Positive Vibes - Hello August
Good Day All,
Welcome to OSCL's July newsletter/blog.
This month it's all positive vibes in this turbulent and uncertain market.
Let's get straight into the various market summaries.
The market has stabilized to a degree, with limited GRIs being introduced in July. It has been forecasted that in the second half of August that volumes will increase followed by the rates, as the larger retail corporations such as Kmart and Big W secure spacing for the first lot of Spring and Christmas stock.
Recently the ministers of Chinese and Australian foreign affairs met in Bali. This has done wonders for our commercial relationship after the last couple of months of tension between the two countries.
We have seen on average a four-week delay with bookings in the form of vessel rolling's and offloads by the shipping lines. OSCL recommends that importers start to work on Christmas stock supply chain planning/forecasting now. This will ensure there is plenty of time for the factories to manufacture your goods amongst the COVID lockdowns, as well as secure space and have adequate time buffers if delays are experienced. Rates will only go up, it might be worth booking your cargo to ship a little earlier to take advantage of more affordable shipping rates.
Peak season tends to start in August for the USA. We can expect to see the typical delays off the ports, delays with vessel discharges, congestion, and longer container wait times.
Lockdown in Shanghai drove down Asia-North America ocean rates slightly. Asia – US prices on both coasts dropped by more than 13%, and are at least 13% lower than this time last year. Asia – US West Coast rates have now fallen more than 50% in Q2. Europe – US East Coast rates are 42% higher than this time last year, and about 4x pre-pandemic figures.
The US is heading into a recession and it is expected the global market will follow suit. What this means is that overheads will increase and demand will decrease as the spending power of the masses is tightened. This does not necessarily mean it will translate to more affordable shipping rates, in fact, we believe it will encourage the opposite with supply chain operators and the lines increase rates to cover higher overheads.
There have been numerous strikes by port and rail workers, especially in Germany. This has decreased the movement of containers which is seeing a domino effect in other European ports, especially in the UK region.
A drop in available exports, and inflation’s impact on European consumer demand are causing decreased Asia-Europe pricing. Asia – N - Europe prices have been stable since early May. This is possibly due to worsening congestion at the European hubs with rates nearly 30% lower than at the start of the year.
This is a great summary of the freight pricing averages during the Pandemic for the Asia-European, Asia-US and European-US markets.
Common issues faced across the global supply chain currently are blank sailings (canceled vessel sailings), congestion delayed containers, vessels delayed off the port, and limited trucking resources.
Our takeaway from the above market summaries - PLANNING WILL BE KEY! Supply chain planning should be the focus for importers in the next few weeks. Start to work out your production needs, see what your manufacturer's schedules are looking like, forecast when you will need the product, and talk to us about the realities of making it happen.
OSCL is here to help all our clients achieve supply chain success. We will work with you to find tailored solutions to meet your needs.
Australian Local Market:
We have received notice of fuel surcharge reductions or notice of fuel surcharges remaining stable. In saying that the surcharges remain fairly high, between 15-25% for most carriers.
Port congestion is increasing in Port Botany (Sydney), as we head into peak season, we can expect to see port congestion become an issue in other domestic ports such as Brisbane, Melbourne, and Perth. As per the last few years, we can expect lines and consolidators to adopt charging a port congestion fee.
The airline terminals have released their latest terminal fees. No surprise that there were significant increases. Please contact us should you wish to review a copy of the industry notice outlining the charges.
As we head into the silly season, we would appreciate it if you could pop your shipments/bookings in with us as soon as convenient. This allows us to ensure we have adequate time to work on the jobs and action any surprises that may arise.
OSCL Internal News:
Did you know that we now offer Transit Insurance? OSCL has teamed up with a fantastic industry leader to provide Transit Insurance Policies for all your imports and exports. Get in touch with us today for a quote for your next shipment.
OSCL is now offering export services. We can assist from small courier packages to full containers to most destinations. We can advise on the best packing methods, types of documents required, and origin requirements.
As it's the end of the financial new year, we are offering a special for compliance auditing. If you are a new client and have recently come to us from another agent, let us audit your previous formal declarations to ensure compliance and to look for any missed duty concessions. Get in touch with us for a tailored quote and have peace of mind heading into the new year that your customs declarations are audit-proof.
- Black Sea Grain Initiative - by Sam Chambers - https://splash247.com/first-ship-readies-for-departure-from-ukrainian-seaport-of-chornomorsk/
- Long-term box rates have peaked: Xeneta - by Sam Chambers - https://splash247.com/long-term-box-rates-have-peaked-xeneta/
- Reduced disposal timeframes for unclaimed imported goods - ABF Newsroom - https://www.abf.gov.au/newsroom-subsite/Pages/reduced-holding-period-for-unclaimed-imported-goods-01-07-2022.aspx
- 131-2022: Impact of biosecurity measures to combat the threat of foot and mouth disease - DAFF - https://www.agriculture.gov.au/biosecurity-trade/import/industry-advice/2022/131-2022 '
- Are we heading into a Recession? - Ben Denniss - News.com.au -https://www.news.com.au/finance/economy/australian-economy/five-signs-australia-could-enter-recession-as-economists-call-for-calm/news-story/430ec5ce498a65abef3d801b08c0cf46
- Australia's Maritime Logistics System - Submission to the Productivity Commission on behalf of Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) - FTA - ttps://www.ftalliance.com.au/data/news_attachments/fta_submission_australia’s%20maritime%20logistics%20system.pdf - This is a big read.
That's a wrap from us.
Thank you again for the support and continued business.
We have had a fantastic end to the financial new year and we hope you have a prosperous financial new year.
All the best,
Bianca & Steve