FEBRUARY NEWSLETTER 2017
From the MD’s Desk
From the MD’s desk – Glenn Allison
Welcome to the February edition of the Orbit Logistics Newsletter
This month we have a couple of articles on global trade, with the expected withdrawal of the USA from the Trans Pacific Partnership, which might give a flow-on benefit to China. There is also an article on the current size of our trading figures with China, over 30% of our total exports and over 22% of our total imports.
Japan remained a major trading partner for Australia, still ranked No. 2. The imports of motor vehicles from Japan makes up the largest component of this trade, and this is likely to increase after Toyota finishes local production later this year. Orbit Logistics is strengthening our network in the Japanese market, and would welcome any enquires for imports/exports in that market.
The Marmorated stink bug is a major Quarantine issue for Australia, and we have an update on the spread of that bug from USA & Europe. There will be costs for importers as a result, for Quarantine fees and possible fumigation of certain commodities.
Something else that is spreading is the road network in Melbourne, and that will also come at a cost in the supply chain in terms of significant increases in truck tolls.
It’s not all great news, but it is all pretty important…happy reading, and please contact our Customer Service team with any queries or comments. We would love to get your feedback.
CHINA STILL AUSTRALIA’S BIGGEST TRADING PARTNER
CHINA topped the list of Australia’s merchandise trading partners in 2015-16, accounting for more than a quarter of total trade (26.5%), according to the Department of Foreign Affairs and Trade’s publication Composition of Trade Australia 2015-16.
Two-way trade between the countries was worth a total of $136.67bn over the year.
Exports to China were $75.2bn, or 30.8% of Australia’s total exports by value for the year.
Not surprisingly iron ores and concentrates were the number one export to China in 2015-16 (worth $75.4bn), followed by coal ($5.6bn) and gold ($3.5bn).
Exports of “edible products and preparations” saw a year-on-year increase in value of 224.5% to $966m in 2015-16.
Imports from China were worth $61.5bn, or 22.6% of the year’s total imports.
The top three most valuable merchandise imports from China were telecom equipment and parts; computers; and furniture, mattresses and cushions.
Japan was Australia’s second-biggest trading partner over 2015-16, accounting for 10.7% of the total value of Australian two-way trade, or $55bn.
Aussie exports to Japan were worth $35.8bn over the year, or 14.7% of Australia’s total exports.
The three most valuable exports from Australia to Japan in 2015-16 included coal (worth $11.2bn), iron ores and concentrates ($4.7bn), and beef ($1.8bn).
While imports from Japan were worth $19bn, 7.1% of total imports to Australia.
Top imports from Japan were passenger motor vehicles ($6.6bn), refined petroleum ($2.6bn) and goods vehicles ($1.4bn).
And, coming in at the number three most valuable trading partner was the US – trade between the two countries was worth $46.2bn over the past financial year, or 9% of Australia’s total.
The US was Australia’s second-largest source of imports, which were worth $32.5bn, or 12% of total imports into the country.
The US was a major source of passenger motor vehicles, with imports of cars into Australia totalling $2.4bn for the period. Aircraft parts and telecom equipment were also valuable imports.
Exports to the States had a value of $13.7bn, or 5.6% of Australia’s total exports.
THE TPP (TRANS PACIFIC PARTNERSHIP) REGIONAL TRADE AGREEMENT GETS TRUMPED
As we alluded to in a previous newsletter, the 14 country TPP proposed trade agreement has been hit with the USA now out of discussions. No surprise there, both major candidates were expected to withdraw as soon as elected.
We are not sure if Mr Trump rang our PM to advise him of the US withdrawal, but it isn’t likely…
Perhaps there is flow on effect from this with regards to China trade, and the possible strengthening of China’s position as an even more powerful trading power.
The attached article provides some further commentary in this regard.
MARMORATED STINK BUG PLAGUE SPREADS TO EUROPE
With such an appealing name, the MSB was always going to become big in Europe.
The huge spike in the MSB plague in USA has caused major problems for Australian importers, with mandatory strict fumigation requirements now required on many products.
The MSB plague has spread to Europe, so the expectation is that imports from there will also be covered by the same quarantine requirements.
The Department of Agriculture has taken a slightly unusual step of corresponding with all shipping lines, providing preventive measures aimed at limiting the MSB issue coming to Australia.
The attached article provides insight to the step being taken to avoid the danger of this bug.
Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) received a letter today from Leanne Herrick, Acting Assistant Secretary, Pathway Compliance – Department of Agriculture & Water Resources. The correspondence refers to a notice that has been sent to all shipping lines advising that Brown Marmorated Stink Bugs are now establishing in Europe and provides some preventative measures that the shipping lines can implement to help prevent the bugs from arriving in Australia on vessels and cargo from European ports.
We will continue to communicate with our affected customers on a case by case basis.
INCREASE IN CITY LINK TOLLS FOR TRANSPORT OPERATORS
Container transport operators have united in agreeing that City Link toll increases to come into effect on 1 April will be passed along the supply chain, impacting the cost of goods to Victorian consumers.
Container Transport Alliance Australia (CTAA) companies have agreed that the increase in tolls, plus any associated administrative costs, will be passed along the container supply chain, through an identified and separate ‘toll surcharge’ on invoices to their customers.
From April onwards, container transporters delivering Victoria’s vital import and export freight face up to a 225% increase on toll fees when travelling between the Port of Melbourne and Dandenong. Other increases impact on freight moving to and from the north on the Tullamarine Freeway.
To download the CTAA media release and notice to alliance companies click HERE.