Industry Update – September 2021
Attention: Shipping Manager
New packaging requirements for BMSB fumigation permission forms
Australian Quarantine are requiring new declarations in relation to packaging to be included on fumigation permission forms. These are:-
Brief descriptions of commercial and shipping packaging are below:-
Commercial Packing is considered any packing/wrapping that is applied as part of the manufacturing process. This includes presentation packing, commercial distribution boxes, and hermetic sealing done at the immediate completion of the manufacturing process.
Shipping Packaging is considered any packaging used / completed post manufacturing, such as packing goods into cardboard boxes or crates, shrink wrapping when consolidating packages onto a pallet etc.
When completing permission to fumigate forms, the packaging options will need to also be completed as appropriate, otherwise fumigation will be unable to be completed.
“Pondus” Weighing System to be introduced at VIC East Swanson Dock
Further to our previous advice in relation to the new Pondus system being introduced in Brisbane early this year, we have been advised by Patrick Terminal that from 4th October 2021 onwards, this will also be introduced at VIC East Swanson Dock Terminal. The new weighing solution, Pondus, helps identify misdeclared weights by statistically sampling containers for weighing and then automatically notifying relevant parties of weight discrepancies, allowing parties to better meet their Chain of Responsibility obligations. Both import and export containers will be sampled for weighing on the Pondus stand. Any misdeclared container found to be outside of the 1-tonne tolerance will be charged a Weight Amendment Fee of AUD230.00 per container plus GST.
Situation in USA and Canada:
- Inland trucking crisis and intermodal issues
The severe shortage of truckers across the US is causing major disruption to the global supply chain. Furthermore, due to the increased volume of imports and exports, shipping lines are experiencing reduced trucking capacity in most areas in North America. As a result, many carriers have stopped offering to/from door services in the USA and Canada. In particular, on the west coast, trucking options are extremely limited, most carriers do not quote ex/to door, only port to port or rail to port. One major shipping line offering direct service out of west coast ports will only resume to/from door services early next year.
The extreme chassis shortages are also causing delays in pickups, deliveries and drays at major rail facilities. Being the largest rail hub in the US, Chicago rail ramp is dealing with increased delays and congestion. It has been reported that there are currently more than 20 miles of container trains lining up outside of Chicago area waiting for deramp.
The crisis is expected to deteriorate during the next few months and will not recover until 2022.
- Port congestion
All US ports remain heavily congested, especially on the west coast. There are 40 or more container ships waiting at anchor off the ports of Los Angeles and Long Beach, which is 4.8 times the pre-COVID level. Vessel waiting time is 10 to 14 days at these two ports due to high import volume and labour shortage. All railroads, warehouses and port terminals are operating at full capacity. The situation is similar at east coast ports, vessels are delayed between 5 to 6 days awaiting berth assignment at Savannah port. Meanwhile, arrival delays in New York and New Jersey are up to 3 days (Source – American Shipper).
Due to the current congestion, many shipping lines have introduced some temporary changes to their vessel schedules between US west coast and Oceania to mitigate delays and protect schedule reliability. These adjustments include fortnightly omissions of Sydney and Oakland port. In addition, another carrier is currently not offering service from Seattle due to operational issues and labour shortage at the port.
To compound matters, the port of New Orleans has been closed and all operations at the port have been suspended due to catastrophic damage caused by Hurricane Ida. Vessels will be omitting New Orleans port until the terminal reopens.
- Airfreight – Limited capacity
American Airlines will be suspending their passenger flights into Australia for the next few months starting from 01st September 2021, to focus on the Northern Hemisphere market. Experts are anticipating a number of similar withdrawals from other airlines as Australian borders remain closed. This service suspension will have a significant impact on the air cargo sector as there will be extremely limited space and equipment from America to Australia. Consequently, airfreight rates will increase substantially.
Situation in Europe:
Consumer demand for container shipping from Europe continues to surge while supply chain bottlenecks, port congestion and capacity crunch persist. Due to these reasons, freight rates out of Europe have been inflating significantly. The only two carriers offering direct service to Australia have implemented a massive rate increase and peak season surcharge on this route.
There is extremely limited space availability for Europe – Australia/New Zealand trade lane, as most vessels are fully utilized until October. Some shipping lines have declined to quote and are not accepting cargo out of Europe due to space constraints. The current market situation is expected to continue and will only recover in the first quarter of 2022 at the earliest (Source – Seatrade Maritime News).
German Train Drivers’ Union (GDL) strike – The GDL union has announced plans for a 5-day national strike starting from 01st September 2021, their third strike in a month. This industrial action will bring restrictions to inland operations, railway infrastructure and equipment availability across the country. Major delays and disruptions to cargo planning and rail schedules are expected during this period (Source – Euronews).
Situation in Asia:
- China – Port congestion, rising freight rates, air cargo chaos
China is facing the most challenging COVID-19 outbreak since the pandemic first emerged earlier last year. New cases are rising and spreading more widely than previously, many cities are in lockdown. Ports of Shanghai and Ningbo are experiencing additional congestion from new COVID restrictions. Although Meishan terminal in Ningbo has reopened, it will take at least a month to tackle the backlogs, and full resumption of operations may only be possible by the beginning of October. As a result, dozens of transpacific sailings are expected to be delayed over the next couple of weeks.
Meanwhile, freight rates from China continue to soar and have reached all-time-high levels. Rates from China to Australia have increased substantially compared to pre-COVID levels. The price has surpassed USD 10,000 per 40’ container in August and the figures are forecasted to skyrocket in the upcoming months.
Airfreight market – Airlines have cancelled hundreds of cargo flights out of China amid the COVID outbreak. Most freighter activity and warehouse operations at Shanghai airport, China’s largest cargo airport, were suspended due to positive cases detected at the airport. Extensive delays and disrupted flight schedules, as well as flight cancellations out of China are expected.
Furthermore, the growing scarcity of cargo flights along with unprecedented demand for air shipping will push freight rates to record-high levels. Airfreight rates out of China during peak-season rush are estimated to be 5 to 6 times higher compared to low-season months (Source – American Shipper).
- South East Asia – COVID-19 lockdown, port congestion
As previously reported, many countries in South East Asia remain in lockdown as cases continue to surge across the region. There are over 100,000 containers piled up at Cat Lai port in Vietnam as vessel handlings and terminal operations were negatively impacted by strict COVID measures. Factories in Malaysia are shut down or operating at reduced capacity during this period. Consequently, this prolonged lockdown has impacted global supply chains significantly due to serious shortages of labour and equipment (Source – The Load Star).
- South Asia and the Middle East – Limited capacity
Some shipping lines have temporarily suspended all bookings between Oceania and India, Pakistan and the Middle East due to severe congestion at transhipment ports in Singapore and Malaysia. Also, carriers are prioritising the Far East and South East Asia and restricting their services only to/from these regions. Shipping costs will escalate quickly due to the limited capacity.
Situation in New Zealand:
All New Zealand ports are operating with restricted labour supply and revised schedules to ensure compliance with new COVID-19 requirements. Due to the new restrictions, terminal operations are affected critically. Berth and crane productivity, as well as receival and delivery performance at the ports, are significantly impacted. Average delays to obtain a working berth are about 2 to 4 days.
Additionally, many carriers are currently unable to offer services to New Zealand due to schedule and equipment restrictions.
General Rate Increase from USA and Canada to Australia and New Zealand:
We have been advised of a General Rate Increase to be implemented on cargo originating from US East Coast, US Gulf Coast and Canada ports to Australia and New Zealand, effective 15th September 2021 as follows:
USD 500 per 20GP
USD 1,000 per 40GP/HC
From 01st October 2021, there will be a General Rate Increase for all inbound shipments from US West Coast and Canada to Australian and New Zealand ports. The increases will vary per line, at this stage they are advertised to be between:-
USD 200 – 300 per 20GP
USD 400 – 600 per 40GP/HC
LCL will increase by USD 8 per w/m.
Bunker Adjustment Factor (BAF) Increase from USA and Canada to Australia and New Zealand:
All carriers will be increasing their Bunker Adjustment Factors, effective 01st October 2021, from USA and Canada to Australia and New Zealand. The amount of increase varies from carrier to carrier.
IMO2020 Surcharge Increase from USA to Australia and New Zealand:
From 01st October 2021, IMO2020 surcharge will increase for all LCL cargo moving from USA to Oceania, the new surcharge will be:
USD 12 per w/m or minimum
General Rate Increase from Europe to Australia and New Zealand:
A General Rate Increase will be applied for all sailings from Europe to Australia and New Zealand, effective 11th September 2021 as follows:
USD 1,000 per 20GP
USD 2,000 per 40GP/HC
LCL will be applied accordingly.
Peak Season Surcharge from North Europe and the Mediterranean to Australia and New Zealand:
From 10th September 2021, there will be a Peak Season Surcharge applied to all inbound shipments from North Europe and the Mediterranean to Australian and New Zealand ports. The surcharge will be:
USD 1,200 per 20GP
USD 2,400 per 40GP/HC
General Rate Increase from North East Asia to Australia:
Announcements were made in relation to a General Rate Increase for all cargo moving from China, Hong Kong, Taiwan, Korea and Japan to Australia, effective 01st September 2021. The increases will be:
USD 500 per 20GP
USD 1,000 per 40GP/HC
LCL will be applied accordingly.
Peak Season Surcharge from North East Asia to Australia:
One major carrier has implemented a Peak Season Surcharge on all cargo from China, Hong Kong, Taiwan, Mongolia, Japan and Korea to Australian ports, effective 16th August 2021, as follows:
USD 750 per 20GP
USD 1,500 per 40GP/HC
Another carrier operating on this trade lane has introduced a lower surcharge from 01st September 2021 for all shipments coming from China, Hong Kong and Korea to Australia’s East Coast, as follows:
USD 300 per 20GP
USD 600 per 40GP/HC
General Rate Increase from South East Asia/South Asia/India Subcontinent/Middle East to Australia:
A General Rate Increase has been announced for all exports out of South East Asia, South Asia, India Subcontinent and Middle East to Australia effective 15th September 2021, as follows:
USD 200 per 20GP
USD 400 per 40GP/HC
Overweight Surcharge (OWS) from Malaysia and Brunei to Australia:
An Overweight Surcharge will be implemented on all 20’ Dry containers with gross weight equal or over 14 tons (including tare) from Malaysia and Brunei to Australia, effective 15th September 2021. The surcharge will be:
USD 300 per container
General Rate Increase from Australia to New Zealand:
Shipping lines operating from Australia to New Zealand have announced a General Rate Increase to be implemented on this trade effective 01st October 2021, as follows:
USD 200 per 20GP
USD 400 per 40GP/HC
LCL will increase by AUD 7 per w/m.
Brisbane Empty Container Park Increase:
Brisbane Empty Container Park surcharge has increased slightly, effective immediately. The updated empty container park fee in Brisbane will be AUD 80 per container.
Fremantle Side Loader Levy Increase:
Side Loader Levy surcharge has increased in Fremantle, effective immediately. The updated surcharge will be AUD 85 per container.
Given the current situation, we would suggest that if you have any upcoming orders, please let us know about these well in advance so that arrangements can be made and bookings can be secured as soon as possible.
We will keep you updated with any further information.