Ocean Freight E-Commerce Standards for International Freight Forwarding

The EIPP Standards Advisory Board, established in 2010, is comprised of a self-funded global team of ocean industry leaders.  Conceived as a neutral forum for the top ocean carriers and international freight forwarding executives to partner with customers; its purpose is to expedite e-commerce best practices for success in a digital world.  This independent body has regular meetings to collaborate on, and advance e-Invoicing messaging and process standards for ocean freight commerce.  This November, the organization focused on enhancing the best practices already under development.  The discussion centered on three such processes.

One of the items on the agenda was A Payment Advice Process for invoice payments including the use of electronic messaging to provide remuneration information to collectors.  The process will ensure that all participants share understanding of how using remittance messages can automate IT processes for payment applications and proper payment verification.

Another discussion covered A Credit Note Process to streamline the issue and sending of electronic credit notes whose purpose is to correct prior invoices or shipments from ocean carrier to shipper.  In this case, it helps create a converged understanding of the process for exchanging messages in the ocean freight industry. It also supports the automation of credit note acknowledgement, confirmation, accounting, auditing, and reporting for tax purposes. 

Recognizing the value of electronic invoicing in enhancing customer collaboration, efficiency and cost savings;  the players in the ocean freight industry are becoming more demanding of improvements.  Further development of relevant EDI message guidelines will encourage adoption and sustained e-invoicing in ocean freight commerce.  Electronic invoicing standards which satisfy market demands will lead to instant information delivery, automatic routing to the appropriate parties and improved lead time for speedy invoicing.

Every day millions of tons of freight travel the globe.  Every step produces documentation related to logistics, schedules, exports, imports, custom clearance, duties and more.  Requiring critical focus, the management of information in ocean shipping is uniquely challenging due to the complexity of rate and contract administration.  Embracing established best practices of the latest developments in e-commerce will help advance and streamline the international freight forwarding industry

Pirate's Moving West

The recent attack by Somali-based extremists at a mall in Kenya has renewed discussion about Somali pirate attacks along key shipping routes.

The International Maritime Organization (IMO) initiated a long-term anti-piracy project in 1998, and it continues today. Through regional seminars and workshops for government officials from piracy-riddled areas and using evaluations and assessment missions, IMO has worked toward regional agreements for anti-piracy measures.

Although IMO's work has largely been toward creating a network of consistent and collaborative anti-piracy measures, their emphasis continues to be on self-protection. The best defense is a well-protected merchant ship.

There has been success in recent years, which has largely been attributed to $3 billion in annual spending on shipboard security and navy patrols. Thanks to increased shipboard defense spending, attacks off the Horn of Africa have fallen 70% since 2011. At a time when company and state budgets are seeing massive cuts, there is worry that reduced spending on shipboard defense measures will lead to a rise in Somali hijackings.

The conditions favoring Somali piracy have not changed. Poverty and instability in the region feed extremist movements. Merchant ships passing through the Gulf of Aden between Yemen and Somalia continue to be at risk.

With increased piracy activity, merchants and freight forwarders would likely see steep rises in ocean freight insurance premiums. A 2008 report on Ocean Piracy and Its Impact on Insurance described a dramatic increase in insurance rates after a surge of piracy activity between 2007 and 2008. In 2007, it cost $900 to insure a container. After a rise in pirate hijacking, that cost rose to $9,000 in 2008.

Regardless, all warn against complacency. Declines in pirate attacks have come at a significant financial cost. As conditions in Somalia remain unchanged and as companies examine budgets, defense against piracy remains imperative. A well-protected ship and insured cargo are the best defense against attacks.

Federal Maritime Commission Calls for Comments on Proposed Changes to OTI Bond

The Federal Maritime commission is accepting feedback on proposed changes to the OTI Bond. The purpose of these amendments is to adapt to a changing market. The new regulations will affect the licensing, financial responsibility requirements and duties of Ocean Transportation Intermediary's. The FMC's aim is to improve transparency and regulatory effectiveness as well as streamlining processes and reducing regulatory burden. Opinions are due by July 31, 2013 and can be sent to Karen V. Gregory, Secretary Federal Maritime Commission 800 North Capitol Street, N.W.Washington, D.C. 20573-0001 Phone: (202) 523-5725 Email: secretary@fmc.gov. 

These can be sent as confidential or non confidential. For non confidential, include an original as well as five paper copies and if possible a PDF to secretary@fmc.gov. Include Docket No. 13-05, Comments on Ocean Transportation Intermediary Regulation Revisions in your subject line. 

If you want your comments to be kept confidential, they must be sent by mail or courier. These must include a transmittal letter marked confidential and detail the extent of the confidential treatment being requested. Responses to requests including confidential material must contain the complete filing and be marked by the filer as "Confidential Restricted" with the confidential segments marked very clearly on each page. Confidential filings must contain an original and a copy of the public version which shall leave out confidential segments and be clearly marked "confidential materials excluded" on each affected page. For submissions or parts of submissions asking for confidential treatment, the Commission will allow such to the extent of the law.

Any questions about the filing process or treatment of confidential material should be directed to the Commission's secretary, Karen V. Gregory at the address or phone number above.

Scrap Metal Scams, a Hazard for International Freight Forwarders

 

As prices for all metals continue to climb, there has been an increase in occurances of illicit scrap metal trading. International Freight Forwarding companies are often unwitting accomplices to these schemes. Recently, the British International Trade Association (BIFA) issued a warning to its members and to the international trading community about this issue. The UK Parliament had recently introduced a Scrap Metal Dealers Bill. This bill would make it illegal to pay for scrap metals with cash. The concept was that many scrap metal dealers use cash for their illicit transactions.

 

This concern was addressed by Peter Quantrill, BIFA Director General in an interview with Handy Shipping Guide. His advice was to urge freight forwarders to alert the proper authorities to any suspicions that they have about scrap metal shipments. The UK parliment felt that they had addressed the problem of scrap metal theft by making it illegal to pay for scrap metals with cash. The inadvertent result of such legislation is that the problem has been transferred to freight forwarders as criminals seek to export their stolen scrap metals.

 

BIFA is asking that its members report any suspicious looking shipping containers. Organized criminals use shipping containers to transport stolen scrap metals to various locations. Freight forwarders who handle these containers are in a position to recognize and report such suspicious activities.

 

Some indicators to look for are containers found in unusual locations such as brown fields, industrial units, farms and residential addresses. These unorthodox locations might indicate illegal shipments.

 

Although this warning was issued in the UK, shipping is a global activity and criminal enterprises often cross international boundaries. Freight forwarders across the globe can help to monitor and report instances of criminal activity. Knowing what to look for can help freight forwarders avoid becoming accomplices to criminals seeking to ship stolen scrap metals.