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Henning Harders November 2018 Newsletter

Table of Contents

Shipping Updates

New IMO regulations

With new IMO (International Maritime Organisation) regulations in place for Shipping lines to reduce sulphur emissions 85% by the 1 January 2020 many lines are looking at rolling out cost recovery programs immediately to compensate the use of low sulphur fuels.

Today’s vessels can use fuel with a sulphur content level up to 3.5%, whereas the new global sulphur cap will be 0.5%. In doing this it will have a very significant impact on the environment and general human health. These changes do come at a cost and with the ever-increasing fuel prices coupled with the lines reducing sulphur this will flow through to the industry almost immediately. It is estimated that this will cost industry about US$60 billion each year.

Maersk, MSC, CMA-CGM, Hapag Lloyd and OOCL are already looking at recovery approaches through increased BAF (Bunker Adjustment Factors) and we may see these increases flow from 2019.

Henning Harders will be ensuring that any increases are in line with market conditions and that the lines are not profiteering from volatile fuel prices and levies. If you have any questions, please contact your Account Manager.

Peak Season

Peak season is well and truly upon us and the shipping lines are trying to keep pace with rate restorations across the board. In addition, we are advising all importers that there is now around a two to three week booking requirement with several of the main shipping lines, as well as some additional requirements on some airlines. We suggest that sea freight bookings are made around two to three weeks prior to the cargo ready date for full containers and an additional week for any LCL cargo and six to seven days prior if shipping by air. As always, the rate levels follow suit and we are already seeing a steady incline specifically in shipping rates overall. The pressure of the full sailings will also flow into the ports and we are already experiencing some delays with congestion issues. This again influences schedule integrity and increases transit times. Please ensure you contact your Account Manager early to ensure shipments are given the best chance to arrive on time.

Customs Updates

Free Trade Agreements

Australia Officially Ratifies the Trans-Pacific Partnership Trade Agreement (TPP-11)

Six countries have now ratified the TPP and this has triggered the countdown for the agreement to come into force on 30 December 2018. The first group of countries to ratify the agreement are Australia, Canada, Japan, Mexico, New Zealand and Singapore.

TPP-11 will remove most tariffs for the signatory countries. In addition to the above countries that have ratified the agreement, the TPP also includes Chile, Vietnam, Malaysia, Peru and Brunei.

The tariff reductions are expected to come into force on 30 December 2018 with additional reductions on 1 January 2019. Although Australia has bilateral free trade agreements with many of the TPP signatory countries, the TPP is expected to expand on these agreements and is expected to provide additional benefits over the other agreements.

We will provide additional information on the origin rules and documentary requirements to access the benefits of the TPP as soon as they are issued by DFAT.

DAWR Updates

Brown Marmorated Stink Bug update

With the season now in full swing we are starting to see severe impacts on industry and suppliers. In Sydney two major quarantine depots have had to temporarily close their doors to any containers requiring BMSB treatment due to the depots capacity being reached. This will no doubt be an ongoing issue that will lead to delays and additional charges for storage, lifts in the yard and container detention.

Due to the additional attendance required to ensure each container is planned and co-ordinated from document checks through to depot utilisation, Henning Harders will be implementing a special attendance fee of $45.00 levied on any applicable shipment during the BMSB period, effective immediately.

Our teams are committed to ensuring each shipment effected by BMSB measures is handled in a professional and efficient manner.

It remains to be seen how the 2019 season will impact industry given that DAWR is looking to add more countries on the target list. DAWR have now identified Austria, Bulgaria, Croatia, Slovakia, Slovenia, Spain, Switzerland, Turkey and Serbia as ‘Emerging Risk Countries’ and are already profiling shipments from these origins at a ‘low rate’ of random onshore inspections.

With depots at over capacity today, there will need to be more resources added to ensure a continual supply chain through our ports.

Landside Logistics Updates

Infrastructure Surcharges

Since DP World announced further increases in infrastructure fees at their terminal from 1 January 2019, recent representations to the Victorian State government on the significant impact of these charges through the supply chain may be starting to build some momentum with the ACCC hinting they may investigate the issues. Whilst this may not be a quick fix for importers and exporters we see it heading in the right direction and will keep you updated on any changes.

Terminal Productivity

With Infrastructure fees hot news, the ACCC released their 2017-2018 productivity report into terminals, truck turnaround times and port volumes.

  • National Truck turnaround times have improved over the past seven years from 33.9 minutes in 2011/12 to a low of 29.6 minutes in 2017/18.
  • Melbourne has been confirmed as the largest Australian port by TEU (twenty-foot equivalent) at 34.2% of total volume followed by Sydney at 34.1%. TEU count increased at all of Australia’s monitored ports with Melbourne again experiencing the largest growth in 2017/18 by 14.2%. Adelaide had the smallest growth at 2.9%.
  • Total revenue collected by the stevedores increased 6.8% to $1328 million, whilst revenue per lift fell 1.2%

Melbourne Rail Project

Continuing the Melbourne flavour, the Victorian Government has this week announced a plan with private investors to assist in funding a Port Rail Shuttle Network. This will include a ‘full on-dock’ rail solution by integrating the stevedore and the rail terminals at the port and connecting facilities at Somerton and Altona. If successful it should see more than 70,000 containers off the local roads and on the rail, hopefully with a cost benefit to industry.

In other News

EU and US Inland Trucking

Inland trucking across continental Europe and the USA is becoming more challenging due to increased activity in exports, competition in the market and the tightening of regulations.

In the USA we are seeing capacity issues, driver shortages and intermodal disruptions coupled with new regulations around Electronic logging device mandates requiring drivers to record their hours of service digitally.

Within continental Europe it is the ever-increasing export trade that is bringing autobahns to a standstill. The increase in volumes encourages foreign drivers and trucking companies to expand into Europe and compete alongside other transport providers. Well known industry insiders believe this will push trucking costs up 7-10%.

Marine Transit Insurance

In the last 24 months we have seen several incidents where customers containers and products have become subject to claims due to damage and loss. In 2016 the collapse of Hanjin Shipping saw thousands of stranded containers sitting on vessels and terminals accruing charges and holding up stock for Christmas. This year over 80 containers where lost when a container vessel hit large seas off the coast of Newcastle. These are constant reminders of risks that are taken when your goods are not insured with Marine Transit Insurance. Shipping Lines, Airlines, Freight Forwarders, Stevedores and trucking companies all have limited liability when it comes to claims on damage and loss. If you would like to know more about Marine Transit Insurance, please contact your Account Manager.


Import and Export Rules and Customs Regulations as described in this newsletter are subject to constant changes. Please check our website regularly for any updates or contact your Account Manager at Henning Harders.

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