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Shippers deal with sea, air and land issues

By William DiBenedetto, CBN Features Editor

Now that the West Coast labor contract is at least tentatively settled, pending ILWU ratification, shippers still face a host of issues on sea, land and air.

On the sea, shippers have concerns about the European Commission’s pending amendments to the European Union’s advance cargo data reporting requirements, scheduled for adoption this year. These proposed amendments are part of the new Union Customs Code that might be adopted in May and could take effect as early as May 1, 2016.

But here’s the rub: The World Shipping Council is objecting to a "significant change" in the proposed reporting requirements. WSC and other shippers and forwarders say the EC proposal is "a short-cut way to obtain the identity of the ‘buyer’ and ‘seller’ of imported goods before vessel loading." This could lead to the disclosure of sensitive business information, WSC says.

Buyers and sellers are the parties to a merchandise sale and purchase agreement, WSC continued, and "such parties are not relevant to and are not named in the transportation contracts that carriers and forwarder/NVOCCs as transportation service providers are party to. This information typically is not in the possession of a carrier, and the entry summary declaration (ENS) - derived from a bill of lading - was never intended to contain it."

Because buyer and seller data may be confidential information, "it is not appropriate to require its disclosure to ocean carriers/NVOCCs or to these parties’ consignees, who may not be parties to the goods’ sales contract."

WSC was joined in opposing the EC proposals by the European Shippers’ Council, the European freight forwarders’ association (CLECAT), and the European Community Shipowners Association (ECSA).

In the air, shippers are pleased with the growing momentum for so-called all-in rates, expecting that more airlines will follow the lead set by Emirates and Qatar Airways, who were recently joined by IAG Cargo and SAS Scandinavian Airlines.

An all-in price is a price for a product or service that includes everything, with no additional charges. Joost van Doesburg, the European Shippers’ Council's head of air freight policy, was quoted in a news report

that "we’re likely to see a snowball effect now. With IAG (British Airways and Iberia) and SAS, we now have five airlines that have announced a shift to an all-in system. We know that some other European airlines, big ones, are thinking in this direction too."

If all-in pricing catches on, a fairer and more transparent system could result, van Doesburg said. "What we've objected to and for some time now, is airlines' policy of unjustifiably maintaining the fuel surcharge when oil prices were falling significantly."

Under the all-in system, rates will be published twice a year and be valid for a period of six months, or for one year in some cases. "Shippers will know what they'll be paying (in the foreseeable future) and therefore have the visibility over their costs that has been sadly lacking under the present system," van Doesburg said.

On land, the "capacity crunch" is more like being between a rock and hard place for shippers. Mike Mulqueen of Manhattan Associates says capacity issues are "most prevalent in the long-haul, truckload segment of the market…today, the asset-based trucking companies are not yet convinced that they can profitably add capacity, even as demand for their services increase." Recruiting and retaining qualified drivers remain big problems, and the cost of equipment continues to rise. This means higher costs for shippers.

Instead of paying higher rates, Mulqueen says many shippers are focusing on how to change their business processes in order to be "carrier-friendly," by implementing "process improvements that make carriers want to haul their freight." For example, shippers can ensure that driver facilities are clean, comfortable and well-maintained, while also allowing drivers to use their yard if they are out of hours. Shippers that treat their carriers’ drivers respectfully are given preferential treatment.

Will that lead to better rates?