Well we have made it….. To the end of the most unpredictable year.
Unfortunately, many importers / exporters are nowhere near the end of the grind that has become shipping in recent times.
To finish the year off, we @ Transways would firstly like to thank you for your support throughout 2020 and wish you all, a very happy holiday season.
But as we have done throughout 2020, we wish to provide you with a snapshot of market conditions, so you are aware of the impacts on your business.
SEA FREIGHT PRICING
Pricing into the east coast stabilised in the second half of DEC, but we are already seeing increased rates for the mad rush to Chinese New Year (FEB 12th 2021). January we hear rate levels will be similar to NOV, if not higher.
West Coast (Fremantle) continues to climb, although it has not peaked in the USD6000 – 7500 range such as the east coast, its creeping up every two weeks or so. MSC is now offering rates @ USD4700 per 40’ into Fremantle ex CHINA.
Weeks 3 -6 2021 are going to be peak shipping. And word around the industry is that NOT everything will get out of CHINA on time and some stock will be left behind.
So please try your best to push your suppliers to book as early as they can and have the stock ready even earlier.
Freight rates in recent time ex CHINA – UK and STH AMERICA have been hitting USD12,000 – 13,500 per 40’ container…. Absolutely crazy.
2021 VOLUME OUTLOOK
In talking with many cliental and also shipping companies, the trend in 2021 seems to be that current import volume will continue for at least the period MAR – JUN. Some clients are even indicating 50-100% growth in 2021 compared to current levels.
If volume such as this continues for Q1 and Q2, then freight rates may well remain high for some considerable time.
CONTAINER EQUIPMENT SHORTAGE.
You may wonder "Why can my freight company not get a container?" Simple business economics is the answer. There is such a shortage in China, that ocean carriers are prioritising whom they release the equipment too. To understand it, put yourself in the position of the carrier. If they have one container left, do they make USD12,000 revenue sending it to the UK or do they make USD6,000 sending it to SYD / MEL / BNE (or less for Fremantle) . I am sure we all know what decision is being made.
Good news is that we are hearing of EMERGENCY evacuations of equipment from Australia and around the world. But we have also been informed that terminal performance for loading is a big issue. Reason being is that 3 x cranes working a ship, can load 900 x cntrs at best in one shift in AUSTRALIA. But the terminals are only giving 1 or two shifts per empty ship. So if the Ship can hold 6000 cntrs, then 7 x shifts are needed to load the ship. So do they prioritise shifts for loading out empty containers, or do they prioritise unloading urgent stock. So far unloading full containers has taken precedent.
Globally NOV shipping volume is reported to be 20-30% higher than 2019. The demands on industry are just simply too great for it to handle smoothly currently.
QUARANTINE PROCESSING ISSUES
Importers / Exporters in Australia have been crippled by the slow booking / inspection process of the Department of Agriculture & Water Resources. Instances of 14 x day delays on bookings is very common…. Keeping in mind it takes 12 – 14 x days ex Shanghai, but if an inspection is directed it’s taking another 2 x weeks.
Industry bodies are in continual dialogue with the Government to try and improve this. Hopefully sooner, rather than later.
FULL EMPTY PARKS
Yes, it’s sad to report that months later, this is still a problem. One case we know of in SYDNEY is 2 x months and the shipping line won’t accept the container. There has been no major improvements to report and it’s still a battle to get empty parks to accept empty containers.
SHIPPING LINE WHARFAGE CHARGES / DTHC
Various carriers are increasing rates from the 1st JAN 2021. The amounts are significant smaller than the increase in ocean freight, but its yet another price increase that will impact importer / exporter bottom lines.
Transways will only be passing over increased costs where applicable. If they have not increased, then no adjustment to your rates will be applicable.
ILLEGAL LOGGING – GOES HIGH TECH.
The Department of Agriculture, Water and the Environment have commenced an Illegal Logging compliance programme where they are DNA testing timber, 60% of timber tested was labelled accurately, with the remainder being different species of timber to that indicated on the label. Therefore it is imperative that importers of timber and timber products ensure they are performing proper due diligence in their investigations into the origin of the timber they are importing. New guidance has been produced by the department to assist importers in their compliance with the Illegal Logging Prohibition Regulations 2012. In addition to this the Forest Stewardship Council have also produced risk assessment tools that can also assist with compliance. These are available from the relevant websites below.
FSC Risk Assessment Platform | Forest Stewardship Council
Finally, I wish to acknowledge the team at Transways that service your business. They have had a very challenging year (like all – no denying), with the increased pressures of market conditions and COVID matters.
But it would be ignorant of management @ Transways not to acknowledge the hard work and effort they continue to put in. They all greatly appreciate not only the business relationship we have with you, but also personal.
So well done Transways Team.
Here’s hoping 2021 conditions improve for all and the world can get back into synch and logistics flows once again.
If you do not wish to receive future Transways notifications of this nature, please click here and type 'unsubscribe' in the subject line. By doing so, I understand that I will unsubscribe from all future notification related emails from us.