COVID-19 Archives

Digitalisation and automation in transport: a necessity unfolding into new opportunities

August 3, 2020 Leave a Comment

In a world where human interaction and socialisation constituted the epicentre of our day-to-day lives, few could have predicted the day when human connections and globalisation could end up posing the largest risk to our own health and well-being.

The purpose of this paper is to analyse those areas of digitalisation, which have allowed shipping and aviation to innovate and succeed over the last few decades. This will enable us to better define the direction in which such sectors should be heading in the coming years, taking into due consideration the latest hazards posed by the pandemic.

Although shipping and aviation share the same goals (transport of persons and goods), they are based on different models.

i) Aviation is a predominantly passenger-oriented industry, while shipping is primarily focused on the carriage of goods. Although during the last few months airlines have shifted their operations onto cargo, this was limited to a few aircraft per company and to the carriage of medical equipment and supplies. Such conversion was dictated by necessity, rather than by a particular business target. On the contrary, although cruise liners had to interrupt their passenger transportation activities, the shipping bulk cargo segment proceeded at a normal pace.

ii) In the aviation industry, demand is generally stable and based on seasonal travel and macro-events (ie sporting events such as the Olympic Games and World Expos). On the other hand, shipping is largely dependent on economic and geopolitical variables, or fluctuations on the prices of commodities.

iii) Efficiency and environmental goals were introduced and pursued in the aviation agenda much earlier than in the shipping sector.

iv) Public opinion tends to perceive the economic impact of shipping in a different manner to aviation, with the consequent effect that relevant authorities tend to distinguish and prioritise their objectives in the two respective sectors accordingly. In practical terms, the fact that shipping is not under the constant spotlight brings with it a more lax approach in terms of adoption of new objectives and policies.

While for the majority of businesses Covid-19 represented a major showstopper, many have also considered the pandemic as an eye-opener as to the untapped potential offered by particular business segments, such as door-to-door food deliveries. In aviation, some of those involved in the aircraft business also opted to explore new opportunities by channelling their business, with some adjustments and notwithstanding the multiple obstacles, into the cargo segment. Only time will tell whether these attempts might represent a new stable stream of revenue for airlines. In the meantime, recent estimates indicate that airlines will still be forced to ground parts of their fleet during the coming years and therefore the possibility of such aircraft being relocated to the cargo segment is not unrealistic.^[1] Aircraft manufacturer Airbus recently launched its ‘e-delivery process’, a system that ensures ‘continuation of Airbus’ delivery stream, while integrating the required health and safety requirements during the ongoing Covid-19 pandemic’.^[2] Airbus disrupted its ordinary aircraft delivery procedures through an electronic Transfer-of-Title based on the ‘e-SalesContracts’ platform that enables the parties involved to complete the transaction entirely through digital means and in paperless format, without the need for any individuals to be physically present.^[3]

Another area where technology has, out of necessity, required resilience from its operators, is that of data collection in the context of the Carbon Offsetting and Reduction Scheme for International Aviation (‘CORSIA’). CORSIA requires airlines to:

(i) monitor emissions on all international routes; and

(ii) offset emissions by purchasing emission units.

The aim is to halt net carbon emission growth at 2020 levels.^[4]

CORSIA has opened up the market for emission tracking tools, which track CO² consumption, as well as encourage efficiencies. Although Covid-19 might impact the definition of the baseline mechanism, digital solutions will play a key role in ensuring that information is accurately collected in a timely and efficient manner.

Disruptive events like the 9/11 terrorist attacks, the terrorist attacks in Europe and the 2008 Crisis, have all shaped the world we are living in and so will Covid-19. Survival is certainly in the hands of those who are ready to adapt and therefore innovate to new realities. Client expectations have changed considerably during the course of the last few years and notwithstanding recent events, these remain of fundamental guidance. Something that the pandemic brought to the surface, with the inevitable delays in services, is how the ‘insta-generation’ significantly impacted changes to client expectations in recent years. Goods are expected to be delivered within a couple of days, no matter which part of the world they come from. Final destination flights should not include more than one stop, no matter if the point of departure is located in a remote region of the world. This has obviously increased pressure among producers, shippers and passenger transport operators. Although we do not know if such client expectations will be realistically satisfied in the near future, the recent events have clearly highlighted the importance of technology and digitalisation in the sustainability of the demand/supply mechanism.

Aviation and shipping embraced technology at a different pace and extent, starting off in entirely different decades. Aviation companies are highly dependent on the human capital workforce (crew members and large maintenance teams) and oil price fluctuations. Technology was a means to streamline and render more efficient aspects concerning aircraft maintenance, passenger reservations, boarding procedures, claim handling and customer care protection, as well as the tracking of goods carried on a particular aircraft. While in aviation, innovation was led mainly by customer-oriented necessities and was introduced gradually throughout the last two decades, hand-in-hand with software development, often interacting with airport infrastructures; shipping converted its approach towards technology only during the last few years, with serious inconsistencies and deficiencies among the various port hubs across the world. Although distributed ledger technology could have rendered the shipping industry paperless years back, the transitioning phase started only in the last few weeks due to the medical emergency led by Covid-19, which prompted shipping and customs operators to do away with unnecessary paperwork.

Cyberattacks on worldwide major transport and logistics operators a couple of years ago led to a standstill of operations, shutting of IT systems across multiple sites and stranding of ships all over the world, with serious revenue impacts, brought under the spotlight the necessity of having sound cyber-attack mechanisms, aimed at reducing external attacks. This prompted IMO to amend the International Safety Management Code, in order to cater for such events and also for operators to understand the need to consistently invest in digitalisation and not to carelessly outsource this to third parties.

Another sector within the aviation sphere that has encountered a rapid spike over the past decade, is related to the use of drones, which have become operational on a vast scale and widely within the European Union territory. Predictions show that the European drone sector will eventually employ more than 100,000 people and have an economic impact exceeding €10bn yearly over the next two decades.^[5]

The versatility of drones within the military sector is recognised, however the uses of drones during the Covid-19 pandemic has been novel, and in some cases, crucial to continued operation with companies like Zipline offering the delivery of vital medical supplies via drones for remote areas since 2014.^[6] Throughout the Covid-19 pandemic, Zipline has upped its efforts. The use of drone operations minimises human contact by firstly removing the human element from the delivery service and secondly by assisting people to stay safely indoors and allowing the supplies to reach them. The use of technology in support of drones is a truly remarkable progress that has been leveraged by a number of similar drone companies and has borne fruit at a time when the world needed it most.

The potential of technology in this age is vast, from robotic process automation to data analytics. Driverless means of transport are now being used among various sectors of European public transportation and private transportation by car. Even shipping is not immune to such novelties with different grades of automation, which go from semi to complete automated vessels. Furthermore, the benefits arising out of technology and digitalisation are not limited to ship operators and airlines themselves but also extend respectively to ports, airports and subsidiary service providers, such as air traffic control, ship and port operators.

However, while automation could represent an opportunity to increase cost efficiencies, reduce costs on workforce and enhance opportunities for companies involved in the IT and cybersecurity arena, it also comes with multiple challenges. While start-ups with sufficient will and capital to invest might make the most of the competitive advantage offered by the newest technologies, older companies might see this as an unnecessary burden. Automation requires individuals having a strong IT and technical background, as well as substantial adaptation planning from an internal organisational point of view, which not every shipping company may wish to pursue. This is somewhat similar to what was required by the banking sector in embracing the Fintech revolution.

Conclusion

In light of the above observations, it is evident that the world of technology and transport must work in tandem, in order to facilitate and help one another. The cooperation of these industries could result in significant benefits for all involved. Although innovation most certainly comes at an initial cost, it is vital that the transport industry remains progressive, modern and current. Development and innovation has most often been a matter of necessity and urgency. Success, in particular during such hard times, lies in the ability to predict, intercept and safely anticipate – where possible – such necessities. It is our opinion that the digital world provides and will keep on providing the perfect platform for an improved service. Harmony between technology and transport has the potential for unlocking great opportunities and we look forward to this future with great enthusiasm.

by Stephan Piazza and Francesca Ferrando, KPMG Malta

This article first appeared on the website of the Maritime and Transport Law Committee of the Legal Practice Division of the International Bar Association, and is reproduced by kind permission of the International Bar Association, London, UK. © International Bar Association.

[1] Centre for aviation, ‘Lufthansa Europe’s first fleet cut; will go deeper, others to follow’ (CAPA – Centre for Aviation, 10 April 2020) https://centreforaviation.com/analysis/reports/lufthansa-europes-first-fleet-cut-will-go-deeper-others-to-follow-520959 [Accessed 22 May 2020].

[2] Martin Fendt, ‘New aircraft “e-Delivery” process assures health & safety for customers and Airbus employees, and enables business continuity’ (Airbus, 21 April 2020) www.airbus.com/newsroom/press-releases/en/2020/04/quick-news–april-2020.html [Accessed 15 May 2020].

[3] Ibid.

[4] ICAO, ‘2 What is CORSIA and how does it work? ‘ (ICAO Environment, n/a) www.icao.int/environmental-protection/Pages/A39_CORSIA_FAQ2.aspxaccessed 22 May 2020

[5] European Commission – Internal Market, Industry, Entrepreneurship and SMEs. (2018). Unmanned aircrafts – Internal Market, Industry, Entrepreneurship and SMEs – European Commission.

Available at: http://ec.europa.eu/growth/sectors/aeronautics/rpas_en [Accessed 15 May 2020].

[6] Zipline, ‘Zipline’s COVID-19 Response’ (Fly Zipline, n/a) https://flyzipline.com/covid-19 [Accessed 18 May 2020].

Dispute resolution regulations for bunkering operations

July 1, 2020 Leave a Comment

Introduction

Transport Malta’s Ports and Yachting Directorate recently issued Port Notice Number 07/20 entitled “Dispute Resolution and Procedures in Connection with Bunkering Operations” to remind recipients about the Dispute Resolution (Procedures) Regulation under Subsidiary Legislation 545.30 of the Laws of Malta.

The port notice highlighted that authorised providers and customers can make complaints to the regulator to settle any disputes between them.

In accordance with the port notice, the regulation applies to bunkering operations where a dispute has arisen between the bunkering fuel operator and provider and the receiving vessel. The procedure provides for an alternative dispute resolution (ADR) mechanism that aims to be swift, economical, transparent and simple.

Much of the port notice’s attraction lies in the fact that disputes between authorised providers must be settled within four months, while disputes between an authorised provider and a consumer must be settled within 90 days, with extensions allowed only in exceptional circumstances.

Complaints and supporting documentation may be filed with the regulator online and, subject to certain conditions, the regulator’s decisions are binding on the parties to the dispute with administrative fines imposed for non-compliance. However, this procedure is entirely voluntary and does not affect the parties’ rights to proceed to arbitration or court should they prefer.

Dispute Resolution (Procedures) Regulation

The relevant parties under the Dispute Resolution (Procedures) Regulation are as follows.

Authorised providers
The regulation is not limited to bunkering operations and defines an ‘authorised provider’ as any natural or legal person, whether privately or publicly owned, which is authorised to operate, provide or carry out any activity or operation or provide any service relating to energy and water services.

Consumer
A ‘consumer’ means any person who uses or requests a service or product, the provision of which is regulated by the act, for purposes outside of their trade, business, craft or profession. This definition raises the question as to who can qualify as a consumer; however, the port notice explains that it applies to “bunker operations where a dispute arises between the bunkering fuel operator and provider and the receiving vessel”.

Regulator
The regulator, established under the Regulator for Energy and Water Services Act, is composed of a chair and no fewer than four and no more than six members. Members are appointed by the minister for five or seven-year terms and may be reappointed only once.

Proceedings before regulator
The Dispute Resolution (Procedures) Regulation provides for two scenarios: dispute resolution where the parties are both authorised providers and dispute resolution where the parties are an authorised provider and a customer. The regulation seeks to provide authorised providers and consumers with an ADR mechanism that aims to be simple and transparent, offering binding decisions in a swift and economical manner.

Where a dispute arises between authorised providers, the regulator must initiate an investigation into the dispute as soon as possible and seek to resolve the dispute within four months from the date on which it was notified. This timeframe may be extended by a further two months where additional information is sought and the parties agree to such an extension.

Under the regulation, the regulator has the power to initiate an investigation on its own initiative. However, the regulator’s jurisdiction is not automatic and they may refuse to initiate an investigation where they are satisfied that other means of resolving the dispute in a timely manner are available to the parties.

The regulator may also refuse to initiate an investigation where the dispute is already subject to legal proceedings. Where a decision has been taken to refuse to initiate an investigation, the regulator must inform the parties as soon as possible. However, where the dispute has not been resolved or the party seeking redress has not initiated legal proceedings within four months from such a decision, the regulator may, at the request of a party, initiate an investigation.

Subject to possible appeal, the regulator’s decision will be binding on the parties and failure to abide by the decision will be considered an infringement of the regulation, subject to an administrative fine.

Under the regulation, the regulator will also have jurisdiction in cases where a consumer alleges that an authorised provider has infringed the Regulator for Energy and Water Services Act or subsidiary legislation made thereunder. When referring a dispute, a consumer must show on a prima facie basis that it has been affected by an act or omission of the authorised provider. In resolving the dispute, the regulator may, among other directives, order the authorised provider to effect reimbursement of payments received or to make compensation payments. Such payments may include the whole or part of the costs relating to the engagement of a lawyer or technical adviser engaged in submitting the dispute. Should a party fail to abide by an order given, the regulator may impose an administrative fine of not more than €600 for each day of non-compliance.

Notably, the regulator is not a compulsory dispute settlement mechanism for disputes arising between authorised providers and consumers. In fact, the regulation makes clear that “the provisions of this Regulation shall be without prejudice to the right of a consumer to have recourse to any other body in resolving any such dispute”.

As many other ADR mechanisms, the regulator aims to be expeditious in its investigations, with the regulation setting out a 90-day period within which disputes must be resolved. This timeframe may be extended only in exceptional circumstances. The regulator aims to increase efficiency by allowing complaints and supporting documentation to be submitted online. Official communication may also be made electronically or if applicable, by post.

When faced with a consumer complaint against an authorised provider, the regulator may refuse to deal with complaint in the following circumstances:

Where the consumer did not first attempt to contact the authorised provider in order to discuss their complaint and seek to resolve the matter with the authorised provider directly.
Where the dispute is frivolous or vexatious.
Where the dispute is or has been considered by another dispute resolution entity or a court.
Where the consumer did not submit the complaint to the regulator within one year from the date on which the consumer submitted the complaint to the authorised provider.
Where dealing with the dispute would seriously impair the regulator’s effective operation.
Where the consumer did not submit the complaint to the regulator within two years from the date on which the facts constituting the substance of the complaint first arose.

According to the regulation, decisions are binding on the parties to the dispute. However, where the dispute is between an authorised provider and a consumer, it is only binding on the consumer if they have been informed of the binding nature in advance and have specifically accepted this.

Although decisions are binding, they are not final and decisions taken by the regulator are subject to appeal before the Administrative Review Tribunal within 20 days of the decision. Appeals may be filed on the following grounds:

a material error as to the facts has been made;
there was a material procedural error;
an error of law has been made; or
there was some material illegality, including unreasonableness or lack of proportionality.

Comment

The Dispute Resolution (Procedures) Regulation aims to provide for an ADR mechanism that seeks to increase consumer protection in a timely and cost-effective manner. In times where courts have been forced to close due to COVID-19 containment measures and where there may be significant backlogs as they slowly open up again, authorised providers or consumers looking to settle disputes quickly may consider this mechanism as a valid alternative. Nonetheless, it is advised that disputes involving complex legal issues, including bunkering operations, should continue to be referred before a court so that the parties can make full use of all of the legal mechanisms available therein.

by Dr Martina Farrugia, Fenech & Fenech Advocates

Source: ILO

COVID-19 temporary precautionary measures – Framework of protocol for conducting maritime support services

May 28, 2020 Leave a Comment

On the 23rd May 2020, the Ports and Yachting Directorate within the Authority for Transport in Malta (the Maltese Port Authorities) published Port Notice 09/2020 entitled COVID-19 Temporary Precautionary Measures – Framework of Protocol for Conducting Maritime Support Services. This Notice is further to Port Notice 06/2020, which was previously issued by the Authorities on the 26th March 2020.

Port Notice 09/2020 was issued by the Maltese Port Authorities following consultation with the Port Health Office. It creates a framework of protocols that must be respected when maritime services providers in Malta are engaged to conduct various maritime support services.

Ships, yachts and all other vessels intending to obtain services in Maltese waters or within ports and harbours must seek prior port clearance. If cleared, vessels will be required to follow the protocols established in the said Port Notice.

Interestingly, the previous blanket ban on all yachts from entering Malta has been lifted. Yachts requesting permission to enter Maltese waters for services and ships requesting to enter Malta to carry out maintenance will be considered on a case-by-case basis. If and when approved, protocols and other conditions that must be followed by the vessels will then be communicated to the local agents by the Port Health Office.

The Notice also provides for an exemption to the otherwise applicable travel ban in cases of crew repatriation and likewise in cases of “ship operations”. Requests will be referred to the Superintendent of Public Health for consideration and will be dealt with on a case-by-case basis. If approved, protocols and other conditions that must be followed will be communicated by the Port Health Office.

by Dr Jotham Scerri Diacono and Dr Jan Rossi, Ganado Advocates

Source: Lexology

Effect of COVID-19 on Maltese shipping industry

April 1, 2020 Leave a Comment

Europe is presently facing its most testing challenge since World War II. Faced with the threat of the COVID-19 pandemic, many EU states are increasingly adopting stringent measures to ensure that the spread is, to the extent possible, contained. Malta is no exception in this regard.

Conscious of the fact that Malta is a small island with one of the highest population densities per square kilometre in the world, local authorities have been busy implementing various staggered restrictive measures aimed at social distancing. These measures range from the closing of all schools to stopping all commercial flights in and out of the island.

As a result, most sectors of Malta’s economy have to some extent been affected by this epidemic. The local shipping industry has also been hit with several restrictions in recent weeks.

Restrictions on shipping

In early March 2020, all passenger vessels travelling from Italy were prohibited from entering Maltese ports. By virtue of Port Notice 05/20, the Authority for Transport informed the shipping community that it was imposing an immediate temporary ban on the entry of cruise liners and passenger vessels to Maltese ports. This restriction has now been extended. On 21 March 2020, the superintendent of public health extended the order of a travel ban on persons entering or leaving Malta to and from all countries, including by sea. However, an exception was made for all cargo ships, including container ships and ro-ro vessels carrying goods and essential commodities and tankers loaded with essential fuels.

Legal notices affecting court procedures

The measures taken to date have also affected the legal community. By means of Legal Notices 97 and 65 of 2020, the superintendent of public health has ordered the indefinite closure of:

any of the courts of justice, that is the superior courts and the inferior courts including appellate courts irrespective of their competence or jurisdiction, and includes also any tribunal established by law which operates from the building of the Courts of Justice, and any boards, commissions, committees or other entities which operate from the building of the Courts of Justice before which any proceedings are heard or procedures undertaken which are subject to legal, judicial or administrative time limits for filing any claims, defences or other acts.

The closure order came into effect on 16 March 2020 and will remain in force until it is revoked. Legal Notice 97 of 2020 also sets out the time frames in which an appeal of a decision by any other administrative tribunal, board or body may be filed in court once the latter reopens.

Notwithstanding the above, for now, the court registry is still accepting filings in situations where any delay could be seriously detrimental to a party. In such cases, the claimant must file an application to open the court registry and justify the urgency at hand. Within the context of shipping, this effectively means that the filing of warrants of arrest of ships, urgent injunctions prohibiting the transfer of ownership of vessels or the entry of any further mortgages, or any such similar measures, can continue to be filed. Moreover, the processes involved remain expeditious and provided that all documents are in hand, an arrest or a flag injunction can still be carried out in a matter of hours.

Further, to ensure that the closure of courts does not prejudice the rights of any persons, the superintendent of public health has also issued Legal Notices 61 and 84 of 2020 to suspend all prescriptive periods and other time bars. During the period that the courts remain closed, the running of any legal and judicial times and any other time limits have been suspended, including peremptory periods applicable to proceedings or other procedures before said courts. This suspension also applies to prescription in criminal and civil matters.

With regard to the legal and judicial time frames, which are not peremptory in nature, Maltese law already caters for the possibility of extending said limits. Article 106 of the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, allows for such a request on good cause to be made, provided that it is filed within the time period sought to be extended. However, it is not permissible to request such an extension once the original time period has expired. Therefore, in the given circumstances, said article alone would not have provided the necessary safeguards, particularly since it is still unclear when the courts will be reopened. Accordingly, the new legal notices ensure that further protection is offered by legislating the immediate suspension of all such time limits. By doing so, the legislature has also ensured that the judiciary will hopefully not be flooded with extension requests the moment that the courts are reopened.

On the other hand, most peremptory periods cannot be suspended or extended on the request of interested parties. This includes those time bars which cannot normally be derogated from. By way of example, this would include the one-year period to bring a claim in respect of damaged or loss of goods under the Carriage of Goods by Sea Act and those maritime-related time bars found under the Commercial Code. These periods have therefore also all been suspended by means of the superintendent of public health’s legislative interventions.

The abovementioned suspension will last until seven days from when the superintendent repeals the court closure order. Thus, where a legal and judicial time frame or prescriptive period would have ordinarily expired in the period when the court is closed, the interested party now has seven days from the reopening of the courts to file the necessary acts or court papers.

Thus, any party involved in disputes or contentious matters which could result in a claim before the Maltese courts should bear the above in mind and also watch this space to see when the Maltese courts will reopen. In the meantime, with respect to urgent filings such as ship arrests and flag injunctions, it is very much business as usual in Malta.

By Adrian Attard at Fenech & Fenech Advocates

Source: ILO

Measures taken by the Malta Transport Authority in the context of COVID-19

March 31, 2020 Leave a Comment

The Malta Transport Authority has taken measures in the context of COVID-19 which have been made public with the following notices:

MS Notice 160 on SUPPORTING MEASURES TO THE MALTESE SHIPPING INDUSTRY DURING THE COVID-19 PANDEMIC offering shipowners the possibility of deferring due payment of registration fees and annual tonnage tax, the anniversary date of which falls due on or after the first day of April 2020. The deferment may be made for a period of three months, during which period the Registry will continue to issue renewed certificates of registry upon receipt of a request to proceed.

MS Notice 158 on EXTRAORDINARY MEASURES RESULTING FROM THE COVID-19 PANDEMIC

Port Notice 6/2020 ADDITIONAL PRECAUTIONARY MEASURES AND INSTRUCTIONS TO MARINE TERMINALS AND PORT SERVICE PROVIDERS

Port Notice 5/2020 PRECAUTIONARY MEASURES TO CRUISE LINERS AND PASSENGER SHIPS

Member of the Comité Maritime International

Digitalisation and automation in transport: a necessity unfolding into new opportunities

Dispute resolution regulations for bunkering operations

COVID-19 temporary precautionary measures – Framework of protocol for conducting maritime support services

Effect of COVID-19 on Maltese shipping industry

Measures taken by the Malta Transport Authority in the context of COVID-19

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