Welcome to the August edition of the BCR Global Market Update. BCR is an international freight forwarder and 3PL provider located in Australia. Regularly we provide an update on market conditions for companies importing goods into Australia from around the world.

Read on to learn about import sea freight market conditions to Australia for major lanes including North East Asia, South East Asia, the United States and Europe. In addition, learn about the restricted shipping controls ahead of the BRICS Summit in Xiamen and changes to import conditions and documentary requirements for wooden manufactured articles.

North East Asia to Australia

Confidence in the market has started to increase with GRIs finally taking hold. We are observing growing optimism from Shipping Lines for this trend to continue based on supply versus forecasted demand from freight forwarders and importers for upcoming shipments.

After a string of failed GRI attempts, the 1 August GRI has finally had some traction.

Space has started to tighten as an early peak season has commenced. This has been facilitated by various factors such as poor weather conditions, Maersk Cyber Attack and a traditional increase in orders before the end of the month to avoid GRIs. Therefore, as a consequence, these factors have set the stage for Shipping Lines to capitalise on the tighter space challenges and push harder for further rate hikes.

As we have advised in the past, each shipping line will apply increases in line with their own specific requirements. We may see this becoming more prevalent as rates per TEU may no longer apply on certain port pairs as equipment and space pressures are dictating the market rates.

The need to reposition equipment into designated areas of high demand is now a priority for Shipping Lines. Therefore, a cost effective way to do so is by adjusting their pricing per equipment type and not per TEU.

Shipping Lines may also lean on the use of “one way leased containers” which can lead to additional transport costs for consignees as these containers usually need to be de-hired far from the normal container depots near the port.

Transpacific and Asia Europe trade lanes are showing healthier signs of improvement with contract / tender rates on average 19% higher in the second quarter in comparison to same period last year. While the Transpacific and Asia Europe trade lanes may seem geographically far away, increases in those rates usually mean an increase for trade lanes to Australia sometime soon.

Shipping Lines are focused on improving their profitability and are on their way back to black after years of posting huge losses which resulted in the Hanjin collapse and the rise in the mass consolidation of services.

An additional GRI has been announced to take effect 1 September. If forecasts continue to remain strong, there is a high chance that rates will continue to rise and a stronger peak will be experienced in comparison to last year.

Another factor that will contribute to less available space is the upcoming National Holiday in China, Golden Week (1-7 October). Shipping Lines will cut supply by removing vessels and omitting ports as China will come to a grinding halt during this period. Factories prior to this holiday will be working harder to clear excess stock.

South East Asia to Australia

While this trade remains reasonably stable for importers and freight forwarders, we do remind our readers that consolidation of services has in fact cut supply by 3%. Therefore Shipping Lines are uniting to introduce rate hikes on this trade to return rates to more sustainable levels.

Congestion in the hub of Singapore has led to major delays, some being up to 3 weeks for some services. These delays may also assist Shipping Lines to hike rates for a short term period.

A GRI has been announced by some Shipping Lines on this trade to take effect from 1 September.

United States to Australia

While we are seeing some delays in the turn time for truckers in Los Angeles/Long Beach (up from 79 minutes in April to approximately 109 minutes in July), this trade lane remains quite stable. We have not been notified of any GRIs for the next month.

Europe to Australia

With European summer vacations currently taking place there are no major changes on this trade lane. The majority of factories will shut down in August and will not re-open until the latter part of the month.

The only changes in this trade, as previously notified, are in relation to the bunker adjustment factor, origin charges and destination local charges which remain on a VATOS (valid at time of shipment) basis and are subject to change at Shipping Lines’ discretion.

Tighter Shipping Controls Ahead Of BRICS Summit In Xiamen, China

From 3-4 September in Xiamen, Fujian Province the 9th BRICS (Brazil, Russia, India, China and South Africa) Summit will be held.

The Xiamen Municipal Government has announced that to ensure safety, flammable cargoes such as oil, chemicals and liquefied natural gas will be barred from entering or departing the port from 27 August to 6 September. There will be controls on shipping at the port, and temporary restrictions on traffic and airline capacity in Xiamen during the period.

Potential impacts on daily operations may occur. Please adjust the timing of your shipments keeping this in mind.

Changes to import conditions and documentary requirements for wooden manufactured articles

The Department of Agriculture and Water Resources (DAWR) advises importers and freight forwarders that the import conditions for Manufactured Wooden Articles (MWA) within the Timber and timber products BICON case will be changed on 11 September 2017.

From this date, consignments of MWA treated offshore by heat, fumigation or irradiation methods will be required to be exported within six calendar months of the required treatment and be accompanied by additional storage certification in the form of a manufacturer’s, supplier’s or exporter’s declaration.

A manufacturer’s declaration or supplier’s declaration will require the following statements:

  • “The (insert product name/description) have been stored in an appropriate way to minimise the risk of infestation or contamination by pests of biosecurity concern between the date that the goods (were treated/entered the facility), and when the goods (were exported/left the facility).”

Or an exporter’s declaration will require the following statement:

  • “The (insert product name) were stored after treatment at the following locations in an appropriate way to minimise the risk of infestation or contamination by pests of biosecurity concern:
    (list the following information about each product line: country of origin, the storage locations (address) and the dates the items were at each specific location)

The goods arrived in the country of export free of biosecurity concern and were stored at (insert last point of storage location) in an appropriate way that prevented infestation or contamination.”

What should you use?

  • For goods that have been stored in one location in the same country of origin as the country of export, importers should obtain a manufacturer’s declaration or supplier’s declaration.
  • For goods that are stored at multiple facilities after treatment or where the country of origin differs from the country of export, importers should either:
  1. obtain separate declarations from all facilities where the goods were stored prior to export or
  2. obtain an exporter’s declaration.

The exporter’s declaration should chronologically list the storage location and timeframe of storage that accounts for the time that the goods were stored in each location prior to export.

Exceptions

Goods in consignments that have been sealed in a container and exported immediately after treatment (i.e. date of treatment and date of export match) do not require a storage declaration.

Consignments that are exported before 11 September 2017, will need to meet current import conditions that are available in BICON.

For more than a century, 3PL and Freight forwarding service provider, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including BrisbaneSydneyMelbourne, Adelaide and Fremantle (Perth).

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