NOVEMBER NEWSLETTER 2017
INDUSTRY OPINION: Damages of almost $1 million awarded against forwarder
FREIGHT forwarders who issue bills of lading need to take extreme care to ensure their house Bill is not misleading to third parties. In a recent case, a Court found a freight forwarder had mislead a finance company by representing that its house bills were the only bill that applied to the shipment. The judgment is important for all freight forwarders that issue Bills.
The Facts
In Australia Capital Financial Management Pty Ltd v Freight Solutions (Vic) Pty Ltd the NSW District Court had to consider the following facts:
ACFM is a finance company that lent money to an Australian exporter to enable the purchase of goods for export to China.
A term of the finance was that the exporter would provide the BOLs for the exported goods to ACFM. Without the original BOLs ACFM would not provide the finance.
The exporter engaged Freight Solutions to arrange the shipment to China. Freight Solutions used third party carriers.
Freight Solutions issued a BOL that named the exporter as the shipper, the consignee as “TO ORDER”, were stamped as “ORIGINAL” and were not endorsed;
On each BOL issued by Freight Solutions, it signed the document “as agent for” the nominated carrier;
The exporter provided ACFM with only the Freight Solutions BOLs and ACFM provided finance on this basis;
The master BOLs were apparently provided to the exporter. However, the exporter did not provide these documents to ACFM;
The exporter used the master BOLs to obtain the release of the goods in China;
The exporter defaulted on its repayments and ACFM sought to use the Freight Solutions BOLs to obtain possession of the goods. It found that the goods had been released without presentation of the house BOLs.
ACFM made two primary claims against Freight Solutions:
1. Misleading and deceptive conduct in representing that:
Each Freight Solutions BOL was a negotiable instrument providing an entitlement to the holder to present the Freight Solutions Bill to obtain delivery of the goods;
in issuing “Original” BOLs consigned ‘To order” each Bill could be held by a third party as security for payment of the goods or to secure finance.
2. It had no authority to execute the Freight Solutions Bills on behalf of the relevant carriers.
Findings
Freight Solutions was found liable and ordered to pay ACFM $855,456 plus costs, being the amount ACFM lost by relying on the Freight Solutions BOLs.
Hapag-Lloyd Standardising Container Security Deposits for Malaysian Imports
https://www.hapag-lloyd.com/en/news-insights/news/2017/11/malaysia-_-container-deposit.html
Recent New Entrants will Increase Competition at Container Ports
The ACCC’s annual Container Stevedoring Monitoring Report has stated that while stevedoring operating profits per TEU have risen by over 25 per cent in 2016-2017, competition levels are set to increase as there are now three stevedores competing at the Nation’s three largest container ports.
“Competition has significantly increased in recent years with the introduction of a third stevedore in Sydney and Brisbane, and now we can add Melbourne to that list. As such, we expect to see greater levels of price competition as new entrants and incumbents compete for market share,” ACCC Chairman Rod Sims said.
“Stevedores will need to work harder to win or retain their customers, with benefits flowing through to shipping lines, importers, and exporters.”
“However, this remains a critical period for competition. For sustainable competition to develop, these new entrants will need to win a commercially viable share of the market.
APEC a chance to revive TPP, Ciobo believes……
TRADE minister Steven Ciobo believes the Asia-Pacific Economic Cooperation meeting in Da Nang, Vietnam, can revitalise the Trans-Pacific Partnership.
The TPP appeared for the scrap-heap when the new Trump administration withdrew the USA from the deal earlier in the year.
But in recent months, there have been efforts to conclude a deal without the world’s largest economy – a so-called ‘TPP-11’.
“I also look forward to meeting ministers from Trans-Pacific Partnership (TPP) countries to work on bringing the TPP-11 into force as quickly as possible,” Mr Ciobo said.
“Bringing the TPP-11 into force would give Australian businesses improved access to a trade zone with a combined GDP of $12.4 trillion. It would also further integrate the Australian economy into the fast-growing Asia-Pacific region.”
Mr Ciobo said he would continue to advocate Australia’s commitment to economic openness and encourage further trade liberalisation.
“APEC accounts for almost half of global trade and 60% of world GDP. It plays an important role in promoting open trade and investment,” he said.
“Australia’s participation in APEC strengthens our economic relationships and enhances export opportunities, economic growth and job creation for the Australian economy.”
Air Freight demand slows slightly – but still up 9.2%
Geneva – The International Air Transport Association (IATA) released data for global air freight markets in September 2017 showing that demand (measured in freight tonne kilometers or FTKs), rose 9.2% compared to the same month in 2016. This was the slowest pace of growth seen in five months. However, it was still significantly higher than the five-year average growth rate of 4.4%.
Freight capacity (measured in available freight tonne kilometers or AFTKs), rose by 3.9% compared to September of last year —less than half the pace of demand growth. This is positive for industry load factors, yields, and financial performance.
It appears that the industry has passed a cyclical growth peak. The upward trend in seasonally-adjusted freight volumes in Q3 has eased and the inventory-to-sales ratio in the US is now trending sideways. This indicates that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended.
“Demand for air cargo grew by 9.2% in September. While that’s slower than in previous months, it remains stronger than anything we have seen in recent memory. But there are signs that this demand spurt may have peaked. So it becomes even more important to reinforce the industry’s competitiveness by accelerating the modernization of its many antiquated processes,” said Alexandre de Juniac, IATA’s Director General and CEO.
With year-to-date demand growth of 10.1%, the IATA forecast of 7.5% growth in air freight demand for 2017 appears to have significant upside potential even if the peak of the economic cycle has passed.
The Australian Trusted Trade Program Update
The Australian Trusted Trader programme (ATT) rewards accredited businesses with a growing range of trade facilitation benefits to improve international market access. More benefits for Trusted Traders will be implemented during the 2017-18 financial year, including:
access to duty deferral arrangements – payments on imported goods will be deferred for a set period stream-lined reporting arrangements to reduce the administrative burden for businesses.
Air Cargo Prohibition
Electro – Mechanical Devices
Turkey
Freight & Trade Alliance (FTA) has received the following advice from the Office of Transport Security (OTS)
The Australian Government has placed a restriction on the carriage of air cargo from Turkey.
The restriction will prohibit airlines from bringing into Australian Territory any electromechanical device that weighs over one kilogram that has originated in, or transited through, Turkey.
The instrument came into force on Thursday 26 October 2017, and will remain in-force until an instrument of revocation is registered.
Please note that the restriction is a preventive security measure, based on the Government’s understanding of the threat and risk environment in these countries. There is no information to suggest that there is any specific threat for flights to or from Australia.
All enquiries related to the restriction should be directed to aircargosecurity@infrastructure.gov.au
The Departmental website has been updated with further details about the restriction and is available at https://infrastructure.gov.au/security/air-cargo/prohibition-intl.aspx
Commission to investigate Aluminium Extrusions Anti-Dumping
Commission to investigate Aluminium Extrusions Anti-Dumping being Exported via Malaysia, Indonesia, Philippines and Thailand
Dumping duties on aluminium extrusions exported from China were put in place in October 2010 and have been causing issues for importers and customs brokers since. Challenges are often debating whether goods are of aluminium extrusion and therefore subject to dumping duty, or whether it has been further developed to the point where it is more than a mere extrusion, such as a window frame.
Following an application by Australian industry, the Anti-Dumping Commission (ADC) has launched an investigation into whether exporters and importers are seeking to avoid the dumping duties by exporting aluminium extrusions from China to one or more third party countries, including Malaysia, and then re-exporting the goods to Australia from Malaysia and claiming the goods were of Malaysian origin.
Australian industry have claimed that:
· Since 2015 some companies have been contacting Australian importers offering them a service to avoid dumping duties. The service allegedly involves purchasing goods from China, and re-exporting the goods to Malaysia, Taiwan, Indonesia, Thailand, Philippines and Bangladesh then into Australia. Or alternatively looking at sending the goods via a Transhipment carrier service, and having the goods transferred into a new container with a new Bill of Lading produced, certificate of origin, packing list and commercial invoice. Under the latter, the 2nd set of documents are allegedly supported by a genuine aluminium extrusion company working in the transhipment country;
No identifying details of the parties involved have been published. However, the relevant names have been provided to the ADC together with supporting documentation.
The ADC will now investigate into whether the transhipment activities can be proved.
COSCO’S TAKE OVER OF OOCL
COSCO’s US$6.3 billion take over of Hong Kong’s OOCL has passed two more crucial examinations, with US regulatory authorities reportedly raising no objection and shareholders of both companies voting in favour.
According to World Maritime News shareholders of COSCO Shipping Holdings Co and Orient Overseas (International) Ltd passed special resolutions at extraordinary general meetings last week. COSCO plans to buy 90.1% of the target, with Shanghai International Ports Group (in which COSCO holds a significant stake) holding the rest. The deal had already received approval from China’s State-owned Assets Supervision and Administration Commission.
This would not only help drive COSCO’s ascendancy but ensure their domination of the now CMA CGM-led Ocean Alliance (of which OOCL and Evergreen are also members).
The panellists characterised a CMA CGM/Hapag-Lloyd entity as “a kind of Airbus of shipping”, with the national governments of France and Germany as significant shareholders and holding a 23-24% global market share. This would still rank behind the 2M tie-up of Maersk and MSC but would leave the Chinese in third place.
PANAMA CANAL LAUNCHES EMISSIONS CALCULATOR
The Panama Canal Authority has developed a new tool it claims will offer shippers the most accurate assessment of their carbon emissions, rank those who have reduced the most emissions by transiting the Canal versus alternate routes, and encourage action to reduce carbon footprints.
The PCA says its Emissions Calculator extends its commitment to reduce the impact of greenhouse gases (GHG) and demonstrates its support of the global efforts at last week’s International Maritime Organization meeting to set the new IMO Strategy on GHG reduction.
“The Panama Canal has always been committed to reducing its carbon footprint and impact on the environment. This new tool allows us to bring that same commitment to our customers, giving them the information needed to make a more informed and environmentally conscious decision when planning their routes.
The Emissions Calculator will work by leveraging technology already aboard the world’s maritime fleet to capture an array of data on shippers (e.g. vessel type, size, capacity, speed, fuel consumption and route) and provide the most accurate measurement of the GHG they emit, including the total emissions saved by choosing the Panama Canal over other routes.
Data will then be centralized in the CO2 Emissions Reduction Ranking, a specially-designed platform which ranks customers by those with the fewest emissions each month. The Panama Canal hopes to incentivize customers to demonstrate strong environmental stewardship and adopt more sustainable itineraries. The PCA says it has already received encouraging feedback from its preliminary conversations with the industry.
Beyond shippers, the calculator will help the Panama Canal reduce its own carbon footprint as well. The waterway will use the Emissions Calculator to measure and track emissions from its domestic day-to-day operations and support the planning of a low carbon strategy that will be used to establish a roadmap for the Panama Canal to become a “Carbon Neutral” entity.
The Calculator will be housed within the Panama Canal’s Green Connection Environmental Recognition Program and will advance the program’s work to promote emissions reductions by recognizing vessels that comply with the highest environmental performance standards and encouraging others to do the same. It will bolster the program’s existing offerings, such as the Green Connection Award and Environmental Premium Ranking.
For more information about the Emissions Calculator, seegreenroute.micanaldepanama.com
China Market Up-Date
It has been advised that the A3S Service used by OOCL/COSCO &ANL had a loading performance of over 93% in August. However, In September, it has been reported that OOCL rolled approximately 200-300 TEU per Week in the past 3 weeks. COSCO rolled approximately 260 TEU per Week and ANL’s space situation is worse than both OOCL and COSCO combined.
Hamburg-Sud/Maersk have advised that their space is already full for the next two weeks but will continue to take bookings from clients. They have advised that they will roll containers to the first sailing of October. Most carriers are taking advantage of the increase by implementing a GRI from 15 November.
Shipping Lines are advising GRI’S of USD200/USD400, however the expectance is of USD150/USD300.
Many factories in East and North China have stopped working or closed their doors due to failed environmental inspections. This has also affected Shanghai/Ningbo/Qingdao, where space is also becoming an issue.
Orbit Logistics will continue to monitor developments and keep you informed of any further market fluctuations. Please contact your local customer service representative should you require further information. customerservice@orbitlogistics.com.au
Further Import FCL Rate Increases Looming
Carriers from South East Asia, South Asia, the Indian sub-continent, and the Middle East to Australia have flagged a General Rate Increase of U$100.00/20′ & U$200.00/40′ container effective from 1st December 2017. Indications are that LCL rates from these markets will increase by around U$5.00 per CBM if the FCL increases do happen.
Going on Holidays?
It’s hard to believe, but it won’t be long before businesses start to make arrangements for end-of-year holiday planning.
Please assist Orbit Logistics to fit in with your company’s plans by sharing information with us regarding business closures over holiday periods.
Please email customerservice@orbitlogistics.com.au with your holiday planning details.
Orbit Logistics Christmas Closures Dates
As the festive season approaches, we would like to take the Opportunity to advise clients of our opening and closing times over the Christmas and New Year Period.
Monday 18th – Friday 22nd December – Open Normal Business Hours
Monday 25th December – Closed
Tuesday 26th December – Closed
Wednesday 27th – Friday 29th December – Open Normal Business Hours
Monday 1st January 2018 – Closed
Tuesday 2nd January 2018 onwards – Open Normal Business Hours
Please email customerservice@orbitlogistics.com.au with your holiday planning details.
CHANGE OF ADDRESS NOTICE – ORBIT LOGISTICS (HK)
Please note that our Hong Kong office has relocated to a new address, effective immediately.
Please advise your suppliers accordingly. New address and contact details:
ORBIT LOGISTICS (HK) LIMITED
ROOM 2501, 25/F MIDAS PLAZA
1 TAI YAU STREET
SAN PO KONG
KOWLOON
HONG KONG
TEL: (852) 2559 6578
FAX: (852) 2559-6723
Please contact us at customerservice@orbitlogistics.com.au with any queries regarding the above.
Chinese New Year – Friday, 16 February 2018
According to the Chinese 12-year animal zodiac cycle, the Chinese year beginning in 2018 is the year of the Dog. Each Chinese zodiac year begins on Chinese New Year’s Day.
Dog years are believed to be the most unlucky for people born in previous years of the Dog.
Chinese New Year, also known as the “Spring Festival” in modern Mainland China, is China’s most important traditional festival, celebrated at the turn of the traditional lunisolar Chinese calendar, which consists of both Gregorian and lunar-solar calendar systems.
Businesses in China will be Closed between Thursday 15th February and Friday 23rd February 2018, re-opening for business on Monday 26th February.
We therefore urge you to place all orders as soon as possible with your suppliers and make bookings with the Orbit staff 2-3 weeks prior to the Chinese holidays.
For further information please contact customerservice@orbitlogistics.com.au
Port of Melbourne September Container Trade Report
Port of Melbourne released the Overseas Container Trade Report for the month of September.
It is positive to see an increase in imports of 3.7% against September last year. Container exports was up 8.2% against September 2016.
Australian Border Force [ABF] Compliance Update
The latest compliance update from ABF has been released. Click here for online edition
https://www.border.gov.au/Complyingwithyourobligations/Documents/goods-compliance-update-september-2017.pdf
Upcoming World Holidays National & Public Holidays
Wednesday Nov 15 2017 Austria Saint Leopold
Wednesday Nov 15 2017 Brazil Republic Day
Friday Nov 17 2017 New Zealand Christchurch Show Day
Monday Nov 20 2017 Brazil Zumbi dos Palmares
Wednesday Nov 22 2017 Germany Repentance Day
Thursday Nov 23 2017 India Martyrdom Day of Sri Guru Teg Bahadur Ji
Thursday Nov 23 2017 Japan Labour Thanksgiving Day
Thursday Nov 23 2017 USA Thanksgiving
Monday Nov 27 2017 New Zealand Chatham Islands Anniversary Day
Thursday Nov 30 2017 Philippines Bonifacio Day
Friday Dec 01 2017 India Milad-un-Nabi
Friday Dec 01 2017 Indonesia Maulidur Rasul
Friday Dec 01 2017 Malaysia Mawlid
Friday Dec 01 2017 Portugal Restoration of Independence
Saturday Dec 02 2017 India Milad-un-Nabi
Sunday Dec 03 2017 India Feast of St Francis Xavier
Sunday Dec 03 2017 Spain Feast of St Francis Xavier
Monday Dec 04 2017 New Zealand Westland Anniversary Day
Tuesday Dec 05 2017 Thailand Father’s Day
Tuesday Dec 05 2017 Thailand King Bhumibol’s Birthday
Wednesday Dec 06 2017 Belgium Saint Nicholas
Wednesday Dec 06 2017 Italy Feast of St Nicholas
Wednesday Dec 06 2017 Spain Constitution Day
Thursday Dec 07 2017 Italy Feast of St Ambrose
Friday Dec 08 2017 Austria Immaculate Conception Day
Friday Dec 08 2017 Italy Immaculate Conception Day
Friday Dec 08 2017 Macau Feast of the Immaculate Conception
Friday Dec 08 2017 Portugal Immaculate Conception Day
Friday Dec 08 2017 Spain Immaculate Conception Day
Friday Dec 08 2017 Switzerland Immaculate Conception Day
Oribt Contacts
sales@orbitlogistics.com.au
customerservice@orbitlogistics.com.au
transport@orbitlogistics.com.au
customs@orbitlogistics.com.au
imports@orbitlogistics.com.au
exports@orbitlogistics.com.au
accounts@orbitlogistics.com.au