Freight industry update from Personalised Freight Solutions (PFS)
At the beginning of October, there were approximately 38 vessels waiting to berth in Australia and New Zealand with over 100 thousand containers either waiting for their connecting vessels or to be delivered out to the final receiver. Although the industrial action at Port Botany Sydney has since subsided, the on-flow effect from it continues and all importers and exporters are experiencing substantial delays. There remains a severe backlog with some industry experts indicating it could be 2-3 months before we see some relief in Sydney. Importers and exporters in Sydney are still left with the burden of a portside congestion surcharge ranging from USD $300 to USD $700.00 per container.
While Sydney has been a contributing factor, many other issues are causing major interruptions globally. China is still recovering from typhoons that caused havoc for shipping during September, this combined with a weeklong national holiday has amplified demand for space on vessels. A space war has begun as we are certainly in the middle of peak season, shipping lines have increased freight rates week on week, the increases are having no effect on space and all vessels are at capacity, 1 out of 3 bookings are being pushed to the next sailing. There is also talk of a GRI (General Rate Increase) of about USD $300 to $600 per container that may be applied to market rates after 01 November 2020.
Space for shipments departing Qingdao, Ningbo, Xiamen & Tianjin is harder to obtain than in other ports of loading, especially for Qingdao due to shipping lines omitting this port in an attempt to make up time lost.
Military exercises are still being conducted in Northern/Eastern China which is adding to the congestion and vessel delays. With an increased demand for shipping out of Ningbo the need to clear containers as quickly as possible from the backlog caused from military exercises prior to the national holiday has caused significant port congestion. There is also a serious shortage of High Cube containers in Ningbo and combining this with increasing market demand, Ningbo’s freight costs for week 43/44 will see an abrupt increase.
Melbourne is about to experience delays in terminal operations and container availability. 90% of vessels call into Sydney prior to arriving into Melbourne and Brisbane. The delays coming out of Sydney due to the recent protected industrial action has led to schedule volatility as shipping lines shuffle vessel schedules at very short notice to mitigate time lost on services. From Friday 23 October there will be approx. 9 vessels berthing back to back over 4 days, terminal space will become limited with the amount of import containers vs export containers to be loaded. To add salt to the wound, The Grand Final public holiday will cause further delays to all freight operations.
Air freight rates have stabilised however are still being charged at a premium with space being limited to availability of passenger flights and routing options. Delays are still to be expected. There are still temporary service adjustments with International Courier freight, DHL are adding between 3 to 14 days additional to transit times and are still imposing an Emergency Situation Charge.
Globally the situation is ever changing, and we are adapting as the situation unfolds.
Many of the above-mentioned circumstances all add limitations to our businesses and are out of our control. Retailers, distributors, shippers, freight forwarders and anyone else who plays a vital role in the industry will not come out unscathed. Please pre plan for ongoing disruption and delays during this peak season. This may be a timely reminder that we are all in this together and to remain courteous to suppliers, shippers and freight companies.