News

Fracht Australia News - November 2020

1/11/2020

 

“Great minds discuss ideas; average minds discuss events; small minds discuss people.”

                                      Eleanor Roosevelt

 AROUND THE WORLD 

• INDIA: India’s acute container shortage from most shipping lines is expected to continue for the next two to three months and freight rates have increased substantially. Indian exports have fallen for six months in a row, including a 12.6% year-on-year decrease in August, leaving shippers bemused at the lack of available containers.
• SPAIN: Strike action in the port of Bilbao have forced shipping lines to call alternative ports such as Gijon and Santander, causing these ports to suffer temporary congestion. The strike commenced on 9 October and affected all services calling Bilbao and is expected to last to the end of the month.
• UK: The transport situation between the EU and the UK will change drastically on 1 January 2020 due to Brexit. Formal import of export clearances / declarations including payments of VAT and customs duties (if applicable) will be required. This is expected to increase the average door to door transit time by 2-3 days initially which is a considerable setback for importers and exporters. Congestion in the port of Felixstowe continues causing some delays also in the ports of London Gateway and Southampton. CMA CGM has announced a Southampton congestion surcharge of USD 150.00 per TEU (twenty foot equivalent unit) effective 1 November. 

 SEAFREIGHT NEWS 

• IN SPITE OF EARLIER COVID-19 CHALLENGES OCEAN CARRIERS ARE NOW BOOSTING THEIR BALANCE SHEETS WITH VERY HEALTHY PROFITS driven by very substantial gains in container spot rates which have spiked on most major trade routes. On the Asia to Australia trade spot rates reportedly increased by 94% and according to Alphaliner 7,200 TEU weekly capacity has been added by Asia-Australasia carriers in the past month. Cutting capacity and then raising rates and applying surcharges on full vessels along with lower fuel prices has boosted profits which was further enhanced by a huge increase in demand for capacity in the last couple of months. Most ships in October have been 100% full. Most shipping lines are also reporting a shortage of empty containers in recent months.
• COSCO LAUNCHED A NEW FORTNIGHTLY SERVICE DIRECTLY LINKING TOWNSVILLE with destinations in China, Northern Australia and the South Pacific. The CAP (China / Australia / Pacific) links Townsville with Darwin, Yangpu, Hong Kong, Port Moresby, Cebu and Lae. Cargo for other destinations in Asia and around the world will be trans shipped in Yangpu and Hong Kong.
• ZIM LINE RETURNED TO AUSTRALIA AFTER MANY YEARS OF ABSENCE with its new China – Australia Express (CAX) service. The CAX service will deploy six 2,500 TEU vessels between Ningbo, Shanghai, Yantian, Sydney, Melbourne and Brisbane. The transit time from South China to Sydney will be 11 days.
• ALL SHIPPING LINES TO AUSTRALIA HAVE ANNOUNCED FURTHER RATE INCREASES effective November. Given that currently most vessels are overbooked there is little room for negotiations in the near future. 

AIRFREIGHT NEWS 

• THE AIR CARGO INDUSTRY IS NOT READY FOR “THE BIGGEST PRODUCT LAUNCH IN HISTORY” – THE CORONA VACCINE.  A recent survey conducted by TIACA and Pharma.Aero found that only 28% of respondents were “well prepared” and on a scale of one to ten the average score was only 6.32. The biggest concern seems to be the handling and storage of vaccines that required refrigeration. While it’s still unclear how much airfreight capacity will actually be required, IATA’s initial prediction is that around 8,000 B747 freighters may be needed for the global population. This assumes a single shot vaccine although most of those in advanced stages of trial are designed for two injections. Either way, shippers of general cargo will probably be affected by cargo being “bumped” and / or higher rates.
• IATA’S AUGUST STATISTICS REVEAL THAT INTERNATIONAL AIRFREIGHT VOLUMES DECLINED by -14% year-on-year in August. Year to date for the first eight months of 2020 international airfreight dropped -15% and the Asia Pacific Region declined by -15.4%. International belly capacity on passenger aircraft is still scarce and is particularly stringent in the Asia Pacific Region where “available cargo-tonne-kilometres” were down by 35% in August. 

AUSTRALIAN PORTS 

• THE EXTREME CONTAINER DISRUPTIONS IN AUSTRALIAN PORTS is slowly improving but delays, congestion and extra costs are still a major problem, especially in Sydney. The MUA has lifted strike actions against terminals until at least December allowing them to start reducing the backlogs and working towards normal operations. Progress is being hampered by extreme weather conditions requiring the closure of terminals as well as the MUA’s imposing of “Protected Industrial Action” on Svitzer which is a major tug service provider. Berth delays have been reduced in Sydney to around 15 days and Melbourne 5 days.
• ON TOP OF RECORD HIGH FREIGHT RATES MOST CARRIERS HAVE INTRODUCED CONGESTION SURCHARGES in Sydney ranging from USD 285.00 to 350.00 per TEU (twenty foot equivalent unit) for import as well as export containers. Some shipping lines have introduced congestion surcharges also for Melbourne and Brisbane.
• AFTER IMPLEMENTING A TOTAL BAN ON SOUTHBOUND BOOKINGS because of the port congestion, OOCL has announced that they will resume accepting import containers to all Australian ports except Sydney.
• THE VESSEL “CMA CGM URAL” BROKE ANOTHER RECORD IN MELBOURNE when the vessel recently berthed at Victoria International Container Terminal. The 10,622 TEU capacity ship completed an exchange of 8,094 TEU on her visit surpassing the previous record by 268 TEU.

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