Sri Lanka harbors have big maritime ambitions

Sri Lanka harbors have big maritime ambitions

The dramatic recent fire on a container ship off Sri Lanka highlighted the risks involved in the island nation’s ambitions to become one of the world’s busiest maritime hubs.

MV X-Press Pearl burned for 13 days, releasing tons of chemicals and plastics. The sinking ship’s nearly 300 tons of fuel oil may now leak into the Indian Ocean.

How important is Sri Lanka?

Thanks to its geographical location, around 200 container ships and oil tankers sail past every day on the busy routes between Asia, the Middle East and Europe.

But Sri Lanka is also the biggest so-called transshipment hub in South Asia.

Meaning that some of the world’s biggest ships dock in Sri Lanka to load and unload containers.

Colombo, four days by ship from Singapore and four and a half to Dubai, is the only port between those two places deep enough to handle ships.

WHAT ARE ITS PLANS?

Colombo Port now hopes to double its annual handling capacity of 7.2 million containers in four years.

«We are strategically located and we are strategically important,» Sri Lanka Ports Authority (SLPA) chairman Daya Ratnayake told AFP.

«But, we have a serious problem here, the problem is (lack of) capacity.»

India is developing a deep-water port at Vizhinjam on its southwest tip and is planning another in the Nicobar Islands in the Bay of Bengal, both of which may steal some of Colombo’s trade.

WHAT DO OTHER COUNTRIES THINK?

Two-thirds of the transshipment cargo going through Sri Lanka is goods going from or to India.

And New Delhi has traditionally seen Colombo as an ally.

However, since a big chunk of what passes through the Indian Ocean is Chinese-made, Beijing has also shown a keen interest in developing Sri Lanka as a key link on its Belt and Road Initiative (BRI).

Since 2014, Colombo Port has been home to a US$500-million Chinese-run deep sea terminal. To pacify New Delhi, this year allowed India to build another new terminal right next door.

«This is how we are balancing,» Ratnayake said. «We as a country must take all this competition to our advantage.»

Source: Channel News Asia

Block-chain benefits in foreign trade

Block-chain benefits in foreign trade

Block-chain technology provides key functional functions that adapt to the supply chain environment and business needs in international trade and transportation.

  • Transparency
  • Auditable by third parties
  • Immutable data
  • Scalable
  • Safety
  • High degree of automation

But what do these technical characteristics mean in terms of applications and improvements to current processes?

In terms of applications, Block-chain in international trade and transportation could solve.

5 key business of the Block-chain

1. Transparent and secure paperless trading with Block-chain:

Including bills of lading, certificates and letters of credit.

Provides access to the document path and any changes to these documents, whether they are purchase orders, reservations, or invoices.

It ensures the authenticity and integrity of the documents, as well as the transfer of title. An immediate value is avoiding fraud in double billing factoring, for example.

2. Easy procurement and contracting:

The contract can be registered and converted into a «smart contract» * to allow control and automation of its execution.

Block-chain guarantees the irrevocability of these contracts.

These smart contracts can include self-executing features, including payment obligations at the granular level.

Reservation cancellation fees, as well as detention and stay expenses can be invoiced and paid in a clear and consensual way with the potential use of cryptocurrencies.

Block-chain can manage and process warranty claims quickly and automatically.

3. Real-time traceability of goods:

As well as certification of data such as certificate of origin or proof of delivery. Record digital and verifiable events.

The ability to verify the origin of products and their execution in transportation is valuable.

Especially for sensitive cargo such as medicine, food and some consumer goods.

Banks, insurance companies, customs and cross-border agencies can get immediate value in these applications.

4. Real-time traceability:

Of transactions and their correspondence with physical flows.

It can be of great help in automating business finance and asset-based inventory financing.

5. Distribution of information to a network of partners through direct processing:

This without the need for data alteration. It enables collaboration platforms and data pipelines.

Saves time and improves data quality, avoiding multiple data transfers or entries, and reduces the risk of disclosure.

Some applications can be seen in cargo release at terminals, for example.

There are multiple initiatives carried out by large companies or startups in these key fields.

However, Block-chain technology is still not enough in certain areas.

These are the challenges that will be addressed in the coming years in order to have a full implementation beyond simple proof of concept.

The main obstacles are:

  • Lack of strong governance, legal framework, and compliance
  • Lack of data controls
  • Need for standardization
  • Management of related costs and business models
Philippines cuts rice prices to fight inflation

Philippines cuts rice prices to fight inflation

Philippines President Rodrigo Duterte reduced the tariff for imported rice on Saturday (May 15).

To ensure food security and protect consumers in the world’s biggest importer of the grain.

Philippines, who is battling elevated inflation, took into consideration the increase in global rice prices and uncertainties in local rice supply.

The president’s office said in a statement.

In an executive order, Duterte cut the Most Favored Nation (MFN) tariff rates on rice to 35 percent from 40 percent for in-quota purchases and 50 percent out-quota volume for one year.

«To diversify the country’s market sources, augment rice supply, maintain prices affordable, and reduce pressures on inflation.»

In January, the agriculture ministry projected the country to import at least 1.7 million tonnes of its staple food this year to fully cover domestic requirements.

It buys more than 90 percent of import requirements from Vietnam.

The Philippines’ paddy rice output rose 2.6 per cent to a record 19.3 million tonnes last year, government data showed. The agriculture ministry targets unmilled rice output at 20.5 million tonnes this year.

More than 20 tropical storms hit the Philippines annually.

With the strongest typhoons destroying crops like rice and corn in the second half, the peak harvest season.

Duterte also tweaked MFN tariff rates for pork products to 10 per cent for in-quota purchases and 20 percent for out-quota volumes for the first three months.

And 15 percent for in-quota and 25 percent for out-quota from the 4th to the 12th month.

The tariffs were higher than previously-announced rates after opposition by the local hog industry.

The government is rushing to address the shortage of pork supply, hit hard by African Swine Fever outbreaks, that has pushed inflation to the high end of the 2 percent to 4 per cent target.

Source: Channel News Asia

Negotiation mistakes you may be making unconscious

Negotiation mistakes you may be making unconscious

Not everything in international trade is importing and exporting or getting through customs, a fundamental pillar is negotiation.

Negotiations prior to reaching a mutual agreement that can be finalized in an international sales contract implies concessions by both parties.

As well as an approximation of all the positions that the different companies have previously taken.

Knowing our weaknesses can make us stronger so let’s do a quick review of the most common mistakes of companies in the field of international negotiations.

Extremist negotiation

One of the most common mistakes of culture in international negotiations is to conceive of the negotiation itself in terms of «Win or Lose.»

Any process must provide added value that allows both parties to gain mutual gain.

Not being clear about this concept today is starting the house with the roof and the basis for some of the other errors on this list can be found here.

Fronts to convince

An extremist negotiation often generates two fronts that try to convince of their reasoning.

Which in a large percentage of cases causes feedback, hence the need for negotiations to become games to attract the client.

Try to find what the other negotiator wants and offer it in cooperation according to our possibilities.

Fuzzy objectives in the negotiation

To attract, we need to be very clear with our first and second level objectives and the limit of our concessions.

Only in this way will the two parties reach a common area of understanding. When both reach their maximum benefit, they will cordially decide if they are interested in the agreement.

Bad tactics

Tactics that build on past mistakes, but may work locally, rarely work in international trade between vastly different countries to build long-term relationships.

Examples are strategic submission concessions, bargaining as an intermediate solution, the random threat to dissolve the negotiation or the withdrawal tactic.

You have to know very well the tactics that are accepted by that country or company as valid before risking to use them.

Illegitimacy of the agreement

Breaking any sense of fairness, equality or legality in the agreement or proposing it as part of the agreement or import-export process can drastically end the negotiation in many areas.

In countries like Canada it is not allowed to even joke about the matter in many businesses.

Untidy shapes

It is essential in the negotiations to know the culture of the country with which you are going to negotiate as part of persuasion and seduction.

The protocol in formal or informal meetings is a fundamental part of the negotiation and for this the cultural context will give us information on the individualism or collectivism that is expected of us.

A big mistake would be to fall into cognitive dissonances between what is said and our non-verbal communication, generating insecurity and confusion.

Use of time in negotiation

Time must be managed correctly without urgency, but without delay when evaluating options.

Taking into account the Attention Curve, short meetings with breaks are preferable, but with enough time to consider alternatives to the first meeting.

China’s exports grew at a strong pace in March

China’s exports grew at a strong pace in March

China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up.

This amid progress in worldwide COVID-19 vaccination, while import growth surged to the highest in four years.

The data reinforces signs of gathering momentum for the world’s second largest economy as it emerges from the COVID-19-led slump in early 2020.

China’s exports in dollar terms soared 30.6 percent in March from a year earlier.

But at a slower pace from a record 154.9 percent growth in February.

The analysts have forecast a 35.5 percent jump in shipments.

Imports increased 38.1 percent year-on-year last month, the highest since February 2017, beating a 23.3 percent forecast and compared with 17.3 percent growth in February.

China posted a trade surplus of US$13.8 billion last month, versus analysts’ expectations for the surplus to rise to US$52.05 billion from US$37.88 billion in February.

Despite sporadic COVID-19 cases in China’s border cities, authorities have been able to largely contain the virus in a boost to factory activity.

As production has gradually picked up to pre-pandemic levels.

Beijing managed to largely bring the COVID-19 pandemic under control much earlier than many countries.

Thanks to stringent anti-virus curbs and lockdowns at the initial phase of the outbreak last year.

That has helped its economy mount a rapid turnaround after a slump at the start of 2020, led by resurgent China’s exports growth as factories raced to fill overseas orders.

Global demand for Chinese goods have remained strong as the world economic recovery has continued to gather pace helped in part by stepped up vaccination efforts.

China’s gross domestic product expanded 2.3 percent last year, the only major economy to post growth in 2020, underpinned by solid demand for goods such as medical equipment.

Source: CNA

Singapore corroborates participation in RCEP

Singapore corroborates participation in RCEP

Singapore ratified the Regional Comprehensive Economic Partnership (RCEP) agreement on Friday.

Becoming the first participating country to do so, the Ministry of Trade and Industry said in a press release.

The RCEP is the world’s largest free trade agreement, bringing together the 10 ASEAN economies as well as Australia, China, Japan, New Zealand and South Korea.

«Singapore’s expeditious ratification of the Regional Comprehensive Economic Partnership agreement signals Singapore’s strong commitment to strengthening our trade and economic linkages with our partners, for the benefit of our businesses and people,» said Minister for Trade and Industry Chan Chun Sing.

«We look forward to our fellow RCEP Participating Countries doing likewise, to expedite the entry into force of the agreement.»

Singapore has deposited its instrument of ratification with the Secretary-General of ASEAN, said MTI.

The RCEP was signed by the 15 participating countries in November last year.

Prime Minister Lee Hsien Loong said then: «The RCEP is a major step forward for the world, at a time when multilateralism is losing ground and global growth is slowing.»

The RCEP deal establishes a mutually beneficial economic partnership that builds on existing ASEAN agreements with the bloc’s five FTA partners, said MTI on Friday.

Comprising about 30% of global gross domestic product and close to a third of the world’s population.

The deal will complement Singapore’s existing network of FTAs and boost trade and investment flows, the ministry said.

Businesses can expect to benefit from tariff elimination of about 92% on average

As well as streamlined rules of origin for greater flexibility to tap on preferential market access benefits.

The RCEP agreement will enter into force after six ASEAN member states and three ASEAN FTA partners have ratified it.

The participating countries are targeting entry into force on 2022, said MTI.

Source: Channel News Asia .

Top 5 most important navigation channels of the world

Top 5 most important navigation channels of the world

The recent breeding of the Panamanian Flag Ever Given at one end of the largest navigation channels in the world has caused a strong impact on international trade.

That is why we have decided to talk about the navigation channels and what are the most important in the world.

What are navigation channels?

A navigation channel is a waterway or water course of natural or artificial origin.

Artificial navigation channels are very common in many cities, built by the human being, wide and deep enough so that a ship can navigate on it.

Types of navigation channels

Natural navigation channels

Are those geographical accidents carried out by nature without the intervention of man and located in the last sections of a river, a delta or a narrow, although this is usually quite narrow.

Artificial navigation channels

They are also narrow passages, but pass through a watershed, the limit region between two hydrographic basins.

To have an artificial channel it is necessary to dig a long trench and ensure its continuous water supply; This usually is achieved by connecting it directly with the sea, taking water from rivers or springs or pumping the liquid from other sources.

The reasons for building channels are varied, but usually serve to connect bodies of water such as lakes, rivers, seas or oceans.

For example, the Suez Canal was created in the nineteenth century to physically separate Asia and Africa and thus facilitate the pass from Europe to South Asia, connecting the Mediterranean Sea with the Red Sea.

Most important navigation channels in the world

The Suez Canal

The Suez Canal is another of those important navigable channels worldwide. It is situated in Egypt and joins the Mediterranean Sea with the Red Sea.

This work of man converted the Sinai region into a new peninsula, turning it into the border between the continents of Africa and Asia.

It has a length of 163 kilometers, between Puerto Said and Suez.

It is the river way that makes it possible to go directly from the Mediterranean to the Red Sea without the need to border the entire African continent, so its strategic importance is incredible, both at the merchandise level and at the level of tourism.

The Panama Canal

Without a doubt, one of the most important channels is the Panama Canal.

We can say that it is an authentic wonders of engineering, in addition to being one of the most important channels around the world.

This channel is an interopean navigation path between the Caribbean Sea and the Pacific Ocean. It crosses the Panama isthmus at its narrowest point and has an extension of more than 80 km. A maritime passage through which more than 12,000 boats circulate a year, both transport and passenger.

The Corinth Canal

Perhaps not so famous, but another of the important in the world of cruises, is the Channel of Corinth, in Greece.

They say about this channel that is another of the great engineering of the world. The truth is that its beauty is evident, something that also happens with its size.

This channel unites the Gulf of Corinth with the Aegean Sea by the Corinth isthmus.

It was excavated on the rock at the end of the 19th century and has a height of more than 40 meters between these rocks, something that is impressive seen from a cruise.

While it is true that the width does not allow some of today’s biggest ships to circulate out there, it is still a very important and strategic attraction that will leave you completely amazed.

The Grand Canal of China

We are heading this time to China. That is where we find the Grand Canal of China, one of the largest projects of ancient China.

It is one of the oldest (it began to be built at 486 a. C. under the Wu family dynasty) and also one of the largest in the world, surpassing even the Suez or Panama to the one.

This channel begins in Beijing and ends at Hangzhou, so it has more than 1700 kilometers of travel.

The Kiel Canal

Finally, we find the Kiel Canal, in Germany. Recall that this city has the port of Kiel, one of the most important north of Europe.

It is a channel of more than 90 km in length. Its purpose is nothing other than communicating the Baltic Sea with the North Sea, a connection that is able to save enough fuel and hours on the commercial and tourist routes between both seas.

The channel has four locks in the last sections, where both seas are located.

These locks remain open most of the time to facilitate circulation, both commercial and tourist boats.

Importance of navigation channels

Currently, channels facilitate the transportation of millions of tons of goods and raw materials a year between production zones and destination areas.

Undoubtedly, the importance of these as strategic points for world trade will continue to increase over time.

Many governments seek to develop these infrastructure projects to increase the rapidity of supply chains and economic growth.

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The Suez Canal blockage cause a big disarray in trade

The Suez Canal blockage cause a big disarray in trade

The Suez Canal expects 140 ships to pass on Mar 30 after the freeing of a container ship stranded for nearly a week allowed it to reopen.

But experts warned that disruptions to global shipping and at ports could take months to resolve.

The blockage threw global supply chains into disarray, threatening costly delays for firms already wrestling with COVID-19 restrictions.

And nearly doubled rates for oil product tankers.

Shipping convoys through the canal resumed on Monday evening.

After tugs pulled the 400-metre-long Ever Given container carrier free from the spot where it became wedged amid high winds on Mar 23.

«We want to reaffirm in a clear message to the world that everything is back to the way it was,» Egyptian President Abdel Fattah al-Sisi told reporters on Tuesday from a platform on the canal, as container ships passed behind him.

The Ever Given’s grounding across a southern section of the canal forced a halt to all traffic.

Leading to a build-up of 422 ships at either end of the canal and along its course.

Suez Canal Authority chairman Osama Rabie said 95 ships would pass by 1900 local time on Tuesday and a further 45 by midnight, reasserting that he hoped the build-up would be cleared in three to four days.

«We’ll work day and night and God willing we’ll get it done in the shortest time possible,» Rabie said.

Knock-on effects to global shipping and at ports could take much longer to disentangle.

Though the build-up around the Suez Canal might be cleared in four to five days, it could take several months to deal with backlogs at ports. Jan Hoffmann, an UNCTAD expert on logistics, told a briefing.

Shipping group Maersk has also said disruptions to international shipping could last for months.

Source: Channel News Asia

Suez Canal blocked since Tuesday by a stuck ship

Suez Canal blocked since Tuesday by a stuck ship

The Japanese owners of a giant container vessel blocking the Suez Canal said on Thursday they were facing «extreme difficulty» refloating it, prompting Egypt to suspend navigation through one of the world’s busiest shipping lanes. 

It could take weeks to free the ship, said a salvage company, forcing businesses to consider diverting their cargos to the much longer route.

The Suez Canal Authority (SCA) announced that it was «temporarily suspending navigation» through one of the world’s busiest shipping lanes. 

It said it was doing all it could to refloat the Panama-flagged MV Ever Given, a 400m-long vessel that veered off course. 

Satellite pictures released by Planet Labs Inc show the 59m-wide container ship wedged diagonally across the entire Suez Canal. 

It is now blocking transit in both directions through one of the world’s busiest shopping channels for goods, and other products linking Asia and Europe.

More than 200 large container ships, tankers carrying oil and gas, and bulk vessels hauling grain have backed up at either end of the Suez Canal.

This, according to tracking data, creating one of the worst shipping jams seen for years.

Japanese ship-leasing firm Shoei Kisen Kaisha said it owned the giant vessel and was facing «extreme difficulty» trying to refloat it.

«In co-operation with local authorities and Bernhard Schulte Ship management, a vessel management company, we are trying to refloat (the ship).

But we are facing extreme difficulty,» Shoei Kisen Kaisha said in a statement on its website.

«We sincerely apologize for causing a great deal of worry to ships in the Suez Canal and those planning to go through the canal.»

Tugboats have arrived Suez Canal to help refloat the ship

On Sunday, two additional tugboats sped to the Suez Canal to aid efforts to free a skyscraper-sized container ship wedged.

The tugboats will nudge the 400m-long Ever Given as dredgers continue to vacuum up sand from underneath the vessel and mud caked to its port side, said Bernhard Schulte Ship-management, which manages the Ever Given.

Source: Channel News Asia

Singapore exports growth at a slowly peace in February

Singapore exports grew at a slow pace in February

Singapore’s non-oil domestic exports (NODX) grew at a slower pace of 4.2 percent in February from a year ago, after hitting a seven-month high of more than 12 percent in January.

Growth was headlined by non-electronic NODX, which rose by 3.3 percent last month, according to official data released by Enterprise Singapore (ESG) on Wednesday (Mar 17).

A 167.5 percent rise in non-monetary gold NODX was the main driver after such exports plummeted 72.2 percent in February 2020.

Specialized machinery NODX rose 35.6 percent in line with «robust global semiconductor demand» while petrochemicals NODX rose 19.3 percent, also contributing to last month’s non-electronic NODX growth, said ESG.

Electronic NODX grew 7.4 percent from a year ago, driven by exports of personal computers rising 98.3 percent, telecommunications equipment rising 78.6 percent, and diodes and transistors rising 39.1 percent.

On a month-on-month seasonally adjusted basis, Singapore’s NODX rose 8.2 percent last month to reach S$16.7 billion, following January’s 6.9 percent increase.

Re exports grow

Non-oil re-exports (NORX) also grew at a slower pace of 2.2 percent last month, compared to an 8.8 percent increase in January.

NORX growth was driven by shipments of electronics, mainly integrated circuits, telecommunications equipment, and parts of personal computers.

This outweighed a decline in shipments of non-electronics including aircraft parts, non-electric engines, and motors and piston engines.

On a seasonally adjusted basis, NORX rose 4.7 percent last month to reach S$26.5 billion, extending January’s 4.9 percent increase.

Non-oil retained imports of intermediate goods (NORI) grew by S$1.2 billion to hit S$6.7 billion in February, on a seasonally adjusted basis.

Oil domestic exports fell 28 percent in February from a year ago, driven by lower exports to the European Union, Hong Kong, and Malaysia. There was a 29.6 percent contraction in terms of volume.

However, on a month-on-month seasonally adjusted basis, oil domestic exports grew 6.4 per cent in February.

Fuente: Channel News Asia