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Definition and charateristics The European ship supply is a unique “just-in-time” business, which encompasses many different transport modes in many different countries under special time and financial constraints. Global services, economies of scale, efficient logistics systems and operations, prompt local service and unrivalled attention to customer needs are all key elements in the supply of parts and provisions to ships. The following are key characteristics of European ship supply: 365 days – 24 hours a day - service at any time – day or night Although there are still ports where loading and unloading may take several days, generally speaking, modern shipping requires only one day, or even hours, in port before putting to sea again. This makes a severe demand on the efficiency of the ship supplier. As a result, a ship supplier must be fully prepared to store ships at any time of the day or night. Ship suppliers work on a 24-hours-a-day, 7-days-a-week basis. Customs offices closed for the weekend or with limited operation hours create an unsustainable situation, where vessels which are scheduled to leave the port cannot do so as access to the vessels for ship suppliers is blocked due to a closed customs office. The costs for prolonging the stay in the harbour for the ship supplier to reach the vessel on Monday morning can be enormous. “Just-in-time” business The ship supply business is characterized by the need to work against time. Ships can only be loaded with supplies during the short period they are in harbour, so time is of the essence. It also means having to access a ship without delay in the case that small individual items need to be brought to the vessel. Ship chandlers, therefore, are required to operate a unique “just-in-time” business, which encompasses many different transport modes in a myriad of different countries under special time and financial constraints. Small amounts of multiple items – mixed consignments Ship suppliers often need to put together mixed consignments with thousands of different articles in small quantities, purchased from a larger number of different sources. Thousands of different articles are traded – from peanuts and sand to big cylinder liners or heavy anchors, plants, Christmas trees etc. Perishable goods play a special role in this respect. Dairy products, fresh and frozen meat, vegetables and luxury goods, tobacco and wine and spirits require special physical treatment. In addition, ship suppliers need to maintain detailed lists of manufacturers and depots in order to be able to obtain rare or unusual items at very short notice. Special customs procedures "No vessel should have to stay in port for longer than strictly necessary, so efficient customs clearance procedures are essential to our business". Peter de Haas Jr., Chairman of OCEAN’s Working Group on Customs and Taxation. When ship suppliers deliver supplies to the vessel, many customs procedures (such as import, export and transit) will apply in addition to other controls, e.g. veterinary inspections. Especially export regulations need to recognize the special environment in which the ship supply sector operates: Vessels can call different ports whilst in the EU. Ship suppliers would generally not know if the subsequent stop of the vessel is in the EU or not. From a ship supply perspective, this is also irrelevant because ship supply, by nature of its name, leaves the EU as soon as it has been delivered to a vessel (which is often foreign owned). It will never re-enter the EU and goods supplied are consumed exclusively on-board of the vessel, by machines or crew (hence the name ship supply). Given that ship supplies have the vessel as final destination, there is no country of import. This has practical consequences for the way ship supply is created from a customs clearance point of view. Tax and Duty Free deliveries Tax and Duty Free deliveries are a “conditio sine qua non[1]” for international competition between ship suppliers all over the world. In many countries, especially within the European Union, laws and regulations, in particular those governing customs, maritime and veterinary matters, as well as food and agricultural products, are very complicated. Compliance with these rules and regulations causes high administrative costs for ship supply companies. The importance of cooperation and flexibility in ship storing “Storing the ship is teamwork” – This well-known slogan means that ship supply can only be carried out by smooth co-operation between ship suppliers, ship owners, freight forwarders, port authorities, customs and taxation authorities and others. This is essential, as in many cases the time available for supplying a vessel is limited to a few hours. Furthermore, the documentation and administration of the ship supply business is very complicated, even if it is online or electronic. It is, therefore, necessary to have flexibility in application of the regulations to suit the circumstances under which the ship is being supplied, also in an electronic customs and administration environment. Requirements and skills needed for ship supply A ship supplier must have many skills: he must know the type of materials best suited for the use on-board the ship, as any error could result in a serious loss to the vessel at sea. The work of the ship supplier requires years of experience in the ship supply industry. The ship supplier must know all the regulations of the national and European customs authorities in addition to the port and owners regulations. It is vital, therefore, that these regulations be framed in such a way as to be adaptable to suit the circumstances of different ports. This is especially necessary in large port areas where there are large distances between the location of the ship suppliers’ warehouse and the berths of ships. In some instances, deliveries to ships have to be made by small boats or even by helicopter. Ship supply is global business – competition with third countries European ship suppliers are facing strong competition at international level and have to compete with ship suppliers all over the world. The pressure to supply highest quality products at globally competitive prices has been increasing further over the last years. Moreover, the nature of the European Union means that trade barriers exist in the EU, outside customs procedures, which do not exist elsewhere. As a consequence, fierce global competition and a unique European business environment require all EU Member States to focus efforts on more trade facilitation, for European business and industry. A further increase in bureaucracy, administrative burden and other complications need to be avoided at all costs! Otherwise, a vessel might divert to non-EU ports and the ship supply business will be done somewhere else. ------------------------------------------------------------------------------- [1] (Source: www.m-w.com) Etymology: Middle English chandeler, from Middle French chandelier, from Old French, from chandelle candle, from Latin candela , Date: 14th century |