“I was posted offshore where everything used to reach us via ships, including food and water”
Siddhant Palkhedkar was born and brought up at Nashik, a city close to Mumbai. After successfully completing his Degree in Mechanical Engineering in 2013, he shifted to Mumbai to work with the largest oil and natural gas company in India.
While working he had an instigation to get knowhow of logistics industry. He joined DACHSER as an Asia Pacific Management Trainee in June 2019, we discussed with him to know more. Let’s see what we found out.
Delay of Brexit - What is still to be considered?
As is known, early general elections for the House of Commons are scheduled for December 12, 2019 in the UK. The EU has also agreed to extend the Brexit deadline to 31 January 2020. The danger of a no deal Brexit is thus averted for the time being. If an agreement on the negotiated contract is reached before 31.01.2020, the agreed transitional period will initially remain in force until 31.12.2020.
Regardless of whether it is a "soft" or a "hard" Brexit, a customs authority of the respective recipient is essential for the processing of shipments to and from the UK. Therefore, we ask our customers to continue to advise their recipients to provide us with the necessary customs authority.
We will keep you up informed about further developments.
DACHSER in Pharma Supply Chain Management Summit in Mumbai
Organized by United Business Media (UBM), the tenth edition of the Pharma Supply Chain Management (SCM) Summit was themed around “Achieving optimal equilibrium between operational and cost efficiency”. The event was supported by DACHSER India as associate partner.
Pharma Supply Chain Summit took place on 24th- 25th September 2018 at the Westin in Mumbai.
Incoterms 2020 updates
A new version of the Incoterms will take effect on January 1, 2020, and will include a number of changes. The terms of delivery issued by the International Chamber of Commerce regulate essential buyer and seller obligations in international trade, such as transfer of goods to the buyer, transport costs, liability for loss of and damage to goods, and insurance costs.
With the adaptation of the Incoterms 2020 to current global trading practices, the new version is very up-to-date and practice oriented. The aim of the revision was to make the Incoterms clauses more user-friendly. For example, their presentation has been revised to make it easier for users to select the appropriate clause. In addition, the order of the clauses has been changed, and revised user instructions have been added to each clause.
In terms of contents, significant changes have been made to the Intercoms 2010, in particular the following:
- Different coverage levels in CIF and CIP: As in the past, the seller is still obliged in the Incoterms 2020 to take out transport insurance at their own expense in clauses CIF (Cost Insurance Freight) and CIP (Carriage Insurance Paid). In contrast to the Incoterms 2010, however, the two clauses now provide for different minimum coverages. The minimum coverage to be observed when the CIF clause has been agreed remains unchanged. The transport insurance to be taken out by the seller must continue to at least correspond to the coverage in accordance with the (C) clauses of the Institute Cargo Clauses or similar clauses (insurance of named risks). If the CIP clause is agreed, the seller must now provide insurance coverage in accordance with the (A) clauses of the Institute Cargo Clauses (all-risk coverage). Both the CIF clause and the CIP clause allow the parties to the contract to agree on insurance coverage that differs from this.
- Inclusion of security-related requirements: Security-related requirements for the transport of goods have now been included in Rules A 4 and A 7 of each Incoterms 2020 clause. As with other the Incoterms clauses, it should be noted that the Incoterms clauses only directly apply to the parties to the sales contract and are not the subject of the contract of carriage.
- The Incoterms 2020 contain regulations for transporting with one’s own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
- For goods sold under the FCA (Free Carrier) clause and intended for sea transport (such as goods in containers), FCA is stipulating a new option in the future. The buyer and seller may agree that the buyer shall instruct its freight carrier to issue an on-board bill of lading to the seller after the goods have been loaded. At the same time, the seller is obliged to hand over this on-board bill of lading to the buyer. This is typically done through participating banks.
- Renaming of DAT to DPU (Delivered at Place Unloaded). According to the Incoterms 2010 DAT clause, the seller delivered the goods as soon as they were unloaded from the means of transport at a “terminal.” However, according to the Incoterms 2010 application notes, the term “terminal” was not to be understood from a technical point of view but meant any unloading location. This fact was taken into account in the Incoterms 2020 by renaming the previous DAT clause to DPU (Delivered at Place Unloaded) for the sake of clarity. That means that in the future, any (agreed) place can be the place of destination.
- The Incoterms apply between the parties of a (national or international) sales contract and address – but are not limited to – special rights and obligations within this contractual relationship. On the basis of a uniform definition guaranteed in this way, subsequent problems of interpretation or discrepancies between the parties to the sales contract are to be avoided. It should be noted that the Incoterms, due to their character as GT&C-like provisions, do not constitute statutory provisions and thus only become legally binding if they have been effectively agreed between the parties to the sales contract by means of a corresponding reference (for the Incoterms 2020, this is also possible before 1/1/2020). Irrespective of this, in individual cases conflicting statutory provisions still take precedence over an Incoterm clause.
The Incoterms were revised by 500 experts from more than 40 countries.The clauses are recognized worldwide and are in use in more than 30 different languages.
Hard Brexit: Important measures beforehand
Even though there are some movements in the negotiations between EU and UK, still the “No deal” Brexit at the October 31st, 2019 cannot be excluded.
The consequences of a withdrawal without a deal on 31st October, especially for the movement of goods to and from the UK, are well known. First and foremost, longer waiting times would be expected due to border controls and customs clearance of all goods in accordance with WTO rules.
DACHSER will take appropriate measures to ensure that all goods arriving/leaving the UK after 23.00 GMT (00.00 CET) on 31st October are cleared and taxed accordingly.
With this letter we would like to summarize again the most important points and measures to keep the effects and delays in delivery for our customers as low as possible.
In case of Hard Brexit, the following information and documents must be available for customs clearance before the goods are collected:
- Consignment note
- Commercial invoice / pro forma invoice
- Packing list / delivery note
- Export accompanying document (can be issued by us if necessary)
- Preference documents and other product-specific documents, only if possible and required
Please make sure that these documents contain the following information: Sender with EORI number, recipient with contact details, importer if different to recipient with contact details, sequential invoice number, Incoterms, number and type of packages, description of goods, country of origin, Taric code, value of goods, currency, gross/net weight.
Please pay attention to a high data quality of the information - the documents must fit definitely to the respective physical transmission.
If the documents are made available to us in electronic form, they should correspond to a resolution of 300dpi if possible.
In addition, we need the contact person for customs including the contact details of your consignee/importer (e-mail address) so that we can contact them in order to obtain the necessary customs power of attorney. We need these in order to be able to carry out the necessary customs clearance. Without the power of attorney we can not do the customs clearance.
Please do also note, that we also will need more detailed shipment information like number and type of packages, description of goods, value of the goods, if you have got shipments to Ireland via UK territory, as we will have to issue a transit procedure through UK. For the beginning we also recommend that you add a T2L to those shipments as we are not yet sure, if Ireland customs will accept T2 as a proof for goods in free circulation of EU after transit via UK.
Within our eLogistics application the possible incoterms will be changed due to the customs. At the beginning only FCA/EXW or DAP are possible in eLogisitcs in order to ensure the process. Also the EDI information regarding the incoterms have to be adapted, the responsible person from your branch will contact you in order to align the necessary changes.
We ask for your understanding and cooperation so that DACHSER can make your flow of goods as efficient and trouble-free as possible in this exceptional case of hard Brexit.
The most important measures for preparation we have stated additionally in our Brexit checklist.
Please do not hesitate to contact your DACHSER branch if you have any further questions.
On account of assembly elections DACHSER offices in Maharashtra and Haryana will remain close
As the Voters of Maharashtra and Haryana will participate in the assembly election on October 21, 2019 to determine the new members of respective legislative assemblies.
DACHSER offices in these two states will remain closed on the date of election. The list below:
- Regional Office Mumbai
- Mumbai Branch Office
- Pune Branch Office
- Gurugram Branch Office
Please discuss individual arrangements with your DACHSER representative.
Brexit – Information for ASL customers
We face the possible event that the United Kingdom will leave the European Union by the end of October 2019.
This will affect shipments from and to the UK and delays are to be expected. Reasons are amongst others that a higher percentage of shipments has to be processed by customs authorities and that European shippers might switch to Air Freight to avoid border controls.
We expect delays particularly for shipments that do not move into the UK directly or out of the UK directly but via continental Europe. For example if Sea Freight shipments are unloaded in Rotterdam and then forwarded to the UK via truck and ferry:
- Fiscal representation in continental Europe will no longer be possible for goods to the UK. Instead, a transit procedure must be opened.
- The expected problems in Calais/Dover will cause delays in the delivery of goods to the UK.
- Incoterms for subsequent deliveries from the EU to the UK may also have to be converted if necessary, as costs for customs clearance have to be included
Therefore we strongly suggest to ship directly to the UK whenever possible, at least for some time following the Brexit until things clear up. In addition to that, you can also find a “Brexit checklist” here.
Trucker’s Strike at Chennai Ports Continues
Trade operation at the Chennai ports has come to stand still since September 16, 2019 as the Trailer Owner’s Association (TOA) in Chennai went on strike demanding the revision and increase in hire charges.
The strike has affect container truck movement, caused congestion at the ports and have a risk of recovery due to the backlog.
As the talks between the association and the Container freight station remain inconclusive, the strike is set to continue for the fifth day (as of September 20) and the threat continues to loom large.
DACHSER will keep you posted if there is any update. If you have questions about your shipments, feel free to call your DACHSER representative for a discussion.
The International Chamber of Commerce (ICC) will soon release the new Incoterms 2020, providing certainty and clarity to businesses trading across borders. The new Incoterms will be effective as of January 1st, 2020.
Every 10 years, the International Chamber of Commerce evaluates and revises the International Commercial Terms, better known as Incoterms, as a means of creating greater uniformity and effectiveness across the shipping industry. The latest version, Incoterms 2010, will stay in effect until January 2020.
What does "Incoterms" stand for?
It is an acronym standing for international commercial terms. Incoterms is a trademark of the International Chamber of Commerce, registered in several countries.
The Incoterms rules feature abbreviations for terms, like FOB (“Free on Board”), DAP (“Delivered at Place”), EXW (“Ex Works”), CIP (“Carriage and Insurance Paid To”), which all have very precise meanings for the sale of goods around the world. These terms hold universal meaning for buyers and sellers around the world.
The main Incoterms changes that are being considered are:
- The removal of FAS (Free Alongside Ship) as it is being used infrequently;
- Separating FCA (Free Carrier) into two separate Incoterms: one for road delivery and one for maritime delivery;
- The committee is also considering bringing back the terms FOB (Free on Board) and CIF (Cost, Insurance, Freight), instead of the FCA and CIP (Cost and Insurance Paid to) used for non-container shipments;
- There is also a debate about the creation of a new Incoterms called CNI (Cost and Insurance) to bridge the gap between FCA and CFR/CIF (Cost and Freight/Cost, Insurance, Freight). Currently, FCA includes the cost of international insurance on account of the seller-exporter, while CFR/CIF does not include the cost of freight;
- Lastly, to alleviate questions surrounding the party responsible for paying Customs fees, the ICC will evaluate the creation of 2 Incoterms to replace DDP (Delivered Duty Paid).
Other issues and updates being evaluated during this round include:
- Transportation security
- Regulations on transportation insurance
- Relationship between the Incoterms and the International Sale Contract
We will provide another update once the official Incoterms 2020 rules have been announced by the ICC. Please contact us if you have any questions.
IMO 2020 and its impact on sea freight transportation
The International Maritime Organization (IMO) is taking initiatives to promote sustainability and reduce harmful sulphur gases emissions. While the new regulation to reduced maximum sulphur content (currently 3.5%) to 0.5% will be fully enforced on January 1, 2020, it is expected that the adjustment on bunker surcharge will come into effect already at the last quarter of 2019.
- Impact on shippers
With the new regulations to be fully enforced on January 1, 2020, carriers are getting prepared during the course of the year with some options available:
- Switch to low-sulphur fuel
- Use Exhaust Gas Cleaning Systems which commonly known as a “scrubber” to clean up the sulphur oxide emitted from the vessel’s engine.
- Change the fleet to Liquefied Natural Gas Ships that are powered by Liquefied Natural Gas (LNG). LNG is considered as a cleaner fuel with less emission of greenhouse gases including sulphur oxide.
To ensure a smooth transition, carriers have to implement the above changes before January 1, 2020. Due to the investment in clean energy and cleaning systems, there will be an adjustment to the bunker surcharge formula which is expected to be effective from the last quarter of 2019.
- What is IMO 2020?
IMO is proactively taking steps to reduce marine pollution and minimize the vessels’ impact on global warming. Currently, most of the cargo ships use heavy fuel oil which is derived from crude oil and contains sulphur oxide. The gases can cause acid rain and trigger respiratory diseases. Therefore, the tolerant of sulphur oxide emissions has been tightened progressively throughout the past decade.
Also known as “IMO 2020 fuel sulphur regulation”, IMO 2020 is an initiative from the IMO which aims to reduce sulphur oxide emissions from ships.
By the deadline of January 1, 2020, all carriers will have to comply with the new regulation, which imposes a 0.5% global sulphur cap on fuel content and replaces the current limit of 3.5%.
If you have any questions regarding this topic, please feel free to reach out to your local DACHSER representative.
India Sea Cargo Manifest and Transshipment (SCMT) Regulations
The Central Board of Indirect Taxes and Customs in India has advised that the implementation of the India SCMT regulations will be effective from August 1, 2019. It is now compulsory for all shipping lines, importers and exporters to adhere to the defined timelines for manifest filing of all the cargo on a vessel to and from an Indian port.
The rule is applicable for all cargo transshipping, discharging and moving via any Indian port.
Departure Manifest: Export manifest is now required to be submitted to Indian customs prior to the departure of the vessel from any Port of Loading in India.
Arrival Manifest: Import Manifest is now required to be submitted to India customs prior to the departure of the vessel from the last foreign port of call.
Typhoon Lekima causes service disruptions in East Asia
Super typhoon Lekima has brought major impact to the northern part of Taiwan and the eastern coast of China since August 9, local time.
Lekima made landfall near Shanghai in the early morning on August 10. Over the weekend, the storm brought heavy downpours, strong winds, flooding and landslides to coastal areas of seven provinces in China from Fujian to Jiangsu, including Shanghai city.
While some of the affected areas are still suffering from heavy rains and flooding, land transportation is disrupted. At the same time, seaport operations are disrupted and hundreds of flights are postponed or cancelled. Please expect shipment delays due to the adverse weather conditions.
We are sorry for the inconvenience caused. If you have any questions, please contact your local DACHSER representatives.
The will to get ahead
If Murat Kayki and his colleague Swapnali Kurale planned to meet in person, that would take time. A lot of time. More than seven hours in the air separate Nîmes in the south of France, where Kayki lives and works, from the Indian metropolis of Mumbai. They may come from different continents and different cultures, yet the two DACHSER employees have a lot in common. Both of them live and work in the city where they were born. It’s 38 years since Kayki came into the world in Nîmes as the son of Turkish immigrants. Today, he is head of DACHSER’s Nîmes and Avignon offices, and, like Kurale in Mumbai, has had quite a remarkable career.
DACHSER continues to provide highly efficient transport solutions to its valued customers in India
DACHSER India handled a Port-to-Door shipment on a block train with 45 Forty-foot Equivalent Units (FEU) being moved from Mundra Port, Gujarat to Inland Container Depot (ICD) in Sahnewal, Ludhiana.
Shipping buses from Indonesia to Bangladesh
Recently, DACHSER Bangladesh shipped four buses, each weighing 13.5 tonnes, using an efficient Ro/Ro (Roll on / Roll off) mode of transportation. This solution was not only cost effective but also ensured that the buses were transported safely from Indonesia and arrived on time at their destination in Bangladesh.
DACHSER strengthens presence in Bangladesh
The logistics service provider is investing in its South Asian network in order to meet the growing demand on the Bangladeshi market.