Freight Market Update

Topic of the week:

The European Commission has now come forward with new proposals for significant reforms to be made to the EU Customs Union. The new data driven approach to EU customs aims to significantly simplify the customs process for business, in particular trusted traders. The hope is that digital transformation should cut down tedious and time consuming customs procedures as well as a smarter approach to customs supervision, giving customs authorities new resources to assess and prevent risky imports.

The new reforms come off the back of the current pressures that EU Customs are facing from increasing trade volumes to the growing number of EU standards that customs authorities need to check, with the aim off alleviating such pressure. Digital implementation should contribute to a safer and greener customs framework, and also rationalises the requirements that traders face when reporting customs by reducing import process times. These reforms will also implement as new single EU online interface, the EU Customs Data Hub, which will replace the existing IT infrastructure over time, aiming to improve risk managements and customs checks.

Businesses dealing with EU imports will be able to use the new online platform to log all information on goods and supply chains. All data will be compiled on the new data hub using machine learning and AI implementations with the ability for human intervention if necessary. The use of AI to analyse data means that the Hub can be used as a preventative measure to predict upcoming problems, meaning that customs authorities can focus on what is most important and optimize their use of resources. The hub means that businesses now only have to deal with one touchpoint for submitting customs documents and information and even better, only one load of data will have to be submitted even for multiple consignments. Trusted traders, and AEO certified members, will have the added benefit of releasing their goods into the EU without any customs intervention. Overall the new Customs Data Hub allows for minimum customs intervention when shipping into the EU whilst upholding safety, security and anti-fraud requirements. All EU member states will have access to the Customs Hub and can view real-time data and information in order to respond in advance to risks and prevent them more effectively and in a timely manner.

Online platforms will now be responsible for ensuring the payment of customs duties and VAT, meaning that customers will no longer be exposed to unexpected charges or paperwork. They can also rest assured that duties have been paid and that parcels are all compliant with EU environmental and safety standards. These reforms also get rid of the current policy which sees that goods under the value of 150 Euros are exempt for customs duty, which many have exploited by undervaluing their goods. 65% of EU imports are intentionally undervalued in order to avoid paying customs duty.

Overall the reforms should significantly improve the relationships and co-operation between customs and market surveillance and EU law enforcement, and aim to keep the promise ‘to bring EU customs to the next level’ from President von der Leyen.

Sea:

• Freightos data suggests that China/East Asia to North America West Coast rates have decreased by 16% from $1,697/FEU to $1,426/FEU.
• ?China/East Asia to North America East Coast have decreased by 5.5% and are currently sitting at $2,376/FEU.
• Global container spot prices have decreased over the last two weeks, and are now sitting at $1,429/FEU, a 9% decrease, and an 81% decrease from spot rates in May 2022 according to the Freightos Baltic Index (FBX)
• China/East Asia to North Europe spot rates have fallen by 1% over the last two weeks, now sitting at $1,380/FEU, says (FBX)
• Maersk has announced it will be launching a new weekly service between the Middle East and West Africa. The fleet will consist of 7 8,500-TEU vessels.
• Naval Inland Navigation have produced a fleet of 10 hybrid and electric drone ships, that are unmanned and controlled from a control room on land. Two of these ships have made their first voyage in Antwerp and are capable of transporting dry bulk or containers
• Sir Nigel Teare, the chairman of the Association of Average Adjusters has raised concerns regarding the liability complications of artificial intelligence and automated ships, under the Hague Rules for maritime casualties

Air:

• Global Air Freight spot rates currently sit at $2.75, according to the Freightos Air Freight Index (FAX)
• Europe to Northern America spot rates currently sit at $2.34 (100-3000kg), says FAX
• Europe to Central Asia spot rates currently sit at $2.70 (100-3000kg), says FAX
• Europe to Asia, Greater China spot rates currently sit at $1.83 (100-3000kg), says FAX
• CMA CGM Air Cargo has announced a new air freight route between Paris and Mumbai, after partnering with Air France KLM Martinair Cargo
• After runway closures, Luxembourg Airport is now back up and running at full capacity. One of Cargolux’s freighter’s landing gear detached causing an emergency landing at the airport, temporarily suspending flight operations

That’s all for this week’s update…

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