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Changes to Aircargo imported into the USA

A recent US Transport Security Administration (TSA) revaluation of the air cargo security arrangements Australia has in place for exports to the USA has found that they do not meet US requirementsThe TSA has advised that Australia will need to screen 100% of export cargo carried on passenger aircraft to the US at piece level, in order to meet US requirements.

At this stage there is only a very limited capacity in Australia to screen and inspect every piece of every shipment that is tendered to the airlines for uplift to the USA, prior to being loaded on board an aircraft.

Australian Government’s Office of Transport Security (OTS) is working to quickly implement a two part strategy in cooperation with industry to meet these requirements, including:

1)      Allowing approved industry participants to examine air cargo off airport and

2)      Establishing a Known Consignor scheme.

The implementation deadline to comply with the USA regulations is 31st July 2015 – we do not expect that full industry wide arrangements to comply with the US regulations will be in place by that date.

What’s next?

We await advice from the Government OTS on its expectations of the Australian aircargo industry to address the issue of the available resources for screening of aircargo to USA.

As a consequence of the rushed application of these regulations, we foresee significant issues including:

  • Delays and costs in the immediate & longer term
  • Airline & airfreight terminals will be required to invest in new screening equipment and resourcing
  • Significant cargo congestion will be experienced at most Australian airports, with corresponding delays in uplift of cargo
  • At peak times there will be Airline cargo terminal space issues
  • Earlier receival cut-off times will be implemented for freight acceptance at airline and airfreight terminals
  • We expect that a new level of fees will be introduced to cover the costs associated with the application of these USA regulations
  • Confusion & chaos….

 

The application of any interim and long term solution will have an impact on exporters moving their product to the USA via airfreight.

Magellan’s priority at this stage is to find the best “work around” solution to minimise the impact on our customer’s aircargo moving to the USA.

If you would like more information, please contact our office on 1300 651 888 (Aus) or (09) 974 4818 (NZ) or via email on info@maglog.com.au

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USA West Coast Ports Dispute Resolved

The protracted West Coast US Ports dispute has now been resolved, U.S. Labour Secretary Perez announced Friday night, after the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) reached an agreement on a new five-year contract.

U.S. Labour Secretary Thomas Perez announced that the parties had reached an agreement on a new five-year contract, saying that container ports up and down the West Coast will resume working but did not know how long it will take to work off the backlog in container traffic that has severely disrupted the movement of both import and export cargo.

The agreement comes after 10 months of negotiations, slowdowns and congestion at West Coast ports that have resulted in dozens of ships sitting at anchor or circling off shore. Details of the agreement have not been released.

If you are have any questions relating to your U.S shipments, please contact our Customer Service or Customs teams on 1300 651 888.

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Container Gridlock along America’s West Coast

United-States-west-coast-Container-gridlock-Backlog

Source: Monica Almeida, The New York Times

Cargo containers are banked up at Los Angeles and Long Beach Ports, and along the West Coast of the United States, due to a labour dispute between an association of the major shipowners of the West Coast and the union of longshoremen who unload those ships. The negotiations cover operations at 29 ports, including the largest in Southern California; Oakland in Northern California; and the Puget Sound. Collectively they bring in half the United States’ imported cargo.

The congestion is said to be the “worst-ever on record, according to one shipping analyst (Source: Jane Wells, CNBC)

Magellan-United-States-West-Coast-Ships-Backlogged

Source: Tyler Durden, www.zerohedge.com

 

Magellan-United-States-West-Coast-Transport-Truck-Backlog

Source: Tyler Durden, www.zerohedge.com

The New York Times reports that “American retailers, the U.S. Chamber of Commerce and agricultural exporters said they have already lost hundreds of millions of dollars because of mounting port congestion, with spare parts and consumer products from Asia not arriving on time and exports like oranges and apples left to rot.”

There is grave concern that failure to reach an agreement between the disputing parties will lead to devastating consequences for the US retail industry, and logistical nightmares for American exporters, manufacturers and retailers dependant on an efficient supply chain, of which the effects are already being felt.

Out of concern for the economic consequences of further delay, President Obama has taken action and requested, Thomas E.Perez, the secretary of labor, to travel to California to “meet with the parties to urge them to resolve their dispute quickly at the bargaining table,” according to a statement issued by Eric Schultz, a White House spokesman. Mr. Perez will try to mediate a settlement between the two parties. (Source: Erik Eckholm, The New York Times)

Pending a resolution, exporters and importers into Australia and New Zealand, should expect delays for goods going in and coming out of the West Coast.

For more information relating to the labour dispute:

http://www.nytimes.com/2015/02/15/us/politics/obama-to-intervene-in-dispute-at-west-coast-ports.html?_r=0

http://www.cnbc.com/id/102384907#.

http://www.zerohedge.com/news/2015-02-12/catastrophic-shutdown-americas-supply-chain-begins-stunning-photos-west-coast-port-c

 

For more information relating to your import or export shipments, please contact our Customer Service or Customs teams on 1300 651 888.

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IMPORTANT NOTICE: Changes and Delays in Shipping from USA

usa-magellan-news

Thanksgiving update

Last Thursday 27th November was Thanksgiving in America which is usually followed by a holiday for many companies on the following Friday.

The traditional holiday began in the American colonies almost 400 years ago as a feast of thanks to celebrate the successful Autumn Harvest. Moving cargo is quite difficult at this time as many suppliers are closed until Monday December 1st. Bear in mind that some deliveries may be delayed to due this holiday break.

West Coast Delays

Currently the U.S West Coast Ports (Long Beach/Los Angeles) are suffering severe delays stemming from a shortage of trucking equipment, called Chassis. This problem alongside the outstanding labour negotiations were causing trucks standing in mile long queues as stacks of unmoved containers wait for pick up at the complex that handles 40% of U.S. containerised cargo. The Port of New York and New Jersey are also affected but not as severe.
We will continue to monitor the situation and keep you advised as a West Coast Port Congestion Surcharge is likely to be implemented.

Bunker Adjustment Factor (BAF) changes

Changes to Bunker Adjustment Factor (BAF) will be made ex US ports to Australia effective December 15, 2014. The change will be to cover the cost of lowering the cap on Sulphur Oxide emissions to 0.1%. This requires a switch to cleaner more expensive marine gas oil therefore the existing BAF will be decreased and a new Low Sulphur Fuel Surcharge will be applied as follows:

NEW BAF EFFECTIVE DECEMBER 15, 2014

SIZE TYPE LEVEL (USD)
20′ ALL TYPES $794.00
40′ ALL TYPES $1588.00
40’HC ALL TYPES $1588.00

NEWLY IMPLEMENTED LOW SULPHUR SURCHARGE EFFECTIVE DECEMBER 15, 2014

SIZE TYPE LEVEL (USD)
20′ ALL TYPES $47.00
40′ ALL TYPES $94.00
40’HC ALL TYPES $94.00

For more information please contact our customer service team on 1300 651 888.

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