DECEMBER NEWSLETTER 2018

Posted by Geraldine Wilson
Category:

Welcome to the December 2018 Orbit Newsletter

Dear Valued Customers,

As we race towards the end of 2018, the news continues to flow about current hot topics and upcoming changes (especially re further cost increases at container terminals).

On behalf of the Management and staff of Orbit Logistics we thank you for your business during 2018 and we look forward to our continuing partnerships going into 2019 and beyond.

Enjoy the upcoming festive period, stay safe and for those having a break, enjoy the holiday!

Our office will close for the public holidays only.

As always, please contact our office with any inquiries on the Newsletter topics.

Happy Reading!

Glenn Allison
Managing Director

 

Update   – (BMSB) Brown Marmorated Stink Bugs

The BMSB issue continues to be a significant speed-hump in the processing of import consignments.

Importers should continue to expect delays and additional costs during this period of significant border control intervention by the Department of Agriculture.
If any importers have specific concerns regarding excessive costs incurred such as wharf storage/detention, please bring them to our attention.

In cases where the department has not been able to process containers efficiently, consideration may be given to compensation schemes available under the Public Governance, Performance and Accountability Act 2013 – please click HERE to view a presentation on compensation recently delivered by Russell Wiese, Principal Hunt & Hunt Lawyers.

The Department of Agriculture is strongly recommending that importers of BMSB commodities from target countries should arrange off shore treatment of the cargo at origin by approved treatment facilities.

As noted in last month’s newsletter, of significant potential impact is the fact that the BMSB has been located  on vessels that originated from China & Japan, two of our biggest trading partners. More vessels and cargo has been found with BMSB infestations. The Department of Agriculture have some big decisions to make in this regard. If countries such as China and Japan get added to the target risk countries, it has the potential to cause huge impact on import cargo processing and movement.

We are monitoring developments and will continue to share information via our social media and broadcasts.


AUS-Hong Kong Free-Trade Agreement Negotiations Conclude

AUSTRALIA and Hong Kong have concluded negotiations on a free-trade agreement, with Prime Minister Scott Morrison calling it a “significant milestone in our already substantial trade and investment relationship”.Hong Kong is an important trading partner for Australia, with two-way trade in goods and services coming to $18.8bn in 2017, according to DFAT statistics.
Prime Minister Morrison said in a media statement that Hong Kong was a large and vibrant market of Australian goods and services and is a major gateway for Australian producers into East Asia.  “Under World Trade Organization rules both Australia and Hong Kong have the capacity to increase tariffs but this agreement permanently locks in zero tariffs on all Australian exports to Hong Kong, which is good news for our farmers, and in particular our seafood industry, our beef and pork producers and winemakers,” he said.

Australia now has an FTA with China and Hong Kong, which reaffirms the value we place on the principle of one country, two systems.”Negotiations for the agreement were launched on 16 May last year, with then-trade minister Steven Ciobo saying the territory had long been a showcase market to engage consumers from Hong Kong, mainland China and across the region.  “Hong Kong is a trendsetter in the region, demanding high-quality products for its sophisticated and wealthy market,” Mr Ciobo said when negotiations were launched.                                   

 


Transition to 2020 Low Sulphur Fuel (LSS)

Beginning January 2020 all ships & vessels operating will be required by law to use fuel oil with a maximum Sulphur content of just 0.5 per cent m/m. Vessels will use an IMO (International Maritime Organization) approved equivalent method such as exhaust gas leaning systems (known as scrubbers) to ensure that emissions meet the required target.

LSS is being implemented to reduce the impact of Sulphur Oxide Emissions created by shipping for both the environment & human health.

Any vessels that are not compliant with the new regulations by January 2020 will be detained, or the Carrier will be penalised if caught. The overall result of any such action would cause flow on effects of space restraints, vessel rolls and likely cost increases.

Scrubbers can cost up to USD 14 Million per vessel and can take upwards of 2 years to install. With this process already underway globally, shipping lines are now imposing a cost recovery program to fund this. Whilst there has previously been a Low Sulphur Levy in place for some time now on most trades, this amount is expected to increase to cover these additional costs. We expect the increase to range anywhere from USD 50 – USD 300 per TEU and will vary by trade lane. Any increases to costs as a result of this new requirement will be passed on in the form of a Surcharge, exact amounts will be confirmed at a later date as the costs come into effect.

 


IMO 2020 sulphur cap to cost MSC more than US$2bn per year, company says

MSC estimates the cost of changes to its fleet and fuel supply that the IMO 2020 sulphur cap requires will cost the company more than US$2bn per year, necessitating the introduction of new bunker charges as of 1 January.

In a communication to customers, the company explained it was already incurring costs in its preparation for the implementation of the 2020 sulphur cap.

“We believe that it is essential to segregate transparently the burden of fuel costs, in order for this cost to be passed on visibly throughout the supply chain,” the company wrote.

“Passing on that cost is also vital to ensure the sustainable future of the container shipping industry.”
MSC will implement a “bunker recovery charge”, which it said would be “transparent to respective trades”.

“It will reflect the true additional cost that MSC will incur as a result of the regulatory changes we all support in order to protect the environment.”

The new charge is to replace the current bunker contribution, fuel adjustment factor and the emergency fuel surcharge, but charges specifically related to coastal emission control areas are to remain in place.

 


Infrastructure Charges Set To Increase  –  1 January 2019 – The ACCC is now involved…

Customers are reminded that from 1 January 2019, DP World  Australia will be increasing the infrastructure Access Charge at West Swanston Terminal for all road and rail operators, and will also be adjusting a number of ancillary charges.

These levies are in part a response to Port rent increases, by the new overseas based operators, and as a response to Vic Government privatising the Ports and gaining a windfall of 50 Billion.  We understand both Patrick and VICT Terminal will also make announcements to adopt a likewise Increase.

The ACCC is investigating these proposed significant increases, and we expect to hear more from them in the next month or so.

Other Port related surcharges are also coming, such as the Channel widening surcharge in Adelaide. See article below for more info.
We will share details of these charges as the move towards implementation.

For more information, please contact sales@orbitlogistics.com.au


 


Changes to proposed biosecurity import levy raise industry ire

THE Department of Agriculture and Water Resources has proposed changes to the contentious biosecurity levy, a scheme announced in this year’s federal budget that was roundly criticised by industry.

DAWR expects the levy to bring in $325m over the coming three years.

The proposed changes to the yet-to-be-implemented levy include decreasing the levy on bulk cargo from $1 per tonne to $0.50 per tonne, but implementing a fee of $0.027 per volumetric tonne of vessel gross tonnage for every international vessel calling at Australian ports.

Initially, the stevedores were to be responsible for collecting the levy, but in this recent raft of changes, the responsibility has moved to vessel operators, owners and agents. DAWR has proposed that the levy be charged via the Maritime Arrivals Reporting System (MARS).

However, DAWR already charges a fee for biosecurity cost-recovery through its $920 ship-arrival charge (administered through MARS).

Last week DAWR hosted an “industry workshop” to discuss these changes to the proposed levy. One source told DCN “it all went to town”, with industry representatives making known their dissatisfaction with the way the levy is being managed.

The levy is on a tight timeline, with the department aiming to have the legislation before Parliament by February, with full implementation by 1 July 2019.

Shipping Australia CEO Rod Nairn told DCN the levy would cost Australians two or three times as much as the government would collect because of the method of collection.

“The crux of the issue that we’ll be charging families and our farmers more in the name of biosecurity to raise money into the general government bank account. There seems no logic in the way the levy is being applied and it is certainly not proportional to the biosecurity risk,” Mr Nairn said.

“Biosecurity is absolutely crucial for Australia and it should be appropriately budget-funded and not treated as a joke through port policy badly implemented.”

Australian Federation of International Forwarders CEO Brian Lovell said the move away from the stevedore-collection model was positive, but issues remained.

“AFIF voiced concerns at the workshop that the new levy model based on the gross tonnage of commercial vessels, plus a levy on the cargo on board, imposed on the vessel owner, operator or agent, will add complexity and uncertainty for industry,” he said.

“Shipping lines and slot charterers recovering biosecurity fees from importers will in effect be calculating a portion of the vessel gross tonnage fee to add to the $10.00-per-TEU fee.”

In a statement, AFIF pointed out the levy, transferred to importers by shipping lines, would be opaque and variable, depending on the size of the ship.

“There is also the potential for ‘administration’ costs to be added, thereby the DAWR government levy (tax without GST) applied by DAWR to shipping lines, becomes an uplifted fee with a potential GST implication when charged to industry,” the statement read.

“The new proposed collection model does not remove the potential for costs being added, as the Biosecurity Levy passes through the supply chain. AFIF opposes the new collection model and will be responding formally to DAWR. AFIF maintains the biosecurity levy is a government tax, fixed amount for the three years, without GST.”

Freight & Trade Alliance director and Australian Peak Shippers Association secretariat Travis Brooks-Garrett said the organisations remained deeply concerned about “what we judge to be an administratively complex and operationally clumsy method of collecting the new levy, and about the transparency of its application”.

“On a more positive note, FTA and APSA welcome the government’s commitment, through the DAWR, to apply some $313m of the $325m expected to be collected by the levy to much-needed improvements to frontline biosecurity protection and improved service levels,” Mr Brooks-Garrett said.

“The department’s mishandling this year of measures to deal with the incursion of the brown marmorated stink bug shows there’s plenty of room for improvement and we hope vital additional resources will be allocated, now the government is set on introducing this levy.”

DAWR has been contacted for comment.

 


$120 million investment to boost rail capacity at Port Botany

NSW Ports is set to invest in ‘on-dock’ rail infrastructure capacity at each of the three container terminals at Port Botany, commencing in 2019.  Investment will be staged, with stevedores being required to invest in rail operating equipment to meet target terminal capacities.

Marika Calfas, Chief Executive Officer, NSW Ports said “The growth of containers on rail is a key objective in NSW Ports’ Masterplan, to cater for the growing trade needs of NSW. This investment will build greater rail capability at the port, supporting the Government’s investment in completing the Port Botany rail duplication and ongoing investments in large scale intermodal rail logistics centres at Enfield and Moorebank.

“Over the next four years, NSW Ports will invest $120 million on Stage 1 of this uplift to create new on-dock rail capacity at Patrick’s Port Botany Terminal. The new rail terminal will ultimately deliver 1 million TEU capacity. In time NSW Ports will invest at the other two container terminals.

“Increasing rail capacity at the Port means a faster, cheaper, more sustainable way for exporters and importers to get their product to market.” Ms Calfas said.

The investment will reduce the growth in truck movements around the port.  When fully operational this investment will reduce truck kilometres travelled in Sydney by at least 10 million per year. This will save over 2 million litres of diesel per year which is the equivalent to a net reduction in CO2 emissions of more than 5,400 tonnes a year. Michael Jovicic, Chief Executive Officer, Patrick said: “Patrick currently handles a large volume of rail based containers and is focused on growing and optimising our rail offering.  NSW Ports’ investment in rail infrastructure will be accompanied by Patrick’s $70million investment in operating equipment and systems to deliver 1 million TEU capacity. Our agreement with NSW Ports will significantly increase our terminal’s rail capacity and enhance productivity and efficiency in container movements at the port”.

To fund the investment, NSW Ports will implement a modest increase of $3.08 in wharfage fees on full imports and exports from 1 July 2019. This has been spread over the long term to minimise the wharfage increase and will be removed once the cost of the investment has been recovered.

Work will begin next year and is planned for completion by 2023. Rail operations at Patrick are expected to continue during the construction period.


Adelaide Channel Widening Levy

Flinders Ports wishes to announce the Port Adelaide Outer Harbor channel widening project is expected to be completed by the end of the 2nd quarter 2019.

Detailed design, engineering and regulatory studies have now been completed. Removal of navigational aids will commence in December and dredging works are expected to commence in March 2019.

A preferred dredge contractor has been selected for the $80m project, which involves the lengthening of the swing basin off the container terminal in addition to the widening of the 11 km shipping channel to a width of 170 metres. This width will accommodate the largest vessels expected to call Port Adelaide in the foreseeable future.

In order to fund the cost of the project Flinders Ports will be increasing the Channel dredging levy. The increase will only apply to the container trade on a per TEU basis (full containers only).

Effective January 1st 2019 the current channel dredging levy will increase to $26.60/per TEU (full) and will apply to all containers loaded and discharged at the Flinders Adelaide Container Terminal.

For further information about the Channel Widening Project please refer to the following link which will provide regular updates on the project.

www.flindersports.com.au/channelwidening


RISING EBAF LEVELS

In May 2018 the average EBAF level was USD 55.00-60.00 per TEU. In response to rising fuel costs, as of 1st December, this increases to USD 100.00 per TEU

DOMESTIC TRANSPORT

Cartage Fuel Surcharges are continuing to rise on a monthly basis, with the average carrier increasing by 1-2% each month.  Therefore note these changes will be reflected on our end costs.

COLLAPSIBLE SHIPPING CONTAINERS
The way of the future, where shipping containers can collapse down to 25% height.

Please see the attached video link: https://dms.licdn.com/playback/C5105AQH2exsuC2IyKg/76cbd9e98fc04b1694106ea3df5b37f1/feedshare-mp4_3300-captions-thumbnails/1507940147251-drlcss?e=1545084000&v=beta&t=s_tOMmlJp-rLEnPRBXFugcPcKdaAyGmZcyl9tFhaOK0

 

 

 

CUSTOMER NOTICE

Effective date: 01 January 2019

We would like to inform you that, as per new regulation of Viet Nam customs department at No 6889/TCHQ-GSQL dated on 23rd November 2018, customs will control strictly compulsory information in manifest for all VIETNAM INBOUND SHIPMENTS.

So, with effect from January 01st, 2019, manifest declaration must comply with below requirements:

A. FOR NORMAL INBOUND SHIPMENTS:

1. Consignee: The order to declare this item is:
TAX CODE#NAME OF COMPANY# ADDRESS# TEL# FAX#EMAIL

2. Notify Party: In case the consignee’s name is “TO ORDER” or “TO ORDER OF…”, the Notify party must be requested to declare as A.1

3. HS code: HS code with at least 4 digits must be declared.

4. Description of goods: Name of cargo must be stated clearly and concisely, it’s no need to add the unnecessary information.

The order to declare this item is: COMMODITY NAME# DESCRIPTION#…

B. FOR SCRAP CARGO INBOUND SHIPMENTS:

1. Consignee:

The order to declare this item is: TAX CODE#IMPORT LICENSE #BANK DEPOSIT NO# NAME OF COMPANY# ADDRESS#TEL#FAX#EMAIL

* TAX CODE AND COMPANY NAME MUST BE OF THE COMPANY WHO ARE IN THE LIST OF HAVING IMPORT LICENSE

2. Notify party:

ln case the consignee’s name Is “TO ORDER” or “TO ORDER OF…”, the Notify party must be requested to declare as B.1

3. HS code: HS code with 8 digits must be declared.

4. Description of goods:

Name of cargo must be stated clearly and concisely, it’s no need to add the unnecessary information.

The order to declare this item is: COMMODITY NAME# DESCRIPTION#…

Name of cargo must be stated as the list which is issued by local customs officer.

Please disseminate the notice to all related parties in your company to strictly comply with. We are not responsible for any delay or rejection to your cargoes due to noncompliance


 

Melbourne reports record trade in October

 

A TOTAL of 8.72m revenue tonnes in October 2018 represented the highest monthly trade result in the history of the Port of Melbourne.

According to recently-published figures, the previous monthly best of 8.51m revenue tonnes was recorded in July 2018.

All cargo types were reported to have contributed to the monthly gain, with the exception of motor vehicles and dry bulk.

Total container throughput (full + empty) for October 2018 rose 5.9% over October 2017 to a record 270,088 containers, and was in turn up 6.9% for the financial year to date.

This result topped the previous monthly high of 265,679 containers achieved in September 2018.

Total container imports were up 3.4% for the month and total exports gained 8.5%.

Liquid bulk trade recorded an 8.4% increase from October last year, to be up 9.2% for the year to date.

A 25.1% (+73,300 tonne) increase in crude oil imports together with a 6.8% (+9800 tonne) increase in petroleum product imports were the main commodities responsible for the overall monthly increase.

 


Christmas & New Year Holidays / Trading Hours

Many Thanks to those who have sent through their relevant dates for the fast approaching Christmas/New Year Period.

If you have not sent through your dates for the Holiday Period, please do so ASAP. In order to arrange your shipments around the Christmas | New Year Period and to avoid any unnecessary storage costs, please ensure you advise us of your closure dates during this holiday period, along with any emergency contact details.

Please also ensure you advise the FINAL RECEIVAL DATE and DATE SHIPMENT RECEIVALS WILL RECOMMENCE in the New Year.

Please send all Holiday Closure details to sales@orbitlogistics.com.au ASAP!


Orbit Staff Updates

December welcomes a new staff member to our Sales Team.  As some clients will be aware Sacha Owens left the Orbit Team at the end of the November.  Sacha’s replacement in Sales Support is Karen Marks.

Karen can be reached via email at sales@orbitlogistics.com.au

 


National and Public Holidays    

Around the world in the next month:

6th December                 Spain                                                       Constitution Day
24th December               North Korea                                             Birth Day of Kim Jong Suk
24th December              USA (Some States Only)                          Christmas Eve                                
25th December              Australia / New Zealand                           Christmas Day
26th December              Canada/Australia/N.Z                               Boxing Day
30th December              China                                                        New Years Eve
31st December              China & Japan                                          New Years Eve



Note: 25th December is a public holiday also in other Countries as follows:
Indonesia  /  Japan  /  Malaysia  /  South Korea  /  Belgium / Netherlands  /  Denmark  /  France  /  Germany  /  Greece  /  Italy  /  Poland  /  Spain  /  U.K.  /  USA  /  Canada / Hong Kong / China

Note: 26th December is a public holiday also in other Countries as follows:
Denmark  /  Germany  /  Italy  /  Netherlands  /  Poland  /  U.K.  /  Canada / USA (Some States)  / Hong Kong / China