6


NEWS Toll’s goal is pole position


Toll Global Forwarding is on the march in Europe, says CEO Hugh Cushing. Fresh from its purchase of UK forwarders WT Sea Air and Genesis, TGF is now embarking on a European-wide buying campaign as part of its plan to extend its worldwide footprint. He explains: “We’re not interested in basket-cases. We’re looking, typically, at air and sea forwarders that are fundamentally sound businesses, with good customer bases.” Companies with high levels of debt will be considered, but probably not those that have gone bankrupt. Having gained a major presence in the UK, TGF is turning its attention to continental Europe. The earlier acquisition of Baltrans has given it a presence in France, Sweden, Germany and the Netherlands, but it would consider acquisitions here and in other parts of Europe. It would also tend to steer


away from companies that are heavily involved in trucking operations, preferring those with a pure forwarding background. Those that have developed added value services would be particularly welcome. Cushing and his team reckon


that they have a pretty shrewd idea what to look for in a potential acquisition or, as he puts it, “we’re experienced enough to spot the good ones.” Until a few years ago, TGF


meant little except to those outside the Australasian market, but the company has been


steadily expanding its global presence. Other acquisitions include LDS in Dubai and Summit Logistics, one of the biggest players on the China/US trade lane and, back in Australasia, Express Logistics. The Toll Group itself is also a major player in domestic logistics in many markets in Australasia and Asia. Now TGF is approaching a “critical mass” in its airfreight


with TGF’s total sea volumes now hovering at around the 400,000teu mark. “We’re not in a race – we’re not trying to beat anyone, but we do want to be big enough to compete with the largest forwarders.” This actually isn’t a bad time


to be expanding a freight forwarding business, Cushing explains. Not only are there some bargains to be had at the moment for companies that have the cash, but world trade is growing again. We’re not seeing the headlong double-digit growth of a couple of years ago, but even so it’s still huge by any historical standards. One way of putting it, says Cushing, “is that a couple of years ago, the industry’s worldwide expansion was equivalent to a DHL Global Logistics every year. Now it’s perhaps half a DHL, but it’s still huge.” But there’s more to growth


Hugh Cushing: Looking for air and sea freight forwarders that


are fundamentally sound businesses


and seafreight volumes, which will propel it into the upper echelons of the world forwarder rankings, Cushing believes. It’s already number three on the China/US trade lane, following the Summit acquisition,


than the sheer increase in global trade. For one thing, shipping lines are becoming less willing to deal direct with shippers, except for the very largest ones, and this is steering more business into the hands of the forwarders, who can present the lines with large volumes of containers. “In the Transpacific trade, for example, many of the former direct relationships are now coming to the forwarders.” Furthermore, “international


supply chains are becoming more sophisticated and people want more than a simple airport to airport or port to port service.”


Jo’burg call for new Panalpina jumbo


New UK acquisition WT for instance does a lot of processing and ‘final mile’ work. The more sophisticated


market is also reflected in the sorts of technological solutions being adopted by the forwarding industry. In fact, where companies have presented themselves to Toll as potential acquisitions, “it’s often because the ownership have got to a point where they couldn’t fund that sort of investment themselves,” Cushing explains. Nor should the incumbent management worry about being shouldered aside, as has happened in many other takeovers in the industry. He insists that TGF’s policy is to leave existing teams in place, and in most cases brand identities. “This isn’t about building a


global behemoth,” he continues. “We want to get talented and special people into TGF.”


ISSUE 3 2010 ROUND-UP: WORLD TRADE & CUSTOMS


The EU agreed on a free trade agreement with South Korea on 16 September, after a compromise with Italy to delay implementation until 1 July 2011 rather than the hoped-for end of the year start date. The compromise was needed to buy off Italian threats to veto the deal altogether due to that country’s strong misgivings over the effect on industries such as car manufacturing. When it comes into force, the free trade deal will eliminate almost 99% of duties in industrial and agricultural trade within five years and, eventually, most of the remainder. On the same date, the European Council called for Pakistan to be


given a World Trade Organisation waiver to increase its access to the EU market to help the country recover from the recent floods. There would be an immediate but time-limited reduction of duties on key imports from Pakistan from October.


MEPs have sharply criticised Turkey for not fully implementing a customs union signed with the EU back in 1996. In a resolution adopted on 21 September they called on Turkey to remove all remaining barriers to free trade, to recognise EU certification and end the need for duplicate testing and inspection requirements. They also deplored the failure to implement the Ankara Protocol that would guarantee all EU member states, including Cyprus, access to Turkish airports and harbours. However, the MEPs also urged the Commission and the Council to reconsider the visa policy for Turkish truck drivers and business people.


EU and South African leaders said they were closer to an economic partnership agreement (EPA) by the end of 2010, after they met in Brussels, on 28 September. European Commission President José Manuel Barroso said a deal could be signed within months. (See South


Africa feature, page 16)


Government sources have confirmed that trade simplification body SITPRO, is to be closed as part of the current round of government spending cut backs. Its functions have nominally been taken over by the Department for Business, Innovations and Skills (BIS). Peter MacSwiney, the former chairman of SITPRO’s Ports and Borders Group before it was wound up said he had written to business secretary Vince Cable to protest but that he had not received a reply as of 10 September. “Personally, I think SITPRO will have to be reinvented,” he said. It is the only independent voice on trade that has the ear of government. BIS cannot possibly fulfil


that function.”


All four remaining UK free zones will be discontinued from next year, in line with the requirements of the modernised Customs Code, said HM Revenue & Customs. The dates of expiry are: Liverpool 10 August 2011; Prestwick


Airport 10 August; Sheerness 10 August; and Tilbury 2 June 2012.


Tough new sanctions against Iran, adopted by the European Union on 22 July, include specific measures targeting the Iranian-owned IRISL container line and its subsidiaries. Trade support, including export credit guarantees, will banned. There will also be ship inspections at EU ports – in line with the UN sanctions - and cargo flights between EU airports and


Iran will also be prohibited.


The UK is introducing new procedures for imported fresh fruit and vegetables from outside the EU on 20 July, as part of the final phase of a series EU-wide reforms. Under the new regime, the Horticultural Marketing Inspectorate will randomly inspect only 1% of goods although the proportion will be reviewed periodically and, if necessary some goods from particular countries or from particular importers or particular products may be subject to more checks.


FORWARDING & LOGISTICS


A football star with a difference will be guest speaker and host for the 2011 BIFA Awards luncheon ceremony – former referee Graham Poll. The former man in black, who now makes his living as a TV pundit and newspaper columnist, is probably the best known and most experienced English referee of all time, with a 26-year career taking in 1,544 matches. The event takes place at the Chiswell Street Brewery in London on


Thursday 20 January 2011. BIFA is still seeking entries for its annual Freight Service Awards competition; entries to any of the categories can now be made through a dedicated microsite at: www.bifa.org/awards


Johannesburg is included in the itinerary of a new Panalpina 747 freighter service, announced on 16 September. The route from Luxembourg, operated by an Atlasair 747-400 aircraft, will also take in Dubai, Hong Kong and across the Pacific to Huntsville, Alabama. It complements Panalpina’s existing Dixie Jet transatlantic operation, which celebrates its 20th anniversary this year. Panalpina said having its own controlled freighter capacity would provide more flexibility in scheduling and routing are concerned, allowing it to adjust rotations according to market and customer needs. (South Africa feature, page 16)


The long-anticipated privatisation of the Royal Mail will go ahead, Business Secretary Vince Cable announced on 22 September. The Postal Services Bill, which the Government plans to introduce in the autumn, envisages that at least 10% of the shares in Royal Mail will go to its employees. However, trade unions are deeply unhappy at the proposal. Vince Cable said that Royal Mail faced many challenges, including pressure from email and falling mail volumes; a “dire” pension position and a lack of money to invest. “The only way to save it for the future is to bring in new private capital to support the ongoing modernisation and growth opportunities.


This will bring new commercial disciplines,” he commented.


French-based Norbert Dentressangle is to acquire Schneider Logistics’ freight forwarding and customs brokerage business in the US and China. The deal, which is expected to be finalised by 1 October, includes locations at New York, Chicago, Atlanta, Miami, San Diego, Los Angeles,


San Francisco, Tianjin and Shanghai.


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