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The past month has not seen any improvements in the shipping industry as port delays continue. COVID-19 continues to exacerbate global shipping issues. Freight to Australia and New Zealand continues to be difficult with port omissions and operationally induced blank sailings. These pressures continue to cause record price raises, which as predicted in our May Bulletin will likely not normalise until Mid-2023.

While there continues to be differing responses to COVID-19, globally there will continue to be disruptions to the supply chain. Unfortunately, China, Australia and New Zealand are outliers attempting to eradicate the virus in contrast to the most parts of the world where they are trying to live with it.

What that means is when a seafarer or port operator in those countries comes in to contact with COVID-19, operations are swiftly shutdown.

Recently in China, we saw the shutdown of Yantian Port, having a flow on effect to global operations. Currently the World’s third biggest Port Ningbo[1] is partially shut. As a major transhipment port this will have significant flow on effects, including delays, cancellations and reduced capacities.

In New Zealand port delays continue as two vessels have either been quarantined or left the country completely. The MS Mattina, has been quarantined at Bluff port for over a month and the Rio de la Plata departed New Zealand without offloading at Napier, Lyttelton and Port Chalmers.  Short term, this could cause delays to stock arrival however longer term, these changes and inefficiencies mean there is an overall reduced capacity to Australia and New Zealand and there is reduced predictability in when product will arrive.

port delays continue Shipping Port of Port Chalmers, Dunedin

Shipping Port of Port Chalmers, Dunedin.

The flow on effect will mean that there will continue to be higher costs to ship product to Australia and New Zealand.

As consistently reported, there continues to be multiday delays to berth at most Australia and NZ ports. The World Bank undertook a survey and all Australian ports (excluding Brisbane) and most New Zealand Ports are in the bottom 25% of performing ports in the world. Sydney is rated 339th out of 351 ports surveyed[2].  Increased delays and inefficiencies will continue to overall reduce capacity, without improvements costs will continue to grow.

In the past month, costs have continued to increase, to the extent that mainstream Australian media is reporting on it.

The Australian Financial Review has reported a sudden surcharge of up to US$1500 per container[3] from Asia to Australia. NZ Media has reported prices have doubled in the past 12 months[4]. From Redox’ non-contracted rates have increased more than that, tripling on major routes in Australia and quadrupling into New Zealand. To record prices not seen in recent memory.

Please keep in contact with your Account Manager, however, understand that some delays and cost increases are outside of our control. Your account manager can talk through a range of strategies to ameliorate the supply risk to you and your customers.

 

 

 

[1] https://www.bloomberg.com/news/articles/2021-08-16/world-s-third-busiest-port-remains-partially-shut-in-china [2] https://www.thedcn.com.au/news/ports/opinion-australias-container-ports-performance-dreadful/ [3] https://www.afr.com/companies/transport/unprecedented-times-for-ocean-freight-as-fees-soar-20210806-p58glf [4] https://www.stuff.co.nz/southland-times/business/125966647/covid19-spending-causing-container-congestion-for-southland-exporters
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