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Waterfront industrial action and the snowballing effects it has on shipping delays

Update from 10. September 2020
The impact of the waterfront industrial action is increasing with disruption to vessel schedules and delays in unloading of vessels.

Currently, shipping lines are omitting Sydney port for some vessel routings and choosing to discharge Sydney containers at other ports. On some examples, the vessels are changing the routing of the vessel to call other ports first before returning to Sydney. 

To understand the impact of such a routing change, the vessel Pusan C had an original eta Sydney of 10 September. The vessel will now be discharging Melbourne first on 14 September before returning to Sydney to discharge the 23 September.

Sydney empty container crisis

Update from 11. September 2020
The management of empty containers in Sydney continues to worsen.

There are a variety of conditions by empty container park operators. The operators are closed to 40’ containers, all types with an expectation they will resume accepting 40’ equipment next week. This is not yet confirmed.

20’ equipment is being accepted with varying conditions. At some empty container parks, only specific containers are allowed. At other parks, they are allowing 20’ equipment returns, with this limited to the capacity of the empty park operations.

Melbourne empty container parks are reporting capacity concerns. We are closely monitoring this situation.

Vessels are omitting Sydney due to the port congestion which in turn will impact the ability to evacuate empty containers from Sydney port.

We continue working closely with our trucking yards to store your empty containers.  This requires additional transport back to yard, container lifts in/out and storage activity costs.  We predict the trucking yards across Sydney will also reach capacity soon and continue to look to the shipping lines for their solution to manage empty containers returns.

Update from 10. September 2020
The management of empty containers in Sydney is now at a critical point.

Empty container parks are at capacity and unable to accept the de-hire of empty import containers.

We understand the shipping lines need to reposition empty containers out of Sydney is heavily impacted by weather, berth and container terminal congestion and stevedore industrial action. These factors have impacted the shipping lines in evacuating empty containers to ease the critical congestion.

The impact to the logistics chain is significant. FCL Transport yards are now being used as temporary Empty Parks awaiting space or redirection of empty containers.

This required activity adds transport, lifting and storage costs to the management of your empty containers. 

We understand the shipping lines are planning for dedicated vessels calling Sydney to evacuate empty containers. We will share updates as they are confirmed.

Sydney Port Congestions Surcharge – MSC and ANL CMA CGM

Update from 11. September 2020
Mediterranean Shipping Company (MSC) overnight have rejected the industry challenge to their  Sydney Port Congestion Surcharge stating:

“MSC has announced to customers that it is introducing a temporary charge to compensate for costs related to the widely-reported congestion and productivity situation at the port of Sydney. We thank our customers for their understanding and patience in relation to this and we hope that the port situation will soon return to normal.”

ANL CMA CGM overnight have released advice to introduce their own ‘Emergency Port Congestion Surcharge (PCS)’ of USD 285 TEU effective 17 September 2020 for cargo from / to Sydney- applicable until further notice.  (US trade lanes to commence from 10 October 2020). 

Our industry body FTA / APSA have escalated the situation to the Australian Competition and Consumer Commission (ACCC) to investigate any breach of competition law.

Update from 10. September 2020
A notice published by Mediterranean Shipping Company (MSC) dated 9th September 2020 advise their introduction of a US 300 per TEU congestions surcharge imposed on imports and exports through Sydney Port as a result of industrial action. The effective date of this surcharge is 14 September 2020 (US Trade lanes to commence 8 October 2020)

Our industry body has challenged the surcharge and we await a formal response from MSC. We will share any developments with MSC or other Shipping Lines following suit.

Container Detention

Update from 10. September 2020
With the crisis of empty container parks being full, re-directions, storing, transport and container detention costs are the result of this fluid situation. It is publicised, shipping lines are not granting blanket extensions to container detention free periods for this crisis.

Transport yards will reach capacity shortly and other ports are reporting empty container park capacity concerns.

We are continuing with our additional requests to shipping lines for extension to your detention free time. This is a per container/shipment application to ensure we have requests in place for you should the shipping lines agree to accommodate extensions.

We will update you as we learn more of the shipping lines position on container detention free time extensions.

Europe Update: Equipment Imbalance, Rates

Update from 10. September 2020
There is a shortage of both refrigerated (reefer) and dry containers in some European ports, with the equipment stuck in empty container depots around Asia and in other parts of the world.

Carriers have announced a series of freight all kinds (FAK) rate increases on trades from Northern Europe and the Mediterranean to Australia starting in September/October. Other charges, including peak season surcharges, booking cancelation fees in some regions, detention and demurrage charges, and inland haulage rates are also rising across Europe.

Consignees need to prepare for rising costs due to container shortages and several rate increases and surcharges due to demand outweighing supply on the southbound trade. Both direct and transhipment services vessels are running at over 100% capacity, with several weeks waiting time in Asia, in the case of some transhipment services.  This is likely to remain the case throughout Q4 2020.

Asia Update: Rates, Capacity, Delays, Equipment

Update from 10. September 2020
Freight rates continue to increase, after an onslaught of General Rate Increase (GRI) each month since China exited lockdown earlier this year. The trade has announced another GRI planned for 1st October of US$300 / TEU.

South China, in particular, continues to face serious overbooking by all carriers, with some lines not releasing FAK bookings until early October. We are aware of approx. 600 TEU being rolled by some lines, per sailing.

The fortnightly Peak Season service by ANL/COSCO/OOCL appears to have brought little relief. Despite the vessels being small, of approx. 2800 TEU in size, they will only accept bookings on freight all kinds (FAK) basis. No Named Account bookings or discounting is available.

We are aware of 2 to 3 week delays in transhipment ports such as Shanghai, Ningbo and Singapore – particularly in the instances of cargo originating in smaller Chinese ports.

We have been informed of a shortage of 40’GP and 40’HC equipment in Qingdao, Xingang, Dalian, Xiamen and Shenzhen ports.

Rather ironically, we are advised of a blank sailing planned by the Evergreen consortium due to “weaker demand”. This will take effect during the Golden Week holiday in October. It is unclear if COSCO/OOCL/ANL consortium will follow suit, however this will place further pressure on already overbooked services.

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