News

Fracht Australia News - September 2022

31/8/2022

AROUND THE WORLD 

• GERMANY - The closure of the river Rhine – Germany’s most important waterway – was announced on Friday 19 August because the water levels on the Kaub gauge reached only 37cm. A minimum of 41cm is necessary for operations although at this level low level barge operators are running at severely reduced capacity, sometimes as low as 20%. Over the weekend water levels dropped to 32cm. Even when water levels dropped to 81cm some weeks ago barge operators were forced to impose significant low water surcharges because they couldn’t operate at full capacity. This Rhine’s closure has further increased the European supply chain chaos in Europe which even before the closure had to deal with severe port congestion and repercussions of the war in Ukraine. Late August barge users enjoyed a brief respite thanks to rain pushing up water levers on the Rhine to 100cm on the Kaub gauge. Despite that barge surcharges in Europe soared to 150% due to hinterland congestion and container transport’s need to compete with demand for coal following Russia’s decision to cut gas supplies.
• UK - The 1,900 Unite Union members working in the port of Liverpool commenced a one week strike on Sunday 22 August forcing shipping lines to omit the port and offload cargo in alternative ports. The union refused to accept a 7% wage increase and a UKP 500 lump sum. The consequences of the port’s closure will reverberate for many weeks and will result in significant extra costs for importers and exporters.
• USA - The supply chain disaster in most US ports and terminals continued throughout August without any real improvements in vessel delays, port and terminal congestion, shortage of drivers and chassis and general lack of capacity. Some sources however predict some improvements in September regarding frequency and capacity. Let’s hope this is correct.

SEAFREIGHT NEWS 

• MSC ANOUNCED THE UPDATE OF ITS AUSTRALIA EXPRESS SERVICE between Europe and Australia. To cater for market demand both MSC and its partner CMA CGM added a vessel each. The updated service will encompass a total of 15 vessels - 9 MSC and 6 CMA CGM.
• CONTAINER SPOT RATES CONTINUED TO DROP in some markets where carriers cut prices to compete for reduced demand. In spite of this, shipping lines continued to report record profits in H1 2022 even though their overall freight volumes declined.
• HAPAG LLOYD REPORTED AN EBIT OF USD9.919 BILLION for the first half of 2022. The EBIT for H1 in 2021 was USD3.487 billion. While the EBIT increased dramatically the total transport volume increased only by approx 1.4%. In other news Hapag Lloyd announced plans to upgrade 15 ships to technically modernise its fleet and reduce carbon emissions. The Fleet Upgrade Program follows the loading of the first retrofit propeller in the Port of Hamburg. These propellers would enable the ships to save 10 – 13% fuel and carbon emissions. 86 Hapag Lloyd vessels will receive the new propellers while 36 ships will be equipped with a new, flow-optimised bulbous bow. 

AIRFREIGHT NEWS 

According to the latest IATA Air Cargo Market Analysis for the month of June worldwide volumes lifted on slightly by 0.7% in June compared to May 2022. Total international air cargo volumes for the first 6 months in 2022 increased by 2.5% compared to pre-covid 2019 while the Asia Pacific region achieved 1.1% growth. However, compared to 2021 there was a 4.2% decline of international freight and the Asia Pacific region registered -1.1%. The good news is that available capacity is increasing again. Year-on-year international cargo capacity increased by 9.4% in June while the increase in the Asia Pacific region reached 11.8%. 

AUSTRALIAN PORTS 

• THE PORT OF MELBOURNE REPORTED STRONG CONTAINER VOLUMES IN JULY. Total container throughput reached 285,561 TEU (twenty-foot equivalent unit) in July, up 3.7% on July 2021. Full overseas imports increased 3.9% while full container exports were down 5.7%.  Total empty container exports increased 16%.
• INDUSTRIAL ACTION COMMENCED AT DARWIN PORT on 19 August with a series of strikes and indefinite work bans. The Maritime Union of Australia and the Maritimer Officers Union and the Australian Manufacturing Workers’ Union accused Darwin Port of seeking to cut its workers pay. The dispute is going through Fair Work proceedings.
• AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY CEO, Andrew McKellar strongly lambasted Australian port performance in his address to the National Press Club on 17 August. He said that Australia’s globalised economy necessitates a competition for markets, and ports are critical gateways for goods entering and leaving the country. “Yet Australia’s ports rank some of the least productive in the world, snarling up supply chains and slugging business, workers, and consumers with increased costs” he said. “The World Bank recently ranked the top ports in the world and Australia failed to put a single port in the top 250.” 

AUSTRALIAN BIOSECURITY 

• THE NEW BROWN MARMORATED STINK BUG (BMSB) SEASON starts on 1 September 2022 and ends on 30 April 2023. Measures and operations are essentially the same as last year with only a few minor changes. Full sealed standard containers can be treated upon arrival in Australia but open top containers, flat racks, break bulk or roll on / roll off cargo MUST be treated at origin.
• ONGOING BIOSECURITY DELAYS continue to cause major problems and extra costs for importers, customs brokers and freight forwarders. August saw numerous complaints about document assessments taking three to five days and lengthy delays (in many instances several weeks) in inspection booking responses and next available inspection times by the Department of Agriculture, Fisheries and Forestry. This resulted in exorbitant container detention fees being paid to the shipping lines as well as high storage charges applied by terminals and depots. This is particularly alarming given that this situation is occurring even before the commencement of the BMSB season! The Freight & Trade Alliance (FTA) has provided a formal submission to the Senate Rural and Regional Affairs and Transport Reference Committee to support their Inquiry into the Adequacy of Australia’s Biosecurity Measures and Response Preparedness. 

TRANSPORT / MARINE INSURANCE IS IMPORTANT 

We’d like to remind all our valued clients and readers that shipping lines, air lines, truckers, terminals, rail operators as well as forwarders supply their services according to their own Terms & Conditions which allow only FOR VERY LIMITED LIABILITY in case of loss or damage to cargo. Therefore, it is highly recommended to arrange for adequate insurance coverage. Most logistics providers will be happy to arrange cover upon receipt of written instructions, but of course the best solution is to discuss this with your insurance broker and include a marine policy with your business insurance. 

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