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Unprecedented shipping conditions continue to frustrate

In Peak Season Posted December 8, 2020 at 2:00 pm
By Con Xegas

shipping conditions

With the political tensions between Australia China affecting exporters justifiably taking over the front page, it is understandable why the current import shipping conditions are barely rating a mention.

Below is an update to our November Rates & Space Update.

Shipping conditions remain extremely challenging. Ports are still congested, and limited services continue to cause delays. Record high sea freight rates, unreasonable detention charges, staged empty containers movements, congestion surcharges, terminal access charges, new stevedore tariffs continue to frustrate forwarders and importers alike. Biosecurity document assessment, inspections and treatment release timeframes are slow and causing problems of their own.

DELAYS IN BIOSECURITY PROCESSING

  • The Department of Agriculture, Water and the Environment continues to struggle to manage the increased “surge” in import volumes resulting in lengthy delays in the processing of entries, inspections and release of containers post-treatment.
  • The need to re-deploy staff to manage the Khapra Beetle threat has stretched Departmental resources.

INDUSTRIAL ACTION

The ‘truce’ between Patrick Terminals and the Maritime Union of Australia (MUA) ended on Tuesday, 1 December 2020. Patrick has advised that they are still in Enterprise Agreement negotiations with the MUA. As a result, stevedoring productivity is improving.

CONTAINER GRIDLOCK EXPECTED AT PORT BOTANY

  • Over the last 15 months, there is a surplus of import containers coming into Port Botany. This is not uncommon.  In normal times, ‘sweeper vessels’ remove empties to clear congestion and make them available at origin ports.
  • Adverse weather and industrial action have prevented the deployment of these vessels. The is further compounded by capped equipment exchanges and high global demand where all container vessels are fully utilised.
  • The container imbalance is at an unprecedented 75,000 TEU currently sitting in Empty Container Parks and transport operator yards throughout Sydney. It will require a concerted effort to clear a backlog of this scale.  Watch this space.
  • The bottom line from transport operators is that without immediate relief, the glut of empty containers will move Sydney’s container logistics to a state of gridlock. We also understand that empty container volumes are higher in Melbourne.

IMPACTS ON EXPORTERS

  • We understand that some vessels arriving between now and Christmas will focus on a quick turn-around of moving empty containers.
  • It is unclear how this will impact exporters, especially with a bumper grain crop almost ready to reach markets.
  • While we have an over-supply of empty containers, there is still limited availability of certain types of equipment including Food Quality containers for use by exporters of agricultural products.

CONTAINER DETENTION CHARGES

  • Congestion at Sydney Empty Container Parks has some shipping lines advising that they are unable to provide de-hire locations for empty containers. Transport operators are fulfilling many ‘re-directions’, fill their yards (which are now also congested and reaching capacity) and complete multiple lifts to access containers within stacks. Understandably, transport operators are generally passing on this cost down the supply chain.
  • Despite this, shipping lines are continuing to charge container detention for ‘late’ dehire (returns).

CONGESTION SURCHARGES

Shipping line imposed congestion surcharges are still in place. While the situation regarding congestion has improved considerably, we await advice about when we can expect these charges to lift.

As this year’s peak continues and volumes look set to continue until at least Chinese New Year the challenging shipping conditions could be with us for a little while longer.  Please do not hesitate to get in touch with us if you have a shipment that is giving you grief or to hear about the tailored solutions our clients are using to get around the roadblocks.

Sources:

FTA

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