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“The White Paper addresses some of the issues that BIFA has highlighted over the past two years,  including retaining something as close to the Single Market and Customs Union as is possible, with positive ideas on future Customs matters and international trading arrangements.

“But we have to remember that nothing in the White Paper is cast in stone.

“The proposals on Customs, where the UK is proposing to apply EU tariffs to EU goods passing through the UK, while having the freedom to set different tariffs on goods entering the UK, look complex and untested, something that has already seen negative comment from the EU.

“Other than a facilitated customs arrangement, I suspect that there will be other areas where there will be differences of opinion between the UK and EU.

“Notwithstanding the above, it is the most comprehensive and cogent proposal put forward by the UK Government to date and is a useful basis for negotiation with the EU.

“However, we need to be realistic. It still has to get through parliament, even before the negotiations in Brussels.”


BIFA is delighted to report that Mr Louis Perrin of Hemisphere Freight Services has been selected by the steering committee of the FIATA YIFFA as the 2018 Regional Winner Europe. The announcement was made by Michael Yarwood of TT Club, Chair of the Award Steering Group.

The UK nomination for the FIATA YIFFA is made by BIFA with the nominee being the winner of the BIFA Young Freight Forwarder Award at the BIFA Freight Service Awards ceremony in January each year. To be in with a chance of representing the UK in 2019 you will need to enter the BIFA 2018 Awards, go to https://bifa.org/enter-now/young-forwarder-award

Mike Yarwood announced:

“I advise that the judges have finished their marking and the steering group have completed their deliberations with the following result.

“The four regional winners have now been identified as:

Region Africa/Middle East:

Miss Tjaka Segooa

South Africa

Region Americas:

Mrs Kendyl Baptiste

Canada

Region Asia/Pacific:

Miss Sarak Kate   Skrypec

Australia

Region Europe:

Mr Louis Perrin

United Kingdom

“These four will be invited to the FIATA World Congress in New Delhi, India to receive their regional certificates and trophies. A separate e-mail will be sent to each of them for giving details of how to go about this.

“To the other candidates we send our good wishes for their future in forwarding and advise that a Certificate of Participation and a personal memento will be sent to their National Association so that they can be presented with these locally”.

BIFA extends congratulations to Louis and best wishes for the next stage of the competition.


If you have any comments or concerns to the above proposals please inform Border Force by giving details in writing by 10 August 2018.

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However, some BIFA Members have communicated with BIFA stating that as they are billed by the Port for services they should be treated as a customer as well as shipping lines.

The information was provided by the Port in a meeting organised by BIFA. Our Regional Chairman for London East and a representative of the BIFA Anglia Region and our Regional Consultant made the Port aware of the frustration and problems being experienced by all BIFA Members. BIFA cannot comment on billing arrangements, charges or be part of any collective action that may ensue.

BIFA Members will have to make their own representations or take appropriate legal advice if they want to challenge the Port. We cannot instigate action on behalf of the forwarding sector however should a group of BIFA Members want to take action we can facilitate an introduction of such a group to a single point of legal advice. The cost of such advice would have to be borne by the BIFA Members involved.

If you want to be included in such a group of BIFA Members please e-mail Robert Keen – r.keen@bifa.org


Two-year spot freight rate trend for the World Container Index:

World Container Index assessed by Drewry

Our detailed assessment for Thursday, 5 July 2018

View our more detailed weekly analysis, including our freight rate assessment on eight major East-West trades.

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“In the March report we said that we were hopeful of a peaceful resolution, but at this point in time we must accept that tariffs are going to become a reality. The only question now is: how severe will they be?” said Simon Heaney, senior manager, container research at Drewry and editor of the Container Forecaster.

Additional tariffs of 25% on the first list of 818 Chinese products, worth approximately $34 billion, are scheduled to be collected by US Customs from Friday 6 July. A second list of 284 newly recommended products covering $16 billion is currently being reviewed, while there are threats of further tariffs on as much as $400 billion of goods to follow, in response to Chinese retaliation.

The latest edition of Container Forecaster analyses three potential scenarios for eastbound Transpacific container trade, based on the intensity of a trade war, ranging from tariffs of $50 billion to $450bn being applied to Chinese imports.

In the worst-case scenario, Drewry calculates that as much as 1.8 million teu, or nearly 1% of world loaded traffic could be lost to the market over a period of time. As things stand, the impact from the initial two lists of Chinese products alone would be relatively insignificant at around 200,000 teu.

Drewry research shows that revised lists announced on 15 June were heavily weighted towards industrial goods, while also being readily available from other trading partners. China only exported about 13% of the first list of products to the US last year and around 8% of products on the second list.

“With other sourcing options available, tariff increases on Chinese goods on these initial products lists will most likely create a small amount of trade diversions and raise the prospects of other exporting partners of the US,” said Heaney.

“The current risk threat to container demand is relatively low, even when factoring in tit-for-tat measures and disputes with other trading partners, but there is clearly the potential for matters to get much darker if additional tariffs are forthcoming."

“Perhaps, the biggest risk is the unpredictability of it all and the potential confidence knock it will give to the world economy, just when it seems to be finding its feet.”

The trade disputes take the gloss of the strong demand growth seen in the early months of 2018, driven by a speeding of the world economy.

From this report, Drewry is using a redesigned demand forecasting technique, under the guidance of new senior quantitative economist Mario Moreno. The improved model now enables us to present five-year demand forecasts for global and regional port throughput and selected tradelanes within every quarterly report.

Subsequently, Drewry has upgraded its demand forecast for the next two years to 6.5% and 5.8% respectively.

There was also an upgrade to the fleet growth outlook for this year after surprisingly few demolitions. However, anticipated supply growth of 5.4% is below the revised demand increase, which will support ongoing supply-demand rebalancing.

“There will be some gain for carriers this year in the form of increased demand and slowly improving supply-demand, but a lot more pain,” said Heaney. “Escalating fuel prices have caused us to slash the industry’s profitability forecast to break-even and while freight rates are expected to rise modestly in 2H18 it won’t be sufficient to turn things around. In some ways, buoyant demand is a problem for carriers right now as every extra box shipped at a loss only amplifies the deficit.”

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Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 6.2% year-on-year in May 2018. This was the fourth month in a row that capacity growth outstripped demand growth.

After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018. In IATA’s mid-year industry outlook, 2018 freight growth was revised downwards to 4.0% (from the previously forecasted 4.5% in December 2017)

There are three indications that growth will continue at a slower pace:

The re-stocking cycle which required quick delivery to meet customer needs is over The new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is at a 21- month low Global trade appears to be softening as trade tensions increase

"We expect air cargo demand to grow by a modest 4.0% in 2018. That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade. We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers," said Alexandre de Juniac, IATA's Director General and CEO.

May 2018
(% year-on-year)

World share¹

FTK

AFTK

FLF
(%-pt)²

FLF
(level)³

Total Market

100.0%

4.2%

6.2%

-0.9%

44.6%

Africa

1.9%

-2.0%

20.4%

-4.8%

21.2%

Asia Pacific

36.9%

4.9%

7.4%

-1.3%

55.3%

Europe

24.2%

2.3%

6.0%

-1.6%

44.5%

Latin America  

2.7%

11.4%

1.5%

3.3%

37.3%

Middle East

13.7%

2.4%

3.3%

-0.4%

44.9%

North America

20.6%

5.9%

5.4%

0.2%

36.3%

¹% of industry FTKs in 2017   ²Year-on-year change in load factor   ³Load factor level  

Regional Performance

All regions except Africa reported an increase in growth in May 2018.

  • Asia-Pacific airlines saw freight demand increase in May 2018 to grow 4.9% compared to the same period last year. This was an increase over the 3.9% recorded the previous month. Capacity increased by 7.4%. As the largest freight-flying region, carrying close to 37% of global air freight, the risks from protectionist measures impacting the region are disproportionately high. That said, there are signs that demand is accelerating for international FTK’s.

  • North American airlines’ freight volumes expanded 5.9% in April 2018 compared to the same period a year earlier. This was an increase in demand from the 4.6% rate of growth recorded the previous month. Capacity increased by 5.4%. The recent momentum of the US economy and the US dollar has helped strengthen demand for air imports. Data from the US Census Bureau shows a 12% year-on-year increase in imports by air in April, compared to 2.4% growth in March.

  • European airlines posted a 2.3% increase in freight volumes in May 2018. This was a slowdown from the 3.5% rate of growth the previous month. Capacity increased 6.0%. Seasonally-adjusted volumes rose slightly over the past two months; however, the annualized rate of growth over the past six months remains low at only 1.5%.

  • Middle Eastern carriers’ freight volumes grew 2.4% in May 2018. This was a significant deceleration in demand of over 6.9% the previous month. The decrease mainly reflects developments from a year ago rather than a substantive change in the current freight trend. Seasonally-adjusted freight volumes continue to trend upwards at a comparatively modest pace by the region’s standards. This is consistent with signs of a broader moderation in global trade. Capacity increased 3.3%.

  • Latin American airlines experienced growth in demand of 11.4% in May 2018 - the largest increase of any region for the third consecutive month. Capacity increased by 1.5%. The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes surpassed the May 2014 peak this month.

  • African carriers saw freight demand contract 2.0% in May 2018 compared to the same month last year. Capacity increased by 20.4%. After a surge in international FTK volumes last year, seasonally-adjusted international freight volumes have now trended downwards at an annualized pace of 15% over the past six months. This mainly reflects a softening in demand on markets to/from Asia and the Middle East.

View May air freight results (pdf)


Robert Keen, Director General of the British International Freight Association (BIFA) said:

“Having had a meeting with the port’s senior management, it is clear that the only companies that might receive any compensation are shipping lines.

“The port authority has made it clear to us that it does not consider BIFA members to be direct customers of the port, and would not be willing to have a discussion about possible compensation for the damage caused and the increased costs that have been incurred by those members.

“It is astonishing that a port authority, which owns the UK’s busiest container port and has been happy to market it as the ‘Port of Britain’, implemented a new and vitally important system with apparently no fall-back position if it went wrong. 

“And it is very disappointing that it is not even prepared to discuss any kind of compensation for such a failure in customer service.”


In its second-quarter Cargo Chartbook, IATA said the positive air freight performance during 2017 was supported by overall strength in world trade demand that is beginning to flag.

It added that athough FTKs have continued to increase year-on-year, in seasonally adjusted terms, FTKs fell quarter-on-quarter for the first time in two years, and have tracked sideways for the past six months.

IATA attributed slowing growth to weaker sentiment surrounding world trade, connected to increasing concerns over protectionist rhetoric and tariffs.

The association also reported a decline in the new export order component of the global manufacturing Purchasing Managers’ Index (PMI), an indicator of economic health in the manufacturing and service sectors. The PMI reached a 21-month low recently, which is “still consistent with rising orders,” according to IATA, but indicates that third-quarter FTK growth is likely to be even lower, at just under 2 percent.


 

 

 
 
 
 
 
 

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