The FTA has released its latest COVID-19 update, looking at the measures implemented by the government, their effectiveness and predicting that ‘normal’ is still a very long way off. They also explore the COVID-19 cases in China as well as the latest Shipping and airfreight updates. The full article is below:
We are into the second part of the year and a new financial cycle. Finances, be they personal or business, will be on everyone’s mind as we approach September 30 and the possible removal of Jobkeeper, along with other financial support schemes. Many in our industry have managed to continue trading through the last few months with both support from Federal & State governments, as well as cooperation from staff in managing hours and wages. However, if the financial support through Jobkeeper is removed many businesses will need to reassess how they move forward given that airfreight trade is not likely to return to “normal” till well into 2021 and ongoing outbreaks in China and other countries are placing uncertainty across all trading patterns.
China – Update
Our sources from China have provided us with the following updates:
- As at July 1, 2020 China had 531 confirmed cases with 326 cases happening in Beijing. However, the Beijing breakout is slowing down as cases are now less than ten per day since June 25…
- As reported in the Xinhua Press, on June 24, Chinese authorities have approved a new COVID-19 vaccine candidate for human trials, as per the statement from the Institute of Microbiology under the Chinese Academy of Sciences.
- China’s Ministry of Finance and the Ministry of Transport jointly issued preferential policies on June 24 to help enterprises tide over difficulties and advance the development of foreign trade. The extension of fee cuts and exemptions for import and export enterprises have been announced, including waiving port construction fees levied on importers and exporters and halving oil-pollution damage compensation for ships, to be extended to Dec 31, 2020.
- The National Development and Reform Commission has announced a decision that is trying to reduce business costs and stabilise the job market. The policy includes extending the cutting of electricity prices by 5 percent until year-end.
Whilst you will note in our commentary below under airfreight that prices are starting to stabilise in that field, one cannot say the same for the sea freight arena. We have seen globally, as well as on Australian trade lanes, increases in terminal handling charges, price stabilisation increases and General Rate Increases (GRIs). These will be the way of the future as shipping lines manage available capacity and prices to ensure their continued operation out of the pandemic.
Whilst these factors need to be managed by importers/exporters and freight forwarders in their contract negotiations local Australian charges, eg; Infrastructure Charges / Terminal Access charges are being levied on transport operators who have no power to negotiate and need to pay or not be serviced.
Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) are continuing their efforts for these costs to be regulated and applied to the clients of the stevedores, the shipping lines. With tacit approval from the Queensland and Western Australian governments for a national solution, FTA / APSA is in the final stages of discussion with the office of the Deputy Prime Minister to address these concerns on behalf of the industry. These costs, estimated to be $300 million plus in the 2019 calendar year need to be addressed to enable both Australian exporters and importers to be competitive in their respective markets.
Port Authority of New South Wales
Effective last Friday, June 26, the Port Authority of New South Wales has scrapped its restrictions on vessels arriving from Iran, Italy, China or South Korea. This now means all mainland capital city container ports no longer enforce the 14-day sailing requirement from overseas ports. Please note that adherence to pre-arrival quarantine and Department of Health requirements are still necessary and appropriate actions will be taken where health issues are raised.
“US markets continued to post small gains, despite continued hot-spots in virus cases across the Southern and Western States, in the USA. Pfizer announced progress on their vaccine, which served to counter the negative virus narrative.”
“The virus remains a ‘known risk’, but the Geo-Political risks to trade, remain. China has acted extremely aggressively and there will be consequences, but whether they impact the existing supply chain, will be key to the commodity-based currencies.”
The IFAM scheme is continuing to provide air freight services for exporters to access global markets. The web page is updated regularly and provides the latest flight options. The FTA COVID- 19 Air Cargo bulletin board also is a great site to advertise your space availability or needs, again this page is updated as more flights become available.
In discussions with industry participants, it appears air freight rates are starting to stabilise as more flights become available. Mention in news reports that international flights are being diverted from Melbourne airport is affecting only passenger flights. Pure cargo flights are still able to land at Tullamarine.
ACF is updating you on all customs and forwarding news, in Australia and across the world. Keep checking in regularly for the latest news and updates.