News

Fracht Australia News - December 2021

1/12/2021

Last year in December we looked back at a very challenging Covid 19 year and hoped so see significant improvements in 2021. Well, that definitely didn’t happen and while we’ve kicked some very important Covid-goals in Australia thanks to very high vaccination numbers, we are experiencing unprecedented supply chain chaos around the world with skyrocketing freight rates and logistics costs as well as delays. Thanks to the Fracht Groups’ extensive global resources, agility and our amazing and well-trained team we’ve succeeded to overcome most challenges in Australia and around the world and today the group is in an excellent position to continue our growth in 2022 and beyond. This could only be achieved with the help of our wonderful and loyal clients. So, in this last issued of our 2021 newsletter we’d like to convey a BIG THANK YOU to all our clients, suppliers and offices in Australia and around the world for your excellent support.  Our very best wishes for the Christmas season and for a successful, healthy and happy 2022. 

As in previous years we are not sending Christmas cards to our clients and instead we’ll be donating AUD 1,600.00 to the 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 are sure you will agree, this is a very worthwhile cause.  

AROUND THE WORLD 

• CANADA - Canadian military was deployed on 19 November to assist with the evacuation of Vancouver after flooding and mudslides left much of the city cut off from road as well as rail. The British Columbia Government declared a state of emergency for 14 days. Most major highways and railways around Vancouver were closed due to mudslides. The port of Vancouver indicated significant and likely long-lasting disruption. All exports destined for the port of Vancouver have been temporarily embargoed and all intermodal traffic north and eastbound as well as inbound to Vancouver suspended.
• EUROPE - Shippers using Europe’s inland waterways are facing significant surcharges due to low water levels on the Rhine which reduces the capacity of barges in some cases to only 27 per cent. Surcharges apply to full containers transported between the ports of Rotterdam / Antwerp and Rhine / Main destinations above Koblenz.
• EGYPT - The Suez Canal Authority has announced an increase of 6 per cent in charges from February on all vessels except cruise ships and LNG tankers.
• GERMANY - The situation at Fraport Cargo Services FCS has further deteriorated. FCS handles more than 50 airlines at Frankfurt airport which is Europe’s busiest cargo hub. The backlogs and delays have increased and FCS has started storing import cargo outside due to lack of space!
• PANAMA - The Panama Canal Authority (PCA) announced a USD 70 billion long-term development programme to take the canal to zero-carbon emissions by 2050. Part of the plan is to develop clean energy for port and canal operations which includes the replacement of 85 high-powered tugs to move and manoeuvre large vessels. The PCA will also implement a “differentiated tariff scheme” which will offer less-polluting vessels a green premium. 

AIRFREIGHT NEWS 

• AIRLINES ATTENDING THE 77th IATA AGM IN BOSTON IN OCTOBER AGREED TO ACHIEVE NET-ZERO CARBON EMISSIONS by 2050, in line with the stretch Paris agreement target to keep global warming to 1.5 degrees. Sustainable aviation fuels will play a major role in addressing aviation’s environmental impact.
• SEVERE CONGESTION ACROSS MAJOR AIRPORTS AROUND THE WORLD is hampering air cargo flows and negatively affecting already low cargo capacity. Seafreight disruption is also creating a higher demand for airfreight. This has resulted in increased air freight rates on many trade lanes which is unlikely to ease before early 2022.  
• IATA RELEASED THE SEPTEMBER AIR CARGO MARKET ANALYSIS which indicates that industry wide cargo volumes increased by 9.1 per cent in September 2021 compared to pre-Covid 2019. Year to date for the first nine months international airfreight grew 8.7 per cent compared to 2019 while the Asia Pacific Region expanded by 4.2 per cent. While airfreight rates are currently at unprecedented high levels due to shortage of capacity it is relatively more “affordable” today compared to seafreight. Compared to container shipping by sea in September, airfreight was on average three times more expensive to send a kilo of chargeable weight. Prior to the pandemic it was 12.5 times more expensive. 

SEAFREIGHT NEWS 

Port congestion around the world has a cascading effect on the critical shortage of shipping capacity which in turn results to unsustainable freight rates on most trade lanes. It is currently not uncommon for ships to experience an increase of 30 or more days to complete their round-trips which in turn also contributes towards the chronic shortage of empty containers. Shipping lines are obliged to omit severely congested ports, implement blank sailings and are forced to rethink their network coverage by bypassing more ports in favour of hub spoke relays. Meanwhile all major container lines continue to further upgrade their phenomenal profit forecasts and some experts are now predicting combined profits of around USD 200 billion per year! Exporters and importers around the world will have to put up with this situation most likely until the second half of 2022 when the launch of a considerable amount of new capacity will start having a positive impact. Meanwhile the Fracht Group has selectively started to divert some containerised cargo onto roll on / roll off vessels which in certain trades can be more reliable in today’s market. 

AUSTRALIAN PORTS 

• GOOD NEWS! THE MUA WITHDREW INDUSTRIAL ACTION AGAINST PATRICK TERMINALS on 10 November. The move came before a hearing at the Fair Work Commission on Patrick’s application to force the union to terminate the action. This will allow the terminals to return to normal, on-schedule operations.  Hopefully the parties will now find a mutually acceptable agreement.
• DP WORLD AUSTRLIA’S SYDNEY TERMINAL HANDLED ITS 1 MILLIONTH TEU (twenty-foot equivalent unit) in early November. This milestone came across 345 vessels at an average exchange of 1,793 units. The record number of containers via the Port Botany terminal was achieved despite ongoing challenges in the global container supply chain and Covid pressures. 

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