BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management

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BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
SUMMER 2018

 ACROSS

BORDERS
SUPPLY CHAIN
SOLUTIONS UTILISING
BLOCKCHAIN
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
Contents                                                                 ACROSS
2

4
6
     Trusted Traders gaining a competitive edge on the world
     stage
     What is the Motus Ware story
                                                                         BORDERS
     ACCC sets the scene for state governments to act on
     Terminal Handling Charges
                                                                                                                SUMMER 2018
8    Louder voice for Australian shippers
10   Hamburg Süd. A brand apart.
12   Interview - Ian Doherty, Executive Manager Customer &
     Strategic Development, Port of Newcastle
14   Fuel for thought
17   Managing transition – Tasmania’s emerging challenges and
     opportunities
18   General Average – Oh So Misunderstood!
20   Menzies Aviation Cargo Security Screening
22   Interview - Ian Fletcher, Director XLI Global Air & Ocean
25   Data is the New Oil: How Big Data is Transforming Logistics
26   Are you an Employer of Choice?
28   FTA and Logical launch new insurance services
28   Detailed credit worthiness checks often lead to high quality
     customer relationships
29   Trade, travel and travelling traumas
30   The OBP Difference
32   Containerchain Rolls Out Platform Advancements for
     Container Supply Chain Synchronisation and Connectivity on
     the Landside
34   The Economy and the impact on Foreign Exchange Markets
36   Does A Four Day Work Week Make Good Business Sense?                  Advocating for logistics and
37   Interview - Alison Cusack, Australia President, Women’s
     International Shipping and Trading Association – WISTA               regulatory reform
39   Congratulations Jeanine Drummond, Harbourmaster -
     Newcastle                                                            As highlighted in the Chairman’s report, the Australian Peak
39   WISTA Oaks Day                                                       Shippers Association (APSA) and Freight & Trade Alliance
39   Women in Logistics - Speaking with Influence Workshops
                                                                          (FTA) continue to focus on what is clearly an unacceptable
                                                                          imposition of Infrastructure Surcharges. We have been
40   Closing the Gap – automation can help
                                                                          working tirelessly to address this issue and we commend
42   ACFS raises the e-commerce bar with its new facility in              the Australian Competition and Consumer Commission
     Eastern Creek
                                                                          (ACCC) for their latest stevedore monitoring report and the
44   Interview - DSH Global Logistics celebrates 25 years of              Victorian government for taking a lead by announcing a
     service
                                                                          review of port related costs.
46   What we can look forward to in an Australia – European Union
     free trade agreement                                                 Andrew Crawford, our Head of Border and Biosecurity, and
48   The TPP to begin in 2018 – But are there any real benefits?          Tony Nikro have been outstanding in supporting members
                                                                          through the significant challenges posed by the current
50   Border and Biosecurity update – FTA perspective
                                                                          Brown Marmorated Stink Bug season. We look forward to
53   A busy program of biosecurity activities and collaboration this      close engagement with all stakeholders as a part of a post
     holiday season
                                                                          implementation review to examine how to best manage this
56   Biosecurity - where does the future lie?                             significant Biosecurity risk in future seasons whilst ensuring
58   The number one error made on import declarations –                   effective facilitation of import trade.
     the valuation date
                                                                          On a personal note, Caroline (Zalai) and I would also
60   Know Your Data, Know Your Exposure
                                                                          like to take this opportunity to congratulate fellow FTA
62   Inaugural Care-Factor Charity Night 2018
                                                                          Director and APSA Secretariat, Travis Books-Garrett, on
                                                                          his appointment to the Board of the Global Shippers Forum
                                                                          (GSF). This appointment ensures that FTA/APSA members’
                                 Across Borders is published by           interests will stay at the forefront of future international
                                 Freight & Trade Alliance (FTA)           trade developments.
                                  68 Brooker Avenue
                                                                          We trust that you enjoy reading in more detail about the
                                  Beacon Hill NSW 2100
                                                                          above developments and our other key advocacy focus
                                  T: 02 99751878                          areas in this Summer edition of Across Borders. Finally, on
                                  E: info@FTAlliance.com.au               behalf of the FTA/APSA team, we would like to wish you
                                  www.FTAlliance.com.au                   and your families a safe and merry Christmas and we look
                                                                          forward to partnering with you again in 2019.
                                  Design by
                                  Siren Design Studio
                                  T: 0412 103 569                         By PAUL ZALAI, Co-founder and Director,
                                  E: info@sirendesignstudio.com.au        Freight & Trade Alliance (FTA)
                                  For advertising rates please contact
                                  Paul Zalai on 0408 280 123

          Front cover – sponsored by Motus Ware                                                       Summer 2018 I Across Borders I 1
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
FOREWORD

 Trusted Traders
                                                                                               the validation process. It’s great to see the
                                                                                               program growing at such a fast pace.
                                                                                               Recently, I was fortunate enough to present
                                                                                               some newly accredited Trusted Traders with

 gaining a competitive
                                                                                               accreditation globes and welcome them to the
                                                                                               program. Among them were Kmart Australia
                                                                                               and Pandora Jewellery. These new businesses
                                                                                               join the likes of other international businesses

 edge on the world stage
                                                                                               such as Apple, IKEA and Louis Vuitton.
                                                                                               Hong Leow from Kmart Australia Limited
                                                                                               said, “Kmart is thrilled to be an Australian
                                                                                               Trusted Trader. As a fast moving, high volume
                                             Australia has a proud history as a trading        business, this will help with productivity and
                                             nation. My Government initiated the Australian    faster processing times at the border. Fewer
                                             Trusted Trader program to manage the              interventions will mean our stock will be able
                                             increasing volumes and greater complexities       to be more readily available on shelves for our
                                             Australian businesses were facing within the      customers across Australia.”
                                             international supply chain. Australian Trusted    David Blamires, the Logistics Operations
                                             Trader allows us to preserve that legacy and      Manager-Pacific Region for Pandora Jewellery,
                                             propels us into a future of new economic          said they were most looking forward to faster
                                             opportunities.                                    customs processing and getting their new
                                             Australian Trusted Trader has fundamentally       ranges into stores quicker.
                                             changed the way we work with our                  “I know that being a Trusted Trader means
                                             international trading partners in managing        that if a cargo examination is required, we will
                                             the movement of goods across our border.          receive priority processing,” Mr Blamires said.
                                             Our strong relationships with our international
                                             trading partners has meant we’ve been able        Alex Menta, the Regional Customs Manager
                                             to develop a number of Mutual Recognition         from GM Holden has been a Trusted Trader
                                             Arrangements (MRAs), providing Trusted            since the program was piloted in 2015.
                                             Traders with unprecedented access to trade
                                                                                               “For organisations that are consumer centric
                                             facilitation benefits and increasing their
                                                                                               and where time is critical, it’s assuring to
                                             access to global markets.
                                                                                               know you are going to receive your containers
                                             Trusted Traders now have access to seven          on time – that itself is a massive benefit,” Mr
                                             MRAs, streamlining the clearance of goods at      Menta said.
                                             the border with Canada, the People’s Republic
                                                                                               While we can celebrate the economic
                                             of China, Hong Kong, Taiwan, the Republic of
                                                                                               benefits Australian Trusted Trader provides
                                             Korea, New Zealand, and Singapore.
                                                                                               to businesses, the program is also vital to
                                             I am excited to see negotiations are underway     the Government’s approach to facilitate trade
                                             for additional MRAs with the United States,       enforcement. Working in partnership with
By SENATOR LINDA REYNOLDS CSC,               Japan and Thailand, with more countries to        Trusted Traders allows the Australian Border
                                             follow.                                           Force (ABF) to develop a better understanding
Assistant Minister for Home Affairs                                                            of how secure and compliant businesses
                                             MRAs are a fantastic advantage of the
                                                                                               undertake international trade.
                                             Australian Trusted Trader program, which we
                                             predict will provide a benefit of around $2.8     This means the ABF can focus their efforts
   Freight & Trade Alliance (FTA) and        billion to industry between 2015–2025.            on targeting high-risk, unknown or illegitimate
                                                                                               traders.
   the Australian Peak Shippers’             The program has also experienced significant
   Association (APSA) play an important      growth in the last year with the number of        I am pleased to see the program supporting
                                             accredited Trusted Traders now over 250, with     the ABF and continuing to contribute to
   role in protecting the interests
                                             more businesses currently progressing through     keeping Australia’s border safe and secure.
   of Australia’s cargo owners and
   shippers, as well as bringing together
   importers, exporters and industry
   groups. Collectively FTA and APSA
   remain at the forefront of all emerging
   supply chain issues, and I believe it
   demonstrates what can be achieved
   through collaboration between the
   Australian Government, industry and
   our international trading partners.

                                                Assistant Minister for Home Affairs, Linda Reynolds CSC with 12 newly accredited Trusted Traders

 2 I Summer 2018 I Across Borders
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
Australian Trusted Trader
Testimonial – Aqualuma
 Since 2005, Gold Coast-based
 lighting company Aqualuma have
 been leading the marine industry
 with LED lighting technology for
 the world’s top motoryachts,
 superyachts and marinas. Since
 becoming an Australian Trusted
 Trader in late 2017. Directors Carl
 and Grant Amor have expressed
 how becoming accredited has
 helped their business’ reputation.
 “I think the reputation of being a Trusted
 Trader, that is backed by a body like
 Australian Border Force, tells people we can
 be trusted, and from that point of view the
                                                  Aqualuma Directors Carl and Grant Amor with Australian Border Force Officer Angelica Nudo-
 program is a sensational thing,” said Grant
                                                                           Fountain outside Aqualuma Headquarters
 Amor.
 Aqualuma deals with a lot of blue chip          Carl Amor says that since becoming Trusted        in Australia and internationally, as a mark of
 companies around the world, so becoming         Traders, large companies have specifically        trust.
 a Trusted Trader was an obvious next step       chosen Aqualuma over other companies as
 for the company as it speeds up the process     a result of their Australian Trusted Trader       “It’s very easy to endorse your own
 of getting their products across the border     accreditation status. Evidently, the Australian   company—but when you get an endorsement
 without any delays.                             Trusted Trader logo is quickly gaining traction   like this—it’s invaluable,” said Carl Amor.

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                                                                                                             Summer 2018 I Across Borders I 3
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
ADVERTORIAL

What is the
                                                                                              Ask yourself what you want to achieve
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   By SIMON BORG, CEO and founder Motus Ware                                                  culmination of 12 months of planning
                                                                                              and preparation, we have already
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Motus Ware Pty Ltd was founded in                Our view on Blockchain and general           been able to create transactions in a
                                                 discussion on new and emerging               Blockchain.
August 2018 in Melbourne. Although               technologies.
a recent start for the business, we                                                           Rapid Release will allow stakeholders
                                                 Aside from building a usable application,    to easily manage cross-border tax
have been working on a process                   we believe we should also assist industry    obligations using a simple drag and
patent in the Blockchain space for               to break down some of the hype around        drop function. The process is milestone-
the past 12 months. Having now                   the new tech coming into supply chains       based and allows for completely
moved to patent pending, we have                 globally. In my role as Group CEO of
                                                                                              transparent end to end control.
                                                 Navia Logistics, we have invested heavily
started to develop our first product             into technology for quite some time          The payment management side of
based on this patent called Rapid                now. From this experience I have a firm      the business will be handled by Veem
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                                                 the technology as just one tool that can     task.
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                                                                                              On that front, we are working on a new
                                                                                              patent which will encompass a readable
                                                                                              secure container seal to feed data into
                                                                                              a Blockchain. At this stage, we can’t
                                                                                              go too far into the detail however our
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                                                                                              for container tampering, whilst also
                                                                                              adding various payment, customs, and
                                                                                              documentation functionality.
                                                                                              We are also actively seeking additional
                                                                                              industry stakeholders as partners to test
                                                                                              and deploy live product.
                                                                                              If you would like to know more
                                                                                              about our work in this area or if you
                                                                                              would like to participate in
                                                                                              our pilot, please email me at
  Simon Borg (third from left) and team - Kathy, Gian, Brendan, Tanim and Larissa             simon@motusware.com.au

4 I Summer 2018 I Across Borders
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
“ There is no doubt in
                                  my mind that from a
                              reputation point of view,
                                   ATT is invaluable ”

Shaping
                                                    Grant Amor
                                             Director Aqualuma

the         Australian Trusted Trader (ATT) reduces red tape
           at the border and expedites the flow of your cargo

future
            in and out of Australia, providing faster access to
             market and saving you valuable time and money.

                     ATT is free to join with no ongoing fees.

of trade
                                 ATT is the future, join today.

                      www.ABF.gov.au/trustedtrader
                                       Summer 2018 I Across Borders I 5
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
EXECUTIVE REPORT

ACCC sets the scene for state
governments to act on Terminal
Handling Charges
   By PAUL BLAKE, Chairman, Australian Peak Shippers Association

The much-anticipated Australian
Competition and Consumer
Commission (ACCC) Container
Stevedoring Monitoring Report
2017/18 was released on 30 October
2018 against a backdrop of the
announcement of further significant
increases in Terminal Access Fees by
DP World Australia to take effect on 1
January 2019.

    In my report for the Spring edition of
    Across Borders I wound the clock
    back to the late 1990s to set the scene
    around the evolution of the Terminal
    Handling Charge (THC). Shipping lines             Travis Brooks-Garrett (FTA/APSA) welcoming attendees – seated L to R, Peter
    imposed the THC as a “transparency             Morgan (CEO, Australian Council of Wool Exporters & Processors), Andrew Wallace
    tool” for cargo owners to understand           (Senior Advisor Office of the Hon. Michael McCormack MP), Dominic Dillon (Cargill),
                                                       Dr Steven Kennedy (Secretary of the Department of Infrastructure, Regional
    how well (or badly) the stevedoring
                                                       Development and Cities), Paul Blake (Chairman, APSA), Pip Spence (Deputy
    industry was functioning at that time.
                                                     Secretary of the Department of Infrastructure, Regional Development and Cities)
    The THC has been with us for 30
    years and until 2015 was the conduit       based on the historical 80/20 formula        being levied are “fair and reasonable”
    for the passing on of increases (never     (a formula originated by the shipping        and not being used as a revenue-
    decreases) of stevedoring costs, by        industry) developed in Australia and         enhancing exercise by the lines, unable
    shipping lines to cargo owners/shippers,   shared with the global market!!              to be audited by their customers.
                                               The THC was and presumably still is the      The Australian Peak Shippers
                                               cost paid by the shipping line of 80% of
                                                                                            Association (APSA) challenges the notion
                                               the FULL stevedoring service provided
                                               by the stevedore, that is the receival/      of confidentiality of these agreements
                                               delivery of the container, movement to/      back in 2005. If not for the dissolution
                                               from the pad and laydown, sequencing         of the particular Shipping Conference
                                               for loading/unloading, movement to/          during the ACCC investigation, there
                                               from the pad to the ship-side, lift-on/off   may have been a case that, for shipping
                                               the vessel and administration services       lines to avoid a breach of Part X, they
                                               (planning/clerical/management).              would have been compelled to share the
                                               Shippers (exporters and importers)           commercial details of their arrangements
                                               have been (and remain) excluded from         with stevedores.
                                               any negotiation between stevedores
                                                                                            It was therefore with much interest
                                               and shipping lines in the provision
                                               of stevedoring services as these             that I read the ACCC’s 2017/18
                                               agreements have been held to be              stevedoring report and noted the subtle
                                               confidential between the stevedores and      but extremely interesting change in
       Rod Sims (Chairman ACCC) and            shipping lines. As such, shippers are        the language being used in this report,
        Paul Blake (Chairman APSA)             unable to clearly ascertain if the THCs      versus the 2016/17 version.

6 I Summer 2018 I Across Borders
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
The stevedoring and the shipping
                                                                                            industry have been and continue to
                                                                                            be disingenuous towards Australian
                                                                                            cargo owners and the Australian public,
                                                                                            through their manipulation of the current
                                                                                            legal framework and refusal to pass on
                                                                                            the benefits of stevedoring reform and
                                                                                            productivity improvements.
                                                                                            Nothing could demonstrate this more
  Event Sponsor, Anthony Jones (CEO, Linx Cargo Care Group) – seated L to R, Kurt           succinctly than the fact that of the
   Wilkinson (Fletcher International Exports), Olga Harriton (Manildra Group), Eimear       8.1 million TEU which passed through
          McDonagh (Namoi Cotton/ Australian Cotton Shippers Association)                   Australian ports in the period of the ACCC
                                                                                            review, 1.9 million TEU or 23.45% were
                                                                                            not charged an infrastructure fee!
In the 2016/17 report the revenue of           advised by lines in 2018 on the basis that
stevedoring was identified thus:               stevedoring rates have increased.            These containers are “empty
                                                                                            repositioning” and as the movement
“Revenue per TEU, a proxy for price,           How is this so?
                                                                                            of empty stock is a component of the
continued to fall across the industry in                                                    confidential agreements between the
                                               The ACCC report clearly identifies that
2016-17. Total revenue fell 2.0 per cent                                                    stevedores and the shipping lines, they
                                               stevedoring rates have been falling for
to $169.7 per TEU, while stevedoring           some years yet Australian cargo owners       are exempt from an infrastructure levy.
revenue fell 4.5 per cent to $138.8 per        have seen none of the benefit of this        Another free kick for the shipping industry.
TEU. This has continued a very consistent      change in the “transparent tool” imposed
trend which now sees unit stevedoring                                                       The question is why?
                                               by the lines.
revenue at a level which is about a quarter
                                                                                            On a final note, we would also like
less than a decade ago in real terms.”         It is now time for an in-depth review of
                                               the commercial structure of the over-        to express our sincere appreciation
In the 2017/18 report we have a                port model and APSA fully supports           to the Linx Cargo Care Group who
significant change in the language being       the Victorian Government’s recent            generously sponsored our corporate
used to describe stevedoring revenue:          announcement of an investigation of          dinner at the Hyatt Hotel Canberra on
we are introduced to the concept               infrastructure levies as they impact in      9 October 2018. Anthony Jones, CEO,
of “Quayside revenue and Landside              Victoria.                                    Linx Cargo Care Group provided an
revenue”.                                                                                   overview of their diverse operations
                                               We encourage all State Governments to        with a focus on solutions supporting
Indeed, the report identifies that the         do likewise.                                 our regional exporters. We were also
former fell 8.5% to $195.60 and the latter
                                               What is paramount is that any inquiry has    privileged to receive an address and
increased by 30.7% to $63.30 for a total
                                               wide-ranging terms of reference so that      genuine engagement from Dr Steven
revenue per TEU of $258.90.
                                               the complete end-to-end commercial           Kennedy, Secretary of the Department
Does this mean that the 2016/17 numbers        model can be laid bare and the               of Infrastructure, Regional Development
were incorrect or does it mean that            inconsistencies which allow the current      and Cities, Ministerial advisors and senior
stevedoring rates have increased $89.20        unchecked gouging to proliferate are         departmental representatives providing an
per TEU?                                       understood; steps must then be taken to      important opportunity to further support
                                               change oversight and management of the       our advocacy relating to transport, port
While there needs to be some clarification
                                               port interface.                              costs and trade initiatives.
of the numbers, the clear intent of the
stevedoring and shipping industry is for
not only market recognition of the not-so-
subtle change in the commercial model,
to split out the quayside and landside
costs, but also that the “Quayside cost”
will be squeezed to deliver lower prices
to the shipping industry and increased
competitiveness for the stevedore. This is
to the detriment of the landside cost and
shippers.
Clearly the shipping and stevedoring
industry believes that this arrangement will
be unchallengeable, under the historical
confidential agreement arrangements I
referenced earlier in the report.
APSA has received no advice from any
shipping line that THCs will be reduced in
line with findings of the ACCC report. In           Keynote address Dr Steven Kennedy (Secretary of the Department of Infrastructure,
fact, there have been increases in THCs                                    Regional Development and Cities)

                                                                                                       Summer 2018 I Across Borders I 7
BORDERS SUPPLY CHAIN SOLUTIONS UTILISING BLOCKCHAIN - SUMMER 2018 - Logical Financial Management
EXECUTIVE REPORT

Louder voice
                                                                                                                              it, now sits on a global body dedicated
                                                                                                                              to influencing regulatory developments
                                                                                                                              impacting on international freight transport
                                                                                                                              and the policy decisions of governments
                                                                                                                              and international organisations as they affect
                                                                                                                              shippers and receivers of freight,” Mr Brooks

for Australian shippers                                                                                                       Garrett said.

                                                                                                                              “APSA and FTA co-hosted the GSF’s annual
                                                                                                                              general meeting and very successful global
                                                                                                                              conference in Melbourne in May this year –
                                                                                                                              a first for the Southern Hemisphere – and
Australia’s importers and exporters now have a stronger voice in                                                              I believe international members were able
international trade following the election of Travis Brooks-Garrett to the                                                    to see first-hand Australian importers’ and
Board of the Global Shippers Forum (GSF).                                                                                     exporters’ support for our effective, persistent
                                                                                                                              and committed efforts on shippers’ behalf.”

    The London-based GSF, originating in                  shipping services. APSA members include
    1996 and formally incorporated as a non-              Australia’s largest containerised exporters by
    governmental organisation in 2011, is the             volume.
    peak body for leading national and regional
                                                          He is also a director of Freight & Trade
    trade and transport organisations in Asia,            Alliance (FTA), the advocacy body
    Europe, North and South America, Africa and           representing approximately 70% of the
    Australasia.                                          country’s inbound containerised trade,
    Mr Brooks-Garrett is the Secretariat and              including major importers and logistics service
    a Board member of the Australian Peak                 providers.
    Shippers Association (APSA), designated               “While my election to the Board is a personal
    by the Federal Minister of Infrastructure and         honour it’s far more important that Australia,
    Transport to protect the interests of Australian      a nation so utterly dependent on international
    exporters in respect to international liner           trade and the efficient transport that facilitates
                                                                                                                                           Travis Brooks-Garrett

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8 I Summer 2018 I Across Borders
GSF Director and Secretary General James
Hookham said the other directors of the Forum
welcomed the support of the Australian Peak
Shippers Association in nominating Travis to
serve on the GSF Board.
“Travis’ in-depth knowledge of trade
procedures and understanding of the shipping
markets will greatly assist the Board in setting
the direction and strategy of GSF to achieve
the outcomes sought by its members,” Mr
                                                       Travis Brooks-Garrett, FTA / APSA (back row second from left) - representing the GSF as a
Hookham said. “We look forward to working
                                                     guest of the Director-General of Chinese Customs in Shenzen for the U.N. IPPC Sea Container
with him.”
                                                                                  Taskforce Meeting – November 2018
“On a day-to-day basis GSF is lobbying,
educating and influencing government                •     The abolition of liner conferences and         and efficient shipping markets by all modes
and inter-government organisations on an            price fixing and capacity agreements in all          to improve the performance of shippers’
expanding range of regulatory and trade issues      trades to and from Europe.                           logistics and supply chains. We are therefore
affecting shippers, and in doing so raising
                                                    •     Persuaded the ILO/IMO not to introduce         campaigning for:
the profile of shippers and their interests.” Mr
Brooks-Garrett said.                                new regulations increasing shippers’
                                                                                                         •     Regulatory reform in ocean transportation
                                                    responsibilities for the safe stowage of
“I am confident we in Australia can and will        containers throughout the whole supply chain in      in Asia and North America.
make a substantial contribution to GSF’s work       favour of enhanced guidelines in the promotion       •      Market based voluntary environmental
and, at the same time, reap the benefits of their   of training and best practice.
                                                                                                         efficiency measures to mitigate the impacts
drive and momentum.”
                                                    •   Influenced the outcome of the recent             of shipping and transport emissions and
The appointment is for a three-year term.           INCOTERMS revision by the International              greenhouse gases (GHGs).
                                                    Chamber of Commerce.
What results has GSF achieved for                                                                        •      Mutual recognition of global security
shippers?                                           What is GSF campaigning for?                         regimes through ICAO and WCO to enhance
Here are some recent examples of successes          GSF is campaigning on the issues that                existing global security arrangements and
GSF has secured for shippers:                       most affect shippers, including competitive          facilitate international trade.

                    SWIFT CONTAINER SERVICES
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                                                                                                                     Summer 2018 I Across Borders I 9
ADVERTORIAL

Hamburg Süd.
                                                                                         Hamburg Süd’s capabilities comprise:
                                                                                         •   Logistics management
                                                                                             -    Efficient equipment fleet
                                                                                                  management and on-site

   A brand apart.
                                                                                                  container positioning
                                                                                             -    Fail-safe EDI links with ports,
                                                                                                  terminals and road/rail
                                                                                                  operators
                                                                                         •   Ocean transportation services
                                                                                             -    Reliable schedules and fast,
                                                                                                  frequent sailings
                                                                                             -    Highly competitive transit times
                                                                                             -    Convenient, coordinated
                                                                                                  transhipment services
                                                                                         •   Intermodal coordination
                                                                                             -    Secure intermodal links
                                                                                                  (coastal/road/rail)
                                                                                             -    Real-time online track-and
                                                                                                  trace facilities
                                                                                         Hamburg Süd pursues a multi-channel
                                                                                         e-Commerce strategy designed to
                                                                                         support the electronic shipment process
                                                                                         flow, allowing our customers to select
                                                                                         their preferred path. Our advanced
                                                                                         supply chain management services
                                                                                         – including accurate, real-time cargo
                                                                                         tracking-and-tracing – are delivered via
                                                                                         our own e-Portal and mobile website;
                                                                                         external multi-carrier portals such
                                                                                         as INTTRA; and robust, bilateral EDI
                                                                                         connections.
                                                                                         Our sustainability commitment is defined
                                                                                         as “seeking to reconcile economic
                                                                                         efficiency, environmental protection and
                                                                                         social responsibility based on stable
                                                                                         economic development.” Supported by
A future-driven company with a 147 year tradition, Hamburg Süd is a                      our Compliance Management System,
powerful brand in the international logistics services industry. One of the              the company’s processes also reflect
                                                                                         the importance that we place on our
world’s most experienced carriers, the company is synonymous with
                                                                                         industry-related legal obligations and
‘total transport’. With our large fleet of ultra-modern containerships and
                                                                                         guidelines. This includes rigorous Quality
our multi-trade network, we specialise in worldwide ocean transportation;                Management effected according to the
single-source, individually-tailored logistics; just-in-time supply chain                highest ISO and ISM standards.
management and sophisticated end-to-end cargo care. And Hamburg
                                                                                         Hamburg Süd is the embodiment
Süd’s localised, highly personalised approach to service, being of
                                                                                         of a modern, sophisticated ocean
paramount importance and value to our customers, is a distinguishing                     transportation and logistics operator
feature of our operating philosophy.                                                     – and our offering is unique. We
                                                                                         combine all the benefits that only
     Hamburg Süd’s reliable, dedicated       The quality of our equipment and cargo      powerful resources can provide – global
     services link Australia with Europe     care – including monitored end-to-end
                                                                                         strength, stability and technological
     and the Mediterranean; North, South     cold chain integrity and produce-specific
                                                                                         leadership – with the agility, ingenuity
     and Central America; Mexico and         atmosphere control – sets the industry
                                             standard. With our in-house Global          and responsivity that are the hallmarks
     the Caribbean; Asia; South Africa;                                                  of a specialised, high-performance
                                             Reefer Competence Team providing
     New Zealand; and the Pacific Islands.   premium support for our perishable          service support provider and cutting-
     Many of the company’s services          cargo customers, we rank among              edge solutions expert. Excellence – it’s
     are interconnecting and our global      the top five reefer container carriers      our commitment, and it’s what our brand
     intermodal network is second-to-none.   worldwide.                                  stands for.

10 I Summer 2018 I Across Borders
A friend in the business.
Hamburg Süd.
We learned a long time ago that above all, customers need a friend.
Someone with the personal concern needed to take extra care, and
who delights in pleasing you. That kind of relationship is built up
over a long time. It requires dedicated personnel on the part of
the carrier – and commitment from the shipper too. (Trust works
both ways). Hamburg Süd treasures that kind of relationship.
How about you?

No matter what.
                                                                      www.hamburgsud-line.com
                                                                                Summer 2018 I Across Borders I 11
SHIPPING REFORMS

Interview
Ian Doherty, Executive
Manager Customer & Strategic
Development, Port of Newcastle
As a part of a series of updates on developments at the Port of Newcastle, Paul Zalai, Director FTA,
speaks with Ian Doherty

                                                                                           also planning for the continuation and
                                                                                           growth of our major bulk trades, including
                                                                                           coal, fuel, fertiliser, wheat and mineral
                                                                                           concentrates.
                                                                                           3. PAUL ZALAI - Aside from the Port
                                                                                           Master Plan initiatives, how else is
                                                                                           the Port looking to grow and diversify
                                                                                           trade?
                                                                                           Diversification means different things to
                                                                                           different people. There is a suite of key
                                                                                           strategic development opportunities
                                                                                           currently underway that support both our
                                                                                           short- and long-term plans. Having said
                                                                                           that, while our eye is on the future, we
                                                                                           need to ensure we provide best-in-class
                                                                                           service delivery to our existing clients.
                                                                                           We are in the process finalising the
                                                                                           development of a General Cargo Hub
                                                                                           with a focus on making Newcastle the
                                                                                           East Coast’s port of choice for steel and
1. PAUL ZALAI - The Port of                  part of our ongoing conversations with our    general cargo handling, with improved
Newcastle is shortly to publish a            customers and industry partners to 2040.      berth availability and the best in cargo
Port Master Plan. What is the Port of                                                      care.
Newcastle’s long term vision?                2. PAUL ZALAI - What are the
                                                                                           The Newcastle Bulk Terminal is a $33
                                             key projects and development
Our vision is to become Australia’s first-                                                 million investment by Port of Newcastle
                                             opportunities identified in the Port
choice East Coast port. The privatisation                                                  into bulk handling equipment that will
                                             Master Plan?
of the port has changed the way we                                                         be unlike any other Australian port. The
view ourselves as a business, and part       The projects highlighted in the Port Master   Newcastle Bulk Terminal will feature best
of that is recognising we need to be         Plan include the Newcastle Container          practice in safety and environmental
focussed on the entire supply chain and      Terminal, the Newcastle Bulk Terminal,        management, while also driving efficiency
how we can best work with customers          an automotive and Ro-Ro hub and the           and maximising trade growth. The old
and stakeholders to free up capacity         Maritime Precinct in Carrington. We are       unloaders are currently being dismantled
and lower costs. The port is already able                                                  and the new unloaders are due to arrive in
to accommodate a diverse trade base                                                        late 2019.
and we want to partner with customers
and stakeholders to grow and diversify             Our vision is to                        Thinking long term and the future
                                                                                           disruption of the traditional automotive
in sustainable, profitable and innovative
ways.
                                                  become Australia’s                       supply chains, we are currently
                                                                                           investigating the establishment of
We have ambitious plans for the future of          first-choice East                       a specialised niche automotive and
freight in regional NSW and the shortly to
be released Port Master Plan will be a key
                                                       Coast port.                         oversized Ro-Ro facility on our Mayfield
                                                                                           site.

12 I Summer 2018 I Across Borders
4. PAUL ZALAI - Australian freight                    broader than Newcastle and the Hunter.                        The availability of portside land for new
is predicted the double in the                        It would unlock economic opportunities                        import warehousing and distribution
next 20-years. How will the Port                      in regional NSW and the northern areas                        is another area where we can reduce
accommodate the predicted increase                    of the State. It would grow and diversify                     double handling, avoid congestion issues
in trade?                                             the Hunter’s economy, boosting jobs and                       and overall provide what we feel is an
                                                      business opportunities across the region.                     incredibly competitive supply chain for
Port of Newcastle has developed a                                                                                   import across NSW.
number of trade growth scenarios which                We are proud to be the world’s largest
can be accommodated without the                       coal port but are also realistic about                        7. PAUL ZALAI - Do you think a
need for substantial public investment or             coal’s prospects in decades to come. It’s                     container terminal at Newcastle
additional infrastructure.                            important to think long term and that’s                       affects the proposed investments
                                                      why we are committed to pushing for the                       and planning associated with Port
Newcastle already has a significant                   development of a container terminal now                       Kembla?
competitive advantage as an underutilised             to support the future diversification and
major deep-water seaport. A legacy of the                                                                           One of the points we have made is that
                                                      growth of the Hunter’s economy.
old BHP Steelworks and our current coal                                                                             this is a not zero-sum game. We are
industry infrastructure is that we already            6. PAUL ZALAI - Australian trade                              not trying to take a container terminal
have direct connectivity to the national              is import-driven. I have a lot of                             from Port Kembla or Port Botany, which
rail and heavy vehicle road system that is            members who are exporters who see                             together with the Port of Newcastle could
also underutilised. As a global gateway to            enormous potential in a container port                        provide a competitive and efficient freight
regional and northern NSW, we are ready               at Newcastle, but does the business                           network for Australian businesses. Our
to go.                                                case stack up on imports?                                     interest, and the wider public interest, is
                                                                                                                    to have the opportunity for a level playing
5. PAUL ZALAI - What does a                           Currently, 27% of New South Wales’ total
                                                                                                                    field to unlock productivity-enhancing
                                                      imports are already destined for the Port’s
container port at Newcastle mean                                                                                    competition.
                                                      catchment area. This is driven by the
to the people and businesses of the
                                                      population’s demand retail, manufactured
Hunter?
                                                      products and consumable goods. As the
The opportunities presented by a                      population of regional NSW grows, so will
Newcastle Container Terminal are far                  demand for containerised imports.

                                                                                                        NEWCASTLE
                                                                                                          CRUISE
                                                                                                         TERMINAL
                                                                                         NEWCASTLE
                                                                                        BULK TERMINAL                      NEWCASTLE AIRPORT

                                   RENEWABLE ENERGY
                                    INFRASTRUCTURE

                                                                            NEWCASTLE
                                                                            CONTAINER
                                                                             TERMINAL

                                                        BULK LIQUIDS
                                                         PRECINCT

          PORT
                                                                            MARITIME                                 NEWCASTLE CITY
                                                                            PRECINCT

                                                                                                                                   VESSEL FOR
                                                                                                                                   AUTOMOTIVE
                                                                                                                                  AND RO-RO HUB

          MASTER PLAN 2040
           Port of Newcastle is the global gateway for NSW and will soon be releasing its Port Master Plan 2040.

           The Port has an ambitious plan for the future of freight in regional NSW and the Master Plan will be a key
           part of our conversation with customers and the wider logistics industry into the future.

           Find out more
             +61 2 4908 8200                             www.portofnewcastle.com.au
             trade@portofnewcastle.com.au                linkedin/portofnewcastle

                                                                                                                                       Summer 2018 I Across Borders I 13
SHIPPING REFORMS

Fuel for thought
The introduction of new marine air       The International Maritime Organisation,       A study on the human health impacts
                                         a United Nations body, has voluntarily         of SOx emissions from ships, submitted
pollution regulations at the beginning   adopted a policy of cutting air pollution      to IMO’s Marine Environment Protection
of 2020 is aimed at cutting noxious      from ships’ engines by 85% and since           Committee in 2016 by Finland, estimated
sulphur oxide emissions by 85% but       2005 has been gradually reducing               that by not reducing the SOx limit for
the shipping industry is conflicted      the discharge of suphur oxides (SOx)           ships from 2020, the air pollution from
over how best to meet their              allowable under the MARPOL convention.         ships would contribute to more than
                                         From 1 January 2020 the level will be          570,000 additional premature deaths
obligations, as Dale Crisp* reports.     cut to 0.50% m/m (mass by mass), from          worldwide between 2020-2025.
                                         3.50% m/m.
                                                                                         Shipowners and operators have two
                                         Rather belatedly, it seems, most of            main ways of meeting the 2020 SOx
                                         the maritime world is only just coming         requirement while continuing to trade
                                         to terms with the implications and             existing ships. They can continue to use
                                         consequences of IMO 2020 and this              HFO, but this requires the installation of
                                         may explain why little has been done by        exhaust filters called scrubbers, at a price
                                         the industry to raise awareness amongst        of around US$1 million per vessel. Or
                                         customers.                                     they can use low sulphur fuel (LSF) which
                                         Yet the IMO 2020 Low Sulphur Fuel              is both considerably more expensive than
                                         changes are global, mandatory and              HFO and in short supply.
                                         unavoidable – and the cost will inevitably     A third way is to introduce a completely
                                         flow from sea freight right through the        new power system, based on relatively
                                         supply chain.                                  cleaner and greener fuels such as
                                         The background to this is that most            ethanol, methanol or, more popularly,
                                         ships use heavy fuel oil (HFO), which is       liquefied natural gas (LNG, use of which
                                         essentially the ‘rubbish’ that remains after   means a massive reduction in greenhouse
                                         crude oil has been refined into petrol,        gas pollution: CO2 is cut by 30%, NOx by
                                         diesel, avgas, etc. It’s dirty stuff and       95%, particulate matter also by 95%, and
                                         burning it creates toxic emissions.            SOx is virtually completely eliminated).

        Low Sulphur
     Fuel changes are
     global, mandatory
    and unavoidable –
     and the cost will
   inevitably flow from
      sea freight right
    through the supply
           chain.                                  Failure to reduce sulphur emissions could cost hundreds of thousands of
                                                                              lives, a study found.

14 I Summer 2018 I Across Borders
While it is possible to convert existing
ships to use of these fuels the economics
favour suitably-equipped newbuildings
allowing extra costs to be amortised over
the life of the ships.
Thus, looking to the long-term, Australia’s
SeaRoad Group equipped its end-2016
Bass Strait ro-ro Searoad Mersey II to
operate from the outset on LNG (although
due to equipment supply problems the
vessel presently uses marine diesel). Toll
Shipping’s two new freight ro-ros (2019)
and TT Line’s two new ro-paxes (2021),
all destined for the Bass Strait trade, will
also be ‘LNG ready’.                             In Australia, Bass Strait shipping operators are opting for LNG as the low-pollution
                                                                                     fuel of choice.
Elsewhere a new class of bulk carrier
now being delivered from Chinese yards
to Finland’s ESL Shipping is claimed            and for storage of the scrubbing residue         egg situation for LSF. Shipowners may
to be the world’s most eco-friendly:            (which cannot be incinerated aboard and          wish to switch fuels but is there sufficient
powered by LNG but also able to operate         must be disposed of ashore)?                     quantity to meet demand and is it in
100% CO2-emission free on biogas.                                                                the right places? And at what price?
The flipside is the cost - €60 million –        If the ship is one built since 1 January
                                                                                                 For the producers, should they commit
compared to a typical handysize bulker          2016 (when Tier III NOx reduction
                                                                                                 to expensive refinery upgrades and in
price of US$25 million (€22 million).           requirements were applied) can the               what centres? Will the price of LSF fall
                                                scrubber be integrated with the existing         as demand rises, and, conversely, will
Whichever way shipowners and                    selective catalytic reduction/exhaust            the use of HFO slide if the demand for
operators choose to meet the new                gas recirculation system? Can existing           scrubbers reverses or, as some believe,
requirements, “going green” comes at a          exhaust piping be used? Will the weight          their longevity comes into question?
cost and this will have to be fairly shared.    of the scrubber exceed 2% of the
                                                vessel’s lightweight, requiring expensive        The next question – and the most
Some owners are placing multiple bets.
                                                tonnage re-certification and recalculation       important as far as shippers are
For example, French container giant             of centre of gravity/stability?                  concerned – is that of cost recovery.
CMA CGM, parent of Australia’s ANL,
                                                More crucially, is the ship too old to justify   To re-iterate, the new regulations are
is fitting scrubbers to a proportion of its
                                                the price of installation? Some fear as          global and mandatory, as of 1 January
boxboat fleet but others will operate on
                                                realisation of the costs and practicalities      2020. As already noted, several crowded
LSF. At the same time, it currently has
                                                dawns many shipowners, across all                marine environments are already
under construction in China nine 24,000
                                                categories, will walk away – causing a           operating under more stringent air
TEU container ships which will be LNG-
                                                massive potential shortage of seaborne           pollution restrictions, including Emissions
powered.
                                                capacity.                                        Control Areas in northern Europe and
Germany’s Hapag-Lloyd “inherited”                                                                North America. More recently, as from 1
a number of LNG-ready ultra-large               One of the crucial questions all                 October this year, China introduced new
container ships when it merged with             shipowners are grappling with is that of         regulations governing the key ports of
United Arab Shipping Company last year,         sufficient, reliable supply of their preferred   Shanghai and Ningbo.
but is only now taking tentative steps to       fuel choice.
                                                                                                 From late September 2018 major
activate just one of the 17, saying there       When it comes to LNG, use of the fuel            container lines, led by Maersk, began
is “still a lot of uncertainty” about supply.   requires new and separate infrastructure         announcing mechanisms and methods
Only one of the carrier’s operating fleet       in the form of shore storage facilities,         proposed for 2020 LSF cost-mitigation.
will have a scrubber installed next year –      bunkering vessels, on-board tanks                So far, these have largely lacked detail
and that only as a trial.                       and conversion equipment and so on.              and transparency and, globally, shippers
Global number two Mediterranean                 Shipboard use has yet to reach critical          have sought full justification – especially
Shipping Co has committed to installing         mass, meaning that not only are capital          as carriers plan to introduce these new
scrubbers on 120 of its 520 owned               costs high but there are only a limited          surcharges a year early (1 January 2019)
or long-term chartered ships whereas            number of ports where supplies are               to “assist in transition”.
number one, Maersk Line, like Hapag-            available – and a defined number of
                                                suppliers.                                       Those in the bulk trades perhaps face the
Lloyd, has announced only limited trials.
                                                                                                 biggest challenges. Many ships are either
For shipowners, “fitting a scrubber” is         CMA CGM’s solution to this is a                  too small or too old to justify retrofitting.
a simple term that disguises a host of          partnership with fellow French company           Whereas container trades are dominated
challenges.                                     Total, which will ensure LNG availability        by large and powerful players, with the
                                                in major European ports and elsewhere.           ability to spread investments over large
Quite apart from the cost, there are a          Key ports at either ends of major trade          fleets and recover costs directly from
large number of technical and other
                                                lanes are scrambling to offer supplies           customers (of which more later!) there are
considerations: Open loop, closed loop
                                                and appropriate facilities but it seems          literally thousands of small operators in
or hybrid? Individual scrubber for each
                                                certain there will be limited options for        the wet and dry bulk business.
engine/boiler or combined system?
                                                shipowners for several years to come.
Is sufficient room available and/in an                                                           Even the big bulk players are hedging
appropriate location for the scrubber unit,     Then we come to a similar chicken-and-           their bets, with some opting to fit

                                                                                                          Summer 2018 I Across Borders I 15
SHIPPING REFORMS

    scrubbers to vessels under long term          recovered and burdens shared. This is a         with the container sector accounting
    contracts or those in larger size ranges,     complex and potentially fraught issue that      for $15 billion of that. Nevertheless, the
    such as ultramaxes and above. But there       will require careful and vigilant monitoring,   industry maintains it is the right thing to
    are reports major customers are already       as outlined elsewhere in this publication.      do.
    seeking “freight benefits” from scrubber-     A recent study by industry analysts
                                                                                                  But shippers and traders, importers and
    equipped vessels, whereas the owners          Drewry found that 56% of respondents do
                                                                                                  exporters, freight forwarders and supply
    want to recoup the installation cost.         not believe that the current methods of
                                                                                                  chain members take note right now: you
                                                  fuel cost recovery are “sufficiently fair and
    In some cases, cargo interests, especially                                                    will pay a share, one way or another.
                                                  transparent”.
    agribusinesses, have agreed to co-invest
    in or underwrite scrubber installations in    Meanwhile, the overwhelming issue for
    preferred owners’ bulk carrier fleets to      the industry is its practical ability to meet
    ensure continuity of unrestricted capacity    the 2020 deadline.
    to trade worldwide.                           Informed estimates are that, at best,
    Under a somewhat similar arrangement          only 5% of the world’s merchant fleet (c.
    – and one that perhaps illustrates bottom-    4,000 of 94,000) can /will have scrubbers
    line costs – South Korea’s HMM (formerly      installed by then – meaning, with the
    known as Hyundai Merchant Marine) will        exception of those fitted for alternative
    pay Greek shipowner Capital Product           fuels, the vast majority of ships will have
    Partners an additional US$4,900 in daily      to use LSF to be compliant.
    hire to cover scrubber installation on each   The IMO has, so far, resolutely resisted
    of five 5000 TEU containerships; this         all attempts to delay, defer or diffuse the
    translates to an additional US$9 million      implementation of the tighter sulphur
    per ship in ‘scrubber premium’ over the       cap despite the counter-efforts of
    course of charters that run until 2025.       several major countries, most notably
                                                  the Trump-led United States. The policy
    The Australian Peak Shippers Association
                                                  was comprehensively re-affirmed in early
    (APSA) and the Freight & Trade Alliance
                                                  November.
    (FTA) are urging members to seek                                                              *Shipping writer Dale Crisp also provides
    information from their shipping/service       The estimated total cost of IMO 2020 to         FTA/APSA with communication and
    providers about just how costs will be        shipping is in the order of US$60 billion,      content advice.

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16 I Summer 2018 I Across Borders
Managing transition –
                                                     Tasmania’s emerging challenges
                                                     and opportunities
                                                        By BRETT CHARLTON, Chairman, Tasmanian Logistics Committee

I have a theory that I have been considering          planet earth is being met with an alien sigh         ability to carry current volumes through the
for some time.                                        somewhere in the universe.                           reduced wharf operational footprint (some
                                                                                                           say the capacity is down approx. 25%
I have voiced it on occasion to some clever           Tasmania is thriving at the moment.
                                                                                                           presently). This is suggested to ease as
folk in our industry and they have nodded
                                                      It is truly the best place to live on planet earth   we get closer to that mythical time of year
sagely at my ramblings - although I do not
                                                      (me…biased…surely you jest). That said,              where everything becomes urgent (bloody
discount the fact that they could be just being
                                                      we have some challenges coming up and                Santa), but in January there will be a need to
polite, I am taking the position that they are of
                                                      those reading this article need to be on top of      move operations from the current location in
the same mind.
                                                      their logistics game for the next three to four      Burnie (for Tolls) for a period of three weeks
My theory is that we are in a period of               months.                                              (suggested) and it has not been advised as
transition. I believe that this transition (and of                                                         yet as to how this will work (suggestions
course we are always in a state of transition         As most would already know, the tonnage              of redeployment to Devonport for night
- I know that) is the grey area between the           over Bass Strait is getting an injection of          operations, Bell Bay and also alternative
old school method of human networks                   confidence from Toll’s with two new vessels          berthing in Burnie have been rumoured).
and reliance on knowledge to facilitate an            being deployed to the trade and increasing
                                                      the capacity of Bass Strait considerably.            January will be a tough gig for traders and
outcome as opposed to reliance on a pre-
                                                      When these vessels arrive and begin their            logistics operators alike in Tasmania and with
determined and steadfast process to be the
                                                      operations, Tasmania will be sitting in a very       a booming tourism and agricultural world,
driver of the outcome. Whilst in a perfect
                                                      enviable position of having ample capacity           this peak season challenge should be on the
world the processes are what makes for a
                                                      for the next ten years at least (especially post     minds of most (of course, I am very happy to
seamless outcome (think landing a probe on
                                                      the Searoad investment of one vessel and the         be wrong - but suggest planning for the worst
an asteroid hurtling through space), it would
                                                      advice of a second vessel pending coupled            at this stage).
appear that some of the processes are flawed
                                                      with the announcement of two new TT Line
(think an exploding rocket carrying supplies to                                                            Finally, we look forward to again working with
                                                      vessels) - anyone looking for a successful
the space station).                                                                                        the Australian Peak Shippers Association
                                                      coastal shipping story?
                                                                                                           (APSA) and Freight & Trade Alliance (FTA)
My main concern is that the ability for human
                                                      That said however, works at Webb Dock                in hosting the 2019 Tasmanian Freight &
knowledge and networks to remedy a
                                                      and Burnie wharf are being undertaken                Logistics Forum – details are soon to be
situation is eroding as a generation is coming
                                                      to accommodate the increased size of                 released – a great way to visit the best place
through being fed the “follow the process”
                                                      the vessels and presently traders are                on earth and stay at the cutting edge of
doctrine. How many times have you heard
                                                      experiencing capacity issues due to the              logistics reform.
the line “Unfortunately the system does not
allow for me to do that”. At the moment,
at least in my age group, there is a grid of
people around the world that can step in
and assist in applying a common-sense
outcome to some issues, but again - this is
becoming more and more difficult to navigate
as the reigns of corporate, compliance and
accountability strangle the productivity of
industry.
Don’t get me wrong though - I can see the
benefits of process and if it is set up right
the first time then the landing of a probe on
an asteroid can be extremely satisfying….
but at the moment I expect that there
would be demurrage and detention charges
automatically being sent to alien enterprises
dot com because someone didn’t log the
landing date correctly and no matter how
many times they try to communicate with
the earth NASA accounts department to
fix the issue, the automatic reply stating
how important their communication is with                                   Delegates at the 2018 Tasmanian Freight & Logistics Forum

                                                                                                                     Summer 2018 I Across Borders I 17
SHIPPING REFORMS

General Average – Oh
So Misunderstood!
     By CHRIS DENT, Director, TT Club

   While the concept of General         More seriously and on a global scale, the         cover the total value of the sacrifice or
                                        tragic casualty of Maersk Honam has been          expenditure. This process, inevitably, takes
   Average (GA) is widely recognised    well reported; the sad fact that damaging         a long time, typically several years.
   and as old as maritime transport     container accidents are all too frequent,
                                                                                          In order to ensure that payment will be
   itself, it is also a commonly        and the consequences far-reaching. It
                                                                                          received, the Adjuster requires each
                                        is timely therefore, particularly for the
   misunderstood process. This          understanding of shippers and freight             party interested in the voyage, including
   principle of maritime law            forwarders, to explain the dynamics of, and       all owners of the cargo, to provide a GA
                                                                                          bond as security. Since this is done at the
   governs the process by which         risks associated with General Average.
                                                                                          outset, before the full value of the sacrifice
   all stakeholders in a particular     Here, TT Club, as the leading international       and expenditure is known, the Adjuster
   voyage share losses resulting        transport and logistics insurer, does just        will necessarily estimate. A GA bond is a
                                        that.                                             promise to pay whatever contribution is
   from actions taken in an
                                        A GA event is defined in the internationally      assessed, backed up by a GA guarantee
   emergency. Incidents that might                                                        from a bank or insurance company.
                                        agreed convention known as the York-
   be fresh in the reader’s mind        Antwerp Rules as “when, and only when,            Alongside this, the Adjuster will request
   are the YM Efficiency container      any extraordinary sacrifice or expenditure        landed values of carrying equipment,
                                        is intentionally and reasonably made              and Bills of Lading as well as commercial
   stack collapse in Botany Bay last                                                      invoices detailing CIF1 values for cargo in
                                        or incurred for the common safety for
   June and the APL Los Angeles,        the purpose of preserving from peril the          order to work out the contributions for all
   grounded in Fuzhou (China)           property involved in a common maritime            interested parties.
   in September with Australian         adventure”. All container ship voyages are        GA bond and guarantee documentation
                                        classed as a common maritime adventure.           is distributed by the Adjuster to all
   interest cargo on-board.             A GA sacrifice might be jettisoning cargo         known interested parties. Where a freight
                                        to enable a grounded ship to refloat.             forwarder/NVOC2 is identified on the
                                        Employment of salvage tugs where the ship         ocean Bill of Lading, it is likely that this
                                        suffers an engine breakdown could also be         documentation, effectively intended for
                                        GA expenditure.                                   cargo interests, will be received by the
                                        Whilst the combined cargo value will often        forwarder; it should be sent on to the
                                        proportionally hold greater value than the        cargo interests at the earliest opportunity.
                                        ship itself, it is the Master technically who     It is recommended a proof of postage/
                                        generally declares GA; inevitably, the Master     email receipt is retained, in the event
                                        is the one trying to minimise the peril that is   of future dispute. Commercially, it can
                                        threatening the maritime adventure.               prove beneficial for the forwarder/NVOC
                                                                                          to maintain close contact with the cargo
                                        Consequently, once GA is declared,                customers to ensure the requirements
                                        the ship interests appoint the “Average           are understood, and the necessary
                                        Adjuster”, who thereafter operates                documentation completed and returned.
                                        independently and on behalf of all parties.
                                        The Adjuster will compile the total value of      Of course, the client of the freight
                                        the allowable sacrifice and expenditure, and      forwarder/NVOC may no longer be the
                                        establish the total value of the assets of all    cargo owner, under the terms of the sale
                                        the interested parties that has been saved.       contract, and therefore the documents
                                        Such assets include not just the ship and         will need passing on to his customer – the
                                        cargo, but also bunkers and stores, as well       buyer or consignee.
                                        as containers and related equipment.
                                                                                          Where the cargo is insured, standard
                                        Contributory values are calculated                marine policies should cover the costs of
                                        against the net value of all the assets           GA contributions and the insurer will take
                                        at the termination of the voyage. The             over dealing with the Adjuster. Where a
                                        GA contributions from each stakeholder            consignment is uninsured or the Adjuster
                                        together provide sufficient funds to              is uncertain about the security being

18 I Summer 2018 I Across Borders
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