Maersk Line welcomes 30,000 new reefers to the fleet during 2015
Maersk Line’s fleet of reefer containers has seen 30,000 new reefers join the family. The containers are equipped with all the latest technological advances, and the investment manifests our commitment to improving our customers’ cargo care. “We have listened to our customers and recognised the need to upgrade our reefer fleet,” says Shereen Zarkani, Global Head of Reefer Management at Maersk Line. “Our job is to enable our customers to deliver their promises in the exact condition they were intended to. When we pair our expertise and customer relationships with modern innovation, we can really make a difference in their supply chains.”
The 30,000 containers have been delivered from factories in China and Chile. They are all equipped with modern capabilities such as:
- Cold Treatment used for the transport of grapes, citrus and other commodities where regulatory approval of the temperature treatment is required
- Ambient loading of commodities that normally require pre-cooling, which means cargo can move from packing house straight into the container
- Freezing down of commodities to the required temperature while in the container such as cheese and frozen tuna, enabling cost savings and an unbroken cool chain.
“We are committed to constantly finding improved and sustainable ways to match our customers’ expectations,” says Henrik Lindhardt. “For example, commodities such as berries and flowers which used to be airfreighted require new and innovative technologies when transported by sea. And lastly there’s a constant need to further reduce the environmental impact of reefer shipments.”
Empty Notification Fee
From January 1, 2016 the Empty Notification Fee will increase $1 from $15 to $16 per booking. This is a direct result of increases in the fees charged by the MT Parks. All MT parks have substantially increased their fees over the past 6 months. Initially fees were set in range from $5.00 to $5.50. Fees now range up to $8.00 in ordinary time hours and up to $20 for out of hours bookings.
The Melbourne wharf carrier industry is concerned at the rapid increase in MT Park fees, with little or no corresponding improvement in service, and has requested that the Victorian Transport Association refer the matter to the ACCC.
DEPARTMENT OF IMMIGRATION AND BORDER PROTECTION NOTICE No. 2015/37 - Changes to licence charges from 1 January 2016
From 1 January 2016, charges associated with the application for and renewal of licences for customs brokers, depots and warehouses, will change. These changes were announced by the Government as part of the 2015-16 Commonwealth Budget following the Joint Review of Border Fees, Charges and Taxes, which involved significant engagement and consultation with industry. The changes to take effect from 1 January 2016 are:
• Introduction of a licence application charge for customs broker and warehouse licences
• Reduction in warehouse licence grant charges
• Introduction of a variation charge for warehouse licences
• Amendments to the grant and renewal charges for customs broker licences.
Agreement to boost Asian trade ties
Growing export opportunities is the aim of a new alliance between the Victorian Chamber of Commerce and Asialink Business.
Asialink was created a quarter of a century ago by The University of Melbourne and the Myer Foundation and aims to develop trade links and public understanding of Asia, as well as general appreciation of Australia's role in the Asian region.
Chamber chief executive Mark Stone said the arrangement would benefit Victorian businesses looking to grow their export capabilities in key international markets.
“Supporting Victorian businesses to establish or expand their export programs is a focus for the Victorian Chamber and this alliance strengthens our capacity to provide valuable assistance,” Mr Stone said.
“Opportunities to sell to key overseas markets are more important than ever during the Asian Century and at a time when growth prospects are being created by free trade agreements.”
Chamber members can access Asialink Business benefits such as discount entry to capacity development programs on cultural intelligence and engagement as well as relevant public events held throughout Australia and Asia.
Asialink Business members can access several Chamber benefits such as discounted rates on training courses, events and Victorian Chamber global workshops.
“The Victorian Chamber is delighted with this agreement that will be of great benefit to Victorian business and we encourage all members to take advantage of these opportunities to improve their export capabilities,” said Mr Stone.
Maersk Line would like to inform our customers that effective Monday 4 January 2016, we will be closing our operations in two Fremantle depots and consolidating all empty container stock into one single depot facility.
This consolidation will help make it easier for our customers to deal with Maersk Line by simplifying our release & de-hire process for all container sizes and types.
Details of the changes are as follows:
- Maersk Line will close Maersk Container Depot (MCD) and move stock into Qube Central
- Maersk Line will pull out of Qube Port Beach (QCP) and move stock into Qube Central
- Our depot facility will now be located at:
Qube Central
17 Rous Head Road
North Fremantle, WA 6159
The majority of import containers should still be de-hired to the locations currently stated on Delivery Orders, and export container releases will also be valid from the current confirmed depots. Some redirections may be required, however we will communicate these individually.
China-Australia FTA Benefits Set to Flow From 20 December
The substantial benefits secured through the historic China Australia Free Trade Agreement (ChAFTA) are set to start flowing from 20 December, the Minister for Trade and Investment Andrew Robb has today announced. This follows a critical ‘exchange of notes’ in Sydney between Australia’s Ambassador-designate to China Jan Adams and Chinese Ambassador Ma Zhaoxu which formally confirms that both Australia and China have now fulfilled their respective domestic requirements to enable ChAFTA to enter into force.
Mr Robb said this was a most significant moment as the government’s key objective – despite a very tight timeframe – was to see ChAFTA operational before the end of 2015.
“This will deliver a very material early harvest for our exporters in the form of two rounds of annual tariff cuts in quick succession. The first round of tariff cuts will occur on 20 December followed by a second round on 1 January 2016,” he said.
“This will save our exporters hundreds-of-millions-of-dollars in extra tariff payments next year alone compared to if entry into force had been delayed until sometime in 2016. The National Farmers’ Federation estimates our agriculture sector alone is set to save around $300 million.”
Mr Robb said this outcome would immediately enhance our competitive position in the world’s second biggest economy which will be good for growth and job creation. Our dairy industry for example expects ChAFTA to result in 600-700 extra dairy jobs in the first year alone.
“This is the most favourable trade deal that China has done with any developed economy and it will put us in the box seat to further capitalise on China’s rising middle class and increasing demand for the types of high quality goods and services that Australia can and does provide,” Mr Robb said.
On entry into force, more than 86 per cent of Australia’s goods exports to China (worth more than $86 billion in 2014) will enter duty free, rising to 96 per cent when ChAFTA is fully implemented.
Australian services suppliers and investors will also be able to reap the rewards of new and improved levels of access in China from 20 December. Consumers will also benefit from more affordable Chinese goods such as electronics, clothing and other household items as tariffs are eliminated.
ChAFTA’s entry into force rounds out a powerful trifecta of trade deals that the government has sealed with three of our four largest export markets – China, Japan and Korea – covering 49 per cent of our exports.
Together with the Trans-Pacific Partnership Agreement (TPP), these agreements will provide unprecedented access for innovative Australian enterprises to the world’s largest and most dynamic markets.
“In this critical post-mining boom period, the government has very deliberately pursued an aggressive trade and investment agenda to support the transition of our economy by adding diversity to what we do,” Mr Robb said.
Businesses can search for product-specific ChAFTA tariff information and guidance on rules of origin through an innovative new FTA Portal. A guide for exporting and importing goods, providing step-by-step advice ahead of entry into force, is also available.
These and other resources are available on the Department of Foreign Affairs and Trade website.
Plunging sea freight rates bad news for air cargo as price gap hits new record
The continuing frailty of maritime container spot freight rates could spur a new era of modal shift from air to ocean, Drewry Supply Chain Advisors warned today as the pricing gap between the two modes reached record level.
In recent weeks, container freight rates, particularly on the main east-west trades between Asia and Europe and the transpacific, hit some of the lowest levels ever seen, caused by a combination of unexpectedly low demand and overcapacity.
At the same time, while air freight volumes have also stagnated, the pre-Christmas peak season remains in full swing for air cargo operators and Drewry’s east-west air freight index in October rose for the fourth consecutive month.
As a result, the traditional multiplier that air freight is 11 times more expensive than sea freight has dramatically increased recently, and last month stood at 22.3 times, the highest multiple recorded by Drewry since it began covering air freight rates in May 2012.
The multiplier stood at 11.8 times in January, and rose continually month on month – bar a slight decline in August – through to October.
“The longer the multiplier remains above the historical average the greater the chance there will be acceleration to the ongoing modal shift of certain transferrable commodities from air to ocean,” Drewry said.
“The shift towards the much cheaper ocean freight mode has gathered momentum in recent years as shippers have developed more sophisticated IT systems, leaner inventory strategies and greater faith in container service reliability.”
The widening gap is almost entirely explained by the weakness in the ocean freight markets. In October last year, Drewry’s east-west air freight index stood at $3.75 per kg, compared with $3.31 per kg last month, a year-on-year decline of nearly 12%
In contrast, air freight was 16.5 times more expensive than ocean in October 2014, while last month it was 22.3 times more costly – indicating that the widening gap between the two is entirely driven by the sharp decline in sea fright pricing.
The company added that the multiplier may increase further once November’s figures have been calculated, and although it would normally expect to narrow after Christmas, the wild unpredictability of the sea freight market could keep it at record levels.
“Drewry expects air freight pricing to have strengthened further through November, as end-of-year peak season boosts short-term demand. But pricing is not expected to match the dizzy heights of last year, as stagnant growth, combined with rising bellyhold capacity from a fast-expanding passenger aircraft fleet, keeps pressure on pricing.
“Thereafter, rates are expected to soften as peak season recedes. Further weakness to ocean spot rates should serve to keep the pricing multiplier at or around the current levels,” it said.
Drewry’s air freight index, a weighted average of all-in air freight rates paid by forwarders for “standard deferred airport-to-airport air freight services on 21 major east-west routes for cargoes above 1,000kg”, comprises the base rate, fuel surcharge and security surcharge but excludes door delivery costs.
The comparison of east-west air freight price and east-west container freight rate indices is achieved by converting to cost per kg, with the assumption of 4,500 kg per teu.
NYK quits as Asia-West Africa trade goes 'from bad to worse' with rates and volumes falling
NYK is to exit the Asia-West Africa trade, and could be the first of many operators, according to Drewry.
The analyst says more carriers might quit the sector as container volumes continue to fall, resulting in reduced vessel load factors and declining freight rates.
Data from Container Trades Statistics shows that southbound volumes from Asia to West Africa decreased in nine of the first ten months of 2015, compared with the previous year, with the most recent year-on-year declines reaching 10%.
“The lacklustre demand in the trade has forced carriers to curb any growth to capacity with the monthly count of available southbound slots generally static in the last few months,” said Drewry.
It noted that southbound utilisation levels on vessels fell to 64% in October, versus the low-70% range of a year ago.
Spot freight rates have subsequently plunged to around half of their average value of last year, and during November stood at around $1,800 per 40ft.
Drewry said the situation on the trade had gone from “bad to worse”, “showing no signs of recovery”.
NYK has operated the Asia-West Africa service, which it dubbed WAX, together with Hapag-Lloyd and Gold Star Line (GSL) since January, following a reshuffle of vessel-sharing agreements on the route.
The remaining partners are continuing to operate the link – branded WSX by Hapag-Lloyd and FAX by GSL – deploying a dozen 2,500-3,500 teu ships, and are understood to have replaced the two vessels previously provided by NYK with freshly chartered tonnage.
The service features two calls in Nigeria, Lagos-Apapa and Lagos-Tincan, but Africa’s largest economy has suffered badly from crashing oil prices as it relies on this revenue for over 90% of its foreign exchange earnings.
With a glut in supply, Nigeria is having difficulty selling its oil and has been forced to sell much of its production on spot at even lower rates.
Nigeria’s currency, the naira, has subsequently fallen to record lows against the US dollar, and construction contracts and international investment have stalled with consumer demand also considerably reduced.
Indeed, portoverview.com reported in November that falling cargo volumes – 30% down on a year ago – had obliged APM Terminals to cut its workforce at its facilities in Apapa.
Prices of commodities such as iron ore, copper, rubber and cotton have also plunged this year in what the World Bank describes as a “challenging year for the continent”.
Encouraged by 7% southbound growth in 2014, NYK has no doubt become disillusioned with the prospects on the trade and decided to quit the route rather than tough it out and wait for a recovery.
Like many carriers operating under extreme financial pressure, NYK constantly reviews its service links and is no longer concerned about any bad PR that may follow the short notice exit.
It follows compatriot MOL’s announcement in June that it was withdrawing from the Europe-West Africa trade after poor results.
“Our decision was inspired by the poor results… based on the present market outlook and cost exposure, conditions for an improvement of the results are not favourable,” it said at the time.
Most shippers not ready for new container weighing rules
Only 30% of cargo owners globally say they are ready to meet full compliance with new container weight verification rules that kick in next year, according to a survey by Inttra, a global intermediary in the logistics market.
The findings chime with a warning in October by the Freight Transport Association that shippers could fall foul of the new legislation if they do not verify the gross mass of containers before shipment.
The International Maritime Organization has adopted amendments to the Safety of Life at Sea convention requiring every packed export container to have its weight verified before being loaded onto a ship. The rules come into force on July 1, 2016.
Two thirds of the 410 respondents to the Inttra survey forecast major or moderate disruption in the industry as a result of unreadiness, while cargo owners in Asia-Pacific (42%) and Africa (22%) foresaw the greatest level of disruption.
A majority of the respondents say they favour a digital solution, as current paper-based practices appear inadequate to expedite reporting of verified gross mass, or VGM, of packed containers.
Inttra is a US-based multi-carrier e-commerce marketplace for ocean shipping and serves as an intermediary between carriers and cargo owners.
The IMO has specified that two methods of verifying weight are acceptable: either weighing the packed container using certified and calibrated equipment or using a calculated weight method, which involves summing the individual items separately, and adding the tare weight of the container and packing materials using an approved process.
Separately, Inttra announced the formation of a group of major logistics providers to create standards and for digital solutions to meet compliance requirements, called the eVGM Initiative. Inttra described itself as the initiator of the group, which includes APL, BDP International, CEVA, Damco, Hapag Lloyd, Hamburg Sud and Kuehne + Nagel.
Concerns over probable disruption associated with the new compliance requirements, like those voiced by the FTA, have emerged now that the deadline is a little more than a half year away.
“These survey results are consistent with that, as they reflect concerns over potential disruption and lack of preparedness,” Inttra Marketplace president Inna Kuznetsova said. “We believe that co-ordinated action can facilitate a smooth transition.”
