Transport sector consultation: shoulder to shoulder Leading the railway into the 21st century
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Responsible publisher: Olivier Schoenmaeckers
Administration: Ines De Bruyn
Marketing: Vanessa Thys
Change of address: Ines De Bruyn, ines@forwardbelgium.be
Editors: Nicole Verstrepen, Olivier Schoenmaeckers
Pre-press: Ingrid Renders
Concept & creation: KMOdynamoo
The time has come for peaceful Christmas messages and hopeful wishes for the New Year.
I can certainly think of a couple, but the truth is our industry is facing serious challenges.
In recent weeks reports have reached us that bookings made by freight forwarders are no longer being accepted by Hamburg Süd. We have confirmed that colleagues are also confronted with this problem at foreign ports.
This situation comes as no surprise, given Maersk’s long-standing strategy to control the entire logistics chain as a ‘container integrator’.
The historic profits that this shipping company has recorded over the past two years, in times of complete disruption of the global maritime chain, have enabled it to integrate extensively into the logistics chain through acquisitions. These acquisitions, of freight forwarding companies, customs agents and logistics service providers, mean Maersk is no longer profiling itself as a mere provider of ocean transport.
This development has not escaped FORWARD Belgium’s notice. For several years now we have been calling on our sector to reflect on its own added value by investing in digitalisation, sustainable logistics solutions and other innovations to be in a position to face down ‘external market forces’.
CMA CGM spent around six billion euros in recent months on acquisitions of freight forwarders, container terminals, an intercontinental air cargo fleet, an e-commerce platform with direct access to a hundred thousand new customers around the world. Moreover, they funded the deals out of their own pockets.... Amazon has been chartering cargo ships and intercontinental air freight for some time, building its own shipping containers... Amazon has been working for years to establish its own logistics strategy and network. Not so much to reduce costs, but to reduce dependence on logistics service providers.
Amazon has set up its own ocean freight forwarding business through a Chinese subsidiary. That service accounts for 10,000 ocean containers between China and the U.S. each month. This puts it in the top five on ocean freight forwarders in that market.
Let’s not forget that shippers today are still confronted with high sea freight, additional costs due to disruptions in the maritime chain, lack of ship capacity and containers, delays in their supply chains resulting in economic damage. It is to the credit of neutral logistic service providers and freight forwarders that goods flows continue to move, by independently searching for the ideal solution, across the various ports and modes and by weighing up various shipping companies. Shippers who are currently being approached directly would do well to bear this in mind.
The Italian competition authorities recently handed down a 1.1 billion euro fine against Amazon for abuse of its dominant position. As a logistic services intermediary on its own platform it disadvantaged other logistic service providers and suppliers.
In this respect, we are also currently examining whether all applicable legal provisions are respected by all new market providers.
Above all we must build on our own strengths and meet the challenges of 2022 with confidence!
Olivier Schoenmaeckers
Together with other rail stakeholders in Europe, Geert Pauwels, CEO of Lineas has drawn up an action plan to make rail the backbone of European transport. “Our ambition is to double rail traffic by 2030. It’s a necessary shift for the climate and for mobility. Europe stands ready to support us in this. It is important to get the funds committed now,” he says.
75% of all freight transport in Europe is by truck. Leaving aside the many traffic jams, freight transport is responsible for 10% of all CO2 emissions in Europe. Moreover, 40,000 Europeans die every year due to fine particles.
Geert Pauwels: “By 2030, we expect no less than 30% growth in transportation. The result will be even more congestion and more CO2 emissions affecting us all. While it’s true that electric cars are on their way along with innovations such as platoon driving, they will not necessarily solve our mobility and energy problems. If we really want to achieve our climate and mobility goals, we need a modal shift.”
“Rail transport emits nine times less CO2 and eight times less particulate matter. And even if mobility becomes fully electric, trucks will still consume six times more energy than trains. One train can transport up to 50 containers. We could solve the mobility problem overnight. The railway still has plenty of capacity waiting to be unlocked.”
To achieve a successful modal shift to rail, three parties must take action: the railway companies, the infrastructure managers and the government. Geert Pauwels is convinced that customers will follow: “As railways, we need to modernise and digitalise and offer rail products that are so good our customers wonder why they would ever go back to trucks.”
Infrastructure managers should take on the role of flow manager: “If we want to send a train to the Czech Republic today, for example, we have to apply for a path in each country along the route, sometimes up to a year in advance. We also have to ensure that the paths are coordinated. If a problem arises in one country, we
don’t get an automatic notification. With good digital flow management, running a train across Europe would become as easy as running a truck across the continent.”
“What we are asking from the government is for a level playing field between the different modes of transport. Right now, railway companies have to deal with many costs that road transport simply doesn’t face. In concrete terms, we’d like to see an emissions trading system based on the ‘polluter pays’ principle. Just as for industry, such a system would ensure that the CO2 emissions are included in the price of transport.”
Geert Pauwels demonstrates that five innovative technologies can improve freight transport and make it more dynamic.
For example, the railway sector is calling for a single uniform safety system for the whole of Europe: “It won’t be fully rolled out until 2035–2040, but we are advocating for a much faster realisation.”
Geert Pauwels (CEO Lineas):
Digital capacity management would make it possible to request cross-border paths digitally: “Such a system already exists in Germany. With a ‘click and ride’ you have a path in just a few clicks. What we need is a ‘Google Maps’ for rail.”
The creation of a shared digital data platform at European level would enable all stakeholders in the supply chain to exchange information very easily and uniformly and to connect end-to-end.
Wagons are still coupled together manually at present:
“That’s hard work that has to be done time and time again, including at night. On most continents this already happens automatically. The wagons are driven against each other and automatically coupled. We have now developed a technology so our wagons can be coupled digitally and automatically.”
Tests with self-driving trains have already taken place at European level: “If we get to where trains can run automatically, rail transport will become even easier and safer. That’s how we take the railway into the 21st century.”
Geert Pauwels outlined this plan of action to the European Commission some time ago: “This project fits perfectly into the EU’s Green Deal. Europe is enthusiastic and positive, but, in the coming months, it is important that real decisions are made and that the necessary funds are allocated.”■
“The greatest threat to our planet is to think someone else will save it” (Robert Swan)
Geert Pauwels also presented this project at the climate summit in Glasgow on behalf of the entire European rail sector. One of his slides included the above quote: “The greatest threat to our planet is to think someone else will save it.” In Glasgow, I felt three movements. The first movement was that of nations and politics. Honestly, we regularly hear that they’re not making enough progress. The second movement was formed by companies, NGOs, financial institutions ... who do not want to sit around and wait for governments to act. I attended a number of sessions in Glasgow where I really felt that the world of business was setting something new in motion. The third movement is driven by the activists. I spoke to an African girl who told me in a very moving way how her family will be forced to leave their country if nothing is done to combat global warming. Seeing those three movements gave me pause. We must all take action and drive the transition to climate neutrality forward.”
Under the heading ‘The Way Forward’, Alfaport has brought together the professional associations of the Antwerp port community to agree priorities for digitalisation projects.
John Kerkhof, Chairman of the FORWARD Belgium Digitalisation Committee, is a satisfied man. Although each of the professional associations has its own vision, insights and wishes, they have successfully agreed on a joint path. Significant steps forward are currently being made in the area of digitalisation.
The chairman explains that the professional associations, under the guidance of BDO Digital, have ranked some twenty digitalisation projects with a common interest by order of priority: “The goal is to create much more transparency throughout the chain. The order of the projects has been agreed. The next step is to fit those projects into a NxtPort roadmap.”
In tangible terms, a digital pact is now being drawn up between the private port community and the Port Authority to tackle projects in a concrete way.
“We are assessing feasibility project by project. Looking at the cost price and drawing up a cost recovery model... The Port Authority is providing advance financing. For each project, we create a business model to pay the Port back. We also consider
whether new applications need to be built. Sometimes existing apps are enough.”
One of the ‘The Way Forward’ projects high up on the priority list is the further expansion of the Bulkchain platform. Only the delivery of goods to the quayside has been digitalised so far. The loading order and customs clearance will now also be digital.
Another important project for freight forwarders is the expansion of ‘green lights’ on the NxtPort platform. “We are asking for ‘export green lights’, where the export declaration becomes visible to all stakeholders. At the moment, for example, goods are sometimes loaded on board without a valid customs declaration. At FORWARD Belgium we have also pleaded to integrate the VisiGIP app in the CPU app, so that the customs inspection status becomes transparent in a single application.
Such a large digitalisation project will succeed or fail based on data exchanges. John Kerkhof says that there is a strong commitment among the professional associations: “They have all endorsed the digital pact and will be mobilising their members to participate. We are striving for ev-
ery company to connect to NxtPort, the big ‘data pot’, where you can find the data you need.”
At European level, Customs also has a number of large IT projects in the pipeline, described in the Multi Annual Strategic Plan (MASP).
“Although Europe is one customs union, with one customs law, there are still 27 separate customs systems. The Import Control System (ICS) will be centralised in the course of 2024. This means that we will no longer have to send advance notifications to the first port of loading, but to the central solution ICS2. This will preserve the confidentiality of your commercial data.”
John Kerkhof explains that this will have a significant impact on freight forwarders: “In the new system, a freight forwarder who defers his own bill of loading will then also be able to do his own advance notification.”
Belgian customs is set to introduce a new declaration system in 2023 and switch to a modular system: “The software companies are busy adapting their solutions to this new application. We urge you to check with your software vendor in good time to see how they are addressing this and what impact any changes will have on users.” ■
A couple of months ago a sustainability label was created for freight forwarders, customs agents and logistics service providers. The label is called ‘FORWARD Goals for sustainable development’ and has its own logo.
Companies that can demonstrate their commitment to the SDGs through concrete actions taken within their company qualify for the label.
The label distinguishes itself from other certifications or similar sustainability charters by its low threshold. It involves no heavy procedures or audits. Instead a company visit, video or presentation is used to assess whether the proposed actions meet the 17 SDGs.
FORWARD Belgium’s ambition with this initiative is to position the Belgian logistics community as providers of sustainable logistics solutions.
FORWARD members who obtain the label can show their customers how important sustainable business practices are to them. Moreover, in the midst of the ongoing labour shortage, it is an asset to attract young people.
The first awards and certificates were presented during a LIVE networking event on 16 November at Ark Antwerp. The following companies were awarded the FORWARD
Goals label:
- Embassy Freight Services Europe
- Haeger & Schmidt Logistics Belgium
- TCI Carriers
- Portmade
- Deloitte Belgium
The following companies were awarded the FORWARD Goals Gold label:
- H. Essers
- Ahlers Belgium
- Ziegler
- Fast Shipping & Forwarding Belgium
An annual FORWARD GOALS Award was also presented to Ziegler for its Cargo Bike XXL. ▪
Would you also like to participate and receive an award and certificate?
Contact the FORWARD Belgium secretariat for more information: info@forwardbelgium.be
A European Court of Justice ruling, Judgment LC C-288/16 of 29/06/2017, severely restricted the scope of the VAT exemption (Article 146(1)(e) under Directive 2006/112/ EC).
The ruling states that the VAT exemption can only be applied to transport services with a direct link to the export of goods.
The judgment had consequences for Belgian VAT legislation as regards the application of the exemption provided for in Article 41(1), subparagraph 1, 3 of the VAT Code. As a result, the exemption for transport services with a direct link to the export of goods applies only between the supplier of the service and the consignor or consignee of the goods to be exported. There must always be a link with the physical flow of goods to a destination outside the EU and this must be demonstrated by the parties.
If logistics intermediaries are used who reply on a subcontractor to carry out the transport service, the service provided by the subcontractor cannot be exempt from VAT.
This change concerns only transport services related to exports and carried out by subcontractors. There is no change for other services related to transport and for services related to imports.
VAT Circular 2021/C/96 regarding the VAT exemption for transport services with a direct link to the export of goods was published on 27/10/2021.
After consultation with the sector, the decision was taken to postpone the entry into force of this circular until 01/04/2022. This postponement was confirmed with the publication of VAT Circular 2021/C/101.
FORWARD Belgium, in collaboration with Alfaport VOKA, has commissioned an analysis of the impact of this change on the sector.
An information session was held on 6/12. Please contact the FORWARD Belgium office to request the slides from this information session.
In light of the impact on procedures and systems, it is essential to take the necessary steps in your company. ▪
Freight forwarders and carriers are often faced with the same challenges. This is what FORWARD Belgium found when drawing up the conditions that freight forwarders can place on their contract partners. However, they are deemed too one-sided by the transportation federations. In the meantime, consultations are underway. “And they are being held in a constructive spirit. We are confronting the problems shoulder to shoulder”, says Freija Fonteyn, deputy director of Transport en Logistiek Vlaanderen.
Freija Fonteyn says that the transport federations and FORWARD Belgium are on the same wavelength: “Through much deliberation we have moved towards one another. As the last two links in the chain, we often struggle with the same issues. There has been a lot of mutual understanding and we’ve been able to iron out many tricky sticking points.”
In order to facilitate the communication between carriers
and freight forwarders, the transport federations and FORWARD Belgium are working on templates for the exchange of information: “We think that members who start working with the templates or integrate them into their system will avoid many arguments down the line.”
One of the issues on the table between FORWARD Belgium and the federations is the global supply chain congestion which is resulting in considerable disruption.
“The carriers don’t always notify us straight away or provide all the necessary information. If we receive updates too late, for example, there are often no timeslots available for unloading or loading.”
This congestion leads to long waiting times for drivers. “Many customers are only prepared to pay for waiting time once the driver has checked in at the terminal, but
by that point the driver has often already been waiting on the highway for a considerable time. This puts the transport profitability under serious pressure. Then we have the driver shortage to contend with. Shipping companies and terminals have to understand that prospective drivers are more inclined to choose niches other than container transport. A driver would rather drive than sit around waiting. With a growing shortage of drivers, the problems on the docks are only going to get worse.”
FORWARD Belgium and the transport federations agree that a 24-hour economy is part of the solution, but all links in the supply chain must be willing to play their part.
Another sticking point is the poor condition of containers. “Drivers are often required to assess the condition of a
container, but this isn’t as easy as it sounds in practice. Because it is night, for example, or because the driver cannot do a thorough inspection from the ground. If a container in poor condition is then rejected and a new one has to be delivered, there is often a disagreement about who should pick up the cost.”
FORWARD Belgium and the transport federations are also looking into the problem of overseas containers that have not been stowed properly. This often leads to heavy overloading of the axles, resulting in heavy fines. Freija Fonteyn argues that container carriers, on the one hand, are not authorised to open loaded (sealed) containers and do not have the means to redistribute the cargo. Transporters who have invested in an axle weighing system are increasingly refusing to carry such containers because the risk of a fine is too great.
FORWARD Belgium and the transport federations are attempting to set out, in black and white in the templates, what forwarders and carriers can expect from each other during a transport. They aim to finalise the terms in the first few months of 2022. ■
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“ We think that members who start working with the templates or integrate them into their system will avoid many arguments down the line”
During the Corona pandemic, freight forwarders have been working from home en masse, dealing with worldwide congestion from behind their computer screens. “The job of freight forwarder requires extra effort these days. Our mission to connect young people in our industry with each other and with experienced professionals is more important than ever. We’ve had to put many of our activities on hold. Still, we are enthusiastic about the new working year”, says the board of Young FORWARD Belgium. President Tia Meyvis and vice-presidents Stijn Verbist and Cédric Peeters have noticed that members are losing touch with the association because of the lack of physical meetings.
Stijn Verbist: “We’ve noticed that fewer young professionals are finding their way to Young FORWARD
these days, and we have found it more difficult to reach out to them because our activities had to be cancelled.”
Tia Meyvis says that Young FORWARD did organise some online activities during the various lockdowns, but they didn’t garner much support: “Understandably, after a full day of online meetings, there was little appetite to stick it out behind the computer screen again in the evening.”
“We often come up with ideas for activities on interesting topics for our sector at informal, physical meetings, among other things. Because they can’t take place at the moment, it is more difficult for us to find out what topics our members want us to tackle in information sessions and the like”, adds Cédric Peeters.
But not everything was doom and gloom over the past twelve months.
Stijn Verbist: “At Transport & Logistics Antwerp we organised a hackathon that attracted 100 participants. Recently, I also went along to Karel de Grote Hogeschool and Thomas More Hogeschool in Mechelen to promote the freight forwarding profession among logistics and transport students.”
Young FORWARD Belgium also participated in the University of Antwerp’s ‘Beroepencarrousel’ careers event.
All three board members agree that freight forwarding remains an attractive and fascinating profession even in these difficult times. “It is a multifaceted job and that, in times of scarcity, exploding container prices and a driver shortage, can be extremely satisfaction when you can propose good solutions to your customers”, says Stijn Verbist.
In the meantime, the board is enthusiastic about the new working year. Tia, Stijn and Cédric hope to be able to organise some fun activities again soon, like the FORWARD Cup soccer tournament and the FORWARD Afterwork party. ■
Save the date!
12.05.2022:
Young Antwerp Anchorage Congress organised by Young FORWARD Belgium, Antwerp Shipping Association (ASV): The Next Generation, YoungShip Belgium and Alfaport Voka & Jong VOKA Antwerpen-Waasland
