ISSUE 3 2010


NEWS & vIEWS


Freight and logistics: the ministerial view


Britain’s new transport minister with responsibility for ports, Mike Penning, promises that privatisation won’t happen without proper public scrutiny first.


Since taking up my ministerial duties there is a truth that I’ve come to learn pretty quickly: the freight and logistics industry matters to the running of our country. It generates economic prosperity, enhances our social well being and improves our individual quality of life. It literally delivers the goods for producers and consumers, importers and exporters. And it makes a difference to families and to businesses from Lands End to John O’Groats. Nowhere is the central importance of freight and logistics more evident than in Britain’s ports. Around 95% of this country’s international trade by weight, and 75% by value passes through our ports. They are vital economic arteries and irreplaceable international gateways. And that’s precisely


why this Government wants our ports to be successful. In a competitive market


I want to ensure ports have the freedom and flexibility to operate efficiently, safely and sustainably. That means having the transport networks, the policy frameworks and the proportionate regulations to support them. It also means recognising that we need a mix of ownership types in the ports sector - private, trust or local authority - that works most effectively, both for local communities and in the national interest. It was this fact that informed


my recent decision to hold a further period of consultation on proposals for the privatisation of the Port of Dover. I regard Dover as a vital piece of our national infrastructure. I therefore


believe that local residents, port users and other organisations must have a real say about its future. What we need is the right decision, not a quick decision, and that’s something deserving of the closest public scrutiny. Investing in the future of


Britain’s ports also plays a pivotal role. Indeed, on a recent fact finding visit to Felixstowe I got a glimpse of what that future looks like. Felixstowe is already the largest container port in the country and one of the biggest in Europe. But, standing still cannot be an option in an increasingly competitive global economy. Consequently, work is well underway at the port to construct a deep water terminal capable of handling the world’s largest containerships. This project is one of genuine national strategic importance. It is attracting real


investment, creating real jobs and laying the foundations for the continuing success of this major port. And that’s not just good for Felixstowe, it’s great for Britain. From competing in the global


market place to providing essential capacity, our ports face a range of challenges. As they meet them they do so against the backdrop of what is perhaps our greatest collective challenge – the inherited debt crisis. Taking action to deal with the


massive debt bequeathed to this Government is therefore our top priority. This will inevitably entail hard choices and difficult decisions. We are going to have to make our national assets work harder, drive through efficiency savings and maximise returns on investment. All of us, freight and logistics and the ports sector


Mike Penning MP


included, will have to work smarter and do more with less. From day one in my job I have


been keen to escape Whitehall, leave my office behind and get out and about to see our ports and meet the people who make them truly world class. I have not been disappointed. Each visit I have made, every person I have spoken to has convinced me that this sector has the expertise


and experience, the capability and the courage to confront its challenges head on. So yes, these are certainly


testing times. But, ship by ship and load after load our ports are sending out a loud and clear message – Britain is very definitely open for business.


Mike Penning MP Transport Minister


Pay close attention to trading conditions


We’ve all seen terms and conditions on freight documentation, but how many of us give them a second glance? They deserve to be treated with a degree of respect, says Rodd Bankier.


Shipowners, airlines, railways, hauliers, warehouse-keepers and freight forwarders - almost everyone connected with the international or domestic movement of goods seeks to protect themselves by saying they trade under conditions that restrict or limit their liability in the event of loss or damage occasioned to property in their care. In some cases these conditions


reflect international conventions such as Hague, Hague-Visby, CIM, Warsaw or CMR, that are embodied in UK law by statute and these will apply to all transits falling within the definition set out in the appropriate Act of Parliament. The Act sets out the carrier’s responsibilities to cargo and imposes monetary limits to their liability in the event that they fail to perform those duties. Frequently, these limits are expressed in Special Drawing Rights (SDRs), a notional currency measured against a ‘basket’


of currencies. At the time of writing, one SDR is worth about 97p.


Since they form part of the


law of the land, parties to those contracts of carriage governed by statute cannot avoid their responsibilities as described and it is usually impossible to vary the contract of carriage to the benefit of one or other party. Equally, however, if cargo is lost or damaged in transit through the fault of the carrier, the aggrieved party cannot claim more than the limit set out in the relevant convention. As the reader may have gathered, statute law generally applies only to international transits but domestic carriers and other service providers such as warehouse-keepers (‘bailees for hire’ in legal language) frequently claim the benefit of trading conditions which they either devise themselves or through their trade association. Associations which have written


their own standard trading conditions include the Road Haulage Association (RHA), Freight Transport Association (FTA) and the United Kingdom Warehousing


Association


(UKWA). Not to be forgotten are freight forwarders, many of whom are represented by the British International Freight Association (BIFA), although they differ from the other groups in that they are mainly engaged in international trade. In order to obtain the benefit


of ‘private’ trading conditions, like those mentioned in the previous paragraph, the operator must ensure that they are properly incorporated into his contract with his customer. This must be done before the contract is formed so that it can be demonstrated – in court, if necessary – that it was always the intention that the standard trading conditions should form part of the bargain between the two parties. This means


that the contractor seeking to incorporate trading conditions must make reference to them from the outset of negotiations - that is, at the quotation stage. It is not sufficient to put his


trade association’s logo on the written quotation – all verbal indications should be confirmed in writing. The notepaper should also bear a legend to the effect that the company trades exclusively under the association’s standard trading conditions (or their own, if applicable) copies of which are available on request. E-mails, facsimile forms, invoices and even compliment slips should also bear the logo and a similar caveat. For regular customers, credit application forms can carry a sentence attesting to the fact that the applicant has read and accepts the company’s standard trading conditions and it is a good idea to reproduce them in full on the website. Long-


13


standing customers may also need periodic reminders of trading conditions and it is good practice to send them a copy once a year by recorded delivery. All told, it is vital that


trading conditions are properly incorporated into each and every piece of work undertaken and the freight contractor’s liability insurance is written on that basis. Indeed, a company can find


itself without cover if it does not take rigorous steps to incorporate its trading conditions


and this is yet another reason to be diligent. On the other side of the coin,


owners of goods should be aware that the freight operator can, in most instances, limit his liability to much less than the value of the cargo concerned. They need to be properly insured against all risks of physical loss or damage, but that will be the subject of another article.


Rodd Bankier is a director of specialist insurance broker Peter Lole & Co - www.peter-lole.co.uk


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  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32