (ISF or 10+2) enforcement.

The Importer Security Filing (ISF) system—also referred to as the “10+2” data elements—requires both importers and carriers to transmit certain information to CBP regarding inbound ocean cargo 24 hours prior to lading that cargo at foreign ports. These rules are intended to satisfy certain requirements under the Security Accountability for Every (SAFE) Port Act of 2006 and the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002.

Under the ISF, the following 10 data elements are required from the importer:

  1. Manufacturer (or supplier) name and address
  2. Seller (or owner) name and address
  3. Buyer (or owner) name and address
  4. Ship-to name and address
  5. Container stuffing location
  6. Consolidator (stuffer) name and address
  7. Importer of record number/foreign trade zone applicant identification number
  8. Consignee number(s)
  9. Country of origin
  10. Commodity Harmonized Tariff Schedule number

From the carrier, 2 data elements are required:

  1. Vessel stow plan
  2. Container status messages

Source: CBP.gov

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by Mike Poverello

Weighing Cargo at the source

IMG_39671-210x140Worldcargo news.com reports that a recent truck weighing deal in the UK provides food for thought in the run-up to IMO DSC/18 in September 2013.

Central Weighing, part of Avery Weigh-Tronix, has supplied a cost-effective weighing solution to help Balfour Beatty avoid overloading on its fleet of 3000 light commercial vehicles and 1000 heavy commercial vehicles, which are located at numerous and very often temporary sites across the UK.

Balfour Beatty operates a large and diverse fleet of commercial vehicles in the UK ranging from small vans to 44t artics. The plant, tools, equipment and materials carried vary widely depending on the project or contract being serviced.

“With such a wide variety of loads being transported, it is essential that the vehicles can be weighed accurately and efficiently, to ensure safety and comply with road transport legislation,” stated Central Weighing. “Installing a weighbridge at each location was not financially feasible, so Central Weighing’s solution was implemented to supply 10 portable dynamic weighbridges.”

As discussed on numerous occasions in WorldCargo News, where the shipping line requires container weights to be verified by physical weighing of the container, the ideal location from an overall supply chain perspective is the shipper’s or export packer’s container stuffing point. This provides:

  • the earliest possible notice of discrepancy with the declared weight, and hence the most time for the ship planner to adjust the loading plan.
  • confirmation of legality for road shipment in terms of gross truck mass and axle loads. Inland transportation is outwith IMO’s remit, but this point is clearly very important in terms of road safety. It is not acceptable for shipping lines employing hauliers in a carrier haulage move to ignore it and focus exclusively on the integrity of their loading plans.

Of course, most shippers do not have container lifting equipment, but container chassis could easily be fitted with load cells measuring the weight and distribution as the container is stuffed at the loading dock, or the whole rig could be driven onto portable weighbridges/mats shortly after the container is loaded. If Balfour Beatty can do it, why can’t shipping lines or their contracted road hauliers?

If the truck is shown to be overloaded in terms of gross mass and/or individual axle loads, the container will have to be stripped and restuffed, leading to dispatch delays. Since gate “slot” times and reception “cut off” times are so tight, something has got to give. Don’t expect a truck with a three-hour window between departure from, say, Daventry and arrival in Felixstowe to make it in one hour!

Both container weighing and packing are being discussed in special workshops at next week’s TOC CSC Europe conference in Rotterdam, and these points need to be aired.

Sounds like the kind of discussion and development to be followed by Transport (including Port) and Customs authorities alike. Perhaps the MOL COMFORT tragedy will lend some importance (interest) to this debate.

Source: World Cargo News

by Mike Poverello

Cold COMFORT – Industry expert suggests ‘Container Weight’ is an issue

w20130617_581636_51bf7444348dFollowing up on the unvelievable events which saw the MOL COMFORT split in two, see previous post “Container Ship Breaks in Half and Sinks“,  Michael Grey (former Editor of Lloyd’s List and Fairplay, currently the London Correspondent of BIMCO and holder of a British FG Master’s Certificate) writes “How on earth does a 5 year old 90,000 ton containership, built by one of Japan’s finest shipyards and operated by a tip-top liner company, come to be floating in two bits 19 miles apart? Was it the Weather, Welding,  or perhaps one of those 100 year waves the Met. Offices are warning us about are rather more frequent?”

He goes on to maintain that the smart money must surely be on the stresses induced by under-declared container weights, which shippers routinely refuse to take with any seriousness whatsoever.

Always supposing that there is a good run through the IMO, it has been suggested that it could be another three or four years before SOLAS Regulation VI/2, which provides for the “verification” of container weights, comes into effect. As the distinguished delegates undertake their deliberations on this matter, a huge picture of the after part of the MOL Comfort sitting forlornly in the Arabian Gulf might usefully be displayed on the Council Chamber screens to help focus their minds.

It is now more than six years since the emergency in the English Channel when the MSC Napoli nearly sank through an ingress of water.

It is worth underlining the views of the UK Marine Accident Investigation Branch, which painstakingly required all the boxes retrieved from the wreck to be weighed, and note its suggestion that overweight boxes contributed to the loss of that ship.

Wheels often grind slowly in marine safety mills, but there have surely been enough warnings about excessive container weights to wake everyone up. Feeders have been regularly rolling over, fortunately in shallow water or against the quay. This clearly expensive incident which has put 25 lives and more than 4000 containers at risk ought to clarify the issues.

But we shouldn’t bet on it.

Shippers’ organisations, which have been defending their flawed position on container weights for forty years or more will still be arguing about the responsibilities for verification until the bitter end. If the salvors manage to save this ship, let us hope that every one of those boxes retrieved is weighed, and compared with the manifested declaration.

Sources: article posted in gCaptain.com with original credit to the Clay Maitland blog

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by Mike Poverello

From Good to Grey: South Africa’s Low Emission X-Ray System

Lodox Body Scanner Image-Case-Study-1-bright

Click on the image to view fine details on Hi-Res image (Credit-Lodox)

While not exactly the kind of equipment for a Customs Enforcement operation, I did feel suitably proud to punt a locally developed ‘non-intrusive’ imaging device given its recent international prominence.

The South African Media have been abuzz following the airing of the Grey’s Anatomy episode Idle Hands (on MNET), featuring the South African developed Lodox full-body X-ray scanner.

In the episode, the doctors and nurses of Grey+Sloane Memorial Hospital’s brand new ER are excited and amazed to have the Lodox Statscan in their trauma department. After a long wait of anxious anticipation, they are suitably impressed by the X-ray scanner’s ability to take an entire body scan in just 13 seconds, and what this will mean for how they treat trauma patients. Far from paid-for product placement, this was a story line independently researched and written by the Grey’s Anatomy producers. Our Lodox NA team made sure they had a real, working Lodox machine on the set of the new ER.

Some of the tech and application notes off the Lodox website:

Due to its unique X-ray system, scanning technology and design, it emits extremely low levels of entry and scattered radiation, making it safer for operators and staff.

For emergency trauma situations, the Xmplar-dr permits easy access to the patient to allow for monitoring and resuscitation to take place around the scanning process. The 13-second, full-body scan provides instant information with which to form a diagnostic image of the patient’s injuries.

In forensic pathology (medico-legal) applications, the Xmplar-dr provides an easy-to-use, fast method for assessing the entire subject’s body in multiple planes to assist with pathology location, particularly useful in the case of gun shot victims. The single sweep eliminates the need to move the subject to obtain all necessary views, making it more efficient and safer for staff.

Lodox is also ideally suited to imaging of bariatric and paediatric patients, and has found applications in many other areas of medical imaging.

The high quality, digital images, ease of use and reliability make the Xmplar-dr an invaluable piece of imaging equipment in any medical trauma or forensic pathology arena.

Source: Lodox.com

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by Mike Poverello

Euromonitor’s latest insight on the Tobacco industry

World Tobacco

Euromonitor International‘s latest global Tobacco market research provides the latest insight on how the Tobacco industry performed in 2012 and identifies the key prospects through to 2017. The double whammy of continued global economic uncertainty and increasing tobacco control took its toll as the industry posted a year of weak growth, in which no region experienced volume increases with the solitary exception of Asia Pacific, itself bolstered by the cigarettes behemoth that is China. World cigarettes values, normally propelled by growing unit prices and consumer uptrading, also took a battering, unprecedentedly growing by the same amount as global illicit trade volumes. With the current debate surrounding the reduced risk credentials of non-combustible products such as electronic cigarettes and their classification (pharma vs tobacco), the industry finds itself at a crossroads, pursuing cigarette alternatives whilst maintaining its cash cow.

  • Worldwide, 5.8 trillion cigarettes were consumed in 2012, representing 0.19% growth on the previous year, though this was due to the effect of the world’s largest cigarettes market, China. Without China, the world witnessed a -1.7% decline in 2012 versus 2011.
  • Every region in the world, save for Asia Pacific, saw falls in cigarettes volume sales in 2012 (vs 2011), a decline expected to continue to 2017, with the sole exception of Middle East & Africa, which is expected to return to growth once political turmoil stabilises.
  • None of the BRIC markets registered cigarettes volume growth in 2012 (with the sole exception of China), a trend which will continue into 2017.
  • World cigarette value sales grew by almost the same amount in 2012 as global illicit trade volumes – at around 2.5% each. Values decreased in three regions – Western Europe, North America and Latin America – reflecting consumer down-trading.
  • Sales of premium cigarettes grew by nearly 10% globally in 2012, on the back of China’s double-digit premium growth, though this will not be sustained at the global level in the long term. For whilst China will grow its premium brands by nearly 30% over the next five years to 2017, world premium sales will register a 5% fall.
  • World RYO volumes conversely grew by 6% in 2012 (vs 2011), registering growth in all regions, particularly Eastern Europe where it saw double-digit growth. Growth will continue to 2017, albeit at a declining rate.
  • Sales of cigars and smokeless tobacco both saw volume declines of around 3% in 2012, affected by a combination of poor economic performance and declines in its major markets.

Source: Euromonitor International

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by Mike Poverello

Call to Develop Zim-RSA Transport and Trade Links

zim-rsaZimbabwe needs to further develop transport and trade infrastructure links with South Africa to maintain Africa’s biggest economy as its single most important trading partner, recent research findings have shown.

This came from preliminary findings of a research study carried out by Dr Medicine Masiiwa who was commissioned by the Ministry of Regional Integration and International Co-operation to undertake the study on trade and transport. The World Bank funded the study to assess the need to facilitate transport and trade in Zimbabwe. The findings form part of preliminary desk research ahead of a more detailed second phase.

Dr Masiiwa presented the initial findings from the desk research to stakeholders at a workshop in Harare. Preliminary findings of the study show that since economic and political stability, key for trade competitiveness of Zimbabwe is now in place, the country’s trade was bound for significant growth, making a trade and transport facilitation measure critical to support this growth.

“A major implication of having South Africa as Zimbabwe’s single most significant trading partner is that the transport and trade infrastructure between the two countries should be further developed,” he said.

Development options include expanding the current border post to accommodate more traffic or to construct a new border post altogether. Sound transport and trade infrastructure between Zimbabwe and South Africa is critical as more than 34 percent of local imports go to South Africa while Zimbabwe imports more than 60 percent of basic commodities from that country.

But the state of the main trunk road, on the Zimbabwe side, has remained in poor state despite also being the main link between the north and south. Increased trade with China implies that Zimbabwe, in collaboration with its regional partners, needs to further develop the Beira and Limpopo transport corridors, which link Zimbabwe with the ports on the east coast.

“It is also interesting to note that trade with the EU and other Western countries is on the rebound; meaning transport corridors linking western gateways also need to be further developed,” said Dr Masiiwa.

The major problem facing Zimbabwe is that the quality of infrastructure is deteriorating and therefore acting as an impediment to trade. A study by the World Bank showed that in the 1990s, the proportion of primary roads in “good” condition was about 90 percent, but this dropped to 85 percent in 2009. Roads with the worst conditions are secondary roads, where about 45 per cent of paved and 50 percent of the unpaved secondary roads are in poor condition. Source: Zimbabwe Herald