APRIL NEWSLETTER 2018
Welcome to the April Edition
We have a number of articles of interest this month and there is a focus on the landside port challenges that are impacting on costs and productivity.
These include increases in Infrastructure Fees, the trend towards empty containers being returned to Terminals, and the undercurrent of Industrial Relations disputes that are bubbling along across the waterfront.
There is some good news on Trade performance figures and potential benefits regarding Trusted Trader status.
RETURN OF IMPORT CONTAINERS TO AUSTRALIAN SHIPPING TERMINALS
Please see the below information, regarding shipping lines requesting empty containers to be de-hired back to the terminal.As you may be aware there has been a recent policy change of the major shipping lines into Australia with lines now directing empty containers to be de-hired directly to the stevedore terminals rather than the Empty Container Parks. Whilst this may result in a saving to each shipping line, it will significantly increase the handling costs for transport companies operating at the wharf.Procedure has dictated in the past that empties are to be de-hired at dedicated Empty Container Depots whose sole purpose is to unload, survey, clean and/or repair if required and then release for export bookings. Recently, very few containers are needing repair in Australia, and are now typically shipped overseas for repair due to the reduced labour costs.At its peak around 40% (40,000 of these containers) are transferred to the terminal to be exported empty at the shipping lines expense. So these containers are stored at the empty yard, then trucked to the terminal empty for exporting, and these costs have been borne by the Shipping Lines. However, now recognising there is a potential to avoid such cost, thus saving money, they are now nominating empty containers be returned directly to the terminals.Therefore effectively, Shipping Lines are shifting the cost of transport, storage and lifting fees from themselves to the transport companies whom in turn have to pass these costs on to customers.Transport companies have assessed this and have all announced the cost to de-hire directly back to the terminal instead of an empty yard is significantly higher.Orbit Logistics have also assessed these costs and are announcing today that we will be passing the costs onto Customers as follows:-
20’ Containers – AU$65.00
40’ Containers – AU$90.00
As these costs are transport related costs, they do attract a fuel levy. The costs do apply to all Australian terminals in Melbourne, Sydney, Brisbane, Adelaide & Fremantle, and are in place within immediate effect, however charged only when empty return back to the terminal has been nominated to us on the Shipping Lines Delivery Order.
Please however note, where Importers request the handover of delivery orders to a 3rd party, we will not accept any liability for container detention caused by the lack of availability of time slots at the terminal, in order for empties to be received within the detention free time allowance period.
In the meantime, should you have any questions or concerns, please contact our sales department
NATIONWIDE TRUCK SHORTAGES – U.S.A.
A nationwide truck shortage is forcing thousands of shippers into a tough choice of either to postpone all but their most important container deliveries, or pay higher rates to move their shipments. The surging transportation demand is spurring trucking companies to charge as much as 30 percent more for long-distance routes compared with prices a year ago, and they’re hard pressed to add capacity because of a long-standing shortage of drivers.
A new federal safety rule in December requiring drivers to track their hours behind the wheel with electronic logging devices (ELD’s) has exacerbated the problem. Prices shot up for some routes that now might take two days instead of one because of stricter time keeping.
Another factor is a growing shortage of qualified drivers. The shortage is having a dramatic effect on our ability to deliver freight in a timely and effective manner.
Covenant Transportation Group Inc. is offering a $40,000 bonus to persuade more drivers to work in teams, which boosts the usage of the company’s trucks by having one person rest while the other takes the wheel. That will help Covenant meet “extremely strong” freight demand. Some long-haul cargo may move to railroads, which tend to be slower but charge less than trucks. The consolation for companies faced with pricier trucking rates is that the increases are hitting everyone, so no competitor is getting an upper hand.
It’s going to be an industrywide issue that we’re all going to have to face, which is higher freight cost going forward. There is also an increased risk of demurrage, detention, storage and dry run charges. All of us at Orbit Logistics will continue to work diligently to provide the highest level of service our clients deserve.
DFAT report shows trade increases
AUSTRALIA’S total trade in 2016-17 was worth a record $735.5bn. In a statement released by federal trade minister Steven Ciobo said Australian exports had risen 16.8% to $373.2bn, while imports were valued at $362.1bn, up 1.4%.
“For the 12 months to June 2017, resources were again the driver, with iron ores and concentrates and coal accounting for 31.4% of total exports.
Australia’s third largest export was education-related travel services, which rose 16.1% to $28bn, natural gas rose 34.5% to $22.3bn as Australia’s fourth largest export, and personal travel, excluding education, services was fifth, and rose 4.8% to $21.7bn.
Mr Ciobo said Australia’s top trading partner was again China, a position it has held for the past 11 years. Two way trade with China was valued at $174.7bn, or 23.8% of total trade.
Japan also overtook the United States to become Australia’s second largest trading partner at $68.6bn, with the United States as the third largest partner valued at $66.5bn.
Delving deeper into the report, we find that Australia’s exports of goods alone were worth $291.6bn, showing a 19.4% increase over the previous financial year. Meat and meat preparations $11bn, a decrease of almost 10% on the previous year, Cereal grains and cereal preparations were worth $9.3bn, which was an increase of 17%, Exports of metal ores and minerals were worth $85.2bn for the year an increase of 23.1% on the 2015-16 financial year. The value of coal exports was up a whopping 57.1% on the previous year to $54.3bn. Imports of goods were worth $277.9bn over the past financial year, showing an increase of 2.4% on the 2015-16 financial year.
Australia’s top import (excluding services) by value for the financial year were passenger motor vehicles, imports of which were worth $21.8bn in the 2016-17 financial year, an increase of 1% on the previous year. Refined petroleum was the second-largest merchandise import, worth $17.4bn after an increase of 7.2%. Telecom equipment and crude petroleum followed, worth $12bn and $8.6bn, respectively.
Merchandise exports to China rose in value 27.1% in 2016-17 over the previous year, to $95.7bn.
It comes as no surprise that exports of iron ore and concentrates dominated Australia’s trade with China. Over the past financial year, exports of iron ore were worth $51.7bn, after an increase of 33.4% on the previous year. Iron ore accounted for 54% of the value of Australian exports to China. The value of coal exports to China increased 99% over that time to $11.2bn and wool and animal hair increased 20.1% to $2.4bn.
Imports to Australia from China over the financial year were worth $61.5m in total. At the top of the list of Chinese imports were telecom equipment and parts, worth $7m after an increase of 2% on the previous year. Computers were the second-most valuable import from China, worth $5m after a very small increase on the previous year (0.6%). Furniture was the third most valuable import, worth $2.6m, and imports of prams, toys games and sporting goods were worth $2.3m.
The US came in third when looking at the value of merchandise trade with Australia, representing a 7.5% share of Australia’s total merchandise trade.
Merchandise exports to the US totalled $12.3bn over the past financial year. Australia’s biggest export to the home of the brave was beef (fresh, chilled or frozen), worth $1.5bn after a decrease of 40% on the previous year. Other meat (fresh, chilled or frozen) was the second-biggest export to the US, worth $934m over the past financial year. The third biggest export to the US was aircraft, spacecraft and parts, worth $855m after a decrease in value of 23.5% on the 2016-17 financial year. Turning towards merchandise imports from the US, we find they were worth a total of $31bn last financial year. At the top of the list was passenger motor vehicles, imports of which were worth $2.2bn after a 6.6% decrease on the previous year. This was followed by aircraft, spacecraft and parts ($2bn) and medical instruments ($1bn).
South Korea accounted for 6.2% of Australia’s total merchandise trade (by value) during the past financial year.
Exports of both coal and iron ore to South Korea saw significant increases in value (35.7% and 28.4%, respectively). Exports of coal to the peninsular country were worth $6.3bn, while iron ore exports were worth $3.9bn.
The third largest export to South Korea was beef (fresh, chilled and frozen), worth $1.2bn after a decrease of 7.3% on the previous year. Other notable export include sugars, molasses and honey ($998m); aluminium ($748m); and other ores and concentrates ($693m). Refined petroleum topped the list of imports from South Korea, worth $4.8bn over the past financial year after a decrease of 3% on the previous year. Ships, boats and floating structures was the second biggest import category by value from South Korea, worth $3.9bn. Passenger motor vehicles were the third most valuable import from the country, worth $2.4bn after a decrease of 4.6%.
FURTHER UP-DATE ON BROWN MARMORATED STINK BUGS – EX ITALY
To Re-Cap: The Brown Marmorated Stink Bug (BMSB) is an exotic pest of bio-security concern to Australia’s and New Zealand’s agriculture industry as they feed on and severely damage fruit and crops. Typically the Peak Season for these bugs is from the 1st September to the 30th April.
The Department of Agriculture has just announced that an escalating number of failed treatments have been identified for shipments ex Italy, treated with Sulfuryl Fluoride (SF). Recent detections of Brown Marmorated Stink Bug (BMSB), due to ineffective SF treatments out of Italy required the department to implement pro-active controls to manage offshore SF treatment providers.
Currently, to manage the risk posed by these consignments, all containerised consignments shipped from Italy that arrive in Australia between 17 January 2018 and 30 April 2018 will be required to undergo an approved treatment offshore or onshore before being released. Consignments treated offshore with one of the approved BMSB treatments, and where a valid treatment certificate is presented to the department, do not require onshore treatment.
Where a SF fumigation failure from a treatment provider is confirmed, the department adds the treatment provider to a published list of ‘unacceptable’ treatment providers and profiles them using the AQIS Entity Identifier (AEI) field in the Integrated Cargo System (ICS).
Currently the list is:
Offshore Sulfuryl Fluoride Treatment Providers – Italy
As at 8 February 2018 – All sulfuryl fluoride certificates issued by fumigators from this country are acceptable, except for those issued by companies listed below as “unacceptable”. All consignments treated by companies listed as “unacceptable” will be treated on arrival, exported or voluntarily disposed of in a manner approved by the Department of Agriculture and Water Resources.
Treatment certificates are not accepted from treatment providers as of the date they are listed as ‘unacceptable’. There is no allowance for goods in transit.
More information may be found at this link: Offshore Sulfuryl Fluoride Treatment Providers List
|All companies not listed as unacceptable||Acceptable||IT4001SF|
|Societa Italiana Sterilizzazioni||All branches||All branches||Unacceptable||IT4002SF|
|Ligur Control||Salita S. Francesco da Paola 27r
When a treatment provider is listed as ‘unacceptable’ and profiled in the ICS, all consignments with treatment certification from the treatment provider is referred to the department to be directed for appropriate onshore treatment. This system ensures treatment certificates issued by treatment providers responsible for past and future SF failures are rejected by the department and appropriate risk measures taken.
By including the requirement for customs brokers to enter the IT4001SF AEI for ‘All companies not listed as unacceptable’, the department is able to track consignment volumes, conduct random interventions where necessary and have confirmation that customs brokers have conducted the necessary assessment of the certificates and they are determined to be acceptable. This is the same practice currently in place for all methyl bromide certificates received from non-Australian Fumigation Accreditation Scheme (AFAS) countries.
The list is obviously small as this process has only just been implemented, the list is expected to grow as the department receives more failed treatments.
Please review the full details via the following notice from Department of Agriculture and Water Resources:http://agriculture.gov.au/import/industry-advice/2018/04-2018
Infrastructure Levies on the Increase
Further to DP World Australia’s announcement In December/January to Increase their Port Infrastructure surcharge in Melbourne, Sydney and Brisbane terminals. Patrick’s have now announced they will also be increasing their infrastructure fee’s effective 12th March 2018. Infrastructure surcharges recover a portion of the costs that relate to:
- Capital investments already made on dedicated infrastructure that services our land-side interface operations.
- Excess charges over CPI that relate to our property and related costs, (Including rent, land tax and council rates).
- Maintenance and operational costs associated with providing our land-side interface.
The infrastructure surcharge will be applied to both road and rail transport operators for all full container movements, both Import & Export, made at the terminals. Any clients that will be affected by this increase, will be notified separately by a member of Orbit Logistics Sales/Management Team. In the meantime, should you have any questions, please do not hesitate to call our office.
The Department of Agriculture and Water Resources Industry Advice Notice
The Department of Agriculture and Water Resources has published Industry advice notice 33-2018 detailing how conditionally non-prohibited goods will be managed if they arrive without a required import permit. Changes take effect Monday 9 April 2018.
Who does this notice affect?
Importers of conditionally non-prohibited goods that require an import permit and agents acting on importers’ behalf.
What has changed?
From 9 April 2018, the department will no longer facilitate the clearance of conditionally non-prohibited goods that arrive without the required import permit.
Goods that require a permit, but arrive without one, including where an application is currently under consideration, will be directed for export from Australian territory or required to be destroyed in an approved manner.
Why are permits required?
The Biosecurity (Prohibited and Conditionally Non-prohibited Goods) Determination 2016 (the Determination)specifies the alternative conditions for the import of conditionally non-prohibited goods. Where there are no alternative conditions for particular goods specified in the Determination an import permit is required.
The import permit assessment and approval process, as set out in the Biosecurity Act 2015 (the Act), provides the department with control over the import of certain biosecurity risk goods through the application of conditions based on technical, scientific, administrative requirements, and the fitness and propriety of the importer and their associates.
Conditionally non-prohibited goods must not be brought or imported into Australian territory, unless the specified conditions are complied with, including holding a valid import permit if required. The Act does not provide for permits to be issued after the goods have been brought into Australian territory, and to do so is a criminal offence with a penalty of 5 years imprisonment or 300 penalty units, or both. The penalty for this offence is 10 years imprisonment and/or 2,000 penalty units if a person obtains a commercial advantage over their competitors or potential competitors. Contravening the Act can also make a person liable to a civil penalty of up to 120 penalty units.
Check if your goods require an import permit by accessing the Biosecurity Import Conditions (BICON) system.
If you have goods in transit that may arrive without an import permit contact Imports to discuss your options.
QUBE AIRLIFTS MANAGERS TO WEBB DOCK AS WATERFRONT ROW ESCULATES
QUBE Ports opted to airlift managers into Webb Dock recently following the escalation of an industrial row with the Maritime Union.
The MUA reportedly blocked access to Melbourne’s Webb Dock during a two-day strike over the weekend so Qube responded by helicoptering in 36 managers to unload 731 European cars from the vessel Figaro. Qube provides labour for the unloading of car imports at the MIRRAT facility, located at Webb Dock.
Qube Ports director Michael Sousa said the safest way for the managers to enter the site was by helicopter, given the “ongoing threats and intimidation” by the Union. The strike stems from Qube’s application to the Fair Work Commission to end its enterprise agreement after being at loggerheads with the Union for two-and-a-half years.
As a result of the on-going dispute, Qube Ports has been forced to seek the termination of the current enterprise agreement. If Qube’s application is accepted by the Fair Work Commission they will seek to renegotiate a new enterprise agreement in line with the award.
The MUA says reverting to the award would mean a pay cut of at least 40%. The Union is demanding increased pay and changes to conditions for its Webb Dock workers. The MUA also said the company had removed rosters and is “pushing excessive working hours”.
MUA assistant national secretary announced that the company removed the roster in early 2015, saying it would revert when trading conditions improved but some three years later volumes have increased but the roster has not been reinstated. But Qube’s director of corporate affairs said the company had never offered to reinstate the old 2014 roster which was completely uneconomic.In fact it was FWA which approved that the roster should not be applied because the employees do not work 35 hours a week as specified under the roster.
Qube announced they are always happy to keep talking with the Union, but it does need them to tone down the overblown rhetoric and come to a sensible deal on behalf of their members.
The industrial action was apparently costing shipping lines more than $40,000 per day, and causing the working of vessel’s due to employee’s not being able to work.
The two parties have been in negotiations since 15 September 2015, having 43 meetings, with Qube originally seeking an 8.77% wage decrease to address commercial pressures on the business.
However, Qube has now offered a 9.5% increase over four years, with some changes in working conditions. Negotiations however continue.
New Packing Declarations Implementation
Further to the Department of Agriculture and Water Resources (the department) Import Industry Advice Notice 101-2017 – Implementation of revised Minimum Documentary and Import Declaration Requirements and Non Commodity Information Requirements Policies, we would like to remind you the department has now updated the packing declaration templates. The department has aligned the Non Commodity Information Requirements policy and the Non Commodity BICON Case with the import conditions for bamboo packaging. Bamboo packaging is now acceptable provided it is treated by an approved method prior to export or on arrival and does not need to be declared as unacceptable packaging.
The department will continue to accept packing declarations that are in the current format for consignments shipped on or before 30 June 2018. All consignments shipped on or after 1 July 2018, must be accompanied by a packaging declaration that meets the revised requirements.
Updated templates are now available on the Acceptable documentation templates webpage to enable you to advise your clients / suppliers to start using the new templates.
Regulations for Importing Vehicles into Australia
A reminder to all clients Importing vehicles into Australia, that an Import Permit is required to be applied for.
An application for a Vehicle Import Approval, with all necessary supporting documentation will generally be assessed by the Department within 20 working days of receipt (including payment of the lodgement fee). This process will take longer if the necessary supporting documentation is not initially provided, if the original application is incomplete or any further information or clarification is required.
Obtaining a Vehicle Import Approval is only one step in the process of importing a vehicle into Australia. Depending on the type of vehicle, the processes may be complex, involve several organisations, and take many weeks. For an overview of the process, read the 8 steps to import a vehicle.
Permits are required for all of the following forms of vehicles.
New & Used Cars / Race/Rally car or Motorbike’s / New & Used Trucks / Motorbikes / Moped’s / Buses / Motor-homes / Trailers / Motorised Wheelchairs / Power assisted pedal cycle or motorised scooters / ATV’s / Quad Bikes / Go-Carts / Scooters / Small or mini motor-bikes / Any non standard vehicle/special purpose (eg: city utility vehicles – fire tenders, garbage trucks, sweepers, mobile cranes, mobile drilling rigs and mobile plant operators.
If you are unsure if you require a permit or have any questions, please follow the link below or contact our office for further details. https://infrastructure.gov.au/vehicles/imports/
Performance of Australian Freight Infrastructure
BITRE released this week the Australian infrastructure statistics yearbook 2017, providing an overview of the performance of Australian freight infrastructure.
The report reveals that Australia’s five major container ports handled 7.2m TEU over the 2015-16 financial year, an increase of 1.4% on the previous year. In fact, combined container throughput at Sydney Melbourne, Brisbane, Fremantle and Adelaide has risen nearly every year since 1993-94, the farthest back the BITRE data goes.
The only year container throughput didn’t grow was in 2008-09, when it actually decreased by 3% on the previous year. Four of the ports saw decreases in throughput that year, with Sydney showing an increase of just 5495 TEU over the 2007-08 financial year.
Since the 1993-94 financial year, container throughput at the ports increased an average 6% per year. Looking at the Australian trading fleet, we see the fleet’s total deadweight tonnes steadily increasing – at an average yearly rate of 3% between 2001-02 and 2014-15.
Zooming into 2014-15, the total Australian trading fleet’s deadweight tonnage was 4.88m tonnes – of which only 11% is Australian flagged.
In the 2001-02 financial year, 50% (by deadweight tonnage) of the Australian trading fleet was locally flagged. Looking at the number of vessels, we see 53% of the vessels in the Australian trading fleet were locally flagged in the 2001-02 financial year, while in 2014-15, that number went down to 43%.
The full report can be found on BITRE’s website.
Cost Recovery reform opens the door for Trusted Traders
Feedback to date justifiably questions whether this opens the door for further reforms.
The much publicised Australian Trusted Trader programme creates an environment of establishing low risk industry participants allowing Home Affairs to focus resources on targeting higher risk entities and associated import consignments. Those importers that have received this accreditation argue that they should receive a differential cost recovery rate as this too aligns with the AGCRGs principles to move away from cross-subsidisation.
To date this concept was difficult to digest as non-trusted traders would have been required to have a further inflated cost recovery rate to maintain net cost recovery.It is now a realistic outcome that we could see an import cost recovery model whereby high volume / low value consignments attract a transactional levy (as proposed in the discussion paper) and high value consignments subject to a two-tier levy, a lower fee for trusted traders and another for non-trusted traders?This could be achieved without increasing existing cost recovery levies on high risk entities yet still delivering a saving to Trusted Traders. If this concept has legs, those importers that were looking for an extra incentive to join the Australian Trusted Trader programme may well be queuing up to be direct financial beneficiaries of this innovative reform … read more
Orbit Staff Updates
Orbit Logistics congratulates this month Transport team members Erin Dobrautz and our Transport Manager Jason Micallef for competing their Chain of Responsibility course. The Chain of Responsibility course requires that anyone who has control over a transport task must ensure that their action, inaction or demands do not contribute to breaches of Heavy Vehicle National Law.
National and Public Holidays around the world for May
Wednesday 25th April – Australia & New Zealand – Anzac Day
Sunday 29th April – 1st May China & Hong Kong – Chinese Easter
Monday 30th April- Japan- Show Day
Tuesday 1st May- Indonesia, Taiwan, Malaysia- Labour Day
Tuesday 1st May- Europe- May Day
Thur/Fri 3rd-5th May- Japan- Memorial days
Monday 7th May- U.K.- Early May Bank Holiday
Thursday 10th May- Indonesia & Belgium- Ascension Day of Jesus
Wednesday 16th May- Various Countries – 1st Day of Ramadan
Monday 21st May- Belgium, France & Germany- White Day
Tuesday 22nd May- Hong Kong- Buddha’s Birthday
Monday 28th May- U.K.- Late May Bank Holiday
Tue/Wed 29th-31st May- Indonesia, Malaysia, Singapore – Waisak Day