2
B ULK D ISTRIBUTOR
→Continued from page 1 including FIBCs, container liners, shipping
sacks, and other packaging for vital industries such as
pharmaceuticals, food and agriculture, chemicals and oil & gas.
“Disruptions in the availability of these goods would cause
significant hardships to consumers across all geographies that depend
on steady and stable supplies,” the associations said. “To provide
greater certainty and clarity for our businesses and employees, we ask
for clear exclusion of our members’ manufacturing operations from
lockdown orders, restrictive transport measures or border closures.”
FIBC production in the EU is very limited and imports are the real
source of units. Thus, they added that FIBCs should be considered as
priority products when crossing borders either from countries outside
the EU or within the EU.
Difficulties with transport by truck between EU countries have
already been experienced, so both associations asked for refraining
from any further potential restrictions to the transport of these goods
including keeping alternatives such as rail and ship transport open.
They also pointed out that, with the exception of France and
Belgium, the national country measures and announcements so far
on important (ie, ‘system-relevant’) economic sectors do not seem to
mention packaging, although it is “indispensable for the supply of
safe food, protective equipment, medicines and other vital supplies”.
The food industry heavily relies on FIBCs for the safe packaging,
storage and transport of goods. Agriculture, being one of the key
industries in the EU, will also be severely disrupted if FIBCs are not
available for their needs.
Member companies are currently under particular pressure, having
to struggle with the sickness rate of the workforce and problems in
the supply of raw materials.
“Our members are concerned that further measures could endanger
vital supply chains, including in the food, pharmaceutical and oil &
gas industries, if they no longer have sufficient access to plastic
packaging,” the associations argued.
Cefic response
An open letter to European Commission president Ursula von der
Leyen from the European Chemical Industry Council (Cefic)
outlined suggestions from its logistics experts to allow easier and
faster transport of essential goods throughout Europe.
It pointed out that its members are responsible for, among other
things, providing disinfectants to medical suppliers for hospitals, active
pharmaceutical ingredients to pharma producers, plastic resins for
medical equipment and polypropylene fibres for mouthmasks,
ensuring chemical supplies required for treating waste water and
producing drinking water arrive where they need to, and transporting
industrial waste to treatment centres, so plants can remain
operational.
It called for Europe and EU wide solutions as the chemical industry
normally delivers business to business just in time. “Our stocks are on
wheels or rails as there is limited storage at sites and through
distributors. To be able to keep supplies running in Europe to deliver
what is needed, we all should focus on keeping transport of goods
open in Europe,” Cefic said.
The trade body called for designated priority (‘green’) lanes for
freight transport and waiving current weekend and holiday truck
driving bans, as implemented in a number of Member States,
Covid-19 Special
rail transport, further digitalisation and administrative simplification,
including the speeding up of the authorisation processes of railway
customs corridors, and deferral of expected payments due to lack of
liquidity.
Container supply
Intermodal could help greatly as there is minimal people-to-people contact
simplified and harmonised border crossing checking procedures
allowing digital solutions with English as a common language,
temporary suspension of cabotage regulations to avoid further loss of
truck and driver capacity, and the review and easing of driving and
resting times without compromising safety.
Cefic also argued that shifting capacity freed up by reduced
passenger train operations to freight rail would help significantly as it
is substantially free of people-to-people contact, particularly for long-
distance cross border shipments.
Financial support to shippers making more use of intermodal rail
transport, for example, would allow them to avoid road haulage,
despite the higher costs of rail.
Meanwhile, Port of Hamburg refuted media reports of a scarcity of
containers.
Reports of bottlenecks in the supply of empty containers generally
referred to the Container Availability Index (CAx) published by the
firm xChange, said Port of Hamburg Marketing (HHM).
“Since the supply of empty containers is crucial for port customers
in trade, industry, and transportation, HHM conducted a flash poll
asking shipping lines about the current situation. The results showed
that shipping lines see no appreciable scarcity of equipment in
Hamburg or other German seaports. Furthermore, they are not
expecting any shortages to arise,” a spokesman for HHM said.
The shipping lines mentioned several factors that provide for a
stable supply of empty equipment. Most shipping companies plan
their disposition of empty boxes about three to four weeks in
advance. Generally, they take advantage of markets with an
oversupply, such as the USA, Great Britain, and Israel, as the source
for empty containers in Hamburg or other Northern European ports.
Direct shipping of empties from China is rare and has not been
necessary recently.
Axel Mattern, HHM CEO, said: “With the recovery of the Chinese
Stories of container shortages could
be overblown, says Port of Hamburg
On the rails
With Italy on the front line of the pandemic in its earliest days in
Europe, several freight associations also wrote an open letter calling
for more support for intermodal transport.
In addition to a number of Italian trade bodies, the letter was also
signed by the European Shippers’ Council, the European Rail Freight
Association, and the International Union for Road-Rail Combined
Transport.
It stated that rail transport moves large quantities of goods over
long distances, with fixed and monitorable routes, and with a limited
use of staff that can be easily controlled from a health point of view.
In Italy, the volume of goods transported by rail amounts to 97
million tonnes a year, including 60 million in intermodal road/rail
transport.
Logistics companies had already started shifting a significant amount
of freight to rail in order to reduce the mobility of drivers across
Europe, it went on. This happens especially in the north-south
corridor for traffic to/from Italy. In rail transport a train crew, with just
two people, moves 40 semi-trailers, while a transhipment terminal
that handles 20 pairs of trains daily, uses 60 railway staff to move
goods that would otherwise require 800 truck drivers.
These factors make it a relative certainty that the opportunities for
contagion are reduced to a minimum, the letter stated.
So, if intermodal rail transport is vital for the economy and supplies,
it must be supported and guaranteed with specific aids and measures,
including clear and transparent communication at institutional level,
“avoiding counterproductive alarmism”, avoiding any “blocking” of
Force majeure
Insurance mutual TT Club has warned that all sectors of the
logistics industry will be put under pressure by customers
and suppliers to help mitigate potential issues, losses and
liabilities.
As the global economy slows, governments prioritise specific
supplies, consumer spending decreases and personnel shortages
become more prevalent numerous scenarios will affect port,
terminal and warehouse operators as well as carriers across all
modes, forwarders and logistics companies.
“Fundamentally there is a need to communicate; to have an
open dialogue with customers and suppliers and a good
understanding of fast-changing controls and regulations imposed
by local, national and even international authorities,” commented
Peregrine Storrs-Fox, TT Club’s risk management director.
“The physical movement of cargo is understandably
experiencing delays due to cancelled ship sailings, shortage of air
freight capacity and land border checks and these disruptions to
the norm will cause friction between the various links in the chain.
An understanding of ‘what is going on’ by participants in the
chain will serve to ease such friction.”
Where contractual relationships are in place, the supplier is
generally obligated to explore all reasonable options to mitigate a
potential loss arising in circumstances such as presented by this
coronavirus outbreak, the club said. But Storrs-Fox added: “Any
party seeking in the event of a future dispute to rely on a ‘force
majeure’ defence may well face the burden of evidencing that
they took all reasonable steps to mitigate the loss.”
Depending on the individual stakeholder responsibilities, there
March/April 2020
are a number of proactive risk mitigation strategies that can be
considered. Keeping well informed and maintaining open
channels of communication with the national or local authorities
relevant to the business obligations will be key, both to
compliance with additional requirements and service to customers
– even recognising that such obligations may be in another part of
the world and possibly managed through a partner.
Established ‘crisis management’ plans will be relevant for the
circumstances faced, even if the scale and scope of the current
disruption was not envisaged. Such frameworks will, however,
help in identifying vulnerabilities that may impact the ability to
fulfil usual obligations or carry out standard business
requirements. The specifics of this virus – such as exposure
through contact with surfaces – necessitates consideration of
additional protection and training for staff and will almost
certainly make usual personnel and site security procedures more
complex.
TT Club is also building a dedicated page of available materials
on its website in order to share good practice findings from
around the globe. But among all the strain of responding to the
immediate crisis, the Club urges stakeholders to maintain as much
normal rigour as possible in their internal systems and processes,
in sound safety practices and in robust physical and cyber security.
Storrs-Fox concluded: “Such standard business ‘hygiene’ retains
lasting significance, alongside the much heightened health
hygiene to which we are all responding.”
www.ttclub.com
economy, which is already making itself noticeable, shipping, cargo
handling, and seaport-hinterland transport in China will be heading
back toward normal operations. In view of a slowing economy in
Europe, we do not expect to see shortages in the supply of empty
containers in Hamburg or the hinterland.”
Mattern pointed out that individual shipping lines might run into
temporary bottlenecks in supply if short-term imbalances between the
flows of import and export containers occur. Scarcity can thus
occasionally result from fluctuating supply and demand in inland
areas. Depots in the hinterland play an important role in supplying the
market with empty equipment for shippers in various regions.
Ports
Responding to the UK government’s new emergency laws, the British
Ports Association (BPA) said that keeping the UK’s global gateways
open for trade should be a priority.
Chief executive Richard Ballantyne said UK ports facilitate 95
percent of the country’s trade and are instrumental in ensuring the
country is fed and resourced.
“Half of the UK’s food is imported and it is critical to keep our ports
open so that shops, public services, and businesses are supplied with
what the country needs,” he stated.
The new laws enable the Home Secretary to request that port and
airport operators temporarily close and suspend operations if Border
Force staff shortages result in a real and significant threat to the UK’s
border security.
Ballantyne said the BPA had spoken with counterparts in Italy where
the ports remained open and was learning from their experiences.
Port of Antwerp said that despite strict containment measures
announced by the Belgian government the port was identified as an
essential sector and gateway for the supply of Belgium and a large
part of Europe.
“The Port of Antwerp is essential for the supply of the whole of
Belgium and a large part of Europe,” the port authority said. “It is
therefore crucial that it continues to operate. That is why we set up a
COVID-19 Taskforce. This cross-border and cross-sector working
group maps out the entire chain of operation of the entire port.”
The taskforce meets on a weekly basis and the frequency will be
increased if necessary.
The port said it is still 100 percent operational. As of end-March
there was sufficient manpower to handle cargo and drivers drive off
and on without too much delay. Should there be too few employees
available, various chain partners have a fall-back scenario to keep the
flow of goods running.
The port said the logistics chain remained robust and was absorbing
market peaks well. However, Antwerp insisted it was important that
borders in Europe remained open for all forms of goods transport.