Resources & Commodities - Celebrating a big year for trade.
Australia’s two-way trade (exports and imports) reached an all-time high in 2012, growing by 1.5% to $623.8bn (up from $614.5bn in 2011), according to the Department of Foreign Affairs and Trade (DFAT). When a nation has strong trade relations, new investment inevitably follows, said Federal minister for trade and investment Andrew Robb.
“Since the First Fleet foreign investment has been fundamental to Australia’s economic development, providing critical funding and capital for projects, business and industry that in turn creates economic opportunities for Australians,” Mr Robb said.
“The top sources of foreign investment in Australia in 2012 were the US, the UK and Japan, with investment from other nations (such as Singapore, Switzerland, Hong Kong, The Netherlands, Canada, New Zealand and China) also important.”
China, Japan, the US and the Republic of Korea were Australia’s top four trading partners again in 2012.
Trade largely focused on the Asia-Pacific region, with over 70% taking place with member economies of the Asia-Pacific Economic Cooperation (APEC) group.
China leads the field as Australia’s top export market and source of imports, accounting for $46.3bn in imports (goods $44.5bn/services $1.9bn) in 2012 and $78.7bn in exports (goods $73.0bn/services $5.7bn).
“Our trade activity is focused largely on the Asia-Pacific region, with over 70% of transactions taking place with member economies of the Asia-Pacific Economic Cooperation (APEC) group,” Mr Robb said.
“The prosperity of Australia and our region is being built through trade and investment. The opportunity for strong further trade will be underpinned by increased demand resulting from the extraordinary growth expected in the Asia-Pacific’s middle class through to 2030.”
Melbourne tops charts for box lifts, but struggles landside.
Melbourne is Australia’s most productive port when it comes to box lifts per hour, but truck turnaround at the port in Victoria’s capital are an average of seven minutes longer than Fremantle, Australia’s fastest port in terms of truck turnaround.
Melbourne averages 48.1 container lifts for every hour a ship is berthed there. That’s the highest rate in the country by some margin.
Sydney, the only other port in the country comparable in size to Melbourne, comes in at second, lifting an average of 40.5 containers for every hour of ship berth.
Brisbane, at 37.3 lifts per hour comes in third, while Adelaide (35.4 lifts per hour) and Fremantle (32.4 lifts per hour) round out Australia’s ‘big five’ box ports, according to the latest figures from the Bureau of Infrastructure, Transport and Regional Economics (BITRE).
BITRE’s Waterline Report, published every year, records throughput and productivity at each of the major container ports on the Australian coastline. Figures from the 2012/13 edition of the report show Melbourne to be the most productive when it comes to box lifts.
But the port is third in the country when it comes to the other half of the port’s role in the supply chain: loading and unloading containers on and off trucks. Trucks visiting Melbourne can expect to spend 32 minutes or so at the port.
That’s better than at the port’s main competitor – Sydney – where truck turnarounds are just over 36 and a half minutes, but a significant amount slower than at Fremantle, where trucks turnaround in an average of just under 26 minutes.
Adelaide slots in between Freo and Melbourne; trucks in the South Australian capital can expect a turnaround of just under 28 minutes each time they visit.
Australia’s slowest port in terms of truck turnaround was Brisbane. Trucks there averaged a time of 38 minutes, 21 seconds between arrival and departure.
Another interesting set of statistics in BITRE’s report concerned the average number of teu sent out of the port on each visiting truck.
Sydney averages just 2 teu on the back of each truck it sends out. Melbourne, meanwhile, sends out 2.4 teu, on average, on each truck, and is equal with Adelaide in this respect. Brisbane, which sends out 2.5 teu on each visiting truck, was the most productive port in the country in this respect – and that stat might explain the longer turnaround times at the Sunshine State’s capital.
But on balance, Brisbane and Fremantle seemed to be the least productive ports in the 2012/13 period when it came to wharfside activity. Ships berthed at Brisbane for a median figure of 31.1 hours, while only 886.2 container lifts were made on average each time one was berthed.
Melbourne and Sydney, by comparison, made an average of 1418.6 lifts and 1330.8 lifts, respectively, with each ship berth, while only having ships berthed for a median of 36.3 hours, and 32.9 hours each time.
Ships visiting Fremantle, meanwhile, spent a median time of 35.5 hours at berth – just 45 minutes or so less than Melbourne – while only 1014.6 lifts were made from or to each vessel during their stay.
Ships waiting to berth at Port Botany, in Sydney, were the most likely to spend extra time waiting at anchorage during the 2012/13 financial period, according to BITRE’s figures.
Just under 24% of all ships visiting Port Botany waited at anchorage for more than two hours – the highest rate of all the ‘big five’ container ports by some margin.
Brisbane had the next-highest rate, with 15.4% of visiting ships having to spend more than two hours at anchorage – but this was almost nine percentage points lower than at Sydney.
Melbourne’s rate of 5.6% of ships waiting more than two hours at anchorage was the best in the country, while Fremantle – 5.7% – was also close. Adelaide, where 11.9% of ships waited more than two hours, slotted in the middle of things.
Proposed reclassification of high-risk new agricultural machinery effecting importers of new machinery and equipment.
The Dept of Agriculture is proposing to reclassify new goods of tariffs 8437 and 8701 as low risk.
DFAT currently defines machinery or equipment that has been field-tested or factory trialled as used goods.
If consignments of new machinery or equipment are referred to the department, they must be accompanied by a valid declaration stating that “The machinery, equipment and/or parts are new and have not been field tested or factory trialled. The department does not currently define mechanical run-in as factory trialling.
The proposed new wording on declarations is “ The machinery or equipment and/or parts are new and have not been field tested or come in contact with biosecurity risk material”.
This does not change the management of the biosecurity concerns associated with machinery and equipment, it simply makes it easier for importers to comply with the requirements.
Source: AQIS
Australia records 142% increase in January trade
Australia's trade surplus increased $842m or 142% in January to $1.4bn from $591m in December 2013, according to recent data from the Australian Bureau of Statistics (ABS).
Its recent report into Australia’s international trade in goods and services states that January’s account is a 753% increase over November’s $168m.
“This [January] is the largest trade surplus since the $2.1bn recorded in August 2011,” said the Department of Foreign Affairs and Trade (DFAT).
“This comes on top of the strong contribution of net exports (0.6 percentage points) to economic growth in the December 2013 quarter.”
DFAT said imports increased 0.8% to $28.3bn. While intermediate and other merchandise goods increased 7.8% to $10.4bn and consumption goods rose 0.7%to $7bn, these rises were partly offset by the 9.4% fall in capital goods imports, to $5.1bn.
“Exports increased 3.7% to $29.8bn, with increases recorded across all sectors except for services, which fell 1.3% to $4.6bn.”
Australia's goods exports to east Asia rose 30% from a year ago to $17.4bn in January, driven by a 38.2% rise in exports to China to $8.4bn and a 16% rise to Japan to $4bn.
Exports to ASEAN-10 increased by 42% to $2.5bn.
Resources exports rose 3.4% to $15.2bn, with metal ores and minerals rising by 3.3% to $9bn, other mineral fuels 6.5% to $2.7bn and coal, coke and briquettes exports 1.6% to $3.5bn.
Rural goods rose 5% to $3.8bn, largely driven by higher other rural goods and meat and meat-preparations exports. Manufactures rose 0.2% to $3.6bn.
Food importers warned of heavy fines
Food importers are on notice to comply with Australian government regulation with Queensland's B&E Packaging fined $7,500 and court costs for breaching Australian importing requirements.
The Department of Agriculture's First Assistant Secretary for Border Compliance, Colin Hunter, said importers are responsible for ensuring that all food imported into Australia complies with standards set out in the Australia New Zealand Food Standards Code.
"There can be costly consequences for breaching requirements as one food importer recently discovered," Hunter said.
Xu Chun Dong, company director for B&E Packaging, appeared before the Southport Magistrates Court in Brisbane last week and was charged with one count of breaching section 9(1A) of the Imported Food Control Act 1992 – offences relating to dealing with examinable food.
Under the Imported Food Inspection Scheme, managed by the department, 1500kg of cooked and peeled prawns imported by B&E Packaging from Vietnam was subject to mandatory inspection and testing.
The company failed to undertake the required testing and released the prawns without authorisation. Hunter stressed the importance of all imported food meeting stringent food standards and importation requirements.
"Importers must comply with government requirements for the testing and inspection of food," Hunter said. "Blatant or deliberate disregard of Australia's food safety and importing requirements will not be tolerated.
"Where necessary regulatory requirements will be enforced and may result in matters being referred to the Court."
For more information on requirements for importing food into Australia visit Importing Food to Australia.
Most port-of-loading box incidents happen in Asia
Around 40% of port-related container related incidents take place in Asia, according to analysis of data from gathered from the maturing Container Information Notification Systems (CINS) database.
CINS was set up in 2011 by five of the world’s biggest container lines to share information on cargo related incidents. It went live in September 2011, after successfully completing its pilot stage, according to the Container Owners’ Association, which hosts the database.
During 2013, ten liner operators populate the database and these participants in account for about 60% of container slot capacity, according to industry analyst Alphaliner.
The incidents at ports of loading in Asia were broken down into “Asia-Pacific” and “China”, although, unfortunately, at this stage there is no definition publicly given of what comprises the “Asia-Pacific”.
Around 18% of the total number of incidents analysed occurred at “Asia-Pacific” ports while 22% of the total were related to incidents in Chinese ports.
A further 15% of box-incidents took place in European ports of loading and 13% in Middle East ports of loading.
It is not known whether this data focused only on boxes being loaded from origin ports or whether it encompassed boxes being loaded while being trans-shipped.
Incident types overwhelmingly related to mis-declared cargoes – around 46% of the total incidents analysed. Around 27% of incidents related to “leakage”.
After that, there were no obviously dominant incidents types with 27% of incidents in the “miscellaneous” category. These “miscellaneous” incidents included smuggling (2%), radiological taint (2%), fire (5%) and illegal waste (1%) among others.
The insurer, the TT Club, which is also an advisory member to the CINS project, analysed the data.
Commenting on the results of the data analysis, Peregrine Storrs-Fox, the TT Club’s risk management director said, “the significance of this may need to be validated in future analyses, but could greatly assist the lines – and other safety and training organisations – in targeting resources to improve the quality of controls for packing and dispatching cargo entering the supply chain.”
Source: Cargo Incident Notification System database, 2013 data
Shipping associations slam Suez Canal toll hikes
The Round Table of international shipping associations has protested against the third consecutive annual increases in Suez Canal tolls, saying carriers are “dismayed” by steep hikes with a short notice period.
Having raised tolls by 3% in 2012 and 5% in 2013, the Suez Canal Authority (SCA) announced in early February that transit fees would be increased by more than 4% for vessels larger than 20,000 dwt in the dry bulk and energy sectors from May.
In response, the International Chamber of Shipping (ICS), BIMCO, Intertanko and Intercargo have written to the SCA chairman, vice- admiral Mohab Mohamed Hussien Mameesh, to express their discomfort in having to pay more fees and bear higher expenses at a time of macroeconomic uncertainty.
“The shipping industry is once again dismayed both by the quantum of the increases, and by the SCA’s continued insistence on imposing a short notice period of only three months before toll increases are to be implemented,” ICS secretary-general Peter Hinchliffe wrote on behalf of the Round Table.
“Circumstances for owners and operators using the Suez Canal for transit remain very challenging.
“The global economic crisis shows little sign of ending, with most commentators agreeing that no recovery will be seen in 2014 as demand continues to struggle in an oversupplied market.”
Mr Hinchliffe said ship operators “have no chance to plan ahead to share the cost increases with their customers” given just three months’ notice.
Coupled with the challenge of piracy in the western Indian Ocean, the toll increases could drive more operators to take the “longer but safer” route around the Cape of Good Hope, Mr Hinchliffe said.
ANL container line speaks out on Tasmania service subsidy
Recently the Tasmanian Government announced it would enter into negotiations with Singapore-based Swire Shipping to provide an international shipping service from Bell Bay, propped up with taxpayer funds via a subsidy.
The announcement said the service, with a frequency of only 18 days, would be expected to pay its own way sometime in the future.
We see this as a very short-sighted and ill-conceived strategy to meet the needs of Tasmanian exporters,” said ANL managing director John Lines. The issue for Tasmania is that as vessels calling Australian ports get bigger, international direct calls to Tasmanian ports are not viable.
History bears this out as the number of Tasmania, direct-calling international container vessels has dwindled to zero. ANL offers Tasmanian exporters over 400 ports worldwide via Melbourne, connecting to one of the ten services we have, nine of which are weekly.
“We connect to Melbourne across Bass Strait six times a week and offer exporters a through bill of lading, allowing them to quickly lodge paperwork with the bank and get paid for the goods. “Why wait for a service only calling every 18 days with limited port coverage?” asks Mr Lines.
While the actual amount to be paid to Swire Shipping is not yet announced, it will be substantial (** please see the Editor's footnote).“Paying subsidies direct to shipping lines, especially one based offshore, to prop up an uneconomic trade route just doesn’t make sense.
“These things have been tried in the past and they all fail. At some point the subsidy will be cut and the service will fail. “Any businesses built around that service and the subsidised freight rates will also find it tough to continue.
“In the meantime a subsidy actively undermines the existing freight services that are the lifeblood of the state and provide jobs and careers for Australians. It builds no long-term value for the state and can actively work against it when the crunch comes,” said Mr Lines.
ANL is the major carrier of Tasmanian container exports, all carried over Melbourne.
“We carry the most Tassie container exports of any line, and yes, our rates ex Tasmania are higher than our rates ex-Melbourne. “I make no apologies for that as there is a real cost to move the cargo over, but we do our best to squeeze our margins to provide a competitive through rate,” said Mr Lines.
Melbourne is the biggest container port in Australia. There are many lines competing for business and the freight market to all worldwide destinations is pretty cut throat.
The financial disadvantage faced by Tasmanian manufacturers not being able to access the mainland via land has already been recognised by government and addressed by the Tasmanian Freight Equalisation Scheme.
A major failing of the TFES is that it doesn’t cover export cargo. Tasmania is close by the main container port in Australia and has existing fast, frequent and reliable freight services connecting to it. “Extending the TFES to cover exports would even up the playing field. It makes sense to put the subsidy in the hands of the cargo owner, not the shipping line.
“That way let market forces deliver competitive rates and services rather than the government deciding a preferred carrier,” said Mr Lines.
** Editor's footnote: After this article was written by ANL, there were a series of public hearings held by the Productivity Commission into the subject of Tasmanian Freight & Shipping. It was suggested during those hearings that the price to be paid was $11m a year for three years.
Source: Lloyds List
