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Coronavirus – China manufacturing & shipping update

COVID-19 (Coronavirus) continues to disrupt supply chains. Factory, transport and waterside operations are still not yet at capacity. With travel restrictions in place, the movement of cargo is significantly limited.
What’s next for your supply chain?

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Typhoons Affect Shipping from China and SE Asia

Heavy rain and thunderstorms in recent weeks have caused havoc across China, with floods along major rivers destroying bridges, blocking roads and railways and forcing thousands of residents to evacuate. As a result, waiting times in impacted ports, including Shanghai and Ningbo, have increased considerably.

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Chinese New Year 2018 – Plan Ahead

Happy New Year and of course, Happy Chinese New Year 2018!

China’s most important festival, also known as Spring Festival will be here before you know it. Most businesses in China and Hong Kong (as well as many other Asian nations) close for a week and sometimes longer in order for staff to travel to be with their families for the celebrations. This can cause delays in obtaining Customs Clearance documentation for Australian businesses importing cargo from China and elsewhere in the region.

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HOW TO DECIDE THE RIGHT SHIPPING METHOD FOR THE GARMENTS YOU IMPORT

As anyone who is in the business of importing garments for retail sale will tell you, one of their most crucial supply chain considerations is how to ensure that their merchandise remains in the very best condition. Consistency from origin to destination is critical, while not losing sight of the all-important speed to market.

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CHAFTA DUTY RATES TO COME DOWN IN 2017

The nature of retailing is continually changing.  If it’s not the recent growth of online retail and rapidly changing consumer preferences that is keeping you on your toes; then it will be the need to stay on top of distribution chain productivity improvements to remain competitive that’s keeping you up at night.

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G20 China dates announced – implications for Australian importers

Following the release of the summit dates the G20 control measures have also been announced for 2016.  This year’s summit will be held in Hangzhou on the 4th and 5th of September.  Hangzhou is within 2 hours drive of Ningbo and Shanghai ports.

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Your obligations when importing timber products into Australia from China

All imported timber, wooden articles, bamboo and related products (whether for commercial or personal use) must comply with the Department of Agriculture and Water Resources Biosecurity Import Conditions system (BICON).  It should be noted that this includes timber packaging and pallets. The types of timber, wooden articles, bamboo, and related products page has definitions and links to the applicable import conditions in BICON for different types of timber, wooden articles, bamboo and related products

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Tips for avoiding customs delays due to late Chinese Certificates of Origin.

As we work through some of the new processes associated with ChAFTA we are experiencing a spate of late Certificates of Origin.  Our focus is always on avoiding delays at customs and not receiving these certificates in a timely manner has knock-on effects for our clients that include avoidable delays to customs clearance and in some instances paying duty unnecessarily and incurring professional services fees for refund processing once the certificate is received.

We are doing everything in our control to minimise or avoid delays completely and we would like to alert you to some steps you can take to facilitate the receipt of the Certificate of Origin in a timely manner.

1). Remind your supplier not to delay applying for the Certificate of Origin on the basis of unknown means of transport or routing;
2) Changes to vessel or flight details will not affect the eligibility of the consignment to obtain reduced duty rates provided the goods are still destined for direct shipment to Australia;
3). Advise your supplier to forward the certificate ASAP. There is no need to forward the original certificate as copies are acceptable.

A couple of refresher points that will also help with avoiding customs delays by ensuring certificates are issued as quickly as possible and are valid for use:

Origin criteria

The origin criterion listed on the certificate indicates how the goods listed on the certificate comply with the regulations of the ChAFTA.  The criteria indicate how much of the raw materials or manufactured goods was obtained or manufactured within Australia and or China.  Some goods will be ineligible to use some origin criterion due to their nature, for example manufactured goods would be unlikely to qualify for reduced duty rates under ChAFTA via the Wholly Obtained criterion as this is intended for use for raw materials such as minerals.

Whereas, manufactured goods which are entirely produced from components made within Australia or China or a combination of both would more than likely qualify via the Wholly Produced (WP) criterion; and manufactured goods that are made in China from components made within Australia and or China and other countries would more than likely qualify via the Product Specific Rule (PSR).

  • WO (Wholly Obtained) – for goods such as minerals, agricultural products and animals born in China. Would not apply to products that are further manufactured.
  • WP (Wholly Produced) – for goods that are produced entirely from Australian or Chinese originating materials.
  • PSR (Product Specific Rules) – for goods produced from Australian and/or Chinese goods and goods that have been manufactured in other countries and satisfy the applicable product specific rules relating to the classification of the good to be exported.

 

Should you need clarification on this or another freight movement or customs clearance question please contact me via email or on 1300 651 888; or your usual Magellan Customer Service Rep.

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G20 Shanghai – why is China’s presidency so significant?

In 2016 the Group of Twenty (G20)*, finance leaders and government heads from the twenty major economic countries of the world, will meet in the ancient Chinese city of Hangzhou in the Eastern region of the People’s Republic of China (PRC). With world leaders like U.S. President Barack Obama and other Western dignitaries in attendance the eyes of the world will fall on this vast region of high tech and textile manufacturing near the Eastern coast. While the G20 is principally an economic forum the relationship between economics and climate change will be on show.

Textile Industry Closure

The Chinese government is considering temporarily closing the nearby Province of Zhejiang’s textile manufacturing to reduce air contamination during the G20 summit. This action could possibly idle over half of the textile dyeing industry in China.

While it is too early to say for sure whether the Government will order the shutdown, it has been rumoured that the closure could be three months in length, just before the beginning of the summit. Local government sources quickly stated that it would be impossible for a closure of that length to be achievable given the massive amount of goods that the region produces. Yet experts note that the situation would be quite an opportunity to show how much air pollution could be reduced within the province. This may prove a game changer for the entire region as Beijing had also made agreements during international climate talks in December 2015’s Paris Climate discussions.

China is still somewhat of a closed society for gauging public and international reaction, particularly when large scale events like closing down entire manufacturing regions are concerned. But, one can imagine that complete closure, even for a short period of time, will cause market and industrial disturbances on a significant scale. And it isn’t difficult to imaging the flow-on impact of these on the Australian TCF and retail industries.

China’s G20 Presidency

China’s G-20 presidency in 2016 is themed to help lay the groundwork for a world economy that is more “innovative, invigorated, interconnected, and inclusive.” and that office, China is set to become even more of a major player on the world’s financial and environmental stage.

China’s recent willingness to pursue trade agreements and the imminent inclusion of the reminbi in the group of currencies that determine the value of the IMF’s reserve asset, Special Drawing Rights, China’s capacity to help the world (especially emerging-market economies) cope with market volatility will be greatly enhanced.

This bodes well for China’s capacity to help counter the global slowdown in growth, trade, and investment. And not a moment too soon: The ongoing slowdown is among the greatest risks the world currently faces, because it could compound instability in already-fragile countries, while compelling more robust economies to turn inward, rather than address growing crises.

With a binding greenhouse gas agreement in the works at the United Nations, it behoves China to work within the framework of its own country to solve the issues that industrialisation has brought to the country. If closure of Zhejiang’s textile industry can demonstrate measurable environmental results and throw a spotlight on the problem, then it is possible, with help from other G-20 partners and technological advancement, that the PRC as a whole can work towards improving its air quality, as well as find new ways to grow their industrial might.

With the right mix of realism and power sharing, China’s G-20 presidency has the potential to catalyse important progress to strengthen the foundation of a new global economic structure for the twenty-first century … and to further underscore the importance of environmental commitments in the attainment of this.

*Collectively, the G-20 economies account for approximately 80% of the gross world product (GWP), 80 percent of world trade (including EU intra-trade), and two-thirds of the world population. They furthermore accounted for 84% of the world’s economic growth by nominal GDP from the years 2010 to 2016, according to the International Monetary Fund (IMF).

Sources and more information:
http://schema-root.org/region/international/government/g20/
http://news.xinhuanet.com/english/2015-11/16/c_134822759.htm
http://www.thechinamoneyreport.com/2016/01/02/china-in-2016-fewer-jobs-lower-consumer-confidence/
http://www.weforum.org/agenda/2015/12/how-will-china-use-its-g20-presidency/
http://www.chinatexnet.com/textile-news/2016-02-03/554832.html

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China: Plan well ahead for Chinese New Year in 2016.

Christmas probably seems all encompassing right now, but Chinese New Year (CNY) in 2016 will be upon us before we know it. Next year the Chinese holiday for Chinese New Year is from 7 Feb to 13 Feb, 2016 (week 6).

To minimise the rush and avoid potential disappointment in the movement of your freight from China, please take some time to consider your shipping needs well in advance of the holiday.   Please see below for details

 

FCL Shipments

Most factories shut down between 7 Feb and 22 Feb and some for even longer.  While the factories make every effort to process as many orders as possible before the holiday, we recommend booking shipments at least 14 days in advance to avoid disappointment.

As there is already one cancelled sailing in January before CNY, space will become very tight in the two weeks leading up to the holiday.   During this time, ports will become congested and some shipping lines may accept container bookings in excess of the capacity of some ships, and roll these over to the next available vessel resulting in delayed movements.

For Pearl River Delta ports (PRD) – such as Guangzhou, Huangpu, Foshan, Rongqi, Beijiao…etc, the last feeder sailing before CNY will depart on or round 2 February.  Again we recommend booking this at least 2 weeks before sailing.

 

LCL Shipments

As for above FCLs, however please add a further week.

 

China Customs

The duty schedules of Chinese Customs during CNY will only be announced by the Government around 1 February 2016.  Typically, Chinese Customs arranges a skeleton staff or half day duty during the CNY holidays, so processing delays with export Customs clearance should be expected.  Also, most customs brokers and LCL warehouses will close. Therefore, we suggest the following:

  • All shipments must be handled and customs clearance completed before CNY.
  • For PRD ports origin, the customs office will be closed during CNY, all Customs clearance processes must be completed before 30 January.
  • For emergency or special cases which may be encountered during the holiday, advance notice (including full and complete customs documents) will be required to determine feasibility.

 

Trucking Service 

Most of the transport companies will stop services one week before the CNY.  As with the ports, the trucking companies will be at capacity in the two weeks leading up to CNY.  During this time, trucking arrangements will need to be booked at least 10 days (FCL) & 7-10 days (LCL) in advance of requirements.

There will also be increases in trucking costs during and before CNY.

Last dates for trucking services before the holiday:

Last dates for trucking services before CNY

If you have any queries or would like more information, please call me or one of our Customer Service team members on 1300 651 888 or send me an email.

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