In the latest Baltic Exchange market round-up, Chan said that despite a year on year drop in demand over recent months, supply chains remain congested and there could be a surge in production when factories in China re-open following Covid curfews.

“Early in the year, I expressed some level of surprise that we were not seeing even more upward rate trajectory based on the removal of air cargo capacity due to ongoing conflict in Ukraine,” said Chan. “I posited that upward pressure there was being offset, in large part, by a production vacuum in China as a result of widespread Covid-related lockdowns.

“For context, the percentage of the population under lockdown in China right now is estimated to be larger than the entire population of the US.

“And, while critical economic functions are still technically operational, the systemic nature of the quarantine restrictions means that production output from some of the country’s largest manufacturing centers are at their lowest levels since the initial shutdown in early 2020.”

He said that as well as a clearing of backlogged China freight, other factors that could again disrupt the market include ongoing capacity reductions related to the conflict in Ukraine and if US west coast port and labour negotiations result in strike action.

“Assuming no sharp and sudden deterioration in baseline demand levels (which cannot be guaranteed), there is a distinct scenario in which airfreight rates spike again, even from these elevated levels,” Chan said.

He pointed out that even though the market has softened on the demand side in recent weeks, due to pressure on consumer spending and a post-Covid rotation from goods to services, rates in April remained at historic high levels – although there have been some signs of pricing easing on some trades since then.

The latest figures from the Baltic Exchange Airfreight Index (BAI) show that in April the average rate from Hong Kong to North America reached $9.57 per kg, which is 12.9% up on a year earlier.

From Hong Kong to Europe average rates in April stood at $6.01 per kg, which is up 30.4% compared with last year.

“Logistics networks remain very congested and there is a real possibility that any temporary pull back in bottlenecks and rates are ‘head fakes’ and volatility will continue to be an issue until the core problems are resolved,” Chan said.

Peter Stallion, head of air and containers, at derivatives broker Freight Investor Services, agreed that many had expected prices to have weakened in April, although he said spot market prices are likely to be lower than index rates which also incorporate pricing on longer term deals.

“While we may have expected a drop off in rates from the first quarter of this year, the removal of Russian-owned airfreight capacity has artificially levered up the constraints for airfreight shippers,” he said.

“Asia to US rates have also seen a sharp increase, posting double digit rate percentage point increases following a collapse of available airfreight demand. However, this increase is still quite muted versus the true spot price.

“Transatlantic prices continued to jostle as they have done all the way through since second-quarter 2020.”

Stallion added that higher fuel prices are also likely to impact rates.

“The impacts of this fuel demand is reasonably clear, with Singapore Jet Fuel closing back up towards its previous high of $150.39/barrel (now $138.73/barrel).

“This will feed through into fuel surcharges and forms a component of general inflation that bleeds through into the cost of running airfreight operations.”

Source: www.aircargonews.net

Image: www.pexels.com

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It has been well documented that most maritime accidents (~80%) are caused by human error. Still, most of the focus on learning is rooted in technical causes and adding procedures and checklists.

Despite this bias, many accident investigation reports pinpoint that the leadership or safety culture was the root cause of more recent accidents such as the Bulk Jupiter, El Faro, Helge Ingstad and Costa Concordia, as well as older accidents such as the Exxon Valdez, Bow Mariner, Herald of Free Enterprise and Amoco Cadiz.

Industry blind spot

The critical failures leading to the accident were in most cases known before the accident took place. This demonstrates that failures which are not handled properly may develop into critical situations and accidents. This is a blind spot because the biased focus on technicalities and “impeccable” safety inspections makes people reluctant to be open about their failures, concerns and mistakes.

We at SAYFR think shipping companies, and the whole industry, needs to change its focus. Thousands of auditors and inspectors across the world are engaged by classification societies, flag and port state authorities, vetting and insurance companies and HSEQ departments. They verify that ships do the right thing and comply with technical and procedural requirements. However, ticking boxes never made anyone safer.

Cover-up culture

Also, and worryingly, there is a cover-up culture causing errors and unsafe practices. There are now so many procedures and checklists that, in some cases, it is impossible to comply with all of them. The fear of failure is driving accident statistics, and surveys reveal that 45% of seafarers admit that they regularly do not comply with procedures.

I firmly believe that human factors are key to prevent threats and failures from escalating. Yet improving safety or performance is about improving not only individuals but also the collaboration between sea and shore staff, between officers and crew and between different nationalities and cultures on board ships.

Huge potential to reduce accidents

Although this is recognized, it is not always addressed, so I believe a new approach is necessary to improve collaboration and reduce risks. Indeed, collaboration is strongly correlated with the risk of accidents and business interruption. Our experience of working on multiple projects over the years shows that it is possible to reduce the risk of major accidents by up to 75%.

However, there is no quick fix to improve collaboration and implement behavioral changes through, for example, training courses. Changing the culture is key and that process takes time. To help operators improve their approach to safety, proven methodologies must be used.

Safety leadership behaviors

Put simply, it involves observing and identifying working methods on board and then working with all the officers and crew in teams and as individuals to deliver the eight-point safety leadership behaviors, namely:

• Giving feedback
• Speaking up
• Building trust
• Creating openness
• Showing care
• Facilitate learning
• Promoting teamwork
• Managing dilemmas

Experience shows that the focus on the eight behaviors work because they address the blind spot. By encouraging the participants to openly share errors, failures and concerns, they are able to break the chain of events that can lead up to a major accident. Also, this approach helps to move beyond the culture of punishment to the positive safety-enhancing culture where crew members help each other.

Culture assessments key to improving safety

In order to understand how the organization culture influences safety, there is a need to use methodologies specialized for this purpose. One thing that many people are ignorant of is that a key professional competence of organizational psychology is advanced mathematics and data analysis. The evaluation of organizational culture relies on interviews, observations and questionnaires applying psychometric instruments that are tailor-made to ensure valid and reliable results. The professionals drive the process while the data provides the results. As a consequence, the more and better the data on these topics, the more valid, reliable and to-the-point are the results.

However not all the instruments used in the industry are valid and reliable. In a recent review of safety culture maturity instruments, only 3 of 43 instruments were valid. Indeed, there is not one single test alone that can demonstrate the validity of a survey instrument. Therefore, SAYFR has developed tailor-made psychometric instruments to assess these topics and has a database of responses from about 300 000 seafarers.

When it comes to the qualitative and quantitative tests that can be made to verify validity, the basic one is content validity. This dictates how well a safety instrument addresses a safety issue. It specifies that the survey instrument adequately covers the topic being studied as well as having sound scientific grounds and references.

This is important because so many historical examples show risks that were identified well ahead of time but were not addressed. These include the Deepwater Horizon blowout, which claimed 11 lives and caused huge environmental damage, rig personnel had knowingly by-passed safety barriers. In this case, failures were identified but the root cause of the problem – i.e. human neglect, whether cultural or circumstantial – was not factored in.

Reliability of survey instruments through data

Reliability of the survey instrument is also key and that is ensured statistically by use of data. Factor-analysis is a statistical method used to describe variability among correlated items in terms of a potentially lower number of unobserved variables, called factors. For our instrument, the eight factors are equal to the eight SAYFR leadership behaviours (8SLBs) mentioned above.

Moreover, predictive validity is the instrument’s ability to predict something in the future such as an event, or correlations with instrument measurements made by other instruments. If an organization scores low in terms of the 8SLBs, it is a good indicator of future problems. This has been shown on a number of occasions when departments, units or suborganizations have received low 8SLB scores only to have accidents occur in the intervening time, before action was taken.

Predictive validity can also be applied to solutions. When action was taken based upon a low 8SLBs score, a shipping company experienced a 60% reduction in the frequency of serious accidents, to a level which was maintained five years subsequent to the investigation.
Concurrent validity and construct validity are also important elements. Concurrent validity measures the correlation between two independent measurements performed at the same time. An increase in the ability to manage failures, for example, will necessarily correlate with the number of incidents that occur.

Construct validity is when a theoretical model of cause and effect – for example, do the improvements prescribed following appraisal of the 8SLBs – accurately replicate the real-world scenarios they are intended to represent? Construct validity is the ultimate validity measurement, and necessarily incorporates all other validity factors.

Reduction in the frequency of serious accidents

Also, it’s not only the psychometric instruments that rely on data. The use of digitalization, the internet of things (IoT), sensor data, machine learning, and big data has picked up in recent years. The idea is that those with the most data can create the best analytics and forecasts. With the use of more quality data, risk assessments and worst-case scenario simulations provide reliable predictions and identify effective interventions to prevent accidents.

In short, what we at SAYFR see is that the best shipowners and operators have a proactive organizational culture that goes beyond ticking the ‘compliance boxes’ and instead applies a collaborative, trusting approach from top to bottom in the company’s organization. This also includes assessing culture using valid and reliable survey instruments. This is what really helps to improve safety.

Source: www.maritimeprofessional.com

Author: Dr. Torkel Soma, Chief Scientific Officer, SAYFR

Image: www.pixibay.com

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The zero-emissions vessels, which will be constructed for New York-based Zeeboat and available for charter from 2025, will run entirely on battery power, without the use of diesel engines—a first for towboats in North America. Vancouver, B.C.-based Shift Clean Energy will deliver the battery energy storage systems.

ISS, which was selected in 2021 to provide general contract, project management and vessel support services for the manufacture and delivery of the first-of-their-kind vessels, said its request for proposal (RFP) will be open form May 15 through June 30, 2022 and is for construction of the first hull, with options for up to three additional hulls.

The fully-electric vessel is based on The Shearer Group, Inc.’s (TSGI). proven 95- by 34-foot  towboat hull design, which is said to increase water flow to the propeller and improve overall efficiency of the barge/towboat combination by more than 10% compared to traditional towboat designs. When coupled with an azimuth thruster pod drive system, the hull design will improve overall efficiency by more than 30% when compared to conventional towboats, the Houston-based naval architecture and marine engineering firm said.

The project partners said their first goal is to enable greener transit with zero-emissions towboats, but they will later work toward a joint development of electrification technologies to further reduce the carbon footprint of ports and harbors.

“Moving carbon-intensive processes, like shipping and port management, to electric power sources is a critical step to meeting net-zero emissions targets,” said Wade Stockstill, ISS CEO. “Our electrification technologies and track record dovetail neatly with innovations from partners like Shift Clean Energy, enabling ISS to deliver turnkey solutions to some of today’s biggest green energy challenges.”

ISS said interested shipbuilders should contact its director of business development, Jessica Lewis, at Jessica.Lewis@iss-na.com for RFP submission information and detailed project specifications.

Source: www.marinelink.com

Image: www.pexels.com

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ICS2 means that from March 2023 airlines will need to submit shipment information to a new centralised system named the Shared Trader Interface before the goods are loaded onto an aircraft.

Previously, the shipment information needed to be submitted electronically no later than four hours before arrival at the customs authority where the goods first reached the borders of the EU.

In another change, airlines can submit only the basic information and the forwarders and logistics providers can add the more sensitive details to the Shared Trader Interface at a later date.

This provides competitive protection for forwarders as they are not sharing customer details with the carriers.

Simon Lembke, director of customs and forwarding applications at Dakosy, said: “Freight forwarders and logistics providers no longer need to disclose the names of their customers and their related critical data to the shipping companies or airlines in the course of the procedure.”

Dakosy said that participants in the ICS process should prepare for the changeover in good time.

“It must be ensured that sufficiently precise data can be provided,” explained the software firm. “A standardised format called the Entry Summary Declaration (ENS) has been defined for ICS2, which does not permit any deviations.

“The required accuracy of the data is also becoming stricter, for example in the case of the HS code (Harmonised Commodity Description and Coding System). Previously, either the goods description or at least four digits of the HS code  had to be provided for the entry summary declaration; in the future, all six digits of the HS code must be transmitted.”

Lembke added: “For our customers, which include many major airlines and shipping companies, we already work with this format. So for them, by and large, everything remains as it is, and we take care of the new reporting path and, if necessary, an adaptation of the interfaces.

“However, we recommend checking well in advance to find out the extent to which business processes need to be updated and employees need to be trained.”

Source: www.aircargonews.net

Image: www.pexels.com

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THE CHALLENGE

Volatility plagues all industries, especially the trucking industry, and slight failures amount to big problems. Those issues are inherent in any company but especially for shippers with finite, absolute requirements for pickup and delivery, like Niagara Bottling. Missed pick-ups or deliveries at Niagara Bottling result in immediate chargebacks, up to 4%, plus any downstream damages or issues caused by delays.

Edge Logistics can deliver on those needs and promises with the capacity app and top-notch service.

THE SOLUTION

Using the CAPACITY app, Edge Logistics has successfully delivered loads of raw materials like bottle caps, preforms, resins, labels, and shrink films to Niagara Bottling. Edge Logistics also used real-time monitoring to meet Niagara GPS tracking requirements. Paired with first-rate service at all legs of transport, Edge has accomplished top Niagara Bottling carrier milestones:

• Offering 24-hour bilingual support across a larger carrier network.
• Ensuring 100% invoicing compliance.
• Accepting and confirming tenders within 90 minutes of posting.
• Accepting 99% of all Niagara Bottling tenders posted.
• Maintaining 98%+ on-time pickup and delivery rates, 8% above Niagara’s 90% minimum.

Will Kerr, CEO and founder of Edge Logistics, wrapped up the accomplishments, saying, “Niagara Bottling is only one example of how Edge Logistics helps drivers and shippers come together to move more freight. We make promises to stay frictionless, to participate, to bring more market options, and to perform. We pick up and deliver it on time. We stay focused on fulfilling those promises to build a better network of the future.”

Source: www.inboundlogistics.com

Image: www.pexels.com

The post How Edge Logistics Leverages Supply Chain Standards Through Technology Solutions and Service appeared first on Cargo News Today.

The international freight transport insurer said it is calling for increased vigilance to ensure secure and safe lithium battery supply chains following a number of recent fire incidents affecting container transport, ro-ro ships and air cargo movements allegedly involving lithium batteries.

E-commerce consumer demand for a wide variety of rechargeable products is driving increased shipments of lithium batteries, but these batteries now carry more energy, and aren’t always being tested.

However, the company added that revised regulatory restrictions regarding the carriage by air of lithium batteries, which took effect from April 1, may result in greater volumes being transported by surface modes.

“Understanding the risks is crucial,” commented TT’s risk management director, Peregrine Storrs-Fox. “As with many successful technologies, market demand has outpaced the development of safety regulations. Since the mid-1980’s lithium batteries have been classified under dangerous goods regulations for transport based on the weight of lithium contained in the cells or batteries and the potential hazard presented by a given battery is also related to the amount of lithium it contains.

“However, as technology has advanced, the amount of energy derived from the active material has increased by up to 50%, leading to regulatory mismatch where provisions are essentially framed around mass and energy output.”

Lithium batteries are required to be certified to an international standard involving a rigorous series of tests performed by an approved independent testing laboratory, to ensure they can both withstand everyday use through their expected lifetime and the rigours of transport, explained TT Club.

Responsibility for testing and achieving certification rests with the shipper and/or manufacturer. The sharp rise in demand has been accompanied by supply of cheaper, poorer quality and untested batteries, including refurbished and even homemade power banks. E-commerce platforms have facilitated a global trade in potentially lethal products, often circumventing global standards and regulations.

Throughout their intermodal journey the primary risks exist when batteries are poorly manufactured, untested or defective; these have a higher propensity to malfunction.

However, supply chain risk – at any point of handling, storage and transport – is compounded by used, fully or partially charged batteries. As such the reverse logistics of batteries must be carefully managed; damaged and faulty products being returned or shipped as waste for disposal or recycling present increased risk.

The consequences of lithium fuelled fires can be more extensive than others.  They are very difficult to extinguish, prone to thermal runaway and present an explosion risk. Due to the heat generated, re-ignition once a fire has been extinguished is an additional risk.

The UK government’s Zero Emission Flight (ZEF) Delivery Group recently confirmed it aims to make use of battery and hydrogen technology to make zero-emissions flights feasible.

US ULD manufacturer Satco also recently opened a $10m air cargo safety research centre (ARC) for Unit Load Devices (ULD) featuring a fire safety test facility, in response to the increase in products using lithium-ion batteries.

And Qatar Cargo recently invested in Safran Cabin’s new Fire Resistant Containers (FRC) as it aims to take a lead in countering the risk posed by lithium battery shipments.

Source: www.aircargonews.net

Image: www.pexels.com

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The study, which was conducted by MDS Transmodal, identifies the extent of capacity restriction in 2021 that resulted from scheduled port calls being skipped by shipping lines. It measured the number of container ship slots that were expected to be available at the port but never materialized because the lines skipped the port—often because vessels were already fully occupied by containers collected at ports called at earlier on the service.

Skipped ports have become part of how shipping lines are managing their heavily utilized fleets.

“Skipped port calls have multiple effects on shippers,” says James Hookham, director of the GSF. “They create local upward pressure on shipping rates, as shipping line agents ‘auction off’ available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers.

“More pernicious is the wider effect on national economies, especially those of developing nations that lose opportunity to deliver their exports, and hinder the recovery of their economy from the effects of lockdowns and COVID restrictions,” Hookham adds.

Source: www.inboundlogistics.com

Image: www.pexel.com

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The Xeneta-owned data provider’s latest numbers show that air cargo volumes decline by 8% year on year in April following on from a 4.5% fall in March.

Meanwhile, capacity increased by 1% year on year in April, resulting in a nine percentage point fall in the global dynamic load factor – taking into account both weight and space –  to 62%.

However, load factors were “exceptionally high” in April last year at 71%.

CLIVE said that the conflict in Ukraine and Covid restrictions, and the rising cost of living were all having an impact on air cargo.

The fall in demand is likely “exacerbated by the staff shortages jolting airport handling services and manufacturing production”.

Despite the lower volumes and load factors, airfreight rates in April increased by 26% on last year.

“The rationale behind lower load factors and higher rates is the bottleneck on the ground – which appears to be being caused now by not only the shortages of people handling cargo at airports around the world and the severe lack of truck drivers to move the goods, but also by a wider shortage of people for lower paid logistics jobs,” said Niall van de Wouw chief airfreight officer at Xeneta. “We are now seeing this larger theme impacting the entire supply chain.”

Shortages of goods in stores or available online, longer lead times for some products, higher shipping costs, and flight delays and cancellations are all consequences of these market conditions, he added.

“The hike in living costs and lower disposable incomes for consumers are other undoubted contributors to the slowdown in volumes.”

Looking ahead, van de Wouw said that the re-introduction of passenger services for the summer season would also begin to impact the market.

On the transatlantic, for example, load factors dropped by 12 percentage points in one month.

“This was caused by a big jump in North Atlantic passenger capacity as airlines stepped up their summer schedules,” CLIVE said.

Additional passenger flights are also expected to “takes some of the heat out of the demand/supply market,” he said, and potentially lead to a downward pressure on rates.

“During the last week of March, capacity increased by 15% compared to the previous week,” said van de Wouw. “This significant increase in space reinforces our previously stated forecast that the North Atlantic market will most likely be the first to return to some kind of normal, because of the high share of belly capacity on this lane.

“In terms of the dynamic load factor, we are seeing this shift starting to happen as we move from a Seller’s market to a Buyer’s market for air cargo. However, the issues on the ground might delay the Buyer’s market a bit longer.”

Source: www.aircargonews.net

Image: www.pexels.com

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A survey carried out by booking portal Freightos found that 46% of air cargo carriers now enable instant rate searches for quotes on their websites compared with 10% in 2019.

Meanwhile, 33% offer e-booking with instant confirmation compared to 25% in 2019.

But there is still room for development, with 21% offering instant allotment booking and 4% allowing payments to be made online.

Freightos said that the most widespread digital stride among air carriers was the leveraging of third-party platforms to extend their online reach.

The research shows that 46% of leading air carriers provide instant rate search through third-party platforms and 42% also enable e-booking through these channels.

Shipment tracking is also widely available, with 42%providing this as an option.

Freightos said the adoption of third-party platforms was higher in air than ocean, where just 18% offer e-booking on portals.

“In the fragmented air market – compared to the consolidated ocean market and the growing leverage the pandemic has shifted to ocean carriers – airlines are eager for the low-touch access to new customers, new segments and new geographies that platforms represent, even at the cost of making price and service comparisons easier,” Freightos said.

“And the volatility of air cargo during the last two years served as a catalyst for this trend.”

The overall shift to digital booking was accelerated by the pandemic, the company said.

“The rush on PPE early in the pandemic, just as passenger travel plummeted, was an extreme example of the volatility in the air cargo industry over the last two years.

“The fast pace of air transport only quickened as labour shortages and ever-shifting quarantine requirements led to frequent operational changes.

“This environment accelerated the ongoing search many carriers had already been engaged in for improved internal efficiency and faster ways to communicate and transact with customers.

“Like in ocean freight, the pandemic accelerated the pre-existing trend toward digital connectivity.

“While carriers made gains in their website offerings and API connections, the biggest shift was in leveraging third-party platforms to extend their reach.”

Johnny Rubio, chief commercial officer of Silk Way West, said that online booking portals allowed carriers to introduce e-booking without a massive amount of investment in resource and capital and also makes its services more visible to a wider customer base.

IAG Cargo head of distribution Peter Roberts added: “Not only have our e-bookings increased, but the average weight per e-booking has too, suggesting that customer trust is growing.

“In addition to improving both customer satisfaction and our reach, the data unlocked through e-booking enables better business intelligence and a data-driven strategy.”

Source: www.aircargonews.net

Image: www.pexels.com

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The use of the passenger cabin for cargo, known as cargo-in-the-cabin flights, have been operating since 2020, after the EASA issued approvals and exemptions for the transport of cargo in passenger cabins on a case-by-case basis.

These approvals and exemptions were time-limited and while the EASA extended the rules in August 2021, it will not extend the timeframe again, it said in a statement on April 11.

The decision to allow cargo-in-the-cabin flights followed the grounding of passenger aircraft at the start of the pandemic and the subsequent high demand placed on freighter aircraft. In addition to the use of cargo-in-the-cabin flights (with seats in place and seats removed) the pandemic also saw a number of airfreight stakeholders invest in passenger to freighter aircraft conversions.

However, passenger operations – and therefore the availability of bellyhold capacity – are beginning to ramp up while the need to transport urgent pandemic related cargo such as PPE has eased.

The EASA said it “has concluded that the logistical challenges that arose in 2020 as a result of the Covid-19 crisis no longer exist to the same extent”.

In its Issue 6.0 guidelines for “Transport of cargo in passenger compartment – Exemptions under Article 71(1) of regulation (EU) 2018/1139 (The Basic Regulation), published on April 11, it further explained: “Cargo capacity in the holds of passenger aircraft is expected to increase by summer 2022, thus reducing the pressure on the logistic chain.”

The EASA said that in accordance with the guidelines it has “determined that the exemptions delivered in this context will not be extended beyond the current validity of July 31, 2022. The same applies for existing approvals that have been granted based on the use of the Deviation on transportation of cargo in passengers compartments.

“This Deviation can also not be applied to any certification projects for which the approval is issued after that date.”

The Civil Aviation Administration of China (CAAC) last year ruled that from January 2022 the passenger cabins of China-registered aircraft would only be able to carry pandemic-related cargo.

However, contacts have told Air Cargo News that Chinese carriers have continued with cargo in the cabin flights past the deadline.

European regulator extends temporary-freighter exception into 2022

US extends cargo-in-the-cabin exemption

Chinese airlines to refit seats in response to stricter cabin rules

Source: www.aircargonews.net

Image: www.pixibay.com

The post EU to end cargo-in-the-cabin flights appeared first on Cargo News Today.