Australian food exports recover from global financial crisis
Exports of Australian food products have increased around 12% in value to $30.5bn, showing recovery to above pre-global financial crisis levels and highest in a decade, according to latest figures in Australian Food Statistics.
This was despite a strong Australian dollar and a 9% increase in the value of imports to $11.3bn. Asia was the main market, with over 50% of Australian food exports destined for the shores of our nearby neighbours. Favourable production conditions as well as an increase in global food demand were factors contributing to the increases in Australia’s food exports in 2011/12. Broad trends over the past decade show an increase in exports of cereals and oilseeds while dairy products and seafood are declining. Both grain and oilseed exports reached their highest levels in the past 15 years while sugar languished to its lowest.
In 2011/12, grain made up the majority of food exports (34%). Unspecified food products followed (25%) with meat exports closely trailing (24%) and then dairy (8%), wine (6%) and seafood (6%). Imports were dominated by unspecified food products (42%), followed by beverages (20%), horticulture (19%), seafood (12%) and then dairy (7%). Japan remained the biggest market for Australian food products with a market share of 14.5% despite that figure declining over the past decade. Meanwhile, the US slipped to third place with a share of 7.5% compared with 13.4% in 2004/05.
Markets of growing importance are those in north Asia (market share of 34%) and those in the ASEAN group such as Myanmar, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam which had a joint market share of 20.9% in 2001/12 compared with 15.7% ten years ago.
Capacity adjustments not enough to lift rates
The Asia-north Europe service withdrawals and void sailings announced by carriers are not enough to offset new tonnage coming into the market and improve vessel utilisation rates, according to the analyst Alphaliner. The latest research from Alphaliner shows that a total of 20 new ships of between 8500 teu-16,000 teu will be introduced to the trade during the second quarter of 2013, on top of the seven new vessels added in March.
So far, CMA CGM/MSC, the CKYH Alliance – made up of Cosco Container Lines, K Line, Yang Ming and Hanjin Shipping – and Evergreen have announced plans to void a single sailing in May to coincide with the May Day holidays in Asia. Meanwhile, Evergreen and China Shipping Container Lines have announced plans to withdraw their jointly-operated CES 2/AEX 2 service in mid-June. Alphaliner said these service changes would be offset by capacity upgrades on other services, resulting in a difficult supply/demand balance for carriers.
The analyst said capacity upgrades by the G6 Alliance, CKYH and CSCL/Evergreen would add more than 16,500 teu of weekly capacity to the trade by June. “Carriers have limited options to keep capacity in check, with the incessant deliveries of new tonnage hampering their ability to make any meaningful capacity cuts. “The timing of the deliveries was intended to take advantage of the anticipated [northern] summer peak season, but weak cargo volumes have kept utilisation levels at only 80% on average in April with a very slow pickup in demand this year.†It said the average utilisation rate during the January to April period was 81% this year compared with 90% during the same period last year. As a result, freight rates have declined on the trade since the start of the year.
Source: Lloyds List
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Carriers slam Suez Canal toll hike
Operators of containerships transiting the Suez Canal must now pay an extra 2% to cover a rise in toll fees.
A May 1 rise in the tolls for all ships traversing the 192km waterway has led shipping bodies to complain that the increase is unacceptable in a downturn, at a time when ocean freight rates are under renewed pressure.
Some have warned that the decision to hike prices could see operators route their ships via the Cape of Good Hope, especially as bunker prices are now falling.
The London-based International Chamber of Shipping has been scathing of the increased fees, as reported by Containerisation International when the new rates were announced.
ICS secretary-general Peter Hinchliffe said at the time: “This is not the time for the [Suez Canal Authority] to be announcing increases, which for some trades seem very dramatic indeed, and which many ship owners will find impossible to pass on to their customers.â€
Scheduling ships around the Cape of Good Hope would add approximately 15 days’ transit to a boxship travelling between Asia and north Europe and could force carriers to suspend slow steaming, considerably adding to the fuel cost element of a voyage.
On the other hand, re-routing could save the Asia-Europe trade lane ultra-large containership a potential $1m in return Suez Canal toll fees, based on an estimated US$34 per teu cost for a 13,100 teu vessel.
The number of containerships using the Suez Canal fell 12% last year to 6332, roughly one third of all transits.
The Suez Canal Authority earns about US$5bn per year from toll fees.
Source: Lloyds List
ASIA: South-east Asia piracy volumes drop say analysts
Pirate activity in south-east Asia has decreased in the first quarter of this year, in comparison with the like period for the last two years, according to the latest report from the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (Recaap).
A total of 28 incidents, comprising 27 actual incidents and one attempt, were reported in Asia in the first quarter, according to Recaap. Of the 27 actual incidents, five were classed as moderately significant, eight were deemed lesser incidents and 14 were petty theft, said the report.
No very significant incidents were reported during the first quarter of 2013.
In the first quarter 2011 there were 38 actual and 10 attempted attacks.
In first quarter 2012 there were 37 actual and three attempted attacks, according to Recaap.
Improvement was most apparent at ports and anchorages in Bangladesh, said Recaap. In south-east Asia, the improvement was most obvious in the Straits of Malacca and Singapore, with no incidents reported there during January-March 2013.
However, there had been an increase in the number of incidents at some ports and anchorages, with relatively more incidents occurring during daylight hours.
“While a slight rise in piracy might, on the surface, look like the rumblings of more organised criminal operations in south-east Asia, the success rate has been low, throwing considerable doubt over the capability of perpetrators in the region,†Intelligence company Gray Page said in a white paper.
It was likely that the pirates were small-scale opportunists with limited organisation and planning, Gray Page said.
Source: Lloyds List
International: Messina ro-ro collides with Genoa control tower
Jolly Nero, the 37-year-old ro-ro/containership that hit a harbour wall and toppled the control tower in Genoa in early May, had been checked by port state control inspectors just days earlier.
Minor deficiencies were uncovered during an inspection in Spain on May 2, according to Lloyd’s List Intelligence, but nothing sufficiently serious to detain the vessel. A fire safety booklet was said to be incomplete.
An inspection in the same Spanish port of Castellona year earlier found that some hatchway covers had not been properly maintained.
The ship was involved in one previous casualty before this week’s fatal incident. That was in 2001.
Seven people are confirmed dead after the Italy-flag Jolly Nero collided with the building.
Several more were injured and others are still missing, according to media reports.
The 1976-built ship is owned and operated by Italy’s Ignazio Messina and was leaving Genoa for Naples at the time of the incident, having arrived from Castellon a few days earlier.
As many as 14 people were in the control tower at the time, more than usual as staff were changing shift. Parts of the tower fell into the sea and some people were feared trapped or to have fallen into the water.
Source: Lloyds List
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Opinion: Culture change is essential for container carriage
How serious is industry taking its chain of responsibility (CoR) obligations in dealing with mass, load restraint and related issues associated with the road transport of containerised cargo?
It appears that many are simply hoping that everything will be OK and if a problem does occur that they can deflect the responsibility to someone else in the supply chain.
Besides the statutory obligations involved in CoR, ensuring that we do not see another tragedy like the recent one on the NSW M7 (where a container fell off a truck killing a man) should be a sufficient incentive to get this right.
CoR investigations nationally are typically initiated as a result of authorities completing analysis, use of intelligence, in response to critical incidents and from public referrals.
As outlined in operation Steel 3 recently conducted at Port Botany, authorities are also stepping up compliance checks around port precincts.
Let’s make one point clear. All parties are required to take all reasonable steps to ensure compliance. This requires parties to employ a risk management approach to their obligations under CoR legislation by identifying and assessing risks that could lead to non-compliance and then taking steps to eliminate, reduce or manage those risks.
Freight & Trade Alliance (FTA) conducted an extensive interview with Paul Endycott (General Manager compliance operations branch at Roads & Maritime Services).
Mr Endycott provided sound advice suggesting that a key to good risk management procedures is to have in place compliance assurance conditions between supply chain partners so that a level confidence exists that other parties in the chain of responsibility are also meeting their obligations.
The clear message being that it is very important that regardless of industry type (transport operator or otherwise), people engaging the services of road transport companies must take all reasonable steps to prevent breaches.
As professional service providers to the international trade sector, customs brokers and freight forwarders wear a level of responsibility of increasing awareness on this issue and need to guide clients on statutory requirements.
In a highly-competitive and cost-sensitive environment, it is acknowledged that the last thing that this sector will want to do is add more costs to their tender bidding.
However this where a cultural change across the entire import and export sector is essential. COR compliance will come at a cost, but this cost should be not negotiable.
Source: Paul Zalai – Lloyds List
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Aust exports improve in March thanks to Asia demand
Exports from Australia have improved 12% on February figures to $22bn in March due to strong Asian demand, according to the latest trade figures from the Australian Bureau of Statistics.
Imports also increased on February figures, by 2%, to $18bn in March.
Asia accounted for much of the increases with merchandise exports to China up 16.5% on February figures to $7.4bn. Shipments to Japan also rose 13% and to Korea 20.5%.
However, despite the improvement, export figures are still down 7.7% for the nine-month period ending March compared with the same period last year.
In 2012, the nine-month period ending March saw exports total $198bn while this year it was only $183bn. Imports have been less affected in the same period, only losing 0.3% of value. In the nine-month period ending March, imports were worth $187bn.
Source: Lloyds List
Commercial importers hit with increased import processing charge
Federal treasurer Wayne Swan has announced that the import processing charge (IPC) will be tripled in his 2013/14 budget.
Import Processing Charges will increase for consignments over $10,000 as of January 1, 2014.
This will only apply to consignments over $10,000 while the IPC for consignments valued between $1000 and $10,000 will remain at the current rate.
Budget papers highlighted that the restructure of the IPC was to “recover the costs of all import related cargo and trade functions undertaken by the Australian Customs and Border Protection Serviceâ€. “Currently only a portion of these functions is cost recovered,†the paper said.
The changes are set to increase revenue for the government by around $674.3m over the next four years.
This will increase incrementally, with additional revenue from the IPC being $91.6m in 2013/14; $188.7m in 2014/15; $194.2m in 2015/16; and $199.8m by 2016/17.
Freight and Trade Alliance director Paul Zalai said the increases were “staggeringâ€. Mr Zalai raised concerns over the fact that commercial importers would be further required to subsidise high-volume, lost-value imports.
“Perhaps the government has awoken the sleeping giant and this will resurrect arguments of equity and fairness of low-value consignments,†he said.
Customs Brokers and Forwarders Council of Australia executive director Steve Morris expressed similar concerns about cross-subsidisation by commercial importers. “The cost recovery for import and trade-related activities will be in excess of $440m per annum,†said Mr Morris.
However, he highlighted the mismatch in cost recovery and services provided. Over the last three years, 138 full-time employees had been taken from the program while cost recovery had remained constant, he said.
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Port of Melbourne Corporation's (PoMC's)
Port of Melbourne Corporation's (PoMC's) 2013-14 Reference Tariff Schedule (RTS) for port charges which will apply from 1 July 2013.
Overall, PoMC has increased its tariffs by 5.2%. A major component of this adjustment is PoMC's requirement to recover the annual Port Licence Fee (PLF) of $75 million (which is escalated by CPI each year), that has been levied on PoMC by the Victorian Government.
For 2013-14, it is estimated that the total amount of PLF to be recovered is $80 million and includes the recovery of the amount 'under' recovered in 2012-13 (estimated to be $3 million).
As indicated to industry on a number of occasions, PoMC expected there would be some 'under' or 'over' recovery associated with the PLF for any given year and advised that this would be factored into the following years' price adjustments. The price adjustment also includes an amount to fund PoMC's ongoing port infrastructure and development.
PoMC has undertaken an extensive engagement process to inform customers about the implementation of the PLF, the status of its recovery and the 2013-14 RTS review process. In addition to the two pricing information papers published on PoMC's website, PoMC also held a number of discussions with industry representatives and invited comment on the issues raised in the pricing information papers.
A summary of the major price adjustments applicable from 1 July 2013 is as follows:
- Wharfage for loaded twenty foot containers will increase by $3.20 to $64.40 per TEU plus GST
 - Wharfage charges for empty containers will increase by $0.80 to $16.00 per TEU plus GST
 - Motor vehicle charges will increase by an average of $1.82 per motor vehicle to $37.96 plus GST
 - Channel fees will increase on average by 5.2% and minor adjustments have been made to some Channel fee discounts
 - The Channel Deepening Project (CDP) Infrastructure fee will remain at its 2012-13 level (i.e. no CPI increase for 2013-14)
 - The transhipment rate remains unchanged at 35% of the standard published rate for both domestic and international movements.
PoMC is committed to ongoing consultation with industry on the structure of its tariffs to ensure that PoMC, as a self-funding entity, can maintain the safe, sustainable and efficient operation of the Port of Melbourne and develop infrastructure that meets the needs of port users.
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