OCTOBER NEWSLETTER 2020
Welcome to this month’s edition of the Orbit Logistics Newsletter.
Dear Valued Partner,
Supply chain costs and changes to sailing schedules continue to present challenges.
The industrial disputes in NSW have been resolved and this should ease some of the delays, port rotations and the SYDNEY CONGESTION LEVY sooner than later.
OOCL have announced they are recommencing the Asia, Middle East, Indian sub-continent, Europe, North America, Latin America and Africa to Australia ports covered by the AAA1/AAA2/ASA/AWX services and this will provide an increase in capacity from these regions.
Rates ex China, South East & North East Asia continue to rise following Golden week and the rush into Xmas.
Be assured when rates fall we will immediately reflect these in our pricing, however the balance between rate and space is still in the favour of the shipping lines.
Our team is continuing to work at all levels of the Supply Chain and will continue to keep you informed during these challenging times.
Orbit Logistics is ready and able to assist with any concerns you may have.
Please review your daily WEBtrack report to capture any changes to your shipment arrivals until vessel delays and Port rotations settle to some normality.
If you would like to discuss any matters please don’t hesitate to reach out personally via my mobile or email.
Thanks again for your great support, its appreciated by everyone at Orbit Logistics.
NOTICE – Port Congestion Surcharge – Stevedores, Shipping Lines & PSC Schedule
Further to our previous broadcasts on the issues at Port Botany, Sydney stevedore terminals.
Orbit Logistics would like to provide you with updates on actions concerning the Sydney Port Congestion – Stevedores, Shipping Lines & Port Congestion Surcharges (PCS) being imposed by a number of shipping lines in Sydney.
Orbit Logistics has updated a schedule of Port Congestion Surcharges and related information announced by the shipping lines, as attached.
- Maersk & Hamburg Sud Notices – Container Detention Suspension in Sydney Ceased
- OOCL – Australia Ports Bookings Re-open – Sydney temporary booking suspension will remain effective immediately
- ANL-CMA-CGM – Communications Update and Contacts
We will update the schedule as further announcements are received.
Sydney Port Update
Following intervention by the Fair Work Commission (FWC) in the Protected Industrial Action at Patrick and DP World.
- FWC ordered a lifting of PIA and DP World and Patrick to continue negotiations with the MUA.
- All industrial action is ceased during this time and work has returned to pre-PIA operations
- Patrick & MUA – FWC orders in place until 26 October
- DP World & MUA – FWC orders in place until 1 November
Since the FWC orders, work has returned to (pre-PIA) normal, however it is going to take some time to catch up and clear the backlog of ships and containers.
Shipping lines and stevedores are adjusting their schedules to the improved conditions for now, though there are a lot of moving parts involved, including the stevedores and MUA resolving their EBA negotiations.
OOCL reports today –‘the significant schedule disruption around the Australian coast will take time to improve. Whilst we anticipate most ports will see improvements within 10 days, Sydney congestion may take up to 3 weeks to improve.
“Patrick and the MUA met Wednesday/ Thursday of last week following our 424 application to suspend or terminate industrial action, during the two days, parties tried hard to reach agreement however unfortunately this didn’t happen.
We are set to meet again with FWC assistance later this month, for now all PIA has been suspended by the FWC until the case is closed.
Patrick’s operational managers are entirely focused on restoring the business to full capacity and making as much inroad into restoring the schedules as possible and working through the backlog of containers. We remain hopeful we can reach an agreement and move forward stabilizing the business and supply chains”.
- As at last Thursday, Patrick Terminal Sydney was 12-14 days behind schedule with an estimated backlog of 35,000 containers waiting to be loaded or discharged, with significant delays with the current waiting time for a berth at 17.8 days.
- Across the other Patricks Terminals – berthing delays of 8 days in Brisbane, 9.3 days in Melbourne and 3 days in Fremantle.
- Across all four container terminals, there are approximately 100,000 containers that are waiting to be handled by Patrick Terminals
- Currently Patrick is working vessels 24/7 to catch up
- Patrick is working with shipping line customers adjusting the congested berthing schedules during the FWC orders period
- Evacuating empties with the shipping lines is a priority
DP World Sydney
For DPWS, and as publicly stated ‘we have in Principal Agreement’ with our Employees and the MUA. Few small drafting matters to go, however I’d anticipate that we will go to a vote early Nov.
All industrial action was lifted on Sat 19 September and we have been working as normal since. There are no bans or limitations on us at all.
We are operating 24 x 7 on the waterside and rail and the normal 20 of 21 shifts a week on the landside. Road doesn’t normally operate from 2200 Sat to 0600 Sun, however where there is demand from industry we will work this shift.
I agree with the general sentiments expressed by OOCL. I’d expect that we will be in a much better position within 10 days with majority of our customer vessels schedule reliability back on track. Worst affected vessels may take to the 3 weeks mark, given the bunching of some ships over the last 2-3 weeks.
Despite this we have seen a significant jump in out throughput over the last 2 weeks and forecasts are that this will continue. We have and will continue to take adhoc callers and empty loaders in an effort to help clear the backlog, particularly empty containers sitting in full empty parks.
With the challenges of full empty parks, DPWS offers the Direct Return Empty product to majority of our shipping line customers and provide slots for the return of empties differently to the normal PBLIS slot releases. Dayshift slots are normally well used, however there always are slots on E/S, N/S and weekends. This provides avenues for your customers to have containers dehired directly to the terminal. Any challenges in attaining slots, they just need to contact our transport team who will in most instances assist with a slot email@example.com
Under the current circumstances at Port Botany, which still appear to be a few weeks away from returning to normal, we will continue to keep you informed of updates from the shipping lines on their revised schedules, bookings and PCS duration.
To read the Port Congestion Surcharges and Shipping Line Updates below
COSCO Halts Southbound Bookings For Early October
SHIPPING line COSCO has announced a suspension of southbound bookings to Australia for two weeks, starting 5 October. This is for the AAA and ASAL services. The company has cited industrial relations in Australia as the reason for its decision.
“The ongoing industrial action at Australian Ports & Terminals has created significant disruption to COSCO’s South East Asia service network,” the company said in a note to customers. We now have vessels on our AAA1 / AAA2 / ASAL services that have been delayed around the Australian coast for two to three weeks and this is likely to worsen.
“The impact we now face is October southbound voyages across AAA1 / AAA2 / ASAL will be missed or delayed by up to three weeks.” According to the company, it was imperative that they “stop all southbound booking acceptance ex SEA region either loading or connecting onto the for the following vessels”.
“This decision will be until further notice, until we have a clearer picture on schedule recovery,” the company stated. “We deeply regret the inconvenience, however trust customers will understand we must stop booking acceptance in these weeks to avoid serious rollover consequences.”
International Forwarders and Customs Brokers Association of Australia regional manager, Zoran Kostadinoski, said the decision of some shipping lines, including COSCO, to stop southbound booking acceptance would have a significant impact on international trade.
“Demand is already greater than supply due to the pandemic and disruption to shipping services will have a commercial and financial impact on the trading community,” Mr Kostadinoski said. “On top of the current industrial actions, ports and empty container park congestions, BMSB risk season and leading into the peak shipping season, the disruption to shipping services is the last thing shippers and freight forwarders need.”
He said shippers and freight forwarders relied on efficient global supply chains. “IFCBAA encourages the shipping consortiums to ensure enough capacity is provided for the southbound trade lane as Australia is an island nation that heavily relies on trade,” he said.
Freight and Trade Alliance head of business operations John Park said these decisions by COSCO and OOCL added further pain to Australian importers struggling to get space, not to mention paying freight rate increases and surcharges, and/or specific equipment in load ports due to the tens of thousands of empty containers sitting in Sydney.
“Now they are faced with delays in getting the cargo they can pack onto vessels,” Mr Park said.
He said FTA / APSA would be lodging a supplementary submission to its original submission to the ACCC regarding a Proposed Class Exemption for Ocean Liner Shipping to support the need for legislative reform.
Thailand – Booking Cancellation Fee
Please be informed CMA CGM Asia have advised that they will adjust Booking Cancellation Fee effective from 1 October 2020 based on the following scope:
Effective date: 1 October 2020
Origin: All Thailand ports
Destination: All destinations
Booking Cancellation Fee adjustments are as per the following details:
|Booking cancellation is defined as:
The adjustments above are only applicable to CMA CGM’s bills of lading. Please note that Booking Cancellation Fee for CMA CGM will be charged in Thai Baht instead of U.S. Dollar from 1 October 2020.
Khapra Beetle – Latest Updates
We wish to advise of the following notification from the Department of Agriculture, Water and the Environment regarding khapra beetle. The Department has provided the latest notification of the urgent actions to combat khapra beetle. The khapra beetle deemed a Significant Risk for all Import shipments into Australia. As a result, increased detection and inspection processes may result in further delays and additional costs imposed on Import shipments.
Our Industry group FTA has also been advised during meetings with the Department of the following:
- There has been large number of detections in a short period of time
- Some of the detections originated from non khapra beetle countries such as China and Papua New Guinea ,
- There is a high level of confidence that most of infestations originated from the container (under floor) rather than the commodity
- Khapra beetles detected may have been living in the container for upwards of 3 years
For more information please also refer to the following link:
Plan for Bigger Ships, Say ANL Exec
SENIOR figures at ANL have issued a call for Australia to do more to prepare for the advent of bigger ships. In a recent statement, the company said ships around the world had been getting bigger, but Australia was lagging putting our competitiveness under threat. Director of operations Andrew Jena said Australia needed “blue sky thinking”.
“These big ships are already here. They are available and are operating successfully in other parts of the world. For example, 20,000+ TEU vessels operate on large trunk routes, and while the Australian equivalent is moving towards the region of 10,500 TEU we need to prepare for the future,” he said. “This is about evolution. This is a generational change that is happening in the shipping industry. It is similar to what happens with aircraft or cars.”
Mr Jena said an eventual challenge would be that there would be fewer smaller vessels built.
“Ship builders are going to focus on where the demand is and there are already many clear advantages to adopting the newer generation, more technologically advanced and environmentally friendly larger vessels,” he said. “As a result of this, eventually our options in Australia are going to be limited if we cannot receive the increasingly popular larger vessels.”
ANL general manager for Asia ANL Anthony Orgill said as the population increased so would demand for product arriving by sea.
“We are going to have to go bigger if we want to remain competitive in terms of the supply chain,” Mr Orgill said. “The biggest danger if we don’t is that the increased costs of transport will be passed on down to the consumer, which is ultimately not good for the economy.”
ANL argues said there were more challenges in New Zealand with a smaller population making justification harder for larger ships. ANL New Zealand general manager Gary Carter said the interest in larger vessels related to kiwi exports.
“It’s not so much about how much we can bring into the country, but more about how much we can export,” he said. “We probably have a few more challenges to deal with here, but the fact is the bigger ships will be coming here in time and we will need to be ready.”
Commercial manager for ANL’s Pacific Island trades, Steve Austin said the biggest challenge would be infrastructure.
“It will require a collective effort in terms of the roads, trains and ports but we need to think about where we will need to be in the next 10 to 15 years in this industry and the type of vessels we will be able to receive in the Pacific Islands, Australia and New Zealand,” Mr Austin said.
Managing director of CMA CGM Group Agencies ANZ Shane Walden talked of environmental benefits from bigger ships.
“Of course, from a commercial perspective there is no question that bigger ships bring down costs, which benefits everyone within the supply chain,” he said. “But for us it is not just about size. It is about efficiencies and sustainability. The new ships that are being developed are not just bigger but are being designed with a more sustainable focus.”
However maritime analyst for the Centre for Supply Chain Logistics at Deakin University, Peter van Duyn, said the Australian population meant there were limits on ships sizes likely to visit the region.
“Whilst I agree with ANL’s statement that newer and more fuel efficient ships are necessary to make shipping more environmentally friendly… I do not think we will see container ships bigger than 10,000 TEUs, arriving at our shores anytime soon,” he said. “In some ports this type of vessel is only allowed to berth under certain conditions. Furthermore, the Australian population, which is the main driver of the imported containerised freight, is unlikely to grow, even in the distant future, to a size requiring 20,000-TEU ships visiting our shores.”
Mr van Duyn noted the arrival in Australia of the 300-metre CMA CGM Ural in July, a vessel nominally able to carry 10,600 TEU, arguing the ship was nowhere near full.
“She might have been useful in evacuating empty containers from Port Botany given the recent problem of empty container parks in Sydney being at capacity,” he said. “But you really have to ask, do we really need vessels of this size to call at Australian ports?”
First Section of Inland Rail Completed
THE sleepy town of Peak Hill in country New South Wales made history this week when the final golden clip was hammered into place to signify completion of the first section of Inland Rail. Deputy Prime Minister and infrastructure minister Michael McCormack said Peak Hill was an appropriate location as it was here on 15 January 2018 that the first shipment of Australian-made steel was delivered to start the project.
“Inland Rail is an investment in Australia – in our economy, in our regions and in the capacity of our future freight network,” Mr McCormack said. “This is real progress on a project which has been talked about since federation,” he said. “The corridor of commerce we are building with Inland Rail stretches 1700km from Melbourne to Brisbane – we are turning steel into stimulus as we lay the tracks that will deliver jobs and opportunity.”
Finance Minister Mathias Cormann described Inland Rail as a once-in-a-generation project.
“Long-haul rail is cheaper, safer and more reliable than road, that’s why the Australian Government is enhancing the national freight rail network through our investment in Inland Rail,” Minister Cormann said. “The shift from road to rail builds resilience in our freight network – not only will Inland Rail deliver a long-term freight solution for Australia to meet the needs of our growing population – it is also a critical investment supporting an efficient Australian economy.”
Container Trade Drops at Adelaide After July High
A DROP in imports resulted in August container throughput at the Port of Adelaide being down on the previous month, according to the latest trade statistics available from Flinders Ports. The port’s throughput of full containers for August 2020 was 27,773 TEU, down from July’s figures of 30,452 TEU, a drop of 9%. Throughput was up however on August 2019 by 8%, or 1952 TEU. Both imports and exports were down compared with July, with imports dropping by 17% (to 12,898 TEU), while exports fell just short of July’s amount by only 100 TEU (to 14,875 TEU).
Looking at the empties trade last month, 5619 TEU of empty containers crossed the Adelaide wharf, of which 3877 TEU were imported, and 1742 TEU were exported. Malaysia was the destination for the majority of exported empties, accounting for 67% of all exported empties (1161 TEU). Singapore was a distant second (124 TEU), followed by New Zealand (116 TEU). Of all the port’s imported empties, 89% came from Australian ports (3465 TEU).
Looking at break-bulk, Flinders Ports reported 3495 cars imported into Adelaide over the month, a 218% increase from July. The total break-bulk tonnage throughput (including cars, general cargo, scrap metal, iron and steel) came to 24,874 tonnes, an increase of 1008 tonnes from July.
Turning to bulk commodities, the largest imports were limestone (177,600 tonnes), closely followed by petroleum and gas (168,883 tonnes), and cement/clinker (37,187 tonnes). Grain was the leading exported bulk commodity (80,795 tonnes). Following were iron ore (77,264 tonnes) and cement/clinker (70,260 tonnes). There were 25 cellular container vessel calls over the month at Adelaide, down four from July and less than the year-to-date average of 27.
Fremantle Container Trade Falls In August
AFTER hitting its highest level since October last year, container throughput at the Port of Fremantle dropped significantly, according to the latest trade statistics available from Fremantle Ports. Total throughput for August 2020 was reported to be 64,019 TEU, a 14% decrease on July’s figures, largely due to exports dropping by 9904 TEU. Throughput for the month did manage to pip August 2019’s figures by 1% or 639 TEU.
Full imports made up a majority of the port’s throughput, with 33,183 TEU, or 52%, of full containers being unloaded at the port. An additional 1219 TEU of empty containers were also received during the month. Overseas ports accounted for 70% of August’s imports. Of the total 29,617 TEU exported, 55% were full containers, the remainder being empties with 97% of all exports being sent to faraway lands.
Worldwide Public Holidays in October 2020