Emerging Trends in Global Logistics from the Experts at Odyssey
Dear Valued Customer,
Let me first wish you and your beloved ones a healthy 2019. It is a pleasure to share our quarterly newsletter with the objective of informing you about topics which will surely be of your interest. Our basic formatting will cover Odyssey news, safety, regulations, and market outlooks, as well as key current events.
In order to improve our newsletter, we’d very much appreciate your ongoing comments and suggestions regarding how to improve the information in line with your requirements and expectations for future iterations.
Our expert teams from both Berchem, Belgium and Gdansk, Poland have entered 2019 with renewed spirit, and will continue to service you with the best possible quality and solutions.
On behalf of the European team,
*Update completed Monday, January 14, 2019. Discussions in the British parliament have been closed and the evening of Tuesday January 15th voting will take place to say either yes or no on Brexit based on the current agreement which has been negotiated between Great Britain and the European Union.
The chances of accepting the current agreement are very small and if so, the British government has 3 days to provide a new plan.
While the draft withdrawal agreement provides the basis for a 21-month transition period, during which the current trading and transport rules would essentially remain the same, such a transition will not happen if the withdrawal agreement is not ratified. Considering the ongoing political uncertainty in the UK, companies have to be prepared for all outcomes, including a no-deal or ’cliff-edge scenario’ in March 2019.
A ‘no deal’ Brexit would have important consequences in terms of market access conditions for transport operators, but also on the fluidity of traffic and robustness of supply chains. The contingency measures proposed by the European Commission to alleviate some of the negative consequences of a ‘no deal’ Brexit would help when adopted, but industry will still face significant challenges. All players in the supply chain, from importers and exporters, to forwarders, customs agents and transport operators, will need to collaborate and put in place robust plans to mitigate the impact of a ‘no deal’ Brexit on the transit of goods.
We will keep you updated on the further developments during the coming period and reach out to you where we can provide our support to assure that your customers are being delivered in line with expected service requirements.
Read more from Odyssey on Brexit here: BREXIT Update: Potential Impact on the World’s Supply Chain
The updated Union Customs Code stipulates that the status of Authorised Economic Operator shall no longer be guaranteed by a certificate. Two authorizations are replacing the current AEO full certificate namely: AEO/customs simplification (AEOC) and AEO/security and safety (AEOS) authorisation.
We are proud to announce that Odyssey’s AEO full certificate is successfully re-assessed and replaced by the AEO authorizations AEOC and AEOS.
For Odyssey’s customer base in Europe, 670 complaints related to safety issues were reported and processed in 2018; the performance has resulted in a safety performance score of 99,85 %.
The following items fall in the category of safety issues:
- Damaged packaging
- Damaged leaking packaging
- Product spills
- Carrier/driver behavior
- Load securing issues
- Vehicle labeling issues
- Loading/Unloading complications
In particular, our Odyssey Quality Team is highly focused on working with personnel from shipping points and carriers to reduce the number of safety incidents by understanding the root causes and following through with collaborative, corrective solutions.
The European road transport market is under pressure, and although relaxation has been noticed in the past 4 months, demand and available capacity are still not balanced.
Taking a closer look at the recent figures, specifically the third quarter of 2018, capacity did increase in comparison to quarter two, however, it was still insufficient to cope with all extenuating transport demands, resulting in additional pressure on the price level.
Compared to last year, increased capacity has been seen, and transport companies are adding capacity to profit from the increased prices to support their earnings.
Source: TIM CONSULT/TRANSPOREON 2018
Prices decreased by 2,8% compared to previous the quarter, however, compared to the third quarter of 2017, the prices increased by 3% although capacity increased in that same period.
Looking closer at monthly developments in the price and capacity over the last twelve months, the capacity index showed an increase from May onwards continuing through the holiday period following by a decrease again in September. The price level in that same period slightly decreased to recover again in September.
The year-over-year development of the transport price index, which included data from Oct. 2016 – Sept. 2017 compared to data fr4om Oct. 2017 – Sept. 2018, is shown in the graph below.
The price index is increasing towards the end of the third quarter of 2018, much as it did during the third quarter of 2017. However, the 2018 prices are aligning on a higher level.
Source: TIM CONSULT/TRANSPOREON 2018
Looking to the monthly development of the capacity index during the previous twelve months to the same period one year before, we can see in the graph below that the available capacity of this and the previous quarter are very similar compared to last year’s trend, while the capacity index increased slightly during the past 3 months compared with the same months in 2017.
Source: TIM CONSULT/TRANSPOREON 2018
Timocom is a reliable source for analysing the stress factor between demand and supply in the current freight market.
In the graphic below, freight loads offered and available capacity data is shown for Europe as a whole, as well as for Germany and France. Preferably, the percentages shown would be 50% and 50%, representing an even distribution of offered loads and available capacity. As we can see, offered loads far outweigh available capacity across the three selected geographies.
The demand/supply ratio for 2019 is not forecasted to see significant improvements. It is highly recommended that shippers secure capacity at slightly higher pricing of 2 to 5%, depending on the mode and geography.
The diesel index shown here below is based on the oil bulletin of the European Commission.
Increasing diesel prices have resulted in a 3.5% increase in total freight costs year-over-year between 2017 and 2018. The diesel index follows a consistent upward trend, although a decrease since October has been observed.
Germany will increase tariffs for trucks as of 1 January 2019 – how much this will affect your business?
In July 2018, the German government extended tolls to apply to all federal roads. The country’s toll network is currently made up of 52,000 km of motorways and federal roads. The toll is charged to all domestic and international trucks that weigh more than 7.5 tons and use sections of the relevant 52,000 km. The toll per km is worked out based on two factors: the number of axles and the emission rating of the truck.
The new changes will see tolls on these roads increase by between 20% and 60%.
New toll rates as of 1 January 2019.
|Vehicle-class||7,5 t to <12 t||12 t till 18 t||>18 t||>18 t|
|and < 4 Axles||and ≥ 4 Axles|
|EURO 0, I||16,7||20,2||24,7||26,1|
For a truck > 5 axes Euro6, the increase is 5,2 Cent (13,5 to 18,7 Cent / km or 37%)
Although the German government has declared to spend the revenues generated financing the improvement of the national road network and guarantees a modern, safe and efficient traffic infrastructure in Germany, it remains a heavy increase in the logistics cost with impact of 2,5 to 4 % increase of overall freight costs.
Every 2 years ADR is updated.
The new version comes into force as from January 1st, and unless otherwise specified in Chapter 1.6 of the ADR or otherwise specified via the special provisions of Chapter 3.2 and 3.3, are mandatory as from July 1st.
The adjustments in the ADR 2019 Edition are minor. Below is a short summary:
- Most of the adjustments are part of the harmonization with the revised model rules of the UN-20th Edition.
- The obligation to appoint a dangerous goods safety Advisor is also mandatory for the consignor. There is a transition period until December 31, 2022.
- New UN numbers for articles containing dangerous goods UN3537 – UN3548
Also new, UN3535 Toxic solid, flammable, anorganic, n.o.s, 6.1 (4.1) under VG I and II
- Applying the exemption 188.8.131.52.3, the calculated value of each transport category shall be shown on the transport document
- Classification of corrosive substances, section 2.2.8 has been rewritten and adapted to the GHS/CLP texts. However, there remain differences between both regulations.
- ‘UN 3316 chemical kit’ is no longer housed in packing group II and III. Instead, the
special provision 251 is adjusted. The packing group of the most dangerous ingredient in the kit must be used.
- Several special provisions applicable for UN 3166 and UN 3171 are deleted and grouped to a new special provision 388
- There are some editorial changes as far as the labels. Curiously, the specification of 2 mm for the thickness of the inner frame of danger labels, entered in the ADR 2017, is again deleted in the ADR 2019
- There are a number of existing packaging instructions updated, and some new packaging instructions created
- Placarding and Marking of bulk containers is now explicitly mentioned in Chapter 5.3
- In Chapter 6 there are a number of small adjustments.
- In Chapter 7, section 7.1.7 the special provisions applicable for the transport of self-reactive substances of class 4.1 and organic peroxides of class 5.2 substances, stabilized by temperature control are listed. In previous editions, these provisions were to be found in Chapter 2, section 2.2 of the danger classes. In the ADR 2019 Edition these are deleted in section 2.2 d and consolidated in the section 7.1.7.
Full text can be found on www.unece.org