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.
Our COVID-19 Statement – We Are Open For Business

Our COVID-19 Statement – We Are Open For Business

We would like to reassure our customers and suppliers that Tuscor Lloyds remains open for business as usual, despite current global events.  We are committed to going over and above to serve our clients, even during the most...

‘Tis The Season For Sharing

‘Tis The Season For Sharing

As the song goes, Christmas is "the most wonderful time of the year".  However, this is not the case for everyone.  This year, our Christmas campaign is centered around mental health, to highlight this important issue.   Mental health charity Mind found the...

Growing together at Breakbulk Europe 2019

Growing together at Breakbulk Europe 2019

Breakbulk Europe Exhibition is something we look forward to every year. It’s a great opportunity for the logistics industry and breakbulk & projects cargo specialists to meet up and spend exciting time exchanging ideas, getting to know each other and strengthening...

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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.

Port Focus: Mexican Ports

Port Focus: Mexican Ports

Last year we could observe a major increase if it comes to the cargo volumes handled by the Mexican ports.

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Global Container Market: Then and Now

Global Container Market: Then and Now

2016 was a turbulent year for the container shipping industry. Amongst the top ten global carriers there have been countless alliance reshuffles, an inevitable bankruptcy and poignant mergers.

We take a closer look at the evolution of carriers since 2000 and how last year’s events have left the global container market moving into 2017.


 

It’s amazing to consider that in January 2000 the three leading shipping lines Maersk Sealand, Evergreen and P&O Nedlloyd held a combined market share of 23.7%, when compared with today’s figures. According to Alphaliner the three leading carriers Maersk, MSC and CMA CGM now hold a total of 39.9% of global capacity. *This figure only set to increase as Maersk’s acquisition of Hamburg Süd completes at the end of 2017, taking the top three to a dominant 42.8% of global capacity share.

%

Top 3 Combined Market Share Then: January 2000

%

Top 3 Combined Market Share Now: January 2016*

Global Container Market Share 2000-2016
Maersk have prioritised organic growth through acquisitions, confirmed in a 2016 statement and the recent acquisition of Hamburg Süd, the world’s 7th largest container line. Ever since running into difficulties after the purchase of Royal P&O Nedlloyd (that saw their market share shrink by 2%) Maersk have only grown their global fleet.

MSC and CMA CGMs growth over the past 16 years has been impressive for different reasons. The CMA CGM group growing through multiple high profile acquisitions and MSC demonstrating consistent organic growth with only two small takeovers.

 

Merger / acquisitions timeline

1999 Safmarine & Sea-land Service

2002 Torm Liner Service

2005 Royal P&O Nedlloyd

2006 Mercosul Line

2016 Hamburg Süd

2003  WEC services

2006 HMS services

1998 CMA CGM bought the liner division of ANL

2002 MacAndrews services

2005 Delmas and SudCargos

2007 Cheng Lie Navigation, CoMaNav and US Lines

2016 APL / NOL

Where’d all the liners go?

After revisiting Alphaliner’s report the evolution of carrier fleets 1996-2012’ it’s fascinating to see the ghosts of carriers past, blighted by bankruptcy or absorbed by global leaders.

The trend to consolidations and acquisitions has had a significant impact on the number of container lines on the market. For direct shippers and cargo owners, mergers have not been the only concern when looking for fair market rates. Alliances formed by the leading global carriers have only heightened worries over price fixing and concentrated schedules have dramatically reduced consumer choice.

With the top 3 suppliers operating at a 42% market share the container market is now the definition of an oligopoly. According to Drewry, “this trend will continue as the leading five carriers have the largest order books and, as history has shown, the biggest appetite to acquire other carriers.” 

Sources: Alphaliner, Drewry, WSJ 

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Africa Container Traffic TEU [INFOGRAPHIC]

Africa Container Traffic TEU [INFOGRAPHIC]

Africa Container traffic has been growing across all types of cargo. The latest figures available from The World Bank show exactly where the biggest volumes are recorded.

The map shows the difference in annual Container port traffic for each African country. The deeper red shows the most traffic recorded and the lighter shades are the least traffic (TEU 20ft Equivalents).

Infographic Africa Conatiner Traffic TEU

Africa Container Traffic TEU

It is clear that Sub-Saharan Africa has a long way to go to create the kind of volumes seen in Egypt, South Africa and Morocco.

Port Said, alone handled 2.9 million TEU in 2013, around 40% of all Egyptian container traffic and is the busiest port on the continent.

Durban closely followed with 2.6 million capacity and the ports authority have reported an 8.1% increase year on year for bulk and breakbulk volumes. However the future for South Africa is not looking so bright according to Heavy lift & Project Forwarding International Magazineit seems South Africa’s run of good fortune is over. Mining commodity prices have slowed trade volumes and the country has lost a little of its appeal as other African nations have stepped up to the mark.

Tanger Morocco takes third place for the busiest African Port with 2.5million TEU in 2013.

With our recent news on the massive investment in a number of Sub Saharan regions, it will be fascinating to see exactly how Africa Container Traffic figures develop over the coming years.

SOLAS Container Weight Regulations July 2016

SOLAS Container Weight Regulations July 2016

Recently The IMO (International Maritime Organisation) Voted To Tighten The Rules Surrounding Cargo Weight With Mandatory Verification Of The Gross Weight Of Containers Before Loading Onto A Ship

Mis-declared container weight has been identified by the IMO as a risk to operations and has even been described as ‘the most significant risk to modern container shipping’. SOLAS the International Convention for the Safety of Life at Sea is wholly concerned with the safety of merchant ships. It ensures compliance with minimum safety standards for ships construction, design and general operations. Its origins date back to the Titanic disaster in 1914, where the number of lifeboats and emergency equipment needed on board became mandatory. However, keeping up to date with safety precautions on board some of the biggest vessels ever built is a constant challenge.

 

Problems With Misdeclaring Container Weight

Mis-declaring container weight can create major instability problems, causing damage to ship and cargo, as well as the ships overall stability. The new regulations are intended to make shippers responsible for obtaining container weight.

Over the years, the maritime industry has witnessed many incidents reportedly as the direct result of inaccurate container weights. Incidents such as the Container Ship Deneb in Algeciras 2011. A review after the Deneb incident found that out of 168 containers, 1 in 10 had weights far exceeding those declared. In fact, some industry experts suggest that a third of the 130 million containers shipped every year have misdeclared weights.

 

What Do You Need To Know For 1 July 2016?

The responsibility for obtaining the verified gross mass (VGM) lies with the shipper and these details must be provided to the carrier before loading.

SOLAS have outlined ways in which the shipper can obtain the verified gross mass of a container:

  1. The shipper can weigh the pre-packed and sealed container using calibrated and certified equipment.
  2. The shipper can add the weight of each package, including the packing and other securing material and add the tare weight of the utilized container. The method used to complete this needs to be certified approved by the competent authority of the state in which packing of the container was completed.

Once this information is gathered it will be passed to the carrier and must be stated on the shipping document. Carriers have already issued warnings to shippers that if the VGM information is not received the container will not be loaded onto the vessel.

For more information visit World Shipping Council.

 

Cost To The Industry

Many have speculated that the changes in SOLAS could cost global shippers an additional £3.13bn every year. At Tuscor Lloyds we are already implementing operational protocols to establish exact weights of all containers we handle. We are committed to safe practice in every element of the supply chain, using only the most highly skilled teams on-site, with years of experience in handling difficult cargoes. The tightening of SOLAS regulations can only improve the safety of operations at sea and so this news is more than welcome to the industry.

If you would like to contact one of our dedicated team to ensure safe, stable sea services then calls us +44 (0) 161 868 6000 or email shipping@tuscorlloyds.com

For more news and industry insights from Tuscor Lloyds, click here. 

Reverse Logistics: All you need to know [INFOGRAPHIC]

Reverse Logistics: All you need to know [INFOGRAPHIC]

Reverse logistics has become an increasing service offered by Tuscor Lloyds. Many of our clients are using reverse logistics processes in their supply chain, focusing on the benefits of aftermarket care and complete life cycle support. We take a look at some of the key facts and figures of reverse logistics and what it could mean for your business.

 

Reverse-Logistics-infographic

For more information on Reverse logistics why not read our article Reverse Logistics: The way Forward?