Welcome to our March 2023 Newsletter
Shipping costs are remaining at very low levels, especially from China, and its certainly a long way off what was being charged by the carriers at the height of COVID.
Things have certainly changed very quickly for the carriers, as they’re now looking at posting losses for the first quarter this year after regularly posting multi billion dollar profits for the previous few years. Shipping is still slow with ample space and equipment being available on all services and carriers have been continuing to reduce prices to try and secure more cargo for their vessels.
Carriers are also looking at reducing services (eg 3 sailings per month instead of 4) to fill vessels and possibly even pulling services out of some less-profitable routes, We’ve also received several notices advising of possible rate increases (Rate Restoration) for April, click here to see notice from MSC.
Interestingly there’s also the issue that new, bigger vessels are starting to come into service now, as the carriers spent up big and ordered lots of nice new ships to be built during COVID. These new vessels are just now starting to be delivered and will only add to the oversupply of space, which may continue to place downward pressure on freight rates.
Car Carriers / Break Bulk Services
We just wanted to report on the current issue plaguing car carrier and breakbulk vessels. Biosecurity holds due to serious contamination issues with cargo is causing space issues at break bulk terminals around Australia. This subsequently creates port congestion and breakbulk vessels are delayed awaiting a berth in Australian.
A lot of new cars and equipment have been left on wharves all around the world for long periods of time due to demand for breakbulk space, exceeding supply. This has resulted in idle cargo being contaminated with seeds, insects and other plant material, which is a huge issue when shipping to Australia with our strict quarantine rules. As a result, these vessels are being held up at sea while they’re inspected by quarantine before they can berth and when they do finally arrive, the majority of their cargo is having to be thoroughly cleaned before it can be moved off the wharf. These issues are causing long delays with the worst affected port being Melbourne, where the delay can be as long as 20 days, Port Kembla is out to 10 days, Brisbane is around 6 days and Fremantle is out to 10 days according to the latest notice we’ve received from Wallenius Wilhelmsen line.
Due to these long delays, some of these carriers are now no longer accepting any bookings for cargo on their vessels to our region for the next 3 to 6 months due to the backlog of freight already waiting to be shipped.
Weight Discrepancies – PONDUS Fee
In 2016 the International Maritime Organization (IMO) introduced a requirement to declare an accurate gross container weight (VGM) under the Safety of Lives at Sea convention (SOLAS).
There have been numerous issues around the world caused by incorrect weight distribution of incorrectly declared containers on vessels and trucks which has resulted in loss, damage and injuries.
Over the past few years several Australian terminals have implemented a program of weighing all containers both export and import. PONDUS weighing has discovered that not all declarations are accurate. Current PONDUS rules require the actual gross container weight, to be within +/- 1000kg of the VGM declared overseas. Anything outside of this threshold, incurs a PONDUS penalty.
Terminals are issuing the transport company with an on the spot penalty notice for the mis-declared weight, which will then be passed back onto the importer or exporter.
Unfortunately, this issue gets complicated for import cargo, as the terminal is working off the VGM (Verified Gross Mass) weight, which is often supplied by the shipper or truck driver at origin port
Lately we’re seeing more and more penalty (PONDUS) notices being issued as more containers are being weighed and found to be either under or over the declared weight. Below is a link to some further information that we’ve put together regarding this matter,
We encourage all importers to remind their suppliers that if the origin VGM weight is outside of the 1000kg tolerance in Australia, PONDUS penalties will be incurred
Other Shipping Issues
We also wanted to make you aware of some other issues in various countries that are currently impacting shipping and one of these is the ongoing protests and strikes in France over the decision there to raise the retirement age. We’ve had several shipments delayed due to transport and labour issues caused by these strikes and we’re not sure when this matter might be resolved. Germany and several other counties in Europe have also been having various labour disputes on the waterfront for several months, which has been affecting shipping and transport with some vessels being delayed in port because of this.
There is also industrial action taking place in South Africa at the moment with National Shutdowns being planned in protests against the current Government and these shutdowns are expected to impact the movement and shipping of cargo throughout the country.
There are still congestion issues with some of the ports in New Zealand, but mainly with Tauranga who have recently reduced their capacity to try and better manage the movement of cargo and improve the turnaround time for vessels. Due to this change, some services may have to omit Tauranga and go back to calling Auckland port, which was previously congested and often omitted.
We will have to wait and see what impact these changes will have on these ports and we’ll continue to monitor this situation and advise what the carriers end up doing with their services to and from New Zealand.
Local Charges – More Increases
We’re continuing to receive notices from the various Terminals and empty container parks around Australia, as well as from several Air Cargo Operators advising of rate increases, which they claim is due to the increased costs for fuel and energy and as a result of the additional supply chain pressures they’re experiencing.
As a result, please note that that the Terminal Infrastructure Charge has increased yet again for all import and export containers and there’s also been increases to the Airline Terminal Fee for all air shipments and please contact for your usual CFL representative if you need any further details on any of these increases.
Trusted Trader – Duty Deferral
The Australian Border Force (ABF) have advised that they’re going to allow for duty payments to be deferred and paid monthly for eligible Trusted Trader importers, instead of the current system where duty is paid for each shipment when cleared. Below is a link to this notice from the ABF for your information and please contact you usual CFL representative if you have any questions on this new scheme or if you need any information on becoming a Trusted Trader with the ABF.