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Issue 3 2015 - Freight Business Journal


German minimum wage rules still under scrutiny


MEPs are divided over the German minimum wage imposed on road transport operators in transit and, for now, the European Commission is at a loss to give them any clear answers on whether it is legal or not. Questioned on the subject in plenary on the evening of 25 March, Transport Commissioner Violeta Bulc told the European Parliament on 25 March that her


Insurance Can you trust your subcontractor?


Time spent on due diligence is never wasted, says TT Club’s Peregrine Storrs-Fox Cargo fraud and theſt impacts everyone in the international supply chain. A buyer of cargo needs the same assurances as the provider of logistics services, who relies on others for contract fulfilment. These risks are consistently amongst the top five incidents seen by the TT Club and account for about two thirds of supply chain claims.


Criminal organisations continue to advance technologically,


refining their deceptions. From cargo scams to falsified insurance certificates to mimicking genuine haulage companies on freight exchange websites, the financial rewards are clearly still sufficient motivation. Popular internet freight exchange websites unfortunately


provide an efficient smoke screen to search out high value cargoes and are also a clear, simple introduction path for criminals. Many forwarders or logistics operators only use such sites as a last resort, but that is also when the cargo and forwarder are at the greatest risk; time is of the essence and hurried decisions are oſten made to meet delivery schedules and avoid contract penalties. However, the risk to your reputation from cargo theſt should not


be overlooked. The criminal organisations come well prepared. When the


contractor requests basic information, such as a user identification number for the freight exchange site, insurance certificates, contact names and numbers and even driver identification cards, they can be provided without hesitation. Unfortunately all will be false. With time to verify the information provided sometimes short, scant due diligence checks are performed. On many occasions, the email addresses used for correspondence are subtly changed from those of a genuine company. Beware of any free mail accounts, which are easily created and closed with very little traceability. Loss investigations generally discover that once the cargo is


collected immediate efforts are made to conceal all details; email accounts are closed and phone numbers abandoned. In most cases, the cargo is efficiently distributed through the criminal markets and never recovered.


There are additional risks, oſten overlooked, in not engaging a


robust selection process. When trading under the CMR Convention for instance, a theſt claim may ordinarily be subject to a statutory limitation of 8.33SDR/kilo. However, the claimant may pursue wilful misconduct as an argument, where they feel that the subcontractor was appointed negligently, for example. Whilst pleading wilful misconduct may prove very difficult in some jurisdictions, in others, such as Germany,


it may be much easier, potentially


stripping carriers of limitations and other defences. The increased use of internet cargo clearing sites is giving criminal organisations an unprecedented opportunity to steal identities and high value cargoes. So what can be done by the prudent contractor to mitigate such risks through the supply chain? Subcontracting will always be necessary in the industry. But


where a forwarder decides to use a subcontractor or an internet clearing website, risks can be reduced in a number of ways. The essential tool is a robust approved subcontractor selection and employment policy- even for urgent movements. Website providers will generally exclude liability for


fraudulent activity, but do have a duty of care and will oſten detail recommendations and good practice. These should be fully understood and applied wherever possible. Potential partners who communicate solely by free email


accounts, Skype or mobile phone should arouse suspicion. When requesting paperwrok, especially insurance documents, make independent checks of everything submitted electronically and request hard copies of the original certificates. Always verify the insurance policy with the insurer directly. Where you have previous trading experience, be prepared to challenge when a normal point of contact suddenly, and without notice, changes. Ultimately thieves will identify the weakest links in the supply


chain. Be alert and implement robust policies, particularly for the urgent jobs. Fully consider the risks involved; the consequences of failing to deliver on time will be insignificant compared with the theſt of an entire cargo.


David Williams: Germany’s action could hit UK exports Iran and Turkey to be testbed for electronic TIR


The UNECE (United Nations Economic Commission for Europe) and the International Road Transport Union (IRU) are to cooperate on a pilot computerised TIR system between Iran and Turkey. The two organisations signed a


Memorandum of Understanding (MoU) on 24 March for the eTIR project, which aims to demonstrate the possibility of an electronic version of the customs bonding scheme for road transport. UNECE will develop an


electronic exchange platform as a first step towards the implementation of the fully fledged eTIR system. The


ultimate objective is


secure exchange of data between national customs systems on the international transit of goods, vehicles or containers under the


TIR Convention. It will also allow customs to manage the data on guarantees. As well as replacing the current functions of


international the


paper TIR Carnet as proof of existence of an international guarantee and to exchange information between customs administrations, further benefits of eTIR would be to make available


information for risk


assessments prior to the arrival of cargo, speeding up procedures and significantly reducing the administrative burden. It will also prevent false submission of customs declarations. UNECE executive secretary


Christian Friis Bach said: “UNECE and IRU agree that the future of the TIR Convention lies in computerisation. Both parties are committed to achieving this goal in the nearest possible future.”


staff were still examining German legislation imposing minimum wages on road transit operators. The question of its legality was complex, she added. However, Brussels sources


suggest that she is hinting that she will certainly find fault with Germany’s burdensome administrative procedures, in


particular obliging operators


the requirement from non-


EU countries to keep records in German. Other EU countries, notably in


the east, doubt whether the law can be legally applied to transit, as opposed to cabotage, operations, saying that the German rules are tantamount to allowing one member state to impose its legislation on another. However, some MEPs support the legislation, seeing it as a


means to attack low wages in the road transport sector. The German action – as well as similar moves by the French to impose minimum wages on cabotage operators - could have a major impact on the UK’s export drive, added managing director of freight forwarder Rhenus UK, David Williams. He believes it will add unnecessary red tape and cost.


Local wage rates for transit drivers “is in my view a retrograde step that goes against the ethos of the common, single market. The free movement of people and goods was one of the central pillars of the European market concept. These moves bring complexity and cost to a trading bloc that is central to the prosperity of the UK.” Williams believes that if fully enacted, the increases - to €8.50


///NEWS


per hour in Germany and €9.61 for cabotage drivers in France - could increase haulage costs to EU countries by as much as 5%. Williams concludes: “This


move from Germany has prompted accusations from Polish hauliers that the German government is breaking EU law. It’s becoming a divisive issue that needs clarification from the European Parliament sooner rather than later.”


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