News

Fracht Australia Logistics News - December 2024

2/12/2024

The Fracht Australia Group has been able to end this year in good shape and we are very confident that thanks to our global network of offices, agility and very experienced and well-trained staff, we will be in a fantastic position to continue supporting our loyal existing and new clients navigate the current logistics landscape. With this last issue of our newsletter for 2024, we would like to say THANK YOU to all our valued clients, suppliers and offices in Australia and around the world for your excellent support and assistance. We wish you all a very MERRY CHRISTMAS, and a successful, healthy and happy NEW YEAR. 

As has become our tradition in recent years we will donate to charity instead of sending Christmas Cards.  Again, this year we will donate AUD1,700.00 to the Children’s Medical Research Institute who are the organisers of the Jeans for Genes Day fundraising campaign.  CMRI is an independent organisation with over 170 scientists committed to finding treatments and cures for serious conditions affecting kids.  They aim to make the incurable curable.  1 in 20 kids, that's 12 born every minute worldwide, faces a birth defect or genetic disease, and each one needs our help.  Donations such as ours will allow CMRI to devote themselves to finding the genetic basis of these conditions, whether it's cancer, epilepsy, or something rarer.  From those discoveries, CMRI aim to develop new treatments that achieve better results with fewer side effects.  

AROUND THE WORLD 

• PORT OF VALENCIA GETS BACK TO WORK AFTER FLOODS FROM RAINSTORMS. Valencia Port is limping back to cargo activity after it was forced to halt operations in the aftermath of severe rainstorms that lashed the country’s south-eastern region in early November. The devastation from what was said to be the severest flash-flooding in Europe over the past five decades, is reported to have claimed around 100 lives. Valencia is the second-largest port in Spain, after Algeciras, and the fifth busiest in Europe. It saw some 2.7m TEU (twenty foot equivalent units) in H1 24, up 14% year on year, according to available data.
• EUROPEAN HAULIERS BEING DRIVEN OUT OF BUSINESS due to rising costs and falling demand. As manufacturing output declines, so does the demand for freight services, which has driven spot rates down since Q2 23. But despite this, elevated operational costs “prevent rates from dropping to 2021 levels, as carriers must cover their rising expenses even with softer demand conditions. The biggest operational costs for hauliers remain labour, fuel, insurance and maintenance, which have all risen sharply over the past two years with inflation – and still remain volatile.
• TRUMP VOWS 25% TARIFF on imports from Canada / Mexico, and adds 10% to China claiming the tariffs would stop the huge import of illegal drugs. The ‘big price’ however, will be paid by US consumers, particularly in automotive. According to 2023 data on imports from Canada and Mexico, there were $109.2bn-worth of automobile and motor vehicle manufacturing imports. In fact, six of the top 20 imports are automotive-related.
• PANAMA CHIEF FLOATS LAND BRIDGE OPTION to ease future drought restrictions. Rising water levels have restored transits through the Panama Canal, but the canal authority is also looking into how a land bridge could move even more cargo across the isthmus. ACP administrator Ricaurte Vasquez Morales recently unveiled a vision to boost the canal’s capacity by 5m containers a year by 2045, up from a comparatively modest 8.3m today – by moving boxes overland. The authority is seeking $1.2bn to $1.4bn in funding to develop the landbridge idea. 

SEAFREIGHT NEWS 

• TT CLUB ISSUES GUIDELINES FOR FLEXITANK SAFETY. Global freight insurance provider TT Club has released the latest in its series of publications focusing on the increasingly popular flexitank unit used to ship bulk liquid cargoes. In collaboration with the Container Owners Association (COA), Flexitanks in the supply chain – defining safe operations seeks to identify the applicable risks, highlight good practice, and provide practical risk mitigation guidance for those in the supply chain involved with cargoes being shipped in flexitanks. TT Club said steady growth in flexitank usage around the world prompts the creation of safety guidelines to assist shippers, forwarders, carriers, and terminals to handle cargo carried in these units with minimal risk.
• IDLE CONTAINERSHIP FLEET GROWS A LITTLE. The end of the early peak season and a truncated US east coast port strike has led to a lull in active tonnage in the global liner fleet. Alphaliner’s latest fortnightly survey, on 21 October, tallied 71 ships with a total capacity of more than 245,000 TEU as commercially idle, equaling just 0.8% of the world’s 30m TEU liner fleet.
• MAERSK AND HAPAG-LLOYD line up major newbuild order to boost Gemini fleet. Maersk Line and Hapag-Lloyd, set to launch their Gemini Cooperation in February, have reportedly ordered up to 28 17,000 TEU LNG dual-fuel box ships from China’s Yangzijiang Shipbuilding for delivery between 2027and 2029. Maersk Line reportedly wants 10 vessels, while Hapag-Lloyd has ordered a dozen, with options for another six, in a combined order estimated at $5.88bn.
• COSCO, OOCL TRIPLE TASMAN FREQUENCY. The Trans-Tasman service operated by Cosco SL and OOCL, known respectively as ANE and ANS, is being upgraded to weekly frequency, effective December. The upgraded service will rotate Melbourne (Thursday), Bell Bay (Sunday), Port Botany (Wednesday), Auckland (Tuesday), Tauranga (Thursday), Melbourne (Thursday). The additional Bell Bay calls will put competitive pressure on the only other international service calling Tasmania, MSC’s Noumea Shuttle.
• NEPTUNE PACIFIC DIRECT LINE / SWIRE MAKING CHANGES. Drydocking requirements will see Neptune Pacific Direct Line (NPDL) shuffle ships on three services in coming months. Meanwhile, Swire Shipping has mildly re-worked its East Timor Service (ETS) to improve transits from Surabaya to Dili (now four days) and Darwin (now 11 days) by reversing the order of Singapore and Surabaya calls. Rotation is thus now Singapore, Surabaya, Dili, Darwin, Singapore.
• GEMINI DROPS FELIXSTOWE FOR LONDON GATEWAY on Asia-Europe strings. Maersk and Hagag-Lloyd have announced they are to drop Felixstowe on Asia-North Europe routes in favour of London Gateway. A Maersk customer advisory said it recently undertook a review of the new network with Hapag-Lloyd and, “during this optimisation process and our review of the Asia-Europe services, we have concluded that London Gateway is the most optimal port to serve our customers importing / exporting cargo to / from the UK”. 

AIRFREIGHT NEWS 

• AIR CARGO DEMAND HITS 14th CONSECUTIVE MONTH OF GROWTH. The International Air Transport Association (IATA) has reported another increase in air cargo demand, marking the 14th consecutive month of growth. The latest monthly statistics from IATA, for September 2024, show demand rose by 9.4% and capacity by 6.4%, compared with the same month last year. The increase in capacity continued to be largely related to the growth in international belly capacity, which rose 10.3%, extending the trend of double-digit annual capacity growth to 41 consecutive months. Asia-Pacific airlines saw 11.7% year-on-year demand growth for air cargo in September. Capacity increased by 8.5% year-on-year.
• CARGO OPERATIONS AT BRAZIL’S GUARULHOS AIRPORT ON BRINK OF COLLAPSE. Cargo operations at Latin America’s largest air cargo gateway, Sao Paulo’s Guarulhos Airport (GRU), are on the verge of a meltdown. Airline groups are appealing to the federal government to impose emergency measures, including a five-day embargo for dry cargo, in a last-ditch effort to avert the collapse of cargo traffic at the airport. The associations claim the disastrous situation is the result of “lack of labour at the dealership, combined with slowness and bureaucracy in the processes, including by government bodies” which has forced pallets to be stored in the open in yards and plane parking positions.
• AIRFREIGHT RATES REMAINED FIRM in October despite demand growth not reaching the highs many had expected. Rate improvements were led by markets out of Asia, with the November outbound index for Hong Kong improving by 8.2% compared with October and gaining more than 10% versus last year. Rates on other lanes out of Asia, such as from India, Vietnam and Thailand, also remain a long way ahead of 2023 levels, however, performance was not quite as strong as many had expected.
• SPOT RATES RISE AS PEAK SEASON BUILDS. Spot rates are elevated globally and are up 25% year on year (YoY) out of Asia Pacific in particular, as the fourth quarter peak season continues. Comparing the first week of November with the first week of November last year, when various markets were already experiencing the effects of strong peak-season demand, spot prices remain “significantly elevated YoY”, according to WorldACD data. 

OCEANIA PORTS 

• VICTORIAN CONTAINER TERMINALS TO INCREASE LANDSIDE CHARGES. Following discussions initiated by the Victorian Department of Transport and Planning (DTP), it has been announced all of three Victorian-based container terminals will align their landside pricing tariffs to commence from 1 January each calendar year. The move sees DP World Australia, Patrick Terminals, and Victoria International Container Terminal (VICT) adopt amendments to the Victorian Voluntary Pricing Protocol, with 60-day industry notices being issued by each terminal company on 1 November.
• NEWCASTLE HARBOUR PROTEST DISRUPTS PORT, ARRESTS MADE. Protesters on kayaks and small water craft caused disruption at the Port of Newcastle on 24 November by paddling into the Newcastle Harbour in an effort to block vessel movements. A reported total of 170 people were arrested for allegedly refusing to comply with police instructions to move away from the channel. The protest was organised by the climate activist group Rising Tide, which called the event “The People’s Blockade of the world’s largest coal port”. The protests caused the port authority to temporarily pause shipping movements in and out of Newcastle‘sport for several hours before they were resumed.
• MUA THREATENS INDUSTRIAL ACTION BY CHRISTMAS. The Maritime Union of Australia has revealed it anticipates 10 Australian ports will be engaged in industrial action by Christmas time, as the result of the stalled negotiations with Qube Ports. In an announcement, the Union levied a number of accusations against the port operator, accusing Qube of delaying or disrupting the bargaining process, attempting to manipulate industrial relations laws, and being out of touch with the community. Qube has rejected the union’s claims.
• MELBOURNE CUTS SCOPES 1 AND 2 BY 43%. The Port of Melbourne has released its FY 2024 Sustainability Report, marking a range of significant achievements. CEO Saul Cannon said that Port of Melbourne remained dedicated to leading the decarbonisation of its supply chain, minimising its impact on land, air, and waters, and building strong stakeholder and community relationships. “Port of Melbourne has made marked progress on the sustainability front, including sourcing more than 60% of our Scopes 1 and 2 electricity needs from renewable energy, such as Victorian-generated solar and wind,” Mr Cannon said.
• AURIZON APPROVED FOR FLINDERS LOGISTICS ACQUISITION. Freight rail transporter Aurizon has welcomed the decision by the Australian Competition and Consumer Commission (ACCC) to approve its proposed acquisition of Flinders Logistics. Aurizon says it will work to finalise the acquisition of the bulk stevedoring company, with completion expected to occur on 6 December this year. The acquisition is intended to support Aurizon’s presence in South Australia with rail and port solutions for its customers. Flinders Logistics holds leases and, together with its subsidiary Pirie Bulk, operates at Port Adelaide and Port Pirie, including a stevedoring workforce of approximately 100 people. 

CUSTOMER SERVICE 

If you would like further information about any of the above items, please contact one of our friendly Fracht Team members at fracht@frachtsyd.com.au