March Newsletter

Please be advised of the below important information, as once again there is so much going on around the world with shipping and airfreight continuing to be affected by many different factors.

Situation in Ukraine 

As everyone would be well aware, the invasion of Ukraine by Russia has caused many issues around the world and one of the main concerns for the logistics industry is the skyrocketing cost of oil and fuel. This is not just affecting us all as we fill up our cars each week at the service station, but it’s also seriously affecting the airlines, vessel operators and trucking companies. The costs for fuel are already going up dramatically due to the reduced supply of oil that’s available and everyone will be looking to have these additional costs passed on as quickly as possible with airlines, shipping companies and transport operators already increasing their fuel surcharges with immediate effect.

Also, most shipping lines have now withdrawn their services from Russia and the Ukraine due to humanitarian and safety issues, this is affecting many services in and around Europe. Also, airlines are no longer flying in this region and they can’t even fly over this part of Europe, so many carriers have stopped services to certain parts of Europe due the extra cost and longer flying time needed to go around this war zone. All these factors will have an impact on the space available with reduced services in place for both sea and air shipments and it’s expected that freight costs to and from Europe will continue to increase due to this situation.

Recent Port Closures in Brisbane and Sydney

Due to the very poor weather and major flooding that was experienced earlier this month, the port in Brisbane had to be shut down for several days and this closure has severely affected the shipping schedules for many vessels. The port in Sydney was also closed for a period of time as well and due these closures, many vessels, which were already late had to sit off port for many days waiting to be allowed to come in and berth. The flow on affect from these closures will be felt for some time, as all these vessels will now be one or two weeks late on their return voyage, which will affect their next sailings back to Australia. Unfortunately this also means that shipping lines will once again have their vessels omit ports and change schedules at the last minute to try and make up time, with little notification being given to their valued customers.

COVID Update – China Situation

While things are starting to get back to a bit more normal here with COVID, it’s certainly not the same case in China and Hong Kong with several areas being put back under strict lockdowns again. At this stage, Shenzhen, Hong Kong and several districts of Shanghai are experiencing large outbreaks of COVID and to try and stop the spread of this virus, the government has imposed strict lockdowns and more restrictions, which will seriously impact the movement of cargo. Whilst essential services like logistics can still operate, many factories have had to stop working and also many drivers and workers are not available as they’re either sick, isolating or can’t get to work, since there’s no public transport operating in some areas either. Below are the details we’ve received from our agent for the restrictions in Shenzhen for your information and we’ve also been advised that Shanghai has already banned all inbound and outbound passenger flights for the time being.

COVID-19 infections have been reported in the city of Shenzhen in the Guangdong province. The authorities have decided to place the whole city under lockdown for 7 days to contain the spread of infections.

Lockdown restrictions are listed below:

-All non-essential business and services must close

-All non-essential workers must remain at home during the lockdown

-Only essential business and services will be allowed to operate

-All adults must undergo three PCR tests before Sunday, March 20th

-All public transportation is halted

The effects of these restrictions shall see manufacturing in the region suspend production lines. On the other hand, ports, terminals, and logistics services will continue to operate normally, but may be restricted depending on the availability of workers during this lockdown period.

Regrettably, all these restrictions are expected to affect the movement of cargo from these areas and hopefully this outbreak will be contained quickly, so that normal services can resume again as early as possible.

Below is a link to a recent article with further details regarding how this lockdown in Shenzhen may affect the supply chain for your information. New Shenzhen lockdown will hit supply chains harder than Suez disruption – The Loadstar

Fuel Surcharge

Since our last notice on the 15th Feb and as mentioned earlier in the report on the situation in Ukraine, fuel surcharges are continuing to rise at a rapid rate with all operators increasing this fee with immediate effect and regrettably we’ll have to pass on these increases as well.  

Therefore, from the 1st April, fuel surcharge for transport deliveries will increase by as much as 6%.

Biosecurity Related Delays Continue

The resources of the Department of Agriculture, Water & Environment (Biosecurity/Quarantine) remain under severe pressure due to a combination of high cargo volumes, staffing numbers, system outages, Covid, BMSB & Japanese encephalitis virus (JEV) to name a few.

We are continuing to see document assessment times increase and sorry to say that it can sometimes take weeks to get an officer booked for a required cargo inspection.

Also, many of the Fumigation facilities are reporting that they’re at near capacity now due to the higher than expected BMSB container fumigation directions, which is a result of China now being an emerging risk country with more live detections being found.

Export Update

Exports from Australia remain the same, with shipping lines continuing to announce GRI’s on outbound cargo. 

We’re yet to see any rate drops at this time for air and sea freight bookings and Peak Season surcharges are now applicable to some global destinations, which is increasing costs on top of the already high freight charges in place for our valued exporters.

Sailing schedules remain chaotic and sometimes difficult to navigate export FCL planning when the shipping lines themselves don’t know when their vessels are arriving and leaving various ports into and out of Australia.  Changes occur without notice and shipping lines are not transparent in providing accurate information when it comes to booking departure dates.  CFL will continue to communicate on these matters for bookings in order to make load planning as seamless as possible where we can.

Fuel prices will now be impacting rates going forward with both landside and seaside services being affected as well as air freight and we’re already seeing these increases due to the current situation with global conflicts. 

Forward and early planning is a must if you can, just to try and ensure space is available when cargo becomes ready for both air and sea freight and please note the below updated booking details for your information:

Export FCL bookings AU to NZ
Ex Brisbane, Sydney and Melbourne, continued shortages of 20’ and some s/lines also 40’ equipment shortages.  
Most if not all services already at capacity 6 weeks in advance.
Brisbane has limited sailings.

Export FCL bookings via SE Asia/China
Transhipment and main China ports are still heavily congested/delayed and the spread of Covid again is impacting staffing levels throughout the logistics chains further impacting transit times. Delays are to be expected.

Bookings are at capacity anywhere from 4-8 weeks in advance.

Export FCL bookings to USA
Space is still difficult to get with continued delays in the West and East coast being faced (over 30 days). Although improving sailing transit times are still chaotic and delays in the USA continue to impact cargo arrivals.

Bookings are at capacity from 6-8 weeks in advance.

Air freight to Auckland, NZ
Backlogs are still occurring with delays in uplift to Auckland. However it is improving as international travel resumes across the trans tas and more flights are expected. 

At this time, some airlines have not re-introduced their services back to NZ.

LCL Bookings ex AU
LCL cargo is still available with weekly cut-offs to most destinations, however published sailing times are always going to be incorrect, can change without notice and cargo can be impacted by delayed departures from Australia

Patricks Enterprise Agreement

Just some good news to finish with, as it’s been confirmed that the new Enterprise Agreement put forward by Patricks Terminals has been voted up by the employees and accepted in full. After two years of very difficult negotiations, finally a new agreement has been accepted by both parties and this should help bring some stability to Patrick’s ports around Australia for the next four years.     

Please contact your usual CFL representative if you have any questions or if you need any further details regarding any of this information.