Your monthly digest Issue 8, November 2017
This month’s news includes:
- IMO moving towards a global climate agreement
- Supply chain after Brexit
- Container shipping in the digital age
- Post-2020: No more generous bunker credit terms?
- Regulating ship speed could cut emissions by a third – study
- New legislation puts the emphasis on road freight management
- New rail freight services between Europe-China
- Two-thirds of SMEs have no Brexit plans
- Thames should be London’s freight super-highway
- London airports “completely full” by mid-2030s
IMO moving towards a global climate agreement
In recent negotiations for a global climate agreement, the IMO has embarked on the specific contents of the strategy and made progress with the consideration of specific reduction measures in the short, the medium and the long-term. Yet it remains unclear how to specifically formulate the Organisation’s climate vision and level of ambition in this area. The IMO member States agreed this summer on a structure for the initial climate strategy to reduce shipping’s contribution to greenhouse gas emissions globally. The final negotiations are scheduled for April 2018, when the initial strategy is to be adopted.
Now is the time to think about Brexit supply chains, says logistics expert
World Trade Organisation tariffs will apply to imports and exports between the UK and the EU, and between the UK and non-EU countries with which the EU currently has free trade agreements, if the UK exits the European Union without any agreed arrangements, according to Alison Conley, partner and head of retail and consumer at MHA MacIntyre Hudson. This could lead to increased administration and costs. Conley advises that “despite the uncertainty around trade relations, tariffs and VAT, retailers have to plan now and consider all the changes that may lie ahead.”
How container shipping could reinvent itself for the digital age
The shipping industry is now once again facing a period of disruption – this time from digital technologies. Analyst McKinsey & Company encourages the industry players to rethink and advises companies to digitize their operations to take advantage of digital technologies, big data and the Internet of Things. In its forecast McKinsey predicts that autonomous 50,000 TEU ships will set to sea and the volume of container trade will be two to five times what it is today in 50 years from now. Short-haul intra-regional traffic will also increase as converging global incomes, automation and robotics disperse manufacturing footprints. According to McKinsey, shipping companies should invest in digital technologies as well as integrate as next-generation innovations will have to be orchestrated across the entire value chain.
Generous bunker credit terms could become a thing of the past come 2020
The new regulations of the global sulphur cap, coming into force in 2020, are not only likely to put pressure on the supply of suitable fuel oil to the market but also to the supply of credit. In a recent presentation at the Aracon bunker event, it was suggested that the increase in bunker prices post-2020 may force some shipping companies out of the market while credit managers will also come under pressure to raise credit lines to cover increased fuel costs. Furthermore those companies in the bunker supply chain that are least equipped to handle any inflated financial demands will be most likely to suffer.
Regulating ship speed could cut emissions by a third – study
Shipping greenhouse gas emissions from containerships, bulkers and tankers could be reduced by a third, on average, by reducing their speed, according to a new independent study by NGOs Seas at Risk and Transport & Environment, founding members of the Clean Shipping Coalition (CSC). Figures suggest the cumulative savings from reducing the speed of these ship types alone could, by 2030, be as much as 12% of shipping’s total remaining carbon budget if the world is to stay under the 1.5ºC global temperature rise. John Maggs of Seas at Risk and President of Clean Shipping Coalition said that only reduced speed could give the fast, deep short-term emissions reductions that are needed for shipping to meet its Paris Agreement obligations.
Road freight operators need to pay attention to new laws regarding tax evasion
The issue of tax evasion in the transport sector is set to be under greater scrutiny than ever before following the introduction of a new law. Recent controversy over the overnight payments to road haulage drivers and the ever present conflict between ‘self-employed’ staff and regular employees make this a topic for which all senior freight and logistics personnel should ensure they understand both their, and their companies, liabilities. Richard Wadkin and Jim Wright of Shulmans LLP discuss how this affects hauliers. Read more
New rail freight services between Europe-China
In October 2017 two new rail freight services were implemented on the New Silk Road allowing trains to transit between the north-eastern Chinese city of Changchun and Hamburg, in Germany. Meanwhile, a service between Łódź in Poland and Chengdu in China, transiting via the Russian exclave of Kaliningrad was launched. Within the past year railway connectivity between Europe and China has increased enormously due to the Chinese Belt and Road initiative, a major project with the aim to boost the transport of goods along the Silk Road trading routes.
Two-thirds of SMEs have no Brexit plans
A recent survey by CitySprint revealed that two thirds of small and medium companies have not made plans to prepare for Brexit. Further results showed uncertainty amongst the respondents as 43 per cent said that they do not have confidence in the government’s ability to protect their businesses from the impact of Brexit. Yet, when asked about the impact of leaving the EU on their business, 19 per cent expect profit margins to decrease and 17 per cent expect revenue to drop.
Thames should be London’s freight superhighway
The Thames could reduce road congestion in London by becoming a “highway” for transporting freight and construction material, the London Chamber of Commerce and Industry (LCCI) has said. “In effect, the Thames is an underused superhighway which flows through the heart of our capital, surely we should look to maximise its potential,” said chief executive of LCCI, Colin Stanbridge. LCCI requests that the Mayor of London should establish a temporary River Commission to explore possible improvements regarding the use of the Thames. Read more
London airports “completely full” by mid-2030s
An updated aviation demand forecasts published by the UK government stated that all five of London’s main airports will be “completely full” by the mid-2030s, and four of them within a decade. As a consequence, concerns arise on how the future economic prosperity should be secured when over half of global growth will be driven by emerging economies within a decade as currently London is not directly connected to 128 of the biggest cities in the world and capacity is limited.