LUNAR NEW YEAR – THE YEAR OF THE OX – FRI 12th FEB.
The Lunar holiday period is upon us. Container bookings are just about finalized and only a limited amount of space is left for sailings over the coming weeks in FEB. We have seen significant decrease in email volume the last several days (staff are relieved as its been a hectic 10 months), and we anticipate this will be the case for the next 4 – 6 weeks, as we wait for factories to come back on line.
This year is like no previous Lunar holiday period. With many truckers / trucking companies closing well in advance of the official holiday, as drivers are required to quarantine for 12 – 14 x days before they travel back to their cities to celebrate. Along with local government check points, limiting the movement of individuals to try and avoid a mass outbreak of covid.
The disruption this has caused is massive, with many factories unable to obtain truckers to move the last of the orders to the terminal prior to the holiday. Should they be able to obtain trucking, the costs have significantly increased. We have seen one case where the standard trucking has increased from USD200 to over USD750 per container.
Truckers seem to have caught on to the demand and are pricing themselves accordingly.
Be prepared for ongoing disruption post the holiday period also. It is fair to assume that workers will need to quarantine on their return. So factories, truckers and all associated industries in the supply chain, may have disruptions well into MARCH 2021.
Its been reported in industry that the current schedule disruptions globally, are at its worst levels since tracking kicked off in 2011. Data released to market, indicates that only 44% of vessels arrived on time in DEC globally.
To combat the disruptions, ocean carriers are considering increasing the advertised transit times, allowing greater buffer for delays and congestion.
Many industry experts are not predicting improvement until Q2 at earliest. Currently the average delay per vessel globally is 5-7 x days, per port call.
BAF TO INCREASE in 2021
2020 BAF levels dived, due to demand easing thanks to the pandemic. However with the global economy continuing to pick up pace. Demand for fuel has seen an increase in bunker already occur.
OOCL bunkers highlights this, with their monthly FUEL surcharge ex China – Australia increasing from; USD32 per TEU in JAN – USD47 per TEU in FEB – USD73 per TEU in MAR 2021.
This is a 128% increase over a 3 month period. If this continues to trend in this manner, BAF surcharges will sky rocket in 2021.
FREIGHT RATES – Where will they go in 2021
Will they peak in the USD7000 – 8000 per 40’ range as they did in 2020? Or will they ease somewhat back to what can only be called more sustainable levels.
What we do know, is that there was no denying that shipping lines went for the kill in 2020. All shipping lines considered the risk and decided to run with jeopardizing long standing commercial relationships in the hope of gaining significant revenue, and it worked for them.
Many industry experts have noted this risk vs return model that carriers adopted and question the long term viability of it. But it’s obviously with far less risk, given the reduced number of shipping companies available in the market compared to years before.
So the immediate forecast is to expect unseasonal high freight rates to continue into the low season. Where they eventually sit, we are unsure, but its recommend to review costings based on 2020 pricing.
ANL have announced the 1st increase for 2021…. USD300 per 20’ / USD600 per 40’ effective from 1st MARCH 2021 ex CHINA / HONG KONG / TAIWAN into all Australia ports.
Its an ambitious price increase right after Chinese New Year, so time will tell if this is applied in full, part or at all.
Yes, this is still one of the major scenarios impacting the smooth flow of cargo. Empty parks globally are still full. Why you may ask…. I’ll try to explain it. At any one time, an import vessel is allocated say 5000 lifts (cntr moves) per port call. If the import vessel is full and has 4500 lifts, then only 500 lifts are left over to load before the vessel should depart the berth.
500 lifts needs to accommodate the export containers from that port + the empty containers. As you can see the balance is far outweighed.
Yes carriers are manufacturing new containers at record pace, but the output from China is chewing this up immediately.
Yes carriers are running "sweeper vessels" into port to try and clear the back log, but once again this is only having a small impact.
So do expect ongoing supply issues with containers well into 2021.
ANOTHER NEW FEE @ THE WHARF
Patrick’s Container Terminals have announced to industry that they will be charging a "WEIGHT ADJUSTMENT FEE" should the reported weight on the BL be out by more than 1 TONNE.
Patrick’s reason for implementing this fee, is to try and ensure the safety of its workers and not to increase revenue…..hmmmmmm.
The amount the fee will be charged at is AUD230.00 per container.
So please ensure to instruct your shippers to accurately weigh and report the container weight on the BL, to avoid additional costs to you your account.
TERMINAL FEE INCREASES / TOLL FEE INCREASES
As has come the norm (unfortunately) various toll fees and terminal fees have increased or will increase over the coming weeks. The amounts vary terminal to terminal / trucker by trucker, so please wait for updates to follow from your local Transways office.
To give you an estimate, Hutchinson port in SYDNEY has increased its Infrastructure fee by $47.82 and its sidelaoder access fee by $20.
And in Brisbane the infrastructure fee is increasing by $38.30 @ Hutchinson port.
Amounts listed are not the final amount truckers will increase as they will review their admin costs associated and will set the final increase amounts in the coming weeks.
We understand your frustration with the continual regular increase in these fee’s and encourage you to speak to your local government representatives should you wish for change to occur.
Finally a friendly reminder to ensure you have MARINE INSURANCE. In the past 2 x months there have been three major container ship incidents. Numerous containers have been lost over board or damaged. You can check these out by clicking on the below links.
So please remember that it’s your responsibility to ensure you have adequate Marine Insurance. Failing to do so, can see you have significant costs attributed to you, under the terms and conditions of the bills of landing.
One of the most common questions we get asked, "Do containers get lost overboard". As you can see "YES". And with more and more severe weather events forecast to occur, its highly recommended you ensure your marine insurance policies are taken out and up to date.
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