Tag Archives: trade

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BIMCO launches new cybersecurity clause

BIMCO is one of the leading standardization forces in the world of shipping. Here is an example related to cybersecurity.

How do you write a contract that binds participants to provide an appropriate level of cybersecurity?  As the article makes clear, cybersecurity has been an issue in several recent shipping incidents.  Cyber attack is very real, and shipboard systems are great targets; they have low-speed interfaces to the network, there are relatively few kinds of content transmitted, and they operate in international waters where there is no specific enforcement.  And cybersecurity can be expensive, though it is low-cost compared to the damage that could result from just one incident.

Standards are needed.  BIMCO springs to the task.  The drafting team consisted of a law firm, shipowners, P&I clubs, and Klaveness, a maritime investment firm.  There’s a two-fold notification process; immediate notification of an incident, and then a detailed notification once an incident has been investigated.

The parties are required to share the information throughout. This last point is important, because cyber events often require joint resolutions for mitigation and future prevention.

The contract element also requires any third parties employed by the participants to have adequate cybersecurity, and makes the primary firms responsible for seeing to it.

Now we will have to see whether the clause catches on in the contracts we see written.  There is always a risk with a top-down driven standard; it may miss the issues the market needs to address.

Research has shown (albeit in other contexts, such as health care) that top-down standard initiation often does not produce the penetration of results that flexible evolution of a standard does.  However, someone has to start the ball rolling, and here we have a credible effort.

Let’s now see more innovation in this area of contracting, and let’s see the results in the open, so the best combination of terms emerges and gets global acceptance.

screenshot-Digital Ship 2019-05-24  via BIMCO launches new cybersecurity clause – Digital Ship – The world leader in maritime IT news

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Sensors, ‘grey boxes’ and opportunities

 of the Loadstar has a short article about a vision DPWorld has for integrating data and logistics.  He describes some innovative activities. In Yiwu, China DPWorld has an agreement for a project that allows customers to clear cargo through customs before it leaves for Jebel Ali. The DP World representative also pointed out that in the future, each item in a box may carry a sensor.  Box handling equipment could make use of the sensor data (eg, promised delivery dates) to route boxes by a faster or slower route.

It isn’t clear to me how the second method will work out–  I’m reminded of the old Fedex cartoon where the delivery man is swimming ashore to a client on a desert island with a wrapped package, but the stranded client says “But my birthday is tomorrow!”. Rerouting a collection of cargo on the basis of, say, average due date,  is fraught with problems. Are the partners in each supply chain ready for early delivery, or do they want it, or will they actually pay to have it delayed?     I used to have a copy of this cartoon which I showed to my logistics and operations classes, but it’s gotten lost over the years.

There’s no question that improving customs clearance and in fact throughput at any stage will benefit from accurate and easy data interchange.  But for that, you need some standardization, and for it to transform the industry the standards need to be common for the whole industry.  I’m reminded of the effort it took to translate US freight codes to the Harmonized codes used in international traffic.

Standards need to be set, and where they deal with complementary processes they need to be set broadly so that everyone can participate.  That requires some joint standard setting.  It happened for INCOterms, it happened for disk drive interface standards, it happened (more or less) for EDI;  but it takes a village.  One or two firms can’t do it.

logo  via Sensors, ‘grey boxes’ and opportunities in an age where ‘data is the new container’ – The Loadstar

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Flexport access to SF Airlines’ Hangzhou-New York route

This article from the Loadstar indicates that supply chain firms such as Flexport are struggling to align themselves for the volatile tariff situation we have now.  Some firms are leaving China but others are staying in and look for an alternate shipment method with more speed and smaller inventory.

SF Airlines (Wikipedia) is a Chinese cargo airline with headquarters in Shenzen, Guangdong Province. They have about 55 aircraft. SF submitted an application to the USDOT last week for a 3x per week service on the Hangzhou-New York route.  We will see if approval is granted.

Flexport indicated they are seeing a dropoff in trade with China.  But 3PLs like Flexport work to help companies transport goods from anywhere.  Rearrangement of transport becomes the norm, and their business depends on success for their customers.

logo  via Flexport confirms access to SF Airlines’ services between Hangzhou and New York – The Loadstar