Monthly Overseas Container Trade Update Feb 2013
Total overseas container throughput (full + empty) for February was 162,615 TEU, this was a decrease of 1.9% over February 2012 and down 2.3% for the financial year to date. Total (full + empty) overseas container imports for the month were up 5.1% while total (full + empty) overseas container exports decreased by 8.4%, mainly driven by a large decline in empty overseas container exports. Full overseas container imports increased 4.5% against February last year to be down 3.2% on a year to date basis. Several commodities recorded significant gains for the month including furniture, clothing, aluminium, toys and sporting goods, miscellaneous food preparations, footwear, builders hardware, and newsprint. Commodities with the most notable declines were vehicle parts, rubber manufactures, raw plastics and machinery. Full overseas container exports recorded a 0.5% increase over February last year to be down 1.0% on a year to date basis. Cotton, pulp and waste paper, rice, newsprint and dairy products returned the most notable increases, whilst exports of wheat, wine, paper and metal manufactures recorded the most significant declines for the month. Empty overseas container movements for February decreased 19.5% over the same period last year to 28,412 TEU, to be down 2.3% on a year to date basis. Empty overseas exports decreased 24.3% for the month while imports increased by 15.3%.
New security measure in The Netherlands
Based on currently valid EU-regulations as from April 29, 2013 all export air cargo departing from Amsterdam Airport, or any other Airport within the EU, must come from a Known Consignor, or be actively screened prior
to physical uplift from AMS.
To become a Known Consignor, companies will have to apply for this status at The Royal Netherlands Marechaussee (in Dutch ‘Koninklijke Marechaussee’ = KMAR) and have to pass a strict licensing procedure.
Victorian premier sees Indonesian export opportunities
Premier of Victoria Denis Napthine says he wants to increase exports to Indonesia and south-east Asia more generally. The former ports minister is set to lead a trade mission to the region in June, visiting Indonesia, Malaysia and Singapore.
“These countries are three of the strongest economies in one of the world’s most dynamic economic regions. They are vital markets for Victoria,†Dr Napthine said.
In a statement from the premier’s office, the aims of the mission were listed as generating new jobs, investment and growth by connecting Victoria with emerging markets.
Dr Napthine said together, the south-east Asian economies were the largest export markets for Victoria in 2011/12. “In particular, Indonesia is experiencing consistently strong economic growth and is set to become the seventh largest economy in the world by 2030,†he said.
“The opportunities there are enormous. Based on Indonesia’s projected growth, an estimated 90m additional consumers will demand better services, modern infrastructure and urban amenity, education and training, and high-quality food and tourism experiences. Victoria is strongly placed to meet these needs.
“Victoria can be Asia’s food bowl. We produce 30% of Australia’s food exports and a quarter of Australia’s GDP, despite only covering 3% of its land mass.â€
Opportunities are seen in the food and agribusiness sectors as well as in infrastructure and sustainable urban development.
 UN told not to use shipping as a cash cow
Japan has urge the UN not to consider the shipping industry as a cash cow to fund a US$100bn climate change fund.
Mr Hideaki Saito, Tokyo’s representative both to the UN’s International Maritime Organization (IMO) and also to the UN’s Framework Convention on Climate Change (FCC), expressed concern that both aviation and shipping may be targeted as sources of funds at a crucial March meeting.
Nation states who are members of the FCC, which includes Australia, have agreed to create a US$100bn fund to support climate change mitigation measures with a self-imposed 2020 deadline.
Shipping and aviation were fingered as potential sources of revenue for this green climate fund at the last UN FCC workshop, held in Doha, Qatar, last year.
Since then, the FCC has asked its members to come up with comments and observations on that workshop, ready for a meeting at the end of this month.
And the international shipping sector appears as a source of finance in the documentation for the March meeting.
The FCC documents suggest the heads of the secretariat of the IMO and the International Civil Aviation Organisation establish a “high-level expert group in order to examine options for ensuring that revenues from the emissions levy or auctioning of allowances in emission trading regimes for international shipping and aviation can be used in climate financeâ€.
Japan argues that as the members of the UN FCC have not agreed to target any particular sectors then it is wrong to focus exclusively on shipping and aviation.
Tokyo also believes that if the IMO decides to introduce a market-based measure to collect funds from shipping, then it should be the members of the IMO that decide what should be done with those funds.
Asian owners slam Suez toll hike
The Asian Shipowners’ Forum (ASF) has joined the clamour of opposition to plans by Egypt’s Suez Canal Authority to implement a 5% increase in transit fees from May.
In recent weeks, the International Chamber of Shipping and the Japanese Shipowners’ Association (JSA) have both written to the SCA to protest against the rate hike, which comes after a 3% rise last year.
The ICS warned earlier this year that toll hikes in today’s climate could force many vessels to divert around the Cape of Good Hope instead of using the canal, which would defeat the purpose of pushing up canal dues. The JSA calculated that the 2012 and 2013 toll increases would add costs of some US$189m for its members from 2011-2020.
Now, ASF secretary-general Yuichi Sonoda has thrown his hat into the ring, writing to canal chiefs to urge them to rescind the plan. In the letter, Mr Sonoda wrote that the ASF was disappointed by the untimely toll increases, given that the shipping market remained in a prolonged depression.
“Bearing in mind that an increase in canal tolls had just been implemented in 2012, a further increase effective from May 2013 would be excessive and would inflict a greater burden on the shipping companies that are already laden,†he said.
The ASF called for the toll adjustment process to be reviewed and improved.
What will be the impact on trade of tighter border controls?
There is clear action plan being implemented to deter and prevent infiltration by serious and organised crime into Australia's seaports and airports. Recent developments have included reforms internally within Customs & Border Protection, revised licensing requirements and an increased focus on other cargo supply chain entities.
On Wednesday 20 March 2013, the Minister for Home Affairs, the Hon Jason Clare MP, introduced the Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Bill 2013 into Parliament.
The purpose of the Bill is to amend the Customs Act 1901 (Customs Act) and the AusCheck Act 2007 to mitigate vulnerabilities in Australia's aviation and maritime sectors that can be exploited by organised crime through measures to strengthen access controls to Customs places, information and systems and secure areas of ports and airports.
The Bill is part of the Government's response to the 2012 report of Joint Agency Task Force Polaris, which is investigating serious and organised crime on the Sydney waterfront, and the PJCLE's 2011 Inquiry into the adequacy of aviation and maritime security measures to combat serious and organised crime.
The bill will amend the Customs Act 1901 to strengthen the cargo supply chain against criminal infiltration by:
- placing statutory obligations on cargo terminal operators (CTOs) and those that load and unload cargo, which are similar to those that the Customs Act imposes on holders of depot and warehouse licences. These obligations would include mandatory reporting of unlawful activity, ensuring the physical security of relevant premises and cargo, and fit and proper person checks on management at Customs & Border Protection's request. Non-compliance would attract criminal or administrative sanctions;
- creating new offences for using information from the Integrated Cargo System (ICS) to aid a criminal organisation;
- providing that the CEO of Customs & Border Protection can consider the refusal or cancellation of an Aviation Security Identification Card (ASIC) or Maritime Security Identification Card (MSIC) when determining whether the person is fit and proper under the Customs Act;
- aligning aspects of the customs broker licensing scheme with that of depots and warehouses, including providing the CEO of Customs & Border with the power to impose new licence conditions at any time and making it an offence to breach certain licence conditions;
- adjusting other controls and sanctions in the Customs Act, including increasing penalties for certain strict liability offences and the offences in section 234, and improving the utility of the infringement notice scheme by for example increasing the relevant penalties.
The bill will also amend the AusCheck Act 2007 to:
- enable follow up background checks to be carried out without the consent of the card holder where the individual is reasonably known or suspected to have been convicted of a relevant offence, and
- enable the Secretary of the Attorney-General's Department to suspend an Aviation or Maritime Security Identity Card where the Secretary has reasonable grounds to consider the holder has been charged with a serious offence.
The bill will also amend the Law Enforcement Integrity Commissioner Act 2006 to remove the prohibition on the Deputy Speaker of the House of Representatives and Deputy President of the Senate being appointed as members of the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity.
FTA sees merit in the objectives of the legislative reforms and anticipates that Customs & Border Protection will further enhance their targeting strategies aiming to obtain further data about importers through the much discussed concept of "Entity Based" risk assessment.
In a formal submission to Customs and Border Protection, FTA has recommended specific solutions to enhance current systems and risk assessment methodologies.
FTA has also offered assistance in ongoing reforms in an aim to help protect Australian borders and increase facilitation of legitimate trade.
Ships hijacked to order in South East Asia say analysts.
Maritime Intelligence company, Dryad Maritime, says that ships are being hijacked to order.
“In south-east Asia, a concerning new trend is emerging, which sees sophisticated, intelligence-led hijackings, targeting vessels for their cargo or for the hull, to pre-arranged customers,†said Ian Millen, head of intelligence at maritime intelligence company Dryad Maritime.
“Analysis would suggest that organised criminal syndicates are targeting vessels for their cargo.â€
He added that, although low-level opportunistic robbery of ships at anchor and alongside represented most maritime crime in the region, organised, sophisticated piracy operations were causing the greatest concern.
“This targeting suggests insider information detailing a ship’s cargo, intended route and transit times is being passed to criminals before the vessel has even put to sea.
“Unlike piracy operations in the Horn of Africa, it is likely that an increasing majority of attacks are made to order, with buyers in place before the event takes place.â€
Attempts by the nations of south-east Asia to reduce piracy and maritime crime have so far had limited effect, Dryad’s report said.
“A combination of complex archipelagic geography and under-resourced maritime security forces all suggest this trend of increasing maritime criminal activity is likely to continue in the foreseeable future,†the intelligence firm said.
Source: Llyods List March 2013
Hi-tech shippers switch from air to ocean
Cargo that has traditionally used air freight is increasingly switching to sea as shippers capitalise on lower transport costs. Moreover, the trend is expected to continue over the coming years. Hi-tech and telecoms products starting to choose sea over air.
Several freight forwarders reported in their full-year results that certain cargo types – particularly hi-tech and telecoms – switched from air freight to sea freight last year. The switch from air to ocean was the result of a price difference of 10 times between the two modes of transport. Many companies are under cost pressure and looking to reduce total supply chain costs. Therefore, they are buying and moving by ocean freight and particularly it is happening in the technology sector.
Supply chains are used to working with more ocean freight, this impact is predicted to stay for at least a couple of years, until the economy has really recovered, then it will start to shift back again.
Whether cargo was suitable to be switched from air to sea partly came down to the weight of shipment.
The impact of the switch from air to ocean freight was partly to blame for a decline in air freight volumes last year, while container volumes continued to grow.
Source: Llyods List March 2013
Business outlook for importers and exporters on the rise
About 34% of exporters and 26% of importers are expecting the economy to improve in the next 12 months, according to the latest research in the MYOB Business Monitor survey.
Over the past year, 22% of exporters and 21% of importers saw revenue rises while 42% of exporters and 46% of importers saw decreases in revenue.
More broadly across business sectors, only 18% of businesses saw revenue rises in the past year and about 40% saw steady revenue.
In the coming 12 months, 31% of exporters and 35% of importers expect their revenues to rise.
Exporters and importers have a more positive sentiment than other business sectors with only 19% of the industry expecting revenues to drop and 42% expecting revenues to remain steady.
Queensland and Western Australian businesses were the most likely to see a rise in the past year, with New South Wales and Victoria having the highest proportion of businesses seeing revenues fall.
The MYOB Business Monitor is a national study that has been running since 2004. The March 2013 edition examined the business attitudes, plans and performance of 1005 Australian businesses.
Overall, small-to-medium businesses are more hopeful of an upturn with 72% expecting increased or stable revenue this year, said MYOB chief executive officer Tim Reed.
“Considering only 58% saw that occur last year, it indicates hope is springing back at Australia’s business coalface,†he said.
