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Henning Harders June Newsletter

Landside Logistics

Extensive Delays around Melbourne Port

Traffic in and around the Melbourne Port precinct has been severely impacted over the last month due to redevelopment works at DP World’s West Swanson terminal and road closures related to the West Gate Tunnel project.

The Container Transport Alliance (CTAA) reports that the reconfiguration of landside truck grids at the DP Terminal has reduced landside capacity by approximately 35%. As a result, truck turnaround times have extended to over four hours in some cases, causing transport operators to miss vehicle time slots and planned deliveries.

Additionally, the terminal is experiencing a higher volume of vessels arriving simultaneously, similar to the congestion seen during the COVID-19 pandemic. This situation has further complicated operations, affecting the capacity of empty yards as containers are emptied in waves and cannot be relocated quickly enough by shipping lines.

VICT (Victoria International Container Terminal) – Industry Notice

Effective July 1st, VICT has announced a 9.78% increase in the Infrastructure Fee for both import and export containers. The following is an excerpt from the notice provided to the industry on May 31, 2024:

“VICT has seen a considerable increase in costs to the business, and the landside charges recover part of the costs related to maintenance and operation costs on our landside, property costs, and capital investment in landside infrastructure. This step is crucial to maintaining and enhancing the efficiency of our services to meet your needs effectively.

VICT has continued to maintain a sub-37-minute gate-to-gate truck turn time over the last twelve months despite increased activity within our gates.”

Any increases in terminal fees will be passed through to customers accordingly.

If you have any questions about terminal charges, please contact your Account Manager.

Seafreight Market Update

The resurgence of supply-demand imbalances, port congestion, and container shortages within the shipping industry echoes the challenges encountered during the pandemic. Presently, these disruptions are primarily linked to the ongoing Red Sea crisis.

However, we must advise our valued customers that during the initial four months of 2024, there has been a significant increase in trade volumes originating from China, revealing a notable 17.5% rise. Additionally, trade data from Ports Australia indicates a considerable 23.1% surge in import volumes from Southeast Asia to Australia during the same period.

The above increased demand factors coupled with the shortage of available vessels due to congestion and adverse weather delaying berths have played a pivotal role in the current market conditions.

Notably, expectations of further rate increases have materialized, as major shipping lines have announced the imposition of Peak Season Surcharges proposed to come into effect in mid-June and early July. These surcharges are anticipated to range from USD 250 to USD 525 per TEU, dependent upon the specific trade lane and import or export route.

The uncertainty surrounding the global market’s capacity to absorb these incremental changes or implement curative measures to mitigate their ramifications remains uncertain.

Planning your shipments early is imperative for our valued clients to avert additional surges in rates and prevent potential delays in advance of China’s Golden Week holidays, scheduled from October 1st to 7th, 2024.

Please continue to contact our experienced team of professionals who are ready to find solutions to navigate  through these challenges by matching the right sailings with competitive options to meet your supply chain requirements.

Increases to Biosecurity and Imported Foods Regulatory Activities

As previously advised, the import declaration charges for the Department of Agriculture, Fisheries and Forestry will be increasing with effect from 1 July 2024.

Each Full Import Declaration lodged for airfreight imports will increase by $2, and

Each Full Import Declaration lodged for airfreight imports will increase by $3.

There will also be an increase to the assessment fees, including in-office assessments increasing from $37 to $39 per 15 minutes, and out-of-office fees increasing from $63 to $66 per 15 minutes.

Further information and a full table of updated charges can be accessed on the DAFF Website.

Airfreight Update

Global air cargo demand remains solid in June, currently +9% vs same period last year.

Rising e-commerce demand and a modal shift from ocean to air freight due to ongoing Middle East conflicts continue to boost air volumes.

Global air cargo capacity up +11% YoY in June , almost exclusively driven by passenger belly cargo increase. Capacity remains stable across most regions, except for specific trade lanes where high demand is causing some constraints.

Global air cargo spot rate sees first YoY increase since Aug’22, amid geopolitical disruptions and strong e-commerce demand. This comes as ocean shipping already under pressure due to the Red Sea crisis. Have seen volumes and rates soar due to unseasonal capacity shortages and port congestion.

Disruptions to container shipping services, in part caused by the attacks on vessels in the Red Sea, have been exacerbated further in recent weeks due to port congestion and vessel capacity shortages in certain key markets, driving more cargo owners to air cargo solutions.

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.

Harders Contract Logistics

Harders Contract Logistics is an experienced 3PL (Third-Party Logistics) provider with a proven track record of managing complex supply chains for customers from all industries. Our new state-of-the-art warehouse in Melbourne has ambient storage for 12,500 pallets, complete with an ATO underbond license, advanced Warehouse Management System and HACCP certification. Learn more here. https://harders.com.au/contract-logistics/

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