Ligentia Group purchased the business and assets of Air & Cargo Services Ltd on the 13th December 2018. As a result of the deal, we will be providing a home to Air & Cargo Services’ customer base, whilst also welcoming on board their employees. The purchase substantially increases Ligentia’s UK footprint and strengthens our freight forwarding proposition by expanding our global network to 70+ offices, employing 450+ staff and generating annual revenues of £160m in 2019.

Our 25 year heritage and strong international network of customers, delivery partners and suppliers means that we are able to offer stable, reliable and immediate support to new customers by ensuring continuity of service during this busy time, without impacting any work in progress in support of our existing customer base.

The deal unites the knowledge and expertise of a 450-strong global colleague community who will work together to deliver outstanding service underpinned by smart technology.

Dan Gill, our Chief Customer Officer and MD for Europe explains: ‘We are delighted to be able to provide a home to both the people and the customers previously associated with Air & Cargo Services. We believe our teams are stronger together and the integration is enabling us to fast-track the launch of a new and unbeatable proposition called ‘Ligentia Plus’ to the freight forwarding market.’

Please see below an announcement made by MSC to all customers:

Dear customer,

Mediterranean Shipping Company (UK) Ltd. would like to advise our customers that effective Saturday 1st December 2018 until further notice, and following validities of MSC’s Freight All Kind (FAK) rates, MSC will be applying a Fuel Adjustment Contribution (FAD) for shipments from the Far East to the UK/NWC.

FUEL ADJUSTMENT CONTRIBUTION LEVELS:

20’ DV – 100 USD

40 DV/HC – 200 USD

Please note that this surcharge is an additional charge and that all other charges listed in our EU Price Announcements still apply and remain unchanged. For your reference, we have inserted below a relevant extract of our latest relevant EU Price Announcements:

  • FAK Rates above are inclusive of Base Rate (i.e. Ocean Freight Rate), Suez Canal Surcharges (SCS), Bunker Surcharge (BUC), Piracy Risk Surcharges (PRS) and Peak Season Surcharge (PSS).
  • These FAK rates above are subject to an ECA of 15 USD per TEU • Local and contingency charges may also apply, for further inform
  • Port pairs that are not listed above may also be subject to an Emergency Bunker Surcharge. Please contact your MSC local agent for queries related to port pairs not included in this Price Announcement.
  • MSC Agencies’ standard terms and conditions apply including MSC’s standard Bill of Lading, see https://www.msc.com/gbr/contract-of-carriage. Unless otherwise specified on MSC agencies’ standard terms and conditions, MSC shall allow 3 days’ free time to collect and return the container.

In this fiercely competitive environment the success of your business today links inextricably to the performance of your supply chain.

Ligentia has adopted an innovative, technology-centric approach to global logistics to focus on both enhancing your logistics operations and supporting your business goals. Offering a range of multimodal solutions, underpinned by market-leading technology, we can deliver an unbeatable competitive advantage by helping to reduce costs, increase customer satisfaction and better utilise assets.

Introducing Ligentix

Ligentix is our supply chain management visibility and planning solution, developed in-house alongside our customers over the past 21 years. As a fully flexible cloud platform your business can benefit from customised solutions delivered by our global team of logistics experts.

Key functionality includes:

• Purchase order (PO) creation and upload
• Complete control of all your PO milestones
• A fully customised dashboard showing real-time supply chain performance
• Integrated supplier booking and management
• Online origin and destination booking with automated booking approval
• Access to all shipping and commercial documents online
• Exception management
• Vessel tracking through automated carrier data feeds
• Shipping calendar
• Off quay and carrier free time management

NEW functionality

This month we have released new functionality within Ligentix that captures your full supply chain at a glance. The ‘Control Tower’ capability consolidates key information from across your supply chain to one dynamic ‘widget’, keeping you informed and able to view essential data quickly.

Book a demo and find out how Ligentix can transform your business.

IMO has set a global limit for sulphur in fuel oil used on board ships of 0.50% m/m (mass by mass) from 1 January 2020. This will significantly reduce the amount of sulphur oxide emanating from ships and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts.

 When did IMO adopt regulations to control air pollution form ships?

IMO has been working to reduce harmful impacts of shipping on the environment since the 1960s. Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL Convention) was adopted in 1997, to address air pollution from shipping.

The regulations for the Prevention of Air Pollution from Ships (Annex VI) seek to control airborne emissions from ships (sulphur oxides (SOx), nitrogen oxides (NOx), ozone depleting substances (ODS), volatile organic compounds (VOC) and shipboard incineration) and their contribution to local and global air pollution, human health issues and environmental problems.

Annex VI entered into force on 19 May 2005 and a revised Annex VI with significantly strengthened requirements was adopted in October 2008 which entered into force on 1 July 2010.

The regulations to reduce sulphur oxide emissions introduced a global limit for sulphur content of ships’ fuel oil, with tighter restrictions in designated emission control areas.

 What are the limits on sulphur in the regulations?

The current global limit for sulphur content of ships’ fuel oil is 3.50% m/m (mass by mass).

The new global limit will be 0.50% m/m will apply on and after 1 January 2020.

 When was the date of 1 January 2020 decided?

The date of 1 January 2020 was set in the regulations adopted in 2008. However, a provision was adopted, requiring IMO to review the availability of low sulphur fuel oil for use by ships, to help Member States determine whether the new lower global cap on sulphur emissions from international shipping shall come into effect on 1 January 2020 or be deferred until 1 January 2025.

IMO’s Marine Environment Protection Committee (MEPC 70), in October 2016, decided that the 0.50% limit should apply from 1 January 2020.

 What about in Emission Control areas (ECAS)?

Since 1 January 2015 the sulphur limit for fuel oil used by ships in SOx Emission Control Areas (ECAS) established by IMO has been 0.10% m/m.

The ECAs established under MARPOL Annex VI for SOx are: the Baltic Sea area; the North Sea area; the North American area (covering designated coastal areas off the United States and Canada); and the United States Caribbean Sea area (around Puerto Rico and the United States Virgin Islands).

 What will the new global limit mean for ships?

Under the new global cap, ships will have to use fuel oil on board with a sulphur content of no more than 0.50% m/m, against the current limit of 3.50%, which has been in effect since 1 January 2012.

The interpretation of “fuel oil used on board” includes use in main and auxiliary engines and boilers.

Exemptions are provided for situations involving the safety of the ship or saving life at sea, or if a ship or its equipment is damaged.

Another exemption allows for a ship to conduct trials for the development of ship emission reduction and control technologies and engine design programmes. This would require a special permit from the Administration(s) (flag State(s)).

 How can ships meet lower sulphur emission standards?

Ships can meet the requirement by using low-sulphur compliant fuel oil.

An increasing number of ships are also using gas as a fuel as when ignited it leads to negligible sulphur oxide emissions. This has been recognised in the development by IMO of the International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea services.

Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before they are released into the atmosphere. In this case, the equivalent arrangement must be approved by the ship’s Administration (the flag State).

 What controls will there be once the new global cap takes effect?

Ships taking on fuel oil for use on board must obtain a bunker delivery note, which states the sulphur content of the fuel oil supplied. Samples may be taken for verification.

Ships must be issued with an International Air Pollution Prevention (IAPP) Certificate by their Flag State. This certificate includes a section stating that the ship uses fuel oil with a sulphur content that does not exceed the applicable limit value as documented by bunker delivery notes or uses an approved equivalent arrangement.

Port and coastal States can use port State control to verify that the ship is compliant. They could also use surveillance, for example air surveillance to assess smoke plumes, and other techniques to identify potential violations.

 What sanctions will there be for not complying?

Sanctions are established by individual Parties to MARPOL, as flag and port States. There is no established fine or sanction set by IMO – it is down to the individual State Party.

 What additional measures may be developed to promote consistent implementation?

Implementation is the remit and responsibility of the Administrations (flag States and port/coastal States). Ensuring the consistent and effective implementation of the 2020 0.50% m/m sulphur limit is a high priority.

IMO’S Sub-Committee on Pollution Prevention and Response (PPR) has prepared a list of items which could be considered in order to achieve the environmental benefits sought through regulation 14, which regulates emissions of sulphur oxides (SOx) in MARPOL Annex VI. The scope of the work, proposed to be completed during PPR sessions in 2018 and 2019 is outlined here.

A new output on consistent implementation of regulation 14.1.3 of MARPOL Annex VI will be put forward for approval by MEPC 71, meeting 3-7 July 2017.

 What is the current average sulphur content of fuel oil used on ships?

IMO monitors the sulphur content of fuel oil used on ships globally. Samples are taken of residual fuel oil – the “heavy” fuel oil commonly used on ships – as well as distillate fuel oil (“light”, low sulphur fuel oil, which is more commonly used in emission control areas which have stricter limits on sulphur emissions).

The latest figures showed that the yearly average sulphur content of the residual fuel oils tested in 2015 was 2.45%. The worldwide average sulphur content for distillate fuel in 2015 was 0.11%.

 Have there been any studies into the feasibility of using LNG as fuel oil?

Yes, IMO has commissioned and published studies on the feasibility and use of LNG as a fuel for shipping (2016). The publication includes a feasibility study on the use of LNG as a fuel for international shipping in the North America ECA, a pilot study on the use of LNG as a fuel for a high speed passenger ship from the Port of Spain ferry terminal in Trinidad and Tobago and a feasibility study on LNG-fuelled short sea and coastal shipping in the wider Caribbean region.

Source: www.imo/org

In a report released yesterday at the TIACA Air Cargo Forum, Boeing said it expects the global demand for air freight will double over the next two decades, averaging about 4.2 percent annual growth over that period – a figure that brings the market closer to its pre-recession average of 5 percent growth per year, but still far less than the 9 percent growth rate for.

To handle this demand, the aviation giant said in its latest World Air Cargo Forecast that air cargo operators will need more than 2,600 freighters built between now and 2037. That figure will include 980 new medium- and large-scale freighters, plus 1,670 converted freighters to both replace aging metal and expand the worldwide fleet to meet the demand.

“The air cargo market continues to be a major element of commercial aviation’s growth story,” said Darren Hulst, managing director of market analysis and sales support at Boeing Commercial Airplanes. “Our new forecast indicates strong long-term air cargo trends, which coincide with the market recovery that we have seen over the last few years across Europe, North America, and Asia.” Hulst cited the staggering growth of the express market in China and the global rise of the US$5 trillion e-commerce market, which Boeing said it expects to increase by 20 percent each year through 2021.

Despite reports from Airbus that belly cargo demand has been surging in recent years, Hulst said dedicated widebody freighters, which “provide unique capabilities that passenger belly cargo cannot match,” will continue to carry more than 50 percent of the world’s air cargo demand, according to Boeing’s forecast.

The forecast, Hulst said, already factors in the effects of potential pilot shortages in certain regions of the world. “We don’t see any significant trends that could change our predictions globally,” he told the TIACA audience. “But maybe in some spots it could have an effect.”

Announcement by Hapag-Lloyd:

With a stricter International Maritime Organisation emissions regulation (IMO 2020) coming into force as of 1 January 2020, the new sulphur cap for compliant fuel oil will be lowered from 3.5% to 0.5%. This new regulation will significantly improve the ecological footprint of the shipping industry, and the majority of all vessels are expected to be operated with low-sulphur fuel oil by then. Using low-sulphur fuel oil will be the key solution for the shipping industry and Hapag-Lloyd to remain compliant. Furthermore, it is the most environmentally friendly solution in the short term.

At the same time, the utilisation of the compliant low-sulphur fuel oil comes along with an increase in fuel costs, which experts estimate to initially amount up to 60 billion US dollars annually for the entire shipping industry. On the assumption that the spread between high-sulphur fuel oil (HSFO) and low-sulphur fuel oil (LSFO 0.5%) will be 250 US dollars per tonne by 2020, Hapag-Lloyd estimates its additional costs being around 1 billion US dollars in the first years. Therefore, a Marine Fuel Recovery mechanism was developed, which will be gradually implemented from 1 January 2019 and replace all existing fuel-related charges.

“We embrace the level playing field and environmental improvements resulting from a stricter regulation, but it is obvious that this is not for free and will create additional costs. This will be mainly reflected in the fuel bills for low-sulphur fuel oil, as there is no realistic alternative for the industry remaining compliant by 2020. With our MFR, we have developed a system for our customers that we think is fair, as it allows for a causal, transparent an easy-to-understand calculation of fuel costs,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd.

The MFR is based on a formula that combines consumption with market prices for fuel ols.

MFR                 =          Fuel price                      x                      Fuel consumption (TO)

______________

(per TEU)                     (per TO)                                                           Carried TEU

It takes into account various parameters, such as the vessel consumption per day, fuel type & price (specific for HSFO, LSFO 0.5% and LSFO 0.1%), sea and port days, and carried TEU. These parameters derive from a typical representative service in the market on a specific trade. The MFR also takes price fluctuations better into account, as it comes along with an improved coverage of upward and downward developments of market price changes for fuel oil. Overall, it aims for transparent calculation of costs.

Furthermore, Hapag-Lloyd is thoroughly analysing other technological options for the reduction of emissions that might be able to cover a small share of a fleet. This is why trials with a LNG conversion of one ship as well as Exhaust Gas Cleaning Systems (EGCS) on two others will be conducted in the year 2019.

Earlier this month both Maersk and Hapag-Lloyd announced their introduction of a new Bunker Adjustment Factor (BAF) from 1st January 2019, now the world’s second and third largest container shipping lines have revealed they also intend for customers to pay for their sulphur cap compliance.

Mediterranean Shipping Company (MSC) will introduce a new Global Fuel Surcharge from 1st January 2019, a year ahead of the introduction of IMO-mandated global sulphur cap. Like Maersk, MSC explained the cost of the fleet adjustment to meet the criteria of the sulphur cap would cost more than $2bn.

CMA CGM continued the trend, releasing a statement that announced their application of fuel surcharges on a trade-by-trade basis. The French line offered further detail by quantifying how much the sulphur cap was costing per box moved, stating that the fleet changes it was making to be compliant was costing an average $160 per teu.

Ligentia is delighted to announce the appointment of Jan Skovgaard as Chief Operating Officer of Ligentia Group with effect from 1st October 2018. Jan will be based in Hong Kong and joins Nick Jones, Rakesh Patel and Daniel Gill on the Ligentia Group Board.

Jan brings a wealth of experience to Ligentia, most notably having worked since 2001 at Rohlig, initially joining as Managing Director for Asia and later leading the Asia business as Chief Executive Officer.

Nick Jones, Ligentia Group CEO stated “Jan is a great fit for the Ligentia vision, one which sees us increasing our use of automated technologies to reach our global customers better and deliver the highest levels of service in the sector. Jan’s in depth knowledge of the Asia region will also help us accelerate our growth in one of the most rapidly changing markets that we operate in”

Jan added “Ligentia is a customer focused organisation with untapped potential in Asia. By increasing awareness of our industry leading software and expanding our existing service offering, I am confident I can drive the Asian business forward and look forward to the challenges ahead.”

This year Ligentia was proud to have achieved AEO accreditation. Authorised Economic Operator (AEO) status is internationally recognised, allowing Ligentia to be acknowledged as a “preferred forwarder”. This opens opportunities within a network of accredited, vetted suppliers and transporters.

As Brexit looms, customs will focus their attention towards companies that are opening their international supply chain to risk. On a practical level, while not restricted to the EU, AEO status means that items pass through customs as quickly as possible, requiring fewer physical and document checks at borders.

But as HMRC extends its focus to trade between the UK and the EU, what are the advantages?

The advantages brought about by AEO have efficiency, productivity and profits at their core. Faster customs checks, a global network of improved suppliers and a certificate of reliability and safety will offer considerable benefits to our customers.

Post-Brexit – managing to ensure that the majority of shipments pass through supply-chains swiftly will be key to achieving global trade ambitions. This will bring AEO certification evermore into prominence, especially as HMRC advises that currently over 90% of global applications are rejected.

In achieving full accreditation, Ligentia continues to evolve as a global logistics provider delivering world-class solutions in Freight Forwarding and Supply Chain Management.

For more information contact your dedicated account manager or emailsales@uk.ligentia.com