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Henning Harders November Newsletter

Table of Contents

Landside Logistics

DP World 
This month has seen multiple disruptions impacting all DP World terminals across the country as industrial action continued and the terminal suffering from a cyber security incident which forced the shutdown of all its operations for over three days. 

The cyber incident which struck the terminal on Friday 10th November halted all operations until DP World could further investigate and test internal systems to ensure the integrity of data, systems and operations. By Monday morning the 13th of November operations where slowly getting back online with some 5000 import containers being moved off the terminal by close of business that day. 

DP World expected backlogs of 2-3 weeks due to the combination of the outage and industrial actions as trucking companies work around the clock to evacuate containers for urgent Christmas stock and to avoid shipping line detention.

Henning Harders Cargo Insurance

The flow-on effects of these disruptions include;

  • Exporters unable to fulfill their contracts due to containers unable to meet vessel cut offs.
  • Increased costs incurred by transport providers being expenses for additional shifts over the weekends and nights. There is an expectation that transport providers will recoup additional costs which have impacted their business.
  • Shipping line detention being levied without any relief for late return due to the delays.

As the industrial action continues, Industry is calling for the Federal Government to intervene under the Fair Work Act where further action will threaten or could threaten to cause significant damage to the Australian economy. Reports are that these actions are causing up to 23 million dollars per day in economic harm.

DP World Landside Charges
To further complicate matters around the terminal, DP World announced this month that they will increase their landside charges. From the 1st January 2024 the following changes will have a direct result on importers and exporters.

  • Terminal Access Charges / Exports to increase 52.52% in Melbourne, 38.80% in Sydney and 37.50% in Brisbane.
  • Terminal Access Charges / Imports to increase 21.22% in Melbourne, 25.49% in Sydney and 26.18% in Brisbane.
  • VBS (Vehicle Booking System) charges, will also be increasing in Melbourne, Sydney and Brisbane by 35.65% and Fremantle by 49.74% respectively.

Justification of such exorbitant increases include a forecast of $600m in capital expenditure from 2023 to 2026 across its four terminals nationwide.


Airfreight Market Update

Volume levels remain stable, with a minor month-over-month increase.

Moderate demand strength, with slight improvement in Q4 2023.

Market rates remains competitive, slight increase on specific lanes as a surge of e-commerce goods for approaching festive season however, Airfreight rates continued to rise last week as weather conditions, volcanic activity and wars put capacity under pressure.

Qantas terminal operations in AU is back to normal after major service delays in late September – mid October.

We have weekly consoles from USA and Europe 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

The raft of blank sailings introduced last month, which helped to produce the highly anticipated peak season, has sparked continued challenges in supply chains, as demand finally out paces available supply.

DP World’s ongoing industrial action and the recent cyber-attack have exacerbated the situation, resulting in several shipments being delayed or rolled over. Supply chain disruptions and increased costs have resulted from these interruptions.

The Northeast Asia to Australia market, which has seen the largest surge in demand this month, appears to be slowing down in the first half of December. 

Despite this slowdown during the holiday season, the Australian market is not expected to cease entirely, unlike in previous years prior to the COVID-19 pandemic. 

It is now anticipated that a portion of November orders would ship in the second half of December, following the holidays so as not to conflict with business closures common for this time of year.

Shipping lines will react to market conditions by imposing further cuts to capacity and cancelling voyages. It is expected that approximately 7 blank sailings will be imposed via various consortiums over the next 5 weeks.

This will create a shortage of space which will give the shipping lines confidence to implement further rate increases.

We therefore can confirm that carriers will introduce another rate rise of USD 150 per TEU via a Rate Restoration (RR) from Northeast Asia to Australia and New Zealand on December 15th in response to this surge in demand. All factors are pointing to a high probability that these increases will gain momentum.

Moving forward, the pre-Chinese New Year rush will commence in January, which will likely result in continued volatility in the Northeast Asia to Australia and New Zealand market over the next four to six weeks. 

On the East-West head haul trades of the Transpacific, Trans-Atlantic, and Asia to North Europe and the Mediterranean rates have seen on average a 6% drop this week.

With additional capacity re-entering the market, the rise in freight rates following the November rate increases caused a setback, with carriers reducing rates mid-month on these larger trades. These additions are likely to undermine the capacity cuts made earlier and will significantly add to the downward pressure on freight rates.

However, it is certain that the Northeast Asia to Australia and New Zealand market will not experience a decline until the Chinese New Year holidays begin as carriers push to increase rates again in early January 2024. 

We will continue to see an ever-changing pricing cycle as shipping lines adjust their freight rates to suit their needs.

We therefore continue to encourage our valued clients to send forecasts to our team as early as possible and ensure sufficient planning of shipments. Lead times of two to three weeks will remain pivotal in ensuring desired schedules are obtained.

Our team of professionals will remain dedicated to providing customised solutions to our esteemed clients to tackle the challenges that arise and minimise delays.


Offshore BMSB Treatment Providers Scheme

Providers Suspended:
The Department of Agriculture, Fisheries & Forestry (DAFF) has advised industry that the following fumigation providers in Singapore have been suspended from the Offshore BMSB Treatment Providers Scheme as a result of a critical non-compliance.

Singapore

Change Date    AEI                   Name

7 Nov 2023       SG4010SB        Ensure Pest Control & Fumigation

7 Nov 2023       SG4016SB        Fumigation Pest Management

Vietnam

Change Date    AEI                   Name

16 Nov 2023      VN0005MB        Termite Control and Fumigation Company – Hai Phong Branch

21 Nov 2023      VN0004MB        Nam Viet Fumigation Joint Stock Company

22 Nov 2023      VN0032MB        Davicontrol Cantho Branch

23 Nov 2023      VN0017MB        Viet Nam Control Inspection Fumigation Joint Stock Company

23 Nov 2023      VN0019MB        Viet Nam Control Phu My Branch

Fumigation certificates completed by these providers since the suspension dates will not be accepted by the department, and consignments arriving treated by these providers will be directed for fumigation onshore to manage the biosecurity risk. This includes certification issued before each provider’s change in status.

To avoid unnecessary delays and costs, importers should request that their suppliers monitor the Registered Treatment Providers list on the DAFF website to ensure a valid treatment provider is used.

If you have any questions related to BMSB treatments, please contact your Key Account Manager or Harders Advisory.


Imported Foods

Regulatory Changes for Sports Supplements
The Department of Agriculture, Fisheries & Forestry has released Imported Foods Notice IFN 16-23, advising importers and brokers of regulatory changes for sports supplements in tablet, capsule or pill form.

With effect from 30 November 2023, products for the improvement or maintenance of physical or mental performance in sport, exercise or recreation activity, that are supplied in a dosage form of a tablet, capsule or pill, will be required to be registered as a therapeutic good (medicine) with the Therapeutic Goods Administration (TGA). Products containing only glucose are exempt from this measure.

Sports supplements will be captured under the Imported Foods Inspection Scheme from 30 November 2023, and referred to TGA under the new requirement. Manufacturers and importers may decide to withdraw their sports supplements from the market or have the product reformulated to be considered as a food rather than a therapeutic product.

Sports supplements that meet the requirements of the Food Standards Code and presented in different forms will not be affected by the change. This includes products such as protein powders or bars and energy drinks.

Further information may be found here, or by contacting Harders Advisory.


New Packaging Regulations

Australia’s Bold Step Towards Sustainability
Australia faces a pressing challenge with its escalating solid waste production, which surged by 10% in the 2018-19 period, reaching a staggering 75.8 million tonnes. Disturbingly, 9% of this waste comprised packaging materials, totalling 6.74 million tonnes. In response to this environmental crisis, Australia is pioneering transformative regulations within the packaging industry, aiming to curb waste generation and bolster recycling rates.

With the commitment to achieve a circular economy for packaging by 2025, the Australian government is aligning its efforts with global sustainability goals, including the United Nations Sustainable Development Goals and the Paris Agreement on climate change. The new regulations, scheduled for phased implementation starting July 2023, herald a comprehensive approach encompassing the design, production, use, and disposal of packaging materials.

Integral to these regulations is the mandate for incorporating recycled content in packaging, accompanied by ambitious targets to boost the proportion of recycled materials in production. This initiative not only spurs demand for recycled materials but also drives the growth of the recycling and reprocessing sector within Australia.

Currently only 86% of packaging waste possesses good recyclability, leaving a substantial portion to either contribute to harmful landfills or endanger ecosystems as litter. To rectify this, the upcoming regulations will enforce stringent design standards, ensuring that all packaging becomes reusable, recyclable, or compostable by 2025. This bold move is anticipated to diminish the volume of packaging waste and augment the availability of high-quality recyclable materials.

A crucial facet of the regulations involves the phasing out of hazardous chemicals, particularly the PFAS family, prevalent in food packaging. Known for their persistence and accumulation in the food chain, these substances pose significant threats to human health, the environment, and wildlife. The regulations outrightly ban the use of such chemicals, compelling the industry to embrace safer alternatives.

Beyond the physical packaging, the regulations outline a roadmap for the uniformity of kerbside waste collection nationwide, enhancing the overall efficiency and effectiveness of the waste management system. This standardised approach ensures that all Australians enjoy equal access to convenient packaging waste disposal services.

These new regulations introduce a groundbreaking framework for recycled content traceability, empowering businesses and consumers to track the origin and destination of recycled materials in packaging. This transparency fosters accountability within the packaging industry and allows consumers to make informed choices about the environmental impact of their purchases.

Anticipated benefits extend across the Australian economy, environment, and society. Projections include the creation of over 50,000 jobs and a revenue exceeding $15 billion in the recycling and reprocessing sector by 2025. The initiative is also expected to reduce greenhouse gas emissions and energy consumption, saving over 5 million tonnes of CO2 equivalent and 36 petajoules of energy annually.

Crucially, the regulations aim to safeguard public health by preventing over 2,000 cases of cancer and 1,000 cases of thyroid disease annually by 2025. Simultaneously, they bolster the global competitiveness of Australian businesses in sustainable products and services, potentially increasing market share and profitability.

Perhaps most strikingly, the regulations aspire to mitigate the environmental impact of packaging waste, preventing over 1 million tonnes of plastic from entering the ocean and sparing more than 100,000 animals from injury or death annually by 2025. The new packaging regulations signal a transformative shift towards sustainable packaging practices and a brighter, cleaner future.

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