AXIMA Market Newsletter - April 2021

AXIMA Market Newsletter - April 2021

Welcome to the April Market Update. 


As floods cause chaos across New South Wales and South East Queensland in recent days, we could be forgiven for thinking planning ahead is an exercise in wishful thinking. However, despite the local disruptions, there is cause to feel greater certainty about the conditions for global shipping and logistics. 


Overall, the new normal for imports has taken shape, with high demand continuing, space remaining tight, but rates steadying. We do not believe rates will ease to pre-COVID or past slack season levels, but in some regions, a slight decrease is expected. In general, the impacts of the COVID-19 pandemic are either slowing or becoming more manageable for imports in most key nodes aside from the USA. Exports are a slightly different story with a GRI being announced for shipments to many destinations from Australia.


Port congestion issues are also easing in both Australia and many other parts of the world.


One factor that will affect bottom lines is the IMO 2020 regulations around reducing the use of polluting high-Sulphur fuels by cargo ships. We foreshadowed the introduction of new charges relating to IMO in mid-2019, and now we are seeing an increase in IMO-related charges in the fuel component of costs charged to shippers, including the Bunker Adjustment Factor (BAF). You can read more about IMO 2020 here.


As ever, speaking with your Client Service Specialist or Client Success Manager is always wise to get informed advice to ensure your supply chain is resilient, efficient and cost-effective.


North Asia 

The big news in this region is shipping line ONE has added a new service from Asia to Australia. The new China Australia Service (CAS) will provide an additional service option and boost the amount of space available. The planned service rotation: Ningbo – Shanghai – Hong Kong – Yantian – Brisbane – Sydney – Melbourne – Ningbo – has an estimated time of departure of 24/4/21 ex-Ningbo. This will be an especially welcome additional service for customers looking for an option that offers Brisbane as the first Australian port of call.


In general, this is the slack season in North Asia, and we are seeing a slow easing in rates. However, carriers are advising us that rates are unlikely to decrease to pre-COVID slack season levels and will remain comparatively high due to continued high demand and ongoing reduced capacity due to blank sailings and overall reductions in services. 


Shipping lines have announced a GRI of USD 300 per 20GP for FCLs and USD 12 per cbm for LCL cargo ex North and South East Asia. 


Airfreight remains absolutely a carrier’s market with restricted space and high costs. In addition, the Hong Kong Fuel Surcharge will increase as of 1 April 2021 to 1.50/kg and there will also be a Hong Kong Origin airfreight terminal handling increase and Airline document fee incurred as of 1 April 2021.


Please also note there will be office closures due to the upcoming Easter Holidays and Chinese Remembrance of Ancestors (Ching Ming/Qingming) Day. Our Hong Kong office will be closed from 02/04/2021 to 06/04/2021 and the Shenzhen office, Warehouse, Trucking and Customs will be closed from 03/04/2021 to 05/04/2021. 

 

South East Asia

Congestion is causing major issues in Singapore, with vessel turnaround times, as a result, being longer than usual. Containers for transshipment are also affected, with rollovers continuing to occur. Please speak with your Client Service Specialist or Client Success Manager for specific advice when planning for shipments via South East Asia to ensure your timelines are adequate. Planning ahead is essential to minimise impacts on your customers.

 

North America

Although the rollout of the COVID-19 vaccines in the USA and new measures around mask-wearing and other public health measures are slowing the rate of infection, there remains a major issue with workforce on the wharves and for warehousing and local freight.

 

For example, as of 8 March, 46 vessels were awaiting to enter San Pedro Bay, the entrance to the ports of Los Angeles and Long Beach. At the start of March, approximately 800 port employees were unavailable for work. The strain created at the ports and beyond is expected to remain problematic for months to come.

 

A GRI ex USA and Canada to AU and NZ, effective 1 April 2021 of USD 200 per 20GP, USD 400 per 40GP/HC , and USD 8 per CBM for LCL will apply to all cargo. The BAF is also increasing from 1 April 2021 for the 2nd quarter of 2021 – the actual dollar figure for the BAF varies depending on the shipping line, so consult your Client Service Specialist or Client Success Manager for precise costs.

 

Europe and the UK 

There has been some slight improvement in landside operations in the UK, however there is still major congestion occurring at the ports and equipment shortages generating significant difficulties. A GRI ex UK of USD 500 per TEU and USD 32 per cbm is due to be implemented effective 1 April 2021.

 

Exports from Australia

The market for exporters from Australia is starting to move. From 1 April 2021, a GRI will be applicable for shipments from Australia to South East Asia, India, New Zealand, North East Asia and the Middle East Gulf at a rate of USD 200 per TEU for dry containers and USD 300 per TEU for reefer containers. 


Australia Ports

Terminal Access Charges continue to be an issue. Hutchison Terminals increased their Terminal Access Charge considerably in March, and it comes as no surprise that DP World Terminals have announced their Terminal Access Charge increases for May 2021.

 

However, there is some good news in relation to Sydney Port Congestion Surcharge (PCS) that was being imposed by the shipping lines. As the congestion has eased, the lines have pulled back the additional charges levied on importers and exporters for the past six months. The dates for which the PCS is no longer being imposed varies considerably depending on the carrier. The information we have to date is:


•Hapag Lloyd: Charged the surcharge based on the booking date. Cargo booked before or on 22/03/2021 will be charged PCS on arrival. Cargo booked from 23/03/21 won’t be charged the PCS. 

 

•PIL – Charged the surcharge based on ETD date. Cargo that left before or on 22/03/21 will be subject to PCS on arrival. Cargo with an ETD date from 23/3/21 will not be charged the PCS.

 

•ANL/CMA CGM: – Charged the surcharge based on ETD date. Cargo that left on or before 17/03/21 will be subject to PCS on arrival. Cargo with an ETD date from 18/3/21 will not be charged the PCS.

 

•Hamburg Sud: – Charged the surcharge based on ETD date. Cargo that left on or before 15/03/21 will be subject to PCS on arrival. Cargo with an ETD date from 16/3/21 will not be charged the PCS.

 

•MAERSK: Charged the surcharge based on ETD date. Cargo that left on or before 15/03/21 will be subject to PCS on arrival. Cargo with an ETD date from 16/3/21 will not be charged the PCS.

 

•MSC: Charged the surcharge based on the booking date. Cargo booked before or on 11/03/21 will be charged PCS on arrival. Cargo booked from 12/03/21 will not be charged the PCS.

 

•LCL cargo – The surcharge is based on ETD date. Cargo that left on or before 17/03/21 will be subject to PCS on arrival. Cargo with an ETD date from 18/3/21 will not be charged the PCS.


Brown Marmorated Stink Bug 

The end of the Brown Marmorated Stink Bug season is approaching. Formally the season ends for freight that arrives after the end of May, 31/5/21. However, the date of arrival is considered the first port of arrival in Australia, so keep that in mind if your cargo is in transit during late May.

 

From 1 June 2021 we have a four-month break before the new season begins. The rules for next season will be announced closer to the end of September 2021.

 

Khapra Beetle. 

Just as we say goodbye to the stink bug, we now start to think about another seasonal pest – the Khapra Beetle. This tiny beetle, originally from India, is regarded by the Australian Department of Agriculture as the second most concerning plant pest. It has a particular fondness for grains, including rice, and is able to survive for a few years in a shipping container. A full list of high-risk products is here.

 

Because it is often a sneaky hitchhiker in the crevices of shipping containers the government is preparing a comprehensive action plan which includes mandatory offshore treatment requirements for targeted at-risk shipping containers from 12 April 2021. A list of target-risk countries can be found here.

 

Office Closures

AXIMA Australian offices will be closed Good Friday 2/4/2021 and Easter Monday 5/4/2021 for the Easter Break.

 

Due to Easter Holidays and Chinese Remembrance of Ancestors (Ching Ming/Qingming) Day, our Hong Kong office will be closed from 02/04/2021 to 06/04/2021; and the Shenzhen office, Warehouse, Trucking and Customs will be closed from 03/04/2021 to 05/04/2021. 

 

A final note

Given the number of variables affecting both international and domestic shipping and logistics, AXIMA’s people take great care of our relationships with our suppliers, customers and the shipping lines. The past year has truly demonstrated the value of being part of a company with a global network that has a local presence on the ground in the key import-export locations, and this means we are able to rapidly integrate new information as it comes to hand. 

 

What that means for you, our valued clients, is we can work in partnership with you to ensure that for every challenge you encounter in planning your shipping, we can create a solution together based on the best available information. So, reach out to your Client Service Specialist or Client Success Manager by phone or email at any time. In supply chain planning, resilience always starts with a conversation.
 

Stay well,

Matt Ward

COO International – YKGA

 

AXIMA PTY LTD

www.axima.com.au