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Issue 1 2020 - FBJ Ireland Brexit? Bring it on, says IWT


Dublin-based IWT is possibly best known as the operator of Ireland’s only regular container rail freight service, from Dublin port to Ballina in the west of the country, but there is much more to the company than that, say joint managing directors Colin Dunne and Paul Scully. The company runs a large fleet of trucks, trailers and, unusually for a forwarder or logistics company, shipping containers as well as one of the largest customs clearance operations in Ireland. The train service has in fact been running for the past ten years and has now grown to eight services a week in each direction, says Dunne. He would like to see it increase, and possibly include new destinations, but that would mean someone having to invest heavily in terminals. “One of the other challenges now is the fact that passenger demand on rail is also huge, so the opportunities to run extra trains are limited.” The fact that much of Ireland’s rail network is single track limits not only the number of train paths but also, because services need to get past each other at passing loops,


the length of


freight trains. Like all Irish transport


operators, IWT will continue to invest in its road fleet, which now numbers around 200 trailers and other pieces of equipment. “For an asset-light freight forwarder, we do have a lot of equipment,” Scully explains. “It’s what makes us different.” With recent additions,


the fleet now comprises 160 trailers, 25-30 container chassis and five tractors based in Ballina and a further four in Rotterdam. In addition, there is the fleet


of 95 IWT-liveried 45-foot high cube containers, which get transported all over Europe. Not many forwarders run their own liveried boxes, and sometimes shipping lines are not keen to carry anything other than their own units or those of their shipping line partners, but IWT with its balanced import and export traffic is seen as a valuable customer of the lines, shipping around 1m tonnes a year.


IWT is also increasing


its human resources in preparation, especially, for Brexit, and on both sides of the Irish Sea. Most operations and personnel are centred on IWT’s main headquarters just outside Dublin, but IWT also owns three entities in the UK, and has obtained all the necessary customs ‘badges’ so that it will be in a good position to take on additional customs clearance work, should that be necessary. Dunne and Scully are both


pretty confident that IWT will be able to cope with the demands of Brexit, Dunne going so far as to say: “Bring it on. We’re one of the few companies that probably would be comfortable with Brexit.” The Irish government has been quite proactive in its preparations and IWT has sent eight of its staff on customs training courses. In fact, says Scully, pretty much all the company’s


50-strong headquarters staff are conversant with customs procedures. Having AEO status, as IWT does, will also be an asset under these circumstances. The main difficulty that


he sees with Brexit for IWT is having assets caught up at ports and border crossings, especially if the UK leaves the EU on such terms that extensive checks are needed on, for example, food or pharma products. However, Dunne has great


praise for Dublin Port’s Brexit- readiness efforts, saying that 25% of its operational land has now been assigned to Brexit- related issues with €40 million spent on facilities like booths for customs and veterinary inspections. IWT would like to see itself as


its customers’ partner of choice. It could cope with a major surge in clearances and it could even contemplate taking on some new customers for its customs clearance services, although obviously the first priority will be to service the needs of existing, loyal clients. Dunne says: “I think we would say yes, though it does depend on what is required; if it’s a simple entry, probably yes.” New technical solutions could also greatly ease the customs burden. As freight forwarders, IWT


does of course have to be able to deal with the unexpected, such as the Chinese corona virus crisis that was ongoing at the time of writing in mid- February. IWT has seen an upsurge in airfreight, to the extent of chartering freighter


aircraft out of Shannon, to help customers fulfil orders; many have switched from surface transport. Others have switched


to double-manned


overland road transport to places as far afield as Mongolia; IWT’s Netherlands branch has been instrumental in arranging these movements. Overall prospects for the Irish freight market remain very good, Dunne and Scully consider. Investment continues to pour into Ireland, and while some of it – like Google or data servers - may not


generate


very much freight, there is plenty more that does. In fact, there is “a whole pipeline” of companies planning to set up in the country. The boom does bring new


pressures, notably on logistics land


and warehousing,


especially in the greater Dublin area. The port authority’s decision to move all container storage out of the port area to locations around the M50 ring motorway has increased the amount of to-ing and fro-ing by trucks and has introduced an extra leg into many import and export movements, for example. The port has also bought a further 100 acres of land for an inland container port, which could further increase traffic on the roads. But for freight forwarders,


these are all nice problems to have. For those that remember the dark days of the recession only a decade ago, too much business is far better than too little.


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///IRELAND


Virus turns airfreight market upside-down


The corona virus has created turmoil and uncertainty


in


airfreight markets the world over, but none more so than in Ireland. There have been “crazy” fluctuations in airfreight rates, said says Ian McCool, managing director of Dublin-based Irish general sales agent International Airline Marketing (IAM). Speaking in mid-February


he said that the flight situation between Ireland and Asia was “changing by the day” with carriers cancelling scheduled flights but putting in extra chartered freighter capacity, mainly to carry emergency medical supplies such as masks and vaccines; Chinese demand for regular consumer goods has dried up totally. At the time of writing, two chartered 747Fs had already flown direct from Dublin to China. For pretty much the first


time anyone can remember, says McCool, there is an overwhelming imbalance of traffic with China, with heavy demand going in but virtually nothing coming out at the moment. Nor at the time of writing any immediate


was there


sign of regular passenger flights to China or Hong being reinstated. Cathy Pacific, which was due to reinstate its scheduled summer-only flights at the end of March has already postponed this (provisionally) by a month and Hainan has postponed indefinitely. Looking on the slightly


brighter side, when and if an effective virus is developed, it will lead to an upsurge in airfreight, including out


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Ireland where many of the biotech production facilities are located. “Manufacturers in Ireland are trying to plan for it and there could be a big rush back into the market when it happens,” McCool comments. “There’s no doubt that the virus will affect the market this year, but there will be positives as well as negatives.” Overall, adds McCool, the


Irish market was up 7.85% last year, bucking the general trend in Europe while IAM itself was up 8%, its best year ever and following on from a record the year before. However, all


bets are off as to whether this can be repeated in the current climate, in which holding your own would probably be a considerable achievement. The transatlantic market


has remained strong up to now, McCool continues, although here again there could be knock-on effects from the China crisis if it affects consumer and business confidence. One small ray of hope is that the seasonal Dublin-Dallas flights will start a month earlier this year and there are high hopes that Ireland’s first direct air link to Texas will in time become year-round. Until


recently, Brexit was


the big talking point in Irish airfreight, but that all seems to have been forgotten about as the industry grapples with the Corona Virus situation. However, despite Boris Johnson’s election landslide, there is no more certainty about what the eventually trading and transit arrangements with the UK will be. Closer to home, there are


also concerns about politics as it could be very difficult for the parties to form an effective coalition following the surge in support for Sinn Fein and the three way split between it and the two established political parties, Fianna Fáil and Fine Gael. Among the wider global and


political turmoil, plans for a new runway and consequent redevelopment of the existing cargo area at Dublin airport are going ahead, although the eventual outcome isn’t certain. The existing cargo handling shed operators have been told that they will need to move from their existing sites within about a year or so and the plan is to create a cross-dock facility for made-up containers and pallets somewhere on airport but with making up or breaking down of completed units taking place elsewhere. Most operators would prefer to carry out this activity on- rather than off-airport, but finding space at the moment is very difficult. There are tentative plans for


a cargo village but this would not be built for another five years at the earliest.


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