Bulk Distributor Mar/Apr20 | Page 2

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.