China VAT 6% Effective 1st August 2013Â
The China Ministry of Finance (MOF) and State Administration of Taxation (SAT) issued a circular (Caishui [2013] No. 37, (“Circular 37â€)) on May 24, 2013, announcing the expansion of the Value-Added Tax (VAT) Reform Pilot on a nationwide basis. Certain revisions to the pilot regulations in this nationwide application of the VAT program will result in a 6% VAT charge assessed on transportation charges and freight forwarding services billed and paid in China.
Under the VAT pilot, forwarders and other transportation providers could effectively invoice international transportation and freight forwarding services as “VAT Inclusive†– without billing the VAT to client shippers. Circular 37 prohibits this practice and effective August 1, 2013, the 6% VAT will be collected from clients on Air and Ocean freight charges payable within the PRC. The 6% VAT will be collected on behalf of and remitted to, the government.
It is important to note that the 6% VAT affects all transportation costs, freight forwarding charges and related service and handling fees payable within the PRC on or after August 1, 2013.
Airlines, Shipping Lines, Terminals, Truckers and all related parties in the movement of international cargo will add this 6% VAT for services billed and paid for in China. We would recommend our clients contact their suppliers regarding the impact this may have on orders shipped after 1st Aug 2013.
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Box carriers could cope with Suez closure, say analysts
Shippers of cargo on the Aus-Europe trade will be relieved to hear that, in analysts’ opinion, box carriers could cope with a shutdown of Suez – albeit at a price.
Increased tensions in Egypt have again raised widespread fears that cargo transit through the Suez Canal, Egypt, could be affected, perhaps halted.
Reports are coming in from Lloyds’ agents and P&I agents of increase military activity and inspections of ships in the canal zone.
However, box carriers could likely cope and maintain frequency of services by re-routing around the Cape of Good Hope (South Africa) by increasing speeds.
Drewry shipping consultant said container lines would need to increase vessel speeds to 22 knots on Asia-Europe trade services from average speeds of 19 knots westbound and 14.8 knots eastbound to maintain frequencies if services diverted around the Cape of Good Hope.
Increased speed results in very large fuel bill to overcome increased water resistance.
Actual speed also depends on hull design, hull smoothness, hull fouling and propeller type among others.
It follows that fuel consumption is highly-sensitive to speed.
A ship increasing speed by one knot to 22 knots will consume far more fuel to do so than a ship increasing speed by one knot to five knots.
Carriers would likely increase rates to pay for the extra fuel consumption incurred by increased speed and for the increased sailing distance of around 8500 miles.
This cost would be offset slightly, as carriers would not need to pay Suez Canal dues, which Drewry estimates to total $1.4m per round trip journey for a 13,000 teu vessel.
“After taking into account the saving made by avoiding Suez transits, shippers would have to pay an extra westbound and eastbound deviation surcharge of around $58 per teu and $222 per teu respectively – assuming Intermediate Fuel Oil price of US$630 per tonne
Faster US trade realised with new NZ-Asia-Aus service
Weekly trades between the US west coast and Australia have just got shorter with shipments from Los Angles reaching Brisbane in 22 days on the new KIX service
Trade links between Australia and Los Angeles have been boosted. In a statement updating the new Kiwi International Express (KIX) service, ANL and its American counterpart USL said the duo now offer the “fastest weekly service†from Los Angeles and Oakland to Brisbane (via Auckland).
From the boxship Cape Maas 349S, ANL-USL offers an approximate 25-day transit time to Brisbane from Oakland, California.
“For exports from Brisbane to North America, the ANL-USL service will improve to a weekly sailing ex Brisbane, transhipment in Auckland or Tauranga.
“When combined with our recently-announced improvement to weekly sailings of our Panama service to the east coast USA and our two west coast services, we are offering express transit times to major ports on both coasts of North America and everywhere in between,†ANL said.
US east coast shipments on the new weekly Panama service will continue to be routed via Melbourne to Brisbane in around 43 days from New York and 41 days from Savannah.
Approximate transit times from Brisbane to the US west coast on the weekly PSW service via Tauranga will be 33 days from Los Angeles and 31 days from Oakland.
Meanwhile, the fortnightly PNW service via Auckland will link Brisbane to Vancouver in approximately 33 days and Tacoma in 32 days.
Brisbane to US east coast US transit times on the weekly Panama service via Tauranga (from November 2013, fortnightly until then) will reach Savannah in around 36 days and Philadelphia in 38 days.
New NZ-Asia-Aus service set up by three carriers
A long awaited “Kiwi International Express†(KIX) service was announced in July by ANL, APL and Hanjin, particularly to serve the carriage of reefer boxes. Top of FormÂ
“The new weekly service will provide more competitive options to shippers moving dry and reefer cargoes between NZ, Australia and Asia, particularly NZ reefer exports destined for key Asian markets,†the three carriers said in a joint statement.
ANL’s general manager of business development, Chris Schultz, elaborated.
“We don’t currently have a NZ/SEA connection, so it will improve our service offering,†he said, adding that there is demand for carriage from customers.
The “big†cargoes out of NZ are dairy and timber he said, adding that there was likely to be a mix of dry and reefer boxes, although he declined to comment on likely volumes.
Vessels on the KIX service will call Auckland, Tauranga, Brisbane, Singapore, Port Klang, Brisbane, Sydney, Auckland on a weekly basis with six vessels of up to 2200 teu.
Which vessels those will be has not yet been decided. So far it is only known that two vessels will be supplied by each of the three carriers.
A complete rotation from Singapore to all ports of call and back to the Lion City will take 42 days.
Transit times from Port Kelang to Brisbane will take 12 days and from Sydney to Auckland will take six days. From Tauranga back to Brisbane will take six days.
KIX will be put into operation with the first southbound sailing from Singapore on September 1; the first northbound sailing from Auckland is due on September 24.
Source: Lloyds List
Box carriers double services on round-the-world loop
French carriers CMA CGM and Marfret are to upgrade their Australia/New Zealand-East Coast North America-Northern Europe service to weekly from mid-September.
The announcement was made in Europe that the hitherto fortnightly operation will double in frequency, move from 6 ships to 13, and replace the southbound/westbound Manzanillo call with Cartagena and a northbound/eastbound South Island NZ call at Lyttelton.
Port rotation, from the first southbound/westbound sailing from Tilbury on September 18 by CMA CGM Manet, will be: Tilbury, Rotterdam, Dunkirk, Le Havre, New York, Savannah, Kingston, Cartagena, Papeete, Lautoka, Noumea, Sydney, Melbourne, Tauranga, Napier, Lyttelton, Manzanillo (Panama), Kingston, Savannah, Philadelphia and back to Tilbury.
CMA CGM will contribute 11 and Marfret two of the ships, which will average 2500 teu nominal capacity.
Authorities to clamp down on cargo-crime and corruption
A series of moves to harden international trade, and the border, against cargo-related crime, corruption and infiltration have been announced.
An expansion of the counter cargo-crime taskforce into Brisbane was announced by Jason Clare, the justice minister.
Taskforce Jericho, modelled on Polaris and Trident, is a multi-agency law enforcement initiative to target organised cargo-related crime in Brisbane.
Officers and staff from the Australian Federal Police, Customs, the Australian Crime Commission, the Australian Tax Office and Austrac will be deployed.
Approximately $5.6m has been spent by the federal government to expand the Taskforce Polaris model, set up in July 2010, to Melbourne and Brisbane.
Since July 2010 there have been 44 arrests, resulting in 196 charges as part of Taskforce Polaris as well as the seizure of 199 tonnes or $77 million worth of illegal tobacco and the seizure of $1million in cash and 11 firearms.
Taskforce Trident was established in Melbourne in July 2012 which has led to 16 arrests and the seizure of 71 tonnes or $61 million worth of illegal tobacco.
Meanwhile, Minister Clare also announced a “blueprint†for hardening Customs against criminal infiltration and corruption.
This includes, among other things, setting up a special adviser to manage the investigation of serious cases of misconduct; begin fixed tenure periods for staff; tighten up policy around secondary employment by, for instance, requiring approval; improve staff checking processes; ban all use of mobile phones in all sensitive operational areas; introduce anti-corruption impact assessments; re-structure the Customs agency internally by introducing new career streams around functional areas and by setting up a “strategic border commandâ€; patrol more on the waterfront, at the airport and in remote areas and build a partnership with the Australian Federal Police.
A variety of other measures were also announced including working with industry to provide trusted and compliant traders with expedited border clearance.
Source: Lloyds List
Some interesting statistics on freight
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Over 3 million tonnes of sugar was exported out of Australia between 2011 and 2012 (Ports Australia)
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The total amount of road transport in Australia has grown 6 fold over the last 4 decades (Dept. of Infrastructure & Transport)
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3,227,329 full import containers were shipped into Australia and 2,115,127 full export containers were shipped out of Australia between 2011 and 2012 (Ports Australia)
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 Asia has the largest amount of the world's container port traffic at 61% followed by Europe (18%), America (15%), Africa (4%) and Oceania (2%) based on 2012 figures (WTO)
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The majority (70.9%) of world trade in 2011 was manufactured goods, followed by fuels and mining products (21.1%) and agricultural products (9.5%) (WTO)
