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Issue 5 2015 - Freight Business Journal Insurance

A sustainable supply chain is an act of faith

TT Club’s new regional director for Europe, Middle East and Africa, Kevin King warns that if safety and security in the container supply chain is to be maintained then all parties must act with the utmost good faith in operating within best practice standards and communicating accurate information.

As a leading provider of liability, property and cargo insurance to the global freight industry, TT Club has long championed measures to increase safety throughout the container supply chain. At the recent TOC Europe Conference in Rotterdam. I reminded participants in the world’s myriad and complex supply chains that it is of crucial importance that they act within the industry’s best practices. The future of a safe, secure and sustainable, freight transport environment depends on all involved doing their jobs professionally and conscientiously. As the UK MAIB’s report into the loss of MSC

Napoli some years ago highlighted, safety margins are being eroded or eliminated by inaccurate container weights

leading to incorrect stowage onboard ships. Cargo

misdeclarations are thought to be behind a string of container ship fires; improper packing of containers and other transport units leads to countless vehicle accidents and incidents of bodily injury. Cargo loss and damage, leading to inevitable disruption to supply chains, is another obvious consequence. All involved in international trade should take up their

responsibilities. This should include not just container carriers and hauliers, terminal operators and stevedores, but also shippers, forwarders, warehouse operators and others active in packing cargo transport units (CTUs) of all types. It is perhaps time for all these entities to abide by the legal doctrine known as ‘utmost good faith’, meaning all parties must not only operate to the highest standards but also always make a full declaration of the material facts. While I feel the industry should not wait for international

regulations to be imposed, these measures do help to set uniform standards. There are a number of issues currently being addressed. The Code of Practice for Packing Cargo Transport Units (CTU Code), which was approved by the three UN sponsoring bodies (ILO/IMO/UNECE) during 2014, provides guidance for all aspects of packing and securing cargo in CTUs

(including trailers, swap bodies and rail wagons as well as containers). Although it doesn’t have the force of law at this point, the code can be brought into litigation as describing industry good practice. It must be remembered that once a unit is packed there is far less scope to correct things. In addition, the regulatory details within

the SOLAS Convention (Safety of Life at Sea) concerning verification of gross mass for containers was adopted in November 2014 and will become mandatory in July 2016. This relatively modest amendment in essence reiterates the shippers’ responsibility to declare

gross mass accurately. Note that if the ship or terminal loads a container on board without having the required verified gross mass, they effectively assume liability in addition to the shipper. As to the integrity of the cargo unit itself, the ISO standards for

container manufacture and maintenance require more attention and stringent policing. Container operators must be aware that it is not just accidents that are prevented by well-constructed and maintained containers. Significant cost savings can accrue from reduced repair costs, less equipment downtime and fewer disaffected customers. Cargo handling facilities and ship operators must also look to

the effectiveness of twist-locks, lashing systems and other ship securing processes. As ships get larger, stacks higher and the pressure on voyage schedules more intense, securing containers onboard warrants more vigilance and possibly more research. Bringing all these issues, and others including fire prevention, protection against cyber-crime, care for perishable and hazardous cargoes and the reduction of vehicle collision in terminals and freight yards, to the attention of supply chain participants, is vital for the sustainability and ultimate profitability of the industry. What is known about the contents of the ‘box’, how it has been placed there and how it is handled on its journey is so much a matter of trust – each party must act with the utmost good faith.

DSV revamps LCL services

Freight forwarder DSV says it is investing in its

less-than-containerload (LCL) seafreight

services, people and processes “to take them to a new level”. Newly appointed director of LCL, Claus Jensen, says he wants to increase the range of services as well as redefine and strengthen procedures. He says that, until now, larger forwarders

have not really focussed on LCL, treating it mainly as a spin-off from the full containerload

business, with the result that LCL is largely handled by smaller forwarders relying on intermediaries for the actual freight movement. Jensen argues that DSV will be able to carry

more freight on its own system, which in turn will reduce damage and improve information flow. “More oſten than not, when LCL is booked the freight forwarder would normally then go to consolidators, which mean they lose

control and have no say in what vessels the shipments travel on. “You are also not aware what the other

cargo is alongside your own and you don’t know what the handling procedures are when it arrives in port. There can oſten be several days delay during devanning and release of containers and the customer has no information about what is happening at this stage, which can of course be a critical time.”


News Roundup Forwarding & Logistics

The British International Freight Association’s annual Freight Service Awards competition is now open for entries. All of the category sponsors from last year are supporting the awards once again, and they are joined by two new sponsors supporting two new categories. The Cool Award is open to providers of specialist refrigerated freight services. The Extra Mile Award is open to companies that can provide specific examples of innovation and/or customer care by adding value and exceeding customer expectations.

Kerry Logistics Network Limited has secured a contract to support House of Fraser’s store and e-commerce expansion into China in 2016. It will operate more than 9,000sq m of warehousing for the UK- based retailer in Shanghai, providing import agency services, import customs brokerage, and domestic distribution and e-fulfilment. Value-added services will range from re-conditioning of consumer returns to product localisation.

Panalpina is to acquire its Egyptian agent Afifi. The family-owned company specialises in freight forwarding, customs clearance and logistics and has been Panalpina’s agent in Egypt for the last 20 years. Afifi employs around 150 staff in offices in Cairo, Alexandria and Suez/Sokhna. It also operates in Port Said East and West through a long-term subcontractor.

Panalpina has promoted Andy Weber to chief operating officer, while Ralf Morawietz becomes chief information officer, taking over from Rod Angwin who will leave the company for personal reasons during the year.

XPO Logistics has completed its purchase of a 67% interest in Norbert Dentressangle, for €217.50 per share, in accordance with the previously announced agreement between the two companies. US- based XPO says the stage is now set for red trucks announcing ‘We are XPO’ to take to the roads of Europe and will debut at the Grand Départ of the Tour de France this July, for which Norbert Dentressangle is a long-term sponsor.

Neptune Orient Lines said on 29 May that it had completed the sale of its APL Logistics subsidiary to Japanese forwarder Kintetsu World Express, announced on 17 February. All necessary legal, regulatory and shareholder approvals have been obtained.

Kerry Logistics managing director of Europe, Gary Wilcock, died on 21June, aged 54, aſter a short battle against cancer. In a statement, the Far East-owned forwarder said: “Under Gary’s management, Kerry Logistics Network in Europe grew from a single business unit in the UK to a business which today operates in 11 European countries.

Kuehne + Nagel is to acquire 100% of the shares of US transport broker, ReTrans. The Swiss company says that the Memphis-based company is one of the the leading non-asset brokerage providers of intermodal transportation, as well as full and less-than-truckload (FTL and LTL) services in North America, with more than 300 employees, 68 locations and annual revenues of over US$500 million.

UK and European palletised freight network Pall-Ex has appointed Chris Bowden as its new group sales and marketing director. A former board member at parcels delivery firm DX (Group), he brings experience in business-to-business parcels, business-to-consumer parcels, freight, pick-up and drop-off solutions, as well as logistics.

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