CMA CGM will not use the Northern Sea Route

MARSEILLE: CMA CGM has decided that none of its 500 vessels will use the Northern Sea Route along Siberia, which is now open due to climate change.

Additionally, the company said it would give priority to liquefied natural gas (LNG) to power its future ships in order to further protect the environment.

“With this decision, CMA CGM makes the resolute choice to protect the environment and the planet’s biodiversity despite the major competitive advantage this route represents for shipping companies,” Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, said.

The Northern Sea Route, which runs the length of the Siberian Coast, connects Asia to Europe today. The route has been made navigable due to the effects of global warming.

“The use of the Northern Sea Route will represent a significant danger to the unique natural ecosystems of this part of the world, mainly due to the numerous threats posed by accidents, oil pollution or collisions with marine wildlife,” according to CMA CGM.

Furthermore, the company explained that today LNG offers the best proven solution available to significantly reduce the environmental footprint of maritime transport. The use of LNG reduces emissions of sulphur and fine particles by 99%, nitrogen oxides emissions by 85% and carbon dioxide emissions by up to 20%.

CMA CGM would use LNG to power its ultra-large ships that are designed to carry up to 23,000 containers. The first ship in this fleet of nine container vessels are scheduled for delivery as early as 2020. By 2022, the company will have 20 LNG-powered vessels in its fleet.

The shipowner added that it continues research into other energy sources after a successful test of biofuel oil at port of Rotterdam aboard the 5,095 TEU containership CMA CGM White Shark in March 2019. CMA CGM is also establishing research partnerships to develop hydrogen as a potential long-term energy solution.

During the meeting, Saadé is to deliver to the President of France, Emmanuel Macron, on behalf of the maritime industry, the SAILS (Sustainable Actions for Innovative and Low-impact Shipping) Charter, formalized on the initiative of the Ministry for the Ecological and Inclusive Transition.

Through this charter, ten French signatory shipping companies, including Brittany Ferries, CMA CGM, Corsica ferries, Corsica Linea, Express des îles, Jifmar, La Méridionale, LDA, Orange Marine, PONANT, all members of Armateurs de France, commit to implementing specific actions in the reduction of emissions of air pollutants and greenhouse gases, whale protection, vessel energy optimization and performance, and strengthening of relations with the scientific community.

Between 2005 and 2015, the group reduced its CO2 emissions per container transported by 50% and has a target to further reduce these emissions by a further 30% by 2025.

“We make these decisions for the future, to leave our children a cleaner planet,” Saadé said, inviting the entire industry, competitors, partners and customers, “to join us.”

 

India's GDP expansion much higher than Global growth: Finance Minister August 27 , 2019

NEW DELHI: Seeking to dispel doubts over the economy and Government's growth agenda, Finance Minister Nirmala Sitharaman has recently said the India's GDP continues to grow at a faster pace than the global economy and any other major economy. 

Addressing a press conference, she said reform is a continuous process for her Government and it tops the agenda. Global GDP growth may be revised downwards from the current estimate of 3.2 per cent, she said adding that globally the demand was going to be weak. 

But the Indian economy was growing faster than the global average and all other major economies, Sitharaman added. 

As a result of US-China trade war and currency devaluation, very volatile situation has developed in global trade, she said.

Commerce Ministry to soon come out with new Foreign Trade Policy August 26 , 2019

NEW DELHI: The Commerce Ministry will soon come out with a new Foreign Trade Policy, which provides guidelines and incentives for increasing exports for the next five financial years 2020-25, an official said.
The Ministry is giving final touches to the new policy as the validity for the old one will end on March 31, 2020.
“We have taken views of all stakeholders. The new policy is likely to be announced by September-end or early-October,” the official said.
The Ministry’s arm Directorate General of Foreign Trade (DGFT) is formulating the policy.
Recasting incentives
The new policy would focus on simplifying procedures for exporters and importers, besides providing incentives to boost outbound shipments.
At present, tax benefits are provided under the ‘merchandise export from India’ scheme (MEIS) for goods and ‘services export from India’ scheme (SEIS).
In the new policy, changes are expected in the incentives given to goods as the current export promotion schemes are challenged by the US in the dispute resolution mechanism of the World Trade Organisation (WTO).
In this backdrop, the Government is recasting the incentives to make them compliant with global trade rules.
The Commerce Ministry has also floated a cabinet note for a new export incentives scheme — Rebate of State and Central Taxes and Levies (RoSCTL) — that would be compliant with the WTO norms.
The RoSCTL scheme is available for exports of garments and made-ups.
It would now be proposed to extend it to all exports in a phased manner.
The new scheme would replace the existing MEIS, which was challenged by the US last year in the WTO. It would ensure refund of all un-rebated Central and State Levies and taxes imposed on inputs that are consumed in exports of all sectors.
Major un-rebated levies are: State VAT/ Central excise duty on fuel used in transportation, captive power, farm sector, mandi tax, duty of electricity, stamp duty on export documents, purchases from unregistered dealers, embedded CGST and compensation cess coal used in the production of electricity.
Promoting R&D
Exporters are demanding incentives based on research and development, and product-specific clusters under the new policy.
Ludhiana-based Hand Tools Association President SC Ralhan said the new policy should have provisions for refund of indirect taxes like on oil and power, and state levies such as mandi tax. “Sectors like engineering should be promoted as they create huge number of jobs. There should be relaxation for obtaining licence under Export Promotion Capital Goods for modernisation of industry,” Ralhan said.
Assistant Professor and expert on agriculture economics Chirala Shankar Rao said the policy should look at ways to promote agri-exports as it holds huge opportunities.
During April-July 2019-20, the Country’s exports dipped 0.37 per cent to USD 107.41 billion.
Since 2011-12, India’s exports have been hovering at around USD 300 billion. During 2018-19, overseas shipments grew 9 per cent to USD 331 billion.
The Government is targeting to increase the exports to USD one trillion in the coming years.
 

FreightBro and JOC.com hosted their 1st India Logistics Technology Summit

MUMBAI: FreightBro, India’s first freight forwarder facing platform, associated with Journal of Commerce (https://www.joc.com), a go-to portal providing information on international container shipping & logistics hosted their first ‘India Logistics Technology Summit’ at the Centre of Incubation and Business Acceleration, Navi Mumbai.
The summit witnessed sessions on how software can make key ocean freight processes and capabilities more efficient and less costly, potentially positioning India as the key growth market for world trade in the coming years.
Mr. Raghavendran Viswanathan, CEO & Co-founder, FreightBro, said, “The acceptance curve of the freight forwarding industry for digitization will be gradual and eventually inevitable. There will come a point when the freight forwarder will make decisions looking at dashboards rather than just using it as a price comparison tool. We are glad to contribute to the logistics industry by co-hosting industry led events with the presence of a rich mix of professionals who are working towards digitizing freight forwarding.”
Mr. Eric Johnson, Senior Editor - Technology, JOC.com, said, “It is an interesting phase as we witness logistics networks moving towards supply chain networks with front end and back end technology working seamlessly. We are glad to partner for our first event in India with FreightBro, a key enabler in using cutting edge technology to scale up operation management for the freight forwarding community.”
The panel discussion brought up interesting conversations and observations; plug and play software start-ups offer a layer of flexibility and standardization to the freight forwarding community, the technology platforms act as salespersons reducing customer acquisition costs and older players are opening up to technology once they realize that it is enabling them in all possible ways.
The event showcased the potential of technology to completely change the landscape of international freight movement by reducing reliance on manual processes and paper-based documentation for freight forwarders.

Alphaliner: HMM to add 34 Ships to THE Alliance’s Network in 2020

LONDON: South Korean Container shipping major Hyundai Merchant Marine (HMM) is expected to add some 34 ships to THE Alliance’s network in 2020, according to data provided by Alphaliner.
Citing deployment plans revealed earlier by HMM, the shipping analyst said that the company would add up to 519,000 TEU to the network once it joins THE Alliance as a full member on April 1, 2020.
Although the alliance members have not yet disclosed their new network plans for the next year, Alphaliner noted that the Korean carrier’s ships are expected to be deployed on the following routes:
– Asia – North Europe route, where twelve 23,000 TEU newbuildings are scheduled for deployment from the second quarter of 2020;
– Asia – Med or Asia – US East Coast route would feature ten of the company’s 13,000 TEU ships, including three vessels currently chartered out to the 2M Alliance;
– Asia – Pacific Southwest (USWC) route, where HMM would send six 10,000 TEU units, all of which are currently chartered out to the 2M;
– Asia – Pacific Northwest (USWC) route, where the company would deploy eight of its 8,600 TEU vessels.
Additionally, another eight HMM 15,000 TEU newbuildings are expected to be deployed on the Asia – US East Coast route from the second quarter of 2021.
Alphaliner further said that HMM is expected to cooperate with THE Alliance partners on the Far East – Middle East routes, although its participation in the trade is to be downgraded from the 13,000 TEU scale to tonnage of 5,000 to 6,600 TEU.
Apart from the newbuildings that the South Korean major would receive in 2020 and 2021, its fleet will be strengthened in April 2020 by redeliveries of nine 10,000 – 13,000 TEU ships currently (sub-)chartered out to Maersk and MSC. The charters were among  the conditions set for the 2M-HMM agreement that was signed in March 2017. It resulted in the withdrawal of HMM tonnage from the Far East – North Europe, Far East – Med and Far East – USEC routes.
The new arrangement with THE Alliance will allow HMM ships to return to the Far East – Med and Far East – USEC routes. At the same time, the carrier will be able to gradually replace the 5,000 TEU classic Panamax ships that it started to send onto the Far East – North Europe route in 2018, with 23,000 TEU giants as of April 2020.

DP World announces strong results for first 6 months of fiscal year

DUBAI: Global trade enabler DP World PLC on 22 August 2019 announced strong financial results for the six months ending 30 June 2019 with reported adjusted EBITDA and attributable earnings growth of 21.9% and 26.8% respectively.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem credited the company’s strategy of developing innovative new products and services and prudent management for DP World’s impressive half-year results.
Bin Sulayem added that DP World’s excellent performance against the backdrop of challenging global economic conditions is a testament to the company’s resilience, sound growth strategy and the diversification of its global investment portfolio across energy, maritime and sustainable mobility amongst others.
Bin Sulayem stated: “Our half-year financial results have been in line with our expectations, Mr Bin Sulayem said. He highlighted that DP World continues to be guided by deep market understanding, innovation and operational excellence across 45 Countries Worldwide. Despite uncertainty from the trade war and challenging regional geopolitical realities, DP World has been able to deliver and excel a broadly impressive performance in the first half of 2019.”
“DP World is pleased to report like-for-like earnings growth of 22% in the first half of 2019 and attributable earnings of $753 million. This strong financial performance has been delivered in an uncertain trade environment, once again highlighting the strength of our portfolio. We have continued to make progress on our strategy to become a trade enabler and solutions provider as we look to participate across a wider part of the supply chain. We have invested significantly across our Ports, Logistics & Maritime Services businesses.
The aim is to connect directly with customers to offer logistics solutions and remove inefficiencies in the supply chain to accelerate trade. We are seeing positive signs of progress in our new businesses that give us encouragement for the future,” he added.
“Our balance sheet remains strong, and we continue to generate high levels of cash flow, which gives us the ability to invest in the future growth of our current portfolio. Going forward, we aim to integrate our new acquisitions and deliver synergies with the objective of providing smart end-to-end solutions, which will improve the quality of our earnings and drive returns. While the near-term trade outlook remains uncertain with global trade disputes and regional geopolitics causing uncertainty to the container market, the strong financial performance of the first six months also leaves us well placed to deliver full-year results slightly ahead of market expectations,” he further added.

Reduction in Logistics cost by 10% can increase exports by 5-8% : FIEO

NEW DELHI: The critical role played by India's logistics sector in the country's economic growth story could not be understated. Instrumental in moving goods across its huge length and breadth (about 3.287 million square km), Indian roads are the lifeline of the logistics sector. However, the logistics sector itself is highly unorganised, fragmented and currently mired in multiple challenges leading to operational inefficiency on several fronts.
In India, the logistics cost as a percentage of its GDP stands at 14%. This cost is pretty high compared to the similar cost in the US (9.5%), Germany (8%) and Japan (11%). Nevertheless, the Country aims to bring down this cost to less than 10% by 2022.
Considering the critical role of logistics in propelling India's exports, Federation of Indian Export Organisations (FIEO) believes a reduction in logistics cost by 10% could increase the Country's exports by about 5-8%.
The all-important last mile
Stemming from the same concept is another of its byproduct -called the 'last mile' - a term used in supply chain management to refer to the last leg of the supply chain, denoting the transportation of goods from a transportation hub to its final destination. This final destination could be the location of an end customer or inland container depots (ICDs), container freight stations (CFSs), ports or airports where goods are to be delivered for their eventual exports.
Given the vast expanse of the country's sheer size, a varied and uneven topography, coupled with the fact that a large number of the Country's Industrial Clusters (dominated mainly by MSMEs) are based out of its tier 2 cities, and not in its large metros, the last mile connect has historically been said to be throttling the growth of Indian MSMEs.
While in recent times the Government has taken many steps to minimise last mile woes, a lot is left to be desired. Various studies have shown that Indian logistics landscape, typically comprises of isolated entities, with a skewed modal mix that depends heavily (about 60%) on the already congested Indian roads.
The Indian coastline and river network have historically remained underused, even though such models
are more energy-efficient, eco-friendly and comes with reduced logistics costs, highlights a recent Deloitte-Assocham study. The same study notes that the cost for Coastal Shipping is Rs 0.15-0.2 per tonne-km compared to Rs 1.5 for railways and Rs 2.5 for the road. Addressing these anomalies could alone provide a huge potential to lower logistics cost in the economy by Rs 21,000-27,000 crore by 2025, the report adds. So, what do industry leaders feel about this critical bottleneck?
Anil Bhardwaj, Secretary-General of the Federation of Indian Micro, Small & Medium Enterprises (FISME), believes, "Availability and efficiency of logistics have a direct bearing on firms' competitiveness."
Highlighting how disparities in locational advantage results in a downside to North India based industries, he says, "Industries in North Indian States have a natural disadvantage against Coastal States of Tamil Nadu, Andhra Pradesh, Maharashtra and Gujarat as those can import raw materials at better international prices and export to." According to the industry expert, being handicapped by location weighs down smaller firms more, because compared to their larger counterparts, they cannot relocate to States which have a more efficient infrastructure network.
Putting the last mile in the fast lane Experts assert that to have an integrated end-to-end logistics network, the need of the hour is that all relevant policymakers, logistics service providers (LSPs), transport and terminal infrastructure service providers come together to formulate a cohesive and integrated logistics policy.
The Indian Government, to this effect, has recently reviewed the draft National Logistics Policy (NLP).
The mega policy blueprint, with inputs taken from four relevant Ministries, i.e, the Ministries of Railways, Road Transport and Highways, Shipping and Civil Aviation and 46 Partnering Government Agencies (PGAs), hints at the broad scope of the soon-to-be-introduced policy framework.
With a view to develop a Multi-Modal infrastructure, the policy envisages optimising the current modal mix (road-60%, rail-31%, waterways-9%) to bring them at par with international benchmarks (road--25-30%, railways--50-55%, waterways--20-25%).
To bring down the Country's logistics cost from the present 14% of GDP to less than 10% by 2022 that the Government envisions, industry leaders underline that India needs to play to its strength, which is put to use its proven prowess in domains such as IT capabilities and digital technologies. As per them, any logistics-centric roadmap, aimed at tackling last-mile woes, must thus focus on leveraging on India's capabilities in technologies such as cloud computing, blockchain technology, internet of things, among others.