INDUSTRY NEWS - THE GOOD, THE BAD & THE UGLY
Our latest industry news is outlined below for your convenience and in line with the title of our bulletin, we start off with the good news.
Australian Trusted Trader:
We are pleased to advise that POWERHOUSE recently achieved Australian Trusted Trader status with the Australian Border Force (Customs). ATT is part of an internationally recognized network, governed by the World Customs Organization that reinforces the cooperation between industry and government in strengthening supply chain security and facilitating legitimate trade. Operationally, we have seen our import clearance times reduced by up to 50% for air freight shipments and 25% for sea freight consignments. Using an ATT-accredited business will also help streamline your customs processes in overseas markets, particularly Canada, China, Hong Kong, Japan, New Zealand, South Korea, Singapore and Taiwan, where our government accreditation is mutually recognized.
Covid-19 Lockdown in China:
There are currently 30 provinces in China that are affected by lockdowns, restricting the movements of almost 70 million people. The number of active cases in Shanghai is falling but it is still having a major impact on the supply chain. Shanghai is the world's largest port and there are currently 470 vessels waiting offshore for a berth. While restrictions in some districts of Shanghai have been eased, people are not allowed to cross into other districts if they are still under lock down.
Currently it is estimated that 80% of the container trucking industry is off-line, with air freight and LCL deliveries limited by the various district closures. Suppliers in lock down areas are closed for business and trucks are not allowed to transit through these areas. If your supplier is open for business and we can work out a transport route between their factory and the port / airport, we will be able to move your shipment.
Restrictions are also occurring in in Beijing / Tianjin area, as well as Qingdao, but not as severely as those in Shanghai at the moment. With vessels being diverted to other ports, the congestion problems and resulting schedule delays are expected to continue for some time.
DAWE Delays & Depot Congestion:
The Department of Agriculture, Water and Environment (DAWE) has been flooded with high volumes of import cargo, the re-opening of the borders (where Quarantine officer are also required) as well as the ongoing impacts of Covid-19 on their workforce has resulted in lengthy delays. The department does not have sufficient manpower to handle the current volume of work. This is causing shipments to be held longer than usual awaiting processing resulting in the late return of containers and shipping lines issuing container demurrage to importers.
The delays in Quarantine processing have put pressure on the container depots who have containers block-stacked waiting for inspections to be conducted. The congestion greatly impacts their operating efficiency's and further delays the entire supply chain. DAWE is actively recruiting but new officers take some time to get up to speed meaning these delays are expected to continue for some time.
Terminal Access Fees on the Rise Again:
If very high freight rates and escalating fuel surcharges are not killing your business, our port terminals have embarked on another round of price hikes. Terminal Access Fees are now as high as $185.00 per container, which is the new benchmark set by Hutchison Ports in Brisbane, effective from the 1st of May. Patrick and VIC Terminals have already increased their fees and we expect DP World to follow suit. Despite our industry body making representations to the Federal and State Governments over the last 3 years, they are failing to be heard. The total cost of surcharges - Terminal Access Fees / Port Slot Booking Fees / Empty Container Booking Fees / Road Tolls - is now greater than the actual delivery cost unless you are based in the outer Western Suburbs.
If you wish to discuss these matters further, please do not hesitate to contact your POWERHOUSE representative.