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Fuel a more sustainable future

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.

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."

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.

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.

BARCELONA: June 09, 2017. Some 6,000 Spanish dockworkers are expected to continue their strike action until June 24 unless a meeting between their union and employer association ANESCO scheduled for June 13 results in a breakthrough.

Algeciras SpainAccording to European short-sea operator Seago, part of the A.P. Moller-Maersk Group, Algeciras is expected to work during the weekend of June 10-11; few workers at Valencia has forced Seago to avoid the port; and Barcelona remains "heavily congested" due to the lack of stevedores.

Maersk Line's maiden voyage of its Triple E (2) Madrid Maersk avoided Algeciras (right) for Tangier last week on its way to Felixstowe, UK to discharge 6,000 TEU, while its M2 partner MSC this week unloaded its box vessel Ilona at Sines in Portugal instead.

Earlier this week ANESCO called on the Spanish government to intervene to force members of the port workers' union SAGEO to return to work and the negotiating table.

This has prompted Iñigo de la Serna, Spain's minister for Public Works from the country's ruling Conservative Popular Party, to warn ocean carriers could withdraw from Spain if a solution wasn't found.

The strike centers around future worker job protection following an EU ruling to open up Spain's 39 heavily unionized, closed-shop ports that enable stevedores to earn an average €60,000-€100,000 a year.

ANESCO has said it would guarantee current levels of dock worker employment but can't agree on a SAGEO demand for future employees to receive the same income, protection and benefits as it would contravene European employment law, and subject port operators to a fine equal to 10 percent of annual turnover.

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".

LAUSANNE, Switzerland: May 31, 2017. The United States is no longer one of the top three competitive countries in the world according to a new 63-country index produced by the IMD Business School.

World Competitiveness rankingHong Kong remains the most competitive economy followed by Switzerland and Singapore with the U.S. now in fourth place, its lowest position in five years and down from third place last year. The Netherlands completes the top five rankings, up from eighth position last year.

Ireland follows in sixth place, up one position, followed by Denmark, Luxembourg – up three places – Sweden and the UAE that gained five places since the previous index to round out the top 10.

Finland also became more competitive in the last 12 months moving from 20th to 15th place, as Mainland China gained seven places to replace the UK in 18th position as that country's pre-Brexit economy drops to 19th place. Rounding out the list of the 32 most competitive nations according to the IMD is Kazakhstan that jumped 15 places from 47th last year.

The IMD World Competitiveness Center has published the rankings every year since 1989 from 260 indicators most of which are based on national employment and trade statistics and remainder from 6,250 survey responses that measured the business perception of issues such as corruption, environmental concerns and quality of life.

Professor Arturo Bris, director of the IMD World Competitiveness Center, said the indicators that stood out among the most improved countries are related to government and business efficiency as well as productivity.

"These countries have maintained a business-friendly environment that encourages openness and productivity," he said. "If you look at China, its improvement of seven places to 18th can be traced to its dedication to international trade. This continues to drive the economy and the improvement in government and business efficiency."

Commenting on those countries at the bottom of the table he added: "You would expect to see countries such as Ukraine (60), Brazil (61) and Venezuela (63) here because you read about their political issues in the news. These issues are at the root of poor government efficiency which diminishes their place in the rankings."

The IMD has also published for the first time a 'Digital Competitiveness Ranking' to measure a country's ability to adopt and explore digital technologies than can transform government practices, business models and society in general.

Top of the new index is Singapore followed by Sweden, the U.S. Finland and Denmark. "There is no doubt that supportive and inclusive government institutions help technological innovation," said Bris.

"The U.S. has a history of government support for technological innovation. This shows that in digitally competitive countries, the government must facilitate the adoption of new technologies," he added in an apparent contradiction of Donald Trump's announcement supporting America's fossil fuel industry and rejection of the Paris Agreement on climate change.

Technology pioneer Elon Musk responded by announcing his departure from two presidential advisory councils saying: "Climate change is real. Leaving Paris is not good for America or the world."


BRUSSELS: June 16, 2017. The European Commission says commercial drones flying in a 'U-Space' under 150 meters from the ground will be operate in the EU by 2019.

A vision paper by the Single European Sky Air traffic management Research Joint Undertaking says the U-Space should include three basic aspects:

Swiss Post DroneSafety at low altitude levels will be just as good as that for traditional manned aviation. The concept is to develop a system similar to that of Air Traffic Management for manned aviation.

An automated system will provide information for highly automated or autonomous drones to fly safely and avoid obstacles or collisions.

Basic services like registration, e-identification and geo-fencing* will be up and running by 2019. However, further U-Space services and their corresponding standards will need to be developed in the future, it says.

"Drones mean innovation, new services for citizens, new business models and a huge potential for economic growth," said EU Commissioner for transport Violeta Bulc. "The EU needs to take a leading role worldwide in developing the right framework for this market to flourish, by unleashing the benefits for key economic sectors."

Bulc's department says the market is expected to grow "substantially" with estimates varying between €10 billion and €127 billion a year from the use of drones for delivery services, data collection, infrastructure inspections, precision agriculture, transportation and logistics.

The Commission cites a 2015 report that forecasts the global drone market by 2020 to have grown 42 percent in precision agriculture, 26 percent in media and entertainment, 36 percent in infrastructure inspection, and by 30 percent for leisure activities.

(*Geo fencing creates a virtual geographic boundary around an area using GPS or RFID technology and enables software to trigger a response when a mobile device enters or leaves the area.)

BOSTON, MA: June 01, 2017. As expected, Donald Trump has announced the United States is withdrawing from the Paris Agreement on climate change, despite the reported urging of U.S. secretary of State and former ExxonMobil CEO Rex Tillerson to remain, saying he's prepared to "make a deal that's fair".

Some 24 hours earlier, investors at Exxon-Mobil's annual meeting endorsed a shareholder proposal calling on the company to disclose its plans for a low-carbon future.

With a 62 percent majority vote, the proposal was hotly contested as Exxon's management fought to sway investors right up to the last moment, according to Sustainability advocate Ceres.

The non-profit organization's Investor Network on Climate Risk and Sustainability comprises more than 130 institutional investors, collectively managing more than US$17 trillion in assets.

Donald Trump White House Climate change announcementInstitutional investors with more than US$5 trillion of combined assets under management co-filed the ExxonMobil proposal, including lead-filers from the New York State Common Retirement Fund and the Church Commissioners for England.

"This majority vote sends a resounding message that market forces are continuing to drive toward a low carbon transition, and investors expect companies -- especially carbon-intensive companies like Exxon -- to show how they are addressing the corresponding risks and opportunities," said Sue Reid, vice president of Climate and Energy at Ceres. "Business as usual is no longer an option for carbon-intensive companies like Exxon."

The vote, coupled with recent majority votes at Occidental Petroleum and PPL Corporation, represent a historic shift in investor support for climate risk disclosure said Ceres.

The Exxon proposal specifically requests the company publish an annual assessment of the long-term impacts of technological advances and climate policies on its full portfolio of reserves and resources, including a portfolio resilience assessment that considers a low oil demand scenario consistent with the globally agreed upon 2-degree target.

"This is an unprecedented victory at Exxon for investors in the fight to ensure a smooth transition to a low-carbon economy," said New York State Comptroller Thomas DiNapoli. "Climate change is a risk to the core business of ExxonMobil, and the burden is now on the company to show that it is responsive to shareholder concerns."

Earlier this month, over 280 investors with more than US$17 trillion in assets under management urged the G7 to maintain support for the Paris Agreement. Six have, Trump hasn't.

In anticipation of the Trump decision, the EU and China have said they will take the lead in a transition to a low-carbon economy.

SEATTLE: June 16, 2017. Amazon has agreed to buy Texas-based Whole Foods Market (WFM) for US$13.7 billion including debt.

WFM reported Q2 2017 net sales of US$3.7 billion and an adjusted EBITDA of US$316 million. Net income for the 12 weeks ending April 09 was US$117 million, down from US$142 million in the same period last year. The company reported sales of US$15.7 billion in 2016.

Earlier this year Jana Partners purchased over eight percent of Whole Foods and forced changes in the company's board of directors.

Amazon grocery salesLast month WFM co-founder John Mackey reportedly told Texas Monthly magazine that while "we need to get better" he claimed the hedge fund was a "greedy bastard" that "just want to sell us, because they think they can make forty or fifty percent in a short period of time.

"These people, they just want to sell Whole Foods Market and make hundreds of millions of dollars, and they have to know that I'm going to resist that," Mackey declared.

Assuming shareholder approval of the US$42.00 share price, Jana Partners is set to make an estimated US$1.1 billion when the deal is expected to closes.

Amazon said the Whole Foods Market brand will continue and co-founder John Mackey will remain CEO: "This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers," Mackey commented.

eCommerce analyst One Click Retail said Amazon saw its grocery sales increase an average 30 percent across the US, UK and Germany in Q1 2017 to total around US$400 million.

"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," declared Amazon founder and CEO Jeff Bezos. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they're doing an amazing job and we want that to continue."

SEATTLE: April 28, 2017. Amazon has reported net income of US$724 million on sales of US$35.71 billion for the first quarter of 2017. Results for the same period last year were US$513 million and US$29.13 billion respectively.

AmazonJobs desktop. CB520457356 Revenue from fulfillment, commissions and shipping fees to third parties who use the Amazon.com platform rose 34 percent year-on year to reach US$6.44 billion. By comparison, Amazon retail and digital sales on its own behalf rose 15 percent to US$22.82 billion.

During the first quarter, worldwide shipping revenue increased 37 percent to US$2.5 billion as net shipping costs rose 34 percent to US$4.38 billion year-on-year.

Commenting on the results founder and CEO Jeff Bezos highlighted his company's growth in India saying fulfillment capacity for sellers had already risen 26 percent this year.

"We're grateful that customers are responding - Amazon.in is the most visited and the fastest growing marketplace in India," he said. "It's still Day 1 for e-commerce in India, and I assure you that we'll keep investing in technology and infrastructure while working hard to invent on behalf of our customers and small and medium businesses in India."

At the end of March, Amazon employed 351,000 full and part-time staff worldwide - a rise of 43 percent over Q1 2016. Earlier this month the company announced plans to build three more fulfillment centers in New Jersey and hire another 2,500 full-time employees. "Our ability to expand in New Jersey is the result of two things: incredible customers and an outstanding workforce,” said Akash Chauhan, Amazon’s vice president of North American Operations.

Amazon global net sales are expected to grow 16-24 percent to reach US$35.25 billion to US$37.75 billion in Q2 2017, and assumes foreign exchange losses of US$720 million. Operating income is forecast between US$425 million and US$1.075 billion, compared with US$1.3 billion in Q2 last year.

CSAFE Global




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