Archives For Freight Forwarders

accourt-risk-fraud-managementSenior Claims Executive at the TT Club in Sydney, Kate Hollis, sheds some light on the risks faced by licenced customs brokers and mitigation steps to take:

“As the international trade regulatory landscape continues to change and the commercial environment becomes increasingly competitive, the balancing act for forwarders and customs brokers between providing services to clients and complying with obligations to customs becomes more complicated.

“Customs brokers assume responsibility for acting correctly between cargo interests and customs. As a result, there is the potential to provide advice to customers or carry out actions that result in the cargo interest suffering financial loss, for which you can be alleged to have been negligent. Closely related to the liability exposure of your customer is the potential for customs to levy fines or penalties through infringement notices.

“Identity fraud is perhaps a less obvious area of risk. In some cases authorities find that brokers have committed an offence where checks on the identity of clients have not been performed and that simple verification of the identity would have alerted the broker to the fraud. Consistent with previous advice, we recommend dealing with your clients directly (rather than through an intermediary) and always perform your own background checks, both in regard to the entity itself as well as the statements being made to customs.

“One recent incident saw rice wine being imported into Australia from Korea, but it was declared as apple cider vinegar. This directly resulted in extra costs for handling the container and for storage costs under the customs bond. Following the inspection, duty was charged at the rate for rice wine – not cider – which the freight forwarder pre-paid on behalf of the importer. It proved impossible to reclaim the duty and additional costs because it transpired that the consignee company no longer existed. There have also been cases of people fabricating an identity in an attempt to import goods without paying the full amount of duty. When the companies were not successful, they simply disappeared.

“Customs brokers also need to be aware of the risk of identity theft. While the variety of scams is broad, TT Club has identified three areas that require particular attention for Customs Brokers:

  1. Piggybacking – where an unscrupulous entity uses the identifying details of a legitimate entity on a Cargo Report or Import Declaration, generally with the aim of importing consignments containing illicit substances or smuggled goods.
  2. User access security – the nature of access to customs entry systems and digital certificates means that individual login details need to be carefully guarded to avoid misuse and illegal activity.
  3. Mandate fraud – where fraudulent diversion of payments occurs. It is primarily the responsibility of the party making a payment to ensure that the bank details are correct.

“Customs Brokers should be aware that their licence might be at risk in a situation where the authorities consider that the broker has intentionally or recklessly facilitated a fraud. Such situations can also lead to fines being imposed on the Customs Broker as an individual, as well as actions against the forwarding business as a company.

“Mitigation of these risks is possible. In the first instance, it is important to review your own internal processes and systems. Recognise that the risk exposures are business critical and implement robust technology systems and standard operating procedures accordingly, particularly considering access rights and controls.

“Secondly, ensure that well drafted standard trading conditions are properly incorporated into your interactions with all clients. Many national trade associations provide ideal models You should seek legal advice to ensure that contracts are appropriate for your specific business. A third obvious mitigation is to purchase adequate and appropriate insurance. You should discuss this with your broker to ensure that your specific needs are properly covered.” Source: TT Club

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AEO-LogoHere follows an appreciation of AEO within the context of the EU. According to KGH customs consultancy services, being an Authorised Economic Operator (AEO) already entails advantages for companies that have invested in doing the work to gain the AEO certification. With the new Union Customs Code (UCC), companies with an AEO permit will be able to gain additional advantages leading to more predictable and efficient logistics flows as well as an increased competitive edge.

Centralised clearance (being able to clear all customs declarations from one central location in the EU) and self-assessment (self-declaration of custom fees, similar to VAT reporting) are two new possibilities under UCC that will be implemented towards the end of the initial UCC implementation period from 1 May 2016 to 31 December 2020. To take advantage of these, AEO will be a prerequisite. AEO-ready businesses will therefore be well positioned to take advantage of these new possibilities when they become available.

Direct AEO benefits, including fewer physical and document-based controls, pre-notification in case of controls, easier access to customs simplifications and other customs authorisations, as well as access to mutual recognition with third countries, will continue to apply under UCC. The same is true of the soft benefits, such as better cross-functional communication and cooperation, improved customs knowledge and better risk management, which often outweigh the direct benefits as detailed by customs authorities.

With the UCC, AEO becomes a permit (authorisation) and all AEO certifications will have to be reviewed in line with the new UCC guidelines. Much is recognisable from before, but there is an additional competency requirement that is realised through either experience and/or professional qualifications. There is also likely to be more focus on ensuring that AEO applicants have robust routines that reflect their business, and that those routines are known in the business and used on a day-to-day basis.

Ever since the Authorised Economic Operator (AEO) certification was launched in 2008, many companies have been trying to evaluate whether to go for AEO or not. What are the benefits? How long does it take to become certified? Can we do it ourselves or do we need some help? What do we really gain by being AEO? This has sometimes stopped companies taking active steps to get ready for AEO.

Furthermore, some AEO-certified companies have felt that they have been exposed to more controls after AEO certification than before. In other instances the initial certification was fairly easy to achieve, but it then proved much harder to retain at a subsequent audit because routines were not being kept up to date or there had been insufficient internal controls and reviews performed in the business.

Our experience shows that companies that did a thorough job at the time of certification and that also afterwards had a genuine focus on maintaining knowledge, following routines and updating documentation as and when appropriate, have been able to benefit from improved customs management to a greater extent than they first envisaged.

KGH opines there are six situations where being AEO could be beneficial for a company:

  • Freight forwarder serving customers with logistics flows to and from the EU.
  • Strong business links with countries where the EU either has mutual recognition or is likely to have it in the not too distant future.
  • Businesses with many permits that will be reconsidered as part of the transition to UCC, where being AEO may facilitate the reconsideration process for other customs permits.
  • Large customs guarantee, which may be able to be reduced as a result of being an AEO.
  • Interested in centralised clearance and self-assessment that will be introduced towards the end of the UCC implementation period.
  • Interested in raising customs knowledge in a business, in order to better manage risks and be able to take advantage of business opportunities connected with international trade.

Here AEO can also be seen as a seal of quality. Source: kghcustoms.com

WCO Study Report on Customs BrokersThe WCO has just published a newly developed Study Report on Customs Brokers. The Study Report provides a general background and overview of Customs Brokers’ role in the international supply chain together with some suggested policy and organisational considerations on Customs Brokers regime and a model checklist for licensing/regulating brokers.

Additionally, the Report provides a range of cooperation opportunities between Customs and Brokers including the joint capacity building.

Customs administrations, Brokers, and Brokers Associations are encouraged to make maximum use of the Study Report as a reference/guideline, where needed, in establishing and/or maintaining/adjusting Brokers regime, keeping in view their national circumstances and specificities.

The Study Report on Customs Brokers is available via the following link: Click here

Source: WCO

MCA LogoThe UK Maritime and Coastguard Agency has dropped the tolerances it was considering for weighing equipment used to weigh a container for the new SOLAS VGM requirement.

One of the issues that has been holding some terminals back from investing in equipment to weigh containers is the lack of any clarity over the accuracy standards that equipment must meet. SOLAS says only that equipment must “meet the applicable accuracy standards and requirements of the State in which the equipment is being used”.

The UK Maritime and Coastguard Agency (MCA) had been consulting on a proposal for two weighing tolerances for equipment used to generate a Verified Gross Mass (VGM) using method 1 (weighing the container):

  • +/- 400kg up to 20T then +/- 2%
  • +/- 300kg up to 15T then +/- 2%

Sources involved in the process say some port operators and weighing equipment suppliers had expressed concerns these tolerances were unreasonable. MCA has this week issued new guidance on the VGM requirement, including a procedure for applying for approval to use Method 2 (weighing cargo items and calculating the total weight of a container).

The MCA has dropped any requirement for a specific accuracy level, opting instead to set an enforcement level. It stated: “The verified gross mass should be as accurate as reasonably practical taking into account methodology and operational variances. The MCA has set an enforcement tolerance of ±5% or ±500kg, whichever is the greater value to avoid disruption within the supply chain, however this value is for enforcer’s guidance only and it is the shipper’s responsibility to be as accurate as possible”.

Method 1 equipment includes “weighbridges, or lifting equipment fitted with load cells, or other approved weighing equipment to determine a loaded container’s Verified Gross Mass (VGM)”. Unlike other jurisdictions the MCA has not stated that it requires two 20ft containers on a trailer to be weighed separately, or said anything about how the weight of the truck and trailer is to be obtained. It stated only that “Calculations may be used as part of the method 1 process”, so these items do not in fact need to be weighed as part of the VGM process.

With regard to certification and enforcement, the MCA states: “ Method 1 users are required, on request by the MCA or other body, to provide both of the following:

  • Evidence that the weighing equipment has been supplied/maintained for the purpose of determining the VGM of a loaded container and is capable of producing a ticket (electronic record). Each ticket must include the container number, the VGM of the container, and the procedures for, and records of, any calculations which have been made. If this information is produced as an electronic record, it is essential that it is able to be produced without delay as a paper document.
  • Records kept of maintenance and verification (calibration) procedures, including any corrective / remedial actions taken.

The full guidance and other documentation can be found at this link. Source: WorldCargoNews

World Cargo News reports  – While the Coast Guard maintains the US will be compliant with the SOLAS amendment on container weighing, US Shippers are interpreting guidance from US Coast Guard Rear Admiral Paul Thomas as confirmation they can continue with existing practice to declare the weight of their goods rather than weigh containers.

Following to the fallout over his comments at the Trans Pacific Maritime conference in Long Beach this month, Rear Admiral’s Thomas issued further guidance on the SOLAS amendment that requires containers to have a Verified Gross Mass before they are loaded on a vessel from 1 July.

The US Coast Guard (USCG) has since confirmed that SOLAS is binding on US shippers, but stated that how shippers work with carriers to obtain and report a VGM is a commercial matter for those parties to determine.

Some US shippers, including the US Agriculture Transport Coalition (ATC), have made it known it is not practical for them to supply, and be responsible for anything other than the weight of the cargo, as they do today. The Coast Guard appears to be facilitating this approach, and the ATC last month told its members it “received confirmation” from USCG that shippers can continue to verify the weight of the goods they own, while lines remain responsible for the weight of the container.

On March 14 some 49 groups and associations representing US primary producers, manufacturers, importers and shipper groups wrote to Coast Guard Commandant Paul Zukunft saying they support its “interpretation” of the SOLAS amendment, as presented by Rear Admiral Tomas in his blog.

“Specifically, we support the Admiral’s view that if the shipper provides the cargo mass weight, to which the carrier adds the weight of the container, then the intent of SOLAS is achieved. In fact, several ocean carrier executives have advised that such a process would be practical.”

Some carriers, however, have rightly pointed out that this does not meet the SOLAS requirement, as the letter then notes: “The reason for our concern, and appreciation of Admiral Thomas’ guidance, is that some ocean carriers, citing this SOLAS amendment, are demanding that the shipper certify both the cargo and the carrier’s container. This is contrary to the practical realities of our US export maritime commerce and fundamentally flawed conceptually. (It would be similar to demanding that a soybean shipper certify to the railroad the weight of the railcar itself.)”

The groups maintain that they “fully understand our responsibility to accurately disclose the weights of cargo tendered to the ocean carriers. In fact, advance submission of accurate gross cargo weight is a well-established practice mandated by US Customs and Border Protection, by numerous intermodal (trucking and rail) weight requirements, and presently found in Shipper’s Instructions to carriers to meet so-called “no doc, no load” cargo cutoffs for entry into marine terminals. In addition, an Occupational Safety and Health Administration (OSHA) Rule, in place since 1983, assures that the accurate weight of combined cargo and container be known to the carrier prior to loading.”

Despite SOLAS, the shipper groups do not see a need to weigh individual containers and suggest other solutions can be found: “for instance, shippers are willing to provide to their carriers an annual written confirmation in the service contract (or other mutually-agreed document) that our cargo weights are accurate”.

One of the major concerns is liability, in particular the requirement that someone now sign a VGM document. Shippers say carrier demands for this are being rejected. Many US Corporations will not allow their employee to certify the weight of and assume liability for equipment that the corporation does not own, manage, control and in fact may not even see.”

The Coast Guard, for its part, does not appear to be pushing the issue of current practice not meeting the new SOLAS requirements.

In his testimony at the US House Committee on Transport and Infrastructure’s hearing for the Coast Guard’s 2017 Budget request Admiral Paul F. Zukunft, Commandant, USG made the following statement: “Foreign carriers are pretty much all in compliance today. When I was at the container terminal in Long Beach a month and half ago all the containers that come on to that yard are already weighed before they go in. So I am not seeing a sky is falling panacea playing out around us, but we need to make sure that there aren’t unintended consequences. That is why we are continuing to reach out with the many exporters…that container shows up on a manifest before it is loaded on a ship. What is needed is that final weight, but by and large most of these manifests already have that weight filled in in that column.”

The US, it appears, intends to continue to follow current practice where the shipper provides a declared weight of the cargo, leaving it to the carrier to determine the final weight of the container. Source: World Cargo News

Amazon-BoxMarket forces, competition and the desire to be ahead of the competition demonstrate how dynamic the international supply chain is being maneuvered. Amazon’s latest move is not only innovative but demonstrates just how adaptable international trade and Customs Inc. need to be in order to accommodate nuances to traditional accepted norms in global trade. For Customs, it needs to intimately understand the nature of business of its registered or licensed traders so as to properly apply risk and facilitation regimes appropriately. Recent developments in mutual recognition likewise play an important role in awarding real benefits to companies and their supply chains who undertake such global innovations.

According to the U.S. Federal Maritime Commission, Amazon.com Inc’s China arm has registered as an ocean freight forwarder, a move that will give it more control over shipping products from Chinese factories to U.S. shoppers.

The registration is the latest indication that Amazon plans to expand its logistics reach to cut costs for its retail business and potentially provide third-party logistics services to other industries.

It’s new status as a freight forwarder, or “non-vessel operating common carrier,” gives Amazon, the world’s largest online retailer, a foothold in the $350 billion a year ocean freight business. It will not operate ships but subcontract that work.

Amazon is already negotiating a deal to lease 20 jets to start an air-delivery service in the United States, the Seattle Times reported last year. The retailer bought truck trailers to add shipping capacity and started a program last year that uses a fleet of on-demand drivers to deliver packages.

“It has more and more control over the supply chain of their business and it gives them the ability to squeeze (costs) even further,” said Satish Jindel, a logistics consultant and president of SJ Consulting Group.

He added the move gives Amazon an even bigger edge against traditional U.S. retailers in negotiating lower prices for goods.

The Federal Maritime Commission, a U.S. government agency that regulates the U.S.-international ocean transportation system, said on Thursday a business named Beijing Century Joyo Courier Service Co Ltd, with the trade names Amazon China, Amazon.CN and Amazon Global Logistics China, was registered in its database to provide ocean freight services.

Amazon China submitted its registration request on Nov. 9, the commission said Thursday, and it was reviewed and registered on Nov. 13. It is the entity’s first registration.

“Amazon’s ocean freight services will be far more attractive to Chinese sellers than to American buyers. Chinese suppliers would love direct access to Amazon’s vast American customer base,” wrote Ryan Petersen, chief executive officer of Flexport, a San Francisco-based freight forwarder who first wrote about Amazon’s registration on his company blog on Thursday.

Petersen added that Amazon’s third-party merchants were unlikely to use its shipping service because it would expose key data like wholesale pricing and supplier names to a rival. Source: Reuters

BIMCO E-Bill of LadingPaper bills of lading have been used throughout the world to document and effect international trade for centuries. Yet whilst the world has become increasingly digitalised the paper bill of lading has, on the whole, remained a constant feature of global trade. Its continued use is mainly due to its combination of three legal characteristics that it has developed over time: (i) it is a receipt of the goods carried; (ii) it provides evidence of the terms of the contract of carriage; and (iii) it is a document of title to the goods. It is these characteristics that have, until relatively recently, foiled attempts to replace the paper bill of lading with an electronic equivalent. However, with the inclusion of an electronic bills of lading clause in BIMCO’s NYPE 2015 time charter form, as well as the International Group of P&I Clubs’ approval of the coverage of three electronic trading systems, the dominance of the paper bill of lading may well be coming to an end.

Reed Smith LLP Ship Law blog posts an interesting article in regard to change in law and the impact of e-commerce on bills of lading.

Issues with the paper system
Whilst the paper bill of lading has been used for centuries it is not without its faults, the principal problems being that:

  • Carriers are obliged to discharge the goods carried on production of an original bill of lading: this is particularly problematic today given both the speed of transport and the fact that the cargo may be sold multiple times during carriage. As a result of this the bill of lading is often not delivered to the consignee in time, and the carrier is often required to accept a letter of indemnity. This indemnity does not, however, remove the carriers’ liability under the bill of lading and creates an additional administrative burden and cost to the trade.
  • The paper system is hugely expensive (such cost is estimated to be between 5 – 10% of the value of the goods carried each year).
  • A paper bill of lading may be forged with relative ease and carriers are liable for misdelivery against a forged bill of lading.

Benefits of an electric bill
The electronic bill of lading or e-bill, in theory, addresses many of the flaws of the paper system, bringing with it a number of advantages:

  • It can be sent around the world instantaneously, hugely lowering the administrative burden of trade (especially where cargo is subject to multiple transfers of ownership during carriage).
  • Any amendments or corrections required can be made far more efficiently and cost effectively.
  • Electronic payment systems, and related advances in security, make an electronic system considerably more secure than its paper equivalent. This is obviously subject to cyber issues.

These benefits will cut the administrative costs of trade significantly and reduce, if not eradicate, situations where carriers discharge their cargo against letters of indemnity.

So why so slow on the uptake?
One of the main reasons the widespread use of the e-bill has been slow to proliferate stems from the fact that it is not treated in the same manner, legally, as its paper equivalent. Significantly:

  • A paper bill of lading is a document of title, enabling it to be negotiated and transferred as possession of the bill is evidence of title to the goods. This is not automatically the case at law with an e-bill.
  • The Hague Rules / Hague Visby Rules (HR / HVR) apply to a contract of carriage by reference to the bill of lading, or similar document of title, and it has been less clear whether they would apply to any electronic trading system used. The solution developed to these legal obstacles is essentially a multiparty contract. This takes the form of a set of rules to which users of an electronic trading system are all required to subscribe to use that system. Such rules then set out the specific form of electronic trading documentation to be used and that the consequences of using such documentation shall mirror the position at law as if they were paper bills of lading.

This, however, means that electronic trading systems such as BOLERO, which has been in existence since the 1990s, are only able to function between their members (i.e. those that have agreed to the uniform set of rules and systems that will govern their transactions). Where a member of an electronic trading system enters into a transaction with a non-member, the electronic system cannot be utilised and a paper bill of lading is issued. This feature has limited their growth, as electronic trading systems are only really effective once they have a large number of members, but are not cost-effective for traders to join until they have a large number of members.

The present situation
The benefits of electronic trading systems are particularly tangible to container carriers (as there is often a separate bill of lading for each container carried) and as such have been utilised by liner companies before wider adoption in the industry. However, the efficiencies of electronic trading systems are not confined to the container industry alone and with members of the largest trading companies, trade finance banks, mining companies and oil majors using such systems, it is clear that they are becoming increasingly prevalent in the shipping industry as a whole.

The growth of the use of electronic trading systems in the wider shipping industry is something that BIMCO, by including an e-bills clause in its latest iteration of the NYPE form, has also recognised. In sum the new clause provides that:

  • use of an electronic trading system is at charterers’ option;
  • owners shall subscribe to the system elected by charterers, provided such a system is approved by the International Group of P&I Clubs;
  • charterers shall pay any fees incurred by owners in subscribing to such elected system; and
  • charterers shall indemnify owners for any liabilities incurred arising from the use of the elected system, so long as such liability does not arise from owners’ negligence.

The International Group of P&I Clubs have now ‘approved’ three electronic trading systems (BOLERO, essDOCS and E-title). An ‘approved’ system is one that is found to replicate the legal characteristics of a paper bill (namely (i) as a receipt; (ii) a document of title; and (iii) a contract of carriage which incorporates the HR / HVR). This means that the International Group of P&I Clubs will provide cover for any liabilities arising under carriage covered by these three electronic trading systems (or any such other subsequently ‘approved’ system), provided that such liability would also have arisen under a paper bill. However, members should be advised that risks connected with the use of a non-approved electronic trading system will not be covered.

The use of an electronic trading system does, however, lead to other risks from things such as hacking, systems collapse, e-theft and viruses, none of which are traditionally covered by P&I clubs and would need to be insured separately. In this regard, essDOCS (which is now used throughout 71 countries by over 3,300 companies) has insurance cover of up to USD $20 million per electronic bill of lading for “eRisks” resulting from an electronic crime or electronic system failure.

With the rise in usage of electronic trading systems, the recent judgment in Glencore v MSC (albeit currently under appeal) provides a timely reminder that the release of cargo should only be made in accordance with the contract evidenced by the bill of lading, even where an electronic release system for cargo is being operated. In this instance cargo was released on presentation of a PIN, despite no provisions for this in the bill of lading, two of the released consignments of cargo were misappropriated and the carrier was held liable.

The future?
With the International Group of P&I Clubs’ approval of three electronic systems, the inclusion of an electronic bills of lading clause in BIMCO’s latest NYPE form and the proliferation of the use of electronic trading systems throughout the wider shipping industry, it is clear that the use of electronic trading systems is increasing. Whilst there is no doubt that we can expect teething problems as the industry continues to adapt to such electronic trading systems, and the cyber risks they may bring, it seems that the efficiencies are too great to be ignore. Source: Ship Law log / ReedSmith

AfricaFrom time to time it is nice to reflect on a good news story within the local customs and logistics industry. Freight & Trade Weekly’s (2015.11.06, page 4) article – “SA will be base for development of single customs platform” provides such a basis for reflection. The article reports on the recent merger of freight industry IT service providers Compu-Clearing and Core Freight and their plans to establish a robust and agile IT solution for trade on the African sub-continent.

In recent years local software development companies have facilitated most of the IT changes emerging from the Customs Modernisation Programme. Service Providers also known as computer bureaus have been in existence as far back as the early 1980’s when Customs introduced its first automated system ‘CAPE’. They have followed and influenced Customs developments that have resulted in the modern computerised and electronic communication platforms we have today. For those who do not know there are today at least 20 such service providers bringing a variety of software solutions to the market. Several of these provide a whole lot more than just customs software, offering solutions for warehousing, logistics and more. As the FTW article suggests, ongoing demands by trade customers and the ever-evolving technology space means that these software solutions will offer even greater customization, functionality, integration and ease of use for customers.

What is also clear is that these companies are no longer pure software development houses. While compliance with Customs law applies to specific parties required to registered and/or licensed for Customs purposes, the terrain on which the software company plays has become vital to enable these licensees or registrants the ‘ability to comply’ within the modern digital environment. This means that Service Providers need to have more than just IT skills, most importantly a better understanding of the laws affecting their customers – the importers, exporters, Customs brokers, freight forwarders, warehouse operators, etc.

Under the new Customs Control Act, for instance, the sheer level of compliance – subject to punitive measures in the fullness of time – will compel Service Providers to have a keen understanding of both the ‘letter of the law’ as well as the ability to translate this into user-friendly solutions that will provide comfort to their customers. Comfort to the extent that Customs registrants and licensees will have confidence that their preferred software solutions not only provide the tools for trading, but also the means for compliance of the law. Then, there is also the matter of scalability of these solutions to keep pace with ongoing local, regional and global supply chain demands.

The recent Customs Modernisation Programme realised significant technological advances with associated benefits for both SARS and trade alike. For the customs and shipping industry quantification of these benefits probably lies more in ‘improved convenience’ and ‘speed’ of the customer’s interaction with SARS than cost-savings itself. My next installment on this subject will consider the question of cross-border trade and how modern customs systems can influence and lead to increased regional trade.

Container weighingThe responsibility for verifying the gross weight of loaded containers under next year’s new box-weighing rules will in many cases rest with freight forwarders, logistics operators or NVOCCs, according to freight transport insurance specialist TT Club.

Welcoming the initiative of the World Shipping Council (WSC) in its recent publication of guidelines to the industry in relation to implementing the SOLAS requirements that become mandatory on 1 July 2016, TT Club noted that unlike the CTU Code, which forensically seeks to identify the chain of responsibility for everyone involved in the movement of freight, the amendment to the Safety of Life at Sea Convention (SOLAS) mandating the verification of gross mass of container overtly only names the ‘shipper’, the ‘master’ and the ‘terminal representative’, and – by implication – the competent authorities.

TT Club said the complex nature of logistics means that the term ‘shipper’ may encompass a range of people involved in the contracting, packing and transporting of cargo. However, as stated in the WSC guidance, it said the key commercial relationship in question is with the person whose name is placed on the ocean carrier’s bill of lading.

“Thus, in many cases, the responsibility for actual ‘verified’ declaration will rest with a freight forwarder, logistics operator or NVOC. This means that often reliance will have to be placed on others to have adequate certified methods to provide verified gross mass – particularly for consolidation business,” TT Club said.

It noted that of course many suppliers of homogenous shipments will already have advanced systems, which merely require some form of national certification, adding: “Apart from having a sustainable method by which the gross mass is verified, the shipper also needs to communicate it (‘signed’ meaning that there is an accountable person) in advance of the vessel’s stow plan being prepared.

“The information will be sent by the shipper to the carrier, but with joint service arrangements there may be a number of carriers involved, with one taking responsibility to consolidate the manifest information, in addition to communication with the terminal.”
It said the ‘master’ comprises a number of functions within the carrier’s organisation.

“Implicit in the SOLAS amendment is that the carrier sets in place processes that ensure that verified gross mass is available and used in planning the ship stow,” TT Club said. “Arguably, each carrier will need to amend systems and processes to capture ‘verified’ information.

“However, the simplest might be to amend the booking process, so that the gross mass information is left blank in the system until ‘verified’ data are available. This will be effective if it is clearly understood by all partner lines and terminals with whom the line communicates.”

TT Club said the explicit obligation of the master was simply that he shall not load a container for which a verified gross mass is not available. “This does not mean that one with a verified gross mass is guaranteed to be loaded, since that would derogate from the traditional rights of a master,” the insurance specialist added.

Recognising the pivotal nature of the port interface, it noted that the ‘terminal representative’ has been drawn into the new regulation as a key recipient of information for ship stow planning “and, critically, in a joint and several responsibility not to load on board a ship if a verified gross mass is not available”.

It added: “There has been considerable debate as to whether terminals need to position themselves to be able to weigh containers, not least because of the cost of creating appropriate infrastructure, and amending systems and procedures, with uncertain return on investment. In addition there are commonly incidences of containers packed at the port, in which case the terminal activities could include assisting the shipper in producing the verified gross mass.

“The SOLAS amendment places responsibility on national administrations to implement appropriate standards for calibration and ways of certifying. The overtly named parties rely on this to work smoothly and, preferably, consistently on a global basis.”
TT Club said clarity of such processes needed to be matched by consistency in enforcement. “Talk of ‘tolerances’ is disingenuous,” it said. “SOLAS calls for accuracy. Everyone appreciates that some cargo and packing material may be hygroscopic, thereby potentially increasing mass during the journey, but that need not mask fraudulent activity, nor entice over-zealous enforcement.”

It said the UK Marine Guidance Note may be instructive here, stating that enforcement action will only be volunteered where the difference between documented and actual weight exceeds a threshold. TT Club concluded: “It is suggested that key measures of success of the revised SOLAS regulation will include not only safety of containerised movements, but also free movement of boxes through all modes of surface transport, and a shift in behaviour and culture throughout the unit load industry.”

KentradeThe Kenya Trade Network Agency, operator of the National Electronic Single Window System, has refuted claims by some clearing agents that the platform is lapsing. KenTrade has instead blamed slow integration of its system on the continued parallel use of the Kenya Revenue Authority’s systems – the Orbus and Simba. Currently, importers are using both systems to process documents such as import permits.

Project director Amos Wangora said there is need to retire Orbus system for agents to embrace the Single Window System, particularly in filing Import Declaration Forms. Kentrade accused KRA officials of avoiding the Single Window System.

“We don’t have any problem in the use of the Single Window System. It’s only people who don’t want to embrace the new system. Those using it are doing good only for some KRA officials who still want to use the Orbus system,” said Wangora in an interview on Friday.

KenTrade is the state agency tasked with facilitating cross-border trade through the Single Window System.

Wangora said only three modules remain for the Single Window System to be completed fully – include on declaration submission, bonds and exemption. Testing of the declaration submission module is on and is expected to be completed by 20 January 2015.

A section of clearing agents had raised concerns over delays in cargo clearance at the port of Mombasa under the Single Window System. Yesterday, the Kenya International Freight and Warehousing Association, Mombasa chapter, said KRA officials prefer their own system, which “lacks transparency”.

A clearing agent told the Star that one has to personally push for services, which involves handouts, under the KRA system. Kentrade has since written to KRA commissioner-general to halt the Orbus system on January 31.

The Single Window System integrates about 24 government agencies’ functions, offering a one-stop shop for processing import and export permit documents.  More than 6,000 imports and exports permits were issued under the new system last year, including permits from Kenya Bureau of Standards and Ministry of Health’s veterinary and pharmaceutical departments.

About 1,200 clearing agents, shipping agents, consolidators and partner government agencies will be trained on the remaining modules. Kentrade targets to have the system fully embraced by all stakeholders by July, with the country set to go paperless by 2015. Source: The Star (Kenya)

Ms Nompumelelo Mboweni works as an Airfreight Import Controller at Bidvest Panalpina Logistics in Johannesburg [TT Club]

Ms Nompumelelo Mboweni works as an Airfreight Import Controller at Bidvest Panalpina Logistics in Johannesburg [TT Club]

The 2014 Young International Freight Forwarder of the Year (YIFFY) Award has been presented to South African forwarder Fortunate Nompumelelo Mboweni at the FIATA Annual Congress in Istanbul.

Each year at the FIATA Annual Congress the achievements of young freight forwarders from around the world are celebrated via an awards programme. TT Club is proud to have sponsored this award, now in its sixteenth year, since its foundation. The process of awarding the honour of Young Freight Forwarder of the Year (YIFFY) began earlier this year when entrants from all over the world submitted papers about a wide variety of transport and logistics projects.

These ranged from the transportation of tunnel drilling equipment to Bolivia to the delivery of a catamaran in Indonesia and from a project moving radioactive isotopes from South Africa to Namibia to the expedited deployment of a Disaster Assistance Response Team in the Philippines.

From this bewildering, yet highly professional array, the YIFFY Steering Committee selected a shortlist of four regional finalists. These four young professionals were then invited to attend the 2014 FIATA World Congress this week in Istanbul, Turkey to make a presentation on their dissertation topic.

The four regional finalists who proudly represented the future of the international freight forwarding industry in Istanbul were –

Africa/Middle East: Miss Fortunate Nompumelelo Mboweni, South Africa
Americas: Mr Douglas Whitlock, Canada
Asia-Pacific: Mr Saiful Ridhwan Bin Zulkifli, Singapore
Europe: Mr Christian Hensen, Germany

Following a comprehensive judging process, Ms Fortunate Nompumelelo Mboweni from South Africa was announced as the 2014 Young Freight Forwarder of the Year at the FIATA Congress’ opening ceremony on 13 October. Ms Nompumelelo Mboweni works as an Airfreight Import Controller at Bidvest Panalpina Logistics in Johannesburg. Andrew Kemp, TT Club’s Regional Director for Europe congratulated her and presented the award.

“I have been honoured as TT Club’s representative to be part of the selection process, and I personally was engrossed by the finalists’ presentations, which showed a considerable depth of understanding of their individual projects. I have to say all four finalists performed with flying colours at the recent final presentations; it was certainly a difficult decision to pick an overall winner. However, Fortunate prevailed and deservedly takes this year’s award,” said Kemp.

The award is presented in recognition of forwarding excellence and was established by FIATA with the support of TT Club to encourage the development of quality training in the industry and to reward young talent with additional valuable training opportunities. The TT Club has been a sponsor of the award since its inception and remains firmly committed to the importance of individual training and development within the global freight forwarding community. Source: TT Club

imagesCAQOK2YRKuehne + Nagel has introduced what it claims is the freight forwarding industry’s most advanced environmental emissions calculator tool, providing “exact data” on sea freight and intermodal shipments.

K+N said it had been “continuously enhancing its CO2 emission calculating capabilities and is the first to offer its customers exact data instead of estimations”. The Global Seafreight Carbon Calculator (GSCC) allows calculations of CO2, SOx and NOx emissions for container and LCL movements from door-to-door.

Built upon the European Standard EN 16258, it said the GSCC is a planning support tool that helps customers to calculate and model complex supply chains. The underlying methodology of the programme is based on the Clean Cargo Working Group standards for CO2 emissions, whereby an individual trade lane-based CO2 footprint per gramme/TEU/km can be obtained. Additionally the GSCC features detailed information about SOx.

K+N said the GSCC also provides: real-time CO2 emissions; a calculation model for strategic carbon footprint simulation; a high-level overview of CO2 emissions for sea and intermodal transport; carrier-based CO2 emissions reports.

On request, Kuehne + Nagel can also provide customer-specific CO2 emission reports with its advanced Global Transport Carbon Calculator. This tool is designed to monitor carbon emissions from specific transport activities and the reports include actual ocean carrier emissions data provided by individual carriers.

K+N said the data was fully integrated into the KN Login platform and allows scalable reports per trade lane, region, country, mode of transport and carrier. Source: http://www.kn-portal.com

SAAFFAs the winner of the Region Africa Middle East phase of the Young Freight Forwarder of the Year competition, Fortunate Mboweni of Bidvest Panalpina Logistics is now off to compete on a global platform.

Fortunate’s prize is to attend and participate in the FIATA World Congress in Istanbul in October this year. At this Congress Fortunate and the three other regional winners representing the Americas, Asia Pacific and Europe will compete to become the global winner.

The global winner will receive a total of five weeks training in New York and London, as well as at one of the IATA major centres, with all expenses paid by competition sponsors, the Transit Trade Club and International Air Transport Association. The competition was developed to encourage training in the freight forwarding industry and to further develop the professionalism of young people.

Winners were chosen from dissertations on how they handle all aspects of the international movement of goods that are not the usual run of the mill cargo. Fortunate’s dissertation was called ‘Multimodal transport operations in practice: radio actives and abnormals from and to South Africa.’

Fortunate is a channel controller at BPL and she is currently studying for the Generic Management NQF level 5 qualification. Source: http://www.transportworldafrica.com

Losing-Business-On-Social-MediaOn March 13th, 2014, Sean Day, a Chicago-based wholesaler, called up the Italian branch of a leading global freight forwarder and requested a price quote for a door-to-door air freight shipment from a Rome-based apparel supplier, to his own warehouse in Chicago, IL. Within 37 minutes, he received pricing for two out of the three legs – from the Rome address to Rome’s airport, and from there to Chicago’s O’Hare airport. If that doesn’t impress you, consider that prompt price quotes for international freight shipments, are rather like four-leaf clovers. A spot quote in 37 minutes seemed too good to be true.

It was. Sean only received the final quote, including delivery to his Chicago address, four days later, on May 17th. Yes, four days.

Bear in mind that this was an air freight quote. Sean was willing to pay a substantial premium to fly his precious cargo by air, because he needed it urgently. What’s the point of splashing out on air freight, you might wonder, if you wait four days just for the price quote? Sean wondered the same thing.

At least he would have wondered, if he actually existed. In fact, our company, Freightos, created Sean, a fictional employee working at an imaginary company, as well as multiple whimsical competitors, in order to collect data on the sales process, and customer experience, of procuring international freight forwarding services. Over the course of two months, we requested dozens of air, ocean and ground quotes from five of the top fifteen freight forwarders in the world (after, of course, receiving permission from the companies). Each time, we identified ourselves as a new customer with potential for repeat business in the future.

Sean’s quoting experience was no exception. Due primarily to the archaic back-end systems so prevalent in the industry, and the lack of data sharing between fiefdoms, the average quote time was approximately 62 hours, with some quotes taking as long as a week. The quoting process was rife with other problems, ranging from vague quotations to blatant inaccuracies. In some freight forwarders, each office, or even individual sales staff, used their own price quote templates. Many forwarders had inactive contact numbers on their website. Worst of all, a staggering 43% of quote requests were simply ignored. Some way to capture new customers!

If these quotes were frustrating for the customers, they were also expensive for the vendors. We estimate a person-hour went into each. In developed countries that’s about $40. And forwarders often do five quotes for every secured order. That’s $200 wasted. For a smallish spot order, $200 is the entire profit! Click here to continue reading the full article… Source: LloydsLoading.com

From-the-left-are-Maria-du-Preez-Fortunate-Mboweni-and-James-Reddy-from-Bidvest-Panalpina-LogisticsFortunate Mboweni of Bidvest Panalpina Logistics has been named South Africa’s Young International Freight Forwarder of the Year. According to David Logan, CEO at the South Africa Association of Freight Forwarders (SAAFF), the award was based on her submission on the challenges of super abnormal loads and the complexities associated with the handling of ultra-sensitive cargo.

Says Logan: “Mboweni wrote a well-researched paper on two topical subjects: the shipping of highly sensitive material and the management of project (large, abnormal) cargo. The delivery of work was of a high standard and she can be proud of her efforts, which, in my opinion, stands a good chance of winning-at least the RAME [Region Africa Middle East] round.”

“She will now write a dissertation in order to compete in the regional round of the competition, and if she is successful, will be entered as a global finalist into the ‘Final Four’, which will be decided in Istanbul at this year’s Fiata Global Congress.”

The competition was initiated by its lead sponsor, the TT Club, in 1999 and its objectives are the encouragement of training and development in the industry as well as the elevation of professional standards .

Entrants who are brave enough to take up the challenge are obliged to write a dissertation on a topic that is set by SAAFF. This topic allows the entrant to write about current and often challenging issues and to demonstrate their knowledge and expertise on export and import forwarding and clearing matters.

SAAFF’s judging panel carefully adjudicates each entry in order to identify a winner, whose name is then submitted as the candidate for the regional round. As the competition is supported by FIATA (The International Association of Freight Forwarding Associations), it is adjudicated globally through its regional structures, which under FIATA nomenclature is RAME.

The winner of this round then goes through to the finals comprising the three other regional winners and the global winner is announced at the FIATA Global Congress each year.

Logan concludes: “The status attached to this competition is enormous and reflects positively on both the individual and the company for whom they work. Naturally, only freight forwarders may enter.”

In 2012, SAAFF’s entrant, Daniel Terbille, won the global competition and Logan says they have faith in Mboweni doing well in this international event. Source: Trans World Africa