CURRENT IMPORT SITUATION
Shipping is still quite difficult with many ports continuing to be heavily congested with most vessels being severely delayed. Published sailing schedules from the carriers mean nothing, as they have no bearing on the ships actual transit times or arrival dates and even the carriers themselves are having trouble keeping up with where their vessels are. In fact, DP World are reporting that before the pandemic, vessels were arriving 70% on schedule, but now they’re down to only around 10% on schedule.
In fact, there are so many issues all over the world with the movement of cargo and its not just restricted to shipping. The whole logistics chain has been under severe stress for many months now due to the many ongoing issues caused by COVID with the lack of resources and materials needed, insufficient staff available, restricted working conditions in place, lack of space and equipment to handle cargo and the shortage of trucks and carriers to move cargo. All these issues are causing havoc around the world with many vital components now in short supply with long delays waiting for stock from stressed suppliers. One prime example of this is the microchip industry, as a several of the large suppliers of this product are based in Vietnam and Korea and many of these factories were close for long periods of time due to COVID restrictions. There’s now such a shortage of microchips, that several large car and truck manufactures are now having to close their plants or drastically reduce their production schedules because they can’t get these microchips needed to complete their new vehicles. Because of this, the supply of new cars and trucks around the world has been greatly affected with very long delays being incurred and this will continue well into next year. This is just one example of the many different components around the world that are in short supply due to the many issues with COVID interruption and the flow on affects are many and varied throughout all industries and countries.
The transhipment ports in Asia have been extremely badly affected with some containers being delayed by many weeks waiting for the connecting vessel to Australia. The feeder services around Asia continue to move containers into the main transhipment ports, but the main vessels moving these containers to their final destinations are weeks late with no regular weekly services to keep these containers moving. This is causing terrible delays and huge backlogs of containers, in Singapore they’re having to open new storage areas away from the ports just to hold the volume of containers that are waiting to be shipped.
Shipping to and from the USA is still very bad with around 70 ships waiting off Los Angeles each week to get a berth and some vessels are having to wait 3 or 4 weeks before they can load and unload containers. There’s also so many landside issues in the USA that’s affecting the movement of cargo with a shortage of drivers being one of the main ones, as well as a lack of trailers and rail wagons to move the vast number of containers around the country. As well, most warehouses are full now with no available space left due to the slow movement of cargo and deliveries are now needing to be booked in advance to ensure that the goods can be received and that there’s sufficient pallets available, as this is another commodity that’s in short supply is the USA.
The UK is also experiencing similar problems as the USA with a lack of drivers and equipment available to move the high number of containers and some of this has been caused by the change in rules under Brexit with some drivers from Europe no longer being available. As a result, the ports have become congested and overcrowded with many containers left for many days waiting to be moved and this is slowing down the loading and unloading of vessels, which is one of the main reasons for port congestion and vessel delays around the world.
South East Asia
Shipping from South East Asia is still not going well with very limited space being available from most countries and all services to Australia are disjointed and continually delayed due to various port congestions. Many bookings are being cancelled at the last minute by the carriers due to vessels being overbooked or equipment not being available and there are still some areas where shipping lines are still not taking bookings to Australia. Many services from South East Asia are also being affected by the backlog of cargo caught up in the transhipment ports, as most of the carriers in this area use transhipment services to move cargo to Australia and these shipments can be delayed by weeks waiting for the connecting vessel.
On a more positive note, shipping from China has eased up a little and there’s now space and capacity available on most vessels, as the Christmas rush to Australia appears tapers off. But there are still many issues with port congestion and vessel delays which is affecting most shipments with some vessels arriving weeks later than they were expected to. Freight rates from China have remained around the same level over the past month without any major increases and it’s thought that rates will most likely continue to stay this way for the time being. We’ll have to wait and see if there’ll be any major changes after the Chinese New Year break in February and whether the high demand for space and equipment continues into the new year or not.
Airfreight Backlogs into NZ
Please note that currently airfreight back logs ex AU to Auckland are up to 2.5 weeks. Airlines are at capacity coming into the season’s peak period before for Christmas, please ensure to book early and CFL will do our best to secure bookings and expedite your cargo as soon as possible.
FCL Bookings from Australia
Shipping lines ex AU are all currently at capacity and fully booked from 4 to 8 weeks in advance (depending on destination). Please ensure to get your bookings in early as possible to secure space and please keep your valued customers advised of the situation regarding current FCL booking time frames from AU
Export Sailing Schedules
Shipping line sailing schedules remain chaotic and last-minute changes are affecting export loading planning with our valued customers. CFL will continue to ensure timely communication on any changes as they come to hand, however some carriers at this time are not being at all pro-active in any communicating changes to their sailing schedule and this is impacting clients who maybe forced to accept additional costs to store or hold containers on site until they can be accepted into the terminal all without much notice from the shipping lines
Shipping Line Cancellation Fees
Several shipping lines have now introduced cancellation fees and or amendment fees on their bookings per container. Costs vary between shipping lines from USD 50.00/ctr to AUD$250.00/ctr, CFL will work to try to avoid these charges if we can for our valued customers if we receive enough notice in order to do so.
FCL Equipment Shortages
Shipping lines are advising shortages of 20GP equipment around Australia for general cargo. Many are now repurposing this equipment to be food grade only containers in which they can get more revenue than bookings with general purpose containers. This is purely revenue related decisions by the shipping lines whilst they are already making record quarterly profits globally. If you have 20GP container bookings please note as we are booking so far in advance, that we are seeing our bookings reduced or cancelled with the shipping lines advising us they simply do not have any 20GP equipment now available for our valued customers for this reason.
On another positive note, I’m sure everyone will be pleased to hear that the shipping line CMA CGM, just posted the largest profit of all the carriers for the third quarter this year. Their net profit for this quarter was a mere USD 5.6bn, which is up 83% on the same period from last year and they’re expecting an even stronger result for the 4th quarter this year. Click here to a recent article on this topic if you wanted to read just how well the shipping lines are doing during this pandemic, considering their service has never been worse
Not much has changed with airfreight and there’s still only limited services available with freighter aircraft and charter flights carrying most of the cargo, as few passenger flights have started to return as yet. The rates are also remaining very high and, in some areas, have even increased due to the high demand for space leading up to Christmas, as many sea shipments are now looking to move by air due to all the delays with shipping
LCL Booking Fee
Many of the unpack depots are now implementing a booking system to pick up cargo, similar to how FCL shipments are collected from the wharf and this supposed to alleviate queues and reduce truck waiting times at these depots. But along with this new system comes a new fee, and we now have to pay an LCL booking fee when we make bookings at most depots to collect LCL shipments. This new fee will be per shipment and will be effective from the 1st Jan 2022 and this will apply to all LCL shipments delivered in Australia from this date.
Pallets in Short Supply
Another issue to come out of the pandemic is that pallets are now in short supply all around the world with many large distribution centres having great difficulty operating their warehouses with receivals and deliveries being severely impacted due to this pallet issue. One of the main reasons for this shortage here in Australia is due to the recent lockdowns we’ve had in Sydney and Melbourne with many factories, warehouses and distribution centres being unable to deliver any cargo while stock continued to come in. The major pallet suppliers have put out notices advising that there are shortages of pallets available and that the industry is struggling to keep up with demand. Normally new pallets would be put into circulation, but there’s also a shortage of timber available to make new pallets due to the boom in building and home renovations during COVID, so this isn’t a option for the time being and the costs for second-hand pallets has nearly tripled now as a result of this supply issue, that’s if you can actually get any. All transport companies have also advised that they will only deliver cargo now on a pallet exchange basis and they won’t be able to do any pallet transfers unfortunately, as these pallets are required further deliveries.
Terminal Access Charges
Unfortunately we’ve received notification from the container terminals that the Terminal Access Charges (TAC) will be increasing again for the 1st Jan. A reminder that TAC includes Stevedore Infrastructure & VBS Booking fees plus Empty Container Park booking fee. But it is good that the Terminals and the MUA are working together again to finalise their Enterprise Agreements without the constant industrial action disrupting their service and hopefully this will all be resolved very soon.