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Dear Clients, Middle East Conflict We have all seen or read the news and know majority of the key topics surrounding the conflict. What we wish to share in this update, is tailored to your business, specifically to Sea & Air Freight along with local Landside operations (trucking and wharves). To date, the common questions we are fielding are:
Ships are still sailing, ships are on time and outside of shipments from/to the middle east, there is not a lot to report (as yet). Air freight is starting to be impacted. Cargo is being pumped from flights due to airlines increasing FUEL loadings per flight. This is due to shortage of jet fuel in Australia and or cost. When Fuel is increased, cargo capacity (weight) is reduced. This is on top of al-ready reduced space, due to the Middle East Carriers operating very limited flights. We then move to LANDSIDE. This is where the greater impact is being seen and felt to date. Fuel Surcharges for all Transport related services are increasing sharply weekly. Today, we received notice from an interstate trucker that their fuel surcharge is now 63%, up from 19% pre-war. Today, its been reported that Australian port operators are seeking to be upgraded to a priority status 1 to secure the diesel needed to keep their shore cranes operating. They have petitioned the Federal Government stating that unless they receive this increase in status their ability to move containers on and off vessel may be compromised. Could we see emergency Fuel surcharges applied by Terminals (wharves) in time to come to cover the costs of increased Fuel to operate machinery?? What we will say though, is like the Covid Pandemic things are moving fast, news is fast and minutes / hours or days can change how everything is working. And one interesting (good) point that was shared by a client, we will not run out of toilet paper…. However we are more likely to run out of the packaging that enables us to buy 12 rolls at a time. This is due to a shortage of Resin for Australian manufactures of soft plastics. Resin being a raw material as a by product from fuel is in limited quantities globally currently. North Asia - AU market overview Volumes post CNY are still reported as “sluggish” as factories fully gear up following the long holiday which has seen the imposition of rather heavy blank sailing program up un-til the middle of April at the very least. We are seeing broadcast coming from the ship-ping lines that an Emergency BAF (Fuel) will be levied on most trade lanes however with ships not operating at 100% capacity, will some of the blink and not pass on the Emer-gency BAF in order to secure additional volume? Time will tell. And could importers be ramping up and front loading to try and tackle potential short-ages of raw materials the longer the middle east conflict continues. If this does occur, the increased volume could apply upwards pressure on pricing. Australia and the European Union sign a Free Trade Agreement Good news for Australian importers who source goods from EUROPE. The AU and EU governments have finally signed the Australia European Union Free Trade Agreement (A-EU FTA) earlier this week with the Prime Minister Anthony Albanese and the President of the European Union, Ursula von der Leyan announcing the conclusion of the negotia-tions this week. The agreement will result in the removal of tariffs from 98% of the value of all goods traded between the two. This will result in the removal of the 5% tariff on all imported goods from the EU with the exception of some steel products. The full details of these products are yet to be announced. The next stage of the process is to ratify the agreement for the passage of the various leg-islative instruments in both regions. This will not be a quick process. Indications are that the agreement is not expected to enter into force for at least 12-18 months. We will keep you updated as further information about the commencement date, along with the documentary requirements to access the free trade agreement, comes to light. Hapag-Lloyd tipped to acquire ZIM Hapag-Lloyd have confirmed advanced negotiations regarding a potential acquisition of all shares in Zim. No binding agreement has been entered into as yet. Its believe that Hapag-Lloyd will take over the leased vessels, which according to the Alphaliner data amount to 611,000 TEU of capacity, or 87% of Zim's currently operated capacity. ZIM and its key investors will retain ownership of ZIM owned vessels. This will increase Hapag-Lloyd's global market share from 7.0% to 8.8%. At a new global capacity of 3 Mil-lion TEU, they will remain the world's 5th largest container line Should you wish to discuss any of these points, please don't hesitate to reach out to your key contact @ Transways Logistics International. |
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