BIFAlink August 2022

BIFAlink August 2022

August 2022 The magazine of the British International Freight Association BIFA link Issue: 384 www.bifa.org

Container overboard: How did that happen? – Page 8

INSIDE

9-12: Special four-page pull-out: Customs Declaration Service: your guide to essential information

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Robert Keen’s Column

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Making hay whilst the sun shines

BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266

The saying that headlines this piece came to mind as I was reading a recent report issued by consultant Transport Intelligence (Ti) about the current state and future prospects of the freight forwarding market. As farmers in the UK are predicting excellent harvests this summer, Ti reports that according to its research the global forwarding market had a record ‘harvest’ of its own in 2021, rebounding and exceeding its pre-pandemic levels. It added that whilst limited capacity and record high freight rates present a challenging market for shippers, this has presented opportunities for extraordinary ‘uplift’ in the profitability of freight forwarders, which is certainly the case from the conversations that I have had with many Members.

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(A company limited by guarantee. Registered in England: 391973. VAT Registration: 216476363) Director General Robert Keen [email protected] Executive Director Robert Windsor, Policy & Compliance – Surface & Legal

Ti reports that the global freight forwarding market grew by 11.2% in real terms during 2021, the fastest expansion in a decade, and forecasts that the market will grow 5.7% in 2022 and at a 3.7% compound annual growth rate over the five years to 2026. This also corresponds with many of the anecdotal comments about growth that I am hearing from BIFA Members and will be music to your ears. The market’s expansion was driven by global trade which reached new record highs during the year as recovery from the COVID-19 pandemic boosted demand. As well as the phasing out of pandemic-related restrictions on economic activity, government support schemes and economic stimulus packages introduced in many countries remained, keeping demand for goods at elevated levels. Factors such as the expansion of the e-commerce industry and the rise of free trade agreements have also been contributors to the growth of the global digital freight forwarding market in 2021. However, Ti’s report foresees that the drivers of the growth momentum are likely to gradually abate, with forecasts for the period 2023-2026 being more pessimistic due to inflation, the war in Ukraine, and consumer spending slowing down. The entrance of shipping lines into the acquisition market has created a new driver of industry consolidation, not least due to the carriers’ almost unlimited funds and access to ‘cheap’ money. But ocean freight and port congestion show few signs of improvement and will continue to push traditional ocean shippers into the air freight market. It was interesting to read that the digitalisation trend in the forwarding industry, which was already gathering pace before the pandemic, has been accelerated further by the crisis with the adoption of digital forwarders, online freight booking platforms and marketplaces increasing threefold since 2019. Many believe these ‘newbies’ could become game changers in the industry, and I was somewhat surprised to read that digital forwarders and booking platforms are used by 81% of the shippers and logistics service providers (LSPs) that were surveyed by Ti. What it does not indicate is whether the users are satisfied with their experience, nor how successful the digital forwarders and booking platforms have been in their aim to combine smart technology with actual operational experience. Clearly, however, driven by challenging market conditions, shippers are re-assessing their freight procurement strategies and contractual relationships with LSPs to adjust to the ever-changing environment. Something that another of my old bosses, who has recently hung up his boots, will have seen plenty of during a 62-year career in the freight industry. After a couple of recent obituaries, I am honoured to mark the retirement of industry stalwart, Gerry Burgin, who has been attending meetings of the BIFA Air Policy Group for over 20 years. I worked under Gerry at Transglobal in the early 1980s and he was a dynamic leader then with boundless energy, which is still evident today. Knowing Gerry, I expect he will still be on the forwarding social scene for many years to come and I am sure he will agree with me when I suggest that Members should take heed of the headline of this column and invest profits wisely now to meet the current and future issues that they will face.

[email protected] Executive Director Spencer Stevenson [email protected] Executive Director Carl Hobbis [email protected] Policy & Compliance Advisor – Customs Igor Popovics [email protected] Policy & Compliance Advisor – Air David Stroud [email protected] Editorial Co-ordinator Sharon Hammond [email protected] Communications Manager Natalie Pitts [email protected] Membership Supervisor Sarah Milton [email protected]

Published by Park Lane Publishing [email protected] Contributors

Robert Keen, Robert Windsor, David Stroud, Spencer Stevenson, Carl Hobbis, Sharon Hammond, Natalie Pitts, Igor Popovics Note to media: If you wish to use items in this magazine that are older than one month, please contact the editor to ensure that the item in question still reflects the current circumstances. Please be advised that BIFA DOES NOT OFFER LEGAL ADVICE. BIFA is not a law firm and the authors of this publication are not legally qualified and do not have any legal training. The guidance and assistance set out herein are based on BIFA’s own experience with the issues concerned and should not be in any circumstances regarded or relied upon as legal advice. It is strongly recommended that anyone considering further action based on the information contained in this publication should seek the advice of a qualified professional.

Robert Keen Director General

August 2022

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Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business

Increased biosecurity risks, and delays for biosecurity clearance at the border, are adding costs to already costly global supply chains. Concerns have been raised that some of these new and emerging risks may take limited biosecurity resources away from business-as- usual trade facilitation activities, and lead to bigger delays for some importers at international borders. So that standard and arrived export ports are using similar processes to verify Customs clearances and keep goods flowing at the border, HMRC has made some changes in GVMS for Common Transit Convention Movements for exports. These came into force on 1 August 2022 and mean that an operator can no longer input a transit Movement Reference Number (MRN) in a Goods Movement Reference (GMR) for an outbound transit movement from Britain, unless it is an authorised consignor or consignee (ACC). A retailer rush to restock depleted inventories has left many of the world’s largest stores with an unexpected glut of goods, even as inventory levels across the economy remain lean by historical standards. Supply chain experts say that the gap is in part due to general merchandise stores pulling in orders earlier to fill shelves, whilst consumers have now pivoted in the other direction, pulling back on purchases of goods that were once in high demand. Six in 10 SMEs in the USA have reported stolen shipments over the past year, with 75% of thefts resulting in losses of up to USD20,000, according to a survey of 320 supply chain managers conducted by Capterra. Of those suffering losses, 33% said that theft was enabled by employees and 30% said it was enabled by vendors, whilst 63% reported performing background checks on logistics/inventory management employees.

Ocean carriers adopt blanking strategies

ON THE OCEAN The Loadstar reported in July on the latest edition of project44’s Ocean Carrier Report, concluding that ocean carriers are resorting to more aggressive blanking strategies to

alleviate supply chain constraints and improve the performance of the air cargo market in May, with global demand 8.3% below May 2021 levels. This was an improvement on the year-on-year decline of 9.1% seen in April. Capacity was 2.7% above May 2021, which more than offset the 0.7% year-on-year drop in April. The European Commission (EC) is urging the air cargo industry to prepare for new rules that from March next year will require the submission of advanced shipment information before air cargo is loaded.

and outside of working hours – for the past 28 days.

Eurotunnel Le Shuttle Freight wants to expand its unaccompanied freight business to link inland UK rail freight hubs with European origins and destinations, according to The Loadstar. It says that its Border Pass can make the border crossing as quick as pre-Brexit transitions for unaccompanied freight. IN BUSINESS According to Transport Intelligence, the global forwarding market exceeded pre-pandemic levels in 2021, but limited capacity and record-high freight rates present a challenging market. Ti predicts that the market will grow 5.7% in 2022, slowing to 3.7% by 2026. The TT Club has used the IMO’s recently revised guidelines for the implementation of the inspection of cargo transport units (CTUs), which aims to help governments implement a uniform and safe inspection programme, to reiterate its call for increased inspections of all types of cargo, not just those declared dangerous.

manage a dip in demand and decreasing freight spot rates.

July saw FIATA, the International Federation of Freight Forwarders Associations, make a further call on industry stakeholders and market regulators to take action to ensure a balanced and fair trading system within maritime supply chains. The World Shipping Council (WSC) has reported that during the last two years, container losses at sea have increased significantly with the average losses for the two-year period 2020-2021 reaching 3,113, compared with 779 in the previous period. The WSC said that one of the most important reasons for this worrying spike is the unusually high number of weather-related incidents. IN THE AIR IATA has reported that the easing of the COVID-19 Omicron restrictions in China helped to

OVERLAND With the DVSA increasingly enforcing regulations during roadside stops and when

investigating operators, as well as scrutinising operators’ facilities to find out if they have systems in place to document drivers’ timetables in sufficient detail, TruTac has warned businesses about little- known but stringent tachograph compliance rules. These require commercial vehicle operators to record and show evidence of drivers’ timetables – both during

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Fit for human consumption

Inaccurate weights issues highlighted

In the lead-up to the implementation of the International Maritime Organization’s Safety of Life at Sea (SOLAS) verified gross mass (VGM) regulations, BIFA was heavily involved in making Members aware of the changes. This regulation, which requires the gross mass (cargo gross weight plus container tare weight) of loaded shipping containers to be recorded and verified before they can be loaded onto a vessel for export, came into force on 1 July 2016. Effectively there are two methods to achieve an accurate VGM, but both require weighing. The VGM regulations have been successfully implemented across the globe, resulting in much safer supply chains. BIFA receives very few enquiries on this subject from Members now. Recently, however, concerns have been raised over the accuracy of weighing facilities, as well as the number of late VGM amendments. Asia-Europe ocean carriers are starting to take action against shippers who incorrectly declare westbound booking container weights and make last-minute VGM amendments. Misdeclared booking weights can cause the weight allocations of individual alliance partners to be exceeded, ships to shut out cargo, contracts to underperform and revenue to be lost. The Japanese carrier ONE became the first carrier to take action when advising that it would impose a $2,000 per container weight discrepancy charge (WDS) from 1 July for bookings accepted on or after that date. ONE said the penalty fee would apply where the cargo weight deviated by more than +/- 3 tons per teu from the bill of lading instructions and documentation. The implementation of VGM coincided with relatively low maritime traffic levels. COVID-19 and the resulting higher traffic levels have focused minds on the weight issue, making it more important to ensure that the correct weight for each container is declared.

In an example of its work, the Suffolk Coastal Port Health Authority (SCPHA) has shared information relating to the identification of a consignment of frozen sea bream imported through the port of Felixstowe in June which was contaminated with the tongue-eating parasite cymothoa exigua. With a team of 130, the SCPHA provides essential health checks on food and animal-related imports to ensure that they are safe for human consumption and present no risk to UK wildlife and agriculture. In this case it was able to prevent the parasite- infested consignment from entering the UK. In the course of its work it will check around 80,000 consignments a year arriving at the port of Felixstowe – Britain’s busiest container port – Harwich international port and the port of Ipswich. Port health inspectors are part of the environmental team of the local district council. Information on the import of goods subject to port health control via UK ports can be found at: • www.porthealth.uk/ for the Port of Felixstowe, Harwich International Port and the Port of Ipswich • https://mersey-pha.gov.uk/ for the Port of Liverpool • www.cityoflondon.gov.uk/services/business- standards/london-port-health-authority/contact-lond on-port-health-authority for London Gateway • www.southampton.gov.uk/business-licensing/port- health/ for Southampton • www.nelincs.gov.uk/keeping-our-area-clean-and-

safe/environment-health/port-health/grimsby-and- immingham-port-health-charges/ for Grimsby and Immingham • www.dover.gov.uk/Port-Health-and-Public- Protection/Port-Health/Port-Health.aspx for Dover. Cymothoa exigua are tongue-eating parasites that affect fish and were found in some imported sea bream during a health check by Suffolk Coastal Port Health Authority

Reference to CHIEF removed from BIFA training courses – not quite

All courses from 1 August will contain reference to CHIEF and C88 for exports only. With the full introduction of the Customs Declaration Service (CDS) on the horizon, our training team have been faced with the dilemma of when they stop talking about CHIEF, box numbers, C88 etc, in our Customs-related courses. Carl Hobbis, executive director with responsibility for training, explained: “With a track record of 11th hour delays on previous Brexit and EU Exit-related subjects, this has been a bit of a conundrum for us. “In the end, we have decided that for any Customs course starting from 1 August, all references to CHIEF-related items will be limited to exports only. This is because the

CHIEF import facility is due to be removed on 30 September 2022, with CDS becoming the only place to make import entries. It will still be possible to make export entries through CHIEF until the end of March 2023 when this function will also be removed. “From August, any delegate doing our BTEC course will find that all teaching, homework and the final assessment will be based on CDS.” BIFA is still receiving a relentless number of enquiries and appetite for Customs training, and as a result our freight and Customs training courses are now booked-up months in advance. Hobbis said: “We have added more dates to our calendar for the remainder of the year, so we

encourage people to book early to secure places. “Our training has built-up a reputation for being relevant for the day-to-day knowledge needed and the feedback we receive from our sessions is incredibly positive. “We have recently delivered face- to-face courses in Heathrow, Manchester and the Midlands, plus some in-house at BIFA Member premises. Whilst we all understand the convenience of remote learning, you cannot beat face-to-face, so I would encourage Members to support these.” For course information visit: www.bifa.org/training/customs- procedures or to discuss training options, contact Carl Hobbis at [email protected]

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August 2022

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BIFA welcomes government supported Generation Logistics

Return to Liverpool Following a COVID-19 enforced hiatus, the BIFA Liverpool Region Annual Dinner returns to The Liner Hotel, Liverpool, on Friday 30 September 2022. Tickets are now on sale for this popular black-tie evening during which guests will hear from the Drum Corps of the local Ellesmere Port Sea Cadets, enjoy a three- course dinner and be entertained by comedian John Martin. BIFA is grateful to the sponsors Genco Logistics, Hapag-Lloyd, Maersk, MCP and Peel Ports for their support for this event. The BIFA Liverpool Region Annual Dinner provides an excellent opportunity to entertain guests or reward staff for their hard work. Book your table now at www.bifa.org/events to avoid disappointment. Once again we will be supporting the work of local charity Zoe’s Place Children’s Hospice, Help 4 Heroes and making a donation to the Ellesmere Port Sea Cadets. If you are able to offer either a raffle prize or auction lot, please contact Sharon Hammond at [email protected]

BIFA is supporting the collaborative approach of all trade associations to addressing the industry’s long-term recruitment and staff retention issues with the launch of a major new awareness and recruitment campaign, Generation Logistics. The campaign, which was recently launched across the sector at Multimodal 2022 (pictured), has gained significant support from blue-chip organisations, BIFA Members and businesses of all sizes from across the logistics industry. It is also supported by the Department for Transport. Carl Hobbis, executive director, BIFA, said: “It is really encouraging to see all the key trade associations and the wider industry join forces to help raise the profile of the sector. All our Members have similar challenges attracting talent and this coordinated campaign will help put it at the forefront of young people’s minds as a potential career choice.” The Secretary of State for Transport, Grant Shapps MP, is delighted that the government is supporting the campaign. “I am proud to confirm government support for the Generation Logistics campaign. The pandemic has once again demonstrated the strategic importance of supply chains and their associated workers. Their work to keep the UK moving was exemplary and I have nothing but

backgrounds, experience and skills. This campaign will showcase those opportunities in artificial intelligence, advanced robotics, autonomous vehicles and the decarbonisation of the supply chain. This industry campaign is integral to not only supporting growth of this vital sector but also ensuring we have the workforce needed for now and the future.” In addition to a comprehensive web portal, containing careers advice and guidance, features, video content, jobs and news, the campaign will focus on several key demographic areas, all of which could be inclined towards taking up a role in logistics.

admiration for those unsung heroes who keep the UK trading, keep food on our shelves and provide our factories, shops, hospitals and schools with the supplies they need. Logistics workers make a substantial difference to our lives, every day. “However, we have a new challenge facing us as we look to the future of freight. We need to attract a diverse and skilled workforce to play a key part in a new, exciting era transforming an industry at the forefront of

innovation and technology. There are thousands of logistics roles available to people from all The target audience launch took place at the end of July. To find out more about becoming a sponsor, contact Carl Hobbis [email protected] www.generationlogistics.org The Limits of Liability for Carriers

By sea – Hague Visby rules (2 SDR): £2.20 per kg £731.69 per package

By air – Warsaw Convention (17 SDR): £18.66 per kg

In association with

BIFA STC: (2 SDR): £2.20 per kg

By road – CMR (8.33 SDR): £9.14 per kg

Insurance for the Marine & Logistics industries

(The SDR rate on 18 July 2022,

By air – Montreal Convention (22 SDR): £24.15 per kg

according to the IMF website, was 1.09753)

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goods are involved there is the ever-present danger of pollution and damage to the marine environment. The shipping lines argue that the number of containers lost overboard remains small, relative to the total number of containers shipped in a year. The latest figures from the World Shipping Council, which represents the major container lines, show the number of boxes lost overboard in 2020-21 account for less than a thousandth of 1% of the 241 million containers shipped each year. But the past two years had seen a “worrying break in the downward trend” of losses, with the average number of containers lost at sea per year in the 14 years since the survey began increasing to 1,629, up 18% since the previous survey results for the 12 years to 2019. “The winter of 2020-21 saw an unusually high number of weather-related incidents, and the average losses for the two-year period were 3,113 compared with 779 in the previous period,” the WSC said. Three-year moving average figures had been trending down since 2013, when the total loss of MOL Comfort (IMO: 9358761) with 4,293 containers on board led to a sharp spike in the number of boxes lost. But this trend was reversed in 2020 following the ONE Apus casualty, where more than 1,800 containers were lost in a single event, and the loss of another 750 from Maersk Essen in 2021. To reduce the number of losses, the WSC and its member carriers have joined with Dutch research institute Marin to run a study on how to reduce the risk of container losses. Parametric rolling Among the concerns being investigated is the phenomenon of ‘parametric rolling’, where ships lose stability in following seas. A Notice to Mariners has been developed to help crew recognise, plan their response and prevent parametric rolling. The WSC and member companies have also contributed to and supported revision of the International Maritime Organization (IMO) guidelines for the inspection programmes for cargo transport units. It also supports the creation of a mandatory reporting framework for all containers lost at sea. The WSC will be increasing the frequency of its own reporting, following the sharp increase in numbers during 2020-21. The report, which was previously published every three years, will now be issued annually. There is an increased emphasis on safety in the maritime environment, which is to be welcomed, but it is incumbent upon each party in the supply chain to play their part in driving up standards.

The number of containers lost overboard has, worryingly, begun trending upwards again after a period of decline. As a result the World Shipping Council has joined a study looking at how to reduce these losses How did that happen? Container overboard

In a recent BIFAlink article we highlighted the dangers of undeclared dangerous goods, especially lithium batteries, to ships, crews and landside operations. Whilst major incidents such as the loss of MSC Napoli (2007) attract the most attention, the loss of a number of containers overboard attracts little attention. Some of these incidents can be amusing and can actually have beneficial side effects. The most famous such incident, and the one discussed by David Attenborough in the Blue Planet, was the case of the ‘friendly floatees’ after a consignment of some 29,000 plastic yellow ducks, red beavers, blue turtles and green frogs (estimated weight 28,000 kilos) were washed into the Pacific in 1992. The little toys began appearing on beaches around the world, from the west coast of America to South America, Australia, and by 2007, Europe. This incident attracted considerable media attention and allowed scientists to analyse global ocean currents.

The sad truth of the matter was that scientists were already working on a model, tracking 61,000 Nike trainers lost overboard in 1990. Unfortunately, amusing as these incidents are, sight must not be lost of the simple fact that each container lost overboard represents a loss to the owner of the goods. Also shipping lines, where there is a danger to shipping, are required to recover such containers whenever possible. Bay of Biscay losses One such incident occurred on 14 February 2014, when 520 containers were lost overboard in bad weather in the Bay of Biscay. About 85% of the containers, being empty, sank almost immediately, but some of the balance entered the English Channel. Whilst empty containers sink reasonably quickly, it can take up to two months for a loaded 20 ft container to sink and, buoyed by refrigerant, a ‘reefer’ can take longer. While afloat, these containers represent a danger to shipping, and in all cases where dangerous

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August 2022

Special Pull-Out & Keep Guide

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Customs Declaration Service (CDS): AN OVERVIEW HM Revenue & Customs (HMRC) has published numerous guides designed to assist users making the switch to the new Customs Declaration Service (CDS), most of which are available on GOV.UK The aim of this guidance is to provide an overview of the new CDS system and to highlight the main differences between the incoming system and CHIEF. Undoubtedly, aside from the difference in the interface, the additional >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20

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