Welcome back to OSCL's newsletter and blog.
Let's call it the February rollercoaster and here we go...
The market is fairly quiet as suppliers return from Chinese New Year celebrations. Manufacturing is in full swing; however, volumes are only expected to increase towards the end of March.
It's a tough market at the moment for shipping lines due to decreased volumes and demand. We have seen rates drop to the lowest in many years as the shipping lines compete to fill vessel space allocations. There has been instability in the market, with a few carriers heading into administration or liquidation. As such, our agents in China have decided to utilize only their long-term partnering carriers, which are either Chinese state-owned or solid stock-listed companies.
It is now estimated that we may see some resemblance of stability in the market around July / August 2023. It's expected a few smaller lines will leave the Asia to Oceania trade lane altogether, and the larger shipping lines will take advantage of the higher demand. As an importer, now is the time to ship and take advantage of the low market rates. At OSCL, we have the ability to work with our overseas agents to review the changing market for the best rates, the best service limiting cancellations and vessel omissions, as well as carrier stability. We are holding very competitive rates until the 30/03/2023.
USA & Canada:
There have been major delays over the last few days in Los Angeles due to a blizzard. This has affected California's entire supply chain due to power disruptions, unsafe operational weather and road closures. Port congestion is expected to increase; however, it's estimated to have a small effect on overall operations.
There is talk of airfreight disruptions to the courier sector as the negotiations between FedEx pilots and Fedex management stall. The Air Line Pilots Association stated that the FedEx Express pilot's union approved a strike authorization vote. This sector is undergoing a fair bit of movement as currently, the top four US-based passenger airlines are all in contract renewal negotiations with their pilots.
It's estimated this year that roughly 88% of U.S.-based small and medium-sized businesses are forecasted to explore alternate suppliers in the U.S. or Mexico, according to a recent survey from Gartner-owned consultant Capterra. This is due to the vast number of external factors driving affordability for domestic and neighboring country supply chain solutions. This may be a good time to reassess the feasibility of onshore or nearshoring manufacturing options vs. importing into the States.
The Port of Montreal has earmarked more than C$335m in its new five-year investment plan for its infrastructure on the Island of Montreal. Key projects will include optimization of substations, increase in electrical energy; optimization of rail capacity; and wharf infrastructure modernization. This is due to the port being close to its handling capacity, handling over 34 million tonnes in 2021, with an estimated 15% increase in that figure in 2022.
We are still seeing significant increases by the terminals to infrastructure and wharf landside fees. Rates went up at the start of February at DP World, Hutchies and Berth 10, and Flinders in Adelaide has just released a statement announcing increased terminal charges as of April 2023.
NSW Ports has released concept plans for an offshore wind development project as part of New South Wales’ renewable energy strategy. The project will be based out of Port Kembla. This will be a very exciting space to watch, as it's expected to generate millions in investment, job creation, and development within the renewable energy sector.
The Australian Maritime Safety Authority has issued a refusal of access direction notice to the vessel MSC Kymea II. According to vessel data, the ship has come from Singapore, docked in Sydney, and was inspected in Brisbane, its second Australian port stop. It is currently on its way to Noumea. It has been reported that AMSA has detained five MSC ships since the start of 2023. It's great to see that AMSA is taking a stance on poor maintenance and safety practices on board vessels; considering the profits the lines have made over the last three years, we would expect to see some of that money being invested back into the maintenance of their biggest assets.
It's been a very tough few months on the domestic market front. We heard about Focus Container Lines at the start of the month and are sad to hear about the collapse of Australia's largest cold-chain refrigerated logistics company, Scott's Refrigerated Logistics on Monday. Fingers are being pointed to the "...disparity in profit margins between transport operators and supermarkets...". It's a good reminder to sit down and have a look at the books. As you know, OSCL recently decided to increase fees to meet rising market costs. It is not a fun process; however, the news cycle seems to be a never-ending rotation of companies heading into administration.
News Article Highlights:
- Focus Container Line has declared bankruptcy - Ausmarine. This is an Australian-based shipping line, be wary of abandoned containers and issues at various ports throughout NZ & AU.
Read here: https://www.bairdmaritime.com/ausmarine/ausmarine-shipping-and-offshore/liquidation-proceedings-to-begin-on-short-lived-trans-tasman-shipping-line/
- How world events have burst the bubble of ‘business as usual’ for shipping - Terry Macalister - TradeWinds. Read here: https://www.tradewindsnews.com/opinion/how-world-events-have-burst-the-bubble-of-business-as-usual-for-shipping/2-1-1400343
- Splash investigation pinpoints the true scale of the shadow tanker fleet - Sam Chambers - Splash247.com. Read here: https://splash247.com/splash-investigation-pinpoints-the-true-scale-of-the-shadow-tanker-fleet/
- 12 Supply Chain Trends & Forces to Watch Out for in 2023 - Matt Spooner - www.SupplyChain247.com. Read here: https://www.supplychain247.com/article/12_supply_chain_trends_forces_to_watch_out_for_in_2023/supply_chain
- Scott’s Refrigerated Logistics goes into receivership with 1500 jobs under threat - Staff Writer - Big Rigs.
Read here: https://bigrigs.com.au/index.php/2023/02/27/scotts-refrigerated-logistics-goes-into-receivership-with-1500-jobs-under-threat/
- Global economy 2023: COVID-19 turned global supply chains upside down – 3 ways the pandemic forced companies to rethink and transform how they source their products - Nada R. Sanders - The Conversation.
Read here: https://theconversation.com/global-economy-2023-covid-19-turned-global-supply-chains-upside-down-3-ways-the-pandemic-forced-companies-to-rethink-and-transform-how-they-source-their-products-196764
It has been a great month of testing and learning on our software platform. It is working really well, and we have had great feedback. If you are yet to be added to our portal, please reach out. It's a very handy tool to utilize when monitoring your shipments.
We are very excited to announce that we have commenced the process of obtaining our ISO 9001 certification. This is one of many steps we are currently undertaking to assist OSCL in achieving trusted trader status.
I will return to Perth at the end of March for a few weeks to support a family member undergoing surgery. I do have a few days available on the books and would love to meet with any clients that would like to have a complimentary consultation and chat regarding all things supply chain.
OSCL is participating in the March on Challange. We are conquering 96km in the month of March to support Soldier On's life-saving mental health services to help our brave veterans and their families. As I am sure you are now aware, Steve and I love to participate in challenges that support our active service and veteran family. If you are interested in reading about the cause or would like to donate, follow the link: https://www.marchonchallenge.org.au/fundraisers/oscl
Thank you again.
March is looking to be a spectacular month for us, and we appreciate all the continued support.
All the best,
Bianca & Steve