FIATA e-Flash No 199, 6. May 2019
FIATA AND MEMBERS
50 years on, how do AFI (and FIATA) see the future for freight forwarders?
AFI has come a long way since its founding in 1969 and so has the industry. AFI held its first meeting on 17 June 1970, the same year the B747 ‘Jumbo jet’ made its first commercial flight. While only 540 747s remain in service today, AFI is still flying high and representing members’ interests.
One major evolution that we have witnessed over the years is a clear shift in the role of the forwarder from the ‘agent’ of the airline to a ‘customer’ of the airline. This demanded not only a change in commercial dealings but also enhanced responsibilities, as the erstwhile agent now stepped into the shoes of a virtual ‘shipper’.
For further details and how to register, please visit the field meeting website – http://www.impactpub.com.au/aircargo/index.php?option=com_content&view=article&id=16368:interview-50-years-on-how-do-afi-and-fiata-see-the-future-for-freight-forwarders&catid=161&Itemid=435
2019 RAME Field Meeting Beirut, Lebanon – June 24-26th
RAME Beirut 2019 is the perfect meeting point for a rich Networking experience & an inestimable opportunity to exchange Knowledge & challenges to develop the sector, get hold of valuable information and learnings in the field of logistics and promote alliances and business between The Middle East, Africa and the world.
The Lebanese Forwarders Syndicate have gathered some of the top leaders in the logistics, freight forwarding and shipping industry ranging from UNCTAD, WTO, TradeLens. In addition, the FIATA President, Mr Babar Badat will also join us in Beirut to discuss issues that are related to developing, modernizing and reforming the freight sector.
For further details and how to register, please visit the field meeting website – https://rame2019.com/
FIATA IS GOING ON SAFARI – COME WITH US
FIATA World Congress 2019 will be held in Cape Town, South Africa 1 – 5 October.
You are coming to Africa! This is your chance to experience a unique once-in-a lifetime Big Five Safari. Track these wild animals, live in luxury, dine under the starry Southern skies, and immerse yourself in the African bush. The Congress Organiser has designed a tailor-made safari package for FIATA participants. Visit the virtual itinerary: https://bit.ly/2LdrHpX
In the coming weeks and months, we will take you through all you need to know about the Congress. More information can be found on the Congress website (www.fiata2019.org), and you are welcome to email info(at)fiata2019.org with any questions.
Forwarders Welcome Heathrow Ruling
Speaking after yesterday’s ruling by the High Court in London against campaigners challenging the legality of the UK government’s decision to allow a third runway at Heathrow Airport, Robert Keen, Director General of the British International Freight Association (BIFA) said:
“On behalf of BIFA member companies, which are keen for the greater number of flights and accompanying airfreight capacity that would result from a new runway, I can only hope that yesterday’s ruling helps bring the debate on Heathrow expansion closer to an end.
For more details, please visit: https://www.bifa.org/news/articles/2019/may/forwarders-welcome-heathrow-ruling
WORLD ECONOMY
CBP’s Customs Trade Partnership Against Terrorism Finalized an Update
After over two and a half years of collaboration with the trade community, U.S. Customs and Border Protection’s Customs Trade Partnership Against Terrorism (CTPAT) program has finalized its review and update of its Minimum Security Criteria (MSC).
Early in 2016, CBP formally requested the Commercial Customs Operations Advisory Committee (COAC) to establish a Working Group (WG) in order to discuss and recommend updates to the program’s MSC. CTPAT’s MSC required updating to ensure that it is reflective of the current supply chain environment and the threats that the global supply chain faces today. Once established, the WG, made up of 50 individuals from both the private and public sector, worked diligently to discuss the updates.
For more details, please visit: https://www.cbp.gov/newsroom/national-media-release/cbp-s-customs-trade-partnership-against-terrorism-finalized-update
How to succeed in the most profitable industry in the world
Freight forwarding doesn’t get the same attention as fast-changing, glamorous industries such as high technology. It lacks a certain sex appeal-you could almost call its reputation grubby-and thus, it’s often overlooked by everyday people, and even by many investors. Yet freight forwarding is the world’s most profitable industry, and its top performers are even more profitable than Apple. Think of it as all steak, no sizzle.
Top, middle and lower management of both companies consists primarily of people with considerable experience in the industry, a long tenure at their companies and who understand the key revenue and cost levers.
Although not glamourous, the freight forwarding industry is the fuel that supplies the global economy’s daily needs and therefore it is no surprise to see profit gains from actors in the industry. FIATA has also worked hard to enhance the appeal of the industry through our FIATA World Congress that attracts a range of internal and external stakeholders that want to learn and contribute to our industry. We welcome all to join us in Cape Town at our 2019 World Congress in October.
For more details, please visit: https://www.scmr.com/article/how_to_succeed_in_the_most_profitable_industry_in_the_world
The Deal (Or No Deal) With Brexit: How You Can Plan For Impact On Your Supply Chain
In 2017, 55% of the international tonnage that traveled through UK’s ports were from the EU. The total amount of customs declarations made at UK ports is expected to grow 5X, from 50M to 250M declarations a year, but declarations are expected to increase 100X at ports like Dover where 99% of conducted trade is with the EU.
European borders will also be negatively impacted: the Port of Rotterdam alone anticipates the need to hire 800 more staff to handle the increase in Customs declarations from the UK post-Brexit.
FIATA highly advises its memberships to start working with their clients to ensure there are no disruptions in their supply chain operations. The British International Freight Association has guides and material to help members with their preparation.
For more details, please visit: https://www.wto.org/english/news_e/news19_e/rta_04apr19_e.htm
SEA FREIGHT
How to navigate the choppy waters facing the maritime freight industry
Brexit cast a serious shadow over the maritime shipping world in 2018, as the new terms for the relationship between the UK and its largest trading partner, the European Union, remained unknown. The constant threat of an escalating trade war between economic giants China and the United States only further strained these conditions.
2019 has proven itself to be a moment of transition for the industry– vacillating between recovering from last year’s international turmoil and attempting to be better prepared for the serious changes 2020 will bring.
In order to help improve working relationship with maritime operators, FIATA Published a second edition of its Best Practices on Container Shipping and Quality of Containers last week. Our Working Group Sea noticed that the quality of containers provided by shipping lines in global container shipping has decreased significantly. One has to come to the conclusion that shipping lines are cutting cost in the maintenance of their equipment.
For more details, please visit: https://www.voxmarkets.co.uk/articles/how-to-navigate-the-choppy-waters-facing-the-maritime-freight-industry-99c0c5f/
Understanding The 2019 Ocean Freight Market Through The Lens Of 2018
During the first half of 2018, a global surplus in containers (overcapacity) drove ocean carrier revenues down into negative territory. To stem the tide of declining financials, carriers moved to reduce capacity, introducing a series of blank sailings-disrupting routine schedules that consignees rely on for managing their operations-as well as their customers’ expectations.
With the dearth of ships in commission, cargo capacity was tight, and prices soared, primarily between Asia and the United States-almost tripling in November, according to the Shanghai Containerized Freight Index. Even those with long-term contracts were seeing impact, with space limited just to their allocations, if not sometimes less. Those that required more capacity were forced to pay spot market prices.
For more details, please visit: https://www.forbes.com/sites/flexport/2019/04/08/understanding-the-2019-ocean-freight-market-through-the-lens-of-2018/#1460901e30e2
AIR FREIGHT
Air freight – today’s rate won’t be tomorrow’s
Dynamic pricing is coming to an airline near you, but the only question is whether or not shippers will embrace the fluctuating levels that appear on their invoices. Increasingly, pricing decisions are based on complex algorithms that incorporate frequency of searches, booking windows (how far in advance), high demand times or events (spring break or South by Southwest), competitor pricing and previous purchase data to arrive at an offered rate.
Zvi Schreiber, CEO of Freightos, announced that Air France-KLM-Martinair will begin offering dynamic rates to freight forwarders in real time using WebCargo’s air freight booking platform. When I asked Zvi whether or not this is something forwarders were ready to accept, his observation was that most cargo was already moving on a spot basis.
For more details, please visit: https://www.freightwaves.com/news/airfreight/air-freight-todays-rate-wont-be-tomorrows
e-Commerce is the hot topic for air cargo at CNS Partnership Conference
FreightWaves spoke with Michael (Mike) White, President of CNS and host of this year’s conference, who pointed out that e-commerce is growing at twice the rate of domestic trade and “changing so many of the things we do” in air cargo. Boeing estimates that the global e-commerce market will grow 20 percent per year to $4.9 trillion in 2021.
The FreightWaves SONAR index (RESL.ONLN) for electronic shopping and mail-order house sales tracks well and portrays this rapid U.S. e-commerce growth, averaging nearly 14 percent annually since 2014.
Our industry will be represented at the event through Executive Director, Ruth Snowden form the Canadian International Freight Forwarders Associations (CIFFA) who joins a panel alongside IBM to examine a forward-looking view of e-commerce and the logistics industry’s contribution.
For more details, please visit: https://www.freightwaves.com/news/aircargo/ecommerce-cns-partnership-conference
RAIL AND ROAD FREIGHT
SAP adds Uber Freight to logistics network
Uber Freight has integrated its digital freight matching tool into German software giant SAP AG’s Logistics Business Network, a unit of the company’s “supply chain execution platform” that is designed to help business partners work together under the growing strain of providing e-commerce fulfillment.
Those software platforms are part of SAP’s enterprise resource planning (ERP) suite, known as S/4HANA, that also includes the company’s warehouse management and transportation management modules, as well as other supply chain software products.
For more details, please visit: https://www.dcvelocity.com/articles/20190502-sap-adds-uber-freight-to-logistics-network/
Shippers won’t blow their freight budgets in 2019, Coyote predicts
As the U.S. trucking market slumps downward from its historically high freight rates of 2018, shippers should take advantage of opportunities before the cyclical market inevitably begins to tighten up again, according to the third party logistics provider (3PL) Coyote Logistics.
Since the trucking market’s deflation will likely continue for another quarter before beginning to rebound, shippers can be confident that they probably will not exceed their 2019 freight budgets due to unplanned exposure to volatile spot market rates-which are typically higher than contract rates-as many companies did in 2018, Pickett said.
For more details, please visit: https://www.dcvelocity.com/articles/20190502-shippers-won—t-blow-their-freight-budgets-in-2019–coyote-predicts/
Is rail freight volume growing?
The answer is complex. Economists can measure growth or decline in multiple ways. Therefore, the answer depends upon the market perspective. Between the early 1980s and the record rail freight year in 2006, there was a significant “Renaissance period” of increased rail freight volume. In this case, Renaissance means a new growth spurt instead of a return to the old classical ways.
General Merchandise commodities that are carried via intermodal rail likely will be competitive and continue to grow – at a year-over-year rate in the 2 percent to 5 percent range. To some economists, this would be significantly slower growth than expected a decade ago.
For more details, please visit: https://www.freightwaves.com/news/railroad/is-rail-freight-volume-growing
INNOVATIONS
Amazon Launches Freight Brokerage, Slashes Prices By 30%
Amazon did what it traditionally does every time it enters a new market, and took its own digital freight brokerage platform live while undercutting prevailing market prices by 26% to 33% in the latest deflationary race to the pricing bottom in order to grab market share, according to FreightWaves.
Amazon’s entry into freight brokerage is an attempt to re-accelerate its top line, which has slowed from 30% annually three years ago to less than 15% this year. The company is trying to not allow trucking capacity to constrain its growth and, for now, it is coming in at price points that are far below market prices. This indicates that Amazon is not trying to realize enormous gross margins at first. The company’s new portal is intended for those who want Amazon’s rates for full truckload dry van freight in Connecticut, Maryland, New Jersey, New York, and Pennsylvania. Based on these rates, the company is essentially a “free, marginless brokerage”.
One can view technology as an enabler to enhancing efficiencies or a threat to disrupt the status quo. Ultimately, the consumer will be left deciding and FIATA believes the value-added services from its members coupled with the technological tools that are provided to them will ensure the industry remains competitive and adds value to end customers.
For more details, please visit: https://www.freightwaves.com/news/blockchain/blockchain-in-transport-alliance-welcomes-hong-kong-based-tigers
Digital freight forwarder FreightHub raises €27M: Maersk among new investors
FreightHub, Europe’s first digital freight forwarder has raised USD 30 million (around €27 million) in its Series B financing round. Rider Global, a venture fund founded by logistics experts, took the lead in this funding round and was welcomed as new investor together with Maersk Growth, the corporate venture arm of A.P. Moller‐Maersk – the world’s largest container shipping company.
More than 1,500 customers – including well‐known companies such as Home24, Miele and Viessmann – now rely on FreightHub’s services. In addition to existing locations in Berlin and Hamburg, the company opened its first Asian office in Hong Kong and acquired a sea freight forwarder specialised in Asian imports.
For more details, please visit: https://siliconcanals.nl/news/berlin-based-digital-freight-forwarder-freighthub-raises-e27m-maersk-growth-among-new-investors/
100 organizations join World Economic Forum blockchain supply chain initiative
The World Economic Forum (WEF) announced a new initiative “Redesigning Trust with Blockchain in the Supply Chain” to ensure blockchain is deployed in an “interoperable, responsible and inclusive way”. There’s much to gain in terms of efficiency, transparency and interoperability.
The group aims to co-design an open source roadmap or toolkit for blockchain deployment. Given blockchain is a team sport, many issues are not technology related. Hence the group plans to look at both technical and non-technical drivers of both risks and success.
During FIATA’s 2018 World Congress in Delhi, India, our Advisory Body Information Technology Session hosted a panel with Maersk and IBM to better understand how our industry could contribute towards the Tradelens project. We look forward to continuing the discussion with our partners with the goal of enhancing efficiency throughout sea transport.
For more details, please visit: https://www.logisticsmgmt.com/article/how_can_freight_forwarding_move_forward