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Free Fall in Global Shipping Reliability

We are continuing to experience delays on sailings, shortages of equipment and congestion within ports in Australia.  The issues are global with all major importing countries continuing to experience backlog and congestion and that is creating an ongoing cycle of difficulty within Australia.

Various sources report that global schedule reliability has been in free fall since August this year.  In Australia issues started prior to that with the many extreme weather events and industrial action.

Sea Intelligence Maritime analysis states that globally, carrier on-time performance in October reached a record low 52.4 percent.  That was down 3.6 percentage points from September and 26.7 percentage points from October 2019.

The average vessel delay globally in October was 4.86 days, up from 4.11 days in October 2019.  The above is a global average and we are seeing many examples of greater delay to vessels entering and departing Australia.

In the last week it has been reported that there were up to 20 vessels awaiting berthing in Los Angeles/Long Beach and with more vessels arriving this will continue to cause problems.  The port of Auckland is also experiencing severe port congestion resulting in delays of around 8 or more days on entering or departing the port.

Ports in Europe are reporting unprecedented port congestion that is continually being fuelled by  COVID-19 constraints that has seen slots for pick-ups cancelled by driver shortage, slow operations enforced by social distancing and deep cleaning regimes.

Shipping Lines are implementing Port Congestion fees in many ports around the world including Felixstowe, Southampton, Auckland, Tianjin and most Australian ports.

As we have reported, the above delays through ports globally is having a significant impact on container equipment being returned to Asian load ports.  Containers are being locked at destination ports for weeks longer than normal and with terminals pushing through vessels as quickly as possible to ease congestion export containers are not being loaded back to the load ports.  Carriers like OOCL are using recovery vessels just to reposition empty containers back to origin.

There are a range of events causing the above but the major event common to all regions are surging imports as countries continue to reopen their economies.

This is having an impact on ocean freight rates that is seeing record high Freight All Kind (FAK) rates into Europe, USA, New Zealand and Australia.  It is expected that rates levels will continue to rise until after the Chinese New Year

Industrial Relations in Australia

As reported DP World and the MUA have reached a new enterprise agreement (EA), however we understand that is still be ratified by the MUA. 

Patrick and MUA are still negotiating their EA, there was a moratorium on Industrial action at Patrick Terminal that ceased on 1 December.  The industry is still waiting to hear the outcome and ACA will update urgently when news is forthcoming.  As of this release there has been no new protected stoppage  announcements by the MUA .

Schedule Delay

ACA International has been reporting vessel delays via our general weekly broadcasts for weeks now.  Our last report on Monday advised of 19 delays to both import and export sailings.  Three related to change in rotation from Sydney to Melbourne resulting in long delays to Sydney discharge.

Shipping Lines advise that they do not expect scheduling to return to normal until the end of December if there is no further industrial action.  That’s not considering the impact on vessels coming from USA, EU and NZ as a result of their own port congestion issues.

Equipment Shortages

The shortage of equipment at Asian origins in dire.  All carriers are experiencing severe shortages and this will continue into 2021 and is going to cause delays to your shipments at some point.

In some cases, equipment must be sourced from locations outside the normal loading port. This is particularly the case in the Pearl River Delta region in China where containers are unavailable in the normal feeder port have to be sourced and returned to other feeder ports.  This will incur additional cartage costs but will allow containers to continue to move.

In other cases, there is limited access to non-operating reefers and is not permitted to all destinations and can impact on utilization.

Empty Container Parks

Empty container parks are bursting at the seams and unable to receive empty containers back into their yard.  Carriers are advising that container returns are to be delayed as long as possible as the parks cannot receive new stock.  

Shipping lines are bringing recovery vessel to remove empty containers however this has not been able to make a dent in the 45,000 TEU imbalance in Australian ports. Hopefully over the coming months ongoing recovery vessels and increased export exchanges on vessels will alleviate the problem.

Exports

With the many omission of ports in an attempt restore schedules, there are major gaps in outbound schedules.  Hamburg-Sud notified of 5 vessel omissions in Hong Kong on the Northbound journey restricting bookings to the port.  

Hamburg-Sud also notified they would not take any fresh export bookings on a range of sailings to New Zealand as a result of port omissions.

While other carriers continue to take bookings into New Zealand  their schedules are being impacted by the delays in Auckland.

Many carriers into Asia have advised they would not accept full cargo export bookings and have been cancelling at short notice.  This is an outcome of terminals processing vessel faster to turn around quicker at the expense of export exchange and some carriers preferring to load empty containers because of the faster turnaround of equipment at destination.

Exports to China

We have seen containers being held by China customs on different commodities, some not reported in the news. Those delays are lengthy and are resulting in additional costs. We recommend extreme caution on any exports to China as any costs caused by China customs are the responsibility of the consignee and if they refuse to accept extra fees , the consignor.