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European hauliers continue to feel pressure of driver shortages and rising costs | Brazil Modal

Increases in road freight rates provide some relief but many firms battling for survival.

European hauliers continue to feel the pressure of driver shortages and rising costs but increases in road freight rates have provided some relief to their bottom line, albeit marginally, according to one major operator.

In an interview with Lloyd’s Loading List earlier this year, Sebastiaan Scholte, CEO of  Jan de Rijk Logistics, a provider of specialist road freight and air freight road feeder services (RFS) with more than 1,000 vehicles, said that recruitment had become “a big struggle”.

Several months on, he reckons the situation has “changed a little bit for the better although that’s not to say we can find and drivers and capacity readily everywhere. It’s still difficult and not like where we where with the labour pool two years ago”.

He said Jan de Rijk had put a lot of effort into an “aggressive recruitment campaign, including TV ads in several European countries, which has paid off”.

The company has proposed attractive employment packages to woo new drivers, including accommodation close to the company’s HQ in the Netherlands.

Jan de Rijk has also benefited from a number of drivers, especially young ones, who have quit the profession only to return. “They’ve realised that the grass isn’t always greener elsewhere”.

Incentives have been offered to existing staff in order to keep them.

Scholte drew a parallel with US where the penury in staff appeared to be far more critical.

“A major manufacturer of trucks there told me that some US trucking companies have staff turnovers of 100%. It’s hard to believe that they are finding it so difficult to hold on to staff and of course, this all comes at a cost  cost.

In Europe, the impact of the labour shortfall had perhaps been less severe as a result of some of the heat going out of the market, he noted.

“There continues to be strong demand for road haulage but it’s less intense than last year when the driver/capacity squeeze was aggravated by the surge in air cargo during the during the Q4 peak season”.

Driver shortages aside, rising costs, due principally to fuel hikes and wage increases, continue to weigh on hauliers’ operating margins so the upward trend in rates in recent months which Scholte estimates at 5-10%, even above – has been a welcome development.

“Obviously, anti-trust regulations prevent us from concerting with our competitors on this but on the basis of market feedback there is a general move towards higher rates on European routes. But we are simply recovering costs, nothing more than that. And when you consider that we’re facing even higher costs next year, with new collective wage agreements in the pipeline, the net result will probably be negligible”.

Scholte underlined that the bleak backdrop to the rate increases hikes is that a good number of haulage firms are battling for survival.

“Every week in the newspapers and transport trade publications in the Netherlands you read of companies going bust and it’s incredible that this should be happening when market conditions are good and demand is strong. But that’s the grim reality”, Scholte concluded.


Source: Lloyd’s


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Kalman Filter and Structural Change Revisited: An Application to Foreign Trade-Economic Growth …

In the last two decades, Nigeria's economy has been affected by several shocks such as the 1985-86 oil price crash; 1997 Asian financial crisis; …


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QTerminals Marks New Container, Cargo Handling Milestones | Brazil Modal

Image Courtesy: QTerminals

The company, set up by Qatar Navigation (Milaha) and Qatar Ports Management Company (Mwani Qatar), explained that the surge in volume was achieved in record time with operations at Hamad Port only starting as of October 2016.

“This important achievement is a clear indication of the status which Hamad Port has gained in such a short time. Its great success lies in having diversified and expanded its business base,” Jassim Saif Ahmed al-Sulaiti, Minister of Transport and Communications and Chairman of QTerminals, said. He added that the port “is playing a significant role in meeting the needs of local markets as well as servicing the country’s major projects.”

Neville Bisset, CEO of QTerminals, explained that 2018 “has been a transformative year for the port management and operations industry.”

He added that QTerminals’ objective is to optimize capacity and maintain the highest service levels, thereby driving the expansion and diversification of trading partners “for the benefit of Qatar’s economy and trade.”


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US-China trade war: American companies skirting round tariffs

American companies may be finding an ingenious way to skirt around the tariffs imposed by President Donald Trump on importing Chinese goods, as a means of avoiding the financial hit caused by the 25% taxes.

According to a note from Paul Donovan, the global chief economist for UBS Wealth Management, some US firms are likely funnelling imports from China through other foreign subsidiaries, say in Canada, before finally importing them into the US. This allows companies to continue importing from China while dodging tariffs.

Here’s the key paragraph from Donovan (emphasis ours):

“A US company importing electrical switches from China now has to pay the new trade tax. A US company importing something that uses Chinese electrical switches from a Canadian subsidiary does not have to pay the new trade tax.

“If US companies move a stage of their manufacturing overseas (to a country other than China), the trade tax is avoided. The US is, in reality, importing as many Chinese electrical switches as ever it did. It is just now they come packaged up as something else, and that package is made somewhere other than China.”

This means of skirting round tariffs is most effective, Donovan says, in multinational companies based in the US, as these firms, by their very nature have offices and manufacturing plants around the world. For these companies, moving small parts of production to different factories is a fairly simple process.

It is however, hard to detect, meaning that such moves are unlikely to show up in official data.

“In many cases, however, it is not the whole production process that is changing location, just one part of it,” he wrote.

“Around 40% of all global trade is done by multinational companies. These companies by definition have factories in more than one country. It is not easy to spot this in the data.”

Read more: Crops are rotting in fields as Trump’s trade war bites US farmers

That means there is no real concrete evidence to support Donovan’s theory, but there are very clear hints that it is happening.

“Exports of Chinese electrical switches to Canada increased substantially after the US taxes, as US imports fell,” he said. “Other products saw similar surges in Canadian demand. The patterns of trade after the July trade taxes are certainly suggestive.”

So far, the US and China have traded tit-for-tat tariffs on goods totalling $360 billion, with the US acting as the aggressor, and Trump threatening numerous times to place tariffs on all US imports from China, worth about $500 billion.


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NAT Sinks Deeper into the Red, Eyes Benefits from Tanker Rate Volatility | Brazil Modal

Illustration. Image Courtesy: Pexels under CC0 Creative Commons license

For the nine months ending September 30, the company’s net loss reached USD 84.8 million, against last year’s equivalent of USD 53.6 million.

“As we had expected, the first half of this year saw the bottom of the tanker market. Our predictions that freight rates for our vessels would rise during the second half of 2018 proved correct,” the company said.

“At this time spot contract indexes for two out of five Suezmax routes for our one million barrel tankers are above USD 50,000 per day, compared with the first 9 months of 2018, when the freight indexes showed about USD 6,000 per day. This is a good illustration of the volatility in freight rates and the potential for earnings in the tanker industry when the tanker market turns. We believe there could be much more to come. “

The time charter equivalent for the company’s vessels during the third quarter of 2018 was USD 12,000 per day per ship, an improvement quarter on quarter as in Q2 the TCE stood at USD 10,500 per day per vessel. Going forward, NAT expects much higher rates.

Having sold eight oldies in the first half of the year to make room for three newbuild Suezmax deliveries, NAT has reduced the average of its fleet to 11 years.


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China hopes new Maldives government will not pull out of free trade agreement

BEIJING: China has said it has a “firm and clear cut will” to maintain good ties with the Maldives as it played down reports of a pro-India tilt by the new Maldivian government and hoped that Male would make the “right choice” and not pull out of a free trade deal with Beijing.

Warily watching the political transition in the Maldives following the electoral defeat of the pro-Beijing President Abdullah Yameen by a pro-India Ibrahim Mohamed Solih, China is set to redraw its strategy for the strategic archipelago nation in the Indian Ocean located in India’s backyard.

The new Maldivian government fired its first salvo on Monday when former president Mohamed Nasheed, who headed the ruling Maldivian Democratic Party (MDP), said that the new Solih-led government would pull out of the “lopsided” free trade agreement (FTA) with China signed by Yameen.

Reacting to Nasheed’s remarks, Chinese foreign ministry spokesman Geng Shuang said on Monday that the FTA is based on friendly and equal consultations between both countries.

“It is mutually beneficial. The early implementation of the agreement will bring benefits to the two countries at an early date. We believe the Maldivian government will make the right choice in this aspect,” Geng said.

The FTA, which Maldives opposition parties alleged was signed in a hurry by Yameen while disregarding India’s concerns, is yet to be implemented as the required legislative process has not been completed.

Nasheed, who had earlier alleged that China was “busy buying up the Maldives” during Yameen’s presidency, said the trade imbalance between China and the Maldives is so huge that “nobody would think of an FTA between such parties”.

“China is not buying anything from us. It is a one-way treaty,” he said, adding that the Maldivian Parliament would not pass the changes required.

As per trade data, China’s exports to the Maldives was stated to be USD 342 million between January and August this year, while the Maldives’ exports amounted to just over USD 265,000.

Replying to another question as to how China viewed the power transition in the Maldives and the new government’s plans to audit Chinese loans and projects, Geng played down concerns that Solih will reverse Yameen’s pro-Beijing policies.

While Geng said he was not aware of any plans by the Solih government to audit Chinese projects, he added that the new president in a meeting with his Chinese counterpart Xi Jinping‘s special envoy Luo Shugang had said that the new government attaches importance and is committed to developing relations with China.

While it is for the Maldives government to formulate its foreign policy, “China is committed to deepen our mutually beneficial cooperation with the Maldives and our will to maintain good relations with the Maldives is firm and clear cut,” Geng said.

Chinese Tourism Minister Luo attended Solih’s inauguration on November 17 and called on him a day later.

During their meeting, Solih stated that China has offered “the most economic and development assistance to the Maldives” and various projects like the friendship bridge had brought tangible benefits to the Maldives, Geng said.

Commenting on the new government formation in the Maldives, the state-run Global Times daily said in an op-ed article on Tuesday that “Solih is viewed as pro-India by the Indian and Western media”.

“However, pro-India does not necessarily mean anti-China. Due to close geographic distance, it is normal for India to have such a large influence on small Indian Ocean countries. China’s cooperation with these countries was never meant to replace India’s influence,” it said.

“The new Maldivian government may sway its foreign policy. If small countries such as the Maldives change their foreign policy whenever a leadership transition occurs, it will be a headache for both China and India,” it said.

“The two should support these small countries in adopting a stable foreign policy and protecting foreign investment. The two nations can also carry out mutual third-party cooperation to seek a win-win scenario and stabilise the entire region,” the daily said.

“Undoubtedly, China has its own stakes in the Indian Ocean as it is an important gateway for China’s opening-up. But China’s cooperation with Indian Ocean countries is not to squeeze any other country,” it said.


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HHLA Aims to Be Gateway to the Future | Brazil Modal

Image Courtesy: HHLA / Thies Rätzke


“Our overarching objective is to help our customers to transport their goods and commodities safely, quickly and efficiently from A to B – also in the future. In doing so, HHLA aims to be the gateway to the future,” Angela Titzrath, Chairwoman of HHLA’s Executive Board, said.

In September, HHLA hosted a conference focusing on the question of how logistical transport flows will evolve as a result of digitalization. At the event, it was concluded that containers will still be around for some time to come.

However, HHLA said it needs to be prepared for change, in line with its strategic approach.

“Containers will still be around for some time to come. Therefore, we must continue to invest in strengthening our core business so that we can meet the future needs of our customers. Equally important is our search for new, digital business fields,” Titzrath pointed out.

As informed, more and more start-ups are discovering Speicherstadt historical warehouse district — where HHLA is located — as a location to transform their initial concepts into market-ready solutions. HHLA said it supports these innovation incubators. For example, HHLA has invested in a startup that specializes in software solutions for drones.

“Drones are already being used at HHLA’s terminals… However, we also see further potential for these unmanned flying objects,” Titzrath said.

According to HHLA Chairwoman, investments and partnerships are necessary in order to benefit from innovative developments as quickly as possible. The company also cooperates with the truck manufacturer MAN in the field of intuitive mobility as it wants to find solutions that will enable self-driving trucks to operate at HHLA’s terminals in the future.

Image Courtesy: HHLA / Thies Rätzke

HHLA continued its positive development in the current financial year, exceeding the previous year’s result in the first nine months of 2018. Group revenue increased by 2.3 percent to EUR 964.2 million in the first three quarters of this year, from EUR 942.8 million seen in the corresponding period a year earlier.

In addition, group operating result (EBIT) rose by 0.6 percent to EUR 156.1 million during the January-September 2018 period from EUR 155.2 million posted in the same period last year.

During the first three quarters of 2018, HHLA increased its level of investment in METRANS, Czech Republic, and now holds 100 % of shares in the company. HHLA also acquired 100 % of shares in HHLA TK Estonia AS, a terminal operator based in Tallinn, Estonia.

Container throughput rose slightly by 1 percent year-on-year to 5,507 thousand TEU. This was mainly attributable to a sustained positive development in Far East volumes, as well as the takeover of the container terminal in Tallinn, according to the company.

By contrast, there was a slight decline in container transport of 2.5 percent to 1,098 thousand TEU. This development is linked to the planned realignment of POLZUG activities and a decrease in road transport.

HHLA expects container throughput in 2018 to be in the region of the previous year.  The container transport volume is also forecast to remain in the region of the previous year, as Polish intermodal traffic is being realigned in the course of its integration into Metrans.

“HHLA remains on its successful course in the current financial year. We will safely reach the targets set for 2018, despite an ever-changing market environment,” Titzrath concluded.


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Pence's Sharp China Attacks Fuel Fears of New Cold War

He said the U.S. wasn't in a rush to end the trade war and would “not change course until China changes its ways” — a worrying prospect for a region …


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Atlantska Plovidba Buys Second-Hand Panamax | Brazil Modal

Illustration. Image Courtesy: PxHere under CC0 Creative Commons license


The Maltese-flagged bulker was bought from a mortgage lender on November 7 in the Port of Gdynia, Poland.

The ship has been under technical and commercial management of the Croatian company since April 2018, before being acquired.

Atlantska Plovidba said the ship would be renamed to AP Libertas. The shipping company did not disclose how the purchase would be financed.

In April 2018, Atlantska Plovidba said it managed to refinance its obligations for two ships, namely Miho Pracat and Zagreb, worth a total of USD 18 million. Namely, the Croatian shipowner secured a credit facility with an undisclosed European lender which matures in 2023.

With the latest acquisition, the company’s fleet is comprised of 13 ships, based on the shipowner’s website data.


Source: World Maritime News


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China: RCEP: Why India shouldn’t allow this free-trade deal to fail

By Mihir Sharma

The Regional Comprehensive Economic Partnership, or RCEP, is not a “competitor” to the Trans-Pacific Partnership (or, as it’s now known after adding the adjectives “comprehensive” and “progressive,” the CPTPP). Yes, the CPTPP very obviously excludes the People’s Republic of China while the RCEP does not. But, unlike the former, the RCEP is a more traditional sort of trade deal, in which tariff cuts on tradeable goods — rather than high standards for labor, environmental and intellectual-property protections — are at the center of the discussion.

That’s part of the reason India is leery of signing it. This week, as leaders of the 16 RCEP nations met in Singapore, India managed to postpone its moment of reckoning: Instead of concluding negotiations by the end of the year as hoped, the leaders agreed that the deal would be signed next year. Prime Minister Narendra Modi called for an “early conclusion” to the talks, and others said that significant progress had been made. But the truth is that the gulf between India and the other 15 countries in the RCEP remains deep, and it isn’t clear how or if it can be bridged.

RCEP is is essentially a deal between the 10 members of the Association of Southeast Asian Nations and the other countries — Japan, China, South Korea, India, Australia and New Zealand – with which ASEAN has existing free-trade deals. Indian officials already not-so-quietly regret the current pact with ASEAN. They complain that exports from ASEAN into India have grown far quicker than Indian exports to the bloc, which they attribute to the fact that India is a “services economy.” Thus, they’re willing to hold up RCEP until Indian companies are granted more market access for services than is currently the case.

The truth is that those officials have it backwards. India has largely failed to develop a manufacturing sector because its factories aren’t competitive and aren’t plugged into global supply chains. Over the past few years, tariffs have started rising as well — often in an ad hoc and arbitrary manner — which means that becoming part of spread-out value chains will be even tougher. Modi may want to protect Indian industry. But if he’s going to create the manufacturing jobs he promised in his 2014 prime ministerial campaign, he can’t turn his back on dense knot of production and trade that the RCEP countries represent.

As for Indian services exports, the truth is that market access isn’t as straightforward as all that. Services trade requires harmonized rules and regulations — something that RCEP isn’t prioritizing in the first place. And, in fact, many bits of the agreement that do focus on convergence of rules are also unacceptable to India. It will object, for example, to any clause that forbids laws mandating data localization, having already clamped down on foreign payments networks and internet companies.

Some participants in RCEP might be tempted to dump India and move ahead, signing a reduced version of the agreement just as the other 11 signatories to the CPTPP moved on without Donald Trump’s U.S. In the end, though, such a move wouldn’t be terribly useful. New Zealand, for example, already has trade agreements with every RCEP participant except for India. Given the difficulty of getting Indian negotiators to the table for bilateral trade deals, the RCEP remains the best chance to incorporate India into a genuinely open trading bloc.

In the end, success will come down to give and take, and one country will have to give the most: China. India’s concerns about hidden Chinese subsidies and closed Chinese markets are shared now by much of the world. And it’s not as if Chinese policy makers have no flexibility: After tariffs on U.S. soy exports were imposed as part of the first salvos of the Sino-American trade war, Indian exporters of soymeal found Chinese authorities were far more willing to make things easier for them.

While RCEP may appear to be a multilateral deal, negotiations between China and India lie at its heart. Other countries have now accepted that fact, allowing India to also negotiate separately with China, as well as Australia and New Zealand, under a “bilateral pairing mechanism.”

For Beijing, this is an opportunity to demonstrate not just its continuing commitment to free trade but also its willingness to make trade fairer than it’s been in the past. If the 2019 deadline is to mean anything, then both India and China will have to think very hard about where their national interests really lie. If they do, they’re likely to view compromise much more favorably.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of


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