Following on from our previous summary update, please find below salient information to monitor and factor in with your import supply chain forecasting and planning:
Firstly, GRI announcements have been released by all main shipping lines operating into Oceania (ex Asia and ISC origins).
Shipping line FAK services – effective from on board date 1st September 2021 – a further US$500.00 per TEU has been added on to FAK benchmarks ex Asia (North and South East origins) and ISC into Australia and New Zealand destinations (by shipping line consortium members).
Shipping line Premium services (online platforms) continue to track at higher cost compared to FAK benchmarks: space security (and equipment availability) for multi-container bookings are more dependable using these online carrier platforms.
Breakbulk/MPV liner services have also tracked significant per RT ocean freight price increases on their services from North and SE Asia origins into Oceania destinations – since May 2021, a minimum of 30% increase on RT prices main port pairings has been observed (with further increases expected by October 2021).
Equipment supply at main origin loading ports – the 40’GP and 40’HC shortage situation continues to impact bookings from main ports spanning North & SE Asia, and the ISC.
Ningbo – Meishan terminal – has resumed services from 25th August; but container backlogs to clear are significant, and the terminal’s COVID enforced closure has further disrupted already heavily congested carrier schedules from North Asia into ANZ destinations. It is likely to continue to negatively impact schedules for 4-6 weeks to come.
Golden Week – 1st to 7th October – is now fast approaching. All shipping lines have advertised continuance of their blank sailing campaigns through September; in fact, well into 2022 from a sustained program undertaking. Combined with ongoing schedule instability, heavy port congestion spanning the Asia/ISC/Oceania freight operations theatre, and equipment imbalances plaguing international supply chains, high ocean freight rates and space challenges will continue to impede merchants ability to land inventories into their home markets against forecast planning.
Singapore and Port Kelang international transhipment hubs remain heavily congested; impacting capacity (space) on 1st leg services into those hubs, for relay (2nd leg vessel connections) to Oceania destinations. Accumulative “delay days” via Singapore and Port Kelang T/S hubs continues to track at +14 days unfortunately. This impacts SEA and ISC origins into all ANZ destinations; and North Asia origins into WC AU destinations (Adelaide and Fremantle).
Landside AU and NZ import operations are again coming under pressure from arrival port congestion, stevedore / terminal operator labour industrial action (rolling ongoing), ongoing empty container park congestion (impacting empty container dehiring processes and causing higher transport operator costs), skilled driver shortages due to the many disruptors summarised and the resulting additional time per TEU movement from port availability to empty container dehire. This will pressure wharf cartage operators nationally in terms of their fee structures and capacity to service customers within container free time allowances (leading to heightened risks of container detention and/or additional yard fees being passed through to end customers).
Air services from core Asia and ISC origins to Oceania destinations – Airline flight options remain negatively impacted by international border closures, and resultant commercial options are therefore limited due to significant PAX (passenger aircraft) fleet stand downs. As a result of limited carrier and flight options, space is significantly reduced compared to pre-COVID market conditions, and rates for airfreight services into Oceania destinations are consequentially at record US$/KG highs.
Key takeaways to assist through these unprecedented times:
- Forecast planning of your PO’s on overseas supplier partners
- Place your PO’s as early as you are able to – remember that your factory suppliers will have similar challenges themselves with their own supply chain disruptions in their sourcing and manufacturing planning; potentially causing longer production lead times than pre-COVID benchmarks
- Get acknowledgement confirmation from your suppliers of PO receipt, and specifically ask for as accurate as possible production lead time / expected CRD (cargo ready date)
- Remember to CC your Ligentia CS team in as you place those PO’s and so we can monitor those PO’s for you through production lead time with your vendors via our on ground teams at the origin ports
- Advance bookings by your vendors/suppliers remain critically important, to help advance planning for space and book sailing schedules as close to CRD’s as possible. We continue to recommend that your vendors:
- Alert our origin branches 4-6wks in advance of CRD
- Alert again as production commences, to ensure CRD remains on track (use an ETD – 21 days approach to this, i.e. vendors to re-confirm CRD ETD – 21 days)
- Ligentia origin teams will match these status checks with your vendors (so long as we have record from you of the PO’s in effect)
- Wherever possible, your support of using FAK or Premium rate levels will assist us in planning and navigating space and schedule options for your critical/time sensitive PO’s.
Here at Ligentia, we completely empathise with the obvious challenges these extraordinary events and notices will have on import operations and planning. Please be assured we are doing everything possible to minimise disruption. Your ongoing support is greatly appreciated.
Should you have any queries relating to specific bookings, please contact our Customer teams. We’re here to help!