Fracht Australia News - December 2020
1/12/2020
“Good things come to people who wait, but better things come to those who go out and get them.”
Anonymous
A very challenging year is coming to an end. Not in our wildest dreams did we expect a year like 2020. In spite of drought and unprecedented bush fires we were looking forward to a positive year in our December 2019 newsletter, but COVID changed everything. The pandemic was a major feature already in our March 2020 newsletter and sadly the bad news continued throughout the year. With the imminent release of COVID vaccines we look forward to 2021 with cautious optimism. One of Fracht’s key strengths has always been our agility and an amazing well-trained team which enabled us to rapidly adjust to the new COVID reality and end the year in good shape. This of course would not have been possible without the wonderful support from all our loyal clients. Therefore we’d like to take this opportunity to convey a very BIG THANK YOU to all our clients, friends, the Fracht teams all over the world and our suppliers for your help in 2020 and wish you and your families the very best and excellent health in 2021. Our very best wishes for a wonderful Christmas and a great start in the New Year.
For a number of years we have not been sending out Christmas cards and have instead been donating to a worthwhile charity. Our chosen charity this year is Children’s Medical Research Institute – some of you will know of this charity through their 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. We have donated AUD1,500.00.
AROUND THE WORLD
- CANADA: We are delighted to announce that Fracht Canada opened a new office in Toronto under the expert leadership of Paul Moon paul.moon@fracht.com : Fracht Canada Freight Inc, 2680 Matheson Blvd East, Suite 102, Mississauga, Ontario, Canada L4W OA5. Douglas Thajer doug.thajer@fracht.com is the new regional sales manager in the Toronto office. Welcome to the Fracht family!
- CHINA: The Department of Agriculture, Water and Environment advises that some recent shipments have been delayed on entry into China, leading to commercial losses. The Department will continue to provide certification for goods that meet the requirements of the Export Control Act and encourages exporters to fully consider their own risk and potential losses and urges them to seek advice from the Chinese importer on potential for disruption to the clearance of their shipments. Due to recently imposed stringent control measures and tests on cold chain food imports in China several Chinese ports now have to deal with a critical shortage of reefer plugs which may impact the direct discharge of imported reefer containers. As a result the container may be discharged at an alternative port with all additional costs payable by the importer. Currently the ports of Tianjin, Xingang and Huangpu are severely affected by this problem resulting in shipping lines imposing a congestion surcharge of up to USD 1,500.00 per container. Some shipping lines have stopped accepting reefer bookings.
- INDIA: There is still an acute shortage of containers at all inland locations and the space crunch to Australia continues. Although carriers have now started issuing bookings, they are only for delayed sailings and subject to availability of containers. One of the main reasons is the congestion at transhipment ports Singapore, Port Kelang and Colombo.
- UK: Congestion in UK ports continues to cause major problems and importers are furious over the prospect that containers offloaded in Antwerp, Rotterdam and Zeebrugge may be stranded for weeks before they can be relayed back, potentially missing out on the Christmas market. There’s a shortage of feeder capacity and carriers can’t afford to sit around Felixstowe for a week or more waiting for a berth.
- USA: Inland trucking rates have increased dramatically in the last few months due to COVID issues as well as port / terminal congestion. Numerous trucking companies have closed and laid off staff because of COVID which resulted in a severe capacity shortage now that business has picked up again and volumes increased. COVID-restrictions have also resulted in increased operation costs. Truckers experienced long waiting times in the congested ports of Los Angeles and Long Beach and they are now experiencing similar frustrations at LAX airport where trucks wait four to eight hours to pick up airfreight. CMA CGM has introduced an “Emergency Intermodal Surcharge” of USD 350.00 per container on all US inland point shipments with provision of carrier haulage pre-carriage. There is generally a serious lack of drivers and very high demand for capacity.
SEAFREIGHT NEWS
- SWIRE SHIPPING ENHANCES ITS SOUTH-EAST ASIA SERVICE with an increase of port calls into Port Moresby and improved intervals between vessels arriving in Lae. Port Moresby will be served with a market leading frequency of 11 days. The transit time from Singapore and Malaysia to Motukea Port in Port Moresby will be nine days.
- THE NORTHERN AUSTRALIAN SHIPPING COMPANY SEA SWIFT WILL LAUNCH AN INTERNATIONAL SERVICE in December. The new service will provide two monthly sailings operated by the ro-ro vessel “Karratha Bay” between Dampier and Singapore.
- PORT CONGESTION AROUND THE WORLD IS GETTING WORSE and shipping lines have recently introduced (or increased) congestion surcharges of up to USD 300.00 per TEU (twenty foot equivalent unit) in the UK, Singapore and Auckland.
- THE RATE MADNESS CONTINUED IN NOVEMBER ON MOST TRADES with shipping lines announcing a raft of “Rate Increases”, “Rate Restorations”, “Peak Season Surcharges”, “Priority Go Surcharges” etc of up to USD 1,000.00 per TEU depending on the trade lanes. Sadly, given the current acute space or equipment shortages most shippers have no choice if they need their containers to move.
- ACCORDING TO THE LATEST REPORT BY SEA-INTELLIGENCE the container shipping industry EBIT profit forecast has gone from “doomsday to payday” in a matter of months. In April 2020 when many countries entered into lockdown the worst-case scenario projected a loss of USD 23 billion and now they expect a profit of USD 14 billion this year! This is the greatest turnaround in the 64-year history of containerisation and it also means that the 2020 profits exceed not only last year, but the past 8 years.
AIRFREIGHT NEWS
- IATA RELEASED NEW GUIDELINES FOR GLOBAL VACCINE DISTRIBUTION. This includes a repository of international standards and the establishment of a joint information-sharing forum for stakeholders. Delivering billions of doses of vaccines that must be transported and stored in a deep-frozen state to the entire world will involve hugely complex logistical challenges such as capacity and connectivity. The global route network has been reduced dramatically from the pre-COVID 22,000 city pairs. It will also be the biggest security challenge for a generation. According to TAPA (Transport Asset Protection Association) the true cost of losing a pharma cargo has been estimated to be between five and seven times the value of the product, because of the domino effect it creates, including wide-scale product recalls.
- ACCORDING TO THE LATEST IATA CARGO STATISTICS air cargo has moderately improved in September. The lack of capacity remains a key obstacle for faster recovery in air cargo business. Year to date for the first nine months of 2020 international aircargo declined by -14.5% and the Asia Pacific region dropped by -14.9%.
AUSTRALIAN PORTS
- LAST WEEKEND’S HEATWAVE IN SYDNEY impacted Port Botany and caused the cancellation of slots for several hours.
- THE PORT OF BRISBANE HAS RECEIVED A 5-STAR GRESB RATING – a globally recognised assessment that evaluates environmental, social and governance performance and sustainability “best practices” for real estate and infrastructure funds, companies and assets worldwide.
- VICTORIA INTERNATIONAL CONTAINER TERMINAL (VICT) RELEASED UPDATED TARIFFS effective 1 January 2021. This tariff also includes a NEW “Maritime Security Levy” of AUD 12.95 per laden container. Will other stevedores follow suit??
- THE OVERALL SITUATION IN AUSTRALIAN PORTS, IN PARTICULAR SYDNEY has eased somewhat with significantly reduced delays and congestion. Hopefully this positive trend will continue in December. The situation with empty container parks has not changed in recent weeks causing major headaches for truckers, importers and exporters. It’s particularly frustrating that shipping lines continue to refuse to issue blanket detention waivers in spite of the fact that the problem is their responsibility.
ARE YOU LOOKING FOR ADDITIONAL STORAGE OVER THE HOLIDAY SEASON?
Fracht’s warehouses in Sydney and Melbourne still have some limited capacity to assist you solve your space issues. Please call one of our friendly team members to discuss.
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
