Not so objective 2017 review

Not so objective 2017 review

There are different attitudes that one can have towards the beginning of each new year.

Some struggle to leave the past, overanalysing the previous months. Yet their clock is the only one that stopped. Others treat this opportunity as a blank page and decide to become a whole new person. Each year. Over and over again. There are also the ones spending so much time preparing the yearly-to-do-list, that it ends up longer than their bucket list, and they wake up in December with the pen still in hand.

But although it seems amusing as you stand aside and watch, we all love these yearly recaps and reading New year’s tea leaves.

Various articles have already been published in the shipping world.  If you want to understand 2017 from the economic/financial point of view, we strongly advise you to have a look at 3-part Xeneta publication: If you need a summary of the important regulations and changes, you should see the Ship Insight article:

When you google the topic, you have plenty of options, whether you want a brief summary of 2017 events or a long, yearly analysis of the market.

Yet when others are trying to be impartial and politically correct, instead of focusing on numbers, we will focus on emotions. We’d like to talk about the topics that have touched the shipping industry the most, inspired vibrant discussions and made us feel more human during 2017.

The obvious start would be all the technology madness.

No one would call automation breaking news nowadays, especially as it seems to be a natural and expected step after containerisation started in the late 50s. More than a half-century after that breakthrough, we should not be surprised that the industry is beginning to rely less on humans. The goal is to improve efficiency, reduce the number of mistakes and in general cover the demands of trade. Both port automation and autonomous ships will reduce the environmental impact of the industry and enable shipping to be safer for people, and the planet.

We have had more than enough time to get prepared and contribute to that evolution with our skills, experience and knowledge. Nevertheless, the industry suddenly woke up, realizing that some manual jobs might be in danger of being lost. The question is, can we spend our precious time and apply the amazing abilities of our brains for something greater? Surely technology is a way for us to take up this worthy course.

Apparently not. Instead of developing competencies and learning essential skills, people did what they always do – started finding excuses, most commonly, the problem of cybersecurity. ‘This technology will ruin the world. Nasty hackers will take over our terminals and play Tetris with our containers.’

For some reason, people missed that the problem of cybersecurity is not machines – but ironically – humans. Humans who lack essential knowledge and ignore the regulations, break the rules or are not careful enough to keep the information secured. Simply put, humans do not use technology correctly.

So, technology itself is not the problem here, it’s people who prefer to criticize and waste time looking for problems instead of solving them. To take another example, it’s easy to say that blockchain will affect confidential business models or reveal sensitive data.

Usually, innovation brings lots of uncertainty and challenges, and the natural response for people is to shy away. But guess what, you decide whether the glass is half-full or half-empty. Instead of analyzing the amount of liquid – act. You might change the world.

Don’t misunderstand. I would never say that you should not spend time thinking. The fact that we analyze the problems well before we solve them is the reason we succeed as logistics professionals. The trick is to understand when to think, and when to act. What is more important? Is the subject worth thinking about anyway? We need to ask the right questions to find the right solutions.

Albert Einstein said:

“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”

That’s the key to problem-solving. Some people look for solutions before they really understand the problem. We have already found some solutions if it comes to GHG emissions, but neither do we act nor do we understand what this problem really means to the world. But no need to go into that here, it was discussed more than enough in 2017.

Speaking of discussions, how many publications have you seen this year about abandoned crews? We saw lots. On the very next page, we often found articles about how to attract the so-called millennials and young professionals to the industry. Well, I hope these youngsters don’t end up this way!

We could go on and on with these thoughts, but enough of being sardonic for today. We really wish the best for the shipping industry in 2018.

In the end, if the ship sinks, the crew goes down with it.

We enjoy the voyage and we don’t want it to end. Enough of the moaning, it’s a long journey. Instead of ineffective discussions and negative predictions, let’s use the time to welcome all the new solutions and look to improve them with a more positive attitude.

Finance for Forwarders?

Finance for Forwarders?

The UK’s export credit agency, UK Export Finance (UKEF) has pledged support to exporters and supply chain SMEs (small and medium sized enterprises) by accessing finance through their banks.

This scheme is set to provide thousands of businesses access to government backed finance. UKEF will provide working capital loans and bonds to SME customers and direct trade finance for suppliers who support exporters.

UKEF are working in partnership with five major high street banks (Barclays HSBC, Lloyds Banking Group, RBS/NatWest and Santander) to give companies access to the finance through their bank.

The Secretary of State for International Trade, Liam Fox commented:

“As an international economic department, this new partnership shows the Department for International Trade’s commitment to help small businesses seize the global demand for British exports. Providing easily accessible finance, backed by UKEF’s guarantee, will lift a common barrier to exporting. Providing finance to suppliers as well as exporters means spreading the benefits of global trade, supporting more jobs and growth for companies large and small.”

A new digital platform is being launched in conjunction with the scheme to ensure the quickest transactions.

The Head of Barclays Corporate Banking, John Mahon added:

“Delegated authority will make accessing UKEF guarantees simpler for many businesses and will help companies we work with grow more quickly. Both exporters and companies involved in international trade through supply chains will benefit, and we look forward to further collaborating with UKEF and our colleagues across the industry to find more new and innovative ways to help UK businesses take full advantage of export opportunities.”

UKEF has recognised the importance of supply chain SMEs and obviously wishes to strengthen its base. This becomes imperative as the UK heads into the political abyss once it leaves the European Union. But simply throwing money around is a cop out.

Indirectly investing through company banks is evidence of tunnel vision. UKEF can’t see the broader threats to industry and how a deregulated system can fail the public. The government must provide support with direct action and take responsibility for the export industry.

Providing support to major UK ports should be on the agenda. Ports are the gateway to the world and act as the foundations of international trade. But British ports are owned and ran by private companies. These companies often suffer from financial constraints meaning investment varies from port to port. Therefore establishing a registered body for ports will allow the government to personally ensure that British exports are handled well. UKEF could also promote new electric automated technology for increased efficiency in ports to benefit and stabilise export growth.

Additionally, the recent Petya cyber-attack highlights that stronger cyber-security is needed to sustain supply chains. Maersk is yet to return to full steam and suffered losses due to the attack. We can see the threat to a merchant fleet has evolved into a cyber-presence. The days of the Royal Navy protecting exports with gunboats are long gone. We must strengthen cyber-security and I would call on the government and UKEF to invest in cyber-defence development, especially with the scheme’s new digital format.

If the government wants stability in the future then it must solve the problems of today. It must guarantee the money invested will strengthen the supply chain for security in a post-Brexit society. The government has to develop a closer relationship with industry and not indirectly invest via banks.

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The Industrial History of Trafford Park

The Industrial History of Trafford Park

During our daily commute, many of us pass the former railway tracks that connected Trafford Park and the old docks of the Manchester Ship Canal. We quickly pass this relic, oblivious to the historic line. Once the centrepiece of Manchester’s industrial history, these tracks carried a total 2.5 million tonnes a year, now it’s an artefact of a past that we can often forget.

This history starts with the construction of the Manchester Ship Canal. Opened in 1894, it connects the Mersey Estuary to the Salford Quays. The Port of Manchester became the third largest port in Britain and this encouraged the development of Trafford Park, the world’s first planned industrial park. This attracted an influx of heavy industry through the 1890s. Large factories like the Trafford Brick Company, the Manchester Patent Fuel Company and W T Glover, a cable manufacturer who supplied all of Trafford Park with electricity, arrived in the early stages of the park’s development.

Through the rest of the 19th Century and into the early 20th century, more companies began to move to Trafford Park including the Ford Motor Company. Ford arrived in 1913 creating components for the Model T and other vehicles. However, they were to relocate to Dagenham, Essex in 1931.

Nevertheless, Ford returned to Trafford Park at the outbreak of World War II, under licence to manufacture Rolls Royce Merlin Engines used in the Spitfire, Hurricane and Lancaster planes. A total 34000 engines were constructed during the war effort and Trafford’s significance in the home front brought the looming threat of the Blitz. Many factories suffering structural damage due to the bombing raids.

Despite such damages, and Ford’s return to Dagenham, heavy industry continued to grow with an estimated 75000 working in Trafford Park once war ceased.

Sadly, this prosperity couldn’t be sustained. Employment in the park began to decline through the 1970s. The canal struggled with the recently launched wider container vessels and the docks closed. Materials for factories simply couldn’t arrive.

Employment fell to 15,000 in 1976. Much to the concern of the Trafford Park Industrial Council (TRAFIC), a group of companies based in Trafford established five years beforehand to combat the park’s decline. TRAFIC’s initiative efforts were futile. The fall of the park was inevitable. By the closing years of the 1980s, heavy industry in the area had vanished.

By 1987, the Trafford Park Development Corporation was established in order to attract private sector business to the park. Over the course of 12 years, a total £1.759 billion was invested generating 28,299 jobs by 1998. That same year saw the cease of operations on the railway between the docks and the park, marking the real end of an era. Heavy industry out, private sector in.

Nowadays a total of about 35,000 people work in Trafford Park. An Amazon distribution centre, logistics companies such as ourselves and the online financial advisors, Think Money reside here. The latter’s ‘Think Park’ is a five-building complex that includes on-site restaurant and gym. Think Money provide their entire operations out of these buildings and the absence of local branches is replaced with the internet. This modern industry is utterly juxtaposing to their neighbours Kellogg’s, whose cereal production is the only echo of Trafford Park’s manufacturing tradition, having been residents since 1938. Now Kellogg’s seem an intruder in Trafford Park, as the majority of business in the park is now office based.

The dramatic development of Trafford Park is remarkable. From the early industries to the efforts on the home front, to later decline and rebirth, all is worth remembering.

And for the future? With Peel Ports’ 2017 announcement of a £138 million regeneration of Salford’s Port, we may see a restoration of the Ship Canal’s former glory.

I doubt we’ll see any new trains on those old tracks anytime soon.

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Petya: Black Cyber Swans Breaking the Chain

Petya: Black Cyber Swans Breaking the Chain

The industry suffered as Maersk fell victim to the Petya ransomware attack, one of the biggest Black Swan events our industry has seen. The business analysis, Nassim Nicholas Taleb coined his Black Swan theory to describe a high profile unforeseeable event which has great industry-wide consequences.

Typically Black Swan events occur out of sheer chance. Natural disaster, illness, and accident are common contributors.

The Philips Albuquerque semiconductor plant fire in 2000 is a prime example. The factory was the supplier for the Swedish phone company Ericsson and their Finnish competitor Nokia.

During a storm, a small fire broke in a furnace when cooling fans failed after being struck by lightning. Within a matter of minutes, the fire was extinguished. The damage seemed minor and everything was expected to be running as usual in a few days. Ericsson merely waited for production to restart.

But, the fire contaminated the plant to a further extent than originally thought and production halted for months, leaving Ericsson with a parts shortage and desperately trying to rectify their supply chain. But their chain was too lean. They had no plan B and were subsequently unable to launch their new headsets and suffered huge losses.

Compare this to Nokia, who had a wider supply chain and closely observed Philips so they were well accounted for. They implemented their plan B and suffered significantly less than their competition.

Losses after a Black Swan event are common. A Professor of Operations Management at Georgia Institute of Technology, Vinod Singhal, investigated the effects of breakdowns and found within two days after a breakdown shares can drop by an average of 8%.

Historically, unpredictable events can be controlled with close management of supply chains, just as Nokia understood. But Black Swans have evolved into a new form and in the light of Petya, there is cause for concern.

Maersk’s efforts to increase their cyber security were made worthless. They pledged resources and appointed a CISO (Chief Information Security Officer) and it’s frightening that such extensive efforts have proved so ineffective. It’s obvious that basic firewalls and anti-virus software, the extent of many company’s defenses, are simply not enough and cyber-attacks are a looming threat to the industry.

So how do we cope? Black Swans are now cyber, yet the threat the same.

Cross-industry communication is needed. Because this problem threatens all, we must see a co-operative effort to control it and extending MSC’s support to Maersk is a starting point. The two shared “vessel byplans, load lists, and customs information” in the wake of the event in order to control the damages. Now order is restored, sharing resources is important to maintain this order. Strengthening passwords, two step verification and an investigation into the attack is another place to begin. But this still isn’t enough. A complete industry-wide initiative is vital to even begin preventing this modern threat.

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Not so objective 2017 review

We’d like to talk about the topics that have touched the shipping industry the most, inspired vibrant discussions and made us feel more human during 2017.

Subscribe to Our Updates

Sign up to Tuscor Lloyds monthly newsletter and be the first to hear about news and offers as they are released and gain access to our latest project case studies!

Make Way for the Freight Forwarding Apprenticeship

Make Way for the Freight Forwarding Apprenticeship

Last week the department of education gave the green light to the employer group, known as ‘Trailblazers’, to create the standard for a specific international Freight Forwarding Operative Apprenticeship.

This is something people in the industry have been asking the government for years’ now. There is a shortage of skilled workers in the sector and with increasing pressure on the industry to deliver to tighter timescales, more highly skilled HGV drivers are needed. It is estimated that 35,000 jobs are readily available, but the resources to train and build young people up isn’t there.


The Trailblazer group is made up of 38 members, including Neon Freight, DHL and International Forwarding to just name a few. Driving this is the industry giant Kuehne + Nagel, led by Jon Hettrick – the HR director – who has been a dedicated member of the team on this vital industry endeavour.

“The whole sector can benefit from training and development provision that delivers the specialist knowledge and skills we use every day in freight forwarding,” –  Mr Hettrick

The British International Freight Association (BIFA) have always been a huge encouragement to the Trailblazer group. In January, BIFA called upon the wider freight forwarding community to provide support for the initiative. BIFA said it was imperative that the industry has an apprenticeship scheme now more than ever.


With full support, the Trailblazer group submitted an expression of interest (EOI) in January, now with the approval confirmed they can start work on the blueprints and standards detailing what the apprenticeship will entail.

The story doesn’t end here though, following this submission, BUILDUK released a document outlining how Trailblazer apprenticeships are coming into all industries. The Minister of state for apprenticeships and skills, Robert Halforn said that:

By putting more control in the hands of employers, we are ensuring apprenticeships are high quality and address skills shortages facing the industry.” 

Offering more opportunities to young people gives them a chance to gain vital skills, and this movement forward is not only a milestone for the freight forward industry but for how education can be accessed and applied to real day-to-day work.


Shipping Line vs Forwarder – Whats the difference?

Shipping Line vs Forwarder – Whats the difference?

The biggest players in the supply chain game are shipping lines or carriers. Considering 90% of global trade moves via containership and some of the largest companies own around 42.8% of this it’s safe to say they’re kind of a big deal.

Freight forwarders (NVOCC’s) emerged mainly to make global shipping as seamless and stress free as possible for the shipper, the very definition of a “middle man”. But in the technologically rich 21st century, some industry experts as well as shipping lines and carriers, have argued there is no longer a place for the traditional freight forwarder in the movement of global freight.

As a first time exporter the choice between a shipping line and a forwarder can be a very difficult decision and the wrong choice can lead to costly slip ups. So we thought we’d take a look at the difference between the two and what may be best for your business.

Let’s lay this out simply

A shipping line is a company or organisation that owns and operates vessels, responsible for the handling and transporting of cargo aboard their ships. They deal with the cargo from point of origin to destination (port to port), transiting regular routes on fixed schedules aboard their own vessels.

A freight forwarder arranges shipments for individuals and companies, they may also be the carrier themselves. They are often the link between shipper and carrier. Forwarders typically assist shippers across the whole journey to ensure no logistical hiccups occur. They can also provide extra services in the form of advising on packing, completing the necessary paperwork (like bills of lading), providing insurance coverage and custom clearing services.

Advantages of booking with shipping line
  • Booking directly with the source of the sea freight offering can sometimes result in more competitive rates.
  • It could mean your cargo is more likely to obtain space on your desired vessel.
  • Shipping lines are accountable for any loss or damages.
  • The owner of the goods can authorise the shipping line to sign on their behalf to expedite any processes along the way, without the need of the owner to physically be there. However, the degree to which this power is given is often listed out in the agreed contract prior to the shipment.
Disadvantages of booking with shipping line
  • You may not always get the best rates as rates are often dependant on volume of bookings.
  • You may have to be tied into fixed term rate contracts that do not take into consideration market fluctuations that can impact rates on a daily basis.
  • A shipping line will carry your cargo at sea but may not provide additional transport services.
  • Using only one carrier means only one set of sailing schedules that may not suit your shipment requirements. Although in recent times this has been counteracted by carrier ‘alliances’ over certain trade lanes.
  • Less likely to have one point of contact for your shipment.
  • They would need a forwarder to organise the movement of more ‘awkward’ / out of gauge cargo
  • Working with a carrier directly means you need to ensure bookings are made on time by your suppliers.
Advantages of using freight forwarders
  • Forwarders are able to negotiate with shipping lines on behalf of shippers to get a competitive deal and discover the most economical route to take.
  • Global forwarders commit big volumes to shipping lines which can make their rates very competitive.
  • Forwarders complete all documentation on your behalf.
  • Import / Export processes are after complex and time consuming. Outsourcing these responsibilities in the supply chain can save untold time and potential headaches.
  • A freight forwarder will often see the cargo through the entire process from door to door, providing multi-modal transportation options and advising customers along the way.
Disadvantages of using freight forwarders
  • As a freight forwarder does not actually move your freight a number of different companies may be looking after your cargo at any one given time.
  • Many shippers cite ‘transparency issues’ for not working with freight forwarders, in regards to sub-contracting third parties to complete the work on their behalf.
  • Some freight forwarders may increase costs along the journey that was not anticipated at the beginning of the shipment.
  • As a freight forwarder does not own the vessels carrying cargo they can often be outranked when it comes to finding space on a vessel.

So what’s best for your business?

The main difference between shipping lines and freight forwarders are the types of services offered. A freight forwarder will provide services which are outside the scope of a shipping line. For example, a freight forwarder will often see the cargo through the entire process from door to door. While a shipping line may only be concerned during the process when the cargo is consolidated to the time when the cargo is deconsolidated. Another key difference is a freight forwarder often provides multi-modal transportation options, while a shipping agent will often specialise in a certain mode of transportation, be it via ship, air or land.

What it all boils down to is the type of service you’re after. Are you wanting to entrust a company completely? Do you believe they have the right experience and expertise to do the job? Or are you happy organising your own documentation and relying on relationships you’ve built to get the best deals and rates for your shipment?

To discover the added value of using a global freight forwarder please contact our team today. You’ll be happy you did.

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