The Freight Community’s Weekly Newspaper for Import / Export decision makers – on subscription FRIDAY 2 April 2010 NO. 1904 FREIGHT & TRADING WEEKLY FTW1901SD FTW1881SD Centenary celebrations! BY Liesl Venter In a major milestone for logistics major Safcor Panalpina, the company has celebrated its centenary year at a series of functions for customers, suppliers and staff in Johannesburg, Durban, Cape Town and Port Elizabeth. In 1910 innovative businessman Fred Goldman spotted an opportunity delivering cargo in and around Johannesburg. He sealed his deals with a simple handshake before sending his mule carts to make deliveries timeously. Today, the fledgling company established by Goldman still delivers cargo timeously – but they do it around the world on a scale that would have left him gaping. “This is an incredible achievement for any company but more so for one operating in the tough environment of freight,” said Brian Joffe, chief executive of The Bidvest Group, which bought Safcor Panalpina some 18 years ago. Today the company has an international network of over 500 offices in 80 countries and partner companies in a further 80. Celebrating a milestone … Anthony Dawe, acting managing director, Safcor Panalpina and CEO of Bidfreight; Lukas Fischer, managing director, Sub Sahara, Panalpina; Monika Ribar, president and CEO of Panalpina; Brian Joffe, CE of The Bidvest Group and Svetlana Glavic, Panalpina delegate. Industry condemns Chinese ‘kickbacks’ The answer is to insist on buying ex-works or FOB BY Joy Orlek Despite industry-wide condemnation, the China import service fee (CISF) appears to be here to stay. Particularly prevalent on the China and India routes, it’s beginning to spread globally and involves a kickback paid to the overseas exporter by his appointed forwarder or groupage operator. Effectively, for every cubic metre imported, NVOCCs are paying kickbacks of up to US$50 per freight tonne back to the exporter – and if they don’t comply they simply lose the business. Managing director of independent consolidator CFR Freight, Martin Keck, was the first to publicly condemn it several years ago. At the time he called for intervention to prevent further escalation. Although perhaps not “illegal”, an industry source said it was certainly unethical and appeared to go against the terms of sale. She cited an instance where a CIP Durban contract with freight and insurance “prepaid” reflected an amount equal to the ocean freight as a CSIF fee in US dollars on the local degroup agent’s invoice. This had to be paid before release could be effected. “Furthermore, as is becoming more and more common, the cargo which could have been sent in a 20 ft GP FCL was shipped in a 40 ft groupage box with substantially higher SA land side charges,” she said. To page 8
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The Freight Community’s Weekly Newspaper for Import / Export decision makers – on subscriptionFRIDAY 2 April 2010 NO. 1904
FREIGHT & TRADING WEEKLY
FTW1901SD
FTW1881SD
Centenary celebrations!By Liesl Venter
In a major milestone for logistics major Safcor Panalpina, the company has celebrated its centenary year at a series of functions for customers, suppliers and staff in Johannesburg, Durban, Cape Town and Port Elizabeth.
In 1910 innovative businessman Fred Goldman spotted an opportunity delivering cargo in and around Johannesburg. He sealed his deals with a simple handshake before sending his mule carts to make deliveries timeously.
Today, the fledgling company established by Goldman still delivers cargo timeously – but they do it around the world on a scale that would have left him gaping.
“This is an incredible achievement for any company but more so for one operating in the tough environment of freight,” said Brian Joffe, chief executive of The Bidvest Group, which bought Safcor Panalpina some 18 years ago.
Today the company has an international network of over 500 offices in 80 countries and partner companies in a further 80.
Celebrating a milestone … Anthony Dawe, acting managing director, Safcor Panalpina and CEO of Bidfreight; Lukas Fischer, managing director, Sub Sahara, Panalpina; Monika Ribar, president and CEO of Panalpina; Brian Joffe, CE of The Bidvest Group and Svetlana Glavic, Panalpina delegate.
Industry condemns Chinese ‘kickbacks’The answer is to insist on buying ex-works or FOB
By Joy Orlek
Despite industry-wide condemnation, the China import service fee (CISF) appears to be here to stay.
Particularly prevalent on the China and India routes, it’s beginning to spread globally and involves a kickback paid
to the overseas exporter by his appointed forwarder or groupage operator.
Effectively, for every cubic metre imported, NVOCCs are paying kickbacks of up to US$50 per freight tonne back to the exporter – and if they don’t comply they simply lose the business.
Managing director of independent consolidator CFR Freight, Martin Keck, was the first to publicly condemn it several years ago. At the time he called for intervention to prevent further escalation.
Although perhaps not “illegal”, an industry source said it was certainly unethical
and appeared to go against the terms of sale. She cited an instance where a CIP Durban contract with freight and insurance “prepaid” reflected an amount equal to the ocean freight as a CSIF fee in US dollars on the local degroup agent’s invoice. This had to be paid before release
could be effected. “Furthermore, as is
becoming more and more common, the cargo which could have been sent in a 20 ft GP FCL was shipped in a 40 ft groupage box with substantially higher SA land side charges,” she said.
To page 8
FREIGHT & TRADING WEEKLY DUTY CALLS
Editor Joy OrlekConsulting Editor Alan PeatContributors Liesl VenterAdvertising Carmel Levinrad (Manager)
Yolande Langenhoven Gwen Spangenberg Jodi Haigh
Managing Editor David Marsh
CorrespondentsDurban Terry Hutson
Tel: (031) 466 1683Cape Town Ray Smuts
Tel: (021) 434 1636 Carrie Curzon Tel: 072 674 9410Port Elizabeth Ed Richardson
Now Media Centre 32 Fricker Road, Illovo Boulevard,
Illovo, Johannesburg. PO Box 55251, Northlands,
2116, South Africa.
2 | FRIDAY April 2 2010
Anti-Dumping AmendmentsThe anti-dumping duty on garlic, fresh or chilled and dried garlic, in the form of bulbs or cloves originating in or imported from the People’s Republic of China (China), was increased from 607c/kg to1 037c/kg.
The following anti-dumping duty amendments were either deleted as well as created: (i) drawn glass and blown glass, in sheets, whether or not having an absorbent or reflecting layer, but not otherwise worked, of a thickness exceeding 2.5 mm but not exceeding 6 mm (excluding optical glass), classifiable under tariff subheading 7004.90, imported from or originating in India; and (ii) float glass and surface ground or polished glass, in sheets, whether or not having an absorbent, reflecting or non-reflecting layer, but
otherwise not worked, of a thickness exceeding 2.5 mm but not exceeding 6 mm (excluding optical glass), imported from or originating in China.
Customs and Excise Warehouse RulesAmendments to the Rules to the Customs and Excise Act which relate to due entry of excisable goods received in bond from a Customs and Excise Warehouse: (i) Rule 19A1.04 Transitional Arrangements – Tobacco Products – “Due Entry of Goods Received in Bond from a Customs and Excise Warehouse”; (ii) Rule 19A2.02(d) Rules in respect of Beer – “Clearance of Beer from the Customs and Excise Manufacturing Warehouse and Payment of Duty”; (iii) Rule 19A3.03(a) Rules in respect of Spirits – “Clearance of Spirits Received in a VMS
Warehouse and Payment of Duty”; (iv) Rule 19A3.04(d)(vii)(aa) Rules in respect of Spirits – “Removal of Spirits from a Customs and Excise Warehouse for any Purpose other than for Home Consumption and Payment of Duty”.
Switzerland GSP Preferences TerminatedWith the entry into force of the Southern African Customs union (Sacu)/European Free Trade Area (Efta) Free Trade Agreement of which Switzerland is part, Switzerland ceases to grant preferential treatment based on the GSP system.
Accordingly, exporters are requested not to process any Form A Certificates of Origin for export to Switzerland as these will be rejected by Customs offices.
Waste Tyre Management Plan – Comment DueIn a Government Gazette dated 05 March 2010 the Department of Environmental Affairs
published a notice in respect of the “Draft Integrated Industry Waste Tyre Management Plan for the South African Tyre Recycling Process (SATRP) Company in terms of Section 32(6) of the National Environmental Management: Waste Act, 2008 (Act No.59 of 2008) relating to Waste Tyre Regulations, 2009”.
The document is the culmination of an endeavour to satisfy all environmental and social needs and yet to remain economically feasible without overburdening the consumer. The finalisation of this plan will be the start of removing waste tyres from the present waste stream where they are sent to landfill sites, refitted to vehicles, or dumped in the veld.
Note: This is a non- comprehensive statement of the law. No liability can be accepted for errors and omissions.
A WEEkLY summary of the main changes to the South African tariff dispensation and amendments to customs and excise legislation. Email [email protected].
FTW0016SP
FRIDAY April 2 2010 | 3
Coal industry fired up about 149.6% cargo dues hikeBy Alan Peat
From April 1 South Africa’s coal export industry – which government always says it is trying to encourage – will be seriously jolted by a 149.6% increase in cargo dues.
The hike is from R2.62/t to R6.54/t – which is less than the R7.23/t the TNPA originally applied for, but still a rattling blow for an export industry that relies on price-
competitiveness to sell its product on foreign markets.
Just think of this as a “before and after” scenario. If you previously wanted to export a 30 000-t packet of coal, the cargo dues would have totalled R78 600. Now, with the new tariff, the total is R196 200 – a mere one and a half times as much.
The industry thinks it is “grossly unfair” said a major force on the coal export scene,
and the industry is “basically very unhappy that the port authorities failed to have dialogue before implementing this ridiculous increase”.
The SA Association of Freight Forwarders (Saaff) is obviously upset with this, and is currently looking for TNPA to justify this specific increase.
“The minister of transport has told the ports that they cannot increase tariffs above
the consumer price index (CPI),” said Saaff’s customs and maritime director, Dave Watts. With this now being 5.7%, he could not see how TNPA could even think about an increase of almost 150%.
Meantime, the SA Association of Ship Operators and Agents (Saasoa) told FTW they were aware of what they phrase as “this discrepancy”, and were organising a meeting with
TNPA to discuss the matter.Shipping lines along with
forwarders, coal exporters and Island View Shipping (IVS) – the country’s major bulk carrier operator – all point to it having a huge impact on SA’s coal export fortunes.
As one observer of the coal industry put it: “A sudden R3.92 price increase per tonne of coal will just blow a lot of our exports out of the market.”
Maputo’s lack of container capacity holds back citrus exportersBy James Hall
Nelspruit – Even when a new truck lane is operative at the Komatipoort border post, efforts to move larger volumes of SA exports through Maputo will be hobbled until the port increases container shipping to
global markets.Stakeholders involved
in the Maputo Corridor said at a corridor assessment meeting in Nelspruit recently that the 24/7 one stop border post operations at Komatipoort were essential, and that completion by mid-year of a separate truck lane could not come
soon enough.Shipping agents,
agricultural exporters, transporters and other parties agreed that export costs would decrease for SA firms for whom Maputo is closer than SA ports. The port authority promised stakeholders that container services to global markets would be
introduced in the near future.
SA citrus exporters were vocal in their support for container services. “The (Maputo) corridor has the potential to decrease the cost of citrus exports for the northern regions,” the Citrus Growers’ Association said.
FTW4681
In safe hands
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Julie GroenewaldAccount Representative
Tel: 011 882 7300 www.compu-clearing.co.za
Advanced systems for the freight industry Bronwen Prins
HelpdeskBoitumelo Rafedile
RPG ProgramerLeon Moolman
.NET Programming Manager
Neil CurtisRPG Programer
Moshe ZulbergMarketing & Training Manager
Franco Bavajee Account Representative
Cedric KwenaiteOperations
4 | FRIDAY April 2 2010
Chinese agent now on board
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Coming soon!Zimbabwe, Zambia, Kenya, Usa, singapore, india
Airlink Cargo has been appointed cargo handling agent for Jet Airways which launches daily direct flights between Johannesburg and Mumbai on April 14.
“With India being a main manufacturing country we expect high volumes particularly on inbound flights,” Airlink Cargo MD Alwyn Rautenbach told FTW.
“We believe a physical evaluation of the way we do things was the key
to our appointment. They visited all the warehouses and liked the way we handle cargo and the organisation around our operation – and we are happy to add a new name to our warehouse,” said Rautenbach.
It’s also an opportunity for Airlink to provide onward carriage of cargo to its African and domestic destinations, he said.
An Airbus A330 will be used on the route.
GSAfrica Airlines Services is the general sales agent.
PIL launches FE-West Africa serviceThere’s a new seafreight service linking the Far East and West Africa as Pacific International Line (PIL) last week launched its South and West Africa Container Service 2 (SW2), according to Ivan Naik, MD of PIL (SA).
This is an expansion of its existing Far East/ SA/West Africa services which are supplied by SW1 (linking the Far East, Cape Town and West Africa), and AMI (linking Africa, the
Middle East and India).The rotation of the weekly SW2
service will be Singapore, Hong Kong, Kaohsiung and Taichung in Taiwan, Dongguan, Huangpu, and Nansha in South China, Singapore, Durban, Onne and Apapa in Nigeria, Lome in Togo, Abidjan in Ivory Coast, Durban, Singapore and back to Hong Kong. Onne will be served on a fortnightly basis.
FREIGHT & TRADING WEEKLY
FTW4613
Zimbabwe BuzzDon’t miss out
We will be visiting Zimbabwe later this year. Contact us today
if you would like to advertise or know of companies who could
contribute to the feature.
To promote your services contact CARMEL LEVINRAD on Tel:+27 11 214 7303or JoDI HAIgH at [email protected]
FRIDAY April 2 2010 | 5
FTW1868SD
NileDutch ro-ro plans impromptu SA callIn an impromptu port call at Durban on April 11, the flexible multipurpose vessel, the NileDutch Atlantic, will be able to uplift roll-on, roll-off (ro-ro), breakbulk, project and containerised cargo bound for West Africa and Europe.
According to information released to FTW by Cheryle Bosch of NileDutch SA in Johannesburg, the ship’s on-going port rotation will be: Luanda-Pointe Noire-Lagos-Tema-Lisbon-Antwerp-Rotterdam.
NileDutch is certainly at home in Africa, connecting the continent
directly with Asia, Europe, and South America. It has served African shipping interests for over a quarter of a century, and describes West Africa as its “bread and butter”.
Everyone at NileDutch has gained extensive experience with the trading cultures and customs of the area and is firmly committed to West Africa, according to Bosch.
This one-off call is added to the line’s two regular services linking the Far East, SA, West Africa and the East Coast of South America (ECSA).
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FTW4660
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FTW4383The complexity surrounding the tariff classification of goods in terms of Schedule No 1 to the Customs Act was highlighted recently in a judgment handed down by the Supreme Court of Appeal (SCA) in the matter between Sars and Fascination Wigs.
It all started back in 2005 when a dispute arose as to the correct classification of synthetic hair products. Sars contended that the goods should be classified under tariff sub-heading 67.04, which carries duty, while the importer argued that the goods fell under tariff sub-heading 67.03, which is duty free.
In September 2008 Sars lost the case in the provincial division of the High Court and then lodged an appeal with the Supreme Court of Appeal. On 4 March 2010, the SCA upheld the appeal by Sars.
The cost of protracted litigation together with the demand for duties by
Sars will result in dire consequences for the importer.
This case highlights the fact that classification must not be taken lightly since even the "experts" often disagree. We therefore stress the importance of: • applying for a tariff determination from the Commissioner's office and, in the event that such determination be disputed; • abiding by the determination until such a determination is amended.
It is not good enough to assume that verbal or written advice received from a Customs branch office will protect you. Nor should one incorrectly conclude that if goods are released by Customs after having been stopped, it sets a legal precedent for the tariff classification of the goods. We re-emphasise the fact that the only time the matter can be beyond doubt is when an official tariff determination has been issued by the Commissioner's office.
Custom MadeYour regular specialist column on customs-related issues
Beware the minefield of tariff classification!
Logwin opens new German airport officeThe logistics service provider Logwin has just made a strategic move, opening a new customer services office at Munster/Osnabruck Airport (FMO) in the north-west of Germany fringeing on the Netherlands.
The service focus is on
customs clearance for the import and export of airfreight consignments, according to Stefan Schwind, country director Germany, and replaces the previous use of the Hanover and Dusseldorf centres to service the Munster area.
FRIDAY April 2 2010 | 7
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BEE research flawed – dtiThe Department of Trade and Industry (the dti), has issued a statement in response to the findings of trade union Solidarity research that Black Economic Empowerment (BEE) has led to a remarkable increase in black ownership on the Johannesburg Stock Exchange (JSE), as well as ownership of insurance policies. “The dti is particularly concerned about
these reports as they do not address the issue of direct ownership which is critical when measuring level of transformation,” according to the department’s BEE chief director Nomonde Mesatywa.
Logistics major buys into technology companyImperial Logistics has acquired 50%+1 in the share capital of e-Logics. E-Logics provides technology-based
process planning and control, optimisation, automation and analysis solutions. Its customer base includes the likes of Transnet Freight Rail and Pick ’n Pay Home Shopping.
SA upgraded in global risk ratingThe 17th annual Political Risk Map produced by Aon Risk Services says eight countries/territories have been upgraded to a lower risk
level – Albania, Myanmar/Burma, Colombia, South Africa, Sri Lanka, East Timor, Vanuatu, Vietnam and the Hong Kong Special Administrative Region of the People's Republic of China.
Seafreight rates start to slipThe latest figures from the Shanghai Containerised Freight Index show that freight rates on the Asia to northern Europe trade have
dropped for the first time in over three months as the main shipping lines start to increase capacity on the run.
Pirates on the rampage off SomaliaThere have been several attempted attacks and successful hijacking of vessels off the coast of Somalia, the ICC International Maritime Bureau (IMB) reported last week.
LASt wEEk’S top stories on www.cargoinfo.co.za
Un backtracks on emissions reportBY James Hall
Cows rather than trucks and planes were blamed for more greenhouse gas emissions in a landmark 2006 United Nations report that the UN was forced to refute this week.
The study claimed the production chain for milk and meat products was responsible for 18% of greenhouse gases that have been linked to global warming, more than the transportation sector.
But the methodology was
all wrong, researchers now say.
In press reports University of California researcher Dr. Frank Mitloehner says the study was flawed because it calculated greenhouse gases from milk and meat production differently than transportation green house gas production, resulting in “an apples and oranges analogy that truly confused the issue.”
The report factored in all energy used to clear forests for cattle grazing through
milk and meat production and delivery of products to stores. Also considered were the cow’s own “emissions”.
Only emissions produced through the consumption of fossil fuels were considered as contributors to the transport industry’s greenhouse gas production. If the data were to be consistent, other inputs into the transportation of goods, including energy used to manufacture and maintain land and air vehicles, would have to be factored in.
8 | FRIDAY April 2 2010
Chinese ‘kickbacks’
“The CSIF fee, whether paid back to the exporter or his agent, may also impact on the value for duty purposes, which could result in the under-collection of duty and VAT, which is of serious concern to the industry,” she added.
Mike Walwyn of Seaboard Maritime Services believes the answer is to insist on buying ex-works or FOB. “That way you’ll get a realistic freight rate, but you’ll also be in a position to negotiate reasonable landside charges with the groupage operator here in SA, and your cost chain will at least be transparent,” he told FTW.
“I would imagine that this fee has affected virtually anybody who imports from China or India because most sales from those areas are conducted on a CFR
or CIF basis, which means the exporter gets to choose the carrier. When the cargo arrives here the importer and/or his clearing agent is presented with a bill which incorporates the freight that should have been charged to the shipper.”
And what makes it worse, says Walwyn, is that the local operators often try to disguise this, “hiding” it away in items like unpack charges and cargo dues. “When you see “unpack charges” of R750 per cubic metre, and you know that the cost to the operator is no more than about R120, then you know that something funny’s happening.”
“It’s just not right,” says CFR’s Keck.
“It started around ten years ago and although it’s very prevalent on the China and India routes, if you talk incentives we have to pay the
whole world. Maybe not at the same level, but it can only get worse.”
And South Africa is clearly not alone.
Freightbrain International UK talks about “the games that are played by suppliers that end up costing UK importers more.
“On imports from China suppliers take great delight in offering “CIF” Terms but then do not actually pay any freight charge or pay a very low rate to their favoured Chinese forwarding company,” says the company.
”On arrival into the UK the freight charge is either hidden in a multitude of UK landed and terminal charges or is simply added to the bottom of the invoice as a “CISF” or both.”
A nice use of an acronym but a rather unpleasant way of clobbering the poor UK
importer with what is in effect a rebate or claw back to China to cover an uneconomic freight charge, the company adds.
In terms of duty payable in South Africa, if it is genuinely part of the international freight cost then it would fall outside the value for duty
purposes. But if the contract of sale is under “C” terms and a further amount over the invoiced price is paid to the supplier, Customs may consider such an amount to constitute a dutiable charge, says Dave Watts of the SA Association of Freight Forwarders KZN.
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FTW1501SD
From page 1
CT can’t blame 432-hour delay on wind aloneTerminal upgrades restrict vessel operationsBy Ray Smuts
The recent record 432-hour delay to the Maersk Dryden at the Port of Cape Town (FTW March 26, 2010), has raised a number of questions about port productivity.
While Maersk Line admitted that wind contributed significantly to the delay, there were other issues at play – like the fact that the vessel had to wait for 393 containers to be transhipped back from Port Elizabeth after Safmarine Makutu bypassed the Mother City Port earlier in the month
rather than incur delays of more than 300 hours.
Fred Jacobs, Safmarine’s director for corporate affairs, sub-Saharan Africa, commented: “This was definitely the most serious delay we have seen in recent times in South Africa.
“The impact of the wind on our operation has been significant thus far but this was not caused by wind only.
“The Cape Town Container Terminal refurbishment has restricted the quay length available, the above case (Safmarine Makutu/Maersk Dryden) involving vessels on
our Safari service a good example.
“Due to the works, these vessels can only be operated at Berth 603 as they are too big for the other berth, 601. Maersk Dryden’s overall length is 294.02m.
Safmarine says allowances are made for a ‘reasonable’ amount of wind in operational scheduling but, extreme delays of this nature do nothing but add to further costs.
Vessel delays are costly, estimated at around US$20 000 a day for a 4 000 teu vessel (when taking into consideration operating
costs plus other costs associated with delays, for example cost of fuel as ships speed up to make up for lost time and transhipment costs etc).
And, it must be said, this is what Maersk Line and Safmarine are desperately trying to avoid, having charted a course back to profitability.
Wind will always be a factor in Cape Town’s shipping life, extensive, and expensive, with Transnet probes into seeking at least a partial solution, coming to nought.
Fred Jacobs ... ‘The most serious delay we have seen in recent times in South Africa.’
COMPILED AND PRINTED IN ONE DAYOutbound
Updated until 11am Updated daily on Cargo Info Africa – www.cargoinfo.co.za
Name of Ship/Voy/Line WBAY CT PE EL DBN RBAY Loading for
To: The Far East and South East Asia Updated daily on http://www.cargoinfo.co.za
OUTBOUND BY DATE - Dates for sailing: 05/04/2010 - 19/04/2010