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DFW International Airport

 

LONDON: September 19, 2016. According to the Centre for European Reform (CER), a respected nonprofit think-tank, replacing EU single market membership with a bilateral trade agreement will cost Britain between 0.75 and 3.0 percent of GDP.

According to the World Bank, the UK's GDP last year was US$2.84 trillion in current dollars, so the Brexit cost could range from US$21 billion to US$84 billion.

The CER notes that Brexit "is not an event but a process of disintegration. As long as there is no sudden crisis, Brexit voters will believe that its absence justifies their decision".

BREXITJohn Springford, a senior Research Fellow at the CER, said he expects a single market exit will be costly for British firms with their comparative advantage in high-value added services that rely on single market principles of non-discrimination and freedom of establishment.

He noted any new free trade agreement that includes UK-EU institutions to enforce regulatory equivalence will look "remarkably like" the Swiss deal with the EU, in which joint committees ensure that Swiss legislation accords with EU law.

However the Swiss arrangement only provides access for goods with the service sector largely excluded. "And for that, the Swiss have been forced to accept the free movement of people," he noted.

The CER thinks the EU is unlikely to give Britain better access than Switzerland to its  goods and services markets without an agreement on 
free movement or EU budget contributions.

This week UK prime minister Theresa May said the British people "do not want free movement to continue as it has in the past".

The CER thinks the long-term economic consequences of the Brexit vote are very likely to be negative – but they won't manifest in a slower rate of growth before barriers to trade, investment and migration have risen, which it says may be in 2019.

"And without acute economic pain that is clearly attributable to Brexit, Britain's politicians will find it impossible to defy the electorate's demand to 'take back control', whatever the chronic damage to the economy," added Springford.

The CER says it is pro-European but admits in "many respects" the EU doesn't work well.

USPS delivery divideWASHINGTON, DC: August 19, 2016. A report from the U.S. Postal Service Inspector-General's office warns that competition for last-mile delivery in densely populated urban areas by Amazon, crowdsourced delivery companies and regional carriers such as LaserShip and Lone Star Overnight, could result in "significant" market share loss for the USPS.

The report warns that as these competitors move into urban delivery, the Postal Service could find itself relegated to providing rural delivery service to less people at a higher cost.

"Postal stakeholders and policymakers should note this potential urban-rural divide, as the Postal Service could end up being the only affordable way for Americans outside of urban areas to participate in e-commerce," it said.

With e-commerce growth continuing to rely on ground haulage, last year the U.S. domestic trucking industry carried 11.5 billion tons of goods worth over 
US$13 trillion - or roughly 66 percent of all domestic freight transport.

The USPS said it is almost entirely reliant on contracted highway carriers for its ground transportation services and spent over US$3.5 billion on highway transportation last year.

By contrast, Amazon spent 11.6 percent of its net sales, or over US$5 billion, to ship nearly 500 million packages in 2015.

The report says that the growth in e-commerce has led to new entrants and new business models from existing players that present the USPS with both risks and opportunities.

Within its existing legal authority, the report suggests the USPS could explore options for expanding into logistics services. One example could be the leasing of excess space in many postal facilities across the U.S. to logistic companies as warehouse space.

Another suggestion is the USPS could partner with innovative but asset-light new entrants that might need services like first-mile pickup and intercity delivery to make up for gaps in their own resources, networks, and competencies.

Noting U.S. and Canadian consumers returned
 US$290 billion worth of goods in 2015 - a 66 percent increase in five years - the report added this presents "a profound opportunity [to provide] improved reverse logistics services".

"While full end-to-end logistics services might currently be beyond the Postal Service's legal authority, other posts and delivery companies around the world have demonstrated they have the inherent skills and that offering targeted, value-added logistics services can be a significant opportunity for growth in this era of declining mail volumes," the report concluded.

GENEVA: August 08, 2016. IATA's Cargo-XML messaging standard has been accepted by the U.S. Customs and Border Protection Agency (CBP) for submitting advance cross-border data to its Automated Commercial Environment (ACE) system.

ACE Weekly Stats Jul-17-23The CBP is expected to begin accepting the XML format within the next few months.

IATA says by adopting a common messaging standard for all air cargo shipments, data submitted to the CBP will be technically correct and easier for the agency to identify freight that contravenes U.S. legislation.

"Airlines, freight-forwarders, shippers and border agencies share the common goals of simplifying processes, enhancing efficiency and maximizing safety and security. The key to achieving this is industry collaboration and standardization on a global scale," said Nick Careen, IATA senior vice president for Airport, Passenger, Cargo and Security. "Having support for Cargo-XML from the US-CBP, one of the world's largest federal law enforcement agencies, will positively contribute towards the industry achieving its objective - the global adoption of a standard air cargo messaging system."

IATA says the CBP wants to reduce the number of Electronic Data Interchange (EDI) message formats its supports for processing international imports, exports and cargo release information. By the end of 2016, ACE will be the single window for CBP trade processing.

As of last month CBP required filers to submit electronic entries and entry summaries for additional entry types to ACE including: 02, 07, 12, 21, 22, 31, 32, 34, and 38. The ageny said filing of entry types 06 and 23 with quota merchandise are now also mandated.

On a typical day CBP says it welcomes nearly one million visitors, screens more than 67,000 cargo containers, arrests more than 1,100 individuals and seizes nearly six tons of illicit drugs.

LONDON: August 10, 2016. A report from the Institute for Fiscal Studies (IFS), says Britain's service sector accounted for 39 percent of the country's exports to the European Union in 2015. By comparison Brazil, Russia, India and China totaled less than 5.0 percent of the country's service exports last year.

The report explains that EU membership is completely different from EU access: "Single market access is virtually meaningless as a concept," said IFS associate and report lead author Ian Mitchell. "Any country in the World Trade Organisation (WTO) – from Afghanistan to Zimbabwe – has 'access' to the EU as an export destination.

"Single Market membership by contrast involves elimination of barriers to trade in a way that no existing trade deal, Customs union or free trade area achieves. In particular it means reducing 'non-tariff' barriers like licensing and other regulatory constraints to supplying goods or services. These sorts of barriers have become relatively more important to trade than tariffs (taxes on trade), and especially so for services," he explained.

Hinkley PointNoting that continued EU membership is likely to offer Britain significant economic benefits - particularly for trade in services – the IFS report argues that a Brexit will result in accepting the cost of future regulations designed in the EU without UK input.

"Those costs are salient and the benefits of membership are diffuse – but the financial benefits are real and, at the moment at least, likely to outweigh the financial costs," said Mitchell.

With the EU accounting for 44 percent of UK exports and 39 percent of service exports, the report points out that even small losses in trade with the EU would require "probably implausible" increases in trade with China or India to compensate.

According to reports, China has invested US$38 billion in Britain since 2005 and has said relations are at a "crucial historical juncture" following the UK government's decision to review China's investment in the long-delayed construction of an £18+ billion nuclear power station at Hinkley Point in the West of England. (Pictured: artist's impression)

The IFS concludes that Britain is faced with the choice of continued EU membership and contributing a net £8 billion to the EU Budget, or opting for a European Economic Area, Free Trade Association or WTO model.

The research institute suggests that giving up EU membership would result in a UK tax receipts shortfall of at least £32 billion by 2020. On August 05 the Bank of England forecast 250,000 job losses by 2018 as a result of Brexit.

"From an economic point of view we still face some very big choices indeed in terms of our future relationship with the EU. Choices in these domains will most likely be far more important than any deal on budget contributions," Mitchell concluded.

DONT JAIL WhistleblowersBERLIN, June 29, 2016. Antoine Deltour and Raphaël Halet, the two whistleblowers who revealed secret tax agreements between the Luxembourg authorities and multinational corporations, have been found guilty.

Deltour received a 12-month suspended sentence and fined €1,500, and Halet a nine-month suspended sentence and a €1,000 fine.

Commenting on the decision Transparency International (TI) said it believes Deltour and Halet acted in the public interest and had asked PwC in Luxembourg to withdraw its complaint prior to the two men’s prosecution.

TI managing director Cobus de Swardt said: “This ruling raises serious doubts whether Luxembourg’s law protects whistleblowers. We will increase our advocacy efforts in this regard.”

The anti-corruption organization said whistleblower protection has been demanded by the OECD, the Council of Europe and the European Commission – who’s current president Jean-Claude Juncker is a former prime minister and finance minister of Luxembourg.

“While some progress has been made, most European countries fail to protect whistleblowers. This hurts the fight against corruption as they play a critical role in exposing wrongdoing,” added Anne Koch, regional director at Transparency International. “We urge all countries to enact and strongly enforce comprehensive whistleblowing laws based on prevailing international standards.”

In April this year the EU’s 28 finance ministers agreed that Member States would require multinational corporations operating in Europe to report their earnings and taxes on a country-by-country basis in a bid to curb profit shifting and corporate tax avoidance. The Commission estimates that Europe’s governments lose €70 billion to corporate tax avoidance each year.

The new rules are expected to come into force in 2017.

RIO DE JANEIRO: July 28, 2016. A strike by Brazil's Customs officials is threatening to disrupt the Olympic Games scheduled to begin on August 05. The Sindifisco union of federal tax auditors has launched an indefinite strike in a bid to get a 5.5 percent pay rise.

According to UK delivery company Fastlane International, the union has organized several strikes since 2012 – some of them as long as 50 days. The current dispute will mean no Customs coverage every Tuesday and Thursday and will cost the government an estimated US$455 million a month.

Brazil CustomsFastlane's head of Consumer Research David Jinks said that despite a "fast track" clearance for teams competing in the Olympics that should in theory bypass Brazil's usual Customs checks, officials still have the right to intervene and examine any shipment.

A report by Fastlane says the Olympics "could be the final straw" for Brazil's stretched infrastructure and warns exporters to consider the following:

• Brazil is the world's 9th largest e-commerce market, but the rate of growth has outpaced reforms the country's state post office leading to several months' delays for e-commerce imports.
• Heightened security is predicted to delay deliveries, Customs procedures are slow and arcane even without the current strike, and too many shipments simply "disappear".
• Brazil is ranked No.72 in Transparency International's corruption perception index and
 organised crime is a significant problem in some parts of the country.
• A post-Brexit UK does not have a free trade agreement with the country so imports face a flat tax of 60 percent plus 18 percent VAT for parcels, or six different taxes on items for resale.

"The potential for delays to the delivery of vital Olympic equipment during the Customs strike is there. It is to be hoped that Brazil's government will be able to intervene to stop any such actions, with the entire eyes of the world on the smooth running of the Games," added Jinks.

In a related move American Airlines Cargo says it has delivered 65 tons of broadcast equipment and athletic gear to Rio de Janeiro in time for the opening day. The consignments were shipped out of Japan, the UK and Australia over a three-week period to Rio's Galeão International (GIG) airport via Los Angeles and Miami.

Despite the strike, AA says all the shipments cleared Customs successfully and were delivered to different venues around Rio.

World Bank LPIWASHINGTON, DC: June 29, 2016. Germany has topped the World Bank’s latest Logistics Performance Index (LPI) for the third time.

Making up the top ten countries behind Germany are Luxembourg, Sweden, the Netherlands, Singapore, Belgium, Austria, the UK, Hong Kong and the U.S.

Switzerland took 11th position while the UAE placed 13th, France 16th, China 27th, Qatar 30th, Turkey 34th and India 35th.

The latest LPI survey reflects the input of 1,200 logistics professionals who ranked 160 countries based on supply chain criteria including infrastructure, quality of service, shipment reliability, and border clearance efficiency.

The World Bank notes a March 2016 statement from the French government citing logistics as a policy concern: “France is among the highest performing economies in terms of logistics. This is a determining factor of our competitiveness. It represents 10 percent of national GDP, €200 billion turnover, and 1.8 million jobs.”

However the government added the country needed to improve in order to become a world leader as “logistics underperformance is costing our economy between €20 billion and €60 billion”.

The LPI analysis included six components to be considered by the respondents: efficiency of Customs and border management clearance; quality of trade and transport infrastructure; ease of arranging competitively priced shipments; competence and quality of logistics services; ability to track and trace consignments and the frequency with which shipments reach consignees within scheduled or expected delivery times.

The report concludes that while services are improving overall, logistics professionals are the least satisfied with rail, regardless of the countries’ income levels. On border management, Customs agencies got better ratings than all other agencies involved in the process, said the World Bank.

“Logistics performance both in international trade and domestically is central to countries’ economic growth and competitiveness,” said Anabel Gonzalez, senior director for the World Bank Group’s Trade & Competitiveness Global Practice.

“Efficient logistics connects people and firms to markets and opportunities, and helps achieve higher levels of productivity and welfare. Unfortunately, the logistics performance gap between rich and poor countries continues and the convergence trend experienced between 2007 and 2014 has reversed for the least- performing countries,” she added.

Report download here: http://lpi.worldbank.org/report

GENEVA: July 26, 2016. China has ratified the U.N. TIR Convention. With effect from January 05, 2017 the country will be able to export goods to the European Union and Turkey under a single, simplified transit procedure.

Founded in 1975, the Customs Convention on the 'International Transport of Goods under Cover of TIR Carnets' is the only universal Customs transit system in existence. China's ratification brings to 70 the number of participating countries including the European Union.

'Transports Internationaux Routiers' - or TIR - covers the whole of Europe, North Africa, Turkey and the Middle East. More than 35,000 operators are authorized to use the TIR system and around three million TIR movements are carried out per year.

TIR Turkey Iran"China's accession to the TIR Convention will open new efficient and faster transport opportunities and transport routes between China and Europe," said Christian Friis Bach, executive secretary of the U.N. Economic Commission for Europe (UNECE). "It can become a real game changer for international trade and is a strong contribution to the Chinese vision for 'One Road One Belt,'" he added.

EU-China trade reached €520 billion in 2015, with 60 percent carried by sea. According to Eurostat, rail and road accounted for some 10 percent of China's exports to the EU, and 3.2 percent of the EU's exports to China.

UNECE, which hosts the secretariat of both the TIR Convention and the International Road Transport Union (IRU), says the inclusion of China will facilitate trade between Central Asian countries and the European Union, and stimulate China's transit and logistics services. Kazakhstan, Kyrgyzstan, Mongolia, the Russian Federation and Tajikistan are already TIR members.

"This is an important step in harmonizing standards and boosting transport, trade and development across the Eurasian landmass," said Umberto de Pretto, IRU secretary general.

"IRU has been a strong supporter of China's Belt and Road Initiative, and we will continue working closely with the Chinese government and business community as we turn our attention now to implementing the TIR system," de Pretto added.

IRU was founded in 1948 and has members and in more than 100 countries. The organization manages the TIR system under UNECE's mandate.

In February this year Turkey and Iran launched an e-TIR pilot project under the auspices of UNECE and IRU: (Pictured left to right, president of the Union of Chambers and Commodity Exchanges of Turkey, Rifat Hisarciklioglu; Turkey's minister of Customs and Trade, Bülent Tufenkci; Iranian ambassador Alireza Bikdeli; and secretary general of the IRU, Umberto de Pretto.) 

GermanyBEIJING: June 18, 2016. A visit by German Chancellor Angela Merkel to China this month resulted in 96 contracts worth US$15 billion signed between Chinese and German companies at the eighth Chinese-German Forum for Economic and Technological Cooperation.

One of them was Deutsche Bahn (DB) that reached agreement with the China Railway Rolling Stock Corporation for high-speed traffic maintenance and for a regional transport project in Dalian.

Deutsche Bahn CEO Rüdiger Grube said: “The People’s Republic of China is an important market for us and will remain so in future. In view of the plans to invest more than €300 billion in transport infrastructure, we wish to benefit from the growth and potential in China.”

China Railways operates a 19,000-km long high-speed network with a fleet of 1,400 trains. DB will provide maintenance and repair support for the company.

“There is a second project of which I am particularly proud: Our experts from DB Engineering & Consulting are the first foreigners to work on a regional transport project in China. As part of a consortium, they have a consultancy contract for the operation of regional transport routes in Dalian, a city with a population of six million,” added Grube.

“There is great room for cooperation between our two countries as both upgrade their economic structure,” said Lin Nianxiu, deputy director of the National Development and Reform Commission (NDRC), the country’s top economic planning body.

LONDON: June 28, 2016. A report by the New Climate Institute and CDP, formerly the Carbon Disclosure Project, says the business sector could cut CO2 emissions by 10 billion tonnes by 2030 – up from a current commitment of 3.7 billion tonnes.

This is equivalent to what China, the world's largest CO2 emitter, produces annually.

The current business commitment represents over 60 percent of the six billion tonnes cuts in emissions by pledged by all countries at the Paris Climate Agreement last December through their own Nationally Determined Contributions (NDCs).

leen and greenThe CDP says that's the equivalent of taking more than 1000 coal-fired power stations permanently out of use, almost 75 percent of the world's total.

The new report calls on governments across the world to encourage utilities to offer renewable energy contracts and make it easier for businesses to commit to them; help companies build their own renewable electricity installations; support R&D for low carbon technologies; offer grants and capital depreciation to make energy efficiency investments more attractive; and create incentives for buyers and sellers of sustainable products; and reduce the administrative and cost burden of certification for producers, so it's easier for them to produce commodities without deforestation.

Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC) commented: "A universal climate agreement of nations also needs universal support from the private sector beyond Europe and North America. I would urge committed business to reach out to peers in Africa, Asia and Latin America in order to further seed, catalyze and build action everywhere."

In a related move Cargolux says it is the first airline in the world to be honored with a 'Lean & Green' award from the Dutch Ministry of Infrastructure and Environment for its commitment to improve carbon efficiency by 10 percent within five years. Three other Luxembourg-based companies were also winners: GN Transport, Offergeld and Transalliance (above).

The Lean & Green initiative was started in 2008 to reduce the carbon footprints of companies and today is a leading community for sustainable logistics. Dirk Reich, outgoing president & CEO of Cargolux said: "Our customers and logistics partners, the major forwarders of this world, are well aware of the Lean & Green program and appreciate our efforts. Being Lean & Green certainly gives Cargolux a competitive advantage and underlines our commitment to always deliver the highest service excellence."

ST. PETERSBURG, Russia: June 18, 2016. Russian president Vladimir Putin says the Eurasian Economic Union (EEU) is planning to start official talks with the European Union (EU) and China on the formation of a “comprehensive trade and economic partnership”.

Speaking at the St. Petersburg International Economic Forum, Putin said over 40 states and international organizations want to establish a free trade zone with the EEU including China, India, Pakistan and Iran.

He said Russia was interested in Europe joining the project and welcomed Kazakhstan president Nursultan Nazarbayev’s initiative on holding consultations between the EEU and the EU.

port of Aktau Kazahkstan“Despite all of the well-known problems in our relations, the European Union remains Russia’s key trade and economic partner,” said Putin. “It is our next-door neighbor and we are not indifferent to what is happening in the lives of our neighbors, European countries and the European economy.

“We must return trust to Russian-European relations and restore the level of our cooperation…we don’t hold a grudge, as they say, and are ready to meet our European partners halfway. However, this can by no means be a one-way street,” he added

DP World CEO Sultan Ahmed Bin Sulayem was also in St. Petersburg where he met president Nazarbayev to discussed opportunities for developing Kazakhstan’s Khorgos Eastern Gate Special Economic Zone and the port of Aktau (right).

Bin Sulayem commented: “We already have a fruitful relationship with the government of Kazakhstan that we are looking to build on and will work with them on projects which support the flow of goods and enable trade across the region which remains an attractive market for us with huge long-term growth prospects.

“From our experience, New Silk Road countries need to continue developing trade centric solutions. They bring together all the ingredients required to encourage trade – from marine and inland terminals, free zones, customs and logistics underpinned by smart technology, to create a thriving business environment,” he continued.

With a population of 4.4 billion and an economic output of US$21 trillion, DP World says trade and investment opportunities in the New Silk Road are “immense”. At the same time it acknowledges the potential of the EEU with a combined market of 180 million people and a total GDP of almost US$6 trillion.

CSAFE Global

 

 

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