At the Ordinary General Meeting held on December 20, 2023, the LCTA Executive Board proposed Simone Knobloch, COO of Valcambi SA, Alessandro Odoni, Finance Director of Flame SA and Marco Passalia, Partner of Enet Energy SA be elected as new Executive Board Members. Monica Zurfluh, who officially took office beginning of November, was introduced as new Secretary General. 

The Ordinary General Meeting held in December 2023 elected new Board members in accordance with the Executive Board’s proposal: Simone Knobloch, COO of Valcambi and Alessandro Odoni, Finance Director of Flame SA.  

Michael Mesaric, CEO of Valcambi SA, and Riccardo Talenti, Charter & Operations Manager at Flame SA had previously announced decision to resign from the Executive Board in connection with the General Meeting. Both had been active members of the Executive Board since LCTA’s formation, and the Executive Board recognized them for their contributions to shaping the Association and supporting its interests. 

Marco Passalia, Partner of Enet Energy SA, opted to step down as Secretary General and relinquish operational responsibilities. Recognizing Marco Passalia’s critical role as co-initiator and engine of the Association, the Executive Board proposed he join the Board as 14th member in derogation from the statutes (the temporary increase in the number of Board Members will be reduced again to 13 during 2024 following the complete integration of Credit Suisse into UBS).  

Marco Passalia received special distinction for his achievements since the Associations’ inception in 2010. His lobbying activities at the cantonal and federal levels as well as the organization of several international events and conferences have been critical to the Ticino hub’s positioning and consolidation as Switzerland’s third-largest commodity trading center after Geneva and Zurich, while the launch of both the CAS in Commodity Professional in collaboration with the Zug Commodity Association (ZCA) and the Hochschule Luzern, and the most recent Certified Commodity Trading Specialist training in collaboration with Alma Impact as well as numerous short-term courses contributed to the members’ skills and knowledge, ultimately attracting and retaining talents. 

The General Meeting welcomed Monica Zurfluh, Head of International Trade of the Ticino Chamber of Commerce and Industry (Cc-Ti), as the new Secretary General of LCTA. Monica Zurfluh officially took up her new function on November 1st, 2023. 

As of the end of 2023, LCTA counted 48 active members. 

On Friday November 24, 2023, at the Hotel Splendide Royal in Lugano, the Lugano Commodity Trading Association and Alma Impact AG held an event to discuss sustainability as a critical issue to the future of the Commodity Trading Sector. More precisely, to discuss the opportunities and the challenges that will arise in the coming years and the foreseeable impact on the demand and the operations, in the light of the “Carbon Border Adjustment Mechanism” law, a tax on imported carbon intensive products (cement, iron, steel, aluminium, fertilisers, electricity and hydrogen) recently introduced by European Union to avoid carbon leakage.

A heartfelt thanks goes to the speakers: Dominique Bruggmann from E&Y, Rumi Jahani from CarbonChain, and Simone Knobloch from Valcambi and to the moderator of the roundtable, the journalist Dimitri Loringett. This conference was also the last module of the ‘Certified Commodity Trading Specialist’ course recognized by the SAQ Swiss Association for Quality.

Press review

Materie prime, ecco la tassa UE per ridurre le emissioni (Corriere del Ticino – November 25, 2023)

CCTS program

Certified Commodity Trading Specialist (CCTS) – LCTA (2023 edition)

2024 dates and program to come soon.

On 23-24 June 2022, after the forced hiatus due to the pandemic, the Global Commodities Conference 2022 took place at the LAC in Lugano (Lugano Arte e Cultura). This is an international event organised by the Lugano Commodity Trading Association (LCTA) and supported by the following sponsors: Allianz, Banca Stato, Chamber of Commerce of the Canton of Ticino, Coeclerici, EY, Flame, HFW, Propeller Club – Port of Lugano, Swiss Trading and Shipping Association (STSA), Ticino Welcome and Zug Commodities Association (ZCA).

The event, which was attended by more than 250 guests, confirmed itself as one of the leading industry meetings with the participation of international trade experts, commodity traders, banking institutions and various other service providers. It is important to note that due to the pandemic, it was decided to invite above all local speakers with ties to Swiss trading hubs.

At the opening evening on 23 June, LCTA Vice President Roberto Grassi interviewed the well-known journalist Antonio Caprarica. With a speech entitled ‘Commodity Trading – the challenging geopolitical landscape’, the special guest stimulated the audience’s interest by referring to his diverse and enriching experiences in journalism in various parts of the world.

On 24 June, on the other hand, the day was opened by Matthew Bryza, US Ambassador, who gave his views on the current geopolitical situation with a focus on the conflict in Ukraine.

The day was then divided into three parts.

The first, entitled “Shipping and Logistic: Are we still sailing stormy waters?”; the moderator Michel’Angelo Piccinini (President, Propeller Club Port of Lugano) focused attention on the current dynamics of shipping after the difficult years of the pandemic, which have led to a limited supply of ships, an excessive increase in maritime freight rates, reduced activity of shipyards, and in general management difficulties related to covid19.

Among the speakers were:

Harris Antoniou, Founder & Managing Director, Neptune Maritime Leasing Ltd

Gemma Carbone, Business Development Executive, Ifchor

Andrea Organista D’Amato, Principal & Chartering Manager, Armator Shipping

In the second, ‘Compliance and sustainability in war and resource shortage times’, the focus was on the current geopolitical situation in order to understand the functioning of various trading and financial activities in this complex and volatile environment characterised by international sanctions.

Speakers included:

Sarah Hunt, Partner, HFW

Taylor Konkin, Head of Commodity Trading Audit EY Geneva

Deia Markova, Head of Trade Commodity Finance, SGCIB

Thomas Patrick, CFO, DITH.

This panel was moderated by Pietro Poretti, Director Economic Development Division, City of Lugano, who captured the most relevant and interesting aspects.

Finally, with the third panel, entitled ‘Commodities shortage and global economy’, the conference took a more global slant on the supply of raw materials.

Speakers included:

Marco Arrighini, Head of Southern Region, Allianz Trade Switzerland

Matija Barudzija, CEO, ENET Energy SA

Marco Galimberti, CEO, DP Trade SA

James May, Director Strategy, DITH

The panel was expertly moderated by Florence Schurch, Secretary General, STSA

With around 250 participants over the two days and with several outstanding speakers and moderators, the event was stimulating and offered participants excellent opportunities to exchange, compare and network expertise.

Given the appreciation of GCC 2022, the organisers are already thinking about the next edition.

On the occasion of the official visit to the City of Lugano of H.E. Wang Shihting, Ambassador of the People’s Republic of China in Switzerland, the President of the Lugano Commodity Trading Association (LCTA) Matteo Somaini had the opportunity to present the commodity trading sector active in Lugano, listing also the various commodities traded with China.

This exchange has made it possible to create long-lasting professional ties and important collaboration.

Article by Georges Hardegger, Account Executive Marine, International Trade, Logistics and Fine Art,

IBC Insurance Broking and Consulting Lugano

“Ever Given” or better “Never Get” indemnities for the delay in the global trade?

A few weeks ago everyone was talking about a giant of the seas carrying approximately 18’000 TEU, blocking hundreds of ships from traversing the Suez Canal, leaving (not only) the insurance market breathless and disrupting the world trade. A tremendous number of companies, various industries, ports and infrastructure across the globe are directly or indirectly affected by that event and therefore suffers financial losses.

What’s happened?

The “Ever Given” (about 400 meters in length, roughly the height of the Empire State Building) was caught in a sandstorm while crossing the Suez Canal, the crew was unable to steer the ship which deviates and stuck into the border of the Suez Canal.

Who is responsible?

Two SCA (Suez Canal Authority) official maritime pilots were on board at the time of the incident.  They were in charge to command the ship, taking over from the regular crew and the captain. Independent experts argue that their role is often a mere presence and the captain has the final responsibility. The Egyptians authorities are supporting obviously this understanding of the facts; the ship-owner is blaming obviously the sandstorm. Independent observers might suggest a combination of the causes. By the way . . . the Suez Canal’s own policies suggest it’s not to blame, even if its pilots were at the helm of a ship that ran aground.

The rescue

The 224,000-ton vessel, immobilized on March 23 within the Suez Canal was dislodged on March 29 by the force of several rescue teams with 14 tugboats and multiple dredgers at high tide. On Apr. 13, the “Ever Given” has been immobilized again: this time however by the chains of the Egyptian justice. It was seized by a court in Ismailia after a request of the SCA for compensations estimated initially at USD 916m, including lost revenue for the canal, USD 300m for the salvage (equipment plus 800 people that worked to free the ship) and USD 300m for loss of reputation. The Egyptian State did not say who would be responsible for paying the USD 916m in damages.

Currently the Egyptian Court rejected the request for release the “Ever Given” from arrest; it’s therefore still kept in the Great Bitter Lakes; additionally Egypt has reduced on May 8 its USD 916m compensation claim for the grounding of the Ever Given to USD 600m and then (May 26) to USD 550m. The SCA reduced the value of the required compensation by 40 % after they obtained the estimated financial value of the goods on the ship.

The rescue story is now over. The story for the Legal and Insurance Implications just started.

Damage mapping
There are different insurance sectors that are impacted such as

• Hull & Machinery (H&M)
• Marine & Cargo and
• Protection & Indemnity (P&I)

The Hull insurance covers the damage to the ship itself. These losses should be manageable. The Cargo insurance in place for at least a part of the 18’000 TEU (probably affecting thousands of insurance policies) provides coverage against physical losses and/or damage for the goods being shipped. Information’s received at IBC through own clients indicated that the ship had power at any time and the cooling system for the perishable goods operated properly. Damage to goods on the other 360 blocked ships (including 41 bulk carriers and 24 crude oil tankers) should also be considered. The Protection & Indemnity insurance provides protection to the ship owner/operator should their negligence cause damages to others (this might include claims against the ship’s owner from e.g., the SCA for possible damage to the canal and for loss of revenues, and separately claims for compensation from some of the owners of the delayed ships).
In short: the canal blockage will trigger a flood of indemnity requests by everyone affected. The salvage company which usually work on a so-called Lloyd’s Open Form basis and will claim a success fee based on the value of the ship and cargo; the Suez Canal Authority; the shipping industry; the charterers; the owners of the goods; the other 360 ships stuck in the traffic jam, etc. The insurers for cargo on board will in turn file claims against ship owners, who will turn to their insurers for protection.

The ship-owner of the “Ever Given” declared on Apr. 1 “General Average” following the work to re-float the vessel. The declaration of a General Average means that shippers will be required “to share the relevant expenses incurred in ship rescue”. The General Average terms are outlined in the shipment’s bill of lading and are covering a pretty long list of expenses, which include towing and salvors. Lost revenue for the canal, however, would probably not fall under general average declaration. The goal of this incredibly complex process is to share the costs of a ship’s rescue among all stakeholders. The mandated adjuster RHL (Richard Hogg Lindley) will determine now how much the shippers will have to pay. Currently RHL is getting in touch with all of the shippers that had cargo on board to obtain guarantee bonds from the insurance industry. If the cargo interests decided no not to buy an insurance coverage – although it’s a relatively cheap insurance – then a cash deposit is requested by RHL.

Even if the period of time that the canal was blocked was relatively short, it’s beyond any doubt that the mayor concern will be around the coverage for delayed cargo. We are not speaking about shipping delays of everyday items for customers around the world like garden gnomes – which are in short supply in England – or about flower pots, barbeques and garden furniture in short supply in Switzerland. We are speaking about container ships and tankers which were not in the position to deliver on time food, fuel, commodities, pharmaceutical raw materials and industrial goods to Europe. The same applies the other way round for goods from Europe to the Far East. The impact ranges from infrastructure projects to essential spare parts for the proper working of the industry. Not to speak about the 18’000 TEU which timely availability is compulsively necessary for the shipment of further goods.

Losses due to delays

The crucial point is that most of the cargo policies exclude coverage and therefore an indemnity for losses due to delays. Effectively specific marine insurance policies for delay to cargo are in place however usually for vessel shipping perishable goods such as fruit. Generally, for non-perishable cargo a delay insurance is not bought.

Most of the marine cargo insurance policies adopt the ICC (Institute Cargo Clauses), English law and practice is therefore applicable (e.g., the terms of the UK Marine Insurance Act 1906). These policies require “physical loss or damage” to trigger coverage. The ICC “A” excludes delay. Also, according to the Swiss General Conditions of Marine Insurance on Goods (GCMI 2006) States that the insurer is not liable for the consequences of seizure, confiscation or temporary seizure (quarantine) by government authority or power as well as delay, howsoever caused, in transit or delivery.

Cargo owners of non-perishable goods normally renounce to an expensive coverage for delays. The “Ever Given” case sets a precedent. It should be considered as an alarm bell. The current approach of ship-owners and operators should be seriously reconsidered. Risk Managers across all industries have to reconsider how to deal with such risks, at least partially not insurable and take appropriate actions. Beside additional marine clauses covering pure financial losses, other insurances like CBI (contingent business interruption coverages), TDI (Trade Disruption Insurance) or supply chain risk insurance coverages should be considered. It must be imperatively agreed that the insurance coverage will also be triggered by an event that is not limited to physical loss or damage. The focus has to be aligned on non-physical losses and on business interruption damages as a result of delay in the reception of goods.

On the “Ever Given” case there are objectively different liability situations with an incredible number of parties involved; at the end of the day everyone will try to recover from the party that is at fault.

Please contact the following IBC Insurance Broking and Consulting team members with any additional questions or to discuss further

Georges hardegger@ibc-broker.com – 079 341 38 76
Pascal timmerman@ibc-broker.com – 079 400 19 93
Piermichele bernardo@ibc-broker.com – 078 712 713 2