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Australia News - April 2018
03/27/2018
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SEAFREIGHT NEWS 

  • MSC RESTRUCTURED ITS SOUTH EAST ASIA – OCEANIA NETWORK in late March. The Capricorn service was converted into two new loops, the Kiwi Express and the Capricorn Service. This will improve transit times with a new port call at Northport. The Kiwi Express rotation is Singapore – Jakarta – Brisbane – Sydney – Auckland – Tauranga – Wellington – Napier – Auckland – Northport – Brisbane – Tanjung Pelepas – Singapore. The Capricorn Service rotation is Singapore – Jakarta – Fremantle – Adelaide – Bell Bay – Melbourne – Bluff – Lyttelton – Nelson – Tauranga – Tanjung Pelepas – Singapore.
  • UNFORTUNATELY VESSEL DELAYS CONTINUED INTO MARCH “due to accumulated delays on route from Europe”, vessel “phase out in Singapore”, Melbourne port omission “to assist schedule recovery” etc. Very frustrating for importers and exporters. Hopefully schedule integrity will be restored for April arrivals into Australian ports.
  • SHIPPING LINES FROM NORTH ASIA HAVE ANNOUNCED A “RATE RESTORATION” of up to USD 300.00 per TEU (twenty foot equivalent unit) effective 1 April. Given that ocean freight rates in the first quarter of 2018 have been quite soft, it remains doubtful that this increase can be enforced in full. 

AROUND THE WORLD 

  • BELGIUM: The recent surge in demand for air cargo triggered Brussel Airports investment of EUR 100 million to expand air cargo facilities. The 50,000 square metre “ultramodern logistics building” will have direct apron connections for four different carriers, and will be used for shipping and packaging, as well as temporary storage for high quality, temperature sensitive products, eg pharmaceuticals.
  • EUROPE: The Siberian snowstorms “beast from the east” blanketed Europe as far south as Spain with thick layers of snow creating chaos for the logistics industry in early March. The adverse weather and extremely low temperatures blocked access to ports, airports and terminals in numerous places and caused flight cancellations which in turn resulted (again) in backlogs for outbound airfreight.
  • USA: The nationwide truck shortage continues to cause problems and delays. Some shipping lines which offer carrier’s haulage experience delays of up to 7 days and sometimes even longer depending on pickup or delivery locations.
  • NEW ZEALAND: The Rail and Maritime Transport Union initiated strike action for Lyttelton Port of Christchurch from 21 to 25 March. LPC accused the RMTU of maximising disruption by making it impossible for shipping lines to change plans and divert vessels.
  • USA: Early spring snowstorms caused the cancellation of more than 4,100 flights in Northeast USA airports on 21 / 22 March. 

AIRFREIGHT NEWS 

  • QANTAS AND AMERICAN AIRLINES RESUBMITTED AN AMENDED APPLICATION for a joint business agreement on routes between North America, Australia and New Zealand with the US Department of Transportation. Under the proposed agreement the two carriers would greatly increase the number of codeshare flights and add flights between city pairs currently not served by Qantas or American Airlines. The agreement would cover cooperation for passengers, cargo as well as potential sharing of facilities.
  • THE LATEST IATA FIGURES REVEALED THAT AIRFREIGHT HAD A ROBUST START IN 2018.  International airfreight in January grew 8.6% compared to 2017 and the Asia Pacific region achieved an 8.5% increase.
  • IATA ALSO RELEASED THE 2017 AIRLINE SAFETY PERFORMANCE figures which showed continued strong improvements. The all accident rate (measured in accidents per 1 million flights) was 1.08 compared to 1.68 in 2016 and 2.01 in 2015. The 2017 rate for major jet accidents (measured in jet hull losses per 1 million flights) was 0.11 which was an improvement over the 0.39 in 2016 and better than the 5 year average of 0.33. There were 6 fatal accidents with 19 fatalities compared to 9 accidents and 202 fatalities in 2016. None of the 6 fatal accidents involved a passenger jet.
  • QANTAS RECENTLY CHANGED ITS ROUTING TO EUROPE FROM DUBAI TO SINGAPORE but the withdrawal from Dubai hasn’t dented the alliance agreement between Qantas and Emirates. The ACCC first authorised the alliance in 2013 and has now granted re-authorisation for a further five years subject to a condition to address continuing competition concerns on the Sydney – Christchurch route. 

AUSTRALIAN PORTS AND AIRPORTS 

  • AN AUD 40 MILLION INVESTMENT INTO HOBART International Airport will include a 500 metre runway extension to support larger aircraft. The extension will create new opportunities for Tasmania, eg enabling direct flights from Hobart to South East Asia and enhance Hobart’s role as a gateway to the Antarctic.
  • AIRFREIGHT GROUND HANDLING CHARGES ARE INCREASING at the CTOs (Cargo Terminal Operators). Dnata has advised increases of approx 3% effective 2 April affecting import as well as export airfreight via international airports in Australia. We expect the other CTOs to introduce similar increases in the next couple of months.
  • FOLLOWING AN ESCALATION OF AN INDUSTRIAL ROW, QUBE PORT airlifted 36 managers by helicopter into Melbourne’s MIRRAT Terminal at Webb Dock. The MUA (Maritime Union of Australia) reportedly blocked access to Webb Dock during a 2 day strike on the weekend of 17 / 18 March. The managers unloaded 731 European cars from the vessel Figaro. Qube Ports director Michael Sousa said the safest way for the managers to enter the site was by helicopter given the “ongoing threats and intimidation” by the Union.
  • IN SYDNEY’S PORT BOTANY MUA WORKERS WALKED OFF THE JOB at Hutchinson’s International Container Terminal on 20 March and didn’t return until 22 March. An initial memo from Hutchinson said that the action was unlawful and it intended to seek orders from the Fair Work Commission. The workers returned to work ahead of the FWC meeting scheduled for 23 March.
  • VICTORIA INTERNATIONAL CONTAINER TERMINAL (VICT) IS THE LATEST STEVEDORE TO INTRODUCE A NEW INFRASTRUCTURE CHARGE of AUD 48.00 per container effective 27 March 2018. The Container Transport Alliance Australia (CTAA) condemned this move as a further “cash grab” directed at the landside container logistics sector. 

AUSTRALIAN CUSTOMS AND QUARANTINE 

  • THE BROWN MARMORATED STINK BUG (BMSB) has been a hot topic recently especially for shipments from Italy (see our March newsletter). The Department of Agriculture and Water Resources has meanwhile advised that the treatment with Sulphuryl Fluoride in Italy is no longer acceptable. Only heat treatment is accepted. LCL cargo can now be treated at the container level in Italy prior to departure. This will eliminate delays and extra costs upon arrival of the shipment in Australia.
  • FROM 1 JULY 2018 LOW VALUE GOODS IMPORTED FROM OVERSEAS WILL ATTRACT GST. This means that vendors – including merchants, electronic distribution platform operators and re-deliverers – with sales subject to GST of AUD 75,000 or more per year will  need to register with the Australian Tax Office, collect GST and remit that GST to the ATO.
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