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NEWS/INSURANcE Boeing sees airfreight bounce


World air cargo traffic is set to regain its 2007 peak by the end of this year, according to plane- maker Boeing’s World Air Cargo Forecast for 2010/11. Released at the at the International Air Cargo Forum in Amsterdam on 4 November, it is in strong contrast to some of the gloomier forecasts from airlines earlier this year. Boeing said that the recovery


was being driven by a strong economic rebound, as well as anecdotal evidence that many industrial shippers have turned to air cargo because of a shortage of capacity in other


modes of transport, particularly containerships. Boeing expects world air cargo


traffic to expand by 5.9% a year over the next two decades, and for world air freight traffic to triple by 2029. It said that traffic rebounded strongly from November 2009 and that the trend continued through the first eight months of 2010. Boeing Commercial Airplanes’


vice president for strategic planning and analysis, Jerry Allyne, pointed to world economic growth that was forecast to average 3.2% over the next two decades.


Lithium batteries: new FAA advice


A Federal Aviation Administration technical report published in November suggests that, contrary to earlier advice, there is no advantage in shipping lithium batteries in crew-accessible locations because standard hand-held fire extinguishers are ineffective should


The recovery would come


after a bloody two years in 2008/09 when air cargo traffic contracted for two consecutive years for the first time. Boeing said that the decline affected nearly all geographic markets, but industrial freight flows generally fared worst and the nearly 13% drop in cargo traffic in 2008/09 reflected the steep plunge in industrial activity. But in August 2009, industrial


activity began to recover, particularly in Asia and monthly air cargo traffic statistics turned positive in November 2009. The first eight months of 2010 have


seen an estimated 24% growth in traffic, compared to the same period in 2009. Allyne added that as airlines


return to profitability, “they will begin to consider fleet renewal to improve long-term operating costs.” Asian fundamentals also


remain solid and continued growth in China will have positive market effects, as will fewer barriers to international air trade. Boeing’s own research indicates the world freighter fleet will increase to 2,967 planes from 1,755 during the next 20 years.


they burst into flames. However, using an approved overpack minimises the hazard significantly, says the report. Common metal shipping containers, such as steel drums or pails, are not effective as they are not designed to withstand the high pressures generated by burning lithium metal cells, it adds.


Why cargo owners should ask: are we properly covered?


Apparently, over 60% of the cargo moving through UK ports is uninsured. But what are the consequences of not having cover, asks Rodd Bankier.


As discussed in the last issue of FBJ virtually everyone connected with the movement of goods – shipowners, airlines, terminal operators, freight forwarders, hauliers and so on – trade under conditions which seek to limit or exclude their liability if the cargo they handle suffers loss or damage. When a claim is made, freight operators frequently point to their standard trading conditions and deny liability under this clause or that, showing that they are not responsible for the state that the cargo ends up in. This may be true - they may really not be responsible - but even if liability is admitted, any recompense obtained is likely to fall far short of the value of the goods lost or damaged since, generally, limitation is governed by weight.


The answer is to insure, of course, and it is my conviction that properly arranged marine insurance can benefit both exporters and importers. As far as exporters are concerned, if you sell on terms such as CIF or Delivered (for example DES, DDU or DDP) you will be responsible for purchasing insurance up to the agreed point of delivery as part of the contract of sale. Remember that marine cargo insurance is generally fully assignable and, if arranged on a warehouse to warehouse basis, follows the cargo throughout its passage to destination. At some stage in the transit (often when monies pass from buyer to seller) ownership passes between the parties and the insurable interest (the right to claim under the insurance policy) passes with it. It depends on the exact terms


of sale, but it would be a kindness to your customer to ensure that the insurance is on a warehouse to warehouse basis, despite the fact that your legal responsibility may cease when it crosses ship’s rail or is landed on the quay. However, even if you sell ex-


works, marine insurance can still protect your interest should the buyer reject your goods on arrival because they are damaged. Many shippers who sell ex-works


or FOB wisely protect themselves with Seller’s Interest insurance which would operate if such a mishap occurred. Importers who purchase goods


on CIF terms may think they are fully protected but read the small print – the insurance may only provide cover to port of entry or on restricted conditions. I hear too often of cargoes damaged during the inland transit with no insurance cover. The importer should be wary and buy on C&F or similar terms, arranging his own insurance or, indeed, purchasing a policy on a Buyer’s Interest or difference in conditions basis. The 60% figure quoted earlier


shows just how exposed most international traders are. It is always best, in my experience, to arrange your own insurance whether you are importing or exporting since you will have more control, share a common language and be subject to the same national laws. It’s always worthwhile to talk to an expert marine insurance broker; that way, you can be sure of buying suitable cover at a reasonable price. So, what are your options? The simplest – although the most expensive in the long term – is to find a specialist marine insurance broker and inform them about


each shipment before loading, requesting the necessary cover for that voyage. But what if you forget to call your broker and so have no insurance? A second, preferable, option


is to have your broker arrange a marine cargo open cover which is in place for twelve months. You declare all shipments falling within the terms of that cover - usually at the end of each month and, if one is forgotten, there should be a provision whereby you still have cover. The drawback to this second


option is that if you have a large number of shipments each month, there is a substantial administrative burden and a further option is to pay a minimum and deposit premium based on the likely value of all shipments during the year which can then be adjusted at expiry on the actual values involved. If suitable, this last type of cover can be extended to include your stock in store and final delivery to your customer. Should your company import


or export goods only occasionally and the premium involved would not justify an open cover facility; it is worth speaking to your freight forwarder since many operate cargo open covers for the benefit of their customers.


ISSUE 4 2010 ROUND-UP: ROAD & RAIL


The Belgian EU Presidency has pushed through an agreement on the revised Eurovignette Directive, which could trigger widespread reforms of lorry road user charging in Europe. According to Brussels sources, it could increase the average truck toll from the current 15-25 euro cents per kilometre by a further 3-4c. The political deal, adopted by a qualified majority with Italy and Spain opposed and Ireland and the Netherlands abstaining, will allow second-reading negotiations to start after an 18-month delay. It will permit, though not oblige member states to levy tolls on trucks that reflect their ‘external’ costs, over and above existing infrastructure access charges allowed under the current Eurovignette Directive.


DHL has expanded its Euroconnect less-than-truckload road freight services from Europe to North Africa with services to Tunisia as well as the existing route to Morocco. Five branch offices across the country act as domestic hubs and customer access points.


TIR transport in Afghanistan will start in the first half of 2011, according to a plan of action signed by the International Road Transport Union and the Kabul Government on 9 October. The MoU was marked by the arrival of a Silk Road Truck Caravan in Mazar-i Sherif.


The International Road Transport Union (IRU) and the International Transport Forum (ITF) have taken over implementation of the EC- funded LABEL project on truck parking labelling. IRU and ITF have pledged to provide online information on the availability, location and facilities avalable for sites in 40 countries.


The Port of Felixstowe set a new rail record, moving a total of 10,764 containers by train in the week ending 26 September – exactly a year after the previous record of 10,582 units in 2009. The port has made several improvements to its rail network, including a 39-metre extension of the South Rail Terminal to accommodate 22-wagon trains and in 2009 introduced new services to Hams Hall and Birch Coppice, both near Birmingham.


PROJECT FREIGHT Rickmers moves rail machines


to Jakarta The Rickmers Jakarta shipped three Kirow rail-mounted cranes from Hamburg’s Wallmann terminal to Xingang, China in late September. Each crane is 19.5m long and weighs 167 tonnes and the shipment is part of a larger project to ship 16 similar machines cranes between December 2009 and November 2010.


Global logistics operator Agility and Asian Pacific-based Linfox Logistics have formed an alliance and opened an office in Gladstone, Queensland. It will provide solutions to major oil, gas and mining projects, mainly in remote areas of Australia. The two companies already work for the Gorgon gas field development in Western Australia, where Agility is the lead logistics provider and Linfox provides specialised transport and warehouse services for the project.


Heavylift specialists Abnormal Load Engineering and Chartering and Transportation Company of Tunisia have set up a joint venture covering inland tracking, offshore support, heavy lift and heavy transport in North Africa. The venture will specialise in the supply of manpower, engineering and equipment for gas and oilfield projects, particularly in Tunisia, Algeria and Libya.


Asia-based NVOCC Famous Pacific Shipping Lanka and project cargo specialist Bertling Logistics India have agreed to work together to offer point-to-point project logistics solutions from any part of the world to and from Sri Lanka and the Maldives.


Nurminen Logistics has completed a new 5,720 sq m terminal at Niirala, near Kuopio in central Finland, replacing a terminal which was destroyed by a fire in June 2009. It will allow containers to be handled indoors, a useful feature in the harsh Finnish winter. There are also two railway tracks for direct shipments to Russia.


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