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Do we sometimes get the regulations we deserve?


Whether any particular legislative development is intrinsically good or bad is always debatable, but some issues breed what shippers hate most – uncertainty.


A quick pass over recent, current and future legislative developments reveals uncertainty in areas such as air


cargo security, emissions


from shipping, infrastructure charging, maritime and even rail


freight regulatory reform. The list is not exhaustive by any means, but they demonstrate why shippers cannot ignore the political agenda. If they do they will end up with uncertainty - and bad policies.


For air freight, the search is on for a solution that would reduce the chances of another Yemen bomb plot, but inside information points to disagreement about just how best to achieve this. The big money is on some form of extension of the European Authorised Economic Operator (AEO) programme to non-EU countries, but the devil in the detail reveals big questions over how one establishes trustworthy independent accreditation and audits to validate the security measures and procedures of companies outside the EU. The cost and policing of the


system are key to its success. Surely, EU member states have limited resources for validators and to monitor compliance? What authority would they have outside the EU anyway? Shippers just don’t know what they will need to do in the near future if they wish to continue using air freight, or whether it is worthwhile engaging in any of the security programmes inside or outside the EU; they cannot yet know what the likely impact will be on their supply chains, or their costs.


Air freight services are under threat. An extreme view, maybe, but how many shippers have actively engaged with this issue and helped their representatives to find a workable policy? The number coming forward is rather limited, so without such input, can shippers complain if air freight services are withdrawn? The green revolution in transport


is still at the top


of the political agenda: ship emissions are key. Shipping is a global business requiring global policies, but there are serious


doubts over whether


the international community will actually be able to reach agreement any time soon. The European Commission has pledged to pick up the mantle and run with a CO2


emission-reducing programme if the IMO does not. A policy to


drastically reduce sulphur


content in marine fuels might set the benchmark to follow: the shipping industry looks ill- prepared to comply. They don’t have the technologies in place or the supply of low sulphur fuel. It represents a huge potential problem


for North European


business reliant on shipping. Shippers were arguably slow to see this policy develop within the IMO, and failed to replace it with something more achievable and potentially less damaging for industry. They must engage more pro-actively in the CO2 agenda to prevent any repeat. Infrastructure charging policies are being developed for the coming years: road freight is the obvious target for policy makers. Rather than merely adding costs, industry needs incentives and help to introduce greener technologies and practices and reduce the charges. Great inroads have been made in developing cleaner vehicles, improving supply chain management and generally greening the supply chain. Nevertheless, many companies don’t seem to be employing such tools: they need help, perhaps, but I fear it may be more ignorance, apathy or confusion as to just what to do in


Plugging the gaps in supply chain security


The Shipper’s Voice, the European Shippers’ Council, Clecat and a number of other bodies including customs services and leading consultants are putting the finishing touches to a new project on gaps in supply chain security.


In fact, the report should be


with the European Commission by the time this issue of FBJ appears.


It will draw up a ‘road map’ for a larger demonstration project that will test different supply chain security measures and practices and help give more insight into the main issues. The researchers have interviewed manufacturers, retailers and


With unrest breaking out all over the Middle East, now might not be a bad time to review any war risk premiums in your shipping rates. Granted, these are a relatively small sum dwarfed by the frequently attempted general increase in freight rates


EU-level institutions such as customs and various arms of the European Commission.


Without prejudging what the report actually says, it will highlight the need for more information, the need for more intelligence sharing and issues surrounding the authentication of information, documents and people. It will also address the protection of vehicles, drivers and freight out on the road – though if the other issues can be addressed, this latter should follow.


Whether or not the security problem is getting worse is almost impossible to say. People will always say that it


and bunker adjustment factors, but the concomitant is that they often get forgotten about. It might be worth checking if some of the ‘wars’ they relate to haven’t been over for some time. Shippers can be apathetic and many seem reluctant to delve


is, and indeed some of the data points that way, though that may be explained by higher reporting levels. But there is certainly a lot of high-level political pressure to tackle the issue.


Only a few weeks ago, the US Customs and Border Protection Agency warned that Al Khaida was urging its cohorts to get into general crime as a way of getting at the West and, as well as good old-fashioned


theft,


fraud and counterfeit goods, are becoming a very lucrative businesses for some. The problem is not going to


go away any time in the near future.


Time to go to war over the small print


into this sort of detail in their contracts. But a little time spent doing this is often worthwhile. And don’t leave it to your freight forwarder, either. They can be as guilty as anyone else of loading up premiums and charges - they are, after all, only human.


order to comply with uncertain policy developments.


Regulatory reform in liner shipping and rail is taking all kinds of twists and turns at present and, I would argue, is more influenced by incumbent operators wishing to protect the status quo and their interests. They are swaying political opinion against further deregulation. As a shipper, have you engaged in these debates? Are you aware of the issues and the impacts of such policies on your business today and in the future?


Shippers must shout louder about regulations and proposals - make it impossible for politicians to ignore the shipper’s voice. We need to cut to the heart of what matters and what is important to shippers looking to do a better job and improve efficiency. Either that, or we accept what the policy makers serve up. It’s our choice.


Contracts are key


It’s been mentioned before on this page, but it bears repeating: shippers need more, and better, contracts with their capacity providers. While there are many forecasts of what is going to happen on the Asia/Europe trade in the next few months, there is no doubt that we are in the midst of a period of great uncertainty. We have no idea whether the Japanese earthquake will be good or bad for trade flows, in either direction, while who knows where the current turmoil in the Middle East will leave oil prices. More than ever, we need a more stable relationship between the shipping lines and their customers. Commitment can be hard for both sides. If a shipper agrees to lock into a particular freight rate, it can be very dismaying to see the market fall away substantially – and no doubt the same is true for shipping lines in a rising market. The industry is crying out for sophisticated


a approach to


contracts, perhaps with reviews or break clauses to give comfort to both sides that they are not


locked into a particular forever.


rate


Of course, there are two sides to any contract. Shippers will have to commit their business, while the lines will have to agree to provide a reasonable level of service without recourse to voyage cancellations or super slow-steaming.


The current situation is characterised by very low levels of trust, very little stability and, despite the efforts of many people in the lower echelons of the shipping industry, almost no relationship between shipping lines and their customers at the higher management level. More than ever,we need to create stability and robustness in the supply chain. Haven’t we all already got enough to worry about as it is?


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