News

Fracht Australia News - May 2020

30/4/2020

 

“Strength does not come from winning. Your struggles develop your strengths. When you go through hardship and decide not to surrender, that is strength.”

                                                           Mahatma Ghandi

 

COVID-19 

Further to our Newsflashes of 9 and 14 April please note the following updates: 

• IATA INCREASED THE ESTIMATED REVENUE DROP FOR AIRLINES TO USD 314 billion in 2020, a 55% decline compared to 2019. In the second quarter alone airlines could burn through USD 61 billion of cash. This puts at risk 25 million jobs dependent on aviation. The estimated job loss for the Asia Pacific Region is 11.2 million.
• SEVERAL COUNTRIES INCLUDING NEW ZEALAND ARE WINDING BACK THEIR LOCKDOWN RESTRICTIONS. Once restrictions are completely lifted it is likely that community and business will take time to grow in confidence and there will be an extended recovery period.
• CHINA: According to the Ministry of Transport port foreign trade is expected to reduce by 6% and foreign container throughput will decline by about 10% in 2020. According to the State Council Information Office of the PRC the first season’s GDP of China has reduced by 6.8% and the value of the import / export trade for the same period dropped by 6.4%.
   

AROUND THE WORLD 

• FIJI: The Fijian authorities have reopened the Port of Lautoka. Shipping lines are now again able to accept bookings for discharge in Lautoka.
• INDIA: The Covid-19 restrictions in India are severe. Shipping Lines, Airlines, Customs and Container Freight Stations are operating only with 5% capacity resulting in serious delays for clearances, bookings, space confirmations and responses. Container stuffing in ports is suspended. All cross-border state transportation within India has been closed with the exception of basic amenities and food for personal consumption. Most factories are closed.
• MALAYSIA: The Ministry of International Trade and Industry implemented electronic endorsement of Preferential Certificates of Origin by affixing electronic signature and official seal through their ePCO system. The Australian Border Force will accept these electronic AANZFTA Certificates of Origin.
• SINGAPORE: The Singapore Government implemented the Covid-19 “Circuit Breaker” until 1 June. Only essential businesses are allowed to operate and many factories are temporarily closed.
   

SEAFREIGHT NEWS 

• DUE TO THE UNPRECEDENTED NATURE OF THE COVID-19 PANDEMIC and the reduction in market demand, shipping lines around the world were forced to amend their schedules and implement “blank” sailings. Sea-Intelligence Maritime Consulting reported on 3 April that the global shipping line reliability dropped to only 65.1% in February and is expected to be worse in the 2nd quarter of this year. According to Alphaliner as at 8 April over 250 sailings were withdrawn in the second quarter and the idle container ship fleet capacity is expected to reach a record high of 3 million TEU (twenty foot equivalent unit) within weeks, in the “worst capacity crisis the industry has ever seen”.
• SOME SHIPPING LINES INCLUDING CMA CGM HAVE STARTED SAILING VIA THE CAPE OF GOOD HOPE in both directions from and to Asia and Europe avoiding Suez Canal tolls of USD 500 to 750,000.00 for ULCVs (Ultra Large Container Vessels). This adds around 3,500 nautical miles and approx 10 days to the scheduled transit times. Due to the recent drop in oil prices the additional fuel costs are estimated at only around USD 200,000.00.
• THE WORLD’S LARGEST CONTAINERSHIP WAS LAUNCHED IN SOUTH KOREA on 27 April. The HMM “Algeciras” has a capacity of 24,000 TEU and is considered the most technologically advanced container ship said Korea’s president Moon Jae-in during the launch ceremony at the DSME shipyard in Okpo.
• THE ICONIC “SPIRIT OF TASMANIA” WILL SOON BE CALLING AT CORIO QUAY IN GEELONG rather than Station Pier in Melbourne following an agreement between the TT-Line and Geelong Port. The starting date is scheduled for June 2022. The vessel carries over 450,000 passengers and 105,000 TEUs freight each year.
• FEEDBACK FROM A NUMBER OF SHIPPING LINES INTO AUSTRALIA IS that they still have relatively strong volumes into mid-May before fading away due to public holidays in China in early May. The downturn of 10 to 25% could last through to June/July taking into account also trade volumes from other Asian countries and Europe.
  
  

AIRFREIGHT NEWS 

• DUE TO THE CANCELLATION OF THE VAST MAJORITY OF FLIGHTS around the world airfreight capacity remains extremely tight and freight rates extremely high. This in spite of the fact that overall airfreight volumes have declined due to the closure of factories. Generally freight rates must be negotiated case by case and they have a very short validity. Several airlines are enforcing cancellation fees of up to 100% for no shows.
• IATA RELEASED THE AIR CARGO MARKET ANALYSIS FOR FEBRUARY AND it’s not a pretty picture. Industry wide volumes plunged by 9.1% in February due to the early impacts of the COVID-19 virus. Year to date the figures are (still) better. For the first two months of 2020 international airfreight declined by 2.6% and the Asia Pacific region dropped 2.3%. We expect the March and April figures to be considerably worse.
• IATA’S LATEST AIRLINE SAFETY REPORT REVEALS THAT 2019 was quite a good year compared to 2018 and the latest 5-year-average. Worldwide there were 53 accidents compared with 62 in 2019 and 63.2 5 year average. Total fatalities were 240 compared to 523 and 303.4. Jet hull losses per 1 million flights were 0.15 compared with 0.18 and 0.24. Turboprop losses were 0.69 compared with 0.70 and 1.40. The 2019 fatality risk of 0.09 means that on average a person would have to travel by air every day for 535 years before experiencing an accident with at least one fatality. On average a person would have to travel every day for 29,586 years to experience a 100% fatal accident.
   

AUSTRALIAN PORTS 

• 22 WHARFIES WERE STOOD DOWN ON 31 MARCH and another 40 on 1 April at Melbourne’s DP World Terminal West Swanson because they refused to discharge the vessel “Xin Da Lian” which left Shanghai on 17 March even though it was cleared by the Australian Border Force. According the DP World the vessel was carrying critical imports including medical supplies. The Maritime Union of Australia (MUA) claimed that the vessel docked in breach of the Federal Government’s 14 day coronavirus quarantine period. Shipping Australia CEO Rod Nairn labelled the wharfies’ actions “utterly spurious health and safety claims” and “unconscionable”.
• THE HUTCHINSON PORT BOTANY TERMINAL WAS CLOSED FROM 9 APRIL until 13 April after an employee tested positive for COVID-19. It was concluded that this was not a workplace transmission.
   

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