Landside Logistics
Terminal Delays
The impacts of the current MUA & DP World dispute continue to play havoc on our landside operations. In addition, an evolving industrial dispute with the Electrical Trades Union that maintain the Automatic Staking Cranes (ASC) have severely impacted operations at DP World Brisbane. In January there were over 90 instances of ASC breakdowns with truck turnarounds increasing between 2 to 5 hours. DP World and the ETU have been in negotiation since October trying to settle a pay dispute like the Maritime Union (MUA) negotiations.
Whilst the Maritime Union strikes at DP World may not be making headlines anymore as agreements have been negotiated, it’s important to appreciate the behind work that goes on to ensure containers are collected and delivered as delays impact supply chains. Harders relies heavily on its transport partners to deliver a seamless service to our customers and will continue through these ongoing challenges to manage our customers’ expectations.
Empty Container Complexities
Over the past month we have seen many empty yards ‘redirecting’ containers from one yard to another due to capacity issues. Managing the dehire of containers continues to become a complex process, taking up precious time and resources. Empty Parks continue to increase charges to facilitate containers in and out of their yards, yet from the trucker’s perspective there are no gains made from these price hikes.
Redirections and trucking companies being penalised for turning up out of slot times is adding further cost burdens to the industry. The elephant in the room is shipping line detention, which is often already applicable before the containers can be dehired.
It must be noted that truckers often allow 3-4 working days to collect empty containers from customers’ premises. This must be considered when determining the amount of free detention time provided by the shipping lines for your containers. Managing your container unpacks to allow for this additional time is important. If you are experiencing delays, please ensure you speak with our Account Management team to discuss possible solutions.
Air Freight Update
The rapid rise of e-commerce, disruption in ocean shipping and supply chain diversification are some of the main drivers of air cargo demand in the current market.
Few Airlines restricted booking to Europe and USA in mid-April as they wanted to avoid Middle Eastern Air space due to ongoing war.
Heavy rainfall at Dubai caused disruptions to bookings with major freight carrier Emirates mid-April, however local authorities supported well and almost 80% of the backlog was cleared by the end of April.
Worldwide air cargo capacity remains sufficient in most regions.
Another market that has seen rapid growth over recent years is pharmaceuticals. Please let us know well in advance for all your pharmaceuticals movement. In the last couple months, we successfully managed the import of a number of Vaqtainers and Envirotainers to AU.
We have weekly consoles from USA, Europe, China, and South Africa into AU. Please contact our team of supply chain professionals who will continue to provide you with the most competitive options to support your supply chain needs.
Plain English Allergen Labelling — transition period ended
The 3-year transition period for food businesses to implement plain English allergen labelling ended on 25 February 2024. Approved by FSANZ in February 2021, the labelling changes require allergen declarations in a specific format and location on food labels using simple, plain English terms in a bold font.
The changes are designed to make food allergen information on food labels clearer and more consistent. A stock-in-trade period will run for 2 years until February 2026.
This only applies to food packaged and labelled with existing allergen declarations before the end of the transition period.
Sea Freight Market Update
Last month we advised shipping lines immediately responded to the softening demand and decreasing freight rates by introducing more capacity cuts via blank sailings in the first half of April.
This was in a bid to stabilise freight rates to more sustainable levels and to prevent further decline.
A successful Rate Restoration was pushed through on the Northeast Asia to Oceania trade lanes at a quantum of USD 300 per TEU, effective April 15th, 2024.
With traditional off-peak period this time of year upon us as demand softens (which is otherwise known as “slack season”), shipping lines did not hesitate to extend cancellations of their scheduled sailings for the entire month of April. This is expected to create a difficult situation for the industry as external factors set the stage for a perfect storm.
These factors are likely to impact various aspects of shipping, including capacity, equipment availability, delays, and freight rates.
A total of 8 cancellations of scheduled sailings are underway, representing over 40% reduction in supply, adding to the industry’s woes.
In addition to the above, as a result of the situation in the Red Sea, we will see a buildup of vessels arriving at Southeast Asian hubs in the same week. This will lead to a significant amount of cargo bound for Oceania, causing an overflow at the terminals. Significant routing changes are currently occurring, and the situation is expected to become more critical in 2-3 weeks’ time. Please be aware that usual direct routes may be affected, and unfortunately delays may be inevitable.
These current supply chain disruptions are causing chaos as space and equipment shortages are once again in the spotlight. Uncertainty with the crisis in the Middle East will no doubt have adverse effects on global supply chains.
Effective May 1st, 2024, shipping lines announced another rate restoration of USD 300 to USD 500 per TEU on the Northeast Asia to Oceania routes as we find rates coming full circle once again, nearing pre – Chinese New Year levels in the high 4-digit figures per TEU.
Container space is extremely tight as vessels are currently full and rolling cargo until mid-May 2024 and therefore the likelihood of these new rate increases being announced by the shipping lines may gain traction.
We are witnessing another unprecedented market dynamic and continued volatility will remain as an earlier than usual peak is being created due to the above factors.
Please maintain close communication with our experienced team of professionals to assist you to navigate through these issues. We continue to work closely with our providers to ensure best outcomes and solutions are achieved for our valued customers and we thank you for your continued trust.
Harders Advisory Updates
Imported food virtual label and visual inspections
The Department of Agriculture, Fisheries and Forestry (DAFF) has notified industry that they are still facing resourcing issues that result in delays with inspection bookings.
The resourcing issue is a result of the broader national labour shortages as well as constraints suffered due to funding limitations.
DAFF officers accredited to conduct food inspections are in even shorter supply. To help minimise the strain on these resources, and mitigate unnecessary additional costs to the client, it is recommended to review the possibility of booking virtual visual inspections where possible.
Using NSW as an example, DAFF highlighted that there were 156 entries subject to IFIS, of which 107 were surveillance food. Of the surveillance food entries, it is estimated that around 80% may be eligible for a virtual inspection, which a remotely located officer can handle without need to travel between inspections. This would help free up resources to attend to risk food inspections and sampling sooner than industry is currently experiencing.
If you would like to consider the virtual inspection option, please see IFN 06-22 regarding registration and connectivity testing.
Revision of regulatory charges for biosecurity and imported food activities
DAFF has recently announced an increase to regulatory fees and charges for all biosecurity and imported food related activities, to take effect from 1 July 2024.
Although any increase is regrettable, the absence of a review for many years has inadvertently contributed to the resourcing issues currently faced by the department, and the declining service delivery standards faced by industry.
A full table of the increased fees for biosecurity activities and imported food activities can be found at the links provided.
Some of the fees increasing that will impact industry are:
Full Import Declaration (FID) – Air – increasing from $43.00 to $45.00 per FID
Full Import Declaration (FID) – Sea – increasing from $63.00 to $66.00 per FID
Fees for service, including inspections, examination, document assessment, import permit assessment, analysis, diagnostic activity, clearance of cargo, treatment, audit, supervision and training are also set to increase:
In office fee during ordinary hours (per 15-minute increment) – increasing from $37.00 to $39.00
Out of office fee during ordinary hours (per 15-minute increment) – increasing from $62.00 to $65.00
If you have any questions related to the above, please contact Harders Advisory or your Harders Key Account Manager.
Australia and India sign Authorised Economic Operator Mutual Recognition Arrangement
On 18 April 2024, representatives from Australia and India took further steps towards strengthening ties by signing the Australia-India Authorised Economic Operator (AEO) Mutual Recognition Arrangement (MRA).
This AEO MRA helps to provide reciprocal trade facilitation benefits that will assist Australian Trusted Traders to gain faster access into one of the world’s most diverse and fastest growing economies.
This new MRA is Australia’s tenth, adding to those already signed with Canada, People’s Republic of China, Hong Kong, Japan, the Republic of Korea, New Zealand, Singapore, Taiwan and Thailand.