News

Fracht Australia News - September 2021

31/8/2021

AROUND THE WORLD 

• AUSTRALIA - The Queensland border closures and restrictions are causing extra significant costs for truckers such as paying for drivers mandatory testing, time lost crossing the borders each direction or increased risks. This resulted in cross border surcharges of around AUD 400.00 per delivery!
• CHINA / GERMANY - The first FRACHT Charter Block Train to Duisburg, Germany departed from the ChongQing Terminal on 14 August. Another example of Fracht’s ability to provide client friendly solutions.
• CHINA - Chaos in some of China’s ports and airports. Ships started to divert from Ningbo to Shanghai following the closure of the Meishan Island International Container Terminal on 11 August due to Covid.  MSICT accounts for about 25 per cent of the volume of the world’s third largest port. MSICT handles approximately 6 million TEU (twenty-foot equivalent unit) per year which is roughly three times more than Sydney’s Port Botany. By 17 August there were 41 ships at anchor awaiting a berth while 146 vessels diverted to other terminals. The terminal resumed full operation on 25 August. According to Container xChange the Covid lockdown in June of the southern China hub port of Yantian resulted in a 180% price spike of containers and there are “early indicators” of a similar impact from the Ningbo and Vietnam Covid lockdowns in August.  Ground handling staff in China started quitting in mid-August over new Covid-rules, triggering cancellation of hundreds of flights and extraordinary airfreight rate increases. Shanghai’s Pudong airport was the most affected. The situation deteriorated after the earlier closure of Nanjing airport which also impacted Shanghai, Beijing, Guangzhou and Tianjin. Ground handling staff were put on a 7+7+7 roster where they work seven days, quarantine seven days and then rest seven days. After five Covid cases were reported on 21 August, Covid testing with 14 days quarantine seriously disrupted the operation at the Shanghai Pudong cargo terminal resulting in airlines suspending some flights or imposing an embargo on cargo. Full freighter operations are starting to get back to normal while “passenger-freighters” remain cancelled until 5 September.  
• GERMANY - The German Train Drivers’ Union commenced a new four-day strike on 21 August reducing Deutsche Bahn’s cargo and passenger capacity to approx 25 per cent. This industrial action came just one week after a strike which resulted in the suspension of 300 cargo trains in Germany with impact felt across the continent.
• TAIWAN - The Ministry of Transport and Communications plans to spend USD 1.37 billion to upgrade seven ports in Taiwan by 2026. Kaohsiung, Taipei, Keelung, Taichung, Anping and Su’ao ports will be modernised. This plan will target the growth of Taiwan’s container throughput from 14.59 million TEU per year to 18.6 million TEU by 2026.
• UK - Truckers appear to be abandoning container loads for the more lucrative delivery sector because they are getting better rates and also were not exposed to poor treatment. One of the hauliers summarised “the reason we no longer operate from Felixstowe is a combination of the port’s attitude and the vehicle booking system”.
• USA - The head aches and frustrations for US importers, exporters and logistics providers continue with increasing rates, port and inland terminal delays and lack of capacity across all sectors of the industry.
• VIETNAM - Production in South Vietnam is struggling under the weight of a prolonged lockdown. The logistics industry is warning about mounting financial costs, labour shortages and supply chain disruptions. On 23 August the Ho Chi Minh Council introduced the strictest restrictions to date: Residents must not leave their homes for at least two weeks, not even for food! Factories can continue to operate only under strict closed loop conditions whereby workers sleep onsite. Missing critical supplies due to port congestion, delayed customs checks and lack of shipping capacity is the reason for a further slowed operation in factories. The lockdown in South Vietnam caused a 100,000 TEU (twenty-foot equivalent unit) pile-up at Ho Chi Minh’s Cat Lai port. 

AIRFREIGHT NEWS 

• AMERICAN AIRLINES SUSPENDED PASSENGER AND CARGO FLIGHTS TO AUSTRALIA due to the Governments imposed recent halving the (already very small) cap on passenger numbers. Other carriers are expected to follow suit. Unsurprisingly Qantas has since announced an immediate rate increase for air cargo from the USA!
• THE TOP TEN AIR CARGO CARRIERS IN 2020 according to IATA are: Federal Express, UPS, Qatar Airways, Emirates, Cathay Pacific, Korean Air, Cargolux, Turkish Airlines, China Southern and China Airlines.
• IATA STATISTICS CONFIRM THAT 2020 WAS THE WORST YEAR ON RECORD since passenger numbers were tracked in 1950. Only 1.8 billion passengers flew in 2020 compared to 4.5 billion in 2019. Air connectivity declined by more than half in 2020 with numbers of routes connecting airports down more than 60%. 

SEAFREIGHT NEWS 

• MAERSK WILL INTRODUCE THE FIRST CARBON NEUTRAL LARGE CONTAINER VESSELS in the first quarter of 2024. Eight 16,000 TEU ships powered by methanol will be built by Hyundai Heavy Industries with an option for another four in 2025. The series will replace older vessels generating annual CO2 emissions savings of around one million tonnes.
• THE DREWRY COMPOSITE WORLD CONTAINER INDEX (WCI) CONTINUES ITS METEORIC RISE.  After 19 consecutive weeks of increases the WCI was 351% higher than the same August week in 2020! The average year to date cost of a 40 foot container increased from USD 2,260.00 to USD 6,498.00!
• THE ONGOING DISRUPTION IN THE OCEANIA REGION COUPLED WITH SEVERE WEATHER CONDITONS in New Zealand and Asia caused further schedule changes for several shipping lines including some specific voyage or temporary omissions of port calls to Sydney, Adelaide and Oakland (USA) and Maersk implemented a temporary booking stop for export cargo from Australia to New Zealand.
• HAMBURG SUD IMPLEMENTED A USD 75.00 PER TEU BOOKING CANCELLATION FEE for export containers which are cancelled 14 (!!) calendar days before cargo cut off.
• HAPAG LLOYD’S 2021 HALF YEAR EBIT INCREASED TO USD 3.5 BILLION. This compares to USD 0.6 billion in 2020. The full year profit is expected to range between USD 9.2 and 11.2 billion.
• MAJOR SHIPPING LINES HAVE ANNOUNCED FURTHER SUBSTANTIAL RATE INCREASES from September. Depending on the trade lanes these price hikes range from USD 350.00 to USD 1,200.00 per TEU. 

AUSTRALIAN PORTS 

• BIG VOLUMES OF CONTAINERS CROSSED SYDNEY’S PORT BOTANY in July. The port handled a total of 238,262 TEU which is a 16 per cent increase over July 2020. Import containers grew by 8 per cent while export containers were up 16 per cent. However, the biggest export commodity was fresh Sydney air because 69,670 out of 116,892 TEU were empty containers!
• FREMANTLE REPORTED THE HIGHEST-EVER NUMBER OF CONTAINERS handled in the financial year ended 30 June 2021. 807,061 TEU were handled which represents a 3 per cent increase over the previous year. However, the increase of full containers was only 0.7 per cent.  In other news Shipping Australia and other sources sounded the alarm over Western Australia Government’s threat to turn ships with suspected Covid-19 cases away labelling this as “dangerous and immoral”.
• THE PORT OF MELBOURNE WILL PROCEED WITH THE WEBB DOCK EAST BERTH 4/5 EXTENSION as part of a 30-year, AUD 1.5 billion Port Development Strategy. These works will involve the increase of the berth by 71 metres to cater for the increasing numbers of vessels longer than 300 metres.
• THE ONGOING INDUSTRIAL ACTION IN PATRICK TERMINALS AROUND the country which started in May continues into September. Bans affecting Brisbane Autostrad will continue until 5 September and in Fremantle until 28 September.  

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