DAILY SHIPPING NEWS - FRIDAY FEBRUARY 10, 2017

Air Freight News :

Pharma firms continue drive to seafreight.

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Pharma shippers are likely to continue to try to move away from a reliance on airfreight but will also look to outsource more of their supply chain operations.  Speaking at the Temperature Controlled Logistics event in London, pharmaceutical company Teva’s senior director, logistics Europe, Val Petursson, said that he viewed using airfreight, rather than less expensive sea freight, as a mistake in most cases.

Petursson said that airfreight was usually used in pharmaceutical supply chains because of internal issues such as low demand forecasting accuracy, problems with manufacturing or poor contracts with manufacturers.  “This is where we can do much, much better. If we want to benchmark ourselves against other industries like high-tech and automotive.  We are paying millions and millions and millions just because we are too slow or lazy or misaligned,” he said.  However, he added that in certain cases there was a need to use airfreight.

Cross-border e-commerce set to outpace domestic online orders.

·         Cross-border e-commerce is predicted to grow at twice the rate of domestic online retail, with an estimated 25% compound annual growth rate (CAGR) until 2020 worth $900bn, according to a new survey.

Ken Allen, chief executive of research sponsor DHL Express, said: “Going global and going premium is an opportunity for retailers in all markets.”

The report – The 21st Century Spice Trade: A Guide to the Cross-Border E-Commerce Opportunity – looks in detail at the markets and products that offer the highest growth potential, the preferences of customers making international online purchases and the success factors for online retailers that wish to expand overseas.

It focuses on the opportunity for premium products and service offerings, with higher basket values accounting for a significantly higher proportion of cross-border orders, suggesting that retailers can grow 60% faster with a premium service offering.

The report reveals that cross-border e-commerce offers aggregate growth rates not available in most other retail markets: cross-border retail volumes are predicted to increase at an annual average rate of 25% between 2015 and 2020 (from $300bn to $900bn) – twice the pace of domestic e-commerce growth.

Amazon's new air hub a "base for future growth".

·         Amazon’s planned centralised air cargo hub at Cincinnati/Northern Kentucky Airport will be a base for future growth.

Speaking shortly after the e-commerce giant announced its fourth quarter results, Amazon senior vice president and chief financial officer Brian Olsavsky explained why the company was investing in the new hub.

“What it does for us is it gives us a base for future growth,” Olsavsky said. “It's all about supplementing our existing capacity − both our partners and ourselves − and essentially building capacity that can handle our top line growth and also the growth in Amazon Fulfilled Network units which as I just mentioned is even higher than our paid unit growth.

“It’s the same as some of the investments you saw in airplanes last year, our partnerships with companies that do air cargo.

Sea Freight News :

Govt to develop economic corridors, logistics parks Times o India With an aim to boost "logistics efficiency", the Centre is looking at developing economic corridors and also planning to come up with logistic parks on national highways, Parliament was informed today. "Ministry of Road Transport and Highways got a study conducted on logistics efficiency enhancement. The report has made several recommendations including, inter alia, development of economic corridors, feeder routes and removal of choke points, along with development of logistics parks on national highways," Minister of State for Highways Mansukh Lal Mandavia told the Rajya Sabha in a written reply today. He said the recommendations have been accepted and the work of developing logistics parks at identified locations in partnership with state governments has been entrusted to National Highways Authority of India (NHAI).

Thrust on reducing logistics cost through waterways under Sagarmala The Hindu Inland Waterways Authority of India (IWAI) chairman Amitabh Verma on Thursday said that inland waterways were being promoted in a big way under the Sagarmala project to drastically cut the logistics cost. He said that initially five waterways were identified, but work could not be taken up because of problems arising from the classification of river waters as a State subject. Increase in population as well as pressure on rail and road networks created a necessity for waterways, which were declared a national priority by Parliament. He said that the Centre had already declared 106 water bodies as national waterways. The IWAI employed world-class consultants to conduct studies on rivers, feasibility, commercial terms, designing for barges suitable for low draft, river terminals, dredging, and hydrography.

APM Terminals Pipavav Implements e-SMTP for Paper-Free Customs Clearance Process India Tradeways APM Terminals Management B V-owned Gujarat Pipavav Port Ltd, which runs the harbour at Pipavav in Gujarat, has implemented e-SMTP (electronic Sub-Manifest Transshipment Permit) in a bid to ease customs process and cut cargo dwell time at the port. Containers at Pipavav Port are being released for train loading according to the e-SMTP messages received from ICEGATE (Indian Customs Electronic Commerce/Electronic Data interchange (EC/EDI) Gateway) through PCS (port community system). By implementing e-SMTP, containers can be planned for loading within couple of hours of vessel’s inward entry filed by customs in ICEGATE. Implementation of the new system will help in a quick turnaround of cargoes, thereby resulting in 12 to 48 hours of savings every week.

Terminals at major ports to attract cruise tourism India Today To promote cruise tourism in India, the government has developed terminals at four major ports -- Mumbai, Mormugao, New Mangalore and Cochin -- and also allowed foreign vessels to call without licence from Director General of Shipping, Parliament was informed today. Also, a new cruise terminal is under development at Chennai Port and scheduled to be completed by February 2017. "To attract cruise lines/ships as a part of cruise tourism in India, the government has developed cruise terminals at four major ports namely Mumbai Port, Mormugao Port, New Mangalore Port and Cochin Port," Minister of Shipping Nitin Gadkari informed Lok Sabha in a written reply. Gadkari said foreign flag vessels carrying passengers have been allowed to call at Indian ports till February 5, 2024 without obtaining licences from Director General of Shipping.

India can save $30 bn by moving part of trade closer to ports by 2020: EY Business Standard India can save up to $ 28 billion in infrastructure investment and another $ 3.3 billion in transportation cost if 50 percent of overall trade moves closer to ports by 2020, according to a report prepared by the professional advisory services firm EY (formerly Ernst and Young). India ranked as low as 126 out of 189 countries on total cost of trade while China and Germany are ranked at 98 and 18 respectively, the report said. The EY report "Knowledge Paper on Port Sector", which was released by Andhra Pradesh Chamber of Commerce, maintained that the non-major ports on the eastern and western coasts can play a pivotal role in port centric industrial development thereby achieving cost competitiveness through optimsation of network and logistics.

JNPT gains clients for struggling import plan JOC The number of imports shipped via a program to speed their movement through India’s largest port jumped 19 percent year-over-year from April to January, but the port is still far behind its target of moving 40 percent of imports via the direct port delivery scheme. With only about 4 percent of imports moving through the program thus far in the fiscal year, it will be difficult for Jawaharlal Nehru Port Trust to meet the Ministry of Shipping’s target of 40 percent, a target that is set to nearly double to 70 percent next fiscal year, which begins in April. The program is seen as critical to lowering logistics costs by cutting container dwell times and increasing port productivity. Officials also suggested lines provide round-the-clock services to facilitate speedy clearance of DPD cargo, and JNPT customs authorities previously told container terminals to keep gates open 24/7.

Inland waterway cargo traffic in AP to start in Dec Times of India With focus on decongesting cargo traffic on roads and railways, the Inland Waterways Authority of India (IWAI) is in the final stages of setting up a special purpose vehicle (SPV) with the AP government for development of National Waterway-4 from Kakinada to Puducherry across a length of 1,080 kms. IWAI has set a target of December 2017 for the first cargo movement to take place on a stretch between Muktayala and Amaravati. As part of the first phase, IWAI has zeroed in on the stretch from Kakinada to Muktyala via Vijayawada and has divided it into two parts including one from Muktyala to Amaravati and the second from Vijayawada to Kakinada. He said, "For the development of waterways in AP, the AP government has agreed to set up an SPV with 49% share of AP and 51% of IWAI on behalf of the central government.

Lots need to be done to increase India’s exports, says Union Minister Anant Geete Financial Express Admitting that Indian businesses are facing multiple challenges in overseas markets due to the globally competitive environment, Union Minister Anant Geete today said a lot needs to be done to boost the country’s shipments. “We need to do a lot in the direction of increasing exports. In this era of globalisation, competition has reached a global level. Our businesses are facing multiple challenges to sustain in the global competitive environment,” Union Heavy Industries and Public Enterprises Minister Anant Geete said. “Unfortunately, since 2014 the export growth overall has not been very conducive although it has picked up over the last five months. Therefore, I urge all members of this exporting community (CAPEXIL) to find ways and means of boosting India’s exports,” J K Dadoo, Additional Secretary & Financial Advisor in the Ministry of Commerce said.

BIFA: Shipping lines to charge Service Tax to Shippers for exports to India Hellenic Shipping News The Indian Government Ministry of Finance has recently notified further amendments to its Service Tax Rules 1994 – referring to amendments initially announced with notification No. 30/2012 – Service Tax. These amendments are referred to as the ‘Service Tax (Amendment) Rules, 2017’ and came into force on 22 January 2017 – only 10 days after publication and with too little time for the trade to react and deal with any changes. The Service Tax under this rule is an indirect tax levied on services as specified by the Finance Act. The current amount of the Service Tax is 4,5%. Import freight charges have been subject to Service Tax for all collect shipments since June 2016, with freight prepaid shipments being exempted. With the current ‘Service Tax (Amendment) Rules 2017’, the exemption for freight prepaid shipments is withdrawn making them also subject to Service Tax.

CONCOR announces scheduled train services between Vadodara & Pipavav Port The Container Corporation of India has announced scheduled train services between its Vadodara terminal and the Port of Pipavav. The first service will depart from RCT-BRC on March 8, 2017. This will be followed by another service on March 22. The third train will run from RCT-BRC on April 5, 2017. As many of the vessels call at Pipavav Port on Saturdays/Sundays, the schedule is planned to cater exactly to the trade’s needs, emphasised a release. This new initiative is to cater to the huge demand from the ex-im trade for rail movement of containers between Vadodara and Pipavav, the release said, adding that the frequency can be increased to one train a week and more depending on the response. This is a time- and cost-effective initiative from CONCOR for the ex-im fraternity, the release stressed.