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Post-Brexit Britain to rely on emerging markets?

BAAR, Switzerland: July 19, 2017. As Britain's Conservative government acknowledges the one-time cost of leaving the EU could be £66 billion, Agility Logistics expects the country "will try to spark its economy through trade with emerging markets" after March 2019.

In a report produced in conjunction with analyst Transport Intelligence, Agility says the more difficult the divorce, the more likely Britain will seek quick trade deals with Malaysia, Sri Lanka, Gulf Cooperation Council countries and Brazil.

China and India, it notes, "have the muscle to press the UK for significant concessions and [deals] are unlikely to be hashed out rapidly."

Agility emerging marketsHowever with the EU accounting for 47 percent of UK goods exports in 2016, new trade deals with emerging markets may be constrained by the EU, as the report asks: "Would the UK sweep away barriers to permit cheap North African citrus to the UK if the EU, which heavily protects its Mediterranean producers, retaliates with duties on UK manufactured goods?"

Essa Al-Saleh, CEO of Agility Global Integrated Logistics commented: "Apart from the political hurdles, the UK's desire for 'frictionless' trade with the EU faces complex technical obstacles – what to do about tariff-rate quotas, rules of origin, product standards and import duties. Anything that alters existing UK-EU arrangements probably means delays and added cost to the movement of goods."

The report also notes an already-weakened Sterling will make imports from both the EU and emerging markets more expensive; lead to potential trade disputes over tariffs on agricultural goods and quota arrangements; damage the UK's role as a gateway to the EU for emerging markets; and make exports more costly due to Rules of Origin checks.

Even a Customs union between the UK and the EU would not guarantee the government's hoped-for frictionless trade in goods, according to Agility. "Turkey - which has a Customs union with the EU but is not in the Single Market - faces documentation checks and product sample tests where it does not follow EU rules for the production, labeling, movement and storage of certain goods.

"So the UK needs to establish an appropriate regulatory agreement with the EU or face border checks," the report points out.

In addition to the Brexit impact, Agility notes India's decision to replace more than a dozen state and federal levies with a single Goods and Services Tax from July 01 has led the country's "notoriously inefficient logistics sector" to consolidate warehousing, revamp road freight strategies, and invest in system upgrades to improve the efficiency of their supply chains.

The result could cut logistics costs in India's formal logistics sector by 20 percent, encourage infrastructure investment and further boost the country's surging economy, the report concludes.

Politics not economics key to inequality says research

BOSTON: July 17, 2017. Research by Oxfam suggests the poorest half of the world's population has received one percent of the total increase in global wealth since 2000, while the top one percent has received 50 percent.

According to a new "work in progress" index published by Oxfam and Development Finance International, no country is doing enough to reduce the gap between rich and poor, including social spending, taxation policies, and labor rights.

"While many leaders pay lip-service to the dangers of extreme inequality and the urgency to tackle it, this index shows that not one government is doing enough," said Paul O'Brien, vice president of Policy and Advocacy at Oxfam America. "This is most certainly true here in the United States, where president Trump campaigned against what he called a 'rigged system' that favors the rich, but is now delivering the opposite."

OxfamDFI indexDFI and Oxfam say governments are not powerless to reverse a trend that the World Bank forecasts will see half a billion people still living in extreme poverty by 2030: "Our findings show that a number of governments including Sweden, Chile, Uruguay and Namibia have shown they can buck the trend of growing inequality by taking clear steps to reduce it."

Of the 152 countries surveyed, Sweden, Belgium and Denmark top the index (right) because of high levels of social spending and good protections for workers; while Nigeria, Bahrain and Myanmar come bottom due to "exceptionally low levels of government spending on health, education and social protection; an extremely bad record on labor and women's rights; and, particularly in the case of Bahrain and Nigeria, a tax system that overburdens the poorest in society and fails to tax its wealthiest citizens," according to the Oxfam/DFI report.

"Tackling inequality is about political will. Across the globe ordinary people are suffering the consequences of political failure in the form of underfunded schools, inadequate tax collection, and low paid insecure jobs," added DFI director Matthew Martin.

The U.S. ranks No. 23 behind France (No.8), Australia (No.14), Canada (No.15), the UK (No.17) and South Africa (No.21). One in four of the top 50 countries on the index are low or middle-income - suggesting tackling inequality is as much about politics as it is economics.

Oxfam and DFI estimate Trump's proposed policies on tax reform, social spending and labor rights could see the U.S. fall below Greece and Spain on future editions of the index.

"Our hope with this index is to build a public conversation about how to tackle this crisis. Governments need to build fairer tax systems, uphold the rights of workers, and invest more money in our public services, here at home and around the world," continued O'Brien. "It's time to make our economies work for all of us, not just a few."

100 companies can save the planet

LONDON: July 10, 2017: New research from the Carbon Disclosure Project (CDP) reveals that 71 percent of all greenhouse gas emissions (GHGs) since 1998, when human-induced climate change was officially recognized, can be traced to 100 fossil fuel producers.

From 1988 to 2015, just 25 fossil fuel producers are linked to 51 percent of global industrial GHG emissions with the highest publicly-quoted companies being ExxonMobil, Shell, BP, Chevron, Peabody, Total, and BHP Billiton; and state-owned entities such as Saudi Aramco, Gazprom, National Iranian Oil, Coal India, Pemex, CNPC and Chinese coal - of which the Shenhua Group & China National Coal are key players.

Exxon-MobilThe data also reveals that fossil fuel company operations and products worldwide have released more emissions in the last 28 years than in the previous 237. Between 1988 and 2015 they produced 833 gigatonnes of CO2, compared to 820 gigatonnes from 1751 to 1988.

The CDP says if the trend in fossil fuel extraction continues at the same rate over the next 28 years, global average temperatures would rise by 4ºC by the end of the century – leading to substantial species extinction and large food scarcity risks worldwide.

Technical director of the CDP Pedro Faria noted: "This ground-breaking report pinpoints how a relatively small set of just 100 fossil fuel producers may hold the key to systemic change on carbon emissions.

"That puts a significant responsibility on those investors to engage with carbon majors and urge them to disclose climate risk and set ambitious emission reduction targets to ensure they are aligned with the goals of the Paris Agreement."

Richard Heede of The Climate Accountability Institute that co-produced the report added: "Fossil fuel majors will have to demonstrate leadership by contributing to the low carbon transition at the scale and pace required."

CDP is a global platform for environmental disclosure, insight and action for investors, companies, cities, states and regions.

The organization's latest data says the top 25 emission producers in order of magnitude are: China (Coal), 
Saudi Arabian Oil Company (Aramco), Gazprom OAO, 
National Iranian Oil Co, 
ExxonMobil Corp, 
Coal India, 
Petroleos Mexicanos (Pemex), Russia (Coal), 
Royal Dutch Shell PLC, 
China National Petroleum Corp (CNPC), 
BP PLC, 
Chevron Corp, 
Petroleos de Venezuela SA (PDVSA), 
Abu Dhabi National Oil Co, 
Poland Coal, 
Peabody Energy Corp, 
Sonatrach SPA, 
Kuwait Petroleum Corp, 
Total SA, 
BHP Billiton Ltd,
 ConocoPhillips,
Petroleo Brasileiro SA (Petrobras),
Lukoil OAO,
Rio Tinto,
Nigerian National Petroleum Corp,
Petroliam Nasional Berhad (Petronas),
Rosneft OAO,
Arch Coal Inc,
Iraq National Oil Co, and
Eni SPA.

In March this year ExxonMobil CEO Darren Woods announced his company would invest US$20 billion over the next decade to expand its manufacturing capacity along the U.S. Gulf Coast.

Turkey continues airlift to Qatar

ISTANBUL: July 12, 2017. A report from Reuters says Turkey has sent 197 freighter aircraft, 16 trucks and one ship to Qatar since the political crisis with four Gulf Cooperation Council states began last month.

"We will keep meeting its daily or longer-term needs in the coming period," said Turkey's Economy minister Nihat Zeybekci according to Reuters.

EXPO Turkey by QatarZeybekci made his comments in Ankara following a meeting with Qatar's Economy minister Ahmed bin Jassim al-Thani who said despite the sanctions, Doha's sea and air trade was continuing without interruption and would likely lead to more commercial opportunities for Turkish companies in the future.

In May Turkish exports to Qatar increased 300 percent to reach US$32.5 million according to Customs & Trade minister Bulent Tufenkci.

Prior to the recent exponential rise in airfreight shipments, bilateral trade between the two countries was forecast to increase 10-15 percent this year on a 2016 total of US$700 million.

Next January, Qatar and Turkey are going to repeat their joint trade show initiated in 2017 by Turkey's president Recep Tayyip Erdoğan and Qatar's Emir Sheikh Tamim bin Hamad Al Thani in a bid to strengthen investment and cooperation between the two countries.

Held at the Qatar National Convention Center, this year's Expo attracted 154 Turkish companies including official airline sponsor Turkish Airlines that began A330 freighter flights to Prague and Riga earlier this month. Currently, some 60 Turkish companies are working on 35 projects in Qatar with a turnover of US$14 billion.

UK Customs approves cyber attack fail-safe

LONDON: July 06, 2017. The British International Freight Association (BIFA) says it welcomes the UK government's decision to support 'CCS-UK Fallback', an IT back-up plan in the event the country's Customs Handling of Import and Export Freight (CHIEF) processing system fails.

LHRDesigned by British Telecom (BT) for the CCS-UK user group, the fallback system will work for up to 30 days and allows authorized airlines, forwarders and brokers to continue processing Customs export declarations in the event of any "significant" system outage, and receive automatic fallback clearance to avoid delaying airfreight shipments.

Import entries will also receive fallback clearance, avoiding the backlogging that would result from manual Customs clearance, said BT.

CCS-UK is one of only six providers authorized to connect to, and exchange messages with CHIEF – Her Majesty's Revenue & Customs' computer system that documents all UK imports and exports, issues invoices for duties and taxes where appropriate, and provides for immediate Customs clearance.

BIFA director general Robert Keen noted: "Although the back-up system has been in existence for about a year, it is good to hear that it has now received formal Customs approval and is ready for use to prevent any meltdown in the event of a prolonged outage of HMRC's computer systems."

Keen continued: "In the last week, with the situation at Maersk, we have seen evidence of the problems that can occur when computer systems are disrupted."

Maersk says it has now restored track and trace and booking amendment functions on https://my.maerskline.com/ after the June 27 'Petya' ransomware attack. The company has also enabled New Bookings, Request Delivery Order, Print Bills of Lading and access to 'MyFinance' functionality.

Acknowledging the patience and understanding of its customers as it endeavors to restore normal trading conditions, Maersk added: "It has been an intense week. We have gained so many learnings (sic) and thank you for the clear and good feedback you have provided in the process. We value this a lot."

Emirates Airline wins on water

AUCKLAND: July 06, 2017. Emirates Team New Zealand returned to a hero's welcome after winning the 35th America's Cup 7:1 against defending champion Oracle Team USA in Bermuda at the end of June.

Emirates Team New Zealand 2In April this year bookmakers had given the challenger 3:1 odds to win the sailing competition that began in 1851 and is thus the oldest international trophy in world sport.

Emirates Airline sponsorship of Team New Zealand dates back to 2004 and was renewed in March 2015. Emirates Sky Cargo was responsible for shipping the team's 45 tonnes of equipment, including the multi-hull racing yacht, to Bermuda from Auckland via Los Angeles and back.

The New Zealand team has held a number of America's Cup titles including clinching the trophy in 1995 and successfully defending the title in 2000.

"It's fantastic to be home, we just so proud of being New Zealanders," declared CEO Grant Dalton as hundreds of fans gathered at Auckland Airport for the team's triumphant return via Dubai on July 05.

Meanwhile plans have begun to defend Emirates Team New Zealand's win with the acceptance of a challenge from Circolo della Vela Sicilia, a yacht club in Mondello near Palermo, Sicily that becomes the Challenger of Record for the 36th America's Cup, likely to be held in 2021.

The club will be represented by Luna Rossa Challenge ('Red Moon Challenge'), an Italian sailboat racing syndicate first created to compete for the 2000 America's Cup. The Prada/Telecom Italia boat withdrew from the 35th Challenge after disagreeing with the organizers on the type of vessel to be entered in the race series.

Africa tops airfreight demand in May

GENEVA: July 05, 2017. IATA says the global airfreight market rose 12.7 percent in May compared to the same month last year, as capacity rose 5.2 percent overall.

Ethiopian Cargo  Logistics The increase compares to 8.7 percent in April and is more than three times higher than the five-year average growth rate of 3.8 percent.

Despite expectations of a further 8.0 percent increase in the third quarter this year, IATA notes the rise of the global inventory-to-sales ratio suggests the cyclical growth period for air cargo may have peaked: "This indicates that the period when companies look to re-stock inventories quickly, which often gives air cargo a boost, has ended," it said.

"May was another good month for air cargo. Demand growth accelerated, bolstered by strong export orders. And that outpaced capacity growth which should be positive for yields," declared IATA director general and CEO Alexandre de Juniac.

"But the industry can't afford to rest on its laurels. With indications that the cyclical growth period may have peaked, the onus is on the industry to improve its value proposition by accelerating process modernization and enhancing customer-centricity," he added.

All regions, with the exception of Latin America, reported year-on-year double-digit increases in demand during May with African carriers posting a 27.6 percent rise in volumes as capacity rose 14.7 percent.

European airlines produced a 15.0 percent upturn in airfreight traffic as capacity increased 5.7 percent; North American carriers posted a 13.9 percent rise in volumes and a capacity increase of 4.1 percent; and Asia-Pacific airlines saw volumes rise 11.3 percent and capacity 6.2 percent.

Air cargo volume among Middle East airlines grew 10.2 percent in May as capacity rose 1.7 percent; and Latin American carriers experienced a 6.7 percent increase in demand as capacity rose 7.1 percent.

Lufthansa Cargo to gain from EU-Japan deal?

BRUSSELS: July 06, 2017. On the eve of the G20 summit, the EU and Japan have sent a signal to protectionists by agreeing in principle to a deal covering 40 percent of global trade.

The EU said the agreement will remove almost all €1 billion in annual Custom duties and could lead to a 180 percent rise in EU processed food exports and a 20 percent rise in chemical exports.

The current value of annual EU exports to Japan is €58 billion in goods and €28 billion in services. The new deal is expected to provide opportunities for EU companies to increase exports of pharmaceuticals, medical devices, agri-food, motor vehicles, transport equipment - and with a post-Brexit Scotland subject to tariffs - Irish whiskey.

LH Cargo ANACommenting on the historic accord, European Council president Donald Tusk said: "Although some are saying that the time of isolationism and disintegration is coming again, we are demonstrating that this is not the case. That the world really doesn't need to go a hundred years back in time.

"In the context of the discussion about Brexit, we have heard statements claiming that it isn't worth being in the European Union, as it is easier to do global trade outside of the EU. Today we have shown that this is not true. The EU is more and more engaged globally. And ahead of the EU are negotiations with Mercosur countries, Mexico, New Zealand, Australia and others," he added.

One beneficiary of the expected increase in two-way trade is Lufthansa Cargo and ANA Cargo. In 2014 the two companies signed a joint venture covering the Japan-Europe market with an initial focus on flights from Japan to Europe.

By June the following year, "the cooperation has paid off even within the first few months", declared Akira Okada, CEO of ANA Cargo. "Starting to send consignments from Europe to Japan is an important milestone to provide an attractive service to an extended circle of customers."

With "shared roof" facilities Europe and Japan, "Our customers save valuable time thanks to the large numbers of additional direct connections and rapid transit times. Demand has been consistently high since the partnership began," reported Lufthansa Cargo chairman and CEO Peter Gerber back in mid-2015.

In December of that year the two airlines added connected destinations in Japan including Fukuoka and Sapporo. "Thanks to the joint venture we can connect the wide European network of Lufthansa Cargo with the direct connections of both partners to Japan and the continental de-feeder flights of ANA," said Carsten Wirths, then Area manager Europe and Africa for Lufthansa Cargo and now managing director of Lufthansa CityLine.

"Fukuoka and its region are important centres for the steel and automotive industries, as well as for semiconductor technology, electronics, environmental and biotechnology", added Yutaka Terao, Project manager Cooperations, ANA Cargo. "These are sectors which substantially profit from airfreight."

Flying cheetah drone wins Amazon competition

CAMBRIDGE, UK: July 05, 2017. 'Hannah M' from Ballymena, Northern Ireland has won the Amazon/UK Civil Aviation Authority (CAA) 'Design a Drone' competition that prompted entries from 1,700 UK students.

Hannah's 'Flying Cheetah' drone (right), which would be used by forest rangers to protect cheetahs and other wildlife, will now be exhibited at the Amazon Prime Air Lab in Cambridge for the next 12 months.

HAN All primary school students in Years Two through Five were asked to design their interpretation of a delivery drone to serve a humanitarian purpose or improve society, such as first-response medical aid, sending flowers to a loved one who is unwell, or delivering toys to children in need.

Winning students took home gift baskets of science, technology, engineering and math (STEM) prizes. The first place winner in each region also earned a cash donation of £1,000 for their school, to be spent on in-school STEM resources.

Competition judge Lea Simpson, leader of the Frontier Technology Livestreaming Team at the UK Department for International Development said: "I was really impressed by the quality of the entries, they were full of creativity and anything- is-possible optimism. I believe competitions like these do an important job of sowing early seeds that technology can be a force for good. I have high hope for how this will shape tomorrow's STEM leaders."

The competition helped raise awareness of the CAA's Drone Code, a simple set of rules and guidelines that outline how to fly drones safely and within the law in the UK.

Lauren Kisser, Operations director at Amazon Prime Air commented: "I'm delighted that the Design a Drone competition encouraged these students to unleash their creative thinking on how drones can be used to improve society. The entries we received were full of innovative and thoughtful ideas that could very well change the world one day."

Amazon has a Development Centre in Cambridge working on a range of projects including delivering packages to customers in 30 minutes or less using drones.

British business calls for Brexit “ common sense”

LONDON: July 07, 2017. The UK Confederation of British Industry (CBI) says in order to protect jobs and trade flows the UK should remain in the Single Market and Customs Union until a final exit deal is concluded.

The CBI, which represents 190,000 businesses, is proposing UK and EU negotiators build a bridge from the end of the Article 50 process in March 2019 to the new deal, maximizing continuity for firms and avoiding what it describes as a damaging cliff-edge.

According to CBI director general Carolyn Fairbairn (left of picture), "this is not about whether we are leaving the EU, it is about how. Once the Article 50 clock strikes midnight on 29th March 2019 the UK will leave the EU.

CBI Carolyn Fairbairn"Our proposal is for a limited transition period paving our way to a new future. This common-sense approach would bring continuity to firms in the UK and the EU and protect investment today," she added.

CBI chief economist Rain Newton-Smith said if both sides fail to reach a deal by March 2019, the UK would face an average four percent tariff on its exports to the EU: "If this were applied to total UK goods exports to the EU, the increase in tariff costs would be between £4.5 and £6 billion pounds per year. That's 0.2 to 0.3 percent of GDP."

On the change in the cost of EU imports, the UK would be obliged to impose the same tariffs as from other WTO members, said Newton-Smith: "Overall, our estimates suggest the average Most Favored Nation tariff rate on UK imports from the EU would be around 5.7 percent. This would be an additional annual cost of £11- £13 billion pounds.

"That's around 0.6 - 0.7 percent of annual GDP. Business would have to choose how to deal with these costs. Whether to take the hit themselves or to pass them on to customers," she noted.

Fairbairn added: "Even with the greatest possible goodwill on both sides, it's impossible to imagine the detail will be clear by the end of March 2019. This is a time to be realistic.

"Our proposal is for the UK to seek to stay in the Single Market and the Customs Union until a final deal is in force. Firms tell us this feels like common sense. Because barrier free trade brings jobs, growth and well-being to all parts of the UK and elsewhere in Europe."

David Davis, Britain's minister currently responsible for managing his country's exit from the EU, has said that while there will be a three-year transitional period, under Article 50 the UK will exit the Customs Union and Single Market after March 2019. The continued uncertainty surrounding what happens next suggests a reason for the CBI intervention.

UK logistics industry threatened

Collett UK 2TUNBRIDGE WELLS, UK: June 29, 2017. Britain's Freight Transport Association (FTA) has warned that without EU workers after 2019, the country's logistics industry will "grind to a halt".

The FTA says employees from EU countries account for 13 percent of truck drivers and 26 percent of warehouse workers out of a total 2.54 million people employed in a sector that contributes £121 billion Gross Value Added to the British economy.

"These EU workers are crucial to the success of the UK's logistics industry – and thus to the success of the nation's economy as a whole," said FTA head of European Policy Pauline Bastidon. "With insufficient homegrown workers currently available, the government needs to give careful consideration to how vacancies could be filled in the short and long term, to ensure that Britain keeps on trading, both domestically and internationally."

On June 26 Britain's prime minister Theresa May announced that EU workers who have been living continuously in the UK for five years would be able to apply to stay in the country indefinitely after 2019. However she avoided saying when the cut-off date would be for EU citizens who had not been resident for the requisite period.

“I want to completely reassure people that under these plans, no EU citizen currently in the UK lawfully, will be asked to leave at the point the UK leaves the EU,” she declared.

Noting the government's announcement was a welcome first step in enabling its 16,000 corporate members to plan and manage their workforces, the FTA said much more had to be done to ensure "logistics companies are not left stranded, without the skilled workforce required to keep Britain's trade moving nationwide, and across borders to other nations".

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