News

Fracht Australia News - August 2021

30/7/2021

AROUND THE WORLD 

• CHINA - Typhoon In-Fa caused the temporary closure of several air, sea and rail hubs including Zhengzhou in the Henan province, Shanghai, and Ningbo. Hundreds of flights were cancelled which in turn resulted in a spike of freight rates.
• EGYPT / SUEZ CANAL - After blocking the Suez Canal on 23 March 2021 the vessel Ever Given was arrested and remained at anchor in the Bitter Lakes area. After months of negotiations with the Suez Canal Authority the ship was finally released and resumed its voyage to Rotterdam with an estimated arrival date of 29 July.
• EU - The European Commission has adopted a sweeping package of proposals to reduce the bloc’s emissions by at least 55% by 2030 compared to 1990. Among many other factors this will also affect sea and air freight as well as international trade. The package includes shipping in the EU Emissions Trading System (ETS) which puts a price on carbon. The package also has a Carbon Border Adjustment Mechanism which puts a “Carbon Price” on imports. The International Chamber of Shipping secretary general, Guy Platten said: “Other than an ideological revenue raising exercise which will greatly upset the EU trading partners, it’s difficult to see what extending the EU ETS to shipping will achieve towards reducing CO2, particularly as the proposal only covers about 7.5% of shipping’s global emissions”. “We know that non-EU States like Japan have already expressed concern over this diplomatic overreach and imposition of a unilateral and extra-territorial tax on trade.”  
• ITALY - Most suppliers and trucking companies will be closed during for holidays during the month of August. There will be restrictions for heavy vehicles as well as total bans on specific days. This will affect normal scheduling and will lead to delays and / or extra costs for local transports.
• JAPAN - Also in Japan many companies will close from 9 to 16 August to celebrate “Mountain Day” and Obon holidays.
• SOUTH AFRICA - The recent civil unrest in South Africa which resulted in looting, plundering, violence and loss of life also led to the closure of ports and main highways which in turn messed up import and export schedules because ships had to remain at anchor outside the ports. Toward the end of July operations in the port of Durban were beginning to normalise, BUT then Transnet, the operator of South Africa’s major ports and national freight line, was hit by a major cyber-attack which resulted in further severe disruptions at Cape Town and Durban.
• USA - The headaches for shippers, importers and freight forwarders don’t seem to end. Already slammed by record rates and delays they had to contend with further complications in connection with inland transports. Union Pacific halted all rail shipments from the US West Coast for a week and some shipping lines introduced an Emergency Intermodal Surcharge for containers from / to inland destinations. CGM CMA’s Emergency surcharge effective 20 August will be USD 350.00 per container for exports and between USD 350.00 and USD 1,000.00 for import containers. In other news, President Joe Biden issued an executive order to address competition in shipping, tapping the Federal Maritime Commission (FMC) to take all possible steps to protect American exporters from the high costs imposed by ocean carriers and to crack down on unjust and unreasonable fees, including detention and demurrage charges. 

SEAFREIGHT NEWS 

• THERE SEEMS TO BE LITTLE PROSPECT OF FREIGHT RATE RESPITE for importers and exporters in Australia and New Zealand. This is the recent feedback from various experts. Port congestion, network disruptions and booming import demand are the main reasons for this negative outlook. Average delays in Auckland are 8 – 12 days while Sydney experiences up to seven days delay which according to CMA CGM’s Managing Director Shane Walden is “mostly due to industrial action”. Berthing delays cause additional charter costs which have skyrocketed to unprecedented levels.
• OCEAN CARRIERS COULD BE ON COURSE TO MAKE A PROFIT OF USD 100 BILLION this year according to a recent Drewry report. In an earlier report Drewry increased the estimated profit from USD 35 billion to 80 billion. On 12 July Drewry reported that the composite World Container Index was 333% (!!) higher than the same week in 2020.
• MAERSK HAS SIGNED A SHIPBUILDING CONTRACT FOR THE WORLD’S FIRST CONTAINER VESSEL FUELLED BY METHANOL. The 172-metre-long feeder vessel will be equipped with a dual engine technology enabling it to sail on either methanol or traditional low sulphur fuel. The ship will be delivered by mid-2023 and be deployed on the Baltic shipping route.
• DUE TO UNRECOVERABLE DELAYS CAUSED BY PORT CONGESTION HAPAG LLOYD IMPLEMENTED CHANGES TO PORT ROTATIONS. On the Australia-New Zealand via Panama service (ANP) one of two northbound calls to Cartagena will be removed and the port of Timaru will be omitted until further notice. The new rotation is Sydney – Melbourne – Port Chalmers – Napier – Tauranga – Manzanillo – Cartagena – Philadelphia – Charleston – Cartagena – Bilbao PA – Tauranga – Sydney. On the Westcoast North America and Australia and New Zealand (WSN) service the southbound Auckland port cancellation will continue.
• SHIPPING LINES CONTINUE TO ANNOUNCE FURTHER INCREASES ON VARIOUS TRADES ranging from USD 350.00 to USD 500.00 per TEU (twenty-foot equivalent unit effective August and September. 

AIRFREIGHT NEWS 

According to the latest figures released by IATA international airfreight volumes have increased by 8% in the first half of 2021 compared to pre-Covid 2019. This is the strongest growth since 2017. The Asia Pacific region grew only by 3.7%. Air cargo capacity continues to be very tight with international “Cargo Load Factors” (CLF) levels in June at a very high 65.1%. The Asia Pacific region has the world’s highest CLF of 76.6%.  

AUSTRALIAN PORTS 

• PROTECTED INDUSTRIAL ACTION BY THE MUA AGAINST PATRICK TERMINALS in Sydney, Melbourne, Brisbane and Fremantle continued throughout July and is not expected to end before 15 August. Average terminal delays in Sydney are currently 6.3 days.
• GOOD NEWS FOR THE PORT OF MELBOURNE. THE MUA POSTPONED A SERIES OF WORK STOPPAGES for tug crews employed by Svitzer which were planned to commence on 23 July.
• FREIGHT & TRADE ALLIANCE (FTA) AND THE AUSTRALIAN PEAK SHIPPERS ASSOCIATION (APSA) are escalating advocacy for an immediate and sustained solution at our waterfront and in parallel to the ongoing media campaign launched a formal approach to the Honourable Michaelia Cash (Attorney General / Minister of Industrial Relations). This was done in collaboration with like-minded peak industry bodies.
• THE LOGOS CONSORTIUM ACQUIRED AUSTRALIA’S LARGEST INTERMODAL FACILITY – MOOREBANK LOGISTICS PARK (MLP) – from Qube for AUD 1.67 billion. MLB’s site is larger than Sydney’s CBD and the expected gross asset value once the site is completed in 2026 is AUD 4.2 billion. LOGOS will deliver via MPL more than AUD 11 billion in economic benefits, reduction of 40,000 tonnes greenhouse gas emissions per year by reducing container truck travel within Sydney and interstate and will move 1.5 million containers annually by rail instead of road. This will take more than 2,600 heavy truck movements off Sydney’s roads each day. 

AUSTRALIAN CUSTOMS AND QUARANTINE 

• THE GOVERNMENT HAS EXTENDED THE COVID-19 TARIFF CONCESSION for medical and hygiene goods combatting Covid-19 until 30 June 2022.
• THE 2021-22 BROWN MARMORATED STINK BUG (BMSB) SEASON will start again soon! Target high risk goods shipped between 1 September 2021 and 30 April 2022 require MANDATORY treatment. The target risk countries now include Poland and emerging risk countries include Belarus, Malta, Sweden, United Kingdom and Chile.  

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