Global Container Shortage explained

What to Do About the Global Container Shortage:

Equipment , better known as Container , shortages are just some of the headwinds Shippers , Importers and Freight Forwarders have been facing for the past 12 months.

This video explains how these shortages came about .

Bio Securities Document processing delays

We wish to make you aware that currently there are several day delays in processing documents by Bio Securities.

We have reached out to them to determine when this will be rectified , however no clear information has been provided. These delays could lead to additional charges being incurred for wharf storage, and container detention and we are monitoring the situation daily.

Sydney Port Disruptions May 2021

Hutchinson Terminal in Sydney have suspended operations this morning due to the severe weather in the port area.

DP World Empty Park at Port Botany have also suspended operations until further notice due to the high winds in their area.

Our Transport Team will keep any affected clients updated on revised arrangements as soon as the terminals re-open.

General Update – May 2021

LCL Cargo Surcharges from USA:

Cargo consolidators from USA have/will implement Container Freight Station (CFS) Congestion Surcharges for all LCL cargo received in New York/New Jersey, Chicago and Los Angeles/Long Beach facilities due to the current congestion in these facilities.

The surcharges are effective from 1st May, 2021 at a rate of USD 4.00 per cbm/1000kgs and surcharges have been added to the GPSM web rates module.

 

Montreal Port:

An on-going industrial dispute at the Port of Montreal has been thwarted by the Canadian Government passing urgent legislation that has ordered 1150 dock workers back to work immediately.

Non-compliance by either dockers or port employers carried fines of up to C$100,000 a day. The bill also provides for the appointment of a mediator-arbitrator who will have the power to impose a binding new collective agreement within 90 days.

Such government intervention was sought by increasingly anxious business circles across the country and the Ontario and Quebec provincial governments along with Canada’s 2nd largest port serving shippers in a large hinterland that includes the U.S. Midwest.

“This new turning point lets the Port of Montreal regain stability and the capability to fulfill its strategic role as a public service without long-term interruptions,” said Martin Imbleau, President and CEO of the Montreal Port Authority. This role is especially important while we are still in the middle of a pandemic.”   Port operations commenced returning to normal on Saturday 1st May, 2021.

 

Vehicle Booking Fees:

In our Newsletter dated 24th February, 2021, we announced that vehicle booking fees at Australian ports were being increased by terminal operators from 1 March, 2021.

GPSM have tried to work around the new costs of $ 40.00 per booking, and had not passed on the increase to clients. Please note the increased costs will now have to be passed on as we are unable to continue to absorb these costs.

The new costs have been added to GPSM rate portal and are being invoiced as from 1st May, 2021.

 

USA congestion:

Vessels continue to line up at USA ports resulting in continued unloading and loading operations. The volume of vessels arriving in USA has increased by 50% on the same time last year and is stretching resources and equipment to the limit.

Shippers moving goods to and from inland US points continue to grapple with delays and rail fees as the ongoing surge in freight causes congestion at nearly all North American ports, causing a ripple effect to the inland intermodal ramps.

Unprecedented volumes of cargo have overwhelmed key inland hubs such as Chicago, Dallas, Memphis and Kansas City, making it difficult for shippers to pick up from “wheeled facilities,” where arriving containers are normally mounted to chassis for truckers to pick up. With chassis shortages currently persisting at the ramps, terminals are grounding (and often stacking) those containers, resulting in demurrage fees.

“Instead of getting 30 or 40 boxes off a block of cars every day, you’re getting full trains coming in with 250 to 275 containers,” Van Noel, chief operating officer of chassis provider, TRAC Intermodal said. “Recently, we had a train arrive in Cleveland from a western railroad interchanged with the CSX with around 272 boxes on it. That’s very unusual and we’re just not fleeted for that.”

At the same time, shippers are contributing to the problem by keeping equipment longer. Like the marine ports, inland terminals depend on the returning equipment and those that are kept longer slow the unloading of inbound freight.

 

Global Equipment Shortage continues:

The stocks of empty containers globally are continuing to be depleted due to overwhelming demand, the recent Suez Canal closure only adding to the problem. Many thousands of empty containers being repositioned at that time were caught in the canal closure and are now late arriving at load ports desperate for empty equipment. In particular, USA and most European origins are extremely short of stock, leading to additional delays for bookings to be processed. Some shipping lines are advising of delays up to four (4) weeks before bookings can be confirmed.

According to industry experts, we are unlikely to see an easing of demand n 2021 given the unusually high demand for cargo bookings globally, despite the fact that some shipping have already added hundreds of thousands of new-build containers to stocks already in 2021.

 

Fremantle Tugs Industrial Action:

Svitzer (the National Tug Operator) has received notice of protected industrial action for their Fremantle operations for 24 hours  on Thursday, 6th May, 2021.

The company is working on alternate arrangements to minimise the impact on vessel arrivals and departures.

 

SUEZ BLOCKAGE – THE NEW CHALLENGES

Reports of the Suez blockage easing and shipping getting back to normal have been greatly exaggerated.

At the time of writing some 400 vessels are queuing to pass through the Canal, causing delays for shipments transshipping in South East Asia bound for Australia.

We have been advised by our International agents that , in their discussions with shipping lines YML, COSCO,HMM and EMC, they have been told these lines will cancel vessels to the Middle East and Asia and will concentrate there capacities on the Red Sea , America’s and Europe trades.

This will no doubt put pressure on equipment (containers) for the Australian trade which could force Ocean Freight rates to increase, just as Importers were seeing reductions in these rates.

We believe that the crucial date will be the 3rd week in April to gauge the extent of any increases.

Just as things were showing signs of settling down, space was becoming available and freight rates were dropping, the dramas of 2020 are starting to reappear.

We at GPSM are always mindful that shipping information to our clients is of vital importance, especially in these turbulent times. We will continue to monitor all situations and keep you updated with the most current information as it comes to hand.

Khapra Beetle update ( PLANT PRODUCTS ONLY )

Do you import PLANT PRODUCTS from a Khapra beetle Country see list below ?

Khapra beetle (Trogoderma granarium) is a destructive pest that can reproduce rapidly in stored products under hot conditions and is a significant biosecurity risk to Australia.

Khapra beetle is found throughout Asia, Africa, the Middle East and Europe. The department has identified the following countries as those where khapra beetle is present:

  • Afghanistan
  • Albania
  • Algeria
  • Bangladesh
  • Benin
  • Burkina Faso
  • Côte d’Ivoire (Ivory Coast)
  • Cyprus
  • Egypt
  • Ghana
  • Greece
  • India
  • Iran, Islamic Republic of
  • Iraq
  • Israel
  • Kuwait
  • Lebanon
  • Libya
  • Mali
  • Mauritania
  • Morocco
  • Myanmar
  • Nepal
  • Niger
  • Nigeria
  • Oman
  • Pakistan
  • Qatar
  • Saudi Arabia
  • Senegal
  • Somalia
  • South Sudan
  • Sri Lanka
  • Sudan
  • Syrian Arab Republic
  • Timor-Leste
  • Tunisia
  • Turkey
  • United Arab Emirates
  • Yemen

 

Are these goods High risk plant products ?

Product

Tariff item code

Rice (Oryza sativa)

1209, 1006

Chickpeas (Cicer arietinum)

1209, 0713, 1106

Cucurbit seed (Cucurbita, Cucumis, Citrullus spp.)

1209, 1207

Cumin seed (Cuminum cyminum)

1209, 0909

Safflower seed (Carthamus tinctorius)

1209, 1207

Bean seed (Phaseolus spp.)

1209, 0713, 1106

Soybean (Glycine max)

1209, 1201

Mung beans, cowpeas (Vigna spp.)

1209, 0713, 1106

Lentils (Lens culinaris)

1209, 0713, 1106

Wheat (Triticum aestivum)

1209, 1001, 1104, 1103, 1101

Coriander seed (Coriandrum sativum)

1209, 0909

Celery seed (Apium graveolens)

1209

Peanuts (Arachis hypogaea)

1209, 1202, 0713, 1106

Dried chillies/capsicum (Capsicum spp.)

09

Faba bean (Vicia faba)

1209, 0713, 1106

Pigeon Pea (Cajanus cajan)

1209, 0713, 1106

Pea seed (Pisum sativum)

1209, 0713, 1106

Fennel seed (Foeniculum spp).

1209, 0909

 

The following exclusions apply:

  • goods that are thermally processed that are commercially manufactured and packaged such as retorted, blanched, roasted, fried, par-boiled, boiled, puffed, malted or pasteurised goods
  • goods that are chemically processed and preserved such as with a Formalin Propionic Acid fixative, Formalin Acetic acid alcohol, Carnoy’s fixative or ethanol.
  • fresh vegetables
  • commercially manufactured frozen or freeze-dried food (perishable foodstuffs only)
  • frozen plant samples for plant research (including through the use of liquid nitrogen and freeze drying)
  • oils derived from vegetables or seed
  • Preserved or pickled (such as in vinegar or alcohol)
  • goods that have been refined or extracted to obtain specific components from plant-based raw materials. Examples include starch, lecithin, protein, cellulose, sugars and pigments.

Are these goods other risk Plant products ?

  • Seeds (all species, excluding those listed as high-risk plant products)
  • Spices (all species, excluding those listed in high-risk plant products)
  • Plant gums and resins (except those chemically extracted or highly processed)
  • Meals and flours of plant origin (all species, excluding those listed in high-risk plant products)
  • Dried fruits
  • Nuts (all species, excluding those listed in high-risk plant products)
  • Dried vegetables
  • Unprocessed plant products (excluding fresh fruits, vegetables, nursery stock, herbarium specimens, fresh cut flowers).

The following exclusions apply:

  • goods that are thermally processed that are commercially manufactured and packaged such as retorted, blanched, roasted, fried, par-boiled, boiled, puffed, malted or pasteurised goods
  • goods that are chemically processed and preserved such as with a Formalin Propionic Acid fixative, Formalin Acetic acid alcohol, Carnoy’s fixative or ethanol.
  • fresh vegetables
  • commercially manufactured frozen or freeze-dried food (perishable foodstuffs only)
  • frozen plant samples for plant research (including through the use of liquid nitrogen and freeze drying)
  • oils derived from vegetables or seed
  • Preserved or pickled (such as in vinegar or alcohol)
  • goods that have been refined or extracted to obtain specific components from plant-based raw materials. Examples include starch, lecithin, protein, cellulose, sugars and pigments.

Is the final delivery of goods going to a Rural Grain growing Area ?

If you have answered yes to any of these questions then you goods are subject to MANDATORY TREATMENT PRIOR TO SHIPMENT

 

Treatment options and rates for plant products

In cases where treatment is required for plant products (refer to Phase 3 and 4 of the urgent actions), one of the approved treatment options listed below must be used.

 

Methyl Bromide Fumigation

The goods must be fumigated with a dose of 80 g/m³ or above, at 21°C or above, for a minimum of 48 hours. The fumigation must be conducted in accordance with the Methyl Bromide Fumigation Methodology, including end-point retention and dose compensation requirements.

 

Heat Treatment

The goods must be heat treated at 60°C or higher (measured at the core of the goods) for a minimum of 120 minutes. The treatment must be conducted in accordance with the Heat Treatment Methodology.

For further information please see below link

https://www.agriculture.gov.au/pests-diseases-weeds/plant/khapra-beetle/sea-container-measures

Attachment(s):

Khapra beetle phase 6a summary flowchart

Sydney Port Congestion Surcharge

Industry body, FTA-Freight and Trade Alliance has been lobbying Shipping Lines, ACCC and Government on the above surcharge, questioning why it is still being imposed when all industrial action by the two (2) major terminals has been resolved and vessel movements in and out of the port have improved dramatically over the past month.

Good news has now been received from Maersk Lines and Hamburg-Sud advising that they are removing the surcharge effective from 15th March, while Hapag-Lloyd have overnight announced they will remove their surcharge effective from 22nd March, 2021.

It is expected other shipping lines will follow suit in the coming days, GPSM will keep all clients advised as soon as further details are received.

Industrial issues resolved

Industrial Issues Resolved:

DP World Terminals have confirmed that the Enterprise Bargaining Agreements with Australian Waterside Unions have nows been finalised, ending further industrial unrest at DP World Terminals in Melbourne, Sydney, Brisbane and Fremantle ports.

As well as announcing the long awaited finalisation of their Enterprise Agreement, DP World has made the following important declaration:

“In addition to finalising agreements, we are proud that we have been able to provide you with a reliable service. Over the past five months, DP World Australia has enjoyed zero industrial action at our East-Coast terminals.

This stability has enabled the resumption of pre- bargaining levels of productivity and reduced congestion in the Australian network

All our terminals are operating normally and without berthing delays. We will continue to accept subcontracts, ad hoc callers, and above contract exchanges which includes empty container repositioning.”

 

Shipping Line Surcharges/Empty Container Detention:

Our Industry Groups are now calling on Governments to investigate the congestion surcharges and empty container detention charges.

Industry body, Freight & Trade Alliance (FTA) haveissued the below statement:

“Based on this advice, our state / federal regulators (including the Productivity Commission and the Australian Competition and Consumer Commission) must now scrutinise the validity of shipping lines administering:

  • congestion surcharges on exporters and importers of up to USD 350 per TEU;
  • container detention penalties for ‘late’ dehire of empty containers and refusal to compensate importers for the cost to staged empty container movements when shipping line contracted empty container parks are at capacity”.

 

VICT Melbourne Industrial Dispute:

Further to our Newsflash last week, VICT Melbourne Terminal have advised that The Fair Work Commission have issued an Interim Order suspending industrial action which was due to start Saturday 20th February, 2021.

VICT sought Fair Work Commission intervention, citing economic and other harm threatened by the action.

A mid-March hearing will be scheduled, in the meantime, no further industrial action will be undertaken.

Updated Rates and Surcharges

Airline Handling Fees:

Airline Cargo Terminals have reviewed their Australian handling charges for 2021 and have announced that handling Charges will increase from 1st March 2021 to below levels:

  • Arline Airwaybill Fee               AUD 60.00/airway bill
  • Airline Handling Fee                AUD 0.59/kg, Minimum AUD 59.00
  • International Terminal Fee        AUD 0.20/kg, Minimum AUD 50.00

 

Port Infrastructure Levies:

Australian Port Terminals are set to again increase their charges on import containers into below Australian ports.

The new charges, while being vehemently disputed by freight forwarders, trucking companies and industry representatives with both the operators and various State and Federal Governments, will add additional costs to trucking company operations.

The new charges will be applied from 1st March, 2021:

Sydney:

Side-Loader Trailer Access Fee     AUD 80.00/container

Port Infrastructure Levy                 AUD 140.00/container

 

Melbourne:

Port Vehicle Booking Fee               AUD 40.00/container

Port Infrastructure Levy                 AUD 155.00/container

 

Brisbane:

Port Vehicle Booking Fee               AUD 40.00/container

Port Infrastructure Levy                 AUD 155.00/container

 

Fremantle:

Port Vehicle Booking Fee:               AUD 40.00/container

Port Infrastructure Levy                   AUD 75.00/container

 

Industry bodies are currently lobbying State and Federal Governments in order to end these continual cost increases, further approaches are underway in lobbying Governments to also implement an enquiry into Port Congestion Surcharges, Storage Charges and Empty Equipment Detention Fees being levied by Shipping Lines.

 

IMO 2020 Low Sulphur Fuel Surcharge:

MSC Lines have announced a change to their above surcharge from 1st March, 2021, the new levels will be applied as follows:

From North East Asia to Australia/NZ         USD 30.00 per 20ft container, USD 60.00 per 40ft container

From South East Asia to Australia/NZ         USD 41.00 per 20ft container, USD 82.00 per 40ft container

OOCL Line has also revised their surcharge as follows, effective from 1st March 2021:

From North Asia to Australia/NZ         USD 45.00 per 20ft container, USD 90.00 per 40ft container

From South East Asia to Australia/NZ         USD 26.00 per 20ft container, USD 52.00 per 40ft container

 

Peak Season Surcharges:

CMA-CGM and ANL Line have announced a Peak Season Surcharge will be implemented from all North European ports (excluding Spain and Turkey) effective from 1st March 2021 at a level of USD 200.00/20ft and USD 400.00/40ft container.

MSC Line have announced a Peak Season Surcharge will be implemented from all European, UK, Baltic and Mediterranean origin ports effective from 8th March, 2021 at a level of USD 250.00/20ft and USD 500.00/40ft container.

All above rate variations will be added to GPSM web rates.

Melbourne Industrial Action

Melbourne Port Industrial Action:

The Maritime Union of Australia has notified VICT Terminal (Australia’s only fully automated facility) of impending industrial action , with a series of full shift work-bans and stoppages beginning today Tuesday, 16th February, 2020.

The bans go beyond full shift stop-work directives and include threats to impose old-fashioned over-manning and restrictive work practices on VICT, directly undermining the competitiveness the terminal derives from its automated technology and modern way of working.
With no update from the MUA today, Tim Vancampen, CEO of VICT, said he was amazed the MUA would even consider this sort of attack while the Victorian economy was already at a standstill owing to its third lock-down.
“VICT accounts for a third of Victoria’s container freight. The union is directly attacking VICT’s unique way of working as a modern, automated terminal. They want to take us back to the past, no matter the cost or the ill-considered timing in the context of the lockdown.
“This campaign won’t produce the extra jobs, massive pay rises and fewer hours the Union has promised our employees. All it will do is undermine VICT’s competitiveness and threaten the benefits of port automation for Victoria and for the Port of Melbourne,” he said.
“If the MUA was serious about representing VICT employees’ interests it would seek to protect their modern jobs, not jeopardize them,” he said.

The stoppages and bans include:

  • A Four (4) hour stoppage already planned on Tuesday 16th February, 2020.
  • A stop work for a full 12-hour shift on Friday, 19 February, commencing 6:00pm.Further 12-hour shift bans are threatened for Sunday, 21 February at 6.00 am, following immediately by a 24-hour ban commencing at 18.00, 21 February – therefore incurring a 36-hour concurrent stoppage of all VICT’s operations and equipment maintenance.
  • From Monday February 22, VICT’s control room will be banned from operating cranes unless the operations of each crane is manned by a dedicated quayside supervisor.
  • An indefinite ban on overtime, various restrictions on communications phone use and bans on interaction with anyone outside Australia.

The industrial action will seriously impact container movements in and out of the port and no doubt lead to additional congestion and vessel delays at a time when Australia’s ports are still recovering from unprecedented congestion and vessel delays.