July 2009 - IIFA Newsletter

SDR 2 per kilo or
SDR 666.64 per package

By Road - CMR
SDR 8.33 per kilo

By Air - Warsaw/Montreal
SDR 17 per kilo

IIFA Standard Trading Conditions
SDR 2 per kilo

The SDR rate on 31/07/2009

according to the

International Monetary Fund

was

1 SDR = 0.9101730000 Euro

New IIFA President & Council for 2009/2010

Council - New President

Left to right: Finbarr Cleary & Vincent Brennan

At its most recent meeting on July 7th last, Mr. Vincent Brennan (Phoenix International) assumed the presidency of the Irish International Freight Association, when he took over the position from outgoing President Finbarr Cleary (Celtic Forwarding) who served for two years.

Philip Kane (Geodis) was elected Vice-President.
Other officers elected were Richard Clery (Irish Shipping) Hon. Secretary and Paddy Kenny (Schenker) Hon. Treasurer.

Council members are: John O Hanrahan (DHL), Terry Allen (Hawthorn Logistics), Ms Pearl Cumiskey (Wells Cargo Worldwide), Pat Nolan (Twoway Aramex) and Finbarr Cleary (Celtic Forwarding). Co-opted Qualified Person re-elected to Council - Simon Tobin.

As there are some vacancies, representatives of Full Trading Members are cordially invited to come forward and serve on Council.
Please contact CEO Colm Walsh at iifa@eircom.net

Council - Line 1

Council - Line 2

Council Line 3

C-TPAT Benefits for Japanese Business Partner

On June 26, the U.S. and Japan signed a mutual recognition on Security Standards in Brusssels, Belgium. The arrangement will recognize Japan's Authorized Economic Operator program (AEO) and the U.S. Customs - Trade Partnership Against Terrorism program (C-TPAT).

US Customs Border Patrol (CBP) and Japan Customs and Tariff Bureau (CTB) will accept and recognize the security standards for all members of both C-TPAT and AEO programs.

This will now result in fewer cargo examinations, quicker releases and less paperwork.

C-TPAT currently has mutual recognition agreements with Jordan, Canada, New Zealand and now Japan.

WTO Report Urges Action

Many exporters are still struggling to get the loans they need to ship their goods, World Trade Organization director-general Pascal Lamy said in a new report, requiring a greater effort on the part of the international community to make funding available.

"Anecdotal evidence shows that the global market situation remains tense, with increased payment defaults and high costs of credit," Lamy said. The global economy remains "fragile" and 10 percent fewer goods will be traded this year than in 2008, he said. Wealthy nations are set to suffer a 14 percent merchandise trade drop in 2009, with cars and machinery performing worst, Lamy said in the report.

The report raises questions about when the G20 nations and international lenders will disburse the $250 billion in trade support funding they proposed in April.

"In Latin America, some of the smallest Central American countries, or larger but poor countries, also need support," Lamy said, adding that several eastern European countries currently have no access to new trade credit in the markets.

"Even in the United States, spreads on opening new letters of credit are up, at 100-200 basis points depending on the quality of risk," he said, adding: "The WTO, along with partner institutions, will continue to monitor the market situation.

Source - Journal of Commerce - Online.
Note : Basis Point
The relationship between percentage changes and basis points can be summarized as follows: 1% change = 100 basis points, and 0.01% = 1 basis point.
So a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points.

Rail Carrier Tests Hydorgen Fuel Cell Locomotive

One of the United States' leading railroads tested the first hydrogen-powered fuel cell locomotive this week in Topeka, Kansas.

The railroad, along with the U.S. Army, announced plans in January 2008 to develop the hydrogen-powered fuel cell engine. Further testing of the green' locomotive is scheduled to take place in Colorado and California.

European Commission Weighs in Against Rotterdam Rules

Liability convention seen as too complex

The European Commission may push for an alternative cargo liability regime for European Union members after finding the Rotterdam Rules to be inconsistent with wider EU transportation policy, the European Shippers Council said.

An EC representative, speaking June 22 at an ESC forum in Antwerp on the effects of the Rotterdam rules, said that the new convention was not conforming to European multimodal expectations.
The Rotterdam Rules are a new international convention to govern liability for damage to cargo in international shipping, or inland carriage of international goods shipped door-to-door. The rules were developed by an international working group of the United Nations Commission on International Trade Law that began deliberations nearly a decade ago. If ratified in the United States, the rules would supplant the 1936 Carriage of Goods by Sea Act.

The rules will be signed at a ceremony in Rotterdam in September.
The ECs assessment stops short of a regulatory proposal, but it will go through normal channels. The ESC said the commission vindicated the trade groups conclusion that the Rotterdam Rules were overly complex and discouraged shippers from integrating short-sea and coastal shipping into their intra-European, door-to-door freight logistics.

The ESCs opposition to the Rotterdam Rules has been strongly criticized in the United States by the National Industrial Transportation League. Peter Gatti, executive vice president, said that the ESCs opposition is based on a fundamental misunderstanding of the new rules.

The ESCs desire for simplified rules was misplaced, Gatti said. Cargo liability is a complex legal specialty.

CLECAT speaks out against Rotterdam Rules

Clecat, which represents European freight forwarders, logistics service providers and customs agents, recently stated that "implementing the Rotterdam Rules (RR) was, in its view, a step into a very extended grey area of uncertainty, both in legal and judicial terms. The risk is that these uncertainties will end up adding a new liability regime side by side with existing ones, thus increasing confusion, rather than mitigating it. Clecat members were also concerned that the extreme complication of these rules could lead to a number of local or regional interpretations, which is possible according to the terms laid out in the convention. This would certainly not lead to harmonisation or simplification.

U.S, Europe seek WTO Help

In parallel moves, the U.S. and the EU announced that they are taking a harder line on China's attempts to restrain exports of key materials.

U.S. Trade Representative Ron Kirk announced Tuesday that the United States is initiating formal dispute settlement consultations at the World Trade Organization on China's export restraints on several important raw materials, including bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus, and zinc. Kirk said his agency is very concerned that China appears to be restricting the exports of these materials at the expense of U.S. industries that need these materials, and their workers. This appears to be occurring despite strong WTO rules designed to discipline export restraints.

In Brussels, the European Union requested formal WTO consultations with China on about ten industrial raw materials. If consultations fail to resolve either of these disputes, the next step in each case would be for the U.S. or the EU to request a WTO panel to hear the complaint.

Kirk said that China's measures appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for the Chinese industries using these inputs in the production of numerous downstream products in the steel, aluminum and chemical sectors. China is a major producer of these raw materials. These export restrictions by China skew the playing field against American workers and businesses. They unfairly advantage Chinese producers. Under WTO rules, such distortion of the playing field on trade is simply not allowed.

Kirk added, in his 2009 trade policy agenda, President Obama promised Americans that his administration, including USTR, would stand up for the rights of American workers and businesses in the rules-based global trading system. We believe that on a level playing field, American workers and businesses can compete and win anywhere in the world. China's policies on these raw materials seem to put a giant thumb on the scale in favor of Chinese producers.

For her part, EU Trade Commissioner Catherine Ashton said, "The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn."

China Defends Export Policies

Restraints on exports designed to protect environment, says government

China's ministry of commerce defended its export policies against United States and European Union charges that its restraints on exports are violating World Trade Organization rules. The ministry said in a statement that its policies, on the contrary, were designed to "protect the environment and natural resources," and are "in keeping with WTO rules."

If the complaints by the U.S. and EU are not resolved within the next 60 days, the U.S. and EU can formally request a WTO hearing, a process that can take up to a year. If the WTO then finds against China, and China still refuses to lift its export restrictions, the U.S. and EU would be given permission to impose economic sanctions on China.

World IATA/CASS forwarder rankings 2007

RFID Sales Projected Growing 5 Percent

Worldwide RFID sales will increase 5 percent in 2009 to $5.56 billion despite the global economic downturn, according to a forecast by ID TechEx, an international market research and consulting firm.

The firm said sales of RFID tags, readers and software/services for RFID cards, labels, and other products and services are growing even amid the widespread reduction in inventory and shipping.

The report said many segments of the industry are growing at an annual rate of more than 10 percent.

Retailers will use about 225 million RFID tags on pallets and cases in response to mandates by major retailers such as Wal-Mart, mostly in the U.S.

Despite widespread criticism of the way Wal-Mart managed its mandate, the report forecasts a further "take off" in retail use of RFID outside formal mandates by retailers. For example, Marks & Spencer and American Apparel will use 200 million RFID tags on apparel during 2009. An additional 350 million tags will be used in the form of transit tickets, such as on toll roads. Overall, 2.35 billion RFID tags will be sold in 2009 compared with 1.97 billion in 2008.

A growing number of local governments, including some in China, Australia and New Zealand, have made it mandatory to use RFID systems to track animals such as pigs, cattle and sheep. For example, New Zealand, by law, requires all dogs to be tagged with RFID; Australia requires 35 million head of cattle to be tracked. The report forecasts 105 million tags in this sector in 2009.

Geodis receives Tapa Certification in Dublin

Following an audit conducted by the independent organisation Lloyd's Register Quality Assurance (LRQA), Geodis Logistics' Dublin site has received level A certification from the Technology Asset Protection Association (Tapa). The audit made sure that all operational processes in Geodis' Dublin site adhered to secure handling procedures for high value products in accordance with freight security requirements (FSR). The products concerned are entrusted to Geodis Logistics, the logistics division of the Geodis Group, by its high-tech industry customers. For the minimum requirement of 60% necessary to achieve level A, the highest level, the items relating to access controls scored 100%, while those relating to high-value product dock, warehousing and storage installations and surveillance and alarm systems were awarded 94%.

ATA blames "excessive speculation" as fuel prices rise

Charging that excessive speculation is driving up diesel fuel prices, the American Trucking Associations asked Congress to place new controls on energy futures markets.

The American Trucking Association wants the US Congress to intervene to increase the transparency of futures markets and impose reasonable pricing limits on energy commodities.

The association called the 56-cent increase in the price of diesel since March inexplicable.

It seems that more is at play than just the fundamentals of supply and demand, said ATA President and CEO Bill Graves.

Thanks to the recession, demand for petroleum products is relatively low and oil supplies are at a 19-year high, ATA Vice President and Chief Economist Bob Costello said.

In addition, the International Energy Agency recently predicted that global demand for oil will drop by about 2.5 million barrels a day this year compared to last year the sharpest year-over-year decline in nearly 30 years, he said.

While we don't believe excessive speculation accounts for all of the recent run-up in oil prices, it has to have played a part, said Richard Moskowitz, ATA vice president and regulatory affairs counsel.

Its unlikely that Congress, preoccupied with health care reform, the financial crisis and other issues, will respond quickly to the request. However, rising fuel prices this summer may pressure Capitol Hill.

Diesel prices jumped in the second quarter, increasing 23 percent since bottoming at $2.017 per gallon on March 16. The U.S. national average June 22 was $2.616 per gallon.
The average price of diesel fuel across the country increased approximately 4.4 cents or 1.7 percent from June 15 to June 22, the seventh straight week of rising prices.

Prices are still well off last year's July 14 peak of $4.474 per gallon, but the price run-up is giving large and small carriers the jitters. Trucking companies spent a record $150.9 billion on fuel last year, during better economic times when more freight was available and it was easier to collect surcharges.

Some truckers fear higher fuel prices could push them over the edge into bankruptcy, something some analysts predict and that some competitors would like.

Diesel Climbs 4.4 Cents to $2.616

Highest price in seven months, after seventh weekly increase

After the seventh consecutive weekly increase, diesel fuel reached its highest price in seven months. The average price across the country climbed 4.4 cents to $2.616 per gallon, according to the U.S. Energy Information Administrations report on June 22.

In November 2008, diesel was $2.664 and falling. Although the price is going in the other direction, it seems unlikely diesel will reach as high as it was in the comparable week a year ago, when the national average price was $4.648 per gallon.

Irish Diesel Prices - One year Review

From July 08 to June 2009

www.aaireland.ie/petrolprices

Jul 08    143.8c
Aug 08  138.0c
Sep 08 133.5c
Oct 08 128.9c
Nov 08 113.7c
Dec 08 101.8c
Jan 09    94.4c
Feb 09   97.0c
Mar 09   95.0c
Apr 09    99.9c
May 09 100.9c
Jun 09 104.0c

New road regulations in Hungary

Hungary has introduced new regulations covering the weights and dimensions that are permitted in road haulage, substituting its former lower axel weights with ones more in harmony with EU stipulations. Higher axel and overall weights still apply to vehicles equipped with axles that spare the roads.These vehicles will be recognized if proof has been submitted beforehand to the Hungarian road traffic authority Magyar Kzt Nonprofit Zrt, 1535 Budapest, Pf. 749 in English, German or Hungarian. The paper work must contain the name and address of the vehicle owner, information about how the vehicle is equipped, and a copy of the registration documents.

High Logistics Costs a Chalenge for Africa

Increasing logistics costs combined with poor infrastructure is making it difficult for African nations to attract international trade and investment, according to several recent surveys.

For instance, a study by the U.S. Department of Commerce found that it costs more to ship a ton of wheat from Kenya to Uganda than it does from Chicago to Uganda. Furthermore, logistics costs in South Africa are 14 percent higher than the rest of the world.

Meanwhile, the World Bank ranked South Africa 124 out of 150 countries in terms of logistics costs in 2007.

A sub-par rail network is partly responsible for Africa's high logistics costs, noted one executive. "Transportation costs by road contribute to about 55 percent of the total logistics costs, while transport by rail is about 20 percent of the logistics costs component," he explained. "The development of rail infrastructure is important to logistics."

Mexico Back in Vogue for Low-Cost Manufacturing

A new study finds the manufacturing costs in Mexico are becoming more competitive with countries like China, which has dominated the industry in recent years.

Research firm AlixPartners found that in 2005, Chinese-made parts were 22 percent cheaper on average than American-made parts. By the end of 2008, however, the price gap had narrowed to 5.5 percent. Furthermore, while manufacturing in China was about 5 percent cheaper than in Mexico three years ago, manufacturing in China is now about 20 percent more expensive. Compared with the U.S, the savings in Mexico have widened to 25 percent, from 16 percent.

"A couple of years ago, outsourcing to China was a no-brainer," remarked the managing director for AlixPartners, but that's no longer the case, he said.

Agus an Focail Scoir - the Last Word....

University Challenge

Bamber Gascoyne: What was Gandhi's first name?
Contestant: Goosey?

AND

Patient; How much to have this tooth pulled?

Dentist : $100.

Patient: $100 for just a few minutes work?

Dentist: Well. I can extract it very slowly if you like.......

Joke per State

IOWA
What do they call 100 John Deeres circling a McDonald's in Iowa?
Prom night.

KENTUCKY
How do you know the toothbrush was invented in Kentucky?
If it'd been invented anywhere else it would have been called a teethbrush.