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  • Writer's pictureBianca Flint

Unleashing July and Conquering the Supply Chain Chaos



Hi All,


It’s that time of the month, OSCLs monthly newsletter and blog.

How did we get to the end of the financial year?!

I hope you all had a phenomenal financial year and that business is on the upswing post-COVID.


Let’s get stuck in…

 

Market Updates:


China:

The first week of July has seen many vessel cancellations; we are experiencing high competition to secure space as the lines have cut vessels servicing the CN-AU trade lane, as well as reoccurring vessel cancellations and rescheduling. We experienced slight price increases from our preferred carriers COSCO, OOCL & ANL, with talks that pricing may slightly increase towards the end of July and the start of August as we approach another peak season.


There has been an increase in development domestically in the supply chain infrastructure and a push by the Chinese government to promote and advertise the first China International Supply Chain Expo, which will be held in Beijing from Nov. 28 to Dec. 2. The State Council Information Office released port data supplied by the Ministry of Transport.


The report stated that Chinese ports handled 6.75 billion metric tons of cargo from January to May, a year-on-year increase of 7.9 percent. Investment in water transportation infrastructure across the country amounted to 73.4 billion yuan ($10.1 billion), up 30.3 percent year-on-year. At the conference, Fu Xuyin, deputy minister of transport stated, “…the ministry has guided local governments in 10 coastal provinces and seven provinces along the Yangtze River to form provincial-level port groups driven by market forces and capital…”.


There has been movement with global giant’s, such as Apple, TSMC, and Mazda looking to diversify and strengthen their supply chain resilience, with moving manufacturing and sourcing operations from China to countries such as Japan, USA, Vietnam, India, and Mexico. The Chinese government has been quickly diversifying supply chain options to support the Chinese and Russian trade lane, with Huanghua Port in Cangzhou, north China's Hebei Province, opening two new container routes via Qingdao, Ningbo and Quanzhou.


List of Known Vessel Cancellations:



USA:

The Panama Canal has been a major issue over the last few weeks due to severe drought and dropping ocean water levels. There have been a few incidents that have resulted in the Panama Canal Authority releasing draft adjustments, reducing the size of the vessels allowed to pass through the canal. This has seen shipping lines adjusting vessel schedules to ensure the vessels assigned to the American lanes meet the new requirements.


West Coast dock workers, unions and ports have finally, after more than 12 months of negotiations, reached an agreement with the assistance of the Biden government. The final agreement has not been released, once the agreement has been ratified by all parties it will be made public. We are expecting to see an uptake in port operations as a result.


On the 30/06/2023, The National Transportation Statistics (NTS) have been updated by the Bureau of Transportation Statistics (BTS). You can review the updated and current statistical data here:


The US market is still struggling, with Reuters reporting that in April 2023, Imports dropped 2.7% to $254.0 billion. The drop was led by a 7.3% plunge in consumer goods imports. Industrial supplies imports, which include crude oil, fell 5.9%. Food imports slipped 3.0%. Capital goods imports rose 1.3%, a good omen for business investment. Imports of motor vehicles and parts increased 0.9%.


A significant rail development deal has been agreed upon to construct a rail freight corridor linking Mexico, Texas, and the US southeast states. The plan is to extend and utilize existing infrastructure, with the goal of easing congestion and unreliable road freight lanes. The investment is also in preparation for the increased volumes between Mexico and the US as the US moves away from Chinese imports. The 2022 period saw a 17% increase in freight volume between the two countries.


Canada is the next to follow the US port strikes. Port workers are currently on day three (as of 03/07/23); however, at this stage, there has been minimal impact on the flow and limited congestion at the Port of Vancouver and Price Rupert.


Australian Domestic Market:

Usual price increases are expected by the ports and landside operators; honestly, at this point, I am starting to sound like a broken record. It’s going to be a tough year for us forwarders as costs continue to increase, yet margins do not increase in line due to the competitive market pressures.


The last few weeks saw the port of Melbourne, Newcastle, and Brisbane get hit with significant protesting by Blockade Australia, as structures and protestors blocked the major roadways to the ports. It led to considerable delays in getting boxes out of the port and de-hired. Importers and exporters were stung with extra waiting and detention fees by transport providers as trucks sat stuck for hours. OSCL worked with our providers to arrange new slots and managed to achieve zero disruptions to our client’s consignments.


I believe we are going to see some significant reform taking place domestically in the next few months, especially in the domestic heavy haulage and warehouse handling space. This has been triggered by numerous accidents involving buses and trucks around the nation and the Aldi and FedEx worker incidents and strikes around safety in the warehouses. We will keep you updated as the developments happen.

 

News Highlights:

· Australia digs deep to break China’s dominance in critical minerals, Mike Foley, The Sydney Morning Herald – https://www.smh.com.au/politics/federal/australia-digs-deep-to-break-china-s-dominance-in-critical-minerals-20230619-p5dhqg.html


· Carriers sailing in red ink, with 'another rates bloodbath' heating up, Mike Wackett, The LoadStar - https://theloadstar.com/carriers-sailing-in-red-ink-with-another-rates-bloodbath-heating-up/


· New milestone for MSC as it readies to surpass Maersk for owned box tonnage, Sam Chambers, Splash247 – https://splash247.com/new-milestone-for-msc-as-it-readies-to-surpass-maersk-for-owned-box-tonnage/


· FEDEX NSW WORKERS CEASE WORK AMID SAFETY CONCERNS, Fully Loaded - https://www.fullyloaded.com.au/logistics-news/2306/fedex-nsw-workers-cease-work-amid-safety-concerns


· Former cop needs truckies’ help with fatigue study, Staff Writer, Big Rigs - https://bigrigs.com.au/2023/07/03/former-cop-needs-truckies-help-with-fatigue-study/


· Meth in plastic pallets seized in Australia, US, Hong Kong and New Zealand, Border Operations, Joint media release between the Australian Federal Police and Australian Border Force - https://www.abf.gov.au/newsroom-subsite/Pages/meth-in-plastic-pallets-seized-in-australia,-us,-hong-kong-and-new-zealand-19-06-2023.aspx


· Importers warn of $1b fee hit from stevedores, ports - Jenny Wiggins – Financial Review –https://www.afr.com/companies/transport/importers-warn-of-1b-fee-hit-from-stevedores-ports-20230518-p5d9gg & https://www.ftalliance.com.au/news/29083


· NEW GLOBAL MEASURES - AVOIDANCE OF CONTAMINATION OF CONTAINERS (UPDATE 8) IPPC CPM DRAFT RECOMMENDATION RELEASED – PAUL ZALAI – FTA, APSA & GSF –

 

OSCL Internal News:

We have had our best month to date and that is thanks to all our amazing clients providing OSCL with referrals and taking the time to provide us with online reviews. We are beyond grateful to every one of our clients for their continual support.


Steve and I will be out of the office on Thursday and Friday 06/07 to 07/07. Our little human is undergoing surgery. If anything pops up, please send me a text message, and ill action asap.


I will be in Sydney the week of the 17/07, please do reach out should you wish to catch up. I will be doing the rounds and would love to pop in and say hi.


That’s a wrap from us.

Until the next one…


Bianca & Steve


A quick shout-out to the special clients that sent me condolence messages; we lost a very special member of our team a few weeks ago and it's left a ginormous hole in our hearts. This is a pic of our special boy who sat at my feet every day in the office, he is sorely missed.


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