Landside Logistics
Terminal Access Charges v. Cost of Living Pressures
An interesting move by Patrick Terminals to provide a media release to counter recent commentaries politically and through the media about the cost of living and a direct relationship to the increasing Terminal Access fees. This release provides details around a recent analysis of the terminal’s fees and the total contribution that it makes on the effect of the cost-of-living expenses.
The report suggests that the stevedores contribute approximately $0.40 per week to average household spending, claiming that this cannot be credibly maintained to influencing cost-of-living pressures.
This report leads up to the next ACCC (Australian Competition and Consumer Commission) Stevedore Monitoring Report in November which will be a key part in the consideration of regulatory intervention by the government.
Media Release 19/08 – Patrick Terminals
Airfreight Update
Global air cargo volumes saw a slight decline compared to last month but are still higher than the same period last year.
Sustained e-commerce expansion, global maritime shipping disruptions and rising demand for high-tech, perishables and consumer goods continue boosting air cargo volumes.
Global international air cargo capacity growth remains solid, primarily driven by Transpacific routes.
Global prices remain significantly higher than last year due to elevated demand and high rates from Asia and the Middle East.
The overall tone of the market remains very firm for the time of year, with some reports even proclaiming peak season had come early. Such reports seem somewhat premature given that traditional peak season is still months away.
Many Airlines report a lot of block space agreement capacity has already been signed up for Thanksgiving and Christmas, which could presage a big spike in spot rates later in the year.
Shippers / Importers are preferring long-term contracts for stability, competitive rates, and reliable operational performance.
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.
Seafreight Market Update
Global market conditions are currently experiencing some disparity due to variances in market conditions across different regions.
In Asia, spot freight rates from China and Southeast Asia to North America and Europe have softened, however they remain considerably higher compared to historical norms.
It is notable to mention that in the Transpacific trade lanes there are significant rate reductions as demand for consumer goods declines in the USA and Europe, while Transatlantic routes are showing more stability, with rates showing some resilience due to consistent demand and limited capacity.
While from China to Australia there has been a significant surge in trade volumes this year and as per the port statistics it is clearly showcasing 2024 as the biggest year on record with the highest volumes in comparison to the last 5 years.
This remarkable increased demand has also co-incided with unprecedented disruptions largely attributed to the Red Sea Crisis which has led to rising port congestion, delays, and supply – demand imbalances.
The Oceania trade has been competing with the Transpacific trades for some time as record freight rates have been evident and therefore vessels on the Asia to Oceania routes have been downsized and deployed into these larger trades which represent higher revenue for the carriers.
Therefore, we will continue to see freight rates on an upward trajectory as shipping lines announce another increase effective 1st of September at a quantum ranging from USD 500 to 1000 per TEU on the routes from Asia to Oceania.
We have witnessed a wave of rate restoration announcements since January 2024, and this will be the 13th rate increase this year with more increases expected in the coming months as strong demand continues to outpace supply.
It will be crucial to allow for at least a three to four week booking window as Peak Season is well under way. This time frame ensures that there is sufficient time between receiving the order, placing the booking, and securing the vessel and equipment.
Please continue to contact our experienced team of professionals who will continue to navigate through these challenges by matching the right sailings with competitive options to meet your supply chain requirements.
Contract Logistics
Peak Season planning in full swing!
As the majority of Aussie retailers approach the peak sales periods including Black Friday / Cyber-Monday (BFCM) and Christmas, strategic planning with their 3PL / contract logistics service providers becomes crucial for success. As the myriad of Covid-related supply chain disruptions taught us if we didn’t know it already, seamless logistics is key to achieving the peak season demand, which can make or break the annual sales target.
Retailers that collaborate closely with their 3PL providers to analyze sales trends from previous years, market conditions, and consumer behaviour will win peak. Here it is important to plan for the ‘peak sales day / maximum day volume’, to ensure adequate resourcing is in place and trained to meet said demand. Accurate forecasts allow all parties to align on inventory levels, storage needs, labour and transportation requirements, ensuring that unfulfilled demand situations are minimized.
When it comes to capacity planning, 3PLs are able to analyse storage requirements and assist in securing additional warehouse space and / or transportation capacity well in advance if needed. This proactive approach helps avoid the bottlenecks and headaches that occur when demand spikes unexpectedly. Retailers should delve a bit deeper in discussions around flexible solutions such as scalable workforce options (multi-shift) and on-demand transportation services, to adapt swiftly to surges in orders. Having a commercial mechanism in place to incentivise the 3PL to achieve on the busiest of days (e.g. peak day surcharge) would be a good idea, as annual / quarterly volume service level agreements are inadequate on those big days.
Technology integration plays a significant role in optimizing the partnership. By leveraging advanced analytics, real-time inventory tracking, and automated order processing systems, retailers and 3PLs can ensure that the supply chain operates smoothly, even under the strain of peak season when it can be difficult to ‘trust the numbers’. Collaborative platforms that offer visibility into the entire logistics network enable quick decision-making and troubleshooting, reducing delays and improving customer satisfaction.
Finally, retailers must ensure that their 3PL partners are well-versed in handling returns, as peak sales seasons typically see a corresponding increase in returns…
Reach out to your Key Account Manager / Sales Representative if you would like to have an independent review of your current peak season logistics arrangements.