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The ongoing move count restrictions at Lyttelton and Tauranga ports are having notable effects on port operations and shipping schedules. Here are some key points to consider:

• Move Count Restrictions:
  • Move count restrictions typically refer to limitations on the number of container movements or handling operations at a port within a specific timeframe. These restrictions can be imposed due to various factors, including infrastructure constraints, labor issues, or operational challenges.
• Impact on Port Rotations:
  • The move count restrictions are causing late changes to port rotations. Shipping lines and logistics providers may need to adjust their planned routes and schedules to accommodate the restrictions. This can lead to increased uncertainty and challenges in coordinating shipments.
• Port Omissions:
  • The move count restrictions are resulting in some port omissions, meaning that certain vessels may need to skip or bypass scheduled stops at Lyttelton and Tauranga ports. This can disrupt the regular flow of cargo and may lead to delays in cargo delivery.
• Supply Chain Disruptions:
  • Late changes to port rotations and port omissions can create disruptions in the supply chain. Importers and exporters may face challenges in ensuring the timely movement of goods, potentially impacting production schedules and inventory management.
• Operational Planning Challenges:
  • The restrictions necessitate careful operational planning by shipping lines, port authorities, and logistics providers. Efficient coordination and communication are crucial to adapt to the dynamic situation and minimize the impact on the overall logistics network.
• Customer Communication:
  • Effective communication with customers, including importers, exporters, and other stakeholders, becomes essential during such disruptions. Transparent communication about changes in schedules and potential delays allows for better planning and management of expectations.
• Collaboration Among Stakeholders:
  • Collaboration among port authorities, shipping lines, and other stakeholders is vital to address and mitigate the impact of move count restrictions. Finding collaborative solutions to optimize port operations and enhance efficiency is crucial in overcoming these challenges.
• Monitoring and Adaptation:
  • Given the dynamic nature of the situation, continuous monitoring and adaptation to changing conditions are necessary. Stakeholders in the supply chain should remain vigilant to updates from port authorities and adjust their strategies accordingly.

In summary, the move count restrictions at Lyttelton and Tauranga ports are contributing to changes in port rotations and omissions, with potential implications for the broader supply chain. Stakeholders must collaborate, communicate effectively, and implement adaptive strategies to navigate these challenges and minimize disruptions.

The recent increase in the cost of Vehicle Booking System (VBS) slots at the Port of Auckland, coupled with the decision by Metroport and several empty depots to follow suit, indicates a notable shift in pricing dynamics within the logistics and port operations. Here are some key considerations regarding this development:

• Cost Impact on Shippers:
  • The rise in VBS slot costs directly affects shippers and logistics providers who utilize these services. Increased costs can contribute to higher overall transportation expenses, potentially impacting profit margins for businesses involved in importing and exporting goods.
• Supply Chain Cost Considerations:
  • Businesses operating within the supply chain will need to reassess their cost structures and factor in the increased expenses associated with VBS slots. This may necessitate adjustments to pricing models and financial planning.
• Collaborative Decision-Making:
  • The synchronized increase in VBS costs by both the Port of Auckland and other depots suggests a coordinated or interconnected decision-making process within the local logistics ecosystem. Stakeholders may be responding to shared challenges or cost pressures.
• Communication Challenges:
  • Changes in costs, especially when implemented simultaneously by multiple entities, can pose communication challenges. Shippers and logistics companies may need to adapt quickly to the new pricing environment and ensure clear communication with their clients and partners.
• Potential Industry Trends:
  • The decision by multiple entities to increase VBS costs might indicate broader industry trends or challenges. It could be reflective of rising operational costs, the need for infrastructure investment, or other factors influencing pricing decisions in the logistics sector.
• Impact on Port Competitiveness:
  • Increases in costs, if not justified by corresponding improvements in services or infrastructure, could potentially impact the competitiveness of the Port of Auckland and associated depots. Ports and logistics hubs often compete for business based on efficiency and cost-effectiveness.
• Regulatory and Stakeholder Oversight:
  • Given the critical role of ports and logistics in facilitating trade, regulatory bodies and stakeholders may closely monitor such pricing decisions to ensure they are fair, transparent, and do not unduly burden businesses or consumers.

In summary, the simultaneous increase in VBS costs by the Port of Auckland, Metroport, and other depots suggests a significant development in the local logistics landscape. Businesses should carefully evaluate the impact on their operations and engage with stakeholders to navigate these changes effectively. Additionally, ongoing monitoring of industry trends and regulatory developments will be crucial in adapting to the evolving logistics environment.

The persisting issue of overall container depot capacity, despite lower overall volumes, presents a set of challenges for the logistics and shipping industry in the Auckland region. Here are some key points to consider:

• Capacity Challenges:
  • Despite a decrease in overall container volumes, the container depot capacity remains insufficient. This could be due to various factors such as infrastructure limitations, operational constraints, or increased demand during peak periods.
• Restricted Dehire Slots:
  • The mention of restricted dehire slots at several large Auckland sites indicates limitations on the availability of spaces for returning empty containers. This restriction can lead to delays in the container return process, affecting the overall efficiency of the supply chain.
• Operational Delays:
  • With restricted dehire slots, delays in the return and retrieval of containers are likely to occur. This, in turn, can disrupt the smooth flow of goods through the supply chain, impacting the timely delivery and dispatch of shipments.
• Impact on Businesses:
  • Businesses relying on the efficient movement of goods may face challenges in meeting deadlines and maintaining optimal inventory levels. This can have financial implications and affect customer satisfaction.
• Need for Resolution:
  • The unresolved nature of the container depot capacity issue suggests that a comprehensive solution has not been identified or implemented. It is crucial for stakeholders, including port authorities, logistics companies, and relevant authorities, to work collaboratively to address and resolve these capacity challenges.
• Collaboration and Planning:
  • Collaboration among stakeholders is essential for effective planning and resource allocation. This may involve investing in infrastructure improvements, optimizing operational processes, and implementing strategies to enhance overall container depot efficiency.
• Risk Mitigation:
  • Businesses operating in the region should consider implementing risk mitigation strategies, such as diversifying transportation routes or maintaining higher safety stock levels, to buffer against potential disruptions caused by capacity issues.

Addressing the container depot capacity challenges requires a holistic approach involving coordination, investment, and strategic planning. Stakeholders should engage in ongoing dialogue to find sustainable solutions that support the smooth functioning of the logistics and supply chain ecosystem in the Auckland region.

The deepening industrial action by DP World in Australian ports, particularly in Sydney, is likely to have wide-reaching consequences for vessel arrivals at New Zealand ports. Industrial actions, such as strikes or work stoppages, can disrupt the normal flow of operations at ports, affecting the loading and unloading of cargo containers from ships.

Here are some potential impacts:

• Vessel Delays: The ongoing industrial action is expected to cause delays in the arrival of vessels at New Zealand ports. This delay can lead to a backlog of shipments, affecting the timely delivery of goods and potentially disrupting supply chains.
• Supply Chain Disruptions: The disruption in vessel arrivals can have a domino effect on the entire supply chain. Importers and exporters may experience delays in receiving or sending out goods, impacting production schedules and inventory levels.
• Increased Costs: Delays and disruptions often result in increased costs for businesses. Additional expenses may be incurred due to storage fees, expedited shipping charges, or penalties for not meeting contractual obligations.
• Uncertainty for Businesses: The uncertainty created by the ongoing industrial action can make it challenging for businesses to plan and execute their logistics operations effectively. It may lead to a reevaluation of supply chain strategies to mitigate risks associated with such disruptions.
• Negotiation Challenges: The deepening of the industrial action suggests a prolonged dispute between DP World and the workforce. Prolonged disputes can be challenging to resolve, and ongoing negotiations may further complicate the situation.

Stakeholders, including businesses relying on maritime transportation, logistics companies, and government authorities, will need to closely monitor the situation and take proactive measures to minimize the impact of the industrial action on their operations. This may involve contingency planning, alternative transportation routes, and open communication with all parties involved in the supply chain.

Several changes to the Ports of Auckland tariff costs effective January 1, 2024. Here’s a breakdown of the key points you mentioned:

General Rate Increase (GRI):

• A general tariff GRI of 7.7% will apply. This means that across-the-board, there will be a 7.7% increase in the tariff costs.

Peak Season Cost for VBS Container Booking:

• The cost per VBS (Vehicle Booking System) container booking during peak seasons will increase substantially. This increase is likely intended to encourage more after-hours and weekend VBS bookings.

Additional Base Cost for DG Containers:

• There will be a new base cost of $60 added for every DG (Dangerous Goods) container that moves via the Port of Auckland. This suggests an additional charge specifically for containers carrying dangerous goods.

Charge for Containers Moved via Rail:

• There will be a charge for every container moved via rail through the Port of Auckland. This implies that using rail services for transportation will incur an additional cost.

It’s important for businesses and stakeholders involved in shipping and logistics through the Ports of Auckland to be aware of these changes and plan accordingly. These adjustments may have implications on overall transportation costs and logistics strategies. It would be advisable to review the detailed tariff schedule and communicate with relevant authorities or shipping agents for further clarification and to understand the specific impact on individual shipments or operations.

The escalating attacks on shipping in the Red Sea, particularly the recent incidents involving Houthi rebels from Yemen targeting vessels, have significant implications for the global shipping industry and supply chains.

Suspension of Shipping Services: Major shipping companies, including Maersk, MSC, CMA-CGM, and Hapag-Lloyd, have suspended all journeys through the Red Sea and Suez Canal in response to the attacks by Houthi rebels.

Reasons for Attacks: The attacks by the Houthi rebels are seen as a response to the conflict in Gaza. The Red Sea and Suez Canal serve as crucial routes for East-West trade, especially for oil shipments. The attacks aim to disrupt this trade route, causing delays and economic impact.

Impact on Shipping Prices: A supply chain expert suggests that if these shipping attacks escalate, it is likely to lead to an increase in shipping prices. The disruption to major trade routes can result in higher costs for shipping companies, which may be passed on to consumers.

Global Delays: The suspension of shipping services through the Red Sea and Suez Canal can cause major delays worldwide. The Suez Canal is a key artery for international trade, and any disruption can have cascading effects on global supply chains.

War Risk Insurance Premiums: The attacks have led to a rise in war risk insurance premiums. Shipping companies are likely to face increased insurance costs due to the heightened risks associated with navigating through conflict-prone areas.

Vessel Attacks: Specific incidents mentioned include the attack on the Liberian-flagged MSC Palatium III with a drone and the attack on Hapag Lloyd’s Al Jasrah with a missile. While there were no reported injuries in the MSC Palatium III incident, the vessel suffered fire damage and was taken out of service.

Response of Shipping Companies: Companies like Maersk have responded by instructing their vessels in the area to pause their journeys until further notice. The safety of crews and vessels is a top priority in light of the increased security risks.

Historical Reference to Suez Canal Blockage: The mention of the Ever Given container ship getting stuck in the Suez Canal in 2021 serves as a historical reference to the significant disruptions caused by such incidents. The blockage of the canal had far-reaching consequences on global logistics and supply chains.

Potential Ripple Effects: The expert mentions potential disruptions in ports like Singapore and Hamburg, which have significant Red Sea traffic. The pause in shipping trips through the Suez Canal can have ripple effects, causing delays and challenges in various parts of the world.

In summary, the attacks on shipping in the Red Sea are a cause for concern, with potential ramifications for global trade, shipping costs, and supply chain disruptions. The situation underscores the vulnerability of key maritime routes to geopolitical tensions and conflicts.

The oversupply of vessels in the container shipping industry in 2024 is expected to lead to various strategies by container lines to minimize losses. Philip Damas, managing director of Drewry Shipping Consultants, outlined several methods that container lines may employ:

Blank Sailings: Container lines are likely to implement more blank sailings, where scheduled voyages are canceled to match supply with demand.

Industrial Use of Cancelled Sailings: There might be an industrial use of cancelled sailings, reducing the predictability of container ship departures.

Reductions in Ship Speed: Container lines may further reduce the speed of ships to optimize fuel consumption and operational costs.

Scrapping of Older Ships: The scrapping of the slowest and oldest ships is a possibility, resulting in longer transit times for shippers.

Suspensions or Cancellations of Services: Container lines may consider suspending or canceling entire services or loops to address oversupply.

Despite these measures, Damas predicts that the oversupply will lead to a collective loss of around US$15 billion for container lines in 2024, following an estimated collective profit of US$20 billion in the current year.

The approach that individual container lines take in managing the supply will depend on their priorities, whether it is protecting market share or the bottom line. Damas suggests that some container lines may sacrifice cargo volumes and market share to maintain profitability.

For shippers, Damas advises that the next year will be an ocean freight buyer’s market. While significant rate cuts may be possible, he warns that there will be a trade-off, with service reliability and levels likely to worsen.

Shippers renegotiating ocean freight contracts are urged to seek efficiencies and savings beyond freight rate reductions. This includes examining surcharges, reducing detention and demurrage costs, and carefully considering contract terms, especially related to “free time.”

Additionally, Damas highlights the introduction of new EU Emission Trading System (ETS) surcharges in 2024. The lack of transparency on how these surcharges will be passed on and negotiated is a concern, and shippers are advised to seek clarity and evidence about the justification of these charges.

In conclusion, shippers are encouraged to negotiate not only freight rates but also to scrutinize and understand all associated costs and surcharges, as well as prepare for potential challenges related to ETS surcharges in the coming years.

New Zealand Customs’ 2023 Time Release Study. It’s evident that the customs service is dedicated to optimizing its processes to facilitate fast and effective international trade.

Time Release Study (TRS): The TRS methodology, as established by the World Customs Organization, serves as a valuable tool for assessing customs performance in clearing cargo. By measuring various events and procedures from arrival to release, customs can identify areas for improvement and enhance overall efficiency.

Supply Chain Dynamics: Recognizing that customs is just one component of the broader supply chain, New Zealand Customs acknowledges the interconnected nature of international trade. Efforts to streamline customs clearance contribute to ensuring that trade flows smoothly across borders.

Baseline Indicators: The TRS allows customs authorities to establish baseline indicators, assess their effectiveness, and track improvements over time. This data-driven approach is crucial for identifying successful practices and implementing changes that support economic growth.

Comprehensive Studies: The 2023 TRS is the fourth comprehensive study conducted by the New Zealand Customs Service. The previous studies in 2009 and 2022 provided benchmarks for assessing the effectiveness of customs clearance processes over the years.

Scope of the Study: The study focused on international cargo vessels and flights during a specific week in 2023. Data from a substantial number of import and export entries, involving both sea and air cargo, were analyzed. Collaboration with industry partners, including port and air freight companies, ensured a holistic assessment.

Efficient Clearance: Notably, the key results highlight the efficiency of customs clearance when entries are correctly reported. Import entries that are accurately reported are cleared quickly and, on average, before the arrival of the cargo vessel. Similarly, export entries that are correctly reported are cleared in advance of loading for export.

High Clearance Rates: An impressive statistic is that 98.82% of import and export entries for air and sea cargo were cleared within five minutes of lodgement. This rapid clearance rate underscores the effectiveness of customs processes, particularly when accurate reporting is ensured.

Accuracy is Key: The study emphasizes the importance of accurate reporting. When items are reported accurately, customs clearance can occur within a matter of seconds, further expediting the movement of goods across borders.

In summary, New Zealand Customs’ commitment to continuous improvement and data-driven decision-making is evident in the positive outcomes of the 2023 Time Release Study. The emphasis on accuracy, collaboration with industry partners, and high clearance rates contribute to a more efficient and responsive customs clearance process, ultimately supporting the facilitation of international trade.

 

Air Cargo

The additional information provides a more detailed picture of the efficiency of New Zealand Customs in handling air cargo.

Export Entry Efficiency: An impressive statistic is that 100% of export entries for air cargo were cleared before the departure time of the aircraft. This indicates a high level of efficiency in processing export documentation, ensuring that goods are ready for departure without delays.

Import Entry Efficiency: For import entries for air cargo, 78.3% were lodged and released by Customs before the arrival of the cargo into New Zealand. This indicates a proactive approach by Customs in processing import documentation ahead of the physical arrival of the goods.

Lead Time for Import Entries: On average, import entries for air cargo were lodged and released by Customs 16 hours and 47 minutes before the arrival of the aircraft. This reflects the relatively short flight times from overseas departure points to the landing of the aircraft in New Zealand. The advanced processing of import entries contributes to a smoother and faster clearance process upon arrival.

Efficiency Considerations: The shorter flight times play a significant role in the overall efficiency of air cargo clearance. With a shorter window between departure and arrival, customs processes need to be well-optimized to ensure that cargo is cleared promptly upon landing.

Proactive Customs Practices: The high percentage of import entries lodged and released before arrival indicates a proactive approach by New Zealand Customs. This approach helps in minimizing potential bottlenecks at the point of arrival, contributing to a faster and more streamlined customs clearance process.

Overall, these statistics underscore New Zealand Customs’ commitment to efficiency and timeliness, particularly in the context of air cargo. The advanced processing of import and export entries reflects a well-organized and responsive customs system, aligning with the goal of making international trade fast and effective.

 

Sea Cargo

The additional information provides further insights into the efficiency and performance of New Zealand Customs in clearing cargo, particularly in the context of sea cargo and the overall processing timeframe.

Efficiency in Sea Cargo Import Entries for FCLs:

• A significant 93.9% of sea cargo import entries for Full Container Loads (FCLs) were lodged and cleared by Customs before the arrival of the cargo into New Zealand. This indicates a high level of efficiency in processing sea cargo documentation in advance.

Advance Lodgement for Sea Cargo Export Entries:

• For sea cargo export entries involving FCLs, 87.7% were lodged at least 48 hours before loading on the vessel for export. This advance lodging contributes to the smooth movement of goods and ensures that export entries are processed well ahead of the vessel’s departure.

Performance Measures and Targets:

• In the 2022/23 reporting period, New Zealand Customs aimed to process 98% of trade transactions within 30 minutes. Due to improved timeliness, this target was exceeded, and the specified timeframe for the 2023/24 period has been further reduced to 5 minutes. This highlights the commitment to continuous improvement and efficiency in customs processing.

High Clearance Rates:

• During the study, an impressive 98.82% of all import and export entries lodged were cleared within 5 minutes. This high clearance rate demonstrates the effectiveness of Customs’ processes and their ability to facilitate the clearance of cargo promptly.

Processes in Place:

• The success in cargo clearance is attributed to various processes in place, including electronic reporting, business rules, risk management, alert systems, deferred payment schemes, post-entry auditing capability, and ongoing engagement with the importing and exporting industry at all levels in Customs.

Future Time Release Studies:

• Customs plans to conduct Time Release Studies every two years, with the next one scheduled for 2025. This commitment to regular assessments ensures a continuous focus on improvement and collaboration with port and cargo operators.

Overall, the information indicates that New Zealand Customs has implemented effective processes, embraced technology, and engaged with industry stakeholders to create an efficient and responsive customs clearance system. The commitment to regular assessments through Time Release Studies reflects a proactive approach to maintaining and enhancing the efficiency of cargo clearance processes.

Biosecurity New Zealand is taking proactive measures to enhance arrivals processing and ensure the effective management of biosecurity risks. The introduction of hosts wearing ‘Biosecurity New Zealand host’ t-shirts to guide travellers is a positive step toward improving the overall experience for visitors while maintaining biosecurity standards.

The implementation of new systems, such as biosecurity express lanes for low-risk passengers, not only streamlines processing but also recognizes the importance of differentiating between passenger risk levels. This approach can contribute to a more efficient use of resources while maintaining the necessary scrutiny on potential threats.

The emphasis on protecting New Zealand from biosecurity threats, including pests and diseases that could impact the economy and environment, is crucial. It’s good to see that the focus extends beyond security to educating and guiding travelers on how to navigate the biosecurity system effectively.

The success of the biosecurity system is evident in the significant number of risk items seized and appropriately dealt with by officers in the past three months. The combination of fines, destruction of risk items, and the overall number of interventions reflects the effectiveness of the measures in place.

Encouraging travelers to be patient, travel light, and follow guidelines for declaration and disposal of risk items is essential for fostering cooperation. The call for accurate digital declarations, the declaration of risk items, and proper disposal procedures underscores the shared responsibility of both Biosecurity New Zealand and travelers in safeguarding the country’s primary sector exports.

Overall, this proactive and comprehensive approach to biosecurity measures during the surge in summer travelers is commendable and serves as a model for other regions facing similar challenges. It highlights the importance of balancing security with a positive and informative traveler experience.

The OECD’s latest economic outlook paints a mixed picture for the global and New Zealand economies.

 

Global Economic Outlook:

Slow Global Economy: The OECD forecasts a slow global economy in 2024. Despite a projected slowdown, there is an expectation that it will avoid a “hard landing.”

Global Growth Projection: The global growth is expected to be 2.9 percent in 2023, slowing to 2.7 percent in 2024, with a slight improvement to 3.0 percent in 2025.

 

New Zealand Economic Outlook:

Below Potential Growth: In contrast to the global outlook, the forecast for New Zealand is less optimistic. The OECD projects the New Zealand economy to grow by just 1.3 percent in 2024 and 1.9 percent in 2025.

Comparison with Potential Growth: The projected growth for New Zealand is substantially less than its potential economic growth rate, which was assessed to be 2.9 percent during the same period according to Treasury’s Pre-election Economic and Fiscal Update 2023.

 

Monetary Policy in New Zealand:

Cash Rate Decision: The Reserve Bank’s Monetary Policy Committee held the cash rate steady at 5.5 percent.

Factors Impacting Decision: The committee highlighted that demand growth had not eased as much as anticipated in the first half of 2023, partly due to stronger-than-expected population growth. While this eased supply constraints, there is a concern that it might increase the risk of inflation remaining above the target.

Potential for Rate Increase: If inflationary pressures were to be stronger than anticipated, the committee noted that there might be a need for an increase in the cash rate.

 

Overall Implications:

The global economic slowdown and New Zealand’s economic performance below its potential growth rate pose challenges. The monetary policy decisions, including the potential need for an interest rate increase in response to inflationary pressures, reflect efforts to balance economic stability.