APRIL 2021 View this email in your Edition - Orbit Newsletter browser
Welcome to this month's edition of the Orbit Logistics
Newsletter.
Dear Valued Partner
I hope you find this months newsletter provides you with valuable information around the Logistics industry.
The Suez Canal situation with the Vessel being stuck will provide its challenges to equipment and sailings until schedules can catch-up with the delays.
Global Consumer demand continues to be high as we are all prevented from any significant travel for holidays. The team is monitoring the situation and will keep you informed of any changes within the market.
Like 2020, we will continue to work with our valued partners to ensure minimum delays and costs to your supply chain.
If you need to contact me please don’t hesitate to call or email me for assistance.
Thanks again for your great support, its appreciated by everyone at Orbit Logistics.
Best Regards
Glenn Allison Managing Director
Orbit Logistics Pty Ltd 5B Catalina Drive PO Box 728 Tullamarine, VIC 3043
P: +61 3 9330 2625 | F: +61 3 9330 2468 M: +61 404 444 447 E: [email protected] W: http://www.orbitlogistics.com.au
IMO 2020: The Sulphur Cap One Year On
Posted by Ian Ackerman | 1st February, 2021
ON 1 January 2020, new reduced limits on sulphur in fuel oil brought about a 70% cut in total sulphur oxide emissions from shipping, according to the International Maritime Organization. One year on, indications are that the transition has been extremely smooth, a testament to the preparations of all stakeholders prior to the new rules entering into force, the IMO said.
The upper limit of the sulphur content of ships’ fuel oil was reduced to 0.5% (from 3.5% previously) – under the so-called “IMO 2020” regulation prescribed in the MARPOL Convention. This significantly reduces the amount of sulphur oxide emanating from ships.
IMO head of air pollution and energy efficiency Roel Hoenders said through 2020, 55 cases of 0.50% compliant fuel being unavailable had been reported in IMO’s Global Integrated Shipping Information System.
“Given that more than 60,000 ships plied the world’s oceans in trade last year, this was a remarkably low percentage of ships encountering difficulty in obtaining compliant fuel,” Mr Hoenders said.
“We had a great deal of preparation during 2019 and before, from all stakeholders and all indications are that there have been no significant issues with supply of low sulphur fuel oil.”
The majority of ships trading worldwide switched from using HFO to using VLSFO. Generally speaking, these are new blends of fuel oil, produced by refineries to meet the new limit, in accordance with IMO guidance and ISO standards.
Guidance issued by IMO on dealing with the new fuel blends in advance of the new requirement addressed implications of switching to VLSFO, including assessing and managing risks and highlighting potential safety risks, so that the risks can be mitigated.
Through 2020, and into 2021 to date, IMO has not received any reports of safety issues linked to VLSFO.
Nonetheless, during 2020, an IMO correspondence group considered fuel oil safety issues in general and the need for further mandatory requirements to ensure fuel oil supplied meets the required standards and quality. The report of the group (MSC 102/6) is available on IMODOCS and will be discussed at the next session of IMO’s Maritime Safety Committee (MSC), MSC 103 in May 2021.
Prior to that, the eighth session of the Sub-Committee on Prevention of Pollution from Ships (PPR 8), scheduled to meet remotely from 22 to 26 March 2021, will further consider VLSFO fuel quality issues, including possible effects on black carbon emissions.
Demand boom on collision course with ocean transport ceiling
Shoppers could find more goods out of stock as import delays mount
Source: American Shipper
U.S. containerized imports show no sign of letting up as the second quarter begins. On the contrary: Consumer demand is strengthening in the wake of fiscal stimulus and falling inventories that necessitate even more restocking.
The biggest risk to Q2 container-shipping volume is not demand for goods, it’s transport supply.
Fallout from the Suez Canal accident will constrain vessel and container-equipment availability, leading to longer delays. By the end of this quarter, shoppers in America’s stores could find more bare shelves. Online shoppers could increasingly see the words “out of stock.”
Inventory restocking tailwinds The positive data on demand keeps piling up. On Thursday, the Institute for Supply Management (ISM) Customers’ Inventories Index (SONAR: ISM.MCIN) sank to 29.9 points.
“This reading is the lowest ever reported since the subindex was established in January 1997,” said Timothy Fiore, chairman of the ISM survey committee. “For eight months in a row, [the index] has been at historically low levels.”
According to Amit Mehrotra, transportation analyst at Deutsche Bank, this falling index number “tells us there is additional runway for restocking demand as retailers shift away from just-in-time inventory.”
Mehrotra expects cargo volumes to be “stronger for longer” as a result of both inventory restocking and increased consumer confidence driven by vaccines and stimulus.
New retailer surveys at investment bank Evercore ISI paint a similarly bullish picture. As of Thursday, the Evercore retail sales survey index was at 67.5, up from an average of 47.1 in February.
Evercore ISI’s retailers pricing power survey index rose to 33.4, its highest level since December 2019. “Improving demand with lean inventory” drove the rise, said the bank.
In general, if demand outpaces inventory replenishment, import demand grows.
Bookings are still rising FrieghtWaves’ SONAR platform features a proprietary index of shippers’ ocean bookings. Bookings are measured on a 10-day-moving-average basis in terms of twenty-foot equivalent units (TEUs) as of the scheduled date of departure. On Friday, the index for China-U.S. bookings (SONAR: IOTI.CHNUSA) hit a record high.
The nationwide index for inbound cargoes from all countries (SONAR: IOTI.USA) reached its highest-ever level on Wednesday.
The index also tracks bookings seven days into the future. This forward view shows that a fresh all-time high is coming next week. (Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)
The cargoes tracked by this data will not arrive at U.S. ports until late April or early May. In other words, as strained as ports are now, they face even greater pressure in the near future.
In California’s San Pedro Bay, off the ports of Los Angeles and Long Beach, there were 32 container ships at anchor on Thursday. That’s back up above the average of 30.5 container ships per day that have been at anchor since the beginning of the year.
(Chart by American Shipper based on data provided by the Marine Exchange of Southern California)
Meanwhile, up in Northern California, ship-position data showed 14 ships at anchor off Oakland on Friday. Anchorage levels there have been in double digits since February.
Suez Canal fallout is coming The Suez Canal accident is putting more pressure on an already strained global system. The number of ships waiting to transit the canal peaked last Monday, at 367. About 80-90 ships have transited per day since the Ever Given was refloated, according to Leth Agencies. Prior to the accident, there were 52.7 per day (year to date).
But even as transits surge, more ships keep arriving. As of Saturday, there were still 156 ships at anchor awaiting passage through the Suez Canal. That’s about three times as many as normal.
After container ships transit the canal northbound, they head to Europe or the East Coast. “What’s going to happen is we’re definitely going to see bunching at European ports,” said Nathan Strang, global head of ocean freight at freight forwarder Flexport, during a webinar presented by Flexport on Wednesday. “Bunching” refers to too many ships arriving at once, creating congestion.
“There may be reduced time in port to try to recover those schedules. That’s going to lead to export cargo and equipment being left behind,” said Strang. He added that “there’s going to be delays for Europe and East Coast services.”
‘Curveball’ to prolong situation Strang also speculated that carriers could “blank” (cancel) sailings on other routes so they could switch more ships to Asia-Europe services to counteract the accident fallout. “Carriers may start blanking trans- Pacific and trans-Atlantic routes to recover on the more lucrative Far East [to Europe] route,” he said.
Anders Schulze, Flexport’s global head of ocean freight, predicted that the Suez Canal accident would lead to “a capacity reduction across the board, both in terms of vessel capacity and [container] equipment. There will be a domino effect in terms of vessels and equipment getting back to Asia.”
The disruption at the Suez Canal and congestion at European ports will limit the number of empty containers transported back to Asia. This, in turn, will reduce the number of empty containers available to stuff with Chinese exports bound for the U.S. on trans-Pacific routes.
“The equipment situation was already somewhat critical,” said Schulze. “We were just seeing a light at the end of the tunnel with equipment availability and now this curveball will prolong the situation.”
Further compounding challenges for shippers, at least one carrier — Maersk — has temporarily halted short-term bookings in the wake of the Suez Canal accident. As of Friday, Maersk’s short-term bookings from Asia to both North Europe and North America remained suspended until further notice.
Add it all up — rising consumer demand, very low inventories, a halt to some bookings, voyage delays, vessel and container capacity curbed by Suez Canal fallout — and it’s a recipe for more bare shelves at American stores.
Rebound in Global Trade Forecast for 2021
Posted by Paula Wallace | 17th February, 2021
THE real value of global trade is set to surge by 7.6% year on year in 2021 and 5.2% year on year in 2022 according to IHS Markit’s Global Trade Atlas Forecasting. This follows an estimated contraction of 13.5% year on year in 2020 to US$16.4 trillion.
The growth this year is attributed to the forecasted recovery in global GDP in 2021 and a particularly strong growth impulse expected in the second quarter. The predicted compound annual growth rate for the real value of global trade for the period of 2021-2030 is 3.5%.
In terms of volumes, IHS Markit estimates a contraction of 11.2% year on year in the global trade in 2020 to 12.7 billion tonnes and forecasts a 7.5% year on year growth in 2021 and a 4.1% year on year increase in 2022.
This will allow the global economy and in particular the transport community to regain momentum and to recoup some of the losses from the trade collapse of 2020. The forecasted CAGR for global trade volume stands at 3.2% in the period of 2021-30.
“The estimated contraction in global trade volume in 2020 (-11.2%) is higher than the contraction in the global financial crisis (-7.7%),” said Dr Tomasz Brodzicki, senior economist at IHS Markit.
“Economic developments will critically depend on the shape of the pandemic curve and the severity of containment efforts taken globally and by individual states as well as the effectiveness of vaccination programs globally.”
Although the COVID-19 vaccines have been developed with unprecedented speed, the effects of vaccination programs are unlikely to be felt globally before Q3 or Q4 of 2021, as larger parts of the population get immunity.
However, many uncertainties still remain and are likely to observe more pronounced adjustments to global value chain/trade patterns (trade diversion effects) the longer the pandemic lasts.
Other important qualitative factors that could affect global trade in 2021 include the side-effects of Brexit, functioning and progress of the Regional Comprehensive Economic Partnership Agreement in participating nations, the new US administration’s trade agenda taking a more multilateral trade policy approach or elections in in countries like Germany resulting of a shifting in power impacting German and EU policies.
Australia Post Provides Insights into Online
Shipping Trends
Posted by Paula Wallace | 1st April, 2021
AUSTRALIAN online shopping reached an all-time high in 2020, with the COVID-19 pandemic driving a huge shift in online shopping behaviour.
According to Australia Post’s Inside Australian Online Shopping 2021 report, an average of one million extra households shopped online every month, when compared to 2019.
Online purchases grew by 57% year-on-year, adding up to a total spend of $50.46bn at the online checkout.
Metro purchases were up 60% and regional purchases up 50.7%.
April saw the first significant spike in online growth. Food and liquor items and home and garden purchases more than doubled compared to 2019, and were the only categories which saw triple digit growth twice in 2020.
“The events of 2020 and ongoing effects saw a shift in the industry that we could never have foreseen,”said Ben Franzi, general manager parcel and express services at Australia Post.
“One thing is clear, the resulting transformation has brought about a significant step-change for e- commerce in Australia.”
Last year, nine million Australian households shopped online – that’s 82% of all households.
At the height of the first COVID-19 wave, the national lock-down saw online purchase growth rise to a level that had not been seen before outside of a key sales period. Then again, during Victoria’s second wave, a new record was set eclipsing the initial growth numbers.Although restrictions eased and online shopping activity softened, volumes never returned to the pre-pandemic level. This was evident in November when the combination of the Cyber Sales and people shopping early for Christmas saw the month become the biggest in Australian online shopping history.
Online shopping was initially driven by necessity while bricks and mortar stores were closed, and this habit became ingrained even as restrictions eased, according to Australia Post. Other factors were also at play, such as social distancing and the shift to working from home, adding to the sustained engagement with online.
“Each month saw an average of one million additional households buying online when compared to 2019,” said Mr Franzi.
“This can be attributed to two key factors: regular shoppers buying more frequently and new shoppers entering the market for the first time.”
More than 1.3 million new households entered the market last year, with the largest cohort of these shopping online for the first time in April.
“To understand their future buying behaviour, we tracked them through to December. Had they bought online out of pure necessity, or would a pattern start to form?” said Mr Franzi.
The data revealed that almost half of this new contingent continued to buy online on a frequent basis (in at least three of the months that followed April). Many of the new shoppers had converted into regular shoppers.
The data shows that the events of 2020 gave rise to a sudden and permanent shift in buyer behaviour.
“Shoppers’ habits have changed and while they are more engaged than ever, they are also more comfortable buying from a broader cross-section of retailers and categories. This poses a question for retailers,” Mr Franzi said. “How can they improve the experience they deliver for their customers and by extension, continue to be competitive?
“In my view, it needs to be a collaborative effort. A seamless end-to-end experience is critical, and the power of partnerships between retailers, supply chains, and delivery partners is even more important, in order to continue meeting the evolving needs of our customers,” he said.
Through the early months of 2021, Australia Post has continued to see around five million households shopping online each month.
“We’ve reached a new level, and online has never been more in focus,” said Mr Franzi.
2020 Global Shipping Carbon Emissions Down
During Covid
Posted by Paula Wallace | 8th March, 2021
MARITIME data provider Marine Benchmark reports that CO2 emissions from global shipping decreased by 1% last year due to the pandemic.
Carbon emissions among the “Big Three” – tankers, bulkers and containers – actually increased 1.2%, with a 2.4% decline in container emissions offset by growth in the bulker and tanker sectors. However, the smaller sectors reversed this growth, with cruise ship emissions experiencing the greatest contraction – down 45% – and with steep declines in ferries, roro’s and vehicles carriers consistent with the weak demand.
Torbjorn Rydbergh, Marine Benchmark’s CEO, said, “The coronavirus pandemic has had a varied effect on shipping, with tankers and bulkers generally performing well, while other sectors faced headwinds as consumer demand plummeted. “Whilst the overall result is a decrease in carbon emissions for last year, the effect may be temporary as the current recovery in global economic demand points to stronger 2021 shipping activity.”
Vessel CO2 emissions are calculated from the carbon content of the fuel consumed. Marine heavy fuel oil is approximately 86% carbon, which implies about 3.15 tonnes of CO2 per tonne of fuel consumed. Since the carbon content of diesel (gas oil) is slightly higher, so too are the CO2 emissions per tonne of fuel consumed.
Actual vessel fuel consumption depends on a range a range of factors, but primarily the hull, engine and propeller design, vessel displacement (draft), speed and fouling, as well as hydrological and meteorological conditions (including wind, waves and current).
Marine Benchmark’s proprietary algorithms estimate vessel fuel consumption by main and auxiliary engines, based on these factors, utilising hourly AIS data for all IMO registered ships spanning more than 10 years.
New Data Shows Drop in Global Container Port
Performance in 2020
Posted by Paula Wallace | 3rd March, 2021
CONGESTION at major global seaports spiked in the second half of 2020, with ships requiring the loading and unloading of more than 6000 containers per visit spending an average of over 83 hours in port, a rise of 20% year-on-year.
The data comes from a report by research firm HIS Markit Global, which also shows that port delays for ships doing smaller workloads were up between 7.8% and 9.5% depending on the call size.
Turloch Mooney, associate director at IHS Markit said ports in the United States were especially hard hit.
“Ports on the US west coast struggled to deal with volume surges in the aftermath of supply disruption due to the pandemic, bigger concentrations of cargo coming at once as well as equipment and labor shortages,” he said.
The San Pedro Bay ports of Los Angeles and Long Beach saw combined average in-port time for ships with workloads of more than 6000 moves rise to more than 170 hours in Q4 2020 from 112 hours in Q3 and 102 hours for similar workloads in Q4 2019.
The in-port time is calculated from arrival at port limits to departure from berth, excluding waiting time outside the port. The overall delays for ships are likely to be higher due to extended anchoring outside ports as ships waited for berths became available.
“The global congestion phenomenon also impacted major gateway ports in Europe and Asia, including some normally associated with very high levels of performance,” Mr Mooney said.
Qingdao port in the northeast of China, a global top ten container port by volume well known for high levels of comparative efficiency, saw average in-port time for ships with workloads of more than 6000 moves increase to over 50 hours in the second half of 2020, a year-on-year rise of more than 21%.
Ships with workloads of more than 6000 moves were in-port for an average of 45 hours in Singapore (+22% y/y) and for more than 92 hours at the UK’s major container gateway of Felixstowe (+34%).
“Restrictions imposed by COVID-19 saw a huge increase in port delays last year costing time and money for cargo owners, ship and terminal operators, increasing emissions and heavily disrupting supply chains,” Mr Mooney said.
“As the world trade is set to grow this year, it is important that ports operate as efficiently as possible as trading economies seek to get clear of the negative economic impact of the pandemic.”
Suez Canal Blocked
Posted by Ian Ackerman | 24th March, 2021
THE CONTAINERSHIP MV Ever Given is blocking the Suez Canal in both directions after running aground south of the Great Bitter Lake.
Shipping has been backing up on both ends of the Suez Canal throughout the day without an end in sight as tugs and at least one digger battle to refloat the colossal vessel.
A statement from GAC said the vessel “suffered a blackout while transiting in a northerly direction”. It was the fifth in the northbound convoy. While none of the vessels ahead of it were affected, there were 15 vessels behind Ever Given, which were stuck at anchorages, according to GAC.
The Panama-flagged Ever Given (IMO 9811000) has a capacity of 20,000 TEU with a current draught of 15.7 metres. It is 399.94 metres long (LOA) and has a width of 59 metres.
The ship is on Evergreen’s China-Europe Mediterranean Service (CEM) and was scheduled to transit the Suez Canal on 23 March. Its next scheduled port was Rotterdam on 3 April, followed by Felixstowe on 6 April and Hamburg on the ninth.
According to its schedule, Ever Given’s last port of call was Tanjung Pelepas on March 13, preceded by Yantian on 9 March, and Taipei, Ningbo, Shanghai, Qingdao and Kaohsiung before that.
AIS playback of March 23rd, 2021 via @MarineTraffic pic.twitter.com/zJ71WOOl9r
— TankerTrackers.com, Inc. (@TankerTrackers) March 24, 2021
PIL Creditors Approve Debt Restructuring Plan
Posted by Ian Ackerman | 3rd February, 2021
PACIFIC International Lines’ plan to restructure its debt was approved by the requisite majority of shareholders, which, it says, demonstrates broad commitment across all creditor classes.
The company said the next step is a hearing at the High Court of Singapore to approve the scheme, with the debt restructure exercise expected to be complete by the first half of this year.
PIL executive chairman S. S. Teo said he was heartened by the results of the votes.
“This is indeed a strong testament to creditors’ confidence in PIL’s business and future prospects. We wish to thank our investor, our creditors and our advisors for their steadfast support and belief in PIL, and all our customers and vendors for their patience during this challenging time while we are working on normalising our financial situation,” he said.
“The comprehensive financing package offered by our Investor, in conjunction with a holistic restructuring of PIL’s financial liabilities, will recalibrate PIL’s capital structure for long-term sustainability, thereby allowing PIL to emerge as a stronger, leaner and better capitalised company, and one that will provide creditors with a clear path to recovery going forward.”
MSC Breaks Reefer Record in 2020
Posted by Ian Ackerman | 10th March, 2021
MSC said it handled more than 1.9 million reefer containers in 2020, breaking its record of 1.8 million set the previous year.
The company said global demand for fresh fruit has grown by 40% over the past decade. This trend was intensified last year by a greater demand for foods containing vitamin C such as fresh fruit, the company said.
To meet this ballooning demand, MSC has expanded its reefer fleet, notably by adding 15,000 of its Star Cool units in 2020.
Also, its new Gülsün class container ships are able to carry more than 2000 additional reefer containers than the previous generation. This increased capacity, the company said, has helped service the high volumes of trade between Europe and Asia.
MSC uses both controlled atmosphere and cold treatment technology to transport a wide variety of fruits and vegetables around the word.
Cold treatment is a chemical-free way to eliminate fruit flies and other insects. The process lowers the temperature of the fruit pulp and maintains it for a specified period of time, with varying settings, depending on the country of origin, the type of commodity and the country of destination.
MSC said the market for reefer services is set to grow in the coming years and with a fleet of 560 vessels, MSC is well-positioned to service that demand as an established leader in refrigerated cargo transportation in many regions. As part of our unrivalled customer service, we have more than 1,000 reefer experts available to advise customers on their transportation needs.
MSC chief logistics officer Giuseppe Prudente said reefers and temperature-controlled systems have gained in popularity over 2020.
“At MSC, our customers remain our top priority and we’re glad that we’ve been able to keep their reefer operations functioning amid the pandemic,” he said.
“The growing demand has also opened up new market possibilities, which we have been able to support thanks to our continual investment in the best technologies for refrigerated transport solutions.”
In 2020, MSC made the first ever shipment of Chilean clementines to Hong Kong, connecting Asia and Latin America via its INCA Service.
Shortly after, MSC successfully delivered the first ever shipment of avocados from Colombia to China.
HAPAG-LLOYD Concludes 'Green Financings' for
6 Large Containerships
Posted by Ian Ackerman | 11th February, 2021
HAPAG-Lloyd concluded two debt transactions according to the Green Loan Principles of the Loan Market Association. They were associated with the financing of six 23,500-TEU containerships, which were ordered in December 2020.
The Green Loan Principles aim to facilitate and support sustainable economic activity. The Loan Market Association sets out four core components of this type of loan.
The first principle is about ensuring loan proceeds are used for green projects, which should be described in the finance documents.
The second Green Loan Principle says the borrower of a green loan should communicate to its lenders its environmental sustainability objectives in the project being financed and the process by which it will be evaluated.
The third principle talks about how the loan proceeds should be used, and the fourth principle is about reporting on the use of the proceeds of the green loan.
Hapag-Lloyd’s syndicated green loan in the amount of US$417 million has a 12-year maturity and will be used to finance three of the six container ships on order.
The credit facility is being backed by the Korea Trade Insurance Corporation, and the syndicate consists of 11 banks. KfW IPEX-Bank and BNP Paribas were in charge of structuring and co-ordinating the transaction.
The lease financing for the remaining three newbuildings is in the amount of US$472 million, has a maturity of 17 years plus construction-phase financing, and has been structured by the Industrial and Commercial Bank of China Leasing (ICBC Leasing).
Hapag-Lloyd CFO Mark Frese said these first green financings are a major milestone for the company. “We are breaking new ground in the container shipping segment by financing newbuilding projects geared towards sustainability,” he said.
“The transactions will help us to modernise our fleet while further reducing our carbon dioxide footprint at the same time.”
According to Hapag-Lloyd, the newbuildings will reduce carbon dioxide emissions by about 15-20%.
This means in addition to the requirements of the LMA’s Green Loan Principles, the ships will also satisfy the EU Taxonomy’s technical screening criteria for sea and coastal freight water transport, according to the company.
The vessels are being built in South Korea and are scheduled to be delivered in 2023.
HMM takes delivery of first 16,000 TEU containership
Posted by Ian Ackerman | 24th March, 2021
HYUNDAI Merchant Marine has taken delivery of the first of eight 16,000-TEW newbuild containerships with the HMM Nuri.
The vessel was built at Hyundai Heavy Industries’ Ulsan shipyard, with the other seven set to be delivered through the second quarter of this year. HMM Nuri will be deployed on the Far East Europe 4(FE4) route under THE Alliance’s product plan, with its port rotation of Busan, Shanghai, Ningbo, Yantian, Singapore, Suez Canal, Rotterdam, Hamburg, Antwerp, Southampton, Suez Canal, Yantian, Hong Kong, Shanghai, and Busan.
The vessel has a nominal capacity of 16,010 TEU and is equipped with 1,200 plugs for reefer containers.
Each of the newbuilds will be fitted with an open-loop scrubber system embedded with what HMM says is “hybrid-ready technology” with selective catalytic reduction technology to reduce nitrous oxide emissions by 80% or more compared to the industry average.
HMM said the carbon footprint per vessel also can be reduced by 52% with greater energy efficiency.
HMM said its new vessel, HMM Nuri, and its seven sister vessels have adopted a full range of modern container securing systems to improve operational safety. In particular, the lashing bridges have been designed as a wind-resistant structure that ensures reliable securing of containers from high winds.
HMM said it was expecting to boost its fleet with a total of 20 “mega vessels” including 12 24,000-TEU container ships acquired last year. HMM plans to expand its capacity to about 1 million TEUs by 2022.
Maersk to Operate World's First Carbon Neutral
Liner Vessel by 2023
Posted by Paula Wallace | 18th February, 2021
MAERSK has announced it will speed up its decarbonisation activities with the advent of a new methanol- fulled feeder vessel in operation by 2023. The vessel will pilot a scalable carbon neutral product to customers and offer fuel suppliers an incentive to scale production of the “fuels of the future”.
The liner shipping company also said that all future owned newbuild vessels will be able to operate on carbon neutral fuels or very low sulphur fuel oil.
It cites fast-tracked advances in technology and increased customer demand as the key drivers in its decarbonisation efforts, which are now tracking seven years ahead of its initial timeframes.
Søren Skou, CEO, A.P. Moller – Maersk said, “Maersk’s ambition is to lead the way in decarbonising global logistics. Our customers expect us to help them decarbonise their global supply chains, and we are embracing the challenge, working on solving the practical, technical and safety challenges inherent in the carbon neutral fuels we need in the future.
“Our ambition to have a carbon neutral fleet by 2050 was a moonshot when we announced in 2018. Today we see it as a challenging, yet achievable target to reach.”
Around half of Maersk’s 200 largest customers have set – or are in the process of setting – ambitious science-based or zero carbon targets for their supply chains, and the figure is on the rise.
Maersk’s methanol feeder vessel will have a capacity of around 2000 TEU and be deployed in one of its intra-regional networks. While the vessel will be able to operate on standard VLSFO, the plan is to operate the vessel on carbon neutral e-methanol or sustainable bio-methanol from day one.
“We believe our aspiration to put the world’s first carbon neutral liner vessel in operation by 2023 is the best way to kick start the rapid scaling of carbon neutral fuels we will need,” said Henriette Hallberg Thygesen, CEO of fleet and strategic brands, A.P. Moller – Maersk.
Both the methanol-fueled feeder vessel and the decision to install dual fuel engines on future newbuildings are part of Maersk’s ongoing fleet replacement. CAPEX implications will be manageable and are included in current guidance.
YM Constancy Officially Named
Posted by Ian Ackerman | 24th March, 2021
YANG Ming held a naming ceremony for its 2800-TEU YM Constancy at CSBC’s Kaohsiung shipyard on 19 March.
YM Constancy is the eighth in a series of 10 2800 TEU container vessels built at CSBC shipyard.
It has a nominal capacity of 2940 TEU and is equipped with 353 plugs for reefer containers. It has a length of 209.75 metres, a width of 32.8 meters and a draft of 11.2 meters. YM Constancy is designed to cruise at a speed up to 21 knots. The newbuilding adopts what Yang Ming calls the Sea Sword Bow design to significantly save energy and optimise hydrodynamic performance.
The ship is outfitted with an electronic controlled fuel injection engine with low-load tuning exhaust gas bypass fuel control system will greatly enhance the new ship’s energy efficiency.
Furthermore, the installation of scrubbers will help Yang Ming to fulfil its promise to reduce emissions of nitrous oxides and sulphur oxide.
The ceremony was officiated jointly by Yang Ming Chairman Cheng Cheng-Mount and CSBC Corporation Chairman Cheng Wen-Lon.
Ho Shu-Ping, Director General of Department of Navigation and Aviation, Ministry of Transportation and Communications was invited to officially name the ship during the ceremony and wished the ship and its crew the best of luck on their future voyages.
In addition to the environmental advantages, YM Constancy is also certified with Bureau Veritas’ SMARTSHIP (MACHINERY 1) notation, which indicates that the ship is equipped with an integrated computer-based system for the controlling and monitoring of the automated installations of periodically unattended machinery spaces.
YM Constancy will be deployed on Yang Ming’s intra-Asia service, JTS, from April 1st. With the addition of the new vessel, its energy-saving technologies coupled with current steady market demand will help optimize Yang Ming’s intra-Asia service network.
The port rotation of JTS is Nagoya – Tokyo – Chiba – Yokohama – Keelung – Kaohsiung – Hong Kong – Shekou – Port Kelang – Singapore – Manila South Port – Kaohsiung – Hong Kong – Shekou – Xiamen – Nagoya.
Minister Acknowledges Concerns Around
Biosecurity Delays
Posted by Ian Ackerman | 11th February, 2021
DAVID Littleproud, the agriculture minister, acknowledged industry concerns with delays in receiving biosecurity document assessment and inspections services from his department.
Mr Littleproud said the Australian government was making all efforts to manage the increased demand at the border and reduce the impact on industry while still effectively managing biosecurity and imported food risks.
“International trade volumes and emerging biosecurity risks will only continue to grow,” he said.
“We cannot afford to compromise Australia’s biosecurity to achieve better service delivery outcomes. While biosecurity must come first, it is also important that we explore more innovative ways of operating. Doing more of the same is not an option.”
Mr Littleproud said partnering and co-design activities with industry at both a grassroots and strategic level are critical to reform while ensuring the flow of trade and goods to Australian consumers keeps moving.
“Australia is facing significant and changing threats posed by exotic pests and diseases such as African swine fever, brown marmorated stink bug and khapra beetle, which would all have devastating effects on agricultural industries, the environment, exports and our economy if they established here,” he said.
“We are lucky to be free from these harmful pests and diseases and we want to keep it that way, as the impacts would be felt across communities, including businesses trying to recover from the effects of the COVID pandemic. My department is currently working on a number of initiatives which will help to manage biosecurity risks more effectively and efficiently at the border.”
Mr Littleproud said these initiatives include:
• implementing 3D x-ray and auto-detection technologies to identify biosecurity risk material at the border – trials of the x-ray technology have been a success with the department using the 3D images to create the world’s first auto-detection algorithms for biosecurity risk material; • training detector dogs to identify scent extracts and volatile organic compounds to detect priority pests such as brown marmorated stink bugs; • testing scanning systems mounted on ship-to-shore cranes to detect pests and contaminants on sea containers – as part of the Business Research and Innovation Initiative (BRII) challenge, two companies are testing these systems. If successful, they may reduce unnecessary inspections and result in faster release of containers; • automating processes to increase the speed and accuracy of biosecurity document assessment; • piloting virtual inspections of surveillance low-risk foods, in consultation with industry participants; • trialling RealWare’s hands-free Smartglasses. These trials have been ongoing since early 2020 to test their potential useability in certain biosecurity activities, such as remote inspections; and • investing in modern systems to schedule and deploy assessment and inspection services more effectively. Mr Littleproud said these are some examples of how his department is working to manage increased volumes of cargo and emerging biosecurity risks through increasingly more complex global pathways.
“I have asked my department to work with industry groups on other short-term and medium-term system and process improvements, and on setting a global benchmark in biosecurity best practice through co- design,” he said.
“I thank members of the import supply chain for their ongoing cooperation and patience while these improvements are rolled out, and assistance in managing biosecurity risks.
BioSecurity Laws Are About to Get Sharper
Teeth
Posted by Ian Ackerman | 18th February, 2021
THE AUSTRALIAN government is introducing legislation that enable courts to mete out higher penalties for breaching biosecurity laws – including jail time and fines up to $1.11 million.
Minister for agriculture David Littleproud said the Biosecurity Amendment (Strengthening Penalties) Bill 2021 is about sending a clear message to people and companies who put at risk Australia’s $61-billion agriculture industry and more than $1 trillion in environmental assets by contravening the Biosecurity Act 2015.
“The clear message is you could cop jail time and a bigger fine of up to $1.11 million when this legislation is passed by the Parliament,” Mr Littleproud said.
“The amendments focus on individuals and businesses, such as commercial importers and biosecurity industry participants, that have a particular responsibility to know and understand their obligations under the Act and take necessary steps to comply with the law.”
Mr Littleproud said the bill would ensure penalties are set at a level that means they are not merely a cost of doing business.
“The new maximum penalties, in some cases up to $1.1 million, reflect the potential gains someone might obtain or seek to obtain through non-compliance with our biosecurity laws, as well as the devastating impact that contraventions may have on Australia’s biosecurity status, market access and economy,” he said.
“Similarly, the new Biosecurity Amendment (Strengthening Penalties) Bill is also designed to provide a stronger penalty regime that more appropriately reflects the seriousness of breaching the Biosecurity Act than the current law.”
In the bill’s explanatory memorandum, Mr Littleproud wrote that the growth in trade and travel expected as part of the economic recovery from the current COVID-19 pandemic is expected to accentuate biosecurity threats.
“In the face of growing regional and global threats such as African Swine Fever and hitchhiker pests (such as khapra beetle) the current penalty regime needs reinforcement to provide an effective deterrent against non-compliance,” he wrote.
“The penalty amounts in this bill more appropriately reflect the impact the contraventions may have on Australia’s biosecurity status, market access and economy.”
International Forwarders and Customs Brokers Association of Australia CEO Paul Damkjaer told DCN IFCBAA supports the legislation.
“We support it because we appreciate that Australia’s agricultural business is worth billions, and it also has a good reputation around the world,” he said.
“Biosecurity is a shared responsibility. As freight forwarders, we’re on the forefront, so we must assist the department in biosecurity matters.”
Import Food Notice 01-21 - February 2021
Imported Food Notice (IFN) 01-21 - Changes to mandatory allergen labelling - advises food importers of regulatory changes to mandatory allergen declarations on food labels
IFN01-21 can be accessed via the link: agriculture.gov.au/import/goods/food/notices
Independent Review For Imported Prawn
Biosecurity Risks
Posted by Paula Wallace | 22nd February, 2021
A SCIENTIFIC advisory group will independently evaluate how the government has assessed the biosecurity risks posed by imported raw prawns to Australia’s $3.4bn seafood industry.
“Imported raw and uncooked seafood can bring in a range of pests and diseases of biosecurity concern such as white spot syndrome virus and the government is fully committed to protecting our industries from these critical threats,” said agriculture minister David Littleproud.
“Given that white spot has entered Australia previously and continues to cause disruption to Moreton Bay seafood farmers and fishers, the seafood industry must have complete confidence that we have the best possible import requirements in place.”
The independent panel of scientific and technical experts will evaluate whether the conclusions of the review of prawn and prawn products that is currently underway, will protect Australia from the threat of white spot syndrome virus and other significant known and emerging diseases.
The panel will provide its report to Australia’s director of biosecurity.
“The panel will include individuals with expertise in biosecurity, economic assessment, risk analysis, as well as aquatic animal diseases,” Mr Littleproud said.
“Australia’s enviable biosecurity status underpins our international agricultural trade, however we cannot be complacent when it comes to protecting the health of our food and fibre industries.”
Visit awe.gov.au for more information on current import conditions for uncooked prawns and other prawn products for human consumption and the review of prawns and prawn products.
New Import Container Measures to Combat
Khapra Beetle
Posted by Ian Ackerman | 13th April, 2021
SEA containers loaded with high-risk plant products and packed in a khapra beetle target risk country are now required to undergo mandatory treatment offshore.
Approved treatment options for containers include methyl bromide fumigation, heat treatment and insecticide spray.
Target risk countries include many countries in Asia, Africa, the Middle East and Europe. A full list can be found on the Department of Agriculture, Water and the Environment’s website.
The high-risk plant products include many common grains such as rice, chickpeas, lentils, wheat and peanuts. A full list of high-risk plant products can also be found on DAWE’s website.
Agriculture minister David Littleproud said the mandatory offshore treatment was one of the urgent actions being put in place under the Australian government’s $14.5-million investment in surge capacity to respond to the changing threat of khapra beetle.
“Khapra beetle is a significant global pest threat,” Mr Littleproud said.
“Australia is free of khapra beetle and it is important we keep it that way for continued access to valuable international markets.”
Mr Littleproud said 80% of Australia’s grain exports would be at risk if the beetle was established in Australia or if there was even the perception that it had.
“Dried food exports such as nuts and dried fruit would also be at risk,” he said.
“Khapra beetle can survive as a hitchhiker pest in sea containers for a number of years with little to no food; and managing the risk of sea containers is a complex, global problem.”
Mr Littleproud said the government is working with overseas counterparts, industry and research organisations to identify possible ways to deal with the problem in the global supply chain.
“In the meantime, urgent actions are being put in place to minimise the risk this pest entering Australia via sea containers,” he said. “Australia has a robust biosecurity system that reduces the risks posed by exotic pests and diseases, as well as established procedures to manage detections when they do occur.”
The khapra beetle (Trogoderma granarium) is DAWE’s number two national priority plant pest, and the number one plant priority for grains.
The department said it is not present in Australia, but it would be a pernicious pest if it established itself here.
The beetle eats goods such as stored grains and dry food. In so doing, it can cause significant damage.
DAWE said infested goods can become contaminated with beetles and larval skins and hairs, which can be a health risk and be difficult to remove from grain storage structures and transport vessels.
Royal Assent granted to the Customs Tariff Amendment (Incorporation of Proposals and
Other Measures) Act 2021
The Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Act 2021 has now received Royal Assent. The consequential amendments to the Tariff should therefore commence on 29th March 2021.
The amendments to the Tariff include:
• New subheadings for specifically formulated caffeinated beverages, formulated supplementary sports foods and formulated supplementary foods; • A new Note providing that products such as the gummi bears in Pharmacare are not classified medicaments of Chapter 30, but as food supplements of 2106, unless another classification applies; • A new Note what wheelie bins are not classified to Chapter 87, and therefore their wheels are classified to Chapter 39 or Section XV as appropriate; • New Notes that provide that plates, rods, angles, shapes, sections, tubes, pipes and the like requiring further modification prior to being used cannot be classified as parts. New Chapter notes have ben added to Chapters 73 and 76.
Shipping Cartel Fines Now Total $83.5 Million
After WWO Conviction
5 February 2021
Norwegian-based global shipping company Wallenius Wilhelmsen Ocean AS (WWO) has been convicted of criminal cartel conduct and ordered by the Federal Court to pay a fine of $24 million, in a case prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).
This brings to a close an extensive investigation by the ACCC into an international cartel involving several international shipping companies in relation to the shipping of vehicles to Australia from Asia, Europe and the US on behalf of major car manufacturers.
In Australia, three international shipping companies have been convicted and fined a total of $83.5m in relation to this cartel, after detailed investigations by the ACCC. In August 2017, Nippon Yusen Kabushiki Kaisha (NYK) was fined $25 million, while K-Line was fined $34.5 million in August 2019, which remains the largest criminal fine ordered under the Competition and Consumer Act.
Yesterday, the Federal Court found WWO had engaged in a cartel with the other shipping companies in relation to the transportation of vehicles such as cars, trucks and buses to Australia between June 2011 and July 2012.
WWO along with other multinational shipping companies gave effect to a cartel provision by allocating major vehicle manufacturing customers between themselves including on certain shipping routes to Australia. Justice Wigney found that this cartel had the capacity to limit or distort the competitive setting of freight rates and was likely or at least had the potential to impact on the prices paid by Australian consumers.
WWO pleaded guilty on 18 June 2020 and was convicted and sentenced yesterday afternoon for one criminal charge of giving effect to cartel provisions. WWO also admitted guilt in relation to two further offences of giving effect to cartel provisions in 2009 which was taken into account on sentence.
Justice Wigney noted that this was the third criminal prosecution arising from a global cartel in a market of considerable economic importance for Australia.
He said that “on just about any view, this was an extremely serious offence against Australia’s laws which prohibit cartel conduct” and WWO’s conduct was covert, deliberate, systematic, and involved planning and deliberation.
He also said that while the objective seriousness of WWO’s conduct was less than NYK and K-Line, unlike these other companies WWO was not entitled to any material discount for co-operation with the ACCC because it was not established that WWO had provided any assistance to the ACCC.
“The $24m fine for WWO brings this complex international criminal cartel investigation to a successful conclusion,” ACCC Chair Rod Sims said.
“Notably, Justice Wigney emphasised that the fine imposed on WWO ‘was intended to send a powerful message to multinational corporations that conduct business in Australia: that anti-competitive conduct will not be tolerated in Australia and that they will be dealt with harshly by this Court if found to have engaged in such conduct’. ”
“The three shipping companies were the subject of our first criminal cartel investigations after a change in the law came into effect in July 2009, introducing criminal cartel offences,” Mr Sims said.
“The total $83.5m in fines for these companies reflects the seriousness of cartel offences, which can damage the economy and other businesses, and can result in increased prices for consumers.”
“The ACCC’s investigation into this cartel, which was assisted by the US Department of Justice, Federal Bureau of Investigation (FBI), the Japan Fair Trade Commission and the European Commission, shows our commitment to tackling criminal cartels and the value of strong networks between competition agencies worldwide,” Mr Sims said.
“International cartel investigations can be challenging and complicated because parties, witnesses and other evidence are located overseas. We are grateful for the excellent cooperation with our international counterparts.”
“We will continue to investigate serious cartel conduct which affects Australian businesses and consumers, no matter where in the world those involved are located or how long it takes,” Mr Sims said.
Notes to editors
The ACCC investigates cartel conduct, manages the immunity process, takes proceedings in the Federal Court in respect of civil cartel contraventions, and refers serious cartel conduct to the CDPP for consideration for prosecution. The CDPP is responsible for prosecuting criminal cartel offences, in accordance with the Prosecution Policy of the Commonwealth.
A cartel exists when businesses agree to act together instead of competing with each other. Conduct can include price fixing, sharing markets, rigging bids and controlling the output or limiting the amount of goods and services. More information on cartel conduct can be found on the ACCC’s website.
Anyone with information about any cartel conduct is urged to call the ACCC Cartel Hotline on (02) 9230 3894 or email [email protected].
Background
WWO is headquartered in Oslo, Norway and operates in 29 countries worldwide. WWO employs over 9,000 staff and operates 130 vessels on multiple trade routes covering six continents and was previously known as Wallenius Wilhelmsen Logistics AS (WWL).
WWL has been prosecuted in several other jurisdictions including South Africa, Europe and the United States in connection with conduct related to this cartel and has paid multi-million dollar fines in connection with those cases.
Release number: 4/21
Maersk 2020 Results Solid
Posted by Ian Ackerman | 11th February, 2021
“TWENTY-twenty will forever be remembered for the COVID-19 pandemic, that negatively impacted our lives, jobs, businesses and the global economy,” A.P. Møller – Mærsk CEO Søren Skou said in his introduction to the company’s results report.
“I am proud that we have accelerated our transformation and delivered earnings growth during every quarter of 2020, despite very different market conditions starting with strong COVID-19 impact in the first half to a rebound in Q4,” Mr Skou said. “Our customers want us to help them build more resilient supply chains and buy more end-to-end services and, as a consequence, our logistics business more than doubled earnings in 2020. We are today a profitable, growing logistics company with a broad offering of ocean and air transportation, port services and logistical capabilities including warehousing, custom services and lead logistics.”
Mr Skou said the company left 2020 with a strong balance sheet and little debt.
“We are well equipped to deal with the ongoing market volatility and also benefit from a world that hopefully starts to re-open,” he said.
Maersk reported that its underlying EBITDA grew 44%. to US$8.2 billion and revenue grew to US$39.7 billion in 2020 compared to US$38.9 billion last year. While the demand surge in the second half of year created supply chain bottlenecks, including vessel and container shortages, and led to higher rates that contributed approximately US$1.5 billion to results, Ocean further improved its intrinsic performance by focusing on costs, agile capacity management and launching new digital offerings.
Logistics and services grew to US$7 billion, compared to US$6.3 billion last year, and EBITDA improved 110%. to US$454m, supported by the acquisition of Performance Team as well as improved performance in intermodal, air freight forwarding and warehousing and distribution.
Gateway terminals saw a decrease in revenue of 3.9% to US$3.2 billion in 2020 because of lower volumes due to impact from the pandemic. EBITDA increased by 8.3% to US$989m, reflecting an improved EBITDA margin to 31% driven by higher revenue per move and cost reductions in several terminals.
Maersk said with the current outlook, there continues to be a high degree of uncertainty related to the impact from COVID-19 on the economic growth and global demand patterns.
The company said it expects another year of earnings growth and transformation progress.
“We expect the current, exceptional situation to continue into 2021 with Q1 to be stronger than Q4, followed by a normalisation thereafter, and announce a guidance for the full-year 2021 of an underlying EBITDA in the range of US$8.5 billion to 10.5 billion, compared with US$8.3 billion in 2020. This is equivalent to an underlying EBIT guidance of US$4.3 billion to 6.3 billion.
Ocean is expected to grow in line with the global container demand at an expected 3-5% in 2021, with the highest growth seen in the first half-year.
SAL OPINION: Melbourne Port Upgrades Should
Be Privately Funded
Posted by Shipping Australia | 8th February, 2021
SHIPPING Australia has lodged a submission with the Victorian Essential Services Commission (ESC) objecting to a price hike plan by the private operators of the Port of Melbourne.
In its application to the Victorian ESC, the port operators propose upping prices to fund an infrastructure upgrade. The Port of Melbourne would thereby be enabled to handle bigger ships.
Shipping Australia argues that allowing the port to hike prices to fund those infrastructure upgrades is unreasonable.
Firstly, the need for an upgrade was both predictable and actually predicted at the time of privatisation. The cost of this wholly-necessary upgrade should have been factored in at the time of privatisation.
Who should bear the risk? Secondly, it is a general commercial principle that a business which decides to invest in expansion will itself bear the risk of not recovering its capital and/or not generating a desired return on investment. For example, if an ocean shipping company decides to build a new fleet of ships then the ocean shipping company, its suppliers and its customers would reasonably expect that the ocean shipping company itself would bear the risks of that investment.
Why should the Port of Melbourne be any different? Why should the Port of Melbourne be allowed to insulate itself from free-market risk by getting ocean shipping companies to pay for its infrastructure upgrades?
Thirdly, it is also a general commercial principle that a business which builds and owns assets for the purposes of increasing product sales (in this particular case, increased container throughput), and thereby ultimately increasing revenues and profit for itself, ought to fund its own investments.
After all, when a private ocean shipping company decides to expand its business by placing an order for a fleet of new ships at a shipyard, the ocean shipping company itself pays for that new-build order. It either pays for its new fleet directly from its balance sheet or it borrows money from banks to do so. Similarly, the Port of Melbourne should use its own resources, or borrow money to fund investment in its own assets from which it will benefit through increased throughput, revenues and profits. Shipping Australia agrees that more cargo and bigger ships are coming and that the port needs to upgrade so as to handle a much bigger trade.
If not, it seems likely that the port will be choked with severe and ongoing congestion in the not-too-distant future.
Private port operator will face strong incentives to upgrade Whether or not Port of Melbourne chooses to upgrade its assets so that it can handle larger ships is a matter for the private port operators. However, Shipping Australia takes issue with the argument that private port operator (being a monopoly, or near-monopoly, actor) has no incentive to fund an upgrade without being heavily subsidised by the ocean shipping industry.
Firstly, as noted above, a more capable port will ultimately lead to greater revenues and profits.
The biggest benefit to the private operator is perhaps not quite so evident. And it’s this: upgrading now will massively obviate future severe disbenefit that would otherwise inevitably occur.
These disbenefits include:
• the daily pains and frustrations of operating a chronically and severely congested port; • being subject to fierce criticism from the public, industry and political representatives; • possible future regulatory or legislative intervention by public officials as a consequence; • shipping lines taking actions such as skipping port calls to manage the effects of congestion; • the possible creation of strong competitors located in the Port of Melbourne’s hinterland; and • a boost to the competitive position of more distant competitor ports that have hinterlands which overlap with the Port of Melbourne.
These disbenefits could potentially lead to a loss of monopoly status and market share at the Port of Melbourne in the future.
In the event that a price hike is authorised Should the Port of Melbourne be allowed to charge an enhanced fee to pay for the Port of Melbourne’s upgrades, a proposition to which the ocean shipping industry objects, Shipping Australia calls for:
• a prohibition on any price increase, tariff, surcharge or other price increase of any shape, form, or kind being introduced to fund infrastructure until such time as the extra infrastructure is actually ready for use; • any funding mechanism should take the form of a clearly-labelled, discrete and differentiated surcharge that is invoiced on a line-item basis and is provided together with a statement explaining what the charge is, who introduced it and why it is being charged; • any price increase, surcharge etc should be specifically and publicly limited in amount, scope and duration. There should be a specific prohibition on that mechanism being rolled over, absorbed into other charges, continued or extended in any shape, form, or in any way whatsoever; and • any surcharge should be given a specific name, with specific spelling, which cannot in future be changed or amended. There should be a clear and unambiguous explanation in plain English prominently displayed on the Port of Melbourne’s website of what the charge is, how it is calculated and applied, how much it costs and when it will end.
Port of Melbourne Withdraws Its Proposal to Hike
Wharfage Fees
Posted by Ian Ackerman | 12th February, 2021
THE PORT of Melbourne has withdrawn its rebalancing application to the Victorian Essential Services Commission to change its prescribed service tariffs for wharfage.
In a statement, the ESC welcomed PoM’s withdrawal of its rebalancing application.
“The commission consulted on the port’s application over four weeks from December 2020 until 1 February,” the ESC said.
“During this process, a host of issues were raised by stakeholders which led to a series of discussions with the Port of Melbourne over recent weeks and ultimately, resulted in withdrawal of the application.”
In a letter to the ESC, Port of Melbourne CEO Brendan Bourke wrote: “In order to provide further opportunities for port users and other stakeholders to provide their views, PoM has decided to temporarily withdraw the rebalancing application and defer the proposed tariff adjustment from 1 July 2021 to a later date.”
Mr Bourke continued: “PoM looks forward to ongoing engagement with the ESC to ensure that it is able to continue to make efficient investments in port infrastructure in the long-term interests of port users and Victorian consumers.”
The ESC noted the port’s commitment to providing further opportunities to port users and other stakeholders to contribute to the process. “Given the ongoing nature of this process we will not be making any further comment at this time,” the commission said.
PoM’s proposed tariff rebalancing only relates to wharfage fees for overseas full containers.
The proposal would have done away with the current wharfage fee for full inward containers and replace it with a wharfage tariff for full inward containers “that is $10 per TEU higher than the current wharfage fee”, which would apply to vessels that exceed the port design vessel of 300 metres length overall by 40 metres beam. The current wharfage fee would continue to apply to full inward containers from vessels smaller than this.
Also the wharfage fee for full outward containers would have been decreased by an estimated $3.77 per TEU from the current export wharfage tariff.
Freight Victoria to Commence Study into Empty
Container Management
Posted by Ian Ackerman | 17th February, 2021
FREIGHT Victoria is to commence a study into empty container management capacity and supply-chain issues in Melbourne.
DCN understands the study is to inform the development of the Voluntary Port Performance Model, which aims to “increase the transparency of pricing and agree to a set of performance indicators which are consistent, measurable and meaningful”.
Container Transport Alliance Australia welcomed the announcement of the study into empty container management capacity and supply chain issues in Melbourne.
CTAA said Freight Victoria engaged consultancy firm NineSquared to conduct the study, which follows the commitment of the Victorian government to ensure that its proposed Voluntary Performance Monitoring Framework for container trade through the Port of Melbourne covers all parts of the Melbourne container supply chain.
CTAA director Neil Chambers said the alliance had worked closely with NineSquared and its principal Phil Bullock in the conduct of a similar study in NSW (the NSW Empty Container Study).
“This has also extended to collaborative work between industry and the NSW Government to try to address the study’s recommendations for improvement,” Mr Chambers said.
“The NSW study estimated that current empty container management inefficiencies in NSW result in an additional cost of $49 million per year, which could blow out to approximately $100 million if not addressed. And, that estimate was made before the current severe empty container congestion in Port Botany, which is ongoing.”
Mr Chambers said he anticipates that the Victorian study will discover similar added costs in Melbourne caused by inefficiencies and congestion.
He said tight physical and slot capacity in many parts of the Melbourne empty container chain leads to:
• supply-chain delays and added container handling; • increased empty redirections to alternative de-hire facilities; • added truck kilometres travelled and futile truck trips; • difficulties in obtaining suitable empty containers for export packing; and • fractious arguments between shipping lines, importers and transport providers about container detention fee demands when containers aren’t de-hired within detention free timeframes.
“Transport operators now have to hold swags of empty containers in their yards before they can gain a slot for de-hire, which could be as much as two days hence at some empty parks,” Mr Chambers said.
Port of Melbourne and QUBE Agreement to Add
Empty Container Capacity
Posted by Ian Ackerman | 8th February, 2021
THE PORT of Melbourne and Qube have secured a short-term agreement that makes available empty container capacity for up to 9000 TEU in the Swanson Dock precinct.
A statement from the port said the 60,000-square-metre site is operational immediately under Qube’s management.
The agreement follows ongoing discussions between Port of Melbourne, Qube and Freight Victoria.
Port of Melbourne CEO Brendan Bourke said he was pleased that the parties were able to come to a solution that would help alleviate the backlog of empty shipping containers across the supply chain as a result of strong and sustained import volumes.
“It’s critical that the port supply chain is able to able to operate as efficiently and effectively as possible, and part of that is making sure that empty containers can be moved and utilised to enable the flow of goods into and out of the port,” he said.
“We have closely monitored land requirements for the supply chain throughout the pandemic. As a result, we’ve been able to reallocate a parcel of land for a period of time which allows Qube to make use of the site while we work with industry towards longer-term solutions.”
Qube chief operating officer Paul Digney said, “Qube is delighted to be part of the solution with the Port of Melbourne and we look forward to support from the industry”.
Container Transport Alliance Australia director Neil Chambers applauded the Port of Melbourne, assisted by the Victorian government, for having done this.
“They had the foresight to ensure that this currently vacant land – centrally located in the Port precinct and earmarked for future development – was able to be made available to assist in managing the current significant surge in container volumes through the port.”
In a media statement, CTAA said it understands the Coode Park site would be operational from as early as this week, with an alert to be issued by Qube shortly through the Containerchain system with operational details.
“It is now a matter for the container shipping lines to support this added capacity to alleviate some of the severe empty container park congestion in other parts of the Melbourne container logistics chain,” Mr Chambers said.
“We’d urge container shipping lines such as Maersk/Hamburg Sud, COSCO/China Shipping, Hyundai Merchant Marine, MSC and others – all of whom have experienced empty container storage dilemmas in Melbourne recently – to consider this de-hire and storage option.”
“It’s at the doorstep of the Swanson Dock terminals, and a short distance from VICT at Webb Dock – so, it’s ideal for empties earmarked for export particularly.”
A New Ports Entity In Victoria Coming in July
Posted by Ian Ackerman | 1st March, 2021
PORTS Victoria is to have sweeping responsibility over the state’s commercial waterways, amalgamating the Victorian Regional Channels Authority and the Victorian Ports Corporation Melbourne.
The state government said it would establish the new entity in an Initial Government Response to the Independent Review of the Victorian Ports System. Ports Victoria will begin operating in July.
The review commenced in early 2020 and delivered to the state government in November, but the review’s full text, with more than 60 recommendations, has not been publicly released. However, the government’s initial response provides some insight into the findings of the review. The establishment of Ports Victoria is a major component of the response.
Victorian ports and freight minister Melissa Horne said, “Ports Victoria will ensure our ports operate in a smart, efficient way to support the sector, continue to grow our economy and create jobs”.
The initial government response said Ports Victoria would have “overarching responsibility for the channels and port waters of the commercial ports”. This will include providing and maintaining channels and navigation aids, ensuring availability of key water-based services, deploying harbour masters, and more.
The new entity will be located in Geelong; the government said locating the new entity in Geelong would grow the city’s influence in the ports sector and allow it to become a “niche centre of maritime expertise”. Among the 60-plus recommendations that came out of the review, one, according to the initial response, was a recommendation for stronger regulatory oversight of pilotage services in the state. It said this would be “to ensure adoption of safe operating practices and to support development of a robust performance- management framework”.
Also, the review recommended that Ports Victoria reinforce the harbour master role by consolidating and clarifying lines of accountability for the state’s major commercial ports.
Landside pricing at Port of Melbourne According to the government response, the review found stevedores are not using their market power to inflate profits. In its finding, it pointed to analysis from the ACCC that shows stevedore rates of return have declined over the past decade.
Andrew Hudson, partner at Rigby Cooke Lawyers, said the response suggests that the review found support for its conclusions in the findings of an ACCC Container and Stevedore Monitoring Report.
“However, the review may have been concluded before the most recent of those ACCC reports in October 2020 which found that operating profits for stevedores had increased for the first time in a decade predominantly from large revenue growth in landside charges including the TACs [terminal access charges],” he said.
“There have also been the comments of the ACCC Chair in October 2020 calling for new regulatory powers over large privately owned businesses with significant control of the supply chain.”
However, Mr Hudson pointed out the response reflects the possibility of more direct regulation if evidence shows that TACs emerge as a “key driver” of increased stevedore profitability.
“Even so, many in industry are concerned that none of the current actions proposed by state or federal governments include the immediate establishment of more direct control on TACs or subsequent new charges that have been introduced (container weighing and vehicle movement charges) and related supply chain issues such as congestion around the ports and difficulties with the use of empty container parks (ECPs),” he said.
International supply-chain issues Mr Hudson said the Victorian government has also recently started a separate review of the use of empty container parks, which may suggest that the review may not address the ECP issues.
“According to all reports there is a clear and present problem in the international supply chain, let alone the national supply chain in Australia,” he said.
“While some of the current actions signal the possibility of future direct regulation of the supply chain (including regulation of charges) in Australia, there remains the concern that these signals may not be enough to drive some real and enforceable changes to regulation of the sector, whether in terms of costs or of access to the ECPs and ports. “There are already significant issues throughout the entire supply chain which warrant specific action now before the issues become more pronounced and further diminish trade benefits.”
Big Ships Berth At Melbourne
Posted by Ian Ackerman | 26th February, 2021
DP World Australia’s West Swanson terminal has serviced two record-breaking vessels in one week.
The first was the COSCO-operated 8888-TEU OOCL Canada on Saturday 20 February. Measuring 335 metres long, 42.9 metres wide, and with a displacement of 120,000 tonnes, the OOCL Canada was the largest and heaviest to ever berth at the West Swanson Terminal, beating the previous TEU record of 8084 achieved by the servicing of the Conti Courage.
OOCL Canada was swiftly bested in size six days later with the arrival of the ANL-operated CMA CGM Loire.
Despite being 35 metres shorter than OOCL Canada, the 300-metre long CMA CGM Loire clocks 9200 TEU.
DP World Australia chief operating officer Andrew Adam said, “The berthing of large vessels like the CMA CGM Loire and OOCL Canada is a clear representation of DP World West Swanson’s ability to service large vessels.
“DP World Melbourne, like all of DP World Australia’s terminals, are equipped to lead the future of Australia’s maritime trade. We’re proud of our role in enabling Australia’s trade flow.”
DPWA general manager of operations Sean Jeffries said the berthing of the two vessels was a great achievement for the DPWA Melbourne team.
“Despite the challenges that we have faced in Victoria during the COVID pandemic, our frontline DP World Melbourne team have weathered the crisis and continued to serve the industry and community daily,” Mr Jeffries said. “I’d also like to thank the highly engaged and skilled marine professionals and support personnel who help plan and guide these ships into our terminal at West Swanson Dock.”
ANL-operated CMA CGM Loire connects South East Asia and Australia, calling Fremantle, Adelaide, Melbourne, Sydney and Brisbane as part of its voyage.
OOCL Canada called at DP World Melbourne’s West Swanson terminal on Friday 19 February as part of the A3 Northern Loop, after embarking on its voyage from Shanghai via Australia’s east coast.
Big ship comes to Melbourne
Posted by Ian Ackerman | 7th April, 2021
THE PORT of Melbourne and Victoria International Container Terminal recently welcomed the massive containership Soroe Maersk – the longest vessel to call at the port.
Maersk deployed the vessel to Sydney and Melbourne to load empty containers that need to be repositioned back to Asia where there is a shortage.
The vessel has a total carrying capacity of 9640 TEU and a record length of 346.98 metres, 11.28 metres longer than the previous longest vessels to call at the port.
Soroe Maersk departed on midday Tuesday, 6 April after loading 4148 TEU at Melbourne.
Maersk Oceania managing director Henrik Jensen said the company works to meet client requirements while also driving efficiencies throughout its service network.
“To that end, the Soroe Maersk port call into Melbourne allows us to test potential future network and infrastructure aspects, and use the one-off vessel call to reposition much-needed empty containers to demand locations in Asia.”
Port of Melbourne CEO Brendan Bourke welcomed the record-breaking arrival. He noted that through its port development strategy and investment programs, the Port of Melbourne stands ready to accommodate the global trend of growing vessel sizes.
VICT CEO Tim Vancampen said: “We welcome the Soroe Maersk and look forward to continuing to accommodate larger vessels of this size at VICT.”
The mega vessel called at DP World Australia’s Port Botany terminal last week on its first stop on its empty sweeper voyage.
Container Throughput At Adelaide Falls In FEB
Posted by Ian Ackerman | 9th March, 2021
FLINDERS Ports reported a total full container throughput at Port Adelaide of 28,612 TEU in February 2021, a decrease of 1.4% from the port’s February 2020 throughput of 29,011 TEU.
However, February’s total full container throughput is a 9.7% increase on the January 2021 throughput of 26,070 TEU.
Last month, imports and exports of full containers through Port Adelaide were nearly even, with just 36 TEU more imported than exported than imported.
Zeroing in on imports, we find last month 14,324 TEU crossed the wharves. That is 10% more than the same month last year (13,062 TEU). However, exports fell by 10%, again comparing February 2021 (14,288 TEU) with February 2020 (15,949 TEU).
Last month, there was just one less containership call than the same month last year, with 25 ships calling in February 2021.
NSW Ports Monthly Trade Report - Dec 2020
(FY21)
Container Throughput At Botany Hitting Records
Posted by Ian Ackerman | 3rd March, 2021
TOTAL container throughput at Port Botany in January was up 14.93% on January 2020 to 247,894 TEU.
This increase was largely even between exports and imports. Total exports were up 14.99% to 121,366 TEU, and imports were up 14.93% to 126,528 TEU.
Of the export containers, 68.5%, or 83,124 TEU were empty – this is an increase of nearly 17% on last year. Full exports were also up, but by only 10.9% to 38,242 TEU.
Of the import containers coming into Port Botany in January, hardly any were empty (only 654 TEU), and 125,528 TEU were full.
NSW Ports CEO Marika Calfas said there had been an initial decrease in container imports at the start of the pandemic, but there have been stronger volumes in recent months.
“December 2020 and January 2021 [delivered] the highest container volumes on record at Port Botany,” she said.
“These increases are being fuelled by pandemic buying – with Australian consumers spending money on home renovations and personal shopping rather than on travel and experiences.” The data confirms what Ms Calfas said, with imports of miscellaneous manufactured articles up almost 30% last month (over January 2020) to 26,119 TEU.
Machinery imports saw an even bigger jump, albeit in smaller numbers; last month 20,962 TEU of machinery imports crossed the wharves at Botany – up 45.26% on the same month last year.
Food, beverages and tobacco imports also increased, by 21.9% to 13,563 TEU; plastic and rubber imports increased by 13% to 12,217; and metals imports rose 34.2% to 9969 TEU.
Despite the increases in throughput, the container trade continues to be impacted by disruptions in the global supply chain, Ms Calfas said.
“High volumes of demand for goods globally, together with COVID-19 impacts on labour availability, have resulted in ships operating at or near capacity; a backlog of containers waiting to be exported out of China; and congestion at many ports around the world including the US, Europe, Asia and New Zealand,” she said.
“This has created delays for vessels and the delivery of goods. International ports are now reporting delays ranging from several weeks to up to a month. By comparison, Australian ports are currently operating well.”
There were 92 container vessel calls at Port Botany in January, just one more than in January last year. But there was an increase in the size of vessels calling at the port. Last month there were 21 vessels with a capacity above 6000 TEU, whereas last year there were 14.
Ms Calfas said vessels continue to arrive at Botany off-schedule due to delays at other ports.
“Ultimately, while Port Botany is well positioned to handle the volume of containers, it will be some time before global shipping schedules return to normal,” she said.
Ms Calfas said there was some improvement in the evacuation of empty containers from Port Botany in December with a load/discharge ratio of 1.04, meaning there were more containers loaded and exported than containers imported. However, in January the ratio dropped to 0.95.
“It’s important that import/export dynamics are managed to achieve a ratio close to one in order to maintain a balanced supply chain,” she said.
“We also understand that both DP World and Hutchison are accepting shipping line requests to load more containers than their contracted volume and Patrick is accepting requests on a case-by-case basis. This is a delicate balancing act as it takes time to load more containers which may have a knock-on effect to subsequent vessels. Positively, this results in containers being exported out of Sydney, assisting in alleviating empty container build up.”
Ms Calfas said NSW Ports is concerned about the continued application of congestion surcharges by shipping lines specifically for Port Botany calls. “Whilst we understand that there continue to be disruptions to shipping lines, it is increasingly being driven by global shipping conditions, including high volume demand,” she said.
“We look forward to such charges being wound back.”
Botany Container Trade Posts Big Gains in FEB
Posted by Ian Ackerman | 22nd March, 2021
PORT Botany is continuing to see increases in container throughput. Consumer goods are pouring in from abroad and the port is expelling empties in huge quantities.
According to the latest figures from NSW Ports, container trade through Port Botany was up 26% last month, compared with February 2020. A total of 223,796 TEU crossed the wharves in February 2021.
Exports from Botany totalled 116,569 TEU. This was an increase of nearly 30% on the same month last year. The increase was driven entirely by an explosion of empty container exports, with 78,423 TEU of fresh air being shipped out of Port Botany in February. This is a 52.5% increase on February 2020’s empty exports.
This influx of empty exports will come as no surprise to anyone who has been paying attention to trade patters over the past year. There has been a colossal increase in goods imports in 2020. This trend is showing no sign of decreasing with NSW Ports reporting 107,227 TEU of imports at Port Botany in February – that’s a 23% increase on the same month last year.
In February, imports of “miscellaneous manufactured articles” rose by 61% (compared with February 2020) to 23,018 TEU. Machinery increased by 29% to 16,042 TEU; food, beverages and tobacco imports increased 2% to 10,754 TEU; plastic and rubber imports increased by 31% to 10,579 TEU; and iron, steel, aluminium and other metals increased 31.49% to 8,777 TEU.
In February this year, there were 84 containership visits to Port Botany, one of which was in the 10,000- TEU-plus capacity band. The band with the most visits was 5000-6000 TEU with 18, followed by 4000- 5000 (15 visits), and 1000-2000 TEU (12 visits). Looking at the non-containerised side of the trade at Port Botany in February, we see a nearly 24% decrease in total throughput last month compared with February 2020 to 362,319 revenue tonnes.
This decrease was mostly driven by a 27.26% fall in bulk liquids imports to 323,733 revenue tonnes last month.
Patrick Fees Increase, Long Vehicle Charge
Raises Ire
Posted by Ian Ackerman | 2nd March, 2021
NEW landside charges at Patrick Terminals have come into effect this week, including a controversial charge for long trucks at some of its terminals.
The revised charges, which were announced in late January, include a $50-per-truck long vehicle fee, which applies to truck and trailer combinations of more than 26 metres at the Sydney and Brisbane terminals.
Container Transport Alliance Australia said transport operators were “bewildered” by the long vehicle fee. CTAA said it was a “draconian tax” on higher productivity freight vehicles such as super b-doubles and a- doubles capable of carrying four TEU at a time.
CTAA director Neil Chambers said no valid justification has been provided to transport operators by Patrick for the introduction of the long vehicle fee in Sydney and Brisbane.
“Also, despite overtures to Patrick’s senior management, no opportunity has been given for a collaborative discussion on how to address road transport/terminal interface improvements without the need for this new fee,” Mr Chamber said.
Patrick Terminals CEO Michael Jovicic told DCN the stevedore facilitates supply-chain productivity through the handling of all modes of transportation, including long vehicles. “The government’s long-standing policy has sought to promote modal shift to rail and Patrick Terminals has invested accordingly,” he said.
“Meanwhile, Patrick Terminals has not been consulted on the disjointed government policy to increase the issuance of long vehicle permits and the subsequent impact of these vehicles on the Patrick terminal operations. Whilst we recognise that these vehicles create certain efficiencies on the road side, they create certain inefficiencies on the terminal side.”
Mr Jovicic said Patrick has invested to accommodate the higher numbers of long vehicles incurring infrastructure costs, additional equipment costs and increased labour resources to support the servicing of more long vehicles.
“We are committed to supporting efficiencies for all modes of landside transport; however, we can also expect to earn a reasonable return for provision of these services,” he said.
“Patrick has engaged with the government in accordance with existing protocols as it pertains to the introduction of new fees and/or changes to fee levels. Patrick will continue to contribute to supply-chain productivity by handling long vehicles and we are committed to engaging directly with representative transport operators to explore mutually beneficial landside efficiency initiatives.”
Mr Chambers pointed out the fee is unlikely to lead to transport operators curtailing the use of HPFVs because they have already invested heavily in them, with enormous sunk costs.
“The productivity benefits of HPFVs have been enjoyed by transport operators and their import and export customers for some time now through lower unit costs, greater volume productivity, enhanced on-road safety and more environmentally friendly operations for the given freight task,” Mr Chambers said.
“Through CTAA, transport operators have again asked Patrick not to implement the long vehicle fee. Instead, Patrick is again invited to the discussion table to address how HPFVs are operated to/from Patrick’s autostrad terminals in Sydney and Brisbane.
“If there are operational productivity and efficiency issues to be addressed regarding the use of HPFVs within Patrick’s terminals, then let’s address them collaboratively without the imposition of the long vehicle fee.”
Vehicles, Appliances, Furniture Imports Up At
Fremantle
Posted by Paula Wallace | 3rd March, 2021
TRADE data issued by Fremantle Ports covering the first seven months of the financial year (July 2020- January 2021), shows Western Australians are continuing to buy a lot of furniture, household appliances and cars.
Agricultural and industrial machinery imports were also up more then 22% on the same period last year.
Full container imports were up about 3% with furniture up about 16% and household appliances up a huge 40%.
Full container exports are down about 14% due to wheat, hay and wastepaper exports being down.
As the eastern states are no longer in drought, exporters there have recovered overseas markets and more wheat is being exported from those states.
Overall, full container trade is down 3.7% on the same period last year with the total container trade (full and empties) only slightly down (0.8%).
Non-containerised trade has increased nearly 9% mainly due to imports of passenger and industrial vehicles, iron and steel product imports, and recreational equipment such as caravans, trailers, boats and motorbikes.
With the onset of the COVID-19 pandemic, used vehicles from the eastern states started being imported to WA more by ship and less by road and rail.
This trade is up a whopping 167% (almost 11,000 vehicles) but new motor vehicles are also up by nearly 14%.
Non-containerised Inner Harbour exports are slightly up with scrap metal up 48% but live sheep and cattle exports are significantly down (37% and 29% respectively).
Fremantle Ports’ bulk business trade at Kwinana Bulk Jetty and Kwinana Bulk Terminal was up nearly 10% but total port trade was down 9% as this figure includes the three private jetties in the Outer Harbour.
Less crude oil is being imported through the BP jetty and there was less grain exported through the CBH Group jetty.
Commercial ship visits to the Fremantle Inner Harbour have declined by 112 visits due to container vessels and car carriers decreasing by about 22% (57 visits) and 19% (23 visits) respectively. The decline in container vessels has resulted from major shipping agent conglomeration and larger vessels causing a reduction of visits.
Another 32 fewer visits were mostly due to a decrease in livestock and cruise ship vessels.
Ship visits to the Outer Harbour have declined by 30 visits (about 8%) mostly due to fewer visits to BP (down 24) and CBH (down 10) jetties.
Patrick Extends Freo Lease
Posted by Ian Ackerman | 17th February, 2021
PATRICK has extended its lease tenure at Fremantle’s Inner Harbour for 10 years, with a potential tenure of up to 21 years.
The company said it also committed $50 million to deliver new equipment and systems, terminal capacity and direct rail interface.
Patrick said these upgrades will be delivered rapidly to benefit Western Australians with more efficient movement of cargo and promoting modal shift to rail.
“Patrick has agreed a set profile for the Landside Charge to 2024. This balances Patrick’s investment commitment and Fremantle Ports’ agreement to provide Patrick with certainty of property costs across the period,” the company’s statement said.
“Patrick is committed to working with Fremantle Ports, port users and community stakeholders to optimise the life of the Inner Harbour so that future port capacity is developed in line with market demand.”
Darwin Trade Remains Steady to Close Out 2020
Posted by Daily Cargo News | 11th February, 2021
TOTAL throughput at Darwin Port experienced an increase in the fourth quarter, according to the latest trade statistics available from the port.
This was achieved on the back of bulk exports which totalled 247,831 tonnes for the quarter, an increase of 31% on the July – September quarter. Meanwhile, bulk imports were 67,486 tonnes, down 31%. In total, bulk throughput was up 37% (85,459 tonnes) on the corresponding period in 2019.
Looking at bulk exports, December was the strongest month with 135,839 tonnes exported. Of this, 130,013 tonnes was attributed to mineral manufactures. For the quarter, the total mineral manufactures exported was 220,027 tonnes with China being the primary destination. Other minor contributors to bulk exports included stone, sand and gravel (10,384 tonnes) and ferrous waste and scrap (9307 tonnes).
During the October – December quarter, the port’s live export trade saw 73,436 head leave the port. This was down 22% on the third quarter and down 13% on the last year’s corresponding period. The live export trade for the quarter was the lowest number for the year. The top three destinations for the quarter were Indonesia (59,195 head), Vietnam (7676 head) and the Philippines (3738 head).
Turning to imports, the main three bulk items unloaded at the port were carboxylic acids (25,135 tonnes), lime, cement and fabricated construction materials (16,688 tonnes) and fertilisers (2597 tonnes).
Australian ports were the main origin point for all bulk imports for the quarter with 16,825 tonnes. This was followed by Singapore (12,997 tonnes), then Thailand (10,940 tonnes).
For the quarter, the port received 210,524 kilolitres of residual petroleum products – up 3% on the previous quarter and up less than 1% on the corresponding period last year. Malaysia was the major contributor for the quarter (159,424 kL), followed by Singapore (39,809 kL) and Australia (11,291 kL).
The port received 1,693 motor vehicle units during the quarter. This was an increase of 44% on the July – September quarter, and 31% up on 2019’s numbers.
Auckland HY Container Volumes, Revenue,
Profits Down
Posted by Ian Ackerman | 8th March, 2021
THE FIRST half of this financial year has been incredibly hard for the business, but we can now look forward with some optimism,” Ports of Auckland chief executive Tony Gibson said when announcing the company’s half-year results.
“That is not to say the second half won’t be difficult – it will – but we have plans in place to resolve the issues that affected us in this period. We expect the current issues to be behind us in the second half of calendar 2021 and to be able to lift performance in FY 2022.”
Over the six months to 31 December, the port’s container volumes fell by 12%, compared with the previous corresponding period, to 416,232 TEU.
The port’s revenue declined by 7% over the period to NZ$114 million, and its NPAT declined 21% to NZ$13.6 million.
The pandemic looms Mr Gibson said there has been a single big issue that has loomed large over the six-month period: global supply-chain congestion as a result of COVID-19. He said this has had flow-on effects to Auckland’s container terminal automation project and to shipping through the container terminal.
“Phase one of automation was meant to go-live in March 2020, but days before the go-live date the country went into Level 4 lockdown and work had to stop,” Mr Gibson said.
“The project is back up and working now with systems all running to plan. As soon as pavement remediation can be done, a full terminal roll-out will happen.
Mr Gibson said across the month of September and into October, the events of the year combined to produce a perfect storm, reducing container terminal throughput and delaying shipping through Auckland.
“With COVID lockdown, we put our people into work bubbles to keep them safe – but this added complexity to our operations and reduced the number of effective work hours,” he said.
“Training time was lost and combined with strong competition from the construction industry we have struggled to maintain our talent pool. Crane drivers are a particular case.” The chief executive went on to say COVID caused normal supply-chain patterns to disappear, and they haven’t come back.
“Other global events have had an impact. Strikes at ports in Australia disrupted schedules and unexpectedly high volumes around the world meant that by August we were seeing more ships running off-schedule than normal,” he said.
“As New Zealand’s largest import port and the first port of call for many services, the increase in import demand had a significant impact.”
Mr Gibson said there had been an unusual patter of demand and continuous flows of ships in the lead-up to Christmas He said in a normal year, there are busy and quite periods during the week and throughout the year, and this is what the port’s rosters and staffing levels are designed around.
“This year, with no quiet periods, there was no time in the week when days off didn’t have an impact and staff were consistently working longer hours. In the interest of staff welfare, we changed the roster to reduce maximum work hours and improve days off with a consequent impact on productivity,” he said.
“The nature of the job we face at the terminal has changed, so we are adapting. While we’ve been able to hire enough new people for the lower skilled roles and have a good training pipeline for straddle drivers, finding and/or training crane drivers has been difficult. For the first time ever, we have looked overseas to recruit.”
Not all doom and gloom However, Mr Gibson said there had been some bright spots over the half year. He said automation is progressing well. More than 70 ships have been through the automated yard, with more than 40,000 containers handled.
“While COVID has presented some big challenges, the multi-cargo operations team and the third-party stevedores who work the ships in this part of the port have done an outstanding job,” he said.
“Trade to the Pacific Islands has continued unabated; cement volumes remain strong and other bulk imports like grains and gypsum have continued steadily. Car volumes have bounced back from a fall in the first six months of calendar 2020 and the newly completed car handling building has been well used, demonstrating its value to the motor vehicle supply chain.”
Suspension of Polar Air Cargo AU Service 2021
We have been advised of the following from Polar Air.
It is with regret that I must inform you that our company has taken a decision to redeploy our aircraft on alternative routes as of March 29, 2021. This means that we will suspend our freighter operations from Australia as of this date. We will operate our published schedule up to and including the final flight PO240 SYD-ICN on March 28, 2021.
Polar will remain an option for certain CAO shipments to the Americas. We are confirming arrangements with other cargo operators in order to offer a way to connect on a PO MAWB from Australia to the Americas over our N. Asia gateways. Our GSA Wexco will confirm those details once the arrangements are confirmed.
I would like to take this opportunity to thank you for your support of the Polar Air Cargo network out of Australia. I do hope that your customers have benefited from the capacity that we have offered in the northbound market during the most difficult period of the recent COVID-19 capacity crunch. Thank you in advance for your continuous support of Polar through the end of this season. We will do our part to ensure the cargo rides as booked.
Global air-cargo demand up significantly on pre-
COVID levels
Posted by Ian Ackerman | 9th April, 2021
THE INTERNATIONAL Air Transport Association’s air-cargo market data for February shows global demand for air cargo continues to be well above pre-COVID levels.
The data show that demand in February was up 9% on the same month in 2019, before the COVID-19 pandemic. The data also showed strong growth over January 2021 levels, up 1.5% in February 2021 (measured in cargo tonne-kilometres). IATA director general Willie Walsh said air cargo demand is not just recovering from the COVID-19 crisis, it is growing.
“With demand at 9% above pre-crisis levels (Feb 2019), one of the main challenges for air cargo is finding sufficient capacity. This makes cargo yields a bright spot in an otherwise bleak industry situation. It also highlights the need for clarity on government plans for a safe industry restart,” he said.
“Understanding how passenger demand could recover will indicate how much belly capacity will be available for air cargo. Being able to efficiently plan that into air cargo operations will be a key element for overall recovery.”
IATA said global volumes have returned to 2018 levels seen prior to the US-China trade war, and all regions except for Latin America saw an improvement in air-cargo demand compared to pre-COVID levels, with North America and Africa the strongest performers.
However, IATA said the recovery in global capacity, measured in available cargo tonne-kilometres, stalled owing to new capacity cuts on the passenger side as governments tightened travel restrictions. Capacity shrank 14.9% compared to February 2019.
Operating conditions remain supportive for air cargo. IATA said conditions in the manufacturing sector are robust, but supply-chain disruptions and the resulting delays in deliveries have led to longer supplier delivery times.
IATA said the level of inventories remains relatively low compared to sales volumes. Historically, this has meant that businesses had to quickly refill their stocks, for which they also used air cargo.
Asia-Pacific air cargo The data from IATA revealed that Asia-Pacific airlines saw demand for international air cargo rise 10.5% in February 2021 compared to the same month in 2019.
As the main global manufacturing hub, the region has benefited from the pickup in economic activity.
Demand in the majority of the region’s key international trade lanes has returned to pre-COVID-19 levels. International capacity remained constrained in the region, down 23.6% versus February 2019. The region’s airlines reported the highest international load factor at 77.4%.
North America North American carriers posted a 17.4% increase in international demand in February compared to February 2019. Economic activity in the US continues to recover, supported by the rising demand for e- commerce amid lockdown restrictions.
Demand grew 39% on the Asia – North America route vs February 2019. The business environment for air cargo remains supportive; the $1400 stimulus checks to US households will likely drive further growth in e- commerce and the level of inventories remains relatively low compared to sales volumes. Historically, this has meant that businesses had to quickly re-stock for which they also used air cargo. International capacity grew by 4.4% in February compared to 2019.
Air cargo in other regions European carriers posted a 4.7% increase in demand in February compared to same month in 2019. Cargo demand was largely unaffected by the new lockdowns in Europe and the operating conditions remain supportive for air cargo. International capacity decreased by 12.5% in February,
Middle Eastern carriers posted an 8.8% rise in international cargo volumes in February versus February 2019. Of the region’s key international routes, Middle East-Asia and Middle East-North America have provided the most significant support, rising 27% and 17% respectively in February compared to February 2019. February capacity was down 14.9% compared to the same month in 2019.
Latin American carriers reported a decline of 20.5% in international cargo volumes in February compared to the 2019 period; this was a deterioration from January when demand was down the 17.5% on 2019 levels.
Drivers of air cargo demand in Latin America remain relatively less supportive than in the other regions. International capacity decreased 43.0% compared to February 2019. Weakness within the Central and South America markets, which dropped around 40% compared to February 2019, continued to outweigh the full recovery seen on North – Central America routes, which saw levels increase 10% compared to February 2019 levels.
African airlines’ cargo demand in February increased a massive 44.2% compared to the same month in 2019the strongest of all regions. Robust expansion on the Asia-Africa trade lanes contributed to the strong growth. February international capacity grew by 9.8% compared to February 2019.
Holidays for Hong Kong & China Office
Worldwide Public Holidays in April 2021
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