Author: NZ Freight

Import:

The second phase of resurfacing work at Fergusson Terminal pad in the Port of Auckland is on track for completion by the end of September. However, there have been delays in working container vessels due to reduced capacity and labor resource issues.

The Port of Auckland has reported a profit of $40.5 million for the full year. It’s mentioned that VBS (Vehicle Booking System) costs are expected to increase soon. There are ongoing concerns about container depot capacity in Auckland, with restricted dehire slots available at several large sites.

There has been a General Rate Increase (GRI) of 9% at the CODA / Tapper freight stations, effective from September 1st. This has led to the need for an increase in local charges for LCL (Less than Container Load) shipments.

In early 2024, Biosecurity NZ plans to introduce a new version of the Container Checks Portal (CCP) for electronic submission of container inspection results by Accredited Persons. This change is part of an overhaul of border systems, and it will require the use of RealMe for access. The functionality of the system will remain the same, but there will be changes in the system’s appearance. Larger Transitional Facilities may also have the option to submit container checks directly from their in-house systems.

 

Export:

Lyttleton and Tauranga ports are experiencing move count restrictions, which are leading to late changes in port rotations and some omissions at these ports.

The narrative surrounding China’s manufacturing prowess facing decline and global supply chains seeking alternatives may be prevalent, but it’s essential to separate fact from fiction. China remains a manufacturing giant, driven by its size, capabilities, product quality, and long-standing reputation. While discussions about decoupling and reshoring often arise in the context of tensions with Taiwan, experts suggest that China’s economic position would prevent a drastic shift due to its reliance on exports.

Supply chain analyses do not support claims of a significant global shift either, but they do highlight some subtle movements, primarily by the United States and Europe. These shifts hinge on countries like India and Southeast Asian nations developing their manufacturing capabilities and transportation infrastructure to match China’s.

One region making strides in this direction is India, particularly its east coast ports. Container carriers have rushed to establish new connections, capitalizing on India’s resurgence as a manufacturing hub. Freight forwarders in Chennai, in particular, are optimistic about the growing options for shipments, creating predictability and shorter transit times.

Chennai Port, featuring DP World’s CCTPL and PSA’s CITPL terminals, has faced infrastructure bottlenecks, particularly on the land side. Crane productivity rates and cargo flow have been concerns for carriers. Emerging alternative terminals, however, offer modern infrastructure and flexible tariff advantages, attracting volumes traditionally handled by Chennai.

China boasts a massive domestic market, which has grown since the onset of the COVID-19 pandemic. However, it prefers not to rely solely on its domestic market. Diversification efforts by Western companies are mirrored by Chinese counterparts, reflecting a desire to expand and complement China rather than replace it.

India, with a larger population than China, faces workforce challenges due to differences in governance. China’s long-term planning, spanning 50-100 years, contrasts with India’s electoral democracy, which can lead to delays and changes in economic plans. Nevertheless, India recognizes the need for improved infrastructure and investments in roads, railways, ports, and airports to provide viable alternatives to China.

This diversification process has been ongoing for over two decades and is not about distancing from China but about expanding and collaborating. As we look ahead to the end of 2023, some key trends in the global shipping industry come into focus.

Container Shipping Trends in 2023: Weak Demand vs. Capacity Expansion

In the container shipping industry, the dynamics of supply and demand play a critical role in shaping the landscape. In 2023, several major players in the industry, including MSC, Maersk, ANL, and ZIM, are navigating the challenges of a market marked by weak demand and an abundance of capacity.

MSC, the world’s largest container line, is embarking on a new alliance with ZIM, the tenth-ranked carrier, spanning multiple trade routes. This collaboration marks a significant shift as both carriers prepare to transition away from their partnership with Maersk within the 2M Alliance. The agreement with MSC includes vessel sharing, slot purchases, and slot swap arrangements, signaling a commitment to optimizing their operations in a competitive environment.

One notable development is Zim’s decision to withdraw ships from its Asia-Australia/New Zealand trades in favor of a vessel-sharing agreement with MSC’s Panda loop. Pending regulatory approval, Zim will rebrand this service as ZAX and contribute three of its approximately 5,000 TEU vessels to the route. Additionally, Zim will become a slot charterer on MSC’s Kiwi Express and Capricorn loops, freeing up ten vessels in the 2,500-2,800 TEU range for redeployment or subletting. This strategic move reflects ZIM’s proactive approach to navigating the challenges in the container shipping market.

As the shipping industry adapts to these changes, the foreign exchange market is experiencing fluctuations. The Australian dollar has eased, while the New Zealand dollar has depreciated due to various factors, including a labor strike in Western Australia’s natural gas facility.

Furthermore, global energy prices are on the rise, contributing to inflationary pressures in Europe. Chinese demand for commodities has been sluggish, impacting the global economic rebound. In the coming weeks, attention will focus on monitoring inflation, energy markets, and economic growth as these factors continue to shape the container shipping industry and the broader global economy.

In conclusion, while reports of China’s manufacturing decline and supply chain shifts persist, the reality is more nuanced. China remains a manufacturing powerhouse, but diversification efforts by Western and Chinese companies reflect a desire to expand and collaborate rather than replace one another. In the container shipping industry, strategic alliances and capacity adjustments are essential strategies in a market characterized by weak demand and ample capacity. The global economic landscape is influenced by various factors, including energy prices, inflation, and Chinese commodity demand, all of which continue to evolve as we move further into 2023.

Zim’s decision to withdraw its ships from the Asia-Australasia trades and enter into a vessel-sharing agreement (VSA) with MSC (Mediterranean Shipping Company). This move involves several changes to Zim’s services in the region:

  1. Suspension of Oceania-related Services: Zim will suspend its three Oceania-related services: Asia-Australia CAX, South China/South-east Asia-Australia TFX, and Trans-Tasman N2A services.
  2. Replacement for CAX Service: Zim plans to join MSC on its Panda loop, which will be branded as ZAX by Zim. This replacement for the CAX service will deploy seven 5,000 twenty-foot equivalent unit (TEU) ships, with Zim contributing three of these vessels.
  3. Introduction of ZAO and ZOX Services: Zim will replace its TFX and N2A loops with two new services: ZAO and ZOX. These services will help maintain connections to New Zealand.
  4. Asia-Australasia VSA: The vessel-sharing agreement with MSC is expected to enhance Zim’s position in the Asia-Australasia region. The EVP (Executive Vice President) of Intra-Asia, Danny Hoffman, expressed excitement about this new phase for Zim. The restructuring of Zim’s Oceania services network, in cooperation with MSC, aims to improve reliability and enhance customer offerings.
  5. Impact on MSC’s Panda Service: MSC stated that the VSA with Zim would enhance its Panda service. Alongside its Capricorn and Kiwi Express loops, the Panda service will continue to provide premium direct services between Asia, Australia, and New Zealand.
  6. Zim’s Current Status: Zim is currently ranked as the 10th container line globally. It operates with a capacity of 584,000 TEU across a fleet of 134 ships, most of which are chartered. Zim also has a significant order book of 38 long-term chartered vessels with a nominal capacity of 306,000 TEU.

This move represents a strategic decision by Zim to restructure its services and collaborate with MSC to strengthen its presence in the Asia-Australasia trades. The partnership is expected to offer improved services, reliability, and options for customers in the region.

The announcement from Ports of Auckland’s CEO, Roger Gray, regarding plans to increase fees for their vehicle booking system (VBS) reflects a strategic move to address the ongoing financial challenges the port has been facing in its container operations. The historical undercharging practice has contributed to consistent financial losses, and Gray’s goal of achieving a net profit between $80 million and $100 million indicates a significant shift in the port’s financial strategy.

The substantial increase in VBS fees, including the speculated surge to $95 or $98 by December, is a clear attempt to rectify the undercharging issue and bring the port’s pricing more in line with economic realities. Gray’s assertion that these fee hikes are justifiable when compared to global standards suggests that the port aims to maintain its competitiveness while also improving its financial performance.

The implementation of incentives for stakeholders to book services during off-peak periods is a thoughtful approach. By offering lower fees during times of reduced demand, the port can encourage a smoother flow of operations and help mitigate congestion during peak hours. This strategy aligns with broader urban efforts to manage traffic-related challenges and demonstrates a willingness to work collaboratively with stakeholders to find solutions.

However, the significant fee hikes are likely to raise concerns within the logistics sector, as they can impact the cost structure of businesses that rely on the port’s services. While the port’s financial recovery is crucial for its sustainability and ability to invest in infrastructure, finding a balance between profitability and maintaining a competitive environment will be key to the long-term success of these changes.

It will be interesting to observe how these adjustments in pricing strategies and fee structures unfold, especially in terms of their impact on trade volume, stakeholder relationships, and the overall financial health of Ports of Auckland.

In the dynamic world of international trade, changes and developments within the ocean freight market can have far-reaching implications for global commerce. As we delve into the recent shifts and emerging trends, it becomes evident that the landscape is evolving rapidly, driven by strategic alliances, market forecasts, and the expanding influence of trade blocs like BRICS.

Zim’s Strategic Move: Enhancing Reliability through Partnership with MSC

In a bid to enhance reliability and bolster customer offerings, Zim, a key player in the shipping industry, has embarked on a significant transformation. Zim’s decision to withdraw its ships from the Asia-Australasia trades and join a vessel-sharing agreement with MSC is a strategic maneuver that has captured the industry’s attention. This move involves the suspension of three Oceania-related services, namely the Asia-Australia CAX, South China/South-east Asia-Australia TFX, and Trans-Tasman N2A services.

As part of this partnership, Zim is set to restructure its Oceania Trade Service, aligning it with MSC’s operations. This involves the deployment of seven 5,000 TEU ships, with Zim contributing three. Additionally, Zim will participate in slot charter agreements on MSC’s Kiwi Express and Capricorn loops, which are set to replace the soon-to-be-discontinued loops. This strategic shift will impact port rotations and services across various regions, including South Korea, China, and Australia.

Ocean Freight Rate Changes: ANL’s Rate Restoration and Consortium Forecasts

Amid these changes, ANL has announced a Rate Restoration program, scheduled to take effect from September 15th, 2023. This program will see adjustments in rates for shipments from South East Asia, India Subcontinent, and the Middle East to Australia’s main ports. The restoration amounts to USD 100 per 20′ dry/reefer and USD 200 per 40′ dry/reefer containers, reflecting the evolving market dynamics and cost considerations.

Looking ahead, consortiums like A3, 2M, and CAE are gearing up for rate adjustments in the coming weeks. These adjustments are anticipated to follow the trend set in August, with forecasts suggesting positive outcomes for rollover arrangements. These consortiums are working towards a Rate Restoration of USD 150 per TEU from North East Asia (NEA) origins to Australia and New Zealand. The aim is to address the cargo rush preceding China National Holiday in October.

BRICS Expansion and Global Trade Dynamics

Beyond the ocean freight market, the BRICS trade bloc is making waves on the global trade stage. With the inclusion of new members such as Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, the bloc is expanding its reach and influence. China and India, as dominant members, continue to foster trade relationships within BRICS, contributing to a significant portion of intra-BRICS trade.

This expansion signifies a challenge to the traditional Western dominance in global trade, with BRICS becoming a formidable contender. Additionally, BRICS nations are exploring alternative cross-border payment systems, indicating a broader shift in the global financial landscape.

Shifting Dynamics in Apparel Trade: India’s Endeavors

The shifting dynamics in the global garment industry reflect the broader changes in trade patterns. As sourcing shifts away from China, India’s ready-made garment (RMG) industry faces both challenges and opportunities. While regional competition intensifies, India is strategically positioned to capitalize on free trade agreements (FTAs) and labor policy reforms. These initiatives, along with collaborations between government agencies and trade stakeholders, are aimed at positioning Indian apparel brands in line with evolving environmental, social, and governance criteria.

Conclusion: Navigating the Seas of Change

The ocean freight market and global trade dynamics are undergoing transformative shifts, driven by strategic partnerships, rate adjustments, and the emergence of influential trade blocs. As industry players like Zim and MSC collaborate to enhance reliability, and consortiums navigate rate adjustments, the landscape is set for further evolution. The expansion of the BRICS bloc and the changing apparel trade dynamics also signal a new era in global commerce. As we sail into these uncharted waters, businesses and nations alike must adapt and innovate to seize the opportunities presented by these changes.

 

HAIFA, Israel, August 21, 2023 — ZIM Integrated Shipping Services Ltd. has recently unveiled an exciting restructuring of its current services catering to the Oceania region. With the aim of enhancing service quality and better meeting customer demands, these changes are set to take effect in October 2023. The revamped services include adjustments to routes and rotations, promising a more efficient and comprehensive shipping experience.

Introducing the New Service Routes

Here’s a breakdown of the forthcoming changes:

ZAX – Northeast Asia – Australia: Formerly known as the MSC panda service, ZAX is set to replace the existing CAX service. The updated rotation will span from Pusan to Brisbane, encompassing major ports like Qingdao, Shanghai, Ningbo, and more. This change is poised to streamline connections and provide a more seamless trade experience between Northeast Asia and Australia.

Southeast Asia – Australia and New Zealand: ZIM’s TFX and N2A services will be succeeded by two new services, ZAO and ZOX.

  • ZAO – ZIM Asia Oceania: This service will connect Laem Chabang, Singapore, Tanjung Pelapas, and Jakarta to key destinations like Brisbane, Sydney, Auckland, Lyttelton, and more. The enhanced route is expected to bolster trade between Southeast Asia and Australia/New Zealand.
  • ZOX – ZIM Oceania Express: ZOX will link Singapore, Jakarta, Fremantle, Melbourne, Napier, Tauranga, Brisbane, and Tanjung Pelepas, facilitating efficient trade connections across these vital ports.

Influence on the Market and Future Implications

The strategic move by ZIM to join forces with MSC on their PANDA SERVICE has set off ripples in the market. Notably, the CAX service will be discontinued, resulting in the immediate removal of thousands of TEUs from circulation starting October. To counteract this, multiple carriers are poised to introduce rate hikes in the latter half of September.

GRI Changes and Market Dynamics

It’s apparent that the market is responding to these changes with recalibrations in rate structures. Some carriers, including PIL, have already announced General Rate Increases (GRIs), hinting at the evolving dynamics. Instead of opting for a single, substantial GRI, it appears carriers are leaning towards dual GRIs, each in the range of USD150.00 per TEU.

Path to a Resilient Freight Market

As the dust settles on these market shifts, analysts predict the culmination of a healthier freight market. The flurry of ultra-low FAK rates and long-term contract rates is anticipated to fade, and with two GRIs likely to be implemented in quick succession.

This transformation, spurred by ZIM’s strategic realignments, offers a promising future for trade between China and the Australia lane. With increased efficiency, streamlined connections, and a focus on sustainable rates, this marks a pivotal moment in the world of shipping and trade.

As October approaches, the shipping industry awaits the implementation of these changes and their subsequent impact on the global trade landscape.

In today’s logistics market, competition is intensifying. Therefore, to match the standards of top global forwarding companies, 1UP Cargo NZ is establishing close ties with PIL (Pacific International Lines). This strategic move can indeed provide your company with a competitive advantage in the logistics market, particularly within the ocean freight sector connecting China and New Zealand. Collaborating with established shipping companies offers several benefits, including access to a broader network, more dependable shipping schedules, competitive pricing, and improved overall service quality.

New Zealand has been progressively strengthening its trade relations with China. China serves as a major trading partner for numerous countries worldwide, and its expanding economy and consumer base make it an appealing market for exporting nations. New Zealand, renowned for its agricultural and dairy products, has discovered a substantial market for these goods in China.

Considering the increasingly competitive nature of the logistics industry, establishing robust partnerships and alliances can help your company distinguish itself and deliver value to your customers. By leveraging the expertise and resources of PIL, you can bolster your capabilities in providing efficient and cost-effective shipping solutions for your clients.

1UP Cargo has indeed had a positive experience with PIL (Pacific International Lines) for ocean freight services between China (CN) and New Zealand (NZ). Establishing a dependable and efficient shipping partnership holds immense importance for businesses reliant on international trade and shipping. Notably, we have found PIL’s services to be exceptional compared to other shipping lines operating in the same route.

Furthermore, PIL’s outstanding support and priority treatment during challenging market situations underscore their dedication to customer satisfaction and service excellence. In a competitive and frequently volatile shipping industry, having a partner that consistently delivers reliable services and customer support can significantly benefit businesses engaged in international trade.

Therefore, should you require any further assistance with your shipping requirements, please don’t hesitate to contact us. We are more than willing to help you.

The Federal Maritime Commission (FMC) is conducting an investigation into Mediterranean Shipping Company (MSC) for alleged violations of the US Shipping Act. The investigation centers around MSC’s billing practices concerning demurrage and detention (D&D) charges, totaling over $2 million.

The FMC conducted an audit of MSC’s D&D charges in 2021. It is claimed that MSC was billing the same daily rate for both operating and non-operating reefers (NORs), despite stating otherwise through its US agent.

Customers allegedly disputed operating reefer detention or demurrage charges on approximately 925 occasions, leading to refunds totaling $1.2 million. Furthermore, in 2021, there were 1,704 alleged overcharges for NORs that went undisputed, resulting in MSC retaining approximately $857,944 in extra revenue.

The FMC alleges that the practice of misapplying operating reefer rates to NOR shipments had become a “normal and customary” practice by MSC, which is said to be in contravention of the Shipping Act.

The FMC notes that MSC failed to provide separate D&D charges for NORs for public inspection until March of the current year. The information was obtained from bills of lading supplied by MSC customers.

The FMC has been investigating various carriers for potential unfair practices, especially during the pandemic when shippers were in urgent need of capacity. Other carriers, like Hapag-Lloyd, Hamburg Süd, and OOCL, have faced complaints and significant claims related to D&D charges.

The text mentions examples of other financial claims related to D&D charges, such as Rahal International seeking repayment of $300,000 from Hapag-Lloyd, Hamburg Süd being ordered to pay $9.8 million to OJ Commerce, and Bed, Bath & Beyond pursuing a $38 million claim against OOCL.

 

The rule changes outlined in a Food Notice issued in February 2023. These changes focus on four important areas for food importers to adhere to. The key requirements for food importers are as follows:

  • Safety and Suitability Assessment before Import: Food importers are required to conduct a safety and suitability assessment before bringing in any food products. This assessment likely involves evaluating the potential risks associated with the food, such as contamination, allergens, and other safety concerns. The goal is to ensure that the imported food meets the necessary safety standards and is suitable for consumption.
  • Safe Storage and Transportation: Food importers are responsible for ensuring that the imported food is stored and transported in a manner that maintains its safety and suitability. This could involve adhering to specific temperature requirements, using appropriate packaging to prevent contamination, and implementing proper handling procedures to avoid any compromise to the food’s quality during transit.
  • Traceability Records: Importers are required to maintain detailed records that allow for effective traceability of the imported food. This means they need to keep track of information such as the origin of the food, its batch or lot number, the date of import, and any relevant information about its processing and handling. This traceability is crucial in case there are safety concerns or recalls in the future.
  • Recall Plan: Importers are obligated to have a recall plan in place. In the event that imported food is deemed unsafe or unsuitable for consumption, the recall plan outlines the steps the importer will take to swiftly remove the affected products from the market. This plan likely includes procedures for notifying authorities, distributors, retailers, and consumers about the recall and the associated risks.

It’s great to hear that New Zealand Food Safety took proactive steps by starting consultations with the industry in June 2022 to inform them about the upcoming rule changes. This approach gave food importers ample time to prepare and adjust their practices accordingly.

The consequences for failing to adhere to the safety rules are significant, reflecting the importance of maintaining food safety standards. Companies that fail to comply with the rules can face fines of up to $500,000, while individuals may be fined up to $100,000 and potentially face imprisonment for up to two years. These penalties are designed to ensure that all stakeholders take these rules seriously and prioritize the safety of imported food products.

For further guidance and support, New Zealand Food Safety has made resources available on its website. Importers can access information and resources related to the new rules, helping them understand the requirements and how to implement them effectively. Additionally, if importers have any questions or need clarification, they can reach out to New Zealand Food Safety through the provided contact information: 0800 00 83 33 or info@mpi.govt.nz.

This comprehensive approach, including consultations, guidance, and accessible communication channels, demonstrates New Zealand’s commitment to food safety and its efforts to ensure that importers are well-informed and well-prepared to meet the new requirements.

It’s great to hear that New Zealand exporters are being offered an easier trading option with China through the self-certification process. This development is a result of the upgraded New Zealand-China Free Trade Agreement (FTA), which aims to enhance trade relations between the two countries.

The self-certification option through the Joint Electronic Verification System (JEVS) managed by the New Zealand Customs Service is designed to simplify the process for exporters and customs brokers. Instead of going through a lengthy certification process, they can now complete and directly send Certificates of Origin to China Customs.

These certificates are crucial as they provide evidence that the exported goods are indeed from New Zealand. This proof of origin enables exporters to take advantage of preferential, lower tariffs, ultimately making their products more competitive in the Chinese market.

This development marks another positive step in the trade relationship between New Zealand and China, which is New Zealand’s largest trading partner. It streamlines the export process and reduces administrative burdens, which can ultimately contribute to increased trade volumes and economic benefits for both countries.

As trade continues to play a vital role in the global economy, efforts to simplify and enhance trade processes like this self-certification option can have a positive impact on businesses, economic growth, and bilateral relationships.

The upgraded Joint Electronic Verification System (JEVS) brings several tangible benefits for exporters and the promotion of paperless trade. The enhancements made to JEVS go beyond just facilitating the self-certification process and have broader implications for trade efficiency and security.

Some key points about the upgrade and self-certification process include:

  • Paperless Trade Support: The upgraded JEVS supports paperless trade by allowing exporters and customs brokers to electronically complete and send Certificates of Origin directly to China Customs. This reduces the need for physical paperwork and streamlines the export process.
  • Improved Connectivity and Data Security: The upgrade includes improvements in connectivity and data security. This is essential for maintaining the integrity of trade data and ensuring that information is transmitted securely between relevant parties.
  • Capacity for Future Trade Negotiations: The upgraded JEVS is designed with the capacity to process trade data that can be used in future trade negotiations. This indicates a forward-looking approach to trade relations and the system’s adaptability to evolving trade requirements.
  • Eligibility and Contact Information: Self-certification is available for exporters who have been approved by the New Zealand Customs. Exporters interested in utilizing the self-certification option can reach out to New Zealand Customs’ Export team for more information. The provided contact email, feedback@customs.govt.nz, can be used for inquiries.
  • Regional Comprehensive Economic Partnership (RCEP): Approved exporters can also utilize JEVS for self-certifying Certificates of Origin to claim preferential tariffs in China under the Regional Comprehensive Economic Partnership (RCEP). This further expands the benefits of the system beyond just the New Zealand-China Free Trade Agreement.
  • Choice for Exporters: Importantly, the upgrade to JEVS provides flexibility for exporters. Those who prefer to continue with their current Certificate of Origin process can do so, as no changes are required. This accommodates different preferences and trade practices.

Overall, the upgrades and self-certification option represent a positive development in New Zealand’s trade relationship with China. The improvements in efficiency, security, and flexibility are likely to contribute to smoother trade operations and increased economic benefits for both countries.

 

Certification of New Zealand Origin

A Certificate of Origin is a crucial document used in international trade to provide assurance about the origin of goods. In the context of the New Zealand-China Free Trade Agreement (FTA), the Certificate of Origin serves to confirm that the goods covered by the certificate are indeed produced or manufactured in New Zealand and adhere to the rules of origin specified in the FTA.

Here are some important points to note about Certificates of Origin in the context of the FTA:

  • Assurance of Origin: The primary purpose of a Certificate of Origin is to assure China Customs that the goods mentioned in the certificate originate from New Zealand. This assurance is essential for claiming preferential tariffs and other benefits provided under the FTA.
  • Rules of Origin: Rules of origin are criteria used to determine the origin of goods for the purpose of applying preferential trade measures, such as reduced tariffs or duty exemptions. These rules are outlined in the FTA and specify the conditions under which a product can be considered as originating in New Zealand.
  • Required Format: Certificates of Origin must adhere to a specific format as prescribed by the FTA and relevant regulations. This format ensures consistency and clarity in communicating the origin of the goods.
  • Certifying Bodies: Only organizations that have been designated by the New Zealand Customs Service as certifying bodies for the FTA are authorized to issue Certificates of Origin. These organizations are recognized as having the necessary expertise and credibility to verify the origin of goods.
  • Designated Template: The New Zealand Customs website provides a template for the Certificate of Origin that exporters can use. This template ensures that the required information is presented in a standardized manner.
  • Submission to China Customs: The Certificate of Origin, once issued by an authorized certifying body, is submitted to China Customs along with other relevant trade documents. It serves as evidence for claiming preferential treatment under the FTA.
  • Claiming Preferential Tariffs: A properly issued and authenticated Certificate of Origin is crucial for exporters to claim preferential tariffs or other trade benefits granted under the FTA. This can significantly impact the competitiveness of New Zealand goods in the Chinese market.

In summary, Certificates of Origin play a pivotal role in international trade agreements like the New Zealand-China FTA. They ensure compliance with rules of origin and provide the necessary assurance to customs authorities in the importing country that the goods originate from the exporting country. This, in turn, allows exporters to access favorable trade terms and enhance their competitiveness in the global marketplace.

 

Other Requirements

The direct consignment rule is an important aspect of the New Zealand-China Free Trade Agreement (FTA) that determines whether New Zealand-origin goods are eligible for preferential duty rates in China. This rule ensures that goods must be shipped directly from New Zealand to China without entering the commerce of another country, with some allowances for transit through third countries for logistical reasons.

Here’s a breakdown of the key points related to the direct consignment rule:

  • Direct Consignment Requirement: To qualify for preferential duty rates in China, New Zealand-origin goods must be consigned directly from New Zealand to China. This means that the goods should not be diverted or enter the commerce of any other country during the shipping process.
  • Transit through Third Countries: While the goods should be directly consigned, transit through third countries is allowed for logistical reasons. However, there are specific conditions that need to be met to maintain the goods’ eligibility for preferential treatment:
    • Limited Operations: Goods transiting through third countries should not undergo any additional processing or operations in those countries, except for actions necessary to keep the goods in good condition.
    • Storage Conditions: If the goods are stored during transit in a third country, they should remain under the administration and supervision of Customs. Moreover, the storage period in the third country should not exceed six months.
  • Documentation and Compliance: China Customs may require specific documents to confirm that the goods still meet the rules of origin, especially if the goods transit through third countries. These documents can include commercial invoices, a through bill of lading, and additional documents when transiting through specific locations such as Hong Kong or Macau. For instance, documents issued by the China Inspection Company Limited (Hong Kong) or CCIC Macau Company may be required.
    • Inspection: If the necessary documents are not provided, China Customs may conduct an inspection of the container to verify the goods’ compliance with origin requirements.
      • Container Seal and Matching Information: Exporters who are unable to provide the required documents should ensure that the container’s seal is intact and that the seal numbers and container numbers match the information on associated documents like the bill of lading and certificate of origin. This serves as a way to demonstrate the integrity and traceability of the shipment.

      Complying with the direct consignment rule is essential for exporters to access the preferential duty rates and benefits offered by the FTA. By maintaining the direct consignment of goods and meeting the specified conditions during transit, exporters can ensure that their products are eligible for favorable treatment in the Chinese market.

       

      Release of Imported Goods

      China’s decision to release New Zealand-origin goods within 48 hours of arrival is a significant development that streamlines the customs clearance process and promotes efficient trade between New Zealand and China. This commitment to expedite customs release is subject to certain conditions and exceptions, as you’ve outlined. Here’s a breakdown of the key points:

      China Customs has agreed to release New Zealand-origin goods within 48 hours of their arrival at the Chinese port of entry. This rapid release timeframe is designed to facilitate quicker clearance of goods through customs procedures.

      There are specific conditions outlined under which the 48-hour release commitment applies. These conditions include:

      1. Importer Information: The importer must provide all necessary information required by China Customs at the time of the goods’ first entry into China. This emphasizes the importance of providing accurate and complete documentation to facilitate the customs clearance process.
      2. Risk Management: The commitment doesn’t apply if China Customs selects the goods for closer examination based on risk management techniques. This means that if certain factors raise concerns about the goods’ compliance or origin, they might undergo additional scrutiny.
      3. Examination by Other Agencies: If the goods are to be examined by agencies other than China Customs, and these agencies have the authority to examine under China’s domestic legislation, the commitment might not apply. This ensures that the examination procedures of other relevant authorities are respected.
      4. Customs Formalities: If all necessary customs formalities cannot be completed, or if events outside the control of China Customs lead to delays in release, the 48-hour commitment may not apply. This accounts for unforeseen circumstances that might hinder the clearance process.

      This commitment by China Customs reflects their willingness to facilitate trade with New Zealand and reduce unnecessary delays in the customs clearance process. It aligns with the broader goal of promoting efficient international trade by streamlining administrative procedures.

      It’s important for exporters and importers to be aware of the conditions and exceptions to this release commitment to ensure a smooth customs clearance process. Proper documentation, adherence to customs regulations, and collaboration with customs authorities are key factors in benefiting from this streamlined release process and maintaining a positive trade relationship between New Zealand and China.