What is a letter of credit, how it works and who needs it..
Many of you would have come across the term Letter of Credit (L/C)..
If you are a shipping line, you would have heard this term from various customers asking you to expedite the draft bill of lading for checking by the bank or for the release of the bill of lading to be expedited because the shipment is under L/C..
If you a freight forwarder or agent, you may have been put under pressure by the BCO to get all the documents required by the L/C sent to them in time..
If you are a BCO, you may have been told by your bank that the documents submitted do not match the requirements of the L/C and some of the documentation may need to be redone..
So what exactly is a Letter of Credit, what is the need for a letter of credit, who issues it and how does it work..
APL England containers lost at sea – Update 30th May
As reported, the APL England, a 5,780 TEU capacity containership lost around 40 containers off the coast of New South Wales in Australia with around 74 containers lying in a collapsed state within the stacks on board the ship..
Although inspections are continuing, preliminary investigations have found that the lashing arrangement for the cargo was inadequate and that some of the securing points for containers on deck were heavily corroded..
These findings are clearly in breach of the requirements of SOLAS (The International Convention for the Safety of Life at Seas) and as a consequence, the ship has been detained in the Port of Brisbane by AMSA and it is understood that this detention will be lifted only after these serious deficiencies have been fixed by the ship’s owner APL and the vessel operator..
In the meantime, charges have been laid against the Master (Captain) of the APL England relating to pollution and/or damage of the Australian marine environment due to this incident..
UN Agencies issue plea to Governments for facilitation of crew changes
“The restrictions for crew change due to COVID-19 is unsustainable for the safety and wellbeing of over 150,000 seafarers who will require international flights to be changed over to and from the ships they work on from the middle of June 2020. These seafarers are having to extend their service onboard ships after many months at sea, unable to be replaced or repatriated after long tours of duty.”
This is the message from The Secretary-General of the International Civil Aviation Organization (ICAO), the Director-General of the International Labour Organization (ILO) and the Secretary-General of the International Maritime Organization (IMO) who issued a joint statement to enlist the support of Governments for the facilitation of crew changes in ports and airports in the context of the COVID-19 pandemic.
Containers falling off ships while at sea – who is responsible..??
2019 was quite the year for maritime disasters with ships on fire, containers falling off ships etc.. 2020 seems to be hitting the industry in other ways which could also be considered a kind of maritime disaster..
But in what may be the first reported case of containers falling off ships in 2020, the APL England a 5,780 TEU capacity containership lost around 40 containers off the coast of New South Wales in Australia.. It has also been reported that around 74 containers are lying in a collapsed state within the stacks on board the ship..
Such incidents bring to the fore the question whether the ship register or ship registry is liable for containers falling off a ship and who is really responsible..
Guidelines for claims handling and submission
For obvious reasons, no one wants to receive cargo claims. More so, carriers who carry the cargo from A to B. It could possibly be the reason why there is a lot of misunderstanding among BCOs and OTIs about which documents are really necessary to submit and which are completely irrelevant in the process of claims recovery.
Below are some simple guidelines for claims handling and submissions. I hope this will help to make the claim submission process as efficient and as simple as possible for you.
The beginning of the end for the Paper Bill of Lading
Many things have changed in the last 30 years in shipping and freight..
Many positive new developments have taken place with things from the vintage days of shipping either obsolete to almost obsolete now..
If you look at many of the news items about the industry recently, there has been a certain buzz and intensity around the electronic bill of lading..
I am fairly confident that people entering the shipping and freight industry in the next decade will be told that 2020 was the year that saw the beginning of the end for the paper “Bill of Lading” and the year in which the switch to “Electronic Bill of Lading” (eBL) began in earnest..
China extends Ballast Water Treaty to cover Hong Kong SAR
Ballast Water Treaty is an important international treaty which helps prevent the spread of potentially invasive aquatic species by ships.. This treaty got a major boost following China’s extension of the treaty to the Hong Kong Special Administrative Region.
Ships flagged to Hong Kong, China – the fourth largest flag Administration in the world by shipping tonnage – will now be required to apply the requirements of the Ballast Water Management Convention (BWM).. This mean that this treaty now covers more than 90% of shipping worldwide..
4 industry executives look into the future of global supply chains
COVID-19 is probably the world’s most disliked word currently due to the rampant economic disruption it has wreaked on the world. All countries and all businesses around the world have been affected by this pandemic.
The supply chain industry is one industry that has also been affected severely. The industry has seen a massive drop in volumes, congestion both on land and at sea, job losses etc, although ironically this is one of the industries that has and is helping to fight this pandemic through its movement of essential goods like medical supplies, food and PPE.
At the end of March 2020, we set up a short survey sponsored by Ocean Insights to analyse the impact of the pandemic on the industry and its preparedness.
12,000 clicks of that survey and the analysis and a 95% engagement rate told us that in times of strife, people want to come together, understand what is going on and help each other out of this situation.
So, we got together a team of executives to discuss these issues in a webinar moderated by an equally celebrated and astute industry journalist.
Investing in freight technologies – are you ready..?? Take this survey..
Transportation is the lifeblood of global supply chains. Whether it is raw materials, CKD (Completely Knocked Down), SKD (Semi Knocked Down), or FBU (Fully Built-Up), the movement of goods are handled through various modes – from origin to destination.
Supply Chain Management (SCM) in general, and transportation in particular, can be very complex. This involves the integration of information at various stages of the supply chain process and entails several modes of transport like road, rail, air and sea.
The role of technology has grown exponentially in the last decade. It has transitioned from a period when technology infrastructure was being developed to a period where the likes of Software-as-a-Service or cloud-based solutions have become a norm.
However, it is also true that a lot of BCOs and international logistics companies are still running their businesses on manual, archaic and other disparate systems.
We would like to understand how you are managing these turbulent markets, how integrated your systems are, and overall, we want to identify current logistic trends and best practices — could you help?
Does ICC (A) clauses cover cargo claims for delays due to COVID-19..??
As we have all seen, COVID-19 is causing severe imbalances in world trade which is affecting everyone, whether it is an exporter, importer, shipping line, shipowner, freight forwarder, trucker, or a spaza shop around the corner..
While ships are moving, ports are discharging and loading containers, nothing is as yet at a 100% capacity in most of the countries around the world..
Ships are facing port congestion resulting in blank sailings, containers are stuck in storage at ports, terminals, and depots around the world for later deliveries creating longer delays than anticipated and also causing yard space congestion..
In view of the delays experienced by the trade, we look at the question – Does ICC (A) cover cargo claims due to COVID-19 delays..??