Author: NZ Freight

China’s dominance in global supply chains has forced companies to adopt the China+1 approach, with Vietnam, the Philippines, and Malaysia emerging as the primary beneficiaries. However, this shift has created uncertainty in the shipping industry, with carriers pushing for index-linked contracts to protect themselves from volatile freight rates. This change has caused a delay in securing supply chains, with last-minute blanking of advertised sailings being the primary cause. While the schedules of vessels that do sail have become more resilient, shippers face the uncertainty of departures, resulting in a lot of paperwork changes until the cargo is onboard.

The maritime industry faces another challenge in the form of slow-moving regulations that have failed to keep pace with changes in the sector, particularly concerning the transport of electric vehicles (EVs) and lithium-ion (li-ion) batteries. Although the chemistry for li-ion batteries is evolving rapidly, updates to dangerous goods codes only take place every two years. The recent Amendment 42, which will require a “significant change” in the way shippers declare their cargo, has been long overdue. The amendment mandates shippers to declare dangerous goods, including li-ion batteries in EVs, in their cargo. Although Amendment 42 will be approved by the end of this year, it will not become finally mandatory until January 2026.

The slow pace of regulation highlights the need for urgent action to address the challenges posed by the increase in non-declared and mis-declared dangerous goods. While the amendment will reduce the amount of documentation required, it is essential to ensure that shippers declare all dangerous goods, including those in the miscellaneous section. The transport of li-ion batteries in EVs is an example of how the sector is evolving, and regulations must keep pace with these changes.

In conclusion, the China+1 approach has resulted in a shift in supply chains to countries like Vietnam, the Philippines, and Malaysia, but it has also created uncertainty in the shipping industry. While regulation in the sector is moving too slowly to keep up with the changes in the industry, Amendment 42 is a step in the right direction. However, urgent action is needed to ensure the safe transport of dangerous goods, including li-ion batteries in EVs. It is essential to ensure that regulations keep pace with the evolving sector to avoid any adverse effects on global supply chains.

Imports:

• Port of Tauranga and Auckland are reinstating berth windows for scheduled vessel calls, which is a positive response as schedule disruption has eased considerably on most routes worldwide.
• Auckland container depot congestion has eased over the past fortnight due to a softening of import container volumes, but underlying resourcing and capacity issues still exist. Local carriers are not yet achieving pre-pandemic service level agreements for dehire turnaround, but the average timespan to dehire from empty notification has improved.
• MPI applications take several days to be processed, and early clearance document submission is appreciated as it helps in spreading the load.
• Some MPI import health standards are being revised, affecting the imports of fish and wood products. Clarification on changes and any new documents required is being worked on, and affected customers will be contacted directly as more information becomes available.

Exports:

• Cargo moving north from the Hawke’s Bay region must transit via Fielding due to Cyclone Gabrielle, adding significant cost and impacting lead times to meet port deadlines.
• Limited freight convoys will have restricted access to State Highway 5 starting March 15th, but access is expected to be extended in the coming weeks.

The global pandemic has had a profound impact on the logistics industry, with ports and carriers worldwide struggling to keep up with the rapidly changing demand patterns. In New Zealand, this has translated into a range of challenges for both importers and exporters, from congestion at container depots to delays in clearance and processing. However, as we move into 2023, there are also signs of progress and opportunity, as we see the reinstatement of berth windows and some relief in congestion.

On the import side, the news from the Port of Tauranga and Auckland is positive, with both ports transitioning back to reinstating berth windows for scheduled vessel calls. This is an important development, as it provides more certainty for exporters and importers who rely on these ports for their business. While there are still underlying resourcing and capacity issues, the fact that schedule disruption has eased considerably on most routes worldwide is a welcome sign of progress.

However, there are still challenges to be addressed, particularly in terms of congestion at container depots. While there has been some relief in Auckland over the past fortnight, this has been partially due to a softening of import container volumes. The underlying resourcing and capacity issues are still in evidence, and local carriers are not yet able to achieve pre-pandemic SLAs for dehire turnaround. Nonetheless, the average timespan to dehire from empty notification has improved, and this is a positive step forward.

Another ongoing challenge for importers is the processing of MPI applications. We continue to see delays of several days, and it is important for all parties to work together to streamline this process. Importers who are able to get clearance documents to their logistics providers early can help to spread the load and ensure smoother processing times.

On the export side, the impact of Cyclone Gabrielle has been significant, with cargo moving north from the Hawke’s Bay region now required to transit via Fielding. This has added significant cost and impacted lead times to meet port deadlines. However, there is some hope on the horizon, as State Highway 5 is set to open to limited freight convoys from March 15th. While there is restricted access to this route, it is expected that access will be extended in the coming weeks, which could help to alleviate some of the pressure on exporters.

In addition to these challenges, there are also ongoing revisions to MPI import health standards, particularly in relation to fish and wood products. We are working closely with MPI to get clarification on changes and any new documents required, and will communicate directly with affected customers as more information becomes available.

Overall, the logistics industry in New Zealand continues to face a range of challenges and opportunities in the wake of the pandemic. While there are ongoing issues with congestion, delays, and processing, there are also signs of progress and improvement, particularly in the reinstatement of berth windows and the opening of State Highway 5. By working together and continuing to adapt to changing circumstances, we can ensure a more stable and reliable logistics network for all parties involved.

Imports:

• Cyclone Gabrielle has caused widespread disruption to air and sea freight operations, including Auckland airport, Auckland port, Port of Tauranga, Napier, container yards, freight facilities, rail, road carriers, and interisland ferries.
• Port of Tauranga is experiencing heavy vessel congestion, leading to a spike in last-minute vessel diversions, delays at anchorage before being allocated a berth, and delays in general. Expect delays.
• Napier Port sites will remain closed until midday on Thursday, 16th February.
• Auckland container depot congestion is causing delays in the rotation of mainly import containers. The main centers, especially Auckland, are operating at an overcapacity level, and depots have either shut altogether for lengthy periods or greatly restricted the number of acceptance bookings issued. Trucking companies are uplifting empty containers from importers’ premises and then hubbing the containers called in until they can obtain an active acceptance with a matching booking, many days later. The backlog of hubbed containers waiting to be dehired is significant.
• While international freight rates have largely progressively reduced, the long-term lack of investment in infrastructure and human resourcing in New Zealand will continue to be a major impediment to the efficient port, rail, landside movement of freight locally.

Exports:

• Tappers has implemented a new procedure that requires shippers/exporters to clearly label all cargo on all four sides and attach a copy of the Booking Confirmation to the outside of the cargo for delivery to avoid the potential of mislabeling and/or receiving the incorrect freight. Failure to comply with these requirements will result in the cargo being rejected.
• Cyclone Gabrielle has caused havoc with road, port, and container depot closures across the North Island.
• Congestion at the Port of Tauranga had worsened prior to the cyclone, with wait times of 14 days. Wait times are expected to escalate to 16-17 days, and carriers are diverting vessels from Tauranga or omitting. There will be disruption for all services in the coming weeks. Departure and close off dates are changing quickly, so it is essential to monitor Port websites closely and aim to have containers on port at the first opportunity.
• Equipment shortages continue for Hapag Lloyd, ANL, & CMA CGM & Maersk, and Nelson, Port Chalmers, and Napier are the most impacted.

The COVID-19 pandemic has had a major impact on global supply chains, leading companies to adopt a “China Plus One” strategy that diversifies their operations outside of China to anticipate future volatility. Countries such as Thailand and India are seeing an influx of companies establishing regional manufacturing hubs to ease their dependence on a single supply chain. This shift in logistics design from just-in-time to just-in-case strategies helps maintain inventories and supply lines, however, 90% of respondents still report higher logistics costs than in 2020.

Despite the current market forecast not being as favorable as the previous month due to inflation in Australia, carriers do not intend to pull capacity out and rates are expected to remain at their bottom level until the beginning of Q2.

The return to “supply chain normalization” has resulted in an estimated surplus of 5 million TEU of containers for the container liner industry, causing equipment storage costs to soar as freight revenues plummet. The surplus of containers has caused the cost of a new standard 40ft high-cube container made in China to decrease from $6,500 at the peak of demand to less than $3,000.

In conclusion, the COVID-19 pandemic has brought attention to the importance of diversifying supply chains and reducing dependence on a single source. While the return to normalization has caused some challenges for the container liner industry, it highlights the need for companies to continue finding ways to streamline and optimize their supply chain operations.

The world of international trade is constantly evolving, and India has emerged as a major player in recent years. With the fastest growing major economy in the world, India is experiencing increased trade activity and a rising demand for large boxships to transport its exports. In 2022, the nation managed to beat its government’s export target of $400 billion with $422 billion in exports. The share of machinery and electricals in India’s exports has overtaken the legacy textiles and apparel sectors, further solidifying its place in the global market.

S&P Global Market Intelligence predicts that India’s trade economy will experience rapid growth in 2023, thanks to the country’s diversification of its manufacturing base and the active use of trade policy measures under the ‘Make in India’ program. The recent construction of the Galathea Bay Transshipment Port is expected to save Indian ports $200m to $220m a year on transshipment cargo and create an opportunity for India to become a major hub in the industry. The terminal is expected to be completed by 2028 and will attract Indian and regional transshipment traffic, reducing logistics inefficiencies and risks to the country’s export competitiveness.

Ocean carriers are also recognizing the growth potential in India, as they pull capacity from Chinese export routes and redirect their ships to more robust tradelanes with growth potential, including Middle East and India-related services. The shift in capacity has seen a boost of 320,600 TEU or 11% of the fleet capacity in these regions.

In addition to the physical infrastructure, digital solutions are also gaining ground in India’s ports. The Nhava Sheva Port is using a tech-enabled imaging system to significantly reduce cargo dwell times for import loads. This high-speed container scanner has a throughput capacity of 100 containers an hour and has been introduced after trial runs. CMA CGM has also adopted a “digital forwarding system” across major depots in northern India, improving turnaround times for rail-related documentation and reducing the need for paper-based processes.

In conclusion, India is making significant strides in the global trade market and is poised for even greater growth in the coming years. Its investments in both physical infrastructure and digital solutions make it a key player in the industry and a destination for businesses looking to tap into the growth potential of the region.

New Zealand’s import and export industry is facing several challenges that are impacting delivery schedules and causing delays. With immediate weather events having a significant impact on rail and linehaul, it is becoming increasingly difficult for the country to handle its import and export cargo. In this blog post, we will take a closer look at the challenges facing New Zealand’s import and export industry and what shippers and exporters can expect in the coming months.

Imports

Auckland container depot congestion continues to be a major problem for the country’s import industry. With capacity in the main centres, especially Auckland, operating at an overcapacity level, it is becoming increasingly difficult to handle the volume of empty containers. Key depots have shut down or restricted the number of acceptance bookings issued, which has resulted in a backlog of hubbed containers waiting to be dehired.

The ongoing resourcing issue in the New Zealand supply chain, driven by a long-term lack of skilled and semi-skilled labour, is also impacting the ports, warehousing, and trucking companies’ ability to cope with existing volumes. The recent resurgence of Covid-19 and sick leave is only adding to the problem.

VBS (container booking) charges are set to increase again in February, and NZ Customs has announced that it will no longer allow goods under $25.00 to be grouped under the “parts” heading for shipments without individual classification. This will result in additional detail lines for some importers of equipment parts.

Exports

Congestion at the Port of Tauranga continues, although there has been some slight easing. Vessel arrival and close-off dates are constantly changing, so it is crucial to monitor the Port of Tauranga’s website closely and aim to have your containers on port at the first opportunity.

Equipment shortages continue to be a problem for several shipping lines, including Hapag Lloyd, ANL, CMA CGM, Maersk, Nelson, Port Chalmers, and Napier.

In conclusion, the import and export industry in New Zealand is facing several challenges that are impacting delivery schedules and causing delays. Shippers and exporters should be aware of the issues and plan accordingly to avoid potential delays and disruptions.