How can we improve international trade flows?

4 February 2020

Those who trade internationally know that it’s a complicated business. In addition to transport, factors such as international legislation, Incoterms and customs legislation must also be taken into account. However, the further specification of these rules as defined at (inter)national level is not always favourable in practice. This is where trade associations such as FENEX come into play. What is the importance for forwarders and shippers of what is for many an unknown force?

A strong base to work with

In short, freight forwarders are responsible for the international transport of goods in the fastest and most efficient way. Behind the scenes, however, there are countless other activities that a good freight forwarder engages in. Active participation in trade associations is a good example of this. This is the only way to give more effective direction to everything that international trade involves.

FENEX is by far the best-known trade association in the Dutch logistics sector. Only freight forwarders who meet certain conditions may become a member. Membership has several advantages, including:

• Forwarders are allowed to work according to the Dutch Forwarding Conditions, also known as the ‘FENEX Conditions’. These general terms and conditions are a widely used standard in the logistics sector.
• It’s all about dependability. That’s why FENEX acts as guarantor for its members, and the members for each other. This means that shippers may claim against the FENEX Guarantee Fund if a forwarder affiliated to the FENEX goes bankrupt.

Ritra Cargo is not only a member of FENEX, but is also represented on the board. This active involvement enables us to properly represent the interests of shippers in international trade.

Helping shippers out of trouble

As a representative of freight forwarders, FENEX has a great deal of influence on an international level. A good example of this is the bankruptcy of Hanjin in 2017, which is still fresh in many people’s minds. Ships were detained and shippers were left empty-handed. Thanks to the efforts of FENEX, the goods of affiliated members were among the first to be exempted. This incident illustrates the importance of trade associations and membership.

But FENEX has also been an important partner of freight forwarders in the field of customs legislation for many years. Together they ensure that the sometimes difficult (new) legislation is made workable in practice. This was the case, for example, in 2016 with FLEGT licences, which are required for imports of timber products from Indonesia. These regularly contain errors, which led to many delays in the release of goods, especially in the start-up phase. Thanks to FENEX, forwarders could sit around the table together with the Dutch Food and Consumer Product Safety Authority (NVWA). In the end, this was the start of closer cooperation in this area. As a result, the number of delays of imported goods due to incorrect FLEGT licenses was greatly reduced.

Influencing international regulations

Trade associations such as FENEX also exert their influence in Brussels. One topical example is the discussion about the so-called ‘General Block Exemption Regulation’ (GBER). The GBER ensures that container shipping companies cooperating in alliances do not have to comply with the generally applicable EU competition rules. This exception has been in force since 1995 and will expire this year. However, the EU may also decide to extend the GBER.

Shippers, freight forwarders and FENEX believe that container shipping companies have an unfairly dominant position thanks to the GBER. This is because they are allowed to make secret agreements with each other about the number of ships they let sail at the same time and the sharing of cargo space, among other things. By now, almost all shipping companies are working together in alliances, which makes the influence of GBER very significant. That is why FENEX is working hard in Brussels to abolish these regulations.