Fracht Australia News - October 2020
1/10/2020
“Opportunities to find deeper power within ourselves come when life seems most challenging.”
Joseph Campbell
AROUND THE WORLD
- ASIA - Back to back typhoons and surging shipping demand ahead of October’s Golden Week holiday have resulted in lengthy vessel delays for ocean freight out of numerous Asian ports. Due to short intervals between typhoons, ports have been unable to reduce backlogs at container terminals. Ports in Korea, China, Vietnam and the Philippines have experienced up to five days of waiting times for incoming vessels. This has also contributed to equipment shortages in China and Vietnam, especially for 40 ft containers.
- CHINA - All offices will be closed from 1 October until 8 October 2020 for China National Day and Mid-Autumn Festival. Container volumes at major Chinese ports increased 2.9% year-on-year in mid-August. China also plans to invest 474 billion yuan in the construction of new transportation infrastructure projects in the Guangdong-Hong Kong-Macao Greater Bay Area. This includes new airports and 13 intercity railway projects.
- INDIA - Many shipping lines have stopped accepting bookings to Australian ports due to an acute shortage of empty equipment in Indian ports and congestion in Australian ports, especially Sydney.
- TAIWAN - During the mid-Autumn Festival all offices will be closed from 1 October until 4 October 2020.
- UK - Port staff shortages, haulage driver shortages, pre Golden week holiday import surge and delayed vessels from Asia have caused chaos in the port of Felixstowe and resulted in temporary bans on de-hiring empty containers at Felixstowe. Empty containers had to be re-directed to inland container parks. The slow working and landside congestion prompted some carriers to “cut and run” with export boxes stranded and containers discharged in other ports. Shipping lines have also been looking to divert ships to London Gateway or Southampton.
AUSTRALIAN PORTS
In our Newsflash on 14 September we informed about a media release describing “Third World” service in Sydney’s Port Botany. Unfortunately the situation has deteriorated further with vessels delayed up to 19 days and shipping lines imposing Port Congestion Surcharges of up to USD 350.00 per TEU (twenty foot equivalent unit). The main cause for the congestion is industrial action by the MUA and the most affected terminals at the moment are Patricks’ which has the major share of the stevedore market at Port Botany. Industrial action has spread to Patrick terminals in Melbourne, Brisbane and Fremantle which will lead to projected delays of nine, five and three days by 2 October in these ports. Some shipping lines stopped calling Sydney while others bypass Sydney to discharge cargo in other ports. This unfortunate situation negatively affected Empty Container Parks which were already congested because of an imbalance of import / export containers and shipping lines avoiding Port Botany and minimising the use of “sweeper vessels” to evacuate empty containers. This causes transport operators to incur extra costs for re-directions, waiting times, futile trips and storage of containers. As of 25 September congestions at the Patrick Terminal in Port Botany cost the NSW road transport sector over AUD 1 million and the severe congestion at NSW Empty Container Parks cost the trucking industry AUD 5 million. The port congestion also leads to insufficient vessel capacity to meet NSW export demand. One of the carriers – OOCL – already notified importers that there will be an additional cost of USD 250.00 per TEU “Transport Additional Surcharge” if vessels omit Sydney and containers are discharged in an alternative port and need to be repositioned on the next available vessel. Importers which arrange their own transport to Sydney won’t have to pay the surcharge. Other shipping lines are expected to follow suit. On 28 September Patricks has made an application to the Fair Work Commission to order the termination of the industrial action.
SEAFREIGHT NEWS
- OOCL ANNOUNCED THE TEMPORARY SUSPENSION OF ITS COASTAL SHIPPING SERVICE as a result of the current port congestions in Australia, schedule unreliability and port omissions caused by a combination of factors including industrial action.
- OOCL INTRODUCED A NEW WEEKLY SHUTTLE SERVICE FROM SINGAPORE to Fremantle on 17 September to cater for peak season volumes. The transit time between the two ports is seven days. The new service complements the carrier’s AAA2 service and provides a second weekly Fremantle call by OOCL vessels.
- DUE TO ONGOING CONGESTION IN AUSTRALIAN PORTS, especially Sydney, MSC has temporarily restructured its Capricorn Service and Kiwi Express Service from Asia by omitting Sydney. In addition MSC implemented a new weekly shuttle service with the following rotation: Singapore – Sydney – Brisbane – Tanjung Pelepas – Singapore.
- CMA CGM & ANL’S PEAK SEASON SURCHARGE FROM ASIA TO AUSTRALIA effective 1 October will be USD 250.00 per TEU for dry container and USD 500.0 per TEU for reefers.
- HAPAG LLOYD’S PSS IS USD 300.00 PER TEU from Asia to Australia from 23 September.
- FURTHER GENERAL RATE INCREASES OF USD 150.00 – 350.00 PER TEU HAVE BEEN ANNOUNCED by most carriers from Europe and Asia to Australia effective 1 October. Given the current shortage of capacity there seems to be little room for negotiations.
AIRFREIGHT NEWS
- DUE TO THE ONGOING VERY REDUCED NUMBER OF FLIGHTS INTO AUSTRALIA all airfreight rates from international origins continue to remain very high compared to “pre-Covid prices”. The situation will only improve once restrictions are lifted and normal flight patterns are restored.
- ACCORDING TO THE LATEST IATA STATISTICS, INDUSTRY WIDE AIRFREIGHT VOLUMES declined year-on-year by 13.5% in July, the slowest decline since February. International year-to-date volumes for the first seven months declined by -15.3% and the Asia Pacific region dropped by -14.4%.
AUSTRALIAN BORDER FORCE
In the early stages of the COVID-19 pandemic the Australian Border Force put in place prohibitions to export certain PPE goods. The prohibition was to apply during the time that the” BIOSECURITY (HUMAN BIOSECURITY EMERGENCY) (HUMAN CORONAVIRUS WITH PANDEMIC POTENTIAL) DECLARATION 2020” was in force. This declaration was due to expire on 17 September but the Health Minister has now extended the declaration period to 17 December 2020.
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
