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Issue 2 2015 - Freight Business Journal Insurance


Machines are good servants but poor masters


TT Club development director and BIFA award judge Brian Sullivan gained a special insight into the recent innovative achievements of which entrants into the Awards are justifiably proud – and he also observed a significant trend.


Over the last decade or so, much has been made of advances in IT that have enabled forwarders and logistics service providers (LSPs) to enhance greatly the services they offer. Many operators are proud, and rightly so, of the tailored or ‘off the shelf’ systems in which they have invested to track shipments, make the documentation process more seamless, increase the accuracy of invoicing, customs clear consignments more efficiently and many other time and labour saving innovations. Arguably, an LSP will not be competitive unless it can offer customers ‘IT solutions’. Logistics companies are also striving to differentiate


themselves, give their offering something unique and avoid commoditisation. In recent years I feel that investment in IT has been so universal that the benefits it has brought have, if anything increased the trend towards so-called ‘white label’ services, where one company’s proficiency is almost matched by every other player in the market. So what now can make an operator stand out from the crowd?


What sort of innovation can help garner market share and liſt profitability? I think a clue to the answer is given in the judges’ commendation


of the winner of the Award sponsored by my own organisation, TT Club. Freightex, the cross-channel freight transport specialist was the winner of the BIFA European Logistics Award this year. Quoting the BIFA website, Freightex was lauded for: “its aptitude for using technology at the sharp end to change its distribution model so as to provide an optimum solution to the logistics challenges presented by customers. Equally important was the contribution made by the company’s own people, which was significant in the scale of the project.” Freightex was a worthy winner but it was not the only entrant


who extolled the importance of its people in the submissions that I saw. There is little doubt that the so-called ‘soſt skills’ of staff from a number of organisations in the sector are starting to make the all- important difference in the service levels of the more successful outfits. I realise that this answer is not ‘rocket science’ and that companies


in all sectors of business, not just freight transport, rely on their people to build long-term relationships with customers, getting to


///NEWS


News Roundup Forwarding & Logistics


The Freight Transport Association (FTA) told the Scottish Parliament’s inquiry into freight transport on 4 February that it needed policies and infrastructure investment that recognise the country’s challenges. Head of policy Scotland, Chris MacRae, outlined how Scotland’s rail, road, air and sea freight routes to the rest of the UK, to Europe and worldwide should be improved, and identified the main obstacles. FTA also raised the issue of the serious imbalances in freight traffic flows which inhibits the development of direct services to and from the country.


GAC North America - Logistics has become one of only two companies in the city to operate as a Foreign Trade Zone in Houston. Merchandise may be admitted into FTZs for storage, exhibition, manipulation, destruction, assembly, manufacture and processing, unless and until the foreign merchandise enters the US Customs territory for domestic consumption. Imported merchandise transported from Houston, by air or sea, is transported under an electronic permit to transfer to the zone.


Europa Worldwide Logistics has moved its Manchester sales office from Trafford Park Village to Media Village in Salford Quays, almost doubling the size of its branch.


Midlands Anglo-Benelux freight specialist Twente Express has appointed Matthew Verrall as its new commercial director. He joins the company with 20 years of experience in the international freight industry, most recently as UK sales and marketing manager of Aramex.


know their business and its needs as if they were themselves part of the customer’s internal structure. However trends, and indeed what is ‘trendy’, in management philosophies at any one time are a pendulum and the race towards more sophisticated IT that we’ve seen over the past decade has had the tendency to swing the dominant business strategy away from the more labour intensive human touch. It is now becoming clearer that within the freight sector, state-


of-the-art IT systems (as so many of them are claimed to be) are no longer enough to put a service provider ahead of the game. Perhaps the urge to cut cost by pushing greater elements of the booking, documentation and clearance processes back down the line to the shipper is beginning to pall. Either way, my sense is that transport operators and logistics


service providers are now increasingly saying to their customers, “We have a knowledgeable, reliable and responsive individual who will take care of your shipment and only inform you if the intended plan for it has to change”. I would conclude by suggesting that it is people who make things happen and sophisticated IT is merely another rather necessary tool in helping them. Perhaps it’s just the basic human urge to communicate with another person rather than a machine.


When will they ever learn?


There is a depressingly familiar theme to the list of top five reasons for claims in multimodal transport, says the TT Club. The international transport, freight and logistics insurance provider found that 66% of its claims by number and 62% by value over five years can be categorised into just five causes - traffic accidents US$68 million (16.1%); handling equipment collisions $57 million (13.5%); theft $54 million (12.7%); fire $44 million (10.5%); and cargo packing $41 million (9.8%). The analysis of 7,000 insurance claims


totalling $425m between 2010 and 2014 showed the same five causes as in its


previous five year analysis. The Club’s risk management


director, Peregrine Storrs-Fox,said: “Risk management and loss prevention initiatives really can be effective in reducing not only losses, but also the largely hidden costs of disruption that ensues. There are many prevention strategies and actions that can be put in place to reduce costs and occurrence of claims, and these should be of paramount importance for the transport industry”. He expanded: “Many traffic incidents


and collisions are due to inappropriate speed, but detailed case review frequently demonstrates the impact


that effective management culture can have on preventing losses. For example, technology solutions, such as the use of GPS tracking or anti-collision sensors, can only be effective when regularly enforced and integrated into staff management.” With fire the fourth most costly area,


cargo mis-declaration “is a real and continuing concern, although a significant number of fires can be traced to design or maintenance issues,” he added. The TT Club also asserts that 65% of


cargo damage incidents can be attributed in part to poor or incorrect packing, hence the importance of good practice guidance, such as the CTU Code.


North-west England wine merchants and distributor Gerrard Seel has signed a multimodal deal with Gefco UK to import from old and new world markets direct to its wet bonded warehouse in Liverpool. This will involve full truck load, rail freight activities as well as sea container movements. The forwarder’s expertise in the rail sector has enabled a solution able to carry 6.5% more freight per shipment than was previously the case.


Freight and logistics insurance provider, the TT Club has appointed Kevin King as regional director Europe, Middle East and Africa. He replaces Andrew Kemp who has moved to the UK P&I Club.


Independent Freight has opened a new HQ and warehouse in Nuneaton. Founded in 2004 by Jenny Hooper, Independent Freight specialises in national and international freight services and customised import and export freight forwarding for both import and export. Within 18 months, it moved from a spare room in Hooper’s home in Nuneaton to offices in Hinckley. David Hooper also joined the business in 2010 from the Advantage West Midlands regional development agency. The company also has an East Midlands base in Derby and a network of warehouse facilities and suppliers throughout the UK.


French-owned forwarder Geodis has united the commercial identity of its operations under a single brand. Geodis Calberson, Geodis Wilson, Geodis BM, Geodis Logistics and Geodis Supply Chain Optimization will disappear and be replaced by Geodis.


Geodis has made permanent the interim appointment of regional EMEA vice president, Matthias Hansen. He replaces Alain Chimene. He will also retain his responsibilities as managing director North Europe (including UK, Belgium and the Netherlands) until a successor is nominated.


The Alliance of European Logistics (AEL) has appointed Mathieu Grosch to the new role of president. A Belgium national, he was a Member of the European Parliament for 20 years during which he played a leading role in several committees and delegations and was the coordinator in the Transport and Tourism Committee. He is currently acting as the TEN-T European Coordinator for the Orient/East-Med Core Network Corridor. AEL is an industry coalition representing the logistics supply chain at the EU level by bringing together companies that both provide and organise their own logistics services in Europe.


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