Author: NZ Freight

The BMSB season runs from September 1st, 2023, to April 30th, 2024. The countries with BMSB populations include Japan, Netherlands, Belgium, Germany, Spain, and Italy.

For LCL (Less than Container Load) containers from Japan, Netherlands, Belgium, Germany, and Spain, two categories of cargo are permitted:

• Low Risk Goods: Such as food items.
• High Risk Goods: Such as auto parts, but these must be accompanied by a declaration stating that the cargo was manufactured and stored indoors prior to export.

Given the high risk of infestation from Italy, all LCL containers must undergo heat treatment before loading on the ship. This treatment involves circulating hot air around the container until it reaches 60 degrees Celsius. Cargo destined for Italy needs to be packed in a way that won’t be damaged by this heat treatment process.

Cargo originating from BMSB countries but transshipped through Singapore or Hong Kong will be subject to treatment at the transshipment port. This implies that even cargo in transit will be held for treatment before continuing its journey. It’s important to ensure that the relevant parties involved in importing and shipping are well-informed about these requirements to avoid any delays or complications.

FCL loads from any of these countries also need to comply:

It’s evident that these procedures are well-established and are aimed at preventing the spread of BMSB and protecting the local environment and agriculture. Any risk goods, such as engine parts, must be accompanied by a manufacturer’s declaration confirming that the cargo is new, produced indoors, and stored indoors prior to export. If these conditions are not met, the cargo will require treatment for BMSB through fumigation or heat treatment.

Full Container Load (FCL) shipments from Italy will generally require treatment (either fumigation or heat treatment) unless they fall under the category of sensitive cargo as defined by MPI. Examples of sensitive cargo include food, pharmaceuticals, and textiles.

Cargo that needs to be transported in open top containers or flat racks are considered very high risk for BMSB infestation, as they are exposed to the environment. MPI mandates that all shipments using these container types must be treated for BMSB prior to loading. Notably, the window for treatment of flat racks and open tops at the origin is limited to just 5 days between treatment and loading on a vessel, necessitating careful planning.

These details provide a comprehensive overview of the import requirements and restrictions related to BMSB for the upcoming season. It’s clear that complying with these regulations is crucial to ensure smooth and timely imports while also adhering to the necessary pest prevention measures.

•  The resurfacing work at Fergusson Terminal pad at Ports of Auckland is moving into its 2nd phase, with a target completion date by the end of September. However, container vessel operations are facing delays due to the reduced capacity caused by the ongoing construction.
• A General Rate Increase (GRI) of 9% will be implemented at the CODA / Tappers freight stations starting from September 1st. Unfortunately, this GRI will result in an increase in local charges for Less than Container Load (LCL) shipments.
• There’s an ongoing issue with restricted dehire slots and insufficient container depot capacity at several large Auckland sites, which remains unresolved.
• Changes are coming to the Container Checks Portal (CCP) in early 2024. Biosecurity NZ will be introducing a new version of the CCP, which is used for electronic submission of container inspection results by Accredited Persons. This change is part of a broader overhaul of internal border systems to upgrade technology and create a more stable platform for the future. The new version of CCP will require the use of RealMe for access, bringing it in line with other MPI systems for external stakeholders. The core functionality, including entering inspection details and managing Transitional Facilities, will remain the same. There will also be an option for larger Transitional Facilities to submit container checks directly from their in-house container record systems. Further information will be provided in the coming months.

In the world of shipping, the dynamics of the industry are always at the mercy of the fundamental principle of “supply and demand.” Over the past couple of years, the CN-NZ trade lane has witnessed significant shifts in market dynamics, presenting both challenges and opportunities for players in the industry. As we delve into the events of 2021 and 2022 and the developments of the first half of August 2023, we begin to understand the fascinating transformation of the freight market and its potential impact in the coming months.

Changing Market Conditions

In 2021 and 2022, new players, TSL and ZIM, joined the CN-NZ trade lane, operating weekly services from China and Hong Kong to New Zealand hubs. However, their market share remained relatively small, with TSL reducing its services to New Zealand and ZIM struggling with long transit times. Meanwhile, established shipping lines like COSCO, OOCL, ONE, CMA, MSK, and PIL were unpredictably canceling sailings based on market conditions, leading to a fluctuating freight market.

Market Reversal and Increased Demand

The beginning of August 2023 marked a turning point as the General Rate Increase (GRI) was successfully applied, leading to a notable increase in freight rates. Notably, COSCO, OOCL, MSK, and ONE canceled the JKN service, removing over 5000TEUS of space allocations from the market. Coupled with the movement of Christmas stock, the CN-NZ trade lane experienced heightened activity, unlike the subdued months of April to June.

Forecasts for the Second Half of August

Looking ahead to the second half of August, carriers forecast strong figures compared to the first half of the month. The demand for shipping services is anticipated to exceed available capacities, causing carriers to increase rates accordingly. This trend applies not only to the CN-NZ trade lane but also to other major trade lanes worldwide, including China to Australia, Europe, and the USA.

Import:

• In early 2024, Biosecurity New Zealand (Biosecurity NZ) will be launching a new version of the Container Checks Portal (CCP). This update is part of a comprehensive overhaul of the internal border systems aimed at upgrading the technology and establishing a more robust platform for the future.                                                                    The major change in this new version of CCP is the requirement for users to use RealMe for accessing the system. RealMe is an authentication service that provides secure access to various government online services. This change brings CCP in line with other MPI (Ministry for Primary Industries) systems available to external stakeholders.                                                                                                                                                                                                                                                                                       The major change in this new version of CCP is the requirement for users to use RealMe for accessing the system. RealMe is an authentication service that provides secure access to various government online services. This change brings CCP in line with other MPI (Ministry for Primary Industries) systems available to external stakeholders.                                                                                                                                                                                                                                                                                       While the basic functionality of the CCP will remain the same, there will be some changes to the system’s appearance and user interface. Biosecurity NZ will provide information about these changes as the launch date approaches.                                                                                                                                                                                  While the basic functionality of the CCP will remain the same, there will be some changes to the system’s appearance and user interface. Biosecurity NZ will provide information about these changes as the launch date approaches.                                                                                                                                                                        Biosecurity NZ is also working on implementing a feature that will allow larger Transitional Facilities to submit their container checks directly from their in-house container record systems.                                                                                                                                                                                                                                                  Biosecurity NZ is also working on implementing a feature that will allow larger Transitional Facilities to submit their container checks directly from their in-house container record systems.

• The ongoing remedial work being conducted on the Fergusson Terminal pad at the Ports of Auckland is resulting in delays for container vessels that operate there. These delays are primarily due to the reduced capacity caused by the ongoing maintenance activities taking place on the terminal pad. As a result, the terminal’s ability to handle incoming and outgoing container vessels is impacted, leading to extended wait times and potential scheduling adjustments for shipping operations. It’s advisable for stakeholders and those involved in shipping activities at the Ports of Auckland to stay updated on the situation and plan accordingly to mitigate any disruptions caused by these delays. 
• The issue of overall container depot capacity remains unresolved, particularly in the context of restricted dehire slots at various large sites in Auckland. “Dehire slots” refer to the time slots allocated for returning containers to depots after they have been emptied and their cargo has been unloaded.                                                               In this case, it seems that there are challenges related to the availability of these dehire slots at several major container depot sites in Auckland. This shortage of available slots can lead to delays and inefficiencies in the process of returning empty containers, which can have ripple effects on supply chain operations, container movement, and scheduling for various stakeholders, including shipping companies, logistics providers, and importers/exporters.                                                        Addressing this issue requires coordination and collaboration among different parties involved in the container logistics chain. Finding ways to optimize and increase the availability of dehire slots, expanding depot capacity, and implementing efficient scheduling and management systems are potential approaches that can help alleviate these challenges.                                                                                                                                                                                                                                                              Stakeholders should work together to identify long-term solutions to enhance container depot capacity and streamline the process of returning containers, thereby minimizing disruptions and improving the overall efficiency of container logistics in the Auckland area.
• It appears that there has been another increase in the VBS (Vehicle Booking System) booking cost at Metroport and certain container depots. This increase took effect in July. As a result of these rising costs, it’s regrettable to inform that the Container Booking Fee will need to be adjusted starting from the 1st of August.                                This adjustment in the Container Booking Fee is likely a response to the increased costs associated with the VBS booking system and other factors that impact the operations of the depots and facilities. The Container Booking Fee is being modified to reflect these changes in operational costs and to ensure that the services provided can be sustained effectively.                                                                                                                                                                                                                                    Such adjustments are not uncommon in industries that rely heavily on logistics, transportation, and infrastructure services. It’s important for stakeholders, including those involved in shipping, transportation, and logistics, to be aware of these changes and plan their operations and budgets accordingly to accommodate the updated fee structure. The key is to maintain open communication with relevant parties, stay informed about any changes, and adapt strategies as needed to ensure the continued smooth operation of supply chain activities while managing the impact of fee adjustments. 

Export: 

The ongoing move count restrictions are having an impact on the operations at the Lyttelton and Tauranga ports. These restrictions likely refer to limitations on the number of moves (loading/unloading of containers) that can be performed within a certain timeframe. As a result of these restrictions, there are several effects on port operations:

• • Late Changes to Port Rotations: The move count restrictions are likely causing delays and disruptions in the expected schedules of vessels and their rotations. Vessel rotations might need to be adjusted on short notice to accommodate the limitations on move counts, leading to potential delays in arrivals, departures, and overall port operations.
  • Late Changes to Port Rotations: The move count restrictions are likely causing delays and disruptions in the expected schedules of vessels and their rotations. Vessel rotations might need to be adjusted on short notice to accommodate the limitations on move counts, leading to potential delays in arrivals, departures, and overall port operations.
  • Late Changes to Port Rotations: The move count restrictions are likely causing delays and disruptions in the expected schedules of vessels and their rotations. Vessel rotations might need to be adjusted on short notice to accommodate the limitations on move counts, leading to potential delays in arrivals, departures, and overall port operations.
  • Late Changes to Port Rotations: The move count restrictions are likely causing delays and disruptions in the expected schedules of vessels and their rotations. Vessel rotations might need to be adjusted on short notice to accommodate the limitations on move counts, leading to potential delays in arrivals, departures, and overall port operations.
  • Communication and Adaptation: To navigate these challenges, open communication among all stakeholders is crucial. Importers, exporters, shipping lines, and logistics providers need to stay informed about the evolving situation and be prepared to adapt their plans as needed.

Overall, the move count restrictions are a reminder of the dynamic nature of the maritime logistics industry and the need for flexibility and contingency planning to manage unforeseen disruptions effectively.

Imports

1. New Zealand Food Safety Notices: In February, New Zealand Food Safety issued two new notices related to imported food. The “Food Notice: Requirements for Registered Importers and Imported Food for Sale” will replace the current “Food Notice: Importing Food” on 1 August 2023. These changes apply to all registered food importers. Since 2015, registered food importers have been responsible for conducting safety and suitability assessments before importing food, ensuring safe and suitable storage and transportation of food, maintaining traceable records, and having a recall plan in place for unsafe or unsuitable food.
2. Port Congestion: Auckland and Lyttelton ports are experiencing mini peaks of congestion, with vessel arrivals being erratic and not following the usual schedule. Other ports in New Zealand seem to be operating satisfactorily, but delays are occurring due to issues at offshore ports.
3. Container Depot Capacity: There is an ongoing problem with container depot capacity, particularly at several large sites in Auckland. Limited dehire slots are available, which is causing difficulties in managing container movements.
4. VBS Booking Cost Increase: The VBS (Vehicle Booking System) booking cost has increased this month at Metroport and some container depots. As a result, the Container Booking Fee will be adjusted to NZD145.00 per container from 1st August.

Exports

1. Lyttelton and Tauranga are major ports located in New Zealand. It appears that these ports have been facing move count restrictions, which means there are limitations on the number of ship movements or port calls they can accommodate within a specific timeframe.

   Move count restrictions can be imposed due to various reasons, such as limited port infrastructure, adverse weather conditions, or other operational constraints. When these restrictions are in place, shipping companies and vessel operators may face challenges in adhering to their regular port rotations and schedules. As a result, they may have to make last-minute changes to their planned routes, which could lead to delays or even omitting certain ports from their rotations altogether.

The container shipping industry has been experiencing a series of challenges and uncertainties in recent months. With rates hitting bottom levels and demand continuing to decline, market stability remains a topic of concern. In this blog post, we will delve into the latest developments, including fluctuating rates, regional shifts in trade, and the impact of technology on the forwarding industry.

Rate Fluctuations and Industry Challenges: After reaching the bottom level, market participants are cautiously optimistic about the stability of rates in the upcoming week. The FAK (Freight All Kinds) rate from NEA origins to AUEC is expected to increase to following the footsteps of COSCO and ANL’s finalized FAK rate adjustment. However, the FAK rate from SEA origins faces challenges due to poor liftings, resulting in its extension.

Competitiveness in SEA Origins: Despite the challenges faced by the SEA origins, PIL rates from this region have become increasingly competitive, both in terms of commodity and customer name. This development signifies the efforts made by PIL to stay competitive and maintain a strong market position.

Market Expansion and Carrier Preferences: The market to AUWC and New Zealand has been extended until the end of June, with most core carriers such as ONE, COSCO, Maersk, and ANL opting for this extension. However, these carriers are also favoring 40’HC containers due to a deficit of 20’gp containers and limited capacity.

Container Shipping’s Downward Correction: The month of June brings with it few surprises for the container shipping industry. Demand continues its downward correction trend, making May the ninth consecutive month of dropping rates. This decline, the largest recorded in real-time global rates developments, paints a bleak picture of the industry’s current state.

Regional Shifts and Chinese Port Congestion: FourKites, a logistics tracking platform, reports a 62% year-on-year decrease in congestion at Chinese ports, a significant contributing factor to last year’s high charter rates. Shippers have been exploring alternatives in South-east Asia, India, and Latin America while maintaining Chinese suppliers for local markets. This trend suggests a growing interest in diversifying supply chains to mitigate risks and reduce dependence on a single market.

The Rise and Challenges of Tech-led Forwarding: The recent demise of India’s digital forwarder, Freightwalla, highlights the challenges faced by the technology-driven forwarding industry. Both carriers and traditional forwarders have invested heavily in technology, including quote systems and visibility tools, to enhance their operations. However, staying ahead of the market in terms of technology remains a significant challenge for industry players.

Air Cargo’s Struggles: While the ocean market faces difficulties, the air cargo sector is also encountering severe challenges. Air freight is expected to hit rock bottom in the coming months due to a combination of excess summer capacity and weak cargo demand. This decline may result in air cargo being dismissed from client boardrooms, adding further strain to an already struggling industry.

Conclusion: The container shipping industry is navigating a period of uncertainty and challenges. With fluctuating rates, shifts in trade patterns, and the impact of technology, industry players must remain vigilant and adaptable. While the future may seem uncertain, strategic adjustments and a focus on innovation could pave the way for recovery and renewed growth in the shipping and logistics sector.

Positive Outlook and Increasing Rates: Despite some challenges, the market expects to remain positive in the upcoming week, particularly for liftings by 40′ and 20’GP containers in China. However, the deficit in container availability for Asia-Europe trade routes (FAK rate fm NEA origins to AUEC) is expected to drive an increase in rates. Major carriers have also announced Rate Restoration from NEA origins, accompanied by an increase in their Instant rate through e-commerce platforms.

Stable Market Conditions and Tightening Space: The market for Australia and New Zealand (AUWC and AUNZ) is anticipated to remain stable. However, space constraints are expected to tighten throughout June, indicating a potential challenge for shippers. Although carriers do not intend to increase FAK rates from Southeast Asia origins to AUNZ, they have reached a bottom level for some direct call ports.

Capacity, Demand, and Rate Pressure: The gap between capacity and demand remains a key concern, exerting pressure on rates. While a surge in ocean traffic is not imminent, the market continues to face uncertainties regarding its future development. The ample ocean capacity currently available has led shippers and logistics providers to postpone capacity commitments. This lack of visibility, combined with the possibility of disruptions, adds to the market’s vulnerability.

Uncertainties and Impact of Macroeconomic Trends: Recent macroeconomic trends have further contributed to the uncertainty in the shipping market. Initially, it appeared that interest rate hikes had temporarily ceased. However, recent warnings suggest the possibility of one or two increases later this year, potentially dampening demand. Expectations for a recovery in the second half of the year have weakened since the beginning of 2023. Nevertheless, the market retains a sense of optimism due to the anticipated launch of new products this year.

Delays and Challenges in Port Operations: Delays at the DP World Brisbane Terminal have been a recurring issue, causing significant disruptions for importers, customs brokers, and freight forwarders. The ongoing equipment issues have led to container detention problems. However, shipping lines are expected to show some leniency in such circumstances caused by their contracted stevedore. Coordination between all parties involved becomes crucial to minimize the impact of these delays.

Ro-Ro Market and Rising Demand: The roll-on/roll-off (ro-ro) market continues to experience a boom, with high demand and limited vessel space driving up rates. SAIC Anji, the logistics unit of China’s largest carmaker, has recently expanded its pure car and truck carrier (PCTC) orderbook, further indicating the growth of this sector. However, long-haul ro-ro schedules face multiple challenges, resulting in congestion and handling delays in ports across Europe, China, South Africa, the US, and Australia.

The shipping industry is a complex and dynamic sector that plays a vital role in global trade. As we assess the market forecast for the upcoming week, it is crucial to consider the current challenges faced by the industry, particularly in Australia and New Zealand. From fluctuating freight rates to capacity cuts, the shipping landscape has been significantly impacted by various factors, including the global macroeconomic climate and evolving outsourcing strategies. In this blog post, we will explore the present state of the shipping industry, discuss the concerns of freight forwarders, and highlight the potential opportunities that lie ahead.

Market Forecast: A Positive Outlook?

Despite the slow recovery of Australia’s East and West coast, the market forecast for the upcoming week remains positive. Freight All Kinds (FAK) rates from NEA origins to AUEC are expected to reach increase slightly from June 1st, thanks to the current upswing in liftings. However, it’s worth noting that the market conditions to AUWC and New Zealand are not as promising as those to AUEC. Consequently, carriers have been forced to drop FAK rates from SEA origins and significantly reduce rates from all origins to AUWC and New Zealand in June.

The Dance of Capacity Cuts and Plunging Rates

Shipping lines have resorted to a familiar strategy of artificially cutting capacity in an attempt to boost their plummeting rates. This approach, although frequently employed, has raised concerns within the industry. The global macroeconomic softness, coupled with China’s outsourcing strategy, suggests that despite some optimism for a bullish second half of 2023 in the sea freight industry, an overly positive scenario may be wishful thinking in a post-Covid world.

The Changing Dynamics: Freight Forwarders and Shipping Lines

Over the past two years, freight forwarders have expressed apprehension about the behavior of shipping lines, particularly regarding their treatment of smaller players in the industry. Disquiet arose when shipping lines reacted to escalating rates by disregarding existing contracts, a practice that many forwarders deemed unfair. However, the tables have turned, and the ocean carriers find themselves in need of forwarder loads once again. This shift in dynamics has given freight forwarders more clarity and leverage in their negotiations.

The Value of Forwarders in a Changing Landscape

To survive and thrive in the shipping industry, forwarders must adapt and provide value-added services beyond simply acting as intermediaries between buyers and sellers. Merely offering a buy and sell rate on ocean shipments may no longer suffice in the long run. Forwarders must focus on enhancing customer experience and providing specialized services that cater to the unique needs of their clients. These value-added services will be the key to future revenue growth for forwarders.

Navigating the Changing Seas: Challenges and Opportunities

The complexion of global trade has undergone significant adjustments, leading to sudden spikes in demand for supply chain managers. Shippers are increasingly relying on forwarders to help them navigate the challenges presented by the post-pandemic world and geopolitical issues. While the COVID-19 pandemic has undoubtedly been a catalyst for this surge in demand, it is the emergence from the crisis and the geopolitical shifts that have generated new shocks, forcing a reevaluation of existing strategies and approaches.

Conclusion

As we delve into the market forecast for the coming week, it is evident that the shipping industry is facing both challenges and opportunities. Fluctuating freight rates, capacity cuts, and evolving dynamics between freight forwarders and shipping lines have created a complex landscape. However, with forwarders focusing on value-added services and the increasing demand for supply chain managers, there is hope for navigating these turbulent seas. The road ahead may be uncertain, but with adaptability, innovation, and strategic collaborations,

Import Updates:

Export Updates:

• Changes to the Pacifica coastal service mean that there is no longer a direct service between Lyttelton and Tauranga. Export cargo that would have gone on this service will now be routed to Auckland, and then railed to Tauranga. Unfortunately, this will add seven days to the transit time.
• There are move count restrictions in both Lyttelton and Tauranga that are affecting the carrier’s ability to load export containers. As a result, some bookings are being declined due to these limitations. This could potentially cause delays or difficulties for exporters trying to ship their goods out of these ports.