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8/F, CHINA HONG KONG CENTRE, 122-126 CANTON ROAD, TSIM SHA TSUI, KOWLOON, HONG KONG. TEL: (852) 2796 3121 FAX: (852) 2796 3719 EMAIL : [email protected] WEBSITE: http://www.haffa.com.hk

HAFFA ANNUAL REPORT 2009-2010

For

FAPAA 37th Executive Council Meeting

Singapore

4th – 5th June 2010

Content 1. Chairman’s Report for the Year 2009-2010

2. Airfreight Sub-Committee

3. External Affairs Sub-Committee

4. FAPAA Liaison Sub-Committee

5. FIATA Liaison Sub-Committee

6. FIATA World Congress Report (Geneva, Switzerland)

7. FIATA Airfreight Institute (AFI) Report (Geneva, Switzerland)

8. FIATA Working Group Sea Transport Report (Geneva)

9. Greater China Affairs Sub-Committee

10. Information Technology Sub-Committee

11. Legal Matters Sub-Committee

12. Logistics Sub-Committee

13. Membership Sub-Committee

14. Policy Sub-Committee

15. Public Relations Sub-Committee

16. SME Development Sub-Committee

17. Training Sub-Committee (attached in a separate file)


Chairman Report for the Year 2009-2010

Date: 12 April 2010 1. Brief overview Over the last year, the resilience that distinguishes Hong Kong freight and logistics service providers was still put to the test. We all witnessed the slackening international economy in the first three quarters leading to the cargo throughput at Hong Kong International Airport was 3.35 million tones last year - the business airport for international air cargo in the world, a decrease of 7.7% over 2008.. Seaports handled a total of 20.9 million TEUs in 2009, a decrease of 14.3 % over 2008. Considering the substantial improvement in shipment demand that we have seen during last quarter of 2009, we hope that 2010 holds a better promise. How long it takes the industry to get back to the level of 2007 are anyone’s guess, but we will surely see much better results this year. 2. Events that are shaping our industry To Better Meet the Needs of Members – POLICY After falling off a business cliff in October of 2008, throughout 2009 HAFFA Members paid a lot of attention to developments in the markets and they continually challenged and reassessed the way they managed their business. By the same token, the Association wanted to strengthen Members’ future business by communicated the need to the SAR Government in the situation whereby there was no uniform policy and procedure in handling transshipment of different commodities since they were controlled and administered by different Government agencies. And we suggested (1) items to be removed from the list of strategic and controlled items, and (2) proposed a one time declaration for all import and re-export cargoes in order to facilitate its operations. After series of positive discussions with CEDB, THB and the Customs and further more Government officials visited the HAFFA Committee Members’ warehouses to better understand our concern of unnecessary delay in transshipment operations, there were gradual improvements such as Trade and Industry Department (TID) has held separated meetings with us to understand the concern from frontline staff in our industry, and subsequently reinforce the express channel called “Approval-in-Principle Arrangement for Bulk Users of Strategic Commodities Licensing Service” and organized more on-going industrial seminars for Members. We believe the Q & A session of the seminars will serve as an interactive platform in which Members may bring out many practical questions and constructive views for service improvement purpose. Security (Revised RAR and 100% screening by US TSA) In addressing the call for both security and trade facilitation, we did mention before that we have successfully completed the consultation works between the Civil Aviation Department, airlines and shippers in response to the recommendations made by International Civil Aviation Organization (ICAO) to reform the current Regulated Agent Regime in Hong Kong for better air security. Just to recap briefly, HAFFA have had lengthy discussions with the Shippers’ Council to come up with a proposal of a new mechanism aimed to strengthen the oversight of Known Consignors which give the least extra workload and costs to Members, especially under the keen competition of our neighboring airports. After we submitted the proposal to the Aviation Security Committee (ASC) for consideration, CAD briefed the good news that ASC had endorsed the joint proposal. To this, we are very honored to have invited official from the CAD to give us the details at the upcoming HAFFA AGM in April.

On a wider spectrum, HAFFA has been closely monitoring the progress of impact of the US TSA directive, mandating 100% screening of belly cargo on international flights in August this year. And we have participated in the Carrier Liaison Group meetings to find out if airlines or CTOs have any requirement in comply with the 100% screening of goods carried on passenger aircraft to U.S. For sea freight the scheme was rolled back to 2014 by the US Department of Homeland. All of this, iff change from our current practice, will result in increased costs and added complexity at every level of the supply chain. Lithium Battery by Air and ROCARS Apart from these security initiatives, HAFFA has also pulled out all stops to assist Members in making the right turn to face the challenges of the recent policy adjustments regarding Lithium Battery by air, by giving proper newsletter guidance early this year and best practice information. And for the final stage of development of the electronic system for Customs Clearance of Road Cargo (in short: ROCARS), the Customs has closely worked with us and other industry stakeholders to finalize detailed operational matters in the past few months in the run-up to the launching of the ROCARS system. And we also look after the best interests of Members and have negotiated a special Member package with the e-certificate service providers. The system is now ready and the application for ROCARS registration has started from 22 January 2010 onwards. To allow time for all parties concerned to prepare themselves for the submissions, there will be a 18-month transitional period before mandating the e-ACI submissions for road cargoes in mid 2011. In order to encourage the industry to engage in early migration to ROCARS so as to overcome any teething problems as early as possible, the Customs and HAFFA have started large-scale publicity programmes. Meanwhile, we have built a ROCARS corner in our website and successfully invited senior official from the Customs to speak at the HAFFA AGM so Members are constantly kept abreast of the latest information of ROCARS. There is no doubt that cargo freight is witnessing rapid change and increasing complexities in cross-border trade. Today more than ever, the Industry has to clearly distinguish between regional and global issues and approach them on a common interactive platform, along with all stakeholders. IT (RFID and Software Agent Technologies) Being the first IT project concerning air freight operations, it is entitled “Enhancing the Competitiveness of the Hong Kong Air Freight Forwarding Industry using RFID and Software Agent Technologies” sponsored by the Innovation Technology Fund under Logistics and Supply Chain Management Enabling Technologies Centre (LSCM R&D Centre) and carried out by the Hong Kong Polytechnic University (PolyU). HAFFA is actively participating in the project to hopefully excavate the maximum benefit to the industry. Thanks to all participating Members who took part in a series of research works including system test, pilot run, workshop, survey and interviews etc., it was learnt how RFID contributed to the efficiency of warehouse management and how the supply chain efficiency can be optimized by harnessing the power of RFID so that one day our industry will be able to feel the real benefit of the hassle-free, secured, efficient and worthy technology. Wine Storage Management Systems Certification Scheme (The first of its kind in the region) On February 2008, the Financial Secretary announced in the Budget to abolish import duties on beer, wine and all alcoholic drinks (except spirits), just over a year Hong Kong took top slot among the world's major wine markets at weekend auctions and it may show the strong supply chain elements in place that can support a sophisticated product distribution like wine. Thus increase in wine import and distribution in and via HK will create the need for professionally managed storage facilities for wine storage. Under the leadership of the Commerce and Economic Development Bureau (CEDB), the Hong Kong Quality Assurance Agency (HKQAA) was commissioned to establish a Wine Storage Certification Scheme with a view to building up a professional image that Hong Kong is competence in being an Asian

wine trading and distribution hub by certifying that our commercial and fine wine storage facilities meet certain standards which should be alongside or even better than those of the facilities available internationally. This scheme is the first of its kind in the region, if not the world. Again HAFFA is actively participating in the Technical Committee comprising stakeholders from wine educator, wine consultants, wine merchant and insurance agency. During the Hong Kong International Wine & Spirits Fair 2009 on November 2009, the Financial Secretary has officially announced the roll-out of the scheme. Education (Vocational Training Program) As an on-going effort to provide a structured training programme for new comers joining the industry,, the first Airfreight (M1) of VTP has been launched on 5 January 2010 and completed within the same month. The whole class has passed the test and exam and we have received positive remarks from the students as the course has focused on basic technical skill and knowledge in the freight forwarding operations. We are now in the process of developing the other module and it is expected the development of the whole training programme to be within 2 years’ time. Please stay tune to the HAFFA news and we will keep Members posted of the latest status. 3. Year 2010 Outlook Not really knowing how long the recession was going to last and change is critical for this industry, as we continue to look for ways to lower your operational costs, so that we were able to be more competitive in the market. Let us work together to analyze the state of the industry, discuss its issues, its challenges, and attempt to solve industry problems, maximize opportunities, and demonstrate that the freight logistics industry is truly an important engine of economic development. Last but not least, I am confident that these challenging plans here will bring benefits to our industry, I would like to thank, personally, all Members, the current executive committee and HAFFA Secretariat Office, which has been the one to deliver the works over the years, for their commitment, professionalism contributions and hard work throughout the year. HAFFA is poised to serve Hong Kong freight logistics service providers to scale new heights and the industry to grow from strength to strength. Yours truly,

Peter Wong Chairman


AIRFREIGHT SUB-COMMITTEE Chairman: A-SONIC AIR FREIGHT (H.K.) LTD – Mr. Cliff Sullivan / Mr. James Chan Vice Chairman: DHL GLOBAL FORWARDING (HONG KONG) LTD – Mr. Edwin Tsang Members: AGILITY LOGISTICS LTD

DACHSER FAR EAST LTD EXPEDITORS HONG KONG LTD HELLMANN WORLDWIDE LOGISTICS LTD NAF NORTHERN AIR FREIGHT LTD NIPPON EXPRESS (H K) CO LTD SCHENKER INTERNATIONAL (H.K.) LTD THE JANEL GROUP OF HONG KONG LTD WANGFOONG TRANSPORTATION LTD EMPEROR SKY LTD

I. Liaise with the Civil Aviation Department (CAD) Regulated Agent Regime (RAR) and Aviation Security Oversight of Known Consignors (KC) In addressing the call for both security and trade facilitation, we did mention before that we have successfully completed the consultation works between the Civil Aviation Department, airlines and shippers in response to the recommendations made by International Civil Aviation Organization (ICAO) to reform the current Hong Kong Regulated Agent Regime. Just to recap briefly, HAFFA have had lengthy discussions with the Hong Kong Shippers’ Council to come up with a proposal of a new mechanism aimed to strengthen the oversight of Known Consignors which gives the least extra workload and costs to Members in view of the keen competition from our neighboring airports. After we submitted the proposal to the Aviation Security Committee (ASC) for consideration, CAD briefed us the good news that ASC had, in principle, endorsed the joint proposal. Senior official from the CAD will give Members the details at the upcoming HAFFA AGM on 20 April 2010. US TSA’s requirement of 100% screening of cargo carried on passenger aircraft as from August 2010 On a wider spectrum, HAFFA has been closely monitoring the progress of impact of the US TSA (Transportation Security Administration) directive, mandating 100% screening of belly cargo on international flights in August this year. And we have participated in the Carrier Liaison Group meetings to find out if airlines or CTOs may have any requirement in comply with the 100% screening of goods carried on passenger aircraft to U.S. Informatively, the 100% screening scheme for sea freight was rolled back to 2014 by the US Department of Homeland. All of this, if change from our current practice, will result in increased costs and added complexity at every level of the supply chain.

Cargo Security

Trade Facilitation

II. Liaise with Airport Authority Hong Kong (AAHK) North Lantau Highway Closure Incident: No Land Link – Airport Provisions and Cargo Alternative Routing Plan Subsequent to a black rain on 07 June 2008 causing landslips and bringing about heavy traffic congestion due to temporary closure of the North Lantau Highway, serious concern from the cargo industry were arose again. Thereafter, HAFFA has proactively taken part in the meetings hosted by AAHK, high level meeting with the Transport & Housing Bureau together with the presence of Ms. Miriam Lau (Legislative Councillor) and sent letters to THB providing practical inputs on the contingency plan catering for the no land link scenario. In late March 2010, AAHK has put the final No Land Link contingency plan together and come up with a working draft outlining the proposed airport provision and cargo alternative routing plan for industry’s comment. However, after gone through the working draft, it was found that quite a number of areas were still considered as impractical, unclear and inefficient. HAFFA has re-iterated the concerns to AAHK again and also urged the Government to take up the coordination role and fairly allocate the limited resources to the stakeholders during no land link situation. III. Liaise with IATA, Carrier Liaison Group (CLG), HACTL and AAT A. Update of IATA e-freight – EDI Model Agreement Subsequent to the first wave of IATA e-freight pilot implementation (including Hong Kong) since 05 November 2007, it was reported that there were 24 locations with 127 airports around the world having gone live as of March 2010. To participate in e-freight, one of the prerequisites is to sign an EDI agreement between individual agents and carriers. IATA has recently announced that the RP 1670 (Recommended Practice 1670 – Carriage of Cargo using Electronic Data Interchange “EDI”) jointly developed by IATA and FIATA had been approved by various governments including US DOT (Department of Transportation). This standard removes the requirement for a paper Air Waybill simplifying the air freight process for the cargo industry. There is no longer a need to print, handle or archive the paper AWB. HAFFA will consult legal opinions and prepare some points-to-note for Members’ reference in due course. Please stay tuned for the HAFFA News. B. Dangerous Goods Working Group (DGWG) HAFFA has pulled out all stops to assist Members in making the right turn to face the challenges of the policy adjustments particularly on the lithium battery. The DGWG finished the review on relevant Best Practices (BP003, BP007 & BP008) and the guidance with salient highlights has been disseminated to HAFFA Members via News and website. C. CASS and FBX (Forwarder Bill Exchange) As of 01 April 2010, total number of CASS-import airlines is 7 while that of CASS export airlines stands at 29. In regard to the FBX (a system providing billing services between consolidators/forwarders), a trial run conducted by IATA and a HAFFA member is still underway. The result of the trial run will be reviewed so that improvement could be made later to the scheme. D. Hactl Daily / Weekly Tonnage Report Under the current cargo market situation, we believed that up-to-date information is of importance for Members to better understand the market trend and make timely decision. In response to the request of the HAFFA Airfreight Sub-committee, apart from the detailed tonnage breakdown currently published on Hactl’s web site on a monthly basis, they also provided HAFFA Members with daily / weekly tonnage report (provisional) for import, export and transit cargo which can be viewed at the HAFFA website: http://www.haffa.com.hk/rs_content.html#Statnew E. Joint HAFFA/CLG Training Program to Cargo Agents Please refer to a separate report under “TRAINING” Date: 12 April 2010 (END OF REPORT)


EXTERNAL AFFAIRS SUB-COMMITTEE Chairman: NAF NORTHERN AIR FREIGHT LTD – Mr. Sunday Chan Vice Chairman: WANGFOONG TRANSPORTATION LTD – Mr. Louis Lee Members: A-SONIC AIR FREIGHT (H.K.) LTD

EXPEDITORS HONG KONG LTD THE JANEL GROUP OF HONG KONG LTD DHL GLOBAL FORWARDING (HONG KONG) LTD

The Electronic System for Customs Clearance of Road Cargo – Road Cargo System (ROCARS) A. Introduction Further to the HAFFA annual report of the External Affairs Sub-committee (2008-2009) published in April last year, the Customs have closely worked with the industry stakeholders (including HAFFA) to finalize detailed operational matters in the past few months in the run-up to the launching of the ROCARS system, which is built to enable Hong Kong to keep abreast with national, regional and global requirements in moving towards electronic advance cargo information to the Customs for adequate risk profiling of road cargoes. Implementation timeframe as below: Launching of the system: 1st Quarter of 2010 Transitional period: 18 months Mandate e-ACI (electronic advance cargo information) submission: mid 2011 The development of the ROCARS has now been completed. To allow industry stakeholders to familiarize with the use of ROCARS before the commencement of the 18-month transitional period, the Customs and Excise Department has started a trial live run of the ROCARS from 1200 hours on 29 March 2010. Thereafter, all the functions of the ROCARS are available to the public. Real cargo data can be used in the Customs clearance process under ROCARS. In order to encourage the industry to engage in early migration to ROCARS so as to overcome any teething problems as early as possible, the Customs has started large-scale publicity programmes and HAFFA Members are also constantly kept abreast of the latest information of ROCARS via News. B. Prerequisite and key features of ROCARS workflow After lengthy discussions and fine-tuning in the ROCARS User Consultation Group (UCG) and Technology and Testing Consultation Work Group (TTCWG) meetings in which HAFFA also participated in, the prerequisite and key features of ROCARS workflow are defined as follows: a. All users (shippers, agents and truckers) of the ROCARS must register with the C&ED

(https://www.rocars.gov.hk/rs-portal/regIndex.do?locale=en_US) via designated Post Offices before they can submit the relevant information in the ROCARS.

b. Shippers and agents of the ROCARS must possess a valid digital certificate issued by the two

recognized Certification Authorities (i.e. Digi-Sign Certification Services Limited or E-Mice Solutions (Hong Kong) Limited) for authentication purpose in the course of data submission.

c. A shipper or a freight forwarder acting as a shipper (or an agent of either party) provides a pre-defined set of cargo information to C&ED through ROCARS at least 30 minutes before the cargo consignment enters or exits Hong Kong by truck.

d. As an acknowledgment, ROCARS returns a Customs Cargo Reference Number (CCRN) for the

cargo consignment to the shipper who would then pass it together with the cargo description to the relevant trucker;

e. Not less than 30 minutes before his truck arrives at a land boundary control point (“LBCP”), the trucker

does the ‘bundling’ work by providing to C&ED, through ROCARS, the following information – (i) the CCRN of the cargo consignment; and (ii) his vehicle’s registration number. The system will direct the trucker to cross the boundary immediately or after 30 minutes. f. C&ED performs risk profiling on the cargo before a truck arrives at an LBCP and determines in advance

whether the cargo needs to be inspected. C. Services channel selection guide for shippers and agents To cater for different performance consideration of companies, the Customs provides three services channels for shippers and agents to submit advance information. They are: i. Direct input portal (on-line) ii. Batch upload portal (to ride on direct input portal) iii. System-to-system interface In response to HAFFA’s request, the Customs has compiled a guide for services channel selection so that users can choose the appropriate service channel based on their current workload and performance expectation. Some characteristics of the service channels are elaborated in the guide to help the shippers and agents to select the appropriate ROCARS service channel assuming one user takes about 1 minute to prepare a consignment and the guide also provides a summary of the hints for the users to consider.

All technical information can be downloaded from the ROCARS website: https://www.rocars.gov.hk/en/TechInfo.html. D. Training seminars and outreach team To enable the industry stakeholders to get familiar with the operation of ROCARS, the Customs arranges a series of training programmes for the users, which include: a. ROCARS Briefing Seminar (overall introduction to the ROCARS System) b. ROCARS System Operation Training (Hands-on training) c. ROCARS Train-the-Trainer Course In case the preferred class is full, the Customs will arrange seminar/training on other dates and the public can go to the ROCARS website https://www.rocars.gov.hk/en/Training.html to view the latest schedule.

Apart from the training course, in order to provide technical assistance to the industry stakeholders, the Customs has set up Customs Outreach Teams to proactively approach the industry users and assist them to migrate to ROCARS at an early stage. Details can be found from the ROCARS website: https://www.rocars.gov.hk/en/Outreach.html. E. Exclusive offer of digital certificate services for HAFFA Members To minimize the ROCARS financial impact to Members, in March 2009, HAFFA has written to request the two Certification Authorities (i.e. Digi-Sign Certification Services Limited and E-Mice Solutions (Hong Kong) Limited) to render exclusive offer of e-certificate services for HAFFA Members. After several rounds of negotiation, both authorities are willing to provide preferential rates of various services exclusively for HAFFA Members. Interested Members can send email to [email protected] to obtain the information table for details. F. Useful Information The ROCARS Government Website: http://www.rocars.gov.hk/ HAFFA – ROCARS Information Corner: http://www.haffa.com.hk/rs_content.html#ROCARS The Import and Export (Electronic Cargo Information) Regulation which can be obtained from the ROCARS website https://www.rocars.gov.hk/en/Legis.html has been gazetted on 16 October 2009. As forwarders may submit advanced data on behalf of shippers, under the said regulation, forwarders will be held liable if there is an offence. In this connection, Members are strongly recommended to make sure that your shippers do send booking or letter of instruction in writing for proper record purpose. G. AGM Speaker Mr. Chow Kwong / Assistant Commissioner (Boundary and Ports) of Hong Kong Customs and Excise Department has agreed to be the AGM speaker this year and he will talk about the ROCARS & its relevant legislative implication.

“ROCARS User Consultation Group Meeting”

Date: 12 April 2010

(END OF REPORT)


FAPAA LIAISON SUB-COMMITTEE Chairman: CARGO FREIGHT SERVICES LTD – Mr. Danny Wong Members: COSMO AIR FREIGHT 'HK' LTD EMPEROR SKY LTD

The business agenda of the Executive Council Meeting of FAPAA this year still focused heavily on air cargo security & collaboration with regional Governments. In the security forum of FAPAA meeting, invited by Walther Nahr (Moderator of the Forum), David Fielder [head of the security portfolio for FAPAA, represented the organisation on several committees around the world, including ACSIF (Air Cargo Security Industry Forum); APAA (Asia Pacific Airline Association) and TAPA (Transported Asset Protection Association) as well as the Chairman of the ABSN (Advisory Body Security Matters) for FIATA]

updated members on air cargo security in the region. 1. Update on the European and US Air Cargo Security Programs

• In Europe there was now a much greater emphasis on the use of dogs to screen cargo at airports.

• In the USA, the date by which 50 percent of all inbound and outbound cargo needed to be screened had halved (February 2009) and evidence indicated that they were exceeding these targets on a regular basis.

• The next target for the US air cargo screening mandatory requirements was August 2010, when

the 100 percent mandatory screening requirement would come into force. The TSA (Transportation Security Administration) was now of the opinion that it would be difficult to achieve this target on the inbound side.

2 IATA Secure Airfreight Project • Partly due to US TSA concerns regarding the

number of air cargo security programs around the globe, IATA had approached ICAO to amend Annex 17 standards on air cargo security and recommended the IATA Secure Freight program. This issue is of great concern to the Air Freight Institute of FIATA and to TAPA.

• Annex 17 primarily recommends that signatories

implement an air cargo security program with the premise of the ‘known shipper’ concept. Many major trading nations had already implemented such a program or were in the process of doing so. If the recommendation from IATA was accepted by ICAO, then all 119 contracting states would be required to implement supply chain security along the lines of the IATA Secure Freight program.

• TAPA has its own security standards and those were in place so that manufacturers requiring their freight to be secured under the TAPA standards, would recommend a freight forwarder accredited under those standards. IATA was in discussion with TAPA to align their Secure Freight program with the TAPA standards.

• It was likely, that in advance of any agreement by ICAO, IATA would push to introduce their Secure Freight program into airports and countries or regions where there was currently no accredited regulated air cargo agent program in existence.

3. New Zealand Update

New Zealand had just introduced their PT108 Air Cargo Security Program, which primarily placed all the responsibility with the airline. However there was an obligation for the freight forwarders and others in the chain to implement a ‘known shipper’ type program.

4 General Overview • The FIATA ABSM had publicly supported

the approach of the IATA Secure Freight program to improve overall security. However it would resist any intrusion into the domain of the freight forwarder, without proper consultation with FIATA.

• Within Secure Freight there would be an audit requirement. Therefore forwarders might find themselves in the situation whereby IATA were authorised to audit the freight forwarder and other supply chain entities beyond the airport to airport contractual scenario that their Association represents.

In summary, the members were advised that the impetus driven by the US government to introduce 100 percent scanning of all air cargo had changed to a risk based approach. Besides, a press release, stating FIATA’s position in regard to IATA Secured Freight, was being developed and it had been suggested that FIATA might care to discuss this with FAPAA to see if they were willing to pursue a joint press release.

“The 36th Executive Council Meeting of FAPAA, Thailand, 5-6 June 2009”

Date: 12 April 2010 (END OF REPORT)


“Specimen of FWB”

FIATA LIAISON SUB-COMMITTEE Chairman: CARGO FREIGHT SERVICES LTD – Mr. Danny Wong Members: COSMO AIR FREIGHT 'HK' LTD EMPEROR SKY LTD Introduction of non-negotiable FIATA Multimodal Transport Waybill (FIATA FWB) in Hong Kong FIATA documents have an excellent reputation and are recognized as documents of tradition and trust all over the world. They greatly contribute to the facilitation of international exchanges and are valuable instruments in the service of world trade. HAFFA has been appointed by FIATA to authorize the issue of its documents since the late 1980s. And being a FIATA Licence holder, it has been legally authorized to issue the FIATA documents (namely FIATA Multimodal Transport Bill of Lading “FBL” and Forwarders Certificate of Receipt “FCR”) in Hong Kong. The Secretariat received an enquiry from a Member (also a FIATA Licencee) who intended to issue another type of FIATA document namely “FIATA Multimodal Transport Waybill (FWB)” in Hong Kong due to a request from its customer who insisted to use FWB in its business. After internal study of the documents based on information provided by FIATA and to go in line with our principle of facilitating members in doing business, the Executive Committee resolved to introduce FWB to HAFFA Members who are now FIATA Licencee. Subsequently, the Secretariat coordinated with FIATA to handle all necessary formalities, including signing the licence agreement and submitting a proof-print of FWB bearing HAFFA’s logo for approval. After completion of all formalities, a letter was sent to all FIATA Licencees on 09 February 2010 promulgating that apart from FBL and FCR, a FIATA Licence holder is also entitled to legally issue FWB in Hong Kong. The features of FWB, requirements of issuing it as well as the price were expounded in the said letter. Interested Members are welcome to contact the Secretariat at 2796 3121 for more details. Date: 12 April 2010

(END OF REPORT)


FIATA LIAISON SUB-COMMITTEE Chairman: CARGO FREIGHT SERVICES LTD – Mr. Danny Wong Members: COSMO AIR FREIGHT 'HK' LTD EMPEROR SKY LTD A report prepared by Mr. Walther C. Nahr Report on the FIATA World Congress 22 - 25 September 2009 in Geneva, Switzerland 1. FIATA President Mr. William Gottlieb Chaired the meeting. 2. 168 voting rights were in attendance. 3. The Financial Year 2008 ended with a surplus of CHF 232,520. 4. Membership subscription will remain the same for the following year. 5. The Budget of a surplus of CHF 4,200 was approved. 6. Confirmation of the Chairmen of the Institutes, the Standing Committees and the Regional

Committees Airfreight Institute Chairman: Mr. Rodolfo Sagel (Argentina) Customs Affairs Institute Chairman: Mr. Stephen Morris (Australia) Multimodal Transport Institute Chairman: Mr. Christopher Gillespie (Canada) Deputies: Mr. Robert Keen (UK) Mr. Ivan Petrov (Bulgaria) Mr. Kostas Sandalcidis (Turkey) Advisory Body Dangerous Goods Chairman: Mr. Frank Huster (Germany) Deputy: Ms. Christine d’Arcy (UK) . Advisory Body Legal Matters Chairman: Mr. Richard Gluck (USA) Advisory Body Security Matters Chairman: Mr. David Fielder (Hong Kong) Deputy: Mr. Piet Timmermans (Belgium) Advisory Body Vocational Training Chairman: Mr. Thomas Sim (Singapore) Deputy: Mr. Ivan Liptuga (Ukraine) 7. Three Senior Vice Presidents were elected. Mr. Francesco Parisi (Italy) Mr. Suwit Ratanachinda (Thailand) Mr. Sarosh Nagarvala (India)

8. Eleven Vice Presidents have been elected (in alphabetical order) Mr. Babar Badat (Pakistan) Ms. Christine d’Arcy (new) Capt. M. Ghafoor (U.A.E.) Mr. Chris Kanter (India) Mr. Ivan Liptuga (new) Mr. Mazen Nadim (Egypt) (new) Mr. Ivan Petrov (Bulgaria) Mr. Peter Yang (Chinese Taipei) (new) Mr. Barry Vining (Australia) Mr. Huxiang Zhao (China) Mr. Sergey Zhelannov (Russia) (new) 9. New Members MNFFA – Mongolian National Freight Forwarders Association SFAAZ – The Shipping and Forwarding Agents’ Association of Zimbabwe 10. The World congress in 2010 will be in Bangkok and 2011 will be in Cairo.

Date: 12 April 2010

(END OF REPORT)


FIATA LIAISON SUB-COMMITTEE Chairman: CARGO FREIGHT SERVICES LTD – Mr. Danny Wong Members: COSMO AIR FREIGHT 'HK' LTD EMPEROR SKY LTD A report prepared by Mr. Walther C. Nahr Report on the Airfreight Institute (AFI) Meeting in Geneva, Switzerland, 23 September 2009 1. CASS A serious complaint was raised by FMFF (Federation of Malaysian Freight Forwarders) in regards to the introduction of CASS. As only AFAM (The Air Freight Forwarders Association of Malaysia) was consulted who is neither a member of FIATA (expelled for non payment of fees) nor FAPAA and only representing a few forwarders in Kuala Lumpur, rather than FMFF which is the member of FIATA and FAPAA. IATA responded that mistakes had been made and all were assured that corrective measures will be taken Similar situations were reported from other countries and IATA informed that Agents Liaison Working Groups would be established and that the ALWG shall ensure that any enhancements or modifications to the system, affecting the Agents’ interests, have been discussed with, and have attracted a broad consensus from the agents’ association, prior to implementation of them.

2. European Air Cargo Programme (EACT) Since in the view of AFI/FIATA the expectations were not fulfilled there are only two options: - Legal action - IATA to agree to an open discussion reviewing all contentious issues 3. E-Freight The general view was that the penetration of E-freight was poor. It was therefore suggested that instead of introducing 16 documents at once that the key documents (MAWB/HAWB/Manifests) are introduced first and thereafter to take it step by step. It was also reported that in the Asia/Pacific region there could be problems as the banks do not accept electronic HAWB/MAWB which will create problems in the case of shipments under L/C. 4. IATA/FIATA Training agreement The IATA FIATA Training Programme has been very positive over the years, IATA and FIATA had reached a new agreement with IATA to renew the IATA FIATA Cargo Training Courses. It covers the four most effective training courses. • The Basic Cargo Training • The Dangerous Goods – initial • The Dangerous Goods recurrent • The Training Cargo English Date: 12 April 2010

(END OF REPORT)


FIATA LIAISON SUB-COMMITTEE Chairman: CARGO FREIGHT SERVICES LTD – Mr. Danny Wong Members: COSMO AIR FREIGHT 'HK' LTD EMPEROR SKY LTD A report prepared by Mr. Walther C. Nahr Report on the FIATA Working Group Sea Transport Meeting in Geneva, Switzerland, 21 September 2009

A. C-TPAT The U.S. Customs and Border Protection (CBP) continues to restrict participation in the C-TPAT program to 3PLs with operations ONLY in the U.S. who own or operate at least some of their own equipment—thereby defeating the purpose of the program. TIA (The Transportation Intermediaries Association) has joined with the U.S. Chamber of Commerce to lobby the Congress and the staff of the congressional oversight committees to demand that CBP open up the program to non-asset based third party logistics providers (ie 3PLs overseas), as required by existing U.S. law. It is hoped that the support of this influential trade association, coupled with the prospect of additional legislation if necessary, will convince CBP to change its policy. This means a status quo in the situation in the Unites States and there is no opening to other interested parties. TIA is waiting for the Obama Administration to appoint people at the lower levels within the Department of Homeland and Security and they hoped that the policy will eventually change. TIA joined the US Chamber of Commerce, which has a very strong interest in this issue, due to the fact that the chairman of the transport committee is the chairman of one of the biggest trucking and logistic company in the United States. Nowadays, he is slightly more optimistic than at the last years’ meeting in Washington, when the reports on this issue were really negative. It was reported that neither from the European nor from the USA side the mutual recognition of the two systems is coming closer (AEO – CTPAT). The Canadian PIP system has been “reinvented” and all companies have to reapply under the new criteria because Canada is going to implement a reciprocal system to C-TPAT and the meeting was informed that the USA told Canada that they should adopt standards similar to those of the USA. B. 100 percent Container scanning –status report

There have been few new developments on this issue. The Department of Homeland Security continues to prefer risk based screening of all containers (using data) to target those few requiring scanning or more intrusive inspection procedures, as does most of U.S. industry involved in international trade. US officials are not moving in the direction of 100 percent scanning, but on the screening system, ie using the transmitted data. They are now on the track what the WG proposed and asked for already a long time. The text of the US law will not be changed. The next year 100 percent of the airfreight shipments will be scanned due to the fact that this cargo will be loaded on passenger airplanes. This law is already in force and the deadline will be in 2012 but there are exceptions that the secretary of the Department of Homeland and Security can invoke to extend the deadline or to grant waivers for ports where it is not physically practical to do the 100 percent scanning. He explained that the policy behind this law was that

US authorities feared that the transmitted data can be misleading, if somebody tries to hide weapons inside containers they can lie about the data and this would give adequate protection.

C. ISF (Importer Security Filing) so-called 10 + 2 regulation – up date

It was confirmed that cargo transiting through the United States does not apply to the 10+2 regulation since there is no import. For such cargo only the regular AMS applies. The ISF regulation only applies to real imports to the United States via US-ports.

D. US Customs and Border Protection (CBP) and Container Security – Green Lane Legislation

The implementation being reviewed to a possible amending of the operation under the Green Lane Legislation and informally discussions with Committee Staff of the Congress, but there is nothing concrete to report at this stage.

E. Implementation of the advanced manifest system in China – status report

There is no official news in China regarding the AMS system. So far the Chinese Customs have not published clear instructions on how the data should be entered and who has to enter them. The official reply from Beijing is still outstanding. There were press reports that the grace period would be extended till January 2010. It is expected that they will try to implement a system similar to that in the United States, so that in future freight forwarders can transmit the data directly and not the shipping lines or via them. A policy briefing with detailed PowerPoint material was collected from the Chinese Customs and distributed to members on 1st February, 2010.

F. Initiatives in other parts of the world

The AEO program updated that this system has been introduced in the European Union. Until now the response to this program is still rather poor, due to the fact that the advantages of the AEO system cannot be demonstrated clearly yet. In some countries the certified companies will profit from lower bonds or guarantees.

G. NVOCC

The President has appointed Mr. Richard A. Lidinsky as new chairman of the Federal Maritime Commission (FMC). The new chairman of FMC stated that he is looking forward to collaborating with his fellow Commissioners, participating in the many challenging decisions and issues facing the Commission, “particularly during this time of severe economic downturn facing the entire maritime industry.” He also intends to make certain that shippers and regulated entities such as ocean common carriers, ocean transportation intermediaries, ports, and other participants involved in the entire maritime logistics chain are provided with an efficient and non-discriminatory ocean transportation system. There was however no reference to NVOCC’s and freight forwarders in Mr. Lidinsky’s statement.

H. UCP 600

The issue is one that is also of concern to the marine carrier community and upon verifying this issue with the world's largest carriers there is no disagreement whatsoever. While there is no question that in the case of a MULTIMODAL B/L an “On Board” notation could refer to the first point at which the goods enter into the custody of the marine carrier. Carriers who are releasing port to port bills of lading upon sailing and reflecting a place of receipt with no such references to their “on board” notation have unanimously agreed that they would never issue/release a “shipped, laden, or loaded on board” bill of lading unless the cargo declared therein was in fact loaded on board the named vessel.

I. Single Transport document, Initiative of the Short Sea Promotion Centre France supported by the European Commission – status report

The single transport document has been initiated by the French short sea promotion centre. As discussed at the last meeting, this idea is not forgotten in EC circles so far. Some EC circles still go on in their wish to create their own European Multimodal document based on a European Multimodal liability system that also would be created. FIATA is against such a system and also CLECAT said that the creation of such European liability system would be a bad idea, due to the fact that this will not lead to a harmonization or simplification of the trade. This will only create an additional liability system and will make the transports more complicated instead.

J. Revision of the INCOTERMS 2000 – up date

The drafting committee has not yet published the result of the first draft version and the second draft version should be available by the end of this month.

K. Abolishment of the FEFC

It is very difficult to judge the situation due to the terrible economical crisis. The rates are changing daily. The abolition of the conference system in the European Union was irrational and unjustified. Without conferences the freight forwarding job has become more complicated than before, tariff sheets have to be updated daily which creates additional work and everybody is confused.

L. US Sanctions

It was reported that on 10 September 2008 the US government issued amended regulations to enforce the sanctions that the United States has taken against trading with Iran. These sanctions apply to US companies and they prohibited any US companies from facilitating trade with Iran which means insisting with respect to the transport industry in any shipments using any Iranian vessel, whether or not the shipment is to or from the Unites States. (e.g. a US freight forwarder is not permitted to participate in any way in a shipment between China and Europe in which an Iranian vessel is involved. The reason why this is important is that many of the vessels are owned or operated by an Iranian company, being flagged or registered in 3rd countries. This is very difficult to identify, but the regulatory body has published a list of vessels that are owned or controlled by an Iranian entity. Freight forwarders and banks in the United States have been told so that they must consult this list with respect to any shipment. So that in advance of the shipment if an Iranian vessel on that list is going to be involved, they must decline to handle the transaction.

Initially there were 123 vessels on the list and now there are 155. Banks in the US have been instructed to examine all of the shipment documentation presented in connection with letters of credit and to freeze any transaction where one of these Iranian vessels is reflected on the credit documentation and to report the matter to the US treasury department and wait for further instructions. There have been shipments and financing related to those shipments have been frozen pending further investigations by the treasury over the past years. The notice from the treasury department specifically called on the freight forwarding industry and said that freight forwarders must put in place compliance programs where they regularly check this treasury list and instruct all of their offices and overseas agents not to use vessels that are on that list. The problem that this presents for US forwarding companies is that many of them operate through independent agents throughout the world and it is very difficult to control what vessels those agents book cargo on. If an overseas agent of a US company assists in facilitating a transaction with Iran and involves a US company in any way (even data processing or any sort of communication to the US company) then the overseas agent itself may be placed on a black list which means being eliminated from doing business with any American company; therefore, it is a two part risk. There are heavy penalties for violation. One global acting freight forwarder has recently been forced to pay millions of dollars. The website for vessels verification is located at: http://www.treas.gov/offices/enforcement/ofac/actions/20080910.shtml There is similar initiative by the European Union and it is mandatory that freight forwarders should check every single shipment against the list.

M. UNCITRAL

The Convention will be opened for signature at a ceremony on Rotterdam this month. There appears to be broad support for it in the U.S. The U.S. State Department still hopes to present the convention to the U.S. Senate for ratification before the end of the year, but there is no way to predict when a vote might be taken on it. Though a group of international law experts assisted in the drafting, it remains an open question whether U.S. ratification will be complicated by the need to enact separate implementing legislation to make sure that there are no conflicts with existing U.S. law.

N. Chairmanship WG Sea

Mr. Boogaerts will retire as Chairman of the Working Group Sea Transport. The new Chairman will be Robert Keen from the UK.

Date: 12 April 2010

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GREATER CHINA AFFAIRS SUB-COMMITTEE Chairman: WANGFOONG TRANSPORTATION LTD – Mr. Louis Lee Vice Chairman: DHL GLOBAL FORWARDING (HONG KONG) LTD – Mr. Tom Li Members: CARGO FREIGHT SERVICES LTD

HELLMANN WORLDWIDE LOGISTICS LTD U-FREIGHT LTD WORLDTRANS AIR-SEA SERVICE LTD COSMO AIR FREIGHT 'HK' LTD

EMPEROR SKY LTD The objectives of the sub-committee are to foster exchanges of information and development of our industry in the Greater China, and to strengthen the ties with governmental and logistics bodies in the Greater China region. During the term, the sub-committee, representing HAFFA, met with many officials, associations and industrial players from different provinces to network and exchange valuable business intelligence and experience on the logistics practices.

Following the success of the 5th Sino-International Annual Freight Forwarders Conference firstly held in Hong Kong, the 6th Sino Conference returned to Hong Kong again in June 2009. Invited by the Hong Kong Logistics Development Council (LOGSCOUNCIL), one of the major sponsors of the event, HAFFA has set up an exhibition booth in the Conference to promote freight forwarding & logistics industry in Hong Kong as well as HAFFA & its Members’ services. (Picture: Chairman Mr. Peter Wong (right) and Mr. Louis Lee (left) at the HAFFA exhibition booth of the 6th Sino Conference.)

Despite affecting by the financial downturn and the health challenges under the strict controlling of the global spread of H1N1 influenza, the conference successfully attracted more than 800 delegates from 100 countries and regions. Over 1.2 million One-on-One meetings were held and the outstanding freight forwarders gathered in Hong Kong in a win-win situation, to look for opportunities and development, to get over the crisis together and create a development of freight forwarding logistics industry.

Since the implementation of CEPA in January 2004, the Mainland Government imposed substantial liberalization measures and policies, with which Hong Kong enterprise can enjoy lower entry thresholds than other countries to explore business opportunity in the highly promising Mainland market, in particular in the PRD region. However, it was learnt that some enterprises (particularly SMEs) encountered difficulties in the investment application and it seems that there are insufficient support rendered by relevant bureaux / departments in Hong Kong and the Mainland.

In this connection, HAFFA has organized a Member Forum on 20 August 2009 with a view to providing a platform for participating Members to voice out issues regarding problems encountered when they set up their businesses in the PRD region. With Members’ enthusiastic participation, the discussion was very informative and fruitful with topics covering policies, regulations, standards, skilled labour availability and infrastructure etc in the PRD region.

Picture: Forum participants are Members from ADL Express Ltd, AE Cargo Services Ltd, AME Transport (HK) Ltd, Emperor Sky Ltd, Hong Kong Air Cargo Industry Services Ltd, Rical Logistics Co Ltd and Worldtrans Air-Sea Service Ltd. Taking this opportunity, Mr. Louis Lee would like to convey his gratitude and appreciation to all our sub-committee members and the Secretariat for their dedication and contribution.

Key activities in 2009-2010 at a glance: Date Event Organizer(s) / Visitor(s)

1 23/04/2009 Luncheon with Nanning Guangxi Delegation 廣西南寧企業與香港物流業界午宴 - Introduction to Hong Kong logistics services to the delegation - Encourage enterprises in Nanning using Hong Kong as a platform to explore international business opportunity

Hong Kong Trade Development Council (HKTDC) 香港貿易發展局

2 21/05/2009

Changsha (Hong Kong) Modern Logistics and Processing Trade Industry Investment Seminar2009 中國長沙(香港)現代物流‧加工貿易配套產業專題招商會 - Better understand the logistics investment environment in Changsha and explore the possibility of cooperation and investment

Changsha Municipal People's Government 長沙市人民政府

3 11-14/06/2009 The 6th Sino-International Annual Freight Forwarders Conference - HAFFA as exhibitor; One-on-one meetings - Explore business opportunities with companies from more than 100 different countries / regions

China International Freight Forwarders Association (CIFA) 中國國際貨運代理協會 and WCA Family of Logistic Networks

4 17/06/2009 第十三屆中國國際投資貿易洽談會推介午餐會暨廈門市重大開發區招商會 – 地產、物流項目對接會 - Overview on the progress of the symposium and introduction to the latest policies and logistics development in Xiamen

Ministry of Commerce of the People's Republic of China 中華人民共和國商務部

5 10/07/2009 Networking Session with the People's Government of Baiyun District 情系白雲發展共創空港門戶－2009年白雲區香港招商會 - Briefing on the strategic position of Baiyun District in Guangzhou and the latest development of its Airport

Hong Kong Productivity Council(HKPC) 香港生產力促進局

6 21/07/2009 香港與珠三角九市落實《珠江三角洲地區改革發展規劃綱要》交流會及政務司司長宴請廣東

及九市領導 - Discussion on how to enhance the cooperation between Hong Kong and PRD under the “Outline of the Plan for the Reform and Development of the Pearl River Delta Region (2008-2020)”

Mr. Henry Tang, Chief Executive for Administration 政務司司長唐英年先生 and Commerce and Economic Development Bureau (CEDB) 商務及經濟發展局

7 20/08/2009 HAFFA Member Forum 會員座談會：探討會員企業在珠三角發展業務時所遇到的問題 - Examine difficulties encountered by HAFFA Members when established business in the PRD Region

HAFFA, Member representatives from various companies

8 26/08/2009 佛山 - 香港CEPA合作交流會及香港貿發局午宴 - Networking and communicate with Foshan Municipal People's Government regarding CEPA cooperation


9 28/08/2009 Focus Group Discussions Hosted by Center of Cyber Logistics - Identify factors that would affect shipping routes (through HK or Taiwan) after the direct transportation links are in place

The Chinese University of Hong Kong (CUHK) 香港中文大學

10 08/09/2009 New Business Opportunities under the Reform and Development in Pearl River Delta “Dynamic Zhuhai City Embraces Aviation Industry” Luncheon Seminar - Briefing on the investment opportunities associated with aviation economics in PRD and introduction to the preferential policies offered by Zhuhai Aviation Industry Park.

Zhuhai Municipal People’s Government 珠海市人民政府

Date Event Organizer(s) / Visitor(s) 11 21/09/2009 Seminar on Regional Planning in the Greater

Pearl River Delta Region - Discussion on the regional planning and cross-boundary transportplanning advocated by the “Outline of the Plan for the Reform and Development of the Pearl River Delta (2008-2020)”

Planning Department 規劃署

12 23/09/2009 落實 CEPA及服務業先行先試宣講會 - Better understand the details of the latest CEPA policy and the pilot arrangement in Guangdong Province.

Trade and Industry Department (TID) 工業貿易署

13 25/09/2009 National Day Cocktail Reception 國慶酒會 - Celebrate the National Day

Hong Kong Media Preparatory Committee for the Celebration of National Day 香港新聞界慶祝國慶籌備委員會

14 28/09/2009 Conference on Global and China’s Economy and Hong Kong’s Future Development 全球及中國的經濟形勢與香港未來發展研討會 - Discussion on the global and China’s Economy and Hong Kong’s Future Development from different aspects.

Central Policy Unit 中央政策組

15 01/10/2009 National Day Reception 國慶招待會 - Celebrate the National Day

Home Affairs Department 民政事務總署

16 23/10/2009 香港貿易發展局宴請福建省副省長葉雙瑜及“投資海西共創商機 — 構建閩港外貿、物流

配送平台”推介對接會 - Update on the latest development of Haixi, Fujian logistics services and explore the possibility of cooperation.


17 04/11/2009 香港貿易發展局宴請寧波市政府及大型企業訪港代表團 - Update on the latest development of Lingbo logistics services and exchange industrial information


18 19/11/2009 內地與香港關於 CEPA交流會 - Exchange views on CEPA and the pilot arrangement in Guangdong Province

Commerce and Economic Development Bureau 商務及經濟發展局

19 08/12/2009 廣東省國際貨運代理協會 10周年志慶 - Networking and celebrate GIFFA 10th anniversary.

廣東省國際貨運代理協會

(GIFFA) 20 12/01/2010 2010 年浙江省暨杭州寧波舟山義烏市現代物流

推介會招待午宴及香港‧浙江周開幕式暨浙港

服務業合作與展望 - Better understand the latest development of modern logistics services in Zhejiang Province. - Explore the possibility of cooperation and investment.

The People’s Government of Zhejiang Province 浙江省人民政府

21 14/01/2010 寧波梅山保稅港投資座談會及招待晚宴 - Update on the latest development of Lingbo Meishan Bonded Port and explore the possibility of cooperation.

Hong Kong Trade Development Council 香港貿易發展局

22 29/01/2010 瀋陽市蘇家屯區物流推介會 - Briefing on the latest logistics development of Sujiatun District, Shenyang

瀋陽市蘇家屯區招商中心

23 08/03/2010 Networking Lunch for Fujian Logistics Mission - Networking and communicate with Fijian Municipal People’s Government regarding the latest policies

Hong Kong Trade Development Council 香港貿易發展局

24 25/03/2010 張家口市產業發展與投資推介會暨招待晚宴 - Explore the latest investment opportunities including logistics industry in Zhangjiakou, Heibei Province

Zhangjiakou Municipal Government 張家口市人民政府



INFORMATION TECHNOLOGY SUB-COMMITTEE Chairman: WORLDTRANS AIR-SEA SERVICE LTD – Mr. Samson Choi Member: BEL INTERNATIONAL LOGISTICS LTD

THE JANEL GROUP OF HONG KONG LTD DHL GLOBAL FORWARDING (HONG KONG) LTD

Innovation and Technology Fund Project: Enhancing the Competitiveness of the Hong Kong Air Freight Forwarding Industry using RFID and Software Agent Technologies Sponsored by the Innovation Technology Fund, the Hong Kong Polytechnic University (PolyU) is now carrying out a project entitled “Enhancing the Competitiveness of the Hong Kong Air Freight Forwarding Industry using RFID and Software Agent Technologies”, aims at developing an RFID-based air cargo processing system which will ultimately benefit the air freight forwarding industry and simultaneously promote the use of RFID technology. This project is the fist one funded by the Hong Kong R&D Centre for Logistics and Supply Chain Management Enabling Technologies Centre (LSCM R&D Centre) concerning air freight operations. Being one of the major supporting organizations, HAFFA is actively participating in the project to hopefully excavate the maximum benefit to the industry. Thanks to all participating Members who took part in a series of research works including system test, pilot run, workshop, survey and interviews etc., it was learnt how RFID contributed to the efficiency and visibility of warehouse management and how the supply chain efficiency can be optimized by harnessing the power of RFID. On 14 January 2010, the PolyU has organized a seminar to report the interim results of the project in collaboration with HAFFA and other co-organizers including DHL Global Forwarding, LSCM R&D Centre and Sun Hing Group of Companies. In the seminar, Mr. Peter Wong / HAFFA Chairman was one of the guest speakers to deliver a welcome address in which the Chairman pointed out that despite some hurdles like the limitation of cost and technology were identified with RFID, we are confident that the issues can be addressed under the hand of PolyU’s team as well as the rapid development of technology. The Chairman also indicated that in the future, after the successful experience of this project, we look forward to extending the RFID technology progressively to the whole supply chain all along from the manufacturer to the end-user and ultimately, our industry will be able to feel the real benefit of the hassle-free, secured, efficient and worthy technology.

This project began in 2008 and is expected to be completed later in 2010. More details of the project can be found from the website: http://www.comp.polyu.edu.hk/~airfreight.

“Distinguished Guests in the RFID Seminar held on 14 January 2010”

Date: 12 April 2010

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LEGAL MATTERS SUB-COMMITTEE Chairman: AGILITY LOGISTICS LTD – Mr. Y. K. Mok Vice Chairman: DHL GLOBAL FORWARDING (HONG KONG) LTD – Mr. Henry Chiu Members: HELLMANN WORLDWIDE LOGISTICS LTD

AE CARGO SERVICES LTD COSMO AIR FREIGHT ‘HK’ LTD

Template of HAFFA Recommended Logistics Services Agreement (LSA) In view of the amendments to the carriage by air ordinances (i.e. HK ratified Montreal Convention 1999) and the growing need of guidance under Trading Conditions for logistics operations, a working group was established to review the HAFFA Form of Trading Conditions back in 2005. After numerous meetings and rounds of comments collection, it was resolved that all logistics provisions would be incorporated into the HAFFA Form of Trading Conditions so as to utilize only ONE trading conditions document for all services by Members. And the logistics trading conditions would be modified into a type of recommended form of Logistics Services Agreement (LSA) which includes operations within 4-walls only. The HAFFA Form of Trading Conditions (Template Only) has been completed with the assistance of HAFFA Legal Adviser and been published in December 2008. As to the template of recommended LSA, extensive internal work is now underway by the working group with a view to establishing a practical and concise LSA template for Members’ easy reference. We will update Members via News when the template is available later.

“HAFFA Form of Trading Conditions (December 2008 – Template Only)”

Date: 12 April 2010

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LOGISTICS SUB-COMMITTEE Chairman: BEL INTERNATIONAL LOGISTICS LTD – Mr. Brian Wu Vice Chairman: DACHSER FAR EAST LTD – Mr. David Lau Members: CARGO FREIGHT SERVICES LTD

HELLMANN WORLDWIDE LOGISTICS LTD Wine Storage Management Systems Certification Scheme After the Hong Kong SAR Government abolished import duties on beer, wine and all alcoholic drinks (except spirits) in 2008, it can be expected promising prospects for Hong Kong’s evolution into a wine trading and distribution hub in Asia. And increase in wine import and distribution in and via HK will create the need for professionally managed storage facilities for wine storage. Under the leadership of the Commerce and Economic Development Bureau (CEDB), the Hong Kong Quality Assurance Agency (HKQAA) was commissioned to establish a Wine Storage Certification Scheme with a view to building up a professional image that Hong Kong is competence in being an Asian wine trading and distribution hub by certifying that our commercial and long term fine wine storage facilities meet certain standards which should be alongside or even better than those of the facilities available internationally. This scheme is the first of its kind in the region, if not the world. A Technical Committee (TC) comprising stakeholders from wine educator, wine consultants, wine merchant, insurance agency, HAFFA and related associations was formed in July 2009 with an aim to establish the certification scheme and compile a handbook which defines the mechanism and criteria of the certification for both fine wine storage facility and commercial wine storage facility. The specifications & requirements of nine big areas for both storage facilities like temperature, humidity, lights, vibrations, maintenance, security, inventory management, hygiene and insurance etc are clearly stated in the said handbook.

To solicit industry’s view on the scheme, three public consultation sessions were held in the form of seminars in which, HKQAA highlighted the objectives of setting up this 1st certification scheme for wine storage facility in the world and introduced the benefit, certification categories, requirements and application procedures to the participants. During the Hong Kong International Wine & Spirits Fair 2009 on 04 November 2009, Mr. John Tsang / Financial Secretary and Ms. Yvonne Choi / Permanent Secretary for Commerce & Economic Development (Commerce, Industry & Tourism) have officially announced the roll-out of the scheme.

News: http://www.news.gov.hk/en/category/businessandfinance/091104/html/091104en03007.htm Speech: http://news.gov.hk/en/category/ontherecord/091105/html/091105en11001.htm Date: 12 April 2010

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MEMBERSHIP SUB-COMMITTEE Chairman: HECNY TRANSPORTATION LTD – Mr. Michael Chu Vice Chairman: WANGFOONG TRANSPORTATION LTD – Mr. Louis Lee Member: CARGO FREIGHT SERVICES LTD DACHSER FAR EAST LTD GRAND EXPRESS LTD SCHENKER INTERNATIONAL (H.K.) LTD UTI (HK) LTD A. Membership HAFFA have admitted total 10 New Ordinary Members during the year of 2009-2010, their names are listed below: Ordinary Member 1. Airway Express (Hong Kong) Ltd 6. Oriental Logistics Group Ltd 2. ETI Logistics Company Ltd 7. Parisi Grand Smooth Logistics Ltd 3. Globe Express Services Ltd 8. Quality-Express Cargo Ltd 4. Leschaco (Hong Kong) Ltd 9. Senator International Logistics Ltd 5. NAF Northern Ocean Freight Ltd 10. Vinflair Logistics Ltd

During the year of 2009-2010 the following members ceased to be a member of HAFFA: 1. AEL Asia Express (HK) Ltd 7. Hanshin Freight International (HK) Ltd 2. AGI Logistics (Hong Kong) Ltd 8. Quality-Express Forwarding (Hong Kong) Ltd3. Alpha Express Ltd 9. Seabridge Transport (HK) Ltd 4. BALtrans Logistics Ltd 10. Star Arifreight Co Ltd 5. Coop Freight Ltd 11. Star Trans International Ltd 6. Exel Consolidation Services Ltd 12. Vinflair Transport Ltd

And the total membership now stands at 342. B. FIATA Licencee In addition we have authorized the following members to issue the FIATA Documents [including FIATA Multimodal Transport Bill of Lading (FBL) “as Carrier”, FIATA Multimodal Transport Waybill (FWB) & Forwarders Certificate of Receipt (FCR)] in Hong Kong: 1. Flynt International Forwarders Ltd (006) 2. Ligentia Hong Kong Limited (016) During the year of 2009-2010 the following members ceased to be FIATA Licencee: 1. AGI Logistics (Hong Kong) Ltd (081) 2. Damco Hong Kong Ltd (083) 3. EAS Worldwide Logistics Ltd (055) 4. Hanshin Freight International (HK) Ltd (066) 5. SIMX Project X & Trade Cooperation Associated Ltd (064) 6. Wide Shine Sea Freight Ltd (053) The total number of members authorized to issue FIATA Documents now stands at 80.

C. Seminar for the Freight / Logistics Industry to Prevent Robbery & Theft of High Value Cargo

Subsequent to the success of the same seminar held in March 2006, the Police revealed that number of the relevant robbery & theft cases involving dollar losses in excess of HK$100,000 reflects an encouraging decrease. In essence, welcome reductions were recorded for Robbery in Premises, Theft from Vehicle and Theft from Premises although a small number of cases resulted in an increase in overall losses.

In order to further reduce the vulnerability of high-value goods/cargo-in-transit to robbery & theft, the Crime Prevention Bureau of the Hong Kong Police Force has again organized a joint seminar with HAFFA on 27 August 2009. Thanks to Members’ enthusiastic support, the seminar was full within a short period of time. In the seminar, participating Members obtained professional briefing on the modus operandi employed in different types of crime, as well as highlights on potential areas of security weakness at various stages of the freight handling process. The Police also recommended to Members a number of crime prevention measures and initiatives (including appropriate security equipment and installations, operational practice and procedures) for consideration & adoption. The

PowerPoint material presented in the seminar has been shared with all Members via News after the seminar.

D. Seminar for HAFFA Members - Hong Kong Export Credit Insurance Corporation (ECIC) New Enhanced Measures to Support the Logistics Industry

ECIC and HAFFA has jointly organized a seminar exclusively for HAFFA Members on 18 August 2009. Owing to the global financial crisis, business failures surged and credit risks multiplied since the third quarter of 2008. With an aim at helping exporters maintain the operations and develop new markets, ECIC rolled out a series of enhanced measures which include: 1. increasing the ceiling of “small credit

limit” applications from $0.5 million or below to $1 million or below, handling them with greater flexibility and completing their processing in two to three days upon receipt of adequate information;

2. upgrading the market ratings of Morocco and Uruguay to facilitate higher credit limits and lower premium rates for exports to these two countries; and

3. publishing latest information on ECIC’s website,

including economic data and bankruptcy figures of major markets.

In the seminar, the ECIC’s speakers focused on how the freight forwarding and logistics industry can face the financial challenge by utilising the ECIC services and its enhanced measures to reduce risk and costs. Under the enthusiastic atmosphere in the Q & A session, participating Members raised many good questions and views to ECIC which has made every efforts to response and provide assistance.



POLICY SUB-COMMITTEE Chairman: THE JANEL GROUP OF HONG KONG LTD – Ir. Paul Tsui Vice Chairman: WANGFOONG TRANSPORTATION LTD – Mr. Louis Lee Members: CARGO FREIGHT SERVICES LTD

EXPEDITORS HONG KONG LTD NAF NORTHERN AIR FREIGHT LTD

Transshipment Policy After falling off a business cliff in October of 2008, throughout 2009 HAFFA Members paid a lot of attention to developments in the markets and they continually challenged and reassessed the way they managed their business. By the same token, the Association wanted to strengthen Members’ future business by communicated the need to the SAR Government in the situation whereby there was no up-to-date policy and procedure in handling transshipment of different controlled commodities since they were administered by different Government departments. The Executive Committee deliberated and come up with a paper submitted to the Government suggesting (1) more items to be removed from the list of strategic and controlled items, and (2) proposed a one time declaration for all import and re-export cargoes in order to facilitate our operations. After series of positive discussions with CEDB (Commerce and Economic Development Bureau), THB (Transport and Housing Bureau) and the Customs & Excise Department and further more Government senior officials visited the HAFFA Committee Members’ warehouses to better understand our concern of unnecessary delay in transshipment operations, there were gradual improvements such as Trade and Industry Department (TID) has held separated meetings with us to understand the concern from frontline staff in our industry, and subsequently reinforce the express channel called “Approval-in-Principle Arrangement for Bulk Users of Strategic Commodities Licensing Service”.

“Government Senior Officials visited HAFFA Members’ Warehouse”

Joint Letters with CILTHK (The Chartered Institute of Logistics and Transport in Hong Kong) to the Chief Executive of HKSARG HAFFA has been liaising with the government on the policies/regulations/initiatives for the logistics industry in different occasions/platforms. All along, the dialogues and responses from the government have mostly been at high level and not so specific. As such, HAFFA, jointly with CILTHK have sent two letters to the Chief Executive with a list of issue worth pursue including establishment of the mechanism of “Co-location Customs Clearance” (一地兩檢) at a bonded area, provision of logistics park and review of transshipment policy etc on 08 October 2009 and 22 December 2009 respectively. With the participation of two key representatives in the industry, we anticipated that it should raise bigger attention to the Government for more substantial progress. TID (Trade and Industry Department) Seminar on Strategic Trade Controls - How to classify strategic commodity and the requirement of relevant licence(s) Through a separate meeting with the Strategic Trade Controls Branch of the TID, HAFFA explained to the TID that quite a number of frontline staff in our industry might not be familiar with the classification of strategic commodity and the requirement of relevant licence(s) due to the complexity of the control system. This could induce unnecessary expense and delay in export shipments. In this connection, we have invited the TID to give a seminar to Members. Thanks to Members’ enthusiastic support, the seminar was successfully held on 09 July 2009 with over 70 participants. During the seminar, participating Members acquired the overall control framework of strategic trade controls in Hong Kong briefed by the representatives of the Strategic Trade Controls Branch of TID. Emphasis was placed on the basis of the control list with introduction of major product categories and explanation of technical information required for deciding whether an item is subject to control or not. The Q & A session provided an interactive platform in which Members brought out many practical questions and constructive views for discussion.

Subsequent to the seminar, HAFFA and TID further deliberated if Members have encountered any difficulties in applying licences for strategic commodities from TID. To name a few like lengthy approval time, lack of knowledge on the requirement of supporting documents, difficulties in explaining the TID’s requirement to the shippers / consignees etc. Hence, Members were invited to submit their comments / incidents / cases to the Secretariat and their valuable inputs have been communicated to the TID for service improvement purpose.



PUBLIC RELATIONS SUB-COMMITTEE Chairman: EXPEDITORS HONG KONG LTD – Mr. Peter Wong Vice Chairman: THE JANEL GROUP OF HONG KONG LTD – Ir. Paul Tsui Members: A-SONIC AIR FREIGHT (H.K.) LTD

WANGFOONG TRANSPORTATION LTD

I) Key Events with Various Trade Bodies

Date HAFFA Event Organizer(s) / Visitor(s)18/05/2009 Ir. Paul Tsui (Vice

Chairman) as guest speaker (Topic: Overview of Recent Global Logistics Industry Development and Outlook; How to Sustain Competitiveness and Explore Business under Current Economic Downturn)

SME Value-Added Seminar Series - Forwarders

The Chinese Manufacturers’Association of Hong Kong (CMA)

04-06/06/2009 Mr. Walther Nahr (HAFFA Representative) and Ms. Alice Lui (HAFFA Secretariat) as conference delegates

The 36th FAPAA Executive Meeting, Bangkok, Thailand

FAPAA (please refer to the Annual Report under FAPAA Sub-committee)

09/06/2009 Mr. Peter Wong (Chairman)

CMA Political Affairs Standing Committee Expert Group Networking Luncheon

The Chinese Manufacturers’Association of Hong Kong (CMA)

24/06/2009 Ir. Paul Tsui (Vice Chairman) as panel speaker (Topic: Leading the Global Supply Chain)

Seminar: How to Build a Smarter Supply Chain in Future?

Hong Kong Productivity Council (HKPC) & IBM

09/07/2009 Mr. Peter Wong (Chairman) as welcome note speaker

Seminar on Strategic Trade Controls - How to classify strategic commodity and the requirement of relevant licence(s)

Trade and Industry Department (TID) & HAFFA


Networking Luncheon with Mr. Duncan Pescod, Permanent Secretary for Commerce and Economic Development (Communications & Technology)

Hong Kong General Chamber of Commerce (HKGCC)

18/08/2009 Mr. Kenneth Chow (Hon. Secretary) as welcome note speaker

Seminar: Hong Kong Export Credit Insurance Corporation (ECIC) New Enhanced Measures to Support the Logistics Industry

Hong Kong Export Credit Insurance Corporation (ECIC) & HAFFA

Date HAFFA Event Organizer(s) / Visitor(s) 27/08/2009 Mr. Louis Lee (Vice

Chairman) as welcome note speaker

Seminar for the Freight / Logistics Industry to Prevent Robbery & Theft of High Value Cargo

Hong Kong Police Force & HAFFA

07/09/2009 Ir. Paul Tsui (Vice Chairman)

Exchange of industrial information

University of Hanover, Germany

08/09/2009 Mr. Peter Wong (Chairman) & Ir. Paul Tsui (Vice Chairman)

Roundtable Meeting with German Delegation on “Supply Chain Acceleration between Hong Kong and Germany”

Hong Kong Trade and Development Council (HKTDC)

08-10/09/2009 HAFFA as endorser and exhibitor

Air Freight Asia 2009 Conference

Conference managed by Reed Exhibitions


Networking Luncheon with Mr. Simon Kennedy Galpin, Director-General of Investment Promotion, Invest Hong Kong

Hong Kong General Chamber of Commerce (HKGCC)

19/09/2009 Ir. Paul Tsui (Vice Chairman) as speaker (Topic: Recent Development of Logistics Services in Hong Kong)

AUSTRIA CONNECT - 2009 China & Hong Kong at Mission Hills

Austrian Trade Commission

21-25/09/2009 Mr. Walther Nahr and Mr. David Fielder (HAFFA Representatives) as conference delegates

FIATA World Congress 2009, Geneva, Switzerland

FIATA (please refer to the Annual Report under FIATA Sub-committee)

22/09/2009 Mr. Walther Nahr (HAFFA Representative) as speaker (Topic: Overview of Hong Kong Logistics Development and Outlook)

Regional Meeting – Asia/Pacific, FIATA World Congress 2009, Geneva, Switzerland

FIATA


PolyU - The 15th Congregation (Faculty of Business)

The Hong Kong Polytechnic University (PolyU)

10/11/2009 HAFFA as supporting organization Ms. Alice Lui (HAFFA Secretariat) as delegate

GS1 Hong Kong SCM (Supply Chain Management) Excellence Summit 2009

GS1 Hong Kong

24/11/2009 Mr. Kenneth Chow (Hon. Secretary)

Press Conference: SME Credit Link Program sponsored by SME Development Fund

Hong Kong Productivity Council (HKPC)

27/11/2009 HAFFA as one of the organizers

Logistics Awards 2009 Seminar & Presentation Cocktail

Hong Kong Trade Development Council (HKTDC) as leading organizer (Others: Logscouncil, CILT, HKPC, HKLA)


Exchange of industrial information

Global Business Reports for Inbound Logistics, UK

Date HAFFA Event Organizer(s) / Visitor(s) 07/12/2009 HAFFA as one of the

organizers Air Cargo Community Charity Golf 2009 at Mission Hills

Other organizer: Hactl

15/12/2009 Ir. Paul Tsui (Vice Chairman)

Hong Kong-Zhuhai-Macao Bridge Construction Ceremony

Highways Department

10/01/2010 Mr. James Chan (Airfreight Sub-committee Chairman) as judge

The 4th Int'l Forklift and Pallet Building Competition

Hactl

14/01/2010 HAFFA as one of the co-organizers Mr. Peter Wong (Chairman) as welcome note speaker

Seminar for the Hong Kong Air Freight Forwarding Industry - Enhancing the Competitiveness of the Hong Kong Air Freight Forwarding Industry Using RFID and Software Agent Technologies

The Hong Kong Polytechnic University (PolyU)

26/01/2010 Mr. Peter Wong (Chairman) and Ir. Paul Tsui (Vice Chairman)

International Customs Day 2010 Cocktail - Customs and Business: Improving Performance Through Partnerships

Hong Kong Customs & Excise Department


Networking Luncheon with Mr. Rokas Bernotas, Ambassador of Lithuania to China, Vietnam, Mongolia and Korea

Hong Kong Trade and Development Council (HKTDC)

04-05/02/2010 Mr. Walther Nahr (HAFFA Representative) as working group member

FIATA Working Group Sea Transport Meeting, Mexico City, Mexico

FAPAA (please refer to the Annual Report under FIATA Sub-committee)

15/04/2010 Mr. Louis Lee (Vice Chairman) & Ms. Alice Lui as delegates

Imminent Direct Transportation Link: Uncertainties & Strategies

Centre of Cyber Logistics under the Li & Fung Institute of Supply Chain Management and Logistics of the Chinese University of Hong Kong

II) Greater China Affairs Delegations / Events Please refer to a separate report under “GREATER CHINA AFFAIRS SUB-COMMITTEE”. III) Media and Others Throughout the year 2009-2010, HAFFA was interviewed by the media on various issues. With the help of the executive committee members, the PR Sub-committee endeavor to entertain almost all press enquiries. In making comments, we adopt a factual, objective approach with the interest of HAFFA members being our first priority.

Date: 12 April 2010

(END OF REPORT)


SME DEVELOPMENT SUB-COMMITTEE Chairman: GRAND EXPRESS LTD – Mr. Kenneth Chow Vice Chairman: THE JANEL GROUP OF HONG KONG LTD – Ir. Paul Tsui Members: DACHSER FAR EAST LTD HECNY TRANSPORTATION LTD

NAF NORTHERN AIR FREIGHT LTD WANGFOONG TRANSPORTATION LTD LOGSCOUNCIL (Hong Kong Logistics Development Council) Sponsorship Programme to Support Small and Medium Logistics Service Providers in Information Technology (IT) Applications To cater for the requirement of global buyers and to improve operation efficiency, logistics service providers will need to equip themselves with the latest technologies, such as Radio Frequency Identification (RFID) technology-related applications, to serve their customers. Yet, according to a research on the “Use of IT and Automation Techniques in Logistics Services” conducted in 2008, many local companies in the logistics sector find it risky to invest in IT applications and equipment as the benefits so generated would be hard to quantify. Small and medium-sized logistics service providers, who often face a tight budget, may be particularly hesitant to invest in IT solutions. There are several funding and sponsorship schemes offered by government bureaux/departments to encourage and assist Hong Kong companies to upgrade their technological level. They, however, focus primarily on research and development projects and promotional activities. There is yet any scheme for the direct support of IT applications by small and medium-sized enterprises (SME). In this connection, the LOGSCOUNCIL has rolled out the Sponsorship Programme to fill this gap in 2009. A total of $2 million has been set aside for the offering of one-off sponsorships up to HK$500,000 each for application by SME logistics service providers as a pilot project to promote the use of IT in their operations. HAFFA was invited by the LOGSOUNCIL to participate in the Sponsorship Programme as an Industry Association to promote the programme to Members, to screen the applications according to the guidelines for consideration by a Judging Panel and to participate in the Steering Committee to oversee the progress if the successful applicant. The invitation for proposal was extended to all Members via Special Circular and we have received an encouraging number of responses. All proposals were submitted to the LOGSOUNCIL for consideration and the participating Members, together with the Sub-committee Members, have attended an interview with a 6-member judging panel arranged by the LOGSOUNCIL. Finally, one of HAFFA Members namely “ACE Protrans Forwarding Limited” was offered the sponsorship for its project entitled “Web-based Global Freight Management System”. The application of IT involved in this project is conducive to enhancing the productivity and competitiveness of the Member as well as the logistics/supply chain sector. The project is now carrying out in full gear and it is expected to be completed in early November 2010. D