Author: GPSM

The Effects of Container Shortage in 2020 and the reasons why there have been large Ocean Freight increases and Vessel Delays.

Hello, we hope you all had safe and happy Xmas celebrations.

This video explains , in an easy to understand method , some of the reasons why shippers are seeing large increases in Ocean Freight rates and vessel delays . It is interesting to note that , whilst the trade lanes in this video are not relevant to Australia, the circumstances and the fall out is being felt across all international supply chains.

We hope you enjoy this 10 minute video.

Department of Agriculture, Water And Environment (DAWE / Quarantine) Shipment Processing Delays:

We have been experiencing significant delays in the processing of shipments subject Quarantine and Imported Foods.

Please see Notice we received from our Industry Body explaining the situation.

Basically the Department is processing the documentation in ETA order and are taking 5-8 days to process.

This results in Storage at wharf and in some cases Container Demurrage.

If you wish to discuss this matter please feel free to call our Customs Department.

Please see attached email from Freight & Trade Alliance in regards to this matter.

 

 

JOIN THE ALLIANCE Who does this notice affect? Importers, customs brokers and freight forwarders Department of Agriculture, Water and the Environment – Industry Roundtable  As outlined in our member notice from 27 November 2020, Freight & Trade Alliance (FTA) representatives met with  Andrew Tongue, Deputy Secretary, Biosecurity & Compliance Group, and Lee Cale, Acting First Assistant Secretary Biosecurity Operations from the Department of Agriculture, Water and the Environment (the department) to discuss the performance levels in a number of services. As a result of this engagement, the department yesterday (22 December 2020) hosted selected industry bodies in a roundtable discussion led by Colin Hunter, the department’s First Assistant Secretary of Biosecurity Operations Division. This is the first in what will become a regular series of industry engagements Mr Hunter committed to chairing. Current operational environment The complexity of the current operational environment was discussed at length with the department keen to gain an understanding of current and evolving trade patterns, recognising that international container trade changes induced by COVID-19 are having a compounding impact on pest and disease arrivals. The combination of waterfront industrial action causing vessel arrival delays, COVID-19, vessel bunching, vessel port omissions, high volumes of low value imports and the need to respond to incursions of Brown marmorated stink bug (BMSB) and Khapra Beetle was described by the department as the “perfect storm” with acknowledgement that their existing resources are stretched and have struggled to meet prescribed service levels over recent months. Reform With a cap on Average Staffing Levels (ASL) to be retained, the department acknowledged a need and a desire to work with industry to progress a series of reforms including improved technology and an increased scope / utilisation of Approved Arrangements. The department noted that a need exists to support such arrangements with assurance and verification measures to reward industry with incentives to maintain high levels of compliance for safeguarding against import biosecurity risks. The department committed to partner with industry through co-designed approaches to better manage biosecurity risks. Reference was made to other initiatives underway (booking tool, document assessment automation, ‘smart glasses’ for inspections, etc) with a commitment made by Mr Hunter to present detail on these and other proposed reforms in the new year in a structured and interactive format. While noting that most of the above listed operational issues are outside the direct control or making of the department, they will continue to divert essential resources to service the import trade sector that would otherwise be deployed to airports and are committed to several lodgement and assessment systems changes for early in 2021. Escalated advocacy Whilst we acknowledge the efforts of the department to work with industry, it is evident that the lack of funding that is hampering their ability to adequately resource its various activities and is having dire consequences across not only the customs broker / forwarding industry but also heavily impacting on commercial business to meet their obligated contracts with their customers. As a result, importers can expect a continuation of commercially unacceptable document assessment, treatment result advice and inspection service levels for the foreseeable future with a forecast of sustained high trade volume. FTA representatives will be escalating concerns with government including scheduled engagements in Canberra during the first Parliamentary sitting week of the year in February 2021. FTA will continue to keep members informed on developments. Paul Zalai –  Director and Co-Founder, FTA / Secretariat, APSA

Australian Port Charges:

Shipping Lines have announced an increase in Australian Port Charges, effective from 1^st January, 2021.

Increase quantum vary from line to line but generally the costs will increase by $ 30.00 to $ 60.00/20ft and $ 60.00 to $ 120.00/40ft for General Purpose containers.

The increase in costs also include recently announced shipping line documentation fees.

The new rates will be updated to GPSM website accordingly.

It is expected that consolidators will also increase port charges for LCL cargo, the increase is expected to be around $ 3.00 per cbm/1000kgs to $ 5.00 per cbm, GPSM rates will be updated to reflect the new costs once revised costs are confirmed.

 

LCL Rates from USA to Fremantle:

Consolidators in USA have announced a general rate Increase of USD 4.00 per cbm/1000kgs effective from 15th January, 2021 for all LCL cargo from USA to Fremantle.

GPSM web rates will be adjusted accordingly.

 

Peak Season Surcharge from Europe/Mediterranean/Blacks Sea Ports to Australia/New Zealand ports: 

Hapag-Lloyd Line have announced a Peak Season Surcharges from North Europe, Mediterranean and Black Sea ports to Oceania (Australia/New Zealand) ports effective 1^st January and valid until 31^st January, 2021 of USD 400.00/20ft and USD 800.00/40ft container.

Consolidators in The Netherlands will implement a Peak Season Surcharge of EUR 14.00 per cbm/1000kgs from 1^st January, 2021 as a result of increased costs from Shipping Lines, GPSM web rates will be updated accordingly.

 

Lyttleton Port Infrastructure Levy:

Effective from 1^st January, 2021, Lyttleton (NZ) Port will implement a Port Infrastructure Levy of NZD 50.00 per container for all import and export containers passing through the port.

 

Australian Tollway Charges:

Tollway charges have been increased in Melbourne from 1st December, 2020, GPSM will implement the increased costs from 1st January, 2021 with increases of approximately $ 5.00 to $ 10.00 per container being applicable.

Protected Industrial Action (PIA) at DP World Fremantle

The Maritime Union of Australia (MUA) has given further notice to DP World Australia (DPWA) of PIA at DP World Fremantle, encompassing work restrictions and additional bans.

The effect of the work restrictions includes various bans on employees working in tasks above their normal grade, overtime, shift extensions, accepting late call-ins and ceasing advanced or delayed start times.

DPWA have advised they remain committed to reaching a new Enterprise Agreement that delivers improved productivity and they will keep us updated as they progress.

The latest update of the PIA and how it may impact you is detailed below.

• Ban on the performance of work on all vessels from 6am on 25 December until 2pm on 27 December
• Ban on the performance of work on all vessels from 10pm on 27 December until 10pm on 28 December
• Ban on the performance of work on all vessels on day shift from 6am from 29 December for indefinite period
• Ban on the performance of work on all vessels from 2pm on 1 January until 2pm on 2 January
• All terminal operations will be stopped during these hours.
• Work restrictions apply.

The above industrial action will have an effect on all deliveries from Fremantle port, our Transport Team will keep all affected clients updated during this period.

Maersk Line withdraws Detention Holiday on 40ft Equipment:

Maersk Line have managed to repatriate a large volume of empty 40ft equipment over the last few days and are now able to accept empty 40ft containers at their Sydney Container parks.

Sydney Empty Container Parks:

Generally most empty container parks in Sydney are close to 100% capacity at present, with a number of locations still unable to accept empty equipment.

This is making our job as container truckers extremely difficult and adding a whole new level of truck/trailer management to our daily tasks. In many cases it is far more cost effective to return the empties to our yard than leaving them on customer’s sites, hopefully the Transport team can manage to return the empties through their close contacts in various parks and terminals.

Extra costs are involved in returning to our yard but much lower than dropping at destination then returning at a later date to start the redelivery process from scratch.

Melbourne Empty Equipment Issues:

Container logistics congestion in Melbourne is at a critical level, with empty container stocks building and significant landside delays being experienced.

November 2020 was another record month for total container throughput (full and empty) with 295,022 TEU – 12% above November 2019.

Worryingly, the ratio of TEUs imported into Melbourne (full & empty) compared with the number of TEUs exported (full & empty) shows a surplus for November alone of over 21,000 TEUs.

Empty container evacuations were up markedly in November – demonstrating that shipping lines are making efforts to reposition empties overseas where there is a shortage of stock.

Despite this, the evacuation rate has not been enough to counter the import surge. This translates into operational congestion at Melbourne’s empty container parks, and in transport yards, as full and empty containers need to be juggled and double-handled.

Brisbane Chaos at Empty Parks:

There’s little cheer in the Port of Brisbane in the lead up to Christmas with appalling landside service performance at Hutchison’s Brisbane Container Terminal (BCT), and truck turnaround time delays also at Patrick Brisbane Autostrad Terminal.

The Hutchison BCT is incapable of dealing with its current container volumes and has been woefully caught short with the surge in container volumes during peak season. In the last few days, truck turnaround times at BCT have blown out to between 5 to 9 hours. Hutchison has also closed its empty container return pool “indefinitely” due to terminal congestion, with empty import containers having to be redirected to other empty de-hire facilities which are also feeling capacity pressures.

This lack of operational performance by Hutchison BCT is totally unacceptable to the container transport industry, and is costing transport companies considerably more in operational and administration costs.

Shipping Lines Priority Bookings:

Many client will have been contacted by our Customer Service Team and advised of the latest shipping line “innovation”, known as a Priority Booking and Rate Service.

A number of lines are now offering this “service”, particularly from Asia, whereby a Premium rate is applied and if accepted, you are guaranteed a slot on a particular sailing, basically this means you are given priority over lower paying cargo.

Kindly note while a booked slot is guaranteed, the schedule of the vessel is still subject to delay or congestion, it is not a guarantee on departure date from load port or arrival date at destination port. It is also noted that in most cases, a cancellation fee is also applicable if slot is cancelled after booking has been confirmed.

The ongoing congestion in main Asia ports is expected to continue for the immediate future, vessel schedules as we used to know them are in complete disarray due to the current congestion and unexpected peak season volumes, with little relief expected prior to Chinese New Year in mid-February 2021.

We are being advised by Shipping Lines that there is a serious shortage of 20ft, 40ft and 40ft High-Cube containers in Asia.

China are reporting equipment shortages in all ports, particularly for 40ft GP and 40ft High-Cube containers.

China, as the only fully COVID recovered manufacturing country has been exporting larger volumes than normal over recent months and the empty equipment is being retained in the receiving countries with little volumes from most countries being re-exported back to Asia.

Australia, with our recent industrial problems also has empty equipment stockpiled, it is estimated that Sydney alone has some 100,000 empty containers at present, most being unable to be repatriated to origin ports due to the on-going port congestion.

Malaysia, Thailand, Vietnam and Indonesia are also advising an acute shortage to the point that some lines are now only releasing empty equipment to shippers/consignees that are prepared to pay a premium rate to destination.

Our GPSM Customer Service Team will keep affected clients advised of issues on a case by case basis.

It is expected this situation will persist for some time and poses more issues in 2021 as we head towards Chinese New Year in mid-February 2021.

 

Port Congestion:

Transhipment ports in Singapore, Port Klang, Ningbo, Shanghai and Hong Kong continue to experience heavy congestion and delays as they deal with unprecedented container volumes.

Los Angeles/Long Beach ports are also experiencing heavy volumes and schedule delays.

UK ports are heavily congested, shipping lines and consolidators have imposed Port Congestion Surcharges as many importers are unable to accept deliveries due to COVID lockdowns.

Auckland is also heavily congested with many lines opting to bypass the port of find alternative ports for discharge.

Sydney berthing congestion has eased, Patrick Terminal delays are down from 18 days delay to around 10 days, DP World and Hutchinson’s Terminal now at 0-2 days delay.

The GPSM team have been working their “wonders” to avoid as many delays as possible for clients under current difficult circumstances.

 

Sydney Empty Container Parks:

All empty container parks in Sydney are 100% full to capacity, GPSM are storing some containers at our Enfield Yard and the Transport Team have been using their close contacts with the port terminals to deliver empties back to the port directly.

Unfortunately these deliveries come with extra costs for vehicle booking and terminal direct fees, our team are working with affected clients closely in an effort to avoid empty detention charges that are still being applied by lines.

One vessel only was chartered by lines especially to collect empties in Sydney for return to Asia, however it faced delays in berthing of some 12 days and is only expected to move some 5,00 + containers.

Stoppage in DP World Terminal:

D P World Port Botany Terminal have announced that road, rail and vessel operations will cease from 9.30am until 2.00pm on Tuesday 24^th November 2020 to allow Maritime Union of Australia members to attend their Annual General Meeting.

Stoppage in Patrick Port Botany Terminal:

Patrick’s have advised that their Sabre and MUA members will also stop work on Tuesday 24^th November 2020 so members can attend their Annual General Meeting.

Patrick Terminal will be inoperative from 6.00am until 2.00pm with all road, rail and vessel operations stopped during this time.

The GPSM Transport Team will be in contact with clients affected to alter any arrangements as a result of these stoppages.

We would just like to take this opportunity to remind you of the importance to provide your shipping documents to us as soon as possible , we are required to lodge your documents at least 48 hours prior to ship or aircraft arrival to avoid any delays and allow sufficient time to submit documents if necessary to both Bio securities and Australian Border Force.

Cargo reporting for freight forwarding / shipping lines is subject to screening hold for 24 hours , as does the import Declaration for 24 hours port entry submission. What this means is that if the entry is submitted less than 24 hours Of vessel / aircraft arrival as a result of the screening period Australia Border Force may apply a border hold after Vessel / aircraft arrival, subsequently relinquishing all rights to a free storage grace period should the hold exceed the 3 free day storage period at terminal.

It is critically important that we have all of your documentation complete for submission at least 48 hours prior to arrival and in peak periods we recommend earlier to reduce the risk of your goods being subject to storage and possibly container demurrage charges.

We appreciate and thank you for your understanding.