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ESCA and ETF sent a joint letter to the council on urgent regulatory measures for the shipping industry



ESCA and ETF sent a joint letter to the council on urgent regulatory measures for the shipping industry. Image: Pixabay
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The shipping industry urgently needs special regulatory measures and actions to prevent a total collapse of seaborne trade to and from the EU.

The outbreak of the corona virus (COVID-19) has developed into a catastrophic event affecting many countries and its citizens around the globe. The European social partners in the maritime transport sector, ECSA and ETF express their compassion with all people being struck by the recent developments.

ECSA and ETF consider it crucial that the EU shipping industry remains able to perform its crucial function for the European economy and its citizens. 76% of EU’s external trade is moved by sea, and 32% of intra EU transport of goods. It has to be ensured that essential goods, energy, food, medicines and many other products from outside the EU can be delivered to EU’s internal market, citizens and vital industries in all Member States and be transported as smoothly as possible between EU Member States. Without this many supply chains would be severely impacted or come to a complete stagnation, making the economic impact of the crisis even bigger than already is the case.

Therefore ECSA and ETF call upon the EU institutions to support the industry and its workforce with the challenges they are facing. Special measures and actions have to be taken with the greatest urgency to ensure that the shipping industry can play its role in supporting the EU economy to the fullest extent possible.

In view of the High Level Video Conference for European Union Transport Ministers on the implications of the novel coronavirus on transport taking place on Wednesday 18 March, we call for immediate action to reduce as much as possible the social, operational and economic impacts. The relationship between the impacts is very strong, so the impacts have to be addressed across-the-board.

Social impact

Seafarers from all over the world are providing an essential contribution making sure that international supply chains to and from Europe continue to function. The measures being taken by Member States to restrict the movement of people, in order to minimise the infection risks, whilst understandable, are having serious consequences for the movement of seafarers. Also the closure of ports is a relevant factor. As a consequence, workers, both at sea and onshore, are experiencing several issues which require immediate action.

  • Movement of ships’ crews: it is of utmost importance that ships are able to dock where necessary and that crew members are able to join and leave their ships with as few impediments as possible. With restrictions at ports – and reductions in flights  – this is becoming increasingly difficult. For this reason, the industry urges flexibility and assistance so as to help seafarers to continue to operate ships and be allowed to leave and return to their homes so that crew reliefs can continue to be effected. We therefore call for seafarers to be exempted from national travel bans, so that they can join their ships and keep the supply lines operating. They should also be treated pragmatically when returning home from their ships. In these critical moments, much like medical staff and security forces, seafarers are key workers and need governments to recognise them as such and afford them special consideration.
  • Maximum period of service: At their own request, or due to the absence of crew replacing them and/or due to the absence of flights from their expected port of disembarkation to their home country, seafarers may have to spend longer on board ships than specified in their employment agreements or under applicable national laws applying the Maritime Labour Convention. We therefore call upon flag and port states to apply a pragmatic approach to such situations and, on a case-by-case basis, permit crew members to remain on board for a reasonable period beyond their scheduled tours of duty in view of the implications of the pandemic, bearing in mind that ships need to sail fully crewed.
  • Seafarers’ certificates: In view of travel restrictions, seafarers may be forced to spend longer on board than usual as they are not being allowed to leave the vessel. Moreover, some training institutes have closed to contain the spread of the virus. This may therefore result in seafarers not being able to do the necessary training required for an extension of their certificate and therefore, one or more of their certificates may expire. This in turn could lead to problems with the vessels’ safe manning certificates and their ability to sail. We call on Flag and Port States to show pragmatism by extending the validity of the certificates by at least 3 months. In order to be effective this would require action in the regional Port State Control Regimes all around the globe.
  • Job redundancies affecting on board and onshore staff: Due to the substantial impact of the imposed travel restrictions on passenger operations and the reduced cargo traffic, companies have had to adjust operations and costs to limit the impact – Member States should consider to put in place special assistance measures where possible, to safeguard EU jobs. We encourage governments to exchange on best practices already implemented in some countries, such as social protection measures for seafarers or covering a percentage of employee’s salaries.
  • Access to on board inspections by specialised staff: the travel restrictions have also caused difficulties for specialised staff, such as inspectors, to access the vessels and conduct legally required inspections (safety, environmental and training). Governments should afford them special consideration in line with the considerations for seafarers’ movement possibilities.

Operational Impact

Several measures and developments are severely impacting ships’ operations globally. There are difficulties in finding medical supplies and shortage of mechanic and electronic parts for vessels. Traffic by sea between specific locations has now been stopped completely. Moreover, operational restrictions have been put in place on port calls. There is a significant increase in the number of vessels out of service due to strong operational limitations, lack of cargo or unavailability of crew.

Therefore there is need for the Commission and Member States to:

  • Keep supply lines open: It is of critical importance that supply lines are kept open so that products and supplies can reach the ships and this depends on ships being able to dock where necessary.
  • Certification of ships: Since dry dock availability is severely limited due to precautionary measures to contain the virus, it becomes increasingly impossible for ships to dry dock in time if renewal of the certificate requires dry-docking. Flexibility by Flag States and Class Societies is required through an extension of the validity of the current certificates by at least 3 months. In order for this to be effective this would require a global approach.
  • Cruise ships have not been permitted to dock in ports of certain countries.  Many cruise ships are in the process of returning to their “home port” within Europe. There are conflicting approaches across EU member states. Clear and consistent guidelines to enable cruise ships to dock are needed as soon as possible. Cruise ships require assurances that they will be able to enter harbours, berth and disembark passengers and crew, permitting repatriation.

Economic Impact

Direct economic impacts are being seen in all shipping segments. Passenger shipping – cruises and ferries – are immediately hit due to more and more countries closing their borders or restricting travel. Global shipping will decline due to the drop of global economic growth and thus seaborne trade. There will be reduced demand for tonnage especially in deep sea container and bulk. The significant reduction in oil prices is impacting the medium and long term viability of offshore ships, that just started to recover from the previous crisis, that started in September 2014.

Therefore there is need for the Commission and Member States to provide financial assistance to the industry:

  • EU banks should be supported by a well-fit regulatory framework  at EU level to solve the immediate liquidity issues of shipowners.
  • The ECB package, as agreed to last Friday 13 March, should be made available without delay in order to make it possible for banks to continue to finance the shipping industry. EU support should also cover financing of investments that will be important for the industry to regenerate itself in the longer term.
  • be flexible in the application of the Maritime State Aid guidelines, so that state aid, like the labour cost reduction schemes, can be assured for the very special situation the shipping industry and EU seafarers are now facing.

In view of the vital importance of shipping and related services for the EU and its citizens, ECSA and ETF call on the European Commission and Member States to take decisive and assertive action in facilitating the supply chains and seafarer travel, providing much needed support to the industry and workforce.

We thank you in advance for taking into account our concerns in your deliberations and we look forward to continue working with the European Commission and EU Member States.


China in action to stabilize foreign investment



China in action to stabilize foreign investment. Image: Pixabay
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China is ramping up efforts to bolster the stability of foreign investment by promoting work resumption of foreign-funded firms and projects as well as opening wider to foreign investors.

Some 60 percent of major foreign-invested manufacturing firms and over 40 percent of key foreign-funded service providers out of Hubei Province had recovered over 70 percent of work capacity as of March 12, according to the Ministry of Commerce (MOC).

Chinese authorities vowed to further facilitate the work resumption of foreign firms. The National Development and Reform Commission urged efforts to address the difficulties in work resumption to help firms return to full capacity at the earliest possible time and advance major foreign-invested projects, while the MOC stressed measures to enhance firms’ sense of gain.

The country is also beefing up wider opening-up to foreign investment. Revision of the negative list on foreign investment is underway as part of the plan to shorten the negative list and expand the catalog of industries where foreign investment is encouraged.

New editions of the list will probably be released in May, expanding market access of the tertiary sector, such as health care, aged service, finance, transportation, logistics, tourism, education and training and value-added services of telecommunications, said Zhang Fei with the Chinese Academy of International Trade and Economic Cooperation (CAITEC).

China will accelerate the opening of industrial and supply chains with weak links, encourage investment to better meet the needs of domestic consumption upgrade and support firms to invest in the central, western and northeastern regions, said Pang Chaoran, a researcher with the CAITEC.

Zhang also noted foreign enterprises are focusing on opportunities in the industries of biomedicine, public health, artificial intelligence, 5G network and industrial Internet as demands emerged amid the epidemic.

The country will continue improving the business environment and enhancing the stability of foreign investment, said Ye Wei, an official with the MOC.

Foreign-invested companies in China are regaining confidence supported by a string of opening-up measures, despite the impact of the epidemic. Retail giant Costco, for example, has announced to open a second store on the Chinese mainland in Shanghai, while Starbucks will build a coffee innovation park in eastern China’s Jiangsu Province.

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Prioritise logistics or risk supply chain chaos, FTA tells UK Brexit negotiators



Prioritise logistics or risk supply chain chaos, FTA tells UK Brexit negotiators. Image: Pixabay
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If the UK is to continue to trade efficiently with the EU, its biggest and closest market, there are six key areas the UK’s negotiators and government need to prioritise in the opening stages of talks with Europe about their future trading relationship, according to FTA, the business organisation which represents the logistics industry.

As Elizabeth de Jong, FTA’s Policy Director, explains, failure by the UK government to prioritise the key areas outlined in FTA’s new policy blueprint, “Keeping the UK and the EU Trading”, could have a devastating effect on the UK’s highly interconnected supply chain, as well as creating a knock-on effect that will hamper the UK PLC’s future productivity and the country’s economy as a whole:

“While the UK is setting out its parameters for the future relationship with the EU in Brussels, it is vital that the needs of the logistics industry are front and centre of any conversations,” she says.  “UK PLC is reliant upon a highly complex, interconnected supply chain, and if the needs of those responsible for moving goods and services to support the country’s economy are not prioritised, the effects could be devastating for the supply of vital products to shops, schools, hospitals and manufacturing.  Delays to deliveries could well cause out of stock issues and shut down factories operating “just in time” production.  The logistics industry needs to be engaged from the start.

“The risk of disruption at the borders must be mitigated to ensure that businesses can continue to operate efficiently and effectively,” she continues.  “It costs more than £1 a minute to operate an HGV – so lengthy delays at the border could add significant costs to the price of goods, driving up prices and fuelling inflation.

“Trade facilitation measures are needed to reduce the impact of additional border requirements and red tape and help reduce the threat of delays and added costs.  There are a number of simplifications and agreements we are pressing negotiators to deliver which could mitigate many of these threats for our industry and our economy. The need for physical checks should be reduced and any which are required should be take place away from the border.

“Logistics needs to know now what procedures and processes will be used to cross borders, to have time to test and feedback on proposals, and then time to install and train staff. The detail our members need is not available. Complex new systems cannot be delivered overnight without interruptions to the existing supply chain, even with the best will in the world.

“There is a substantial customs agent shortage and member states and the UK government need to urgently address this by giving support, guidance and funding.  Sufficient co-funded training should be provided for those new to completing customs declarations, as well as for those handling a significant increase in declarations and other new administrative requirements.

Speaking on behalf of FTA’s membership, Ms de Jong confirmed that there are other key arrangements which must be clarified if all modes of transport are to continue to cross the UK’s borders effectively:  “Existing arrangements for road, air, sea and rail connectivity must be formally agreed soon or the impact on the availability of goods our society and the economy relies upon will be catastrophic.  And to support this, the ability of UK workers to cross borders easily must be protected – goods cannot move without a human interaction, leaving vehicles stranded at borders if extensive immigration checks are carried out.

“Logistics is a massive sector that’s vital to UK PLC, directly impacting the lives of more than seven million people employed in the making, selling and moving of goods. It is a flexible, highly adaptable industry, which stands ready to support the government as the UK moves towards a new economic relationship with the EU. But government needs to prioritise the needs of logistics in the first round of negotiations, so that we have time to adopt and adapt to the future arrangements to keep Britain and the EU trading after the transition period. December is only a few months away, and we need months not minutes to prepare.”

With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc.  A champion and challenger, FTA speaks to Government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.

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EIB supports refurbishment of Port of Ystad to accommodate climate-friendly vessels



EIB supports refurbishment of Port of Ystad to accommodate climate-friendly vessels. Image: EIB
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The European Investment Bank (EIB) has signed a SEK 445 million (EUR 41.75 m) loan agreement with the Municipality of Ystad. The port in the southern-Swedish town is a busy connection point to the Polish Port of Swinoujscie and the Danish island of Bornholm. The financing will be used to expand the quays to accommodate new, more environmentally friendly, LNG vessels of over 240 meters in length, which will start operating next year.

The project aims at increasing the capacity and upgrading the Port of Ystad facilities in order to accommodate larger ro-pax vessels. Works include the construction of two new, deeper, ferry berths at a new pier located in the outer port basin, with associated facilities in reclaimed areas located to the east of the new berths. It also consists of dredging works in the existing outer basin of the port, the construction of a new breakwater south of the existing eastern breakwater, with a new reclaimed platform for future port activities expansion and the extension of the breakwater at the western part of the port.

The project is expected to improve the climate performance of the port. Measures undertaken in this sense include the improvement of on-shore power supply for berthed vessels, and a reduction of emissions by manoeuvring vessels due to easier berthing.

“Ystad is a key connection point for tourism and transport in Sweden.” says EIB Vice President Thomas Östros. “As the climate bank of the EU, the EIB wants to provide finance to projects that seek to reduce the environmental impact of their operations, while keeping business going and stimulating sustainable growth and job creation. This project is spot on in all of those senses.”

”With this investment, Port of Ystad will soon be well prepared to further consolidate its position as the third largest ferry passenger port in Sweden.” added Björn Boström, CEO of Port of Ystad. “Now, in an even more environmentally friendly way.”

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