Coronavirus Trade Update 011020

Thursday, October 1, 2020

"Australia CLOSED for Business"

COVID-19 is fast becoming yesterday's news as shipping delays, enterprise agreements, freight rate increases, congestion surcharges, equipment shortages in Asia, empty container park congestion in Sydney and now refusal by some shipping lines to accept bookings for cargo destined for Australia. 

The "we are all in this together" phrase is quickly losing it's value. Shipping lines will no doubt come out the other side with quite healthy balance sheets according to many global online media sites / industry sites. Cutting capacity and then raising rates and applying surcharges on full vessels along with lower fuel prices will assist in a profitable return. Not to mention the saving they are making when Infrastructure charges / Terminal Access fees that should be for their account as the contractor of the stevedores are being forced onto the transport sector without consultation and/or the ability to negotiate.  
Of course we are still to see any "signed agreement" between DP World Australia (DPWA) and the Maritime Union of Australia (MUA) in regard to what we expect is only the Port Botany terminal. No mention it would seem of what will happen at their other 3 sites. And of course the actions being taken by the MUA against Patrick are still before the Fair Work Commission (FWC) for decision, of course unless Patrick accept the MUA offer of of a 2.5 % wage increase and continuing the current enterprise agreement for a further 12 months so that workers return to normal duties.

The events of the last few weeks place even more focus on the Australian Competition and Consumer Commission (ACCC) discussion paper Proposed Class Exemption for Ocean Liner Shipping. In light of these recent events, and actions being taken, FTA / APSA will be lodging a supplementary submission to its original submission to support the need for a reform of shipping legislation.

China - Update
Our sources from China have provided us with the following updates 
  • Aa at 29 September 2020 China has 388 confirmed cases. There are still 5 cities with local cases. Hong Kong confirmed case numbers have reduced to 180. Shanghai currently has 51 cases. Two major Inner provinces Sichuan and Shan'xi confirmed cases rose to. More than 12,000 dock workers in the eastern Chinese port city of Qingdao have tested negative for COVID-19. Mass testing took place after two of their colleagues were reported as asymptomatic. Authorities are carrying out further coronavirus tests at the port.
  • Chinese State Councilor and Foreign Minister Wang Yi warned against unilateralism and protectionism on Monday 28 September 2020 during a forum on international order and global governance in the post-epidemic era. The foreign minister stressed that countries should be careful in making decisions when the world is at an important historical point and battling COVID-19.
  • OOCL, Maersk and Hapag-Lloyd have resumed some of the previously blanked sailings in the second quarter.  (DHL, Maersk, and others confirmed a shortage of especially large forty-foot containers in the market in recent months. They are working hard to resolve the issue.
  • ZIM is entering the Australian market with a fast service, named China-Australia Express (CAX). CAX, commencing in mid-October 2020, will offer 11-day transit time from South China to Sydney – Port RotationNingbo – Shanghai – Yantian – Sydney – Melbourne – Brisbane – Ningbo.
  • Qingdao port stopped unloading frozen seafood. The Qingdao resurgence is not the first time in recent months where frozen products from overseas have been linked to the spread of coronavirus. Authorities in Beijing and Dalian have linked other outbreaks to imported food products.  Some of the seafood products at Qingdao Port have been sealed off and blocked from entering the market, officials said. A total of 1,440 samples from products and the warehouse were tested for coronavirus and 51 of them have shown a positive result.
  • China's Ministry of Transport, General Administration of Customs and Ministry of Foreign Affairs jointly issued a notice to further prevent and control the cross-border spread of Covid-19 pandemic from ships trading internationally, regardless of flag. Effective from 24 September, the announcement is applied for all the internationally trading ships which are going to berth at China. In a tightening of measures by China, international trading vessels that call the country within 14 days of crew change will need to provide negative Covid-19 test results.
  • Profits of China's major industrial firms maintained steady recovery in August as the production and operations of enterprises further improved, according to date released on 27 September 2020. China's automobile imports and exports continued to rebound in August by gaining 9.2 percent month-on-month, according to data provided by the China Association of Automobile Manufacturers (CAAM). Last month, the import and export volume totaled $13.48 billion, up 4.1 percent year-on-year, said the CAAM, citing customs data.
  • The China Innovation and Entrepreneurship Fair 2020 kicked off on 23 September in Guangzhou, capital of South China's Guangdong province, with more than 3,000 innovation and start-up achievements from home and abroad exhibited.  Shanghai Fashion Week will be held offline in the city's multiple fashion hotspots starting from 8 October with strict epidemic control measures in place, according to the organizer. The 2nd World New Energy Vehicle Congress will be held from 27 September to 30 September in Haikou, capital of South China's Hainan province, focusing on the sustainable and healthy development of new-energy vehicles.
Seafreight commentary
Much of the seafreight focus at the moment is centered around the industrial disputes Nationally and in particular Port Botany. Not only are there quayside issues in Port Botany there is also massive congestion at all empty container parks forcing transport companies to make multiple trips to de-hire empties and/or storing them in their yards or their clients yards as many lines have indicated they only want certain types of equipment de-hired. What happens to container detention you may well ask ??

These disputes, as noted in our lead, are both impacting Australian Importers / Exporters as well as putting pressure, financially, operationally and health wise, on transport / logistics businesses to undertake their daily tasks.

You may also ask yourself why are congestion surcharges being applied to Cargo Owners when inability to service the vessel loading / discharge is a stevedore issue. Why would you not seek compensation from your contracted service provider for non-performance??

Given past commentary from various lines we will be seeing strong volumes through till Christmas.

So let's hope that industrial disputes will be resolved and vessels will soon be back to schedule before the peak season and public holidays compound the issue. Importantly, FTA / APSA will  continue its advocacy lead for the removal of the congestion surcharge which is rubbing salt into the wound of exporters and importers already on their knees from the reduction in services and ability to reach customers with limited shipping services.

Surcharges / Congestion issues - please see links below to view current surcharges that have been applied by various shipping lines. We wish to thank BCR Australia Pty Ltd for creating and allowing us to share this data.

Economic Update                              
"US Equity markets surged again overnight, brushing off the profit taking, in the previous session. Economic sentiment is improving rapidly, regaining some of the lost ground in September, while October looms with many questions in a month reputed for drama. The growing economic confidence is reflected in the statistics, with the ADP Job report confirming private sector jobs, are much higher than expected."
"The real concern over the US election is the lack of a result, which came up in the debate, which would prevent an outcome on the night!? The flagging reserve allowed the trade exposed commodity currencies to regain further lost ground, with the AUD jumping to 0.7150, while the NZD broke back above 0.6600."

  - See the full update HERE  

Airfreight Update

IFAM supports jobs and businesses in WA by maintaining supply chains

Western Australian produce is continuing to reach all corners of the globe, thanks to the International Freight Assistance Mechanism (IFAM). Between April and December this year, more than 21,000 tonnes of WA's products have been exported or are scheduled for export.
Horticulture is the largest product sector by volume, followed by lamb and pork, seafood, beef and dairy. To date, rebuilt supply chains have enabled WA producers to schedule exports such as:
  • strawberries to Malaysia, Singapore, Thailand, the Netherlands and the Middle East
  • cut flowers to China, Taiwan and the US
  • swordfish to Japan
  • broccoli to the UAE
  • brussels sprouts to South Korea. 
And of course, WA's famous rock lobsters are also making their way to restaurants around the world. Geraldton Fishermen's Co-operative (GFC) is one of many local businesses benefitting from IFAM.
(to read full article click HERE)

* IATA Air Cargo action
IATA - Government measure related to COVID-19 - search country specifics

Business Operations
Statements from Senator the Hon. Michaelia Cash
Information to find a job and build skills
Jobkeeper payment and Income Support extended
Mental Health Support
Assistance available to Small Businesses ( with state links )

Transport & Port Updates
Transport for NSW
Victoria - latest UPDATE
Freight & Logistics Council of WA - COVID -19 web site 

COVID-19 Workplace Health & Safety guidance available  
The Safe Work Australia website has been updated to provide a central hub of work health and safety (WHS) guidance and tools to help Australian workplaces manage the health and safety risks posed by COVID-19. The site allows you to select your status, industry and what you need information on. There are some 1300 different web pages addressing some 23 different industry sectors.  Click HERE for more 

Ensuring Employee Health & Communications during Crisis Management

Every one of our clients is wrestling with managing a largely remote employee workforce in the middle of the COVID-19 outbreak.  Providing basic safety and security information about your teams to management, and allowing management to easily communicate with their employees working from home has become more important than ever before. And the need is immediate and now. read full article HERE     
Workplace Relations                               

Are you Workplace Ready?
Employsure has launched a
 new service to tackle COVID-19 risks. Workplace safety has never been more important in the era of COVID-19 and it can be confusing and hard to navigate. If you need assistance navigating the various codes, regulations and laws click HERE or contact Lee Senft on 0401 004 295

Please note the below links for up dated information
FTA will continue to monitor issues surrounding the coronavirus and keep members updated as necessary. 


John Park - Head of Business Operations, FTA / APSA

Department of Health

To stay abreast of all developments and general information concerning the Novel Coronavirus we suggest members maintain a watching brief on the Department of Health website 

Join the Alliance

We encourage importers, exporters and logistics providers to Join the Alliance - together making a united and stronger voice for the international freight and trade sectors