Current China Rate Situation

Dear Clients,

Our International Business Manager, Bob Bulmer, has just returned from a trip to Shanghai China during which time he met with quite a number of the major shipping lines.

This is his second trip in the recent weeks following up on negotiations held in early July with lines to try and finalise global contracts for our global forwarder network, IASA-International Air and Shipping Association. These negotiations are expected to lead to more advantageous rates for all GPSM clients, not only on China to Australia trade, but on all global trade lanes to Australia and the major global ports.

Because the concept we have presented is something totally new that none of the lines have ever been involved in before, the negotiations have been protracted and varied, each shipping line have their rules and regulations and varying requirements in order to finalise an agreement. There are some further requirements that we need to fulfil and we are working on those issues at present and we hope to have this new concept contract in place as soon as possible.

On a more general note, during the meetings in Shanghai, we were advised that more capacity is being introduced into the Japan, Korea, Taiwan, China and Hong Kong to Australia trades from late September 2016 through new shipping line alliances, expected to start operating from 1st October, 2016. The new alliances have come about as lines China Shipping Line, Neptune Orient Line and American President Lines have all be taken over by larger lines, there will be new faster services from some ports and possible twice-weekly services from some major ports when all the alliances are finalised.

The general view in the market at present is that rates in the next 4-8 weeks may increase slightly as lines try and grab back some of their lost income over the past couple of years while rates have been at record all-time low levels. These slight gains may well be short-lived when more space becomes available, all the lines will be vying for whatever business they can gain in order to fill their allocations under the new alliances.

GPSM will as always, keep all clients appraised of any further news as soon as same comes to hand.

SOLAS Container Weight Verification Requirement


The new procedures for SOLAS, Safety For Life At Sea, will be introduced by Australian Ports from Wednesday 22nd June, 2016, as advised in our previous Newsletters.

To reiterate the new requirements for all export shipments are as follows:

All weight of export cargo moved by sea MUST now be declared by the exporter before cargo is lodged at an export LCL deport or at a terminal for FCL shipments.

There are two (2) methods of weighing cargo that are acceptable:

  1. Weighing the packed container using calibrated and certified equipment.
  2. Weighing of all packages and cargo items, including the mass of pallets, dunnage and other securing material to be packed in a container and adding the tare mass of the container to the sum of the single masses, using a certified method approved by the competent authority of the State in which the packing of the container was completed.  

The shipper of a container shall ensure the verified gross mass is stated in the shipping document, this document needs to be:

  1. Signed by a person duly authorised by the shipper
  2. Submitted to the shipping line prior to delivery of container to the export port.

Operationally, GPSM will require a declaration to be signed by every shipper for every export shipment, this must be kept on file in our office for inspection by authorities if required.
We shall forward the declaration form to you and same can be submitted to GPSM by e-mail or fax, or attached to our on-line SLI form when you submit your booking.

Please note that if a weight certificate is not presented to the shipping line prior to port delivery, the container will not be loaded on the vessel.

We understand that many exporters may not have calibrated and certified weighing equipment on site, and in these cases the loaded container will need to be taken to a certified weighing facility prior to delivery to the port. The container will need to be lifted from the truck, weighed and re-loaded for re-delivery to the port.

Naturally additional costs will be involved and we estimate that a cost of approximately $ 300.00 per container may eventuate.

This is similar to the import procedure when an AQIS tailgate inspection is required and costs will be dependent on the weighing facility location and waiting time spent at the facility.

In the case of LCL shipments, a weight declaration will be required by the exporter at time of booking, the actual container weighing requirements will be handled by the cargo consolidator. Each consolidator will charge a fee per shipment for completing the SOLAS weight requirements.

To date it is unknown what action the terminals will take when a container arrives for export and the weight does not match the terminal’s measurements, even if the discrepancy is a matter of KG’S. We have made numerous enquiries and no one seems to be able to answer this question.

We shall be forwarding a copy of the declaration form to you under separate cover, please ensure your staff involved in export shipments are fully aware of these new legal requirements.

Illegal Logging Prohibition Act & Regulation of 2012

The Illegal Logging Act & regulation of 2012 make it an offence to import a timber product or to process an Australian grown raw log that has been illegally logged. As of May 2016 businesses will need to ensure that they are compliant with the regulatory requirements, and that they have done their due diligence. A statement to this effect should be provided to your customs broker to avoid delays and penalties being incurred on your imports.

China Freight Rate Changes

The China freight market continues to be very volatile with past General Rate Increases (GRI’s) in the main, not being upheld in the market.

Every month we receive flyers from shipping lines advising that rates will increase, they have been coming since early January and despite a few minor special port increases
over the past 4 months, rates have remained quite stable.

The lines are all hurting financially with many losing from tens of millions to hundreds of millions of dollars while these historically low rates are being offered. GPSM
are constantly negotiating with all lines and we hear their moaning and bleating every day.

The Free Trade Agreements now in place and level of the Australian Dollar over the past few months have certainly been a much needed boost for importers, however we all know
the ”good times” will come to an end at some stage.

We would warn of ”special rates”, even lower that current market rates, being offered in the market at present by predominately China based freight forwarders. These are known
as ”supermarket specials”, designed to get your interest, however we know from past experience they are generally only valid for very short periods.

There are a number of such flyers in the market again this week, what they do not tell you is that there are no space guarantees offered with the rates, and generally we hear
that containers booked under these rates are seldom loaded on the vessel you require.

”Rolling” of containers under these rate levels is common, particularly at a time when the shipping lines are cutting sailings from China as per below table.

China Freight Rate Changes

The delays involved can be anything up to  3 weeks at these times, so we suggest extreme  caution to avoid unnecessary delays. GPSM offer guaranteed space on booked sailings
and we are constantly working with the lines to ensure these goals are met.

We will keep you updated as further information comes to hand.