Export domination creates serious box imbalance
Exports continue to overshadow imports in South Australia on a three-to-one ratio with the uneven trade creating a container imbalance between empty and filled containers. In 2012/13, of the total cargo handled through the Flinders Ports – which incorporates Port Adelaide, Port Lincoln, Thevenard, Wallaroo, Port Pirie, Port Giles and Klein Point – 31.51% were imports and 68.49% were exports.
Nevertheless, the state’s exports continue to increase. Last year, exports for South Australia were valued at $11.7b, a 9.5% increase over the same period in 2012, according to data from the Australian Bureau of Statistics. That was above the national average increase of 5.9%.
“We are predominantly a teu export trade and an feu import trade which is really probably no different to most other ports, but the supply of empty containers is a big issue,” Flinders Ports general manager Stewart Lammin said. It is common for the feu’s which come into the state to be evacuated out empty or half-filled, as the export content’s weight works better being shipped in teus.
However, getting access to teus is a problem as they are not readily available, South Australia Freight Council chief executive officer Neil Murphy said. “One simple way of improving the empties situation is to get more imports into Adelaide,” he said.
“Bulk and container exports are growing, including a shift of grain export from bulk to containers.” The reason for the popular 40ft container import trend comes with the shipment of light manufactured items from predominantly China, with the product weight making the feu an obvious financial choice for the exporters.
“South Australia exports heavy things so we are filling the feu’s three quarter full,” Mr Murphy said. “It’s not the exporter’s fault for us having this problem, it’s just a convenience for them to use the bigger containers, and we use them as well just because that is what’s available.”
Most valuable - To give an example, 20 tonnes can be loaded into a teu but only around 26 tonnes can be loaded into an feu.
South Australia’s most prominent exports comprise of wheat, iron ore, hay, minerals, sands, cooper, lead and wine with grain as most valuable, according to the Department of Foreign Affairs and Trade (DFAT).
Meanwhile, the state’s imports are mostly petroleum, vehicles, lead ores and concentrates, alcoholic beverages, fertilisers, rubber materials, furniture and civil engineering equipment.
However, the future appears to hold note of optimism. “We’re unique in Australia in that we’ve always been a heavy export trade, but we are slowly becoming more balanced,” says Mr Lammin.
Saturday night’s alright for freighting
Analysis shows Saturday between 6pm and midnight could be the best time for transport businesses to send their trucks to both Port Botany and the Port of Brisbane.
Freight forwarders and other operators sending trucks to Port Botany or the Port of Melbourne could look to use an under-utilisation of available timeslots on Saturday nights, according to new statistics from the Bureau of Infrastructure, Transport and Regional Economics (BITRE).
BITRE’s Waterline report, which gives a number of metrics relating to container ports’ wharfside and landside operations, shows the number of timeslots the five major container ports (Botany, Melbourne, Fremantle, Brisbane and Adelaide) made available to truck visits between January 2011 and June 2013.
The report also shows how many of these timeslots were actually used by trucks.
By combining these two sets of statistics, we can find a ‘utilisation percentage’ – a figure showing what total timeslots are being taken up by the trucking industry, in any specific port, at any specific time. And the most obvious time where truck timeslots are under-utilised is Saturday night, especially at Australia’s biggest two container ports, Port Botany and the Port of Melbourne.
Actual use - At Port Botany, the total number of timeslots on offer drops considerably between 6pm and midnight on a Saturday, with about 46 slots available per hour during that timeframe – down from the average of about 110 slots per hour between 6pm and midnight on weekdays.
But the number of trucks actually using those slots drops considerably, as well: about 33 trucks visit every hour between 6pm and midnight on a Saturday at Port Botany, down from 102 per hour between 6pm and midnight on weekdays.
What that means is that at a utilisation rate of just 72.1%, Saturday’s 6pm to midnight time period is the most under-utilised of all at Port Botany – the relative distance between the amount of slots on offer, and the amount actually used, is the greatest. So while there will of course be other factors at play for every truck operator, Saturday night by this metric looks to be one time freight handlers could use to their advantage, if they want to ensure getting a timeslot on short notice, or want to try to take advantage of a time when perhaps the truck loading areas within the port are not as busy as usual.
It’s much the same story, albeit not quite as exaggerated, at Australia’s other 2m teu per annum container port, Melbourne. Despite an across-the-board utilisation rate of 95% at the Victorian box port, Saturday nights are the most under-utilised timeslots. 47.4 per hour are usually offered by the port, while 39.4 are actually used – resulting in a utilisation rate of 83%.
Shipping faces US$120 per teu increase in Asia-Europe bunker charges
Asia-Europe bunker adjustment factors could increase by as much as US$120 per teu next year as a result of stricter sulphur regulations.
Speaking at the Global Liner Shipping conference in Hamburg, Drewry Supply Chain Advisors director Philip Damas warned that the requirement to use fuel with a 0.1% sulphur content in emission control areas such as the North Sea and Baltic Sea would push up the bunker charges implemented by carriers.
Mr Damas said the cost differential between current fuel and low-sulphur fuel is around US$300 per tonne. Carriers will therefore need to increase BAF charges on the trade lane by around 20% to cover the increased cost.
He said: “The problem is that today very few carriers are equipped with liquefied natural gas engines, instead they have to use low sulphur marine diesel oil or they have to use scrubbers. “The impact of this is that the cost per tonne is 50% higher than the current fuel. So it’s a huge increase next year.
“Our best estimates show that bunker adjustment factors will increase by 20% which is an increase of US$100-US$120 per teu.” Mr Damas said that certain shipping lines were expecting an even higher increase in BAF levels, some expecting increases as high as US$500 per teu.
Drewry’s calculations were based on the assumption that one teu would account for around a tonne of fuel on the Asia-Europe trade and that only a certain percentage of the voyage would take place in the North Sea and Baltic Sea ECAs.
Port of Melbourne to close berths from July
Port of Melbourne Corporation (PoMC) will likely close some of its berths from July to make way for construction that will create additional container capacity. Berths 3, 4 and 5 at Webb Dock East will be closed from July 1 for the construction of the new automotive wharf and waterside infrastructure costing around $400m.
PoMC has appointed maritime works contractor McDonnell Dowell for the task. It will work on upgrading and modifying the wharves to accommodate the needs of ships docking at the port’s new international container terminal.
Dredging work to deepen the shipping berths and the removal of around 2.3m cu metres of material under environmental management controls are also part of the plan. If McDonnell Dowell decides it necessary to use berths 3, 4 and 5 for delivery of project materials, it will be required to seek exemptions and approval from the harbour master, along with any other applicable statutory approvals.
PoMC notes that the exact details of date and time in relation to the formal closure of the berths at Webb Dock East will be announced by the harbour master in the near future.
Shipping lines and agents are advised by the PoMC to liaise directly with the terminal operator in the lead-up to the formal closure of the berths. The project’s completion will commence the commissioning of Melbourne’s third international container terminal which is expected to begin operations by late 2016.
New service connects East Indonesia to regional hub
Maersk Line has launched the first international service to call at the Bitung port in east Indonesia. The service connects Bitung to Tanjung Pelepas in Malaysia, a primary transhipment hub for south-east Asia. The launch of the direct service will reduce the transit time from Bitung port to transhipment ports. It previously took 12 days for exports to be shipped via local feeders that would call first at Jakarta before Tanjung Pelepas. The new service reduces this to7 days.
“The direct service will increase efficiency around the supply chain of exporters in this part of Indonesia, contributing to more competitive products,” said Maersk Line Indonesia president Jakob Sorensen.
Bitung Port’s master plan is aimed at facilitating the trade in main commodities that have the potential of being exported to the world. These include fish, coconut products and wood.
“While the areas around western Indonesia are more developed, we see opportunities in increasing exports out of the eastern part of [the country],” Mr Sorensen said.
“We want to support the development of this area with a direct service to our main transhipment hub port.” The bi-weekly service runs on a 32-day rotation covering the ports of Tanjung Pelepas — Torres Strait — Port Moresby — Port Noro — Lae—Bitung —Tanjung Pelepas. The first sailing departed from Bitung on April 14.
Pre-quarantine check of import wooden-packaged shipments
Qantas Freight has received notice from PACTL , our ground handling agent in Shanghai, reminding all shippers to ensure that inbound wooden crates have appropriate quarantine approval.
The Chinese Customs, Immigration and Quarantine Authorities started carrying out pre-quarantine checks at Shanghai Airport from 1 March 2014. A large proportion of wooden packages have since been found to breach regulations.
All wooden crates destined for China must have an IPPC (International Plant Protection Convention) stamp on them. This is required to prevent the invasion of foreign living creatures and the spread of disease.
All wooden crates without this approval stamp will be considered as infested and will be disinfected and/or destroyed. Please make sure that any shipments bound for China comply with this regulation.
A guide for Importers for the efficient movement of containers at Freemantle Port - Container Import Guide
During the month of April, Fremantle Ports, along with the W.A. Port Operations Taskforce and the Customs Brokers Council of W.A., released a Container Import Guide. EES Shipping Managing Director, Geoff Hack provided valuable input into this document which is available to download on our website. The Guide - known also as an importer Bible - clearly explains all aspects of the import supply chain along with extensive information regarding the Chain of Responsibility.
EES will be teaming up with the Fremantle Port Authority for our very own information seminar in the coming months. Want to learn more about the port and import movements? Register your interest and we will be in touch with details soon.
