News

Fracht Australia News - January / February 2022

18/1/2022

Welcome to our first newsletter of 2022. This time last year we were quite optimistic that life and business would be back to almost normal in 2022 but today Covid still dominates the headlines around the world.  2021 brought unprecedented supply chain chaos with skyrocketing sea and air freight rates. On the short term there is no improvement in sight but we’re hoping for a gradual stabilisation of the market this year. Fracht around the world has continued its successful growth and we look forward to providing all our valued clients with exceptional and personalised customer care in 2022. 

AROUND THE WORLD 

• FRACHT GERMANY - Two of our German offices moved into new premises in December.  Fracht Duesseldorf’s new address is Parsevalstrasse 9b , D-40468 Duesseldorf and Peace Line (Shipping) Gmbh is now located at Sonninstrasse 24, D-20097 Hamburg. Phone numbers remain unchanged.
• FRACHT ITALY - Congratulations to our friends at Fracht Italy. The leading Italian financial newspaper, Industria Felix Magazine in collaboration with Cerved investigated the financials of 850,000 joint stock companies and Fracht Italia was selected as one of the top companies for budgetary performance and financial reliability in the Logistics and Transport sector.
• CHINA - Covid related lockdowns have again negatively affected the handling of cargo in Ningbo and Tianjin in January. Feeder operators in South China have also announced the service suspension from late December 2021 to mid-February 2022 resulting in the temporary suspension by shipping lines to accept cargo to some final destinations in the Pearl River Delta Area and Fuzhou. This doesn’t affect cargo on mainline services to main ports such as Hong Kong, Yantian or Shekou.
• INDIA - Freight rates from India are rising again following record export volumes in December. For the first time exports totaled USD 37 billion in December, up 37% year on year. For the first time exports passed the USD 300 billion mark in the first nine months of the financial year.
• HONG KONG - Bad news for Hong Kong. The city has fallen out of the top five maritime cities in the world according to the latest annual report by Menon Economics and DNV.  The top five rankings were given to Singapore, Rotterdam, London, Shanghai and Tokyo. Hong Kong dropped to 7^th position. 

SEAFREIGHT NEWS 

• SWIRE SHIPPING’S AUSTRALIA TO PACIFIC ISLANDS SERVICE WILL RECOMMENCE on 31 January. One of the two ships servicing the route, the MV Kokopo Chief, will be redeployed. The ship will provide a 26 day frequency calling the ports of Melbourne, Sydney, Brisbane, Noumea, Port Vila, Lautoka and Suva. Transshipment connections are offered to the eastern Pacific ports of Apia, Pago Pago and Nuku-alofa.
• MSC IS NOW THE WORLD’S LARGEST CONTAINER SHIPPING LINE in terms of container capacity. The Switzerland based MSC owns, charters and operates 4,284,728 TEUs (twenty foot equivalent units) and 645 ships calling 500 ports and carrying around 23 million TEU per year. The previous leader, Denmark based Maersk has 4,282,840 TEUs and 738 ships. MSC’s lead is bound to increase given that the carrier’s order book is 23.3% of their existing fleet compared to 6% of Maersk. 
• MAERSK HAS AGAIN UPGRADED ITS SPECTACULAR FULL YEAR PROFIT. Based on a further USD 1.8 billion increase in Q4, the shipping line now expects a 2021 EBIT of USD 19.8 billion!  It looks like Q1 22 will be even better than Q4 21. The record 2021 profit was achieved despite a 4% decline in liftings. 
• PORT CONGESTION IS GETTING WORSE according to a recent analysis by SEA-Intelligence.  In 2021 global container shipping demand increased by 7% and at the same time capacity was effectively reduced by 11%.  Congestion and bottle neck problems are expected to worsen in the coming months resulting in a further upwards push on freight rates and even lower reliability. 

AIRFREIGHT NEWS 

• QANTAS ANNOUNCED IT WOULD CONVERT TWO OF ITS A330 PASSENGER AIRCRAFT into freighters. One of the converted widebody freighters will be used for international cargo and the other will be deployed for domestic parcel and mail business. The Qantas freight business has boomed during the pandemic. 
• CHINA HAS BANNED THE MOVE OF CARGO IN PASSENGER CABINS and has also implemented new regulations that cabin seats cannot be removed to increase cargo space. This move is expected to keep air freight rates high as it will further reduce cargo capacity.  China’s Civil Aviation Administration said “only anti-epidemic-related items are allowed to be loaded in the cabin.”   
• ACCORDING TO THE LATEST IATA STATISTICS international year to date airfreight volumes for the first 11 months in 2021 increased by 7.1% compared to the same period in pre-pandemic 2019. The Asia Pacific region expanded by 3.1%.  Airfreight rates remain at very high levels due to the fact that overall available capacity is still well below 2019 levels. 

AUSTRALIAN PORTS 

In 2021 we regularly had to report about industrial action in our ports which contributed to considerable congestion leading to serious problems and significant additional costs for importers and exporters.  In early December Prime Minister Scott Morrison pointed to the ACCC’s 2020-21 Container Stevedoring Monitoring Report and announced an inquiry into maritime logistics efficiency. “Ports are the gateway for our economy.  Inefficient ports are a tax on all of us.” he said. Meanwhile Patrick Terminals advised that the Fair Work Commission hearing in connection with the Enterprise Agreement is scheduled for three days on 27 January.  In October last year Patrick applied to the FWC to terminate the current enterprise agreement with the MUA because it was no longer fit for purpose. The aim is to remove a number of restrictions which prevent Patrick from determining the composition of the work force or implementation of new technologies and upgrades. In other news the Federal Court recently ordered the MUA to pay AUD 2.2 million in damages to Patrick and Qube in connection with strikes, blockades and work bans at Port Botany in 2017. 

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