10


Issue 6 2011


///NEWS


Bust SeaFrance suspends service S


eaFrance services have been suspended aſter a French


commercial court declared the French railways (SNCF)-owned operator bankrupt. Following an initial 48-hour


suspension on 15 November the court said it could continue to operate services until 28 January. But subsequently on 17 November it was reported that the Calais Sub-prefecture had decided that SeaFrance should not operate until further notice and services currently remain suspended. In a statement on its website, Seafrance said that commercial activities “will resume as soon as


all the issues concerning safety and security are resolved.” The Paris Commercial court


had also on 16 November rejected all bids for SeaFrance and has set a deadline of 12 December for improved offers. The prospective purchasers were a joint bid by Danish-owned ferry company DFDS and French operator Louis Dreyfus group and a nominal €1 bid by the Seafrance workforce. On 24 November, the Nord Pas


de Calais local authority offered €10m (£8.6m) to help save the stricken company, on condition of investment by SNCF and the French national government.


Earlier, the European


Commission rejected French plans for


restructuring the


troubled Dover-Calais ferry operator, saying that it was incompatible with its rules on state aid. It said that despite repeated demands from the Commission, France had not been able to demonstrate that its proposed financial contribution should be exempted from the state aid rules, despite continued efforts to find a solution to SeaFrance’s ongoing financial problems since 1996. Joaquin Almunia, director general in charge of competition


policy, added that the Commission was naturally concerned about the social consequences


of its decision


and would put at France’s disposal any available financial instruments. France had gained a one-


week extension to the original 19 October deadline in which to come up with a solution but attempts to find a private investor to underpin the plan proved unsuccessful. P&O Ferries reintroduced its


European Seaway freighter on Dover-Calais to provide more capacity aſter


the suspension


Globalisation – still a long way to go, says DHL study


G


lobalisation is still not as advanced as most people


believe and the process could still add 5% or more to countries’’ economies, according to the first DHL Global Connectedness Index (GCI), published on 11 November. GCI ranks 125 countries


according to the depth and breadth of their integration into the world economy and also examines the relationship between global connectedness and welfare. It examines data on ten different types of international flows, including trade, capital, information and people, from 2005 to 2010. GCI analyses not only the depth of countries’ cross- border interactions but also their geographic breadth - distinguishing countries that are truly connected across the globe from those with deep ties only to a small set of partner countries. The study found that global


connectedness still has enormous room to expand, even among the most “connected” countries. The detailed country-by-


country analysis of the trade flows of 125 countries also found that the UK ranked sixth in the world, though Ireland did even better, in third place. The Netherlands was top, followed by Singapore. Switzerland was fourth, then Luxembourg and even tiny Malta


managed tenth place. Despite


efforts by the Obama government to boost exports, the US managed a relatively lowly 25th place. The DHL-commissioned study


was unveiled against the backdrop of the APEC CEO Summit and Leaders’ Week in Honolulu, a global summit where heads of state and business leaders meet annually to discuss international economic issues. It was carried out by global business strategist and economist, Pankaj Ghemawat, Professor of


Global Strategy at the IESE Business School, Barcelona. Chief executive officer of


DHL Global Forwarding, Freight, said Roger Crook said: “This research provides evidence that a connected world is a better world, in terms of global welfare and individual development. The free trade of products and services contributes significantly to global prosperity. By calibrating how truly connected we are, countries can identify opportunities and the


channels through which they can improve their prosperity.” Professor Ghemawat added:


“Our research shows that global economic integration is not as deep as perceived. Therefore, we see untapped potential for growth for each country and globally. Increasing global connectedness is likely to spur further growth by adding trillions of dollars to global gross domestic product.” The full study is available at: http://www.dhl.com/gci.


UK exports hold up despite global problems


T


he DHL/BCC (British Chambers of Commerce) Trade Confidence Index of the UK’s exporting health,


also published on 11 November, showed still strong but slowing growth among UK exporters in the third quarter of 2011. The index surveys over a thousand exporters and analyses export documentation for goods moving outside the EU. There was a 3% increase in exports on the same


quarter last year, and 3% on the previous quarter but firms reported weaker export orders, pointing to a slowing in export growth towards the year: But 55% of exporters still believed their turnover and profitability would improve over the next twelve months, down only slightly from 58% in Q2. Continued uncertainty around the resolution of


the Eurozone debt crisis, and the fragility of the UK’s economic recovery is continuing to bug exporters and most of them are cautious about taking on more staff. In


fact, 19% expect to decrease their workforce, the highest level since the third quarter of 2010. CEO of DHL Express UK and Ireland, Phil Couchman,


said: “We cannot underestimate the challenges ahead for exporters, particularly in light of the serious problems facing the Eurozone, which remains a major trading partner for small businesses in the UK. Steps must be taken to support those looking to target overseas markets, particularly SMEs, who are less able to ride the trends of the economic cycle than their larger counterparts.” BCC director general John Longworth said: “If we’re


to see the rebalancing of the economy that we need for recovery, British businesses must be encouraged to take risks and seek out new markets, particularly those outside Europe. The Chancellor must use his Autumn Statement to deliver confidence to exporters, and encourage those looking to trade abroad for the first time to take the leap.”


of SeaFrance operations on 17 November. The dedicated freight ferry can carry 120 heavy goods vehicles and is currently operating two round trips per day, although it could provide up to ten. The vessel had been in ‘warm lay up’ at Tilbury following the introduction of the first of two large multi- purpose ferries, and all the crew had been retained within the fleet. The ship would stay on the


route as long as it was needed, said a P&OF spokesman, adding that it had “ ample capacity to repatriate freight and tourist traffic displaced by the suspension of SeaFrance services.”


P&O Ferries meanwhile


warned that it would “strongly contest any attempt by the French authorities to use illegal state aid to prop up the remains of failed French ferry operator SeaFrance” and has submitted a formal complaint to the EC Competition Commission in Brussels. It says that it is concerned that the French authorities may sell the assets of SeaFrance to a third party at less than fair market value and has submitted a formal complaint to the EC Competition Commission in Brussels. This would would amount to an illegal state aid subsidy, it says.


CBI calls for major rethink of export strategy


T


he CBI called for a complete overhaul of the UK’s export


strategy, to reverse the last decade’s poor performance. In a new report - Winning overseas: boosting business export performance’ - published jointly with Ernst & Young on 21 November, the UK employer’s organisation urged the Government to set out a clear export strategy with ambitious, achievable performance targets. The UK needed to get “ahead of the curve” and look beyond the existing ‘BRIC’ countries to potential major new markets in Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. The UK had had only limited in


success the BRIC countries


(Brazil, Russia, India and China), which account


for only 4% of


exports, said the report. Its major export destinations remained the traditional ones of the US and Europe. However, said CBI director-


general, John Cridland, the Eurozone crisis had underlined the importance of diversifying export efforts to high-growth countries. He explained: “Given that we’re already playing catch- up with many of our competitors, we must act now or never to target high-growth economies, leapfrog the competition and deliver our growth potential. We need to


capitalise on the booming success of the BRIC countries, and look beyond the curve to future high- growth markets such as Indonesia, Mexico and Turkey.” The UK’s share of global exports


have declined sharply over the last decade, from 5.3% in 2000 to 4.1% in 2010, while Germany’s increased from 8.9% to 9.3%. This decline is principally because of the UK’s weak global goods exports, which have dropped from 4.4% to 3.1% in the last decade. Mr Cridland added that, too


oſten, the Government’s public rhetoric did not match with the reality of businesses’ experience on the ground. UKTI, the Government’s export promotion body, needed to become more commercially focused and access to export finance made easier, especially for medium and smaller- sized firms. The CBI’s latest Industrial


Trends survey, published on 24 November, reported that the UK export orders had deteriorated sharply. Of the 446 manufacturers responding, 11% reported export order books to be above normal, while 42% said that they were below. The resulting survey balance (-31%) is the lowest since January 2010 and marks the first time that it has fallen below its long-run average since February 2010.


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