Table of Contents
Sea Freight Market Update
2023 has already seen its first casualty with Focus Container Line going into liquidation, ceasing trading between Australia and New Zealand.
We are of the opinion this may not be the last shipping line to fall prey to these difficult market conditions. We have also seen how the market can change very quickly when shipping lines can no longer sustain low freight rates, they try to influence the disparity between supply and demand by controlling their capacity via blank sailings / sliding vessels / omitting ports and re-engineering their service loops.
This does not help our valued clients as it means fewer port calls and sailings which can burden supply chains with delays in what has now become a shift back to just-in-time purchasing instead of the just-in-case model adopted in 2022.
Beneficial Cargo Owners (BCOs) are being forced by some carriers to engage in long term contracts with penalty clauses in exchange for committed volumes to sure up their vessel space utilisation.
This means that once the contract is active, an agreed allocation is set they will charge for any unused slot this is also known as “dead freight” and is being adopted by some carriers.
We have also received notices from some of the major shipping lines advising of their intentions of implementing a rate restoration to take effect on April 1st 2023 at a quantum of USD 500 per 20’ and USD 1000 per 40’ to maintain a sustainable service. This will apply to both dry and refrigerated cargoes in the base ocean freight for shipments from North East Asia to Australia.
While we do believe the North East Asia to Australia spot freight rates is at unsustainable levels it will be tough for these carriers to gain full quantum of this rate hike given the current low demand factors versus the overcapacity in this trade.
We envisage low demand factors for Quarter 2 and if carriers maintain their current supply, we will continue to see a volatile market perhaps getting worse before it recovers in Quarters 3 and 4.
Our team will ensure that you are made aware of any changes that are occurring as we navigate through difficult times as each shipping line will push their own agenda per port pairs.
45HC Containers – A Better Shipping Choice?
A small number of carriers are now offering 45 foot HC containers from China to Australia as the shipping landscape and container availability continues to improve in favour of importers.
These containers are an optimal choice for shippers of light to medium weight products who are looking for more bang for their buck as the 45HC holds upwards of 85 cubic meters worth of cargo while the standard 40HC only holds around 70 cubic meters.
Shippers need to bear in mind the weight restrictions for road transport when looking at the larger container options. Most transport carriers will allow up to 24T of cargo for a Standard truck deliver and 17T worth of cargo for a Sideloader when delivery 45 Foot High Cube containers.
If you are interested in learning more about these container types and whether they are suitable for your cargo, please reach out to your Key Account Manager to discuss further.
Landside Logistics
With Easter in a little over three weeks it’s an important reminder how this important holiday can impact heavily on terminals, trucking companies, depots, warehouses and other key service providers. We often find that the Easter period has a more impact on local logistics than Christmas and New Year.
Additional planning is the key in ensuring limited exposure to storage, back to yard charges and detention fees. Whilst some of these costs may be unavoidable, small changes to your business will assist you over this holiday period.
This may include organizing deliveries as quickly as possible after the break to ensure no further charges apply to the container and or investing in additional resources to assist the backlog of cargo moving in and out of your business over this long weekend.
Terminal Fee Update
Hutchison Ports (Brisbane & Sydney) has provided notice to industry on cost increases to landside stevedore charges effective mid-May 2023. Infrastructure fees will increase 8.1% along with other landside charges which rival their competitors’ increases which came into effect over the new year.
If you have any questions concerning these matters, please ensure you contact your Key Account Manager
BMSB Treatment Provider Suspension – Anticimex NV (BE4003SB)
The Department of Agriculture, Fisheries and Forestry (DAFF) provided advice to industry on 27th February 2023 of a treatment provider suspension on the BMSB scheme.
The treatment provider in question is Anticimex NV (BE4003SB) in Melsele, Belgium. They are no longer an acceptable provider for ongoing treatments, and those shipments treated prior to this date will require re-treatment export on arrival in Australia. No allowance is made for goods in transit.
If your agents or suppliers have used this provider in the past, please make alternative arrangements. The list of approved treatment providers is available here.
Imported Foods Notice IFN 01-23 – Listeria monocytogenes in enoki mushrooms
The Department of Agriculture, Fisheries and Forestry has released IFN 01-23 to raise industry awareness of the risk of Listeria monocytogenes contamination in importations of enoki (enokitake) mushrooms imported into Australia.
Recent overseas detections and food incident alerts relating to contaminated enoki mushrooms have been linked to illness and deaths. As a result, DAFF has placed responsibility on the importer to request evidence from the supplier that the mushrooms were produced under a food safety management system that identifies and controls foodborne hazards of concern, including Listeria monocytogenes.
The food must also be labelled in compliance with Australia’s standards and temperature controls should be in place during transport and storage to ensure that the food remains safe to eat and does not pose a risk to human health.
The full notice can be found here.
Increased intervention on bulk imported mined and chemical fertilisers from China
The Department of Agriculture, Fisheries and Forestry has observed an increase in contamination incidents in consignments of bulk imported mined and chemical fertilisers from the People’s Republic of China.
As a result, DAFF will be temporarily increasing intervention on some consignments of bulk fertilisers originating from certain Level 1 and Level 1 Gold suppliers, to ascertain the extent of supply chain risks and ongoing contamination.
The increased intervention applies to bulk ships hold consignments, presented either loose or bagged, and does not apply to containerised consignments.