Industry Update – January 2021

Attention: Shipping Manager

Current Shipping Lines BAF Surcharges:

Further to previous correspondence in regards to the above, below are current costs for BAF surcharges with various shipping lines for general cargo, from USA to Australia, as a guideline:-

Hamburg Sud – USD 324/TEU from West Coast USA to Australia

Hamburg Sud – USD 365/TEU from East Coast USA to Australia

Quarter 1 2021 – CMA CGM – USD0/TEU from East Coast USA to Australia

Quarter 1 2021 – ANL – USD227/TEU from West Coast USA to Australia


Situation in Europe:

Further to our previous updates regarding the situation in UK, there are still frequent port omissions and sailing adjustments. Due to these omissions, getting space on the desired sailing remains a major challenge. Additionally, COVID-19 safety measures, shortage of labour at ports and a huge backlog of containers is causing further problems within the supply chain. There are no signs of noticeable improvements in the near future.

In Europe, there are reports of equipment shortages in multiple countries. These include Germany, Austria, Switzerland, Hungary, Czech Republic and Slovakia. In these countries, there is a possibility of some bookings being cancelled due to severe equipment shortage. Furthermore, some carriers have applied a time limit of 7 days prior to vessel departure, for releasing empty containers for shipping from all countries in Europe. Some have even implemented a booking stop for:

  • 40’ GP and 40’ HC containers from various ports in Finland
  • 40’GP containers only from Hamburg depots in Germany.
  • 40’ containers from Gavle, Sweden.

Additionally, various shipping lines have even introduced equipment imbalance surcharges due to critical shortage of 40’ containers. Space remains pretty tight and rates are still much higher than normal. In light of these critical space issues and extremely high demand, few carriers have also implemented a Peak Season Surcharge on top of their freight rates from various European ports to Australia. Transhipment services via Singapore/Port Kelang still remain risky with extended transit times.

Please keep the above in mind while planning for your shipments from Europe and UK.


Massive Delays in USA:

As advised in our previous notices, the current space and equipment situation in USA has reached critical levels. There are major delays, rollovers and wait times of more than a month for containers from USA. Bookings have been frequently rolled over by carriers multiple times due to space issues, lack of truckers and equipment availability. The number of containers coming in to USA are much higher than the ones going out, resulting in empties being accumulated closer to the ports.  Majority of the ports in USA, especially the West Coast ports of Long Beach/Los Angeles are heavily congested due to the spike in import volumes over the last 6 months. Despite the ongoing trade war, USA’s trade with China increased significantly over the last few months, particularly in October when China again overtook Mexico to become USA’s top trading partner (Source – Freight Waves). As a result of this increase in import volumes, some vessels have been delayed by more than 10 days as they wait for space to dock and the overall vessel turnaround times have increased substantially. As of 8th January, there are about 35 vessels waiting to berth at Long Beach/Los Angeles port. Some of the vessels are even omitting Long Beach port to keep up with their planned schedules.

The amount of time taken by truckers to deliver/receive containers from ports have increased as well because of the shortage of labour due to COVID restrictions being implemented. Often, there are difficulties, even with getting a slot for terminal delivery. There are also significant issues with trucker and chassis availability as chassis inventories have plunged across the country and the shortage of hauliers is also adding more pressure to the struggling supply chains. From various locations within mainland USA, the time required to secure trucking power has greatly increased to almost a few weeks. Given the current situation and issues with space, some carriers are refusing to do ex door moves and are only offering rail ramp or port moves. In such cases, we might have to use outside trucking options, based on availability, which are generally expensive but are necessary to keep the cargo moving.

Congestion at West Coast ports has had a flow on effect on rail services as well. Main rail ramps within the country are experiencing significant delays from 5 to 9 days. There are also reports of major delays at Southern California inland rail ramps.

On the other hand, East Coast ports are facing congestion issues with higher empty inventories and increased turnaround times but comparatively, they are not as bad. Some of the East Coast direct carriers are all booked out till early February. Situation in Canada is also similar with a surge in import volumes and labour shortages.

Overall, the situation is very unstable with increased transit times and schedules way off their estimates. It is expected that the situation will not improve much until February.

In terms of air freight from USA, space situation is tight and transit times have increased quite a lot due to schedule delays and higher demand. Space is almost unavailable on cheapest deferred options.

In the current uncertain environment, we are trying our level best to keep your cargo moving as efficiently as possible. Please keep the above in mind while planning for your shipments from USA and allow enough time for imminent delays.


North East Asia Equipment and Space Situation:

In North East Asia, carriers are facing equipment shortages due to strong export demand and decreased imports. The demand for exports to USA is at its peak. Rates are still at all-time high and some vessels are changing port terminals at the last minute to maintain schedules, minimize delays and reduce the impact of port congestion. Rates are still much higher as we are in the Peak Season before Chinese New Year.

As we approach closer to Lunar New Year, there will be a shortage of truck drivers and empty containers in China. Sometimes, this means empty needs to be pre-picked or collected from a different terminal if they are not available nearby, to ensure we can get the equipment for the desired vessel. If this is not done immediately, there is a high chance of missing out on empty collection and thus, missing the sailing. This will likely happen over the course of next month and might result in additional trucking costs. Moreover, there will be space related issues due to CNY as explained in our previous notices. Many factories will close earlier at the end of January for their festive season.

In line with the FCL rate increases from North East Asia, LCL rates from China have increased over the last few months as well. This uptrend is likely to continue until the Chinese New year.

Please place your North East Asian bookings as soon as you can, keeping the above situation in mind.


Reefer Congestion at Dalian port:

Due to the current stringent COVID-19 measures in place at Chinese port of Dalian, reefer plug utilization at the port has reached full capacity. This is affecting the direct discharge of reefer containers. To minimize the impact of this congestion, carriers are diverting reefer containers to discharge at alternative ports which has the potential for extra costs associated with storage, plugging/unplugging at alternative discharge ports and on-carriage costs to final destination afterward. Effective 5th January 2021, some carriers have introduced Emergency Reefer Additional charge of USD 1000 to USD 1500 per reefer container to mitigate the costs associated with this. Few carriers have also stopped reefer bookings to Huangpu port in China, sighting strict customs inspection as the reason.


South East Asia and India Space Issues:

As you would be aware from our notices over the last few months, severe space shortage still remains a major issue from most of the South East Asian ports. As majority of transhipment cargo destined for Australia also changes vessel in Singapore/Port Kelang, there are frequent rollovers and delays being experienced at these ports. Additionally, there are reports of some carriers facing equipment shortages and limiting their bookings, while others are charging very high rates with cancellation fees for bookings that are cancelled after the allowed free time. Few shipping lines are only releasing space on Premium Rates or on Sea Priority Option which is an added surcharge on top of the higher freight rates. Due to these issues, some of the LCL depots are even limiting the amount of cargo that can be shipped as a single shipment.

As advised in our previous notices, carriers from South East Asia have started implementing booking cancellation fees and have changed their cancellation/amendment windows due to the ongoing space issues. These vary from carrier to carrier, trade routes and types of bookings i.e. premium or normal. Premium bookings have a significantly higher cancellation fees as compared to normal bookings and it generally applies for bookings changed/cancelled within 7 days of vessel arrival at port of loading.

With the constant rise in shipping line FCL rates, General Rate Increases, Peak Season Surcharges and Rate Restorations from South East Asia, LCL carriers have also introduced General Rate Increases/peak season surcharges over the course of last few month. These increases have been steep, particularly for cargo coming out of or transhipping via Singapore. Rates advertised vary from carrier to carrier and by location.

From India, the situation is still critical with severe space and equipment shortage. Some of the carriers have just halted taking any new bookings until further notice as there are issues both in India and at transhipment ports of Singapore/Malaysia. Some are only allowing bookings on premium and priority rates. During the last month, we were informed by our partners in India and Indonesia regarding the difficulties in booking DG cargo. We were told that some of the carriers are restricting or temporarily suspending acceptance of Hazardous cargo altogether. These measures are temporary and probably introduced to reduce the booking load.

In the short term, we don’t expect the overall shipping situation to improve much.


Empty Park Congestion – Sydney and Melbourne:

Empty park congestion has been an ongoing issue with record inventory levels over the last four to six months. Initially, it was due to a surge in import volumes, reduced exports from Australia and lower volumes of empty evacuations by carriers. According to FTA, there has been an imbalance of almost 45000 twenty foot equivalent Units (TEUs) over the last six months which has disrupted normal empty park operations. This was further compounded by the recent port strikes that had a devastating impact on vessel schedules and general port operations, further reducing shipping lines ability to evacuate empties. As a result, empty parks reached capacity and there was little to no room to further dehire empty containers. When Sydney port was facing non-stop strikes, carriers started diverting some empties to Melbourne for evacuation or export. This had a flow on effect at Melbourne empty parks as well.

Currently, situation in both Melbourne and Sydney empty parks is congested with significant de-hire issues and delays. There are long queues for empty de-hire in Melbourne and a lack of available empty slots. Some of the empty parks have little to no available slots at all as they have reached their maximum capacity. The situation there is becoming catastrophic and has the potential to increase dehire costs since containers will have to be taken to storage depots which will add additional transportation costs, lift costs, storage costs etc. If such costs are incurred unfortunately, we will have no option but to pass them on.

Some LCL depots in Sydney and Melbourne have also announced empty park congestion fee effective 4th January 2021, to cover the administrative, storage and transportation costs associated with empty dehire issues. This is advertised as 12.5 AUD per w/m or minimum. If cargo arrives with such carriers that have this charge, it will unfortunately incur this cost.


USA and Canada to Australia General Rate Increase LCL:

In line with the FCL rate increases, there will be a General rate increase for LCL cargo from all USA origins to Fremantle port, effective 16th January 2021 as follows:

USD 4 per w/m or minimum

Additionally, LCL GRI’s were also announced from Canada to Australia effective 1st of January 2021 as follows:

USD 4 per w/m or minimum


New York Cargo Facilitation Charge:

Effective 3rd January 2021, shipping lines have announced a Cargo Facility Charge (CFC) which will be applicable on containers loading or discharging at New York port. The amount of this charge is listed as:

USD 13 per 20 GP container

USD 26 per 40 GP container


Long Beach and Los Angeles Port Congestion Surcharge:

As advised in our November’s notice, one of the carriers have introduced a Port Congestion Surcharge to/from Long Beach and Los Angeles ports. If this applies to any of your bookings, we will have no option but to pass on at cost. The current advertised surcharge is USD 180 per container.


Exports to USA Door via West Coast Ports – Emergency Haulage Surcharge

Due to the ongoing congestion at USA West Coast Ports, one of the carriers have implemented an Emergency Haulage Surcharge of USD 350 per container, effective 1st of January 2021 for all shipments from Australia/New Zealand to USA inland door via USA West Coast ports. These ports include Long Beach, Los Angeles, Oakland, Seattle and Tacoma.


Europe to Oceania Peak Season Surcharge (PSS) and GRI:

Since our last announcement on this Peak Season Surcharge, the transhipment carrier has revised their PSS for the month of January 2021. Effective 1st January, the updated PSS rate from North Europe, Mediterranean and Black Sea to Australia for transhipment service is as follows:

USD 400 per 20’ container

USD 800 per 40’ container

This is valid till end of January after which, carrier might extend it or adjust it accordingly.

In line with the above FCL PSS, LCL Peak Season Surcharge varies upon location and carrier but is about Euro 14 per w/m or minimum.

Similarly, direct LCL service providers have increased their rates and applied GRI’s over the last few months from various European locations like Italy, UK, Germany, Sweden, Netherlands, France etc. These will apply accordingly.

Alternatively, export rates to Europe have also seen a massive increase given the fact that they tranship through congested ports of South East Asia like Singapore and Malaysia.


Equipment Imbalance Surcharge from North Europe (Excluding UK/Ireland) and South France:

Because of the ongoing equipment shortage in North European ports and Southern France, some carriers have announced an Equipment Imbalance surcharge for 40’ standard and High Cube containers for all exports from North Europe (excluding UK and Ireland) and Southern France. This will be effective from 15th January 2021 with the following values:

USD 200 per 40’ GP and 40’ HC container


North East Asia to Australia General Rate Increase:

Shipping lines operating in North East Asia to Australia trade route have implemented a General Rate Increase effective 1st of January 2021 with the following values:

USD 300 per 20’ container

USD 600 per 40’ container

LCL will be applied accordingly. Estimated at USD 12 per w/m or minimum.

Over the course of last two months, we have seen a significant increase in LCL rates from North East Asia to Australia. LCL rates have increased from some locations by as much as 40 to 50 USD per w/m. The trend is likely to continue at least for the short term.


South East Asia to Australia General Rate Increase:

Carriers operating this trade route have applied a General Rate increase from South East Asia to Australia effective 1st of January 2021 as follows:

USD 150 to USD 300 per 20’ container depending upon the shipping line

USD 300 to USD 600 per 40’ container depending upon the shipping line

LCL will be applied accordingly. Estimated at least at USD 6 per w/m or minimum. Actual will vary depending upon applicable FCL GRI amounts.

Further to our previous Industry update notice, we have seen an exponential increase in rates from South East Asia over the last two months. LCL operators have applied full GRI’s and rate restorations due to the current capacity issues and we have seen increases of USD 50 to USD 70 per w/m over standard rates from Singapore, Malaysia and other South East Asian ports. Transhipment services via South East Asia have also experienced similar increases. This trend is likely to continue until there are significant improvements in global shipping situation.

In the current uncertain environment, one of the carriers has also introduced a humongous 1000 USD/TEU surcharge for Dangerous/Hazardous cargo coming to Australia which will be applicable until further notice. We will try our best to avoid this carrier while booking any DG cargo.


Middle East and Indian Subcontinent to Australia General Rate Increase:

Shipping lines have implemented a General Rate Increase from Middle East and Indian Sub-continent to Australia as of 1st January 2021 with the following values:

USD 150 per 20’ container

USD 300 per 40’ container

LCL will be applied accordingly. Estimated at USD 6 per w/m or minimum.

Similar to South East Asia, we have seen LCL rates from India rise up substantially over the last few months. These increases are up to 70 USD per w/m and the trend is likely to continue in the near future.


Auckland Port Congestion Surcharge:

As advised in our previous industry update, all carriers still have this port congestion surcharge. Some of the shipping lines have now broadened the scope of Auckland port congestion surcharge to even apply to transhipment cargo which changes vessel in Auckland, rather than Auckland being the actual port of discharge. This change will be effective from 21st January 2021 for USA regulated trade routes.


Lyttleton Port Dues Surcharge, New Zealand:

Due to the increase in operational costs announced by Lyttleton Port authorities in New Zealand, carriers have started implementing Port Dues Surcharge since the beginning of this year. This charge is advertised by carriers as follows for Lyttleton port:

NZD 35 to NZD 40 per 20 GP/Reefer Containers

NZD 74 to NZD 80 per 40 GP/HC/Reefer containers


Increase in Time Slot Booking Fee

We have received notices of a recent update in Time Slot Booking fees at different terminals. Effective 1st of January 2021, updated time slot booking fee for general containers is as follows:

Sydney – 55 AUD per Container

Melbourne – 55 AUD per Container

Brisbane – 60 AUD per Container

Fremantle – 40 AUD per Container


Increase in Sydney and Fremantle Side Loader Levy:

Terminals at Sydney and Fremantle ports have increased their side loader levy surcharge for side loader containers effective 1st January 2021. Updated Side Loader Levy where applicable, is 80 AUD per container.

We will keep you updated with any further developments.

Best Regards,