Ready. Set. June!
It's that time of the month; welcome to OSCL's newsletter and blog.
What a month May has been, we blinked, and it's June. Grab a bevy, sit back, and let us catch you up on all the fun industry updates.
A quick welcome to our new clients that have subscribed to the newsletter. I put this newsletter out monthly to ensure that OSCL's clients receive as much information and industry content as possible. Please do reach out to us should you want us to discuss a certain topic or market.
Chinese Market Update:
We are still seeing issues with overbookings and vessel rollings. It's a very frustrating market to be working in as the lines don't want to lose business and market share; therefore they are continuing to take bookings knowing they will roll a fair few to the next sailing. There has been no significant peak season this year, the volumes and rates have remained fairly stable. It will be interesting to see what the second half of the year brings. How much stock is onshore vs how much will need to be brought in to replenish the domestic market in the lead-up to Christmas and peak retail season.
Our standard operating procedure is to work with our agents to secure the most reliable option/s that fit with the budget and supply chain requirements, however, as mentioned, all lines are currently working the bookings and schedules to ensure the vessels are full, which may result in a rolling of your booking to an alternate vessel. The lines have omitted more vessels from the AU-CN lane to service alternate markets. The good news is the rates have remained fairly stable and are expected to remain as they are for the month of June.
Here is a list of the confirmed canceled sailings for the month.
Onshore has seen a new train route open to service RCEP countries. The route originates from Chengtong Trade Port Free Trade Zone in Shenbei New District, Shenyang. Currently, the line is servicing the Laos, Vietnam, and Japan trade lanes and has the ability to link through to Europe.
USA Market Update:
The US economy is going through a financial stability crisis and major government policy changes, putting immense pressure on the general consumer. Many experts are speculating the next recession is right around the corner, and consumer expenditure is about to drop rapidly. Consumers drive the freight market, and due to the economic outlook, it is expected the US freight market will continue to weaken.
This outlook has been supported by some of the top US retailers reporting lower-than-anticipated first-quarter results. Freight volumes in the Ports of Houston & New Orleans are significantly down, with the Port of Houston reporting an 8% decline and the Port of New Orleans a 1% decline in containers for the month of April.
There have been important updates in the zero-emissions space, as The California Air Resources Board has mandated that drayage companies only buy zero-emission trucks starting in 2024 and that all drayage fleets have zero emissions by 2035. I feel it's important also to make mention of IMO 2023, which is relatively new. This strategy was introduced at the start of 2023 with the aim of reducing carbon emissions in the international shipping sector. I will pop a link down in the news article highlights if you would like to read up more on the scheme.
Australian Domestic Market Update:
In response to the increasing number of accidents involving heavy haulage trucks, the NSW government has announced that penalties will increase for over-height road vehicles. On-the-spot infringements have increased to $4097.00, with a maximum fine of $5500.00. In addition, drivers can lose up to 12 demerit points and potentially lose their heavy vehicle license for a period of six months.
In a very sad correlation, the VIC Transport Workers’ Union (TWU) has requested that WorkSafe investigate further into the two accidents that have occurred in Melbourne in the last fortnight between buses and heavy vehicle trucks. TWU is concerned that supply chain pressures are contributing to a pattern of negligence by transport operators to ensure that delivery timeframes and cost reductions are met. To date in Victoria, 27 people have died in truck accidents, 7 of those reported deaths were the truck drivers. We may see some advocacy and reform in the domestic trucking space as a result.
The federal budget was released and all eyes in the freight industry were on what departments would be given much-needed funding. Biosecurity was the big winner, with $145.2 million to be spent over three years to improve their digital and processing systems. This was a very welcome announcement, as we all know how understaffed and under-trained some of the working groups within the department are. This in conjunction with the increase in the biosecurity cost recovery fees in July, will bring in millions for the department. Funding of $23.8 million was also put aside to invest in modernizing Australia’s international trade system.
The Australia - United Kingdom Free Trade Agreement is live as of the 31/05/2023. If you are importing products from the UK or considering this market, please give us a bell so we can arrange a complimentary consult.
News Article Highlights:
- OOCL fires back at Bed Bath & Beyond over FMC claim, Alex Lennane, The Loadstar,
- Importers warn of $1b fee hit from stevedores, ports, Jenny Wiggins, Australian Financial Review, https://www.afr.com/companies/transport/importers-warn-of-1b-fee-hit-from-stevedores-ports-20230518-p5d9gg
- ALC urges an earlier freight strategy review, Fully Loaded, https://www.fullyloaded.com.au/logistics-news/2305/alc-urges-an-earlier-freight-strategy-review
- List of amendments expected to enter into force this year and in the coming years, International Maritime Organization, https://www.imo.org/en/About/Conventions/Pages/Action-Dates.aspx
- Airlines that adapt quickly will survive likely freight pain in H2, Alex Lennane, The LoadStar,
- IPEF Supply Chains Agreement - More Resilient Supply Chains for Uncertain Times, The Hon Ed Husic MP, Minister for Industry and Science and Minister for Trade and Tourism, Special Minister of State, The Hon Don Farrell, https://www.ftalliance.com.au/news/29133
- Containerships moving at all-time low speeds, Sam Chambers, Splash247.com,
- Australia imposes fresh sanctions on Russia as PM arrives for G7 summit in Hiroshima, The New Daily, https://thenewdaily.com.au/news/people/2023/05/19/albanese-g7-pledge-to-ukraine/#:~:text=Australia%20has%20imposed%20fresh%20sanctions%20against%20Russia%20and,which%20took%20over%20a%20Ukrainian%20nuclear%20power%20plant.
OSCL Internal News:
A big shout-out to our clients that are referring our services; we are grateful and feel humble to know that we are being recommended to other importers. Our goal has always been to provide exceptional service and a solid supply chain product, and we got to do what we love by assisting some amazing small businesses this month.
For a second year, OSCL is proud to support Canberra Rotary's Circus Quirkus. This project raises funds for less fortunate kids, as well as to continue the rotary's amazing work with their District 9705 Vulnerable Youth Project and Ruby's House.
That's a wrap.
We hope you all have a fantastic end to the financial year.
Until next month...
Bianca & Steve