August Connected

16th August, 2023

SCC staff paving way to greater efficiencies
The SCC team has recently concluded an extensive span of internal systems training spanning several days. Leveraging the cutting-edge industry operating system, Cargowise, has consistently positioned us on the forefront of digital advancement over an extended duration. However, in our unwavering commitment to sustaining peak operational efficacy in assisting our valued customers, we recognize the imperative for ongoing adjustments.

Following an intensive knowledge update period focused on the latest PAVE enhancements, we are on the cusp of implementing our refined operational adjustments. This strategic alignment with evolving operating paradigms is poised to greatly enhance our capabilities. A notable transformation will be the transition towards managing all orders and shipments through a structured framework of tasks and exceptional handling. This pivotal shift promises to unlock crucial operational bandwidth while concurrently elevating the calibre of our services.

We extend our gratitude to the entire SCC team for wholeheartedly engaging with the training regimen and demonstrating an unwavering commitment to perpetual advancement. Your dedication is truly instrumental in propelling us towards our collective goals.

BMSB
2023-2024 Seasonal measures for Brown marmorated stink bug (BMSB). The Dept. of Agriculture, Fisheries and Forestry (DAFF) has released their measures for the 2023-2024 Brown marmorated stink bug season.

The key measures for importers for the 2023-24 season are:

• The season will apply to goods shipped between 1 September 2021 and 30 April 2022.  DAFF will use the Bill of Lading Shipped on Board date to determine when goods have been shipped.
• Target Risk Countries remain unchanged other than the addition of Uzbekistan.
• The inclusion of United Kingdom as an emerging risk country – random inspections will apply to goods shipped between 1 December and 30 April.
• The inclusion of China as an emerging risk country – random inspections will apply to goods shipped between 1 September and 31 December.
• Target High Risk and Target Risk Goods remain unchanged.
• The mandatory treatment of Break Bulk shipments (including flat racks and open top containers) and Target High Risk goods offshore remains.
• The 120 hour shipping for break bulk and sealing for containers remains.

Any Target High Risk or Target Risk goods which are manufactured in, or shipped from, the target risk countries will be subject to BMSB seasonal measures.

Ocean freight update (China)
As anticipated, rates have continued their ascent in mid-August, and we have received notifications from select carriers indicating that fresh rate hikes will persist into September. Given the onset of peak season, the current trajectory of these increases aligns with expectations. Shipping companies are persisting in their strategy of voiding sailings to stimulate demand further and fortify the upward trajectory of rates. As we delve deeper into this peak period, it becomes imperative to promptly relay your orders to our customer team. The contracting availability of space necessitates securing bookings on the earliest and swiftest voyages.

Air freight update
During August, air rates from the USA have undergone further reductions, marking a substantial departure from the zenith reached during the Covid-induced peaks. Over the past four months, there has been a consistent trend of rate reduction. Similar downward adjustments are noticeable emanating from EU countries and China. However, it is prudent to anticipate potential rate escalations towards the conclusion of 2023, coinciding with the approach of the Christmas season. We remain committed to keeping you apprised of any ensuing modifications.

Panama Canal delays and surcharges
Recent reports underline the presence of a queue encompassing 154 commercial vessels awaiting passage through the Panama Canal, with the average wait time stretching to 21 days. The canal administration has curtailed vessel allowance due to the prevailing conditions of drought. Although the canal constitutes the conduit for 40% of all US maritime traffic annually, history attests that disruptions within the Panama Canal reverberate across a spectrum of supply chains and trade routes. The resultant vessel adjustments and delays have necessitated the imposition of Panama surcharges by carriers, and larger vessels have, on occasion, had to offload cargo to adhere to drought-related restrictions.

Shipping line boom profits suffer
Shipping line profit downturn for many participants within the global supply chain, the windfall profits reaped by shipping lines during the Covid pandemic stirred unease. However, this phase of exceptional profits seems to have met a jolting conclusion. A case in point is the latest report from HAPAG lines, illustrating a decline in the remarkable profits that once characterized the industry during the pandemic’s height. The present scenario represents a shift in fortune for these shipping lines, marking a departure from the preceding ‘Indian summer’ of earnings.

Hapag-Lloyd saw its second-quarter net profit slump 77% on the previous year, to $1.1bn, despite benefiting from a bottom line boost of $212m from interest and other financial items.

“Weaker demand and lower freight rates are having a noticeable impact on our earnings,” said CEO Rolf Habben Jansen this morning, adding that freight rates on some trade lanes were “unsustainable”.

He explained that freight rates ‘normalising’ to the pre-pandemic levels of 2019 would mean loss-making voyages, given that operating costs on some routes had subsequently increased by 20% to 30%.

Hapag-Lloyd’s revenue for Q2 was down 50% on the previous year, at $4.8bn, and down 20% quarter on quarter, as expiring contracts were replaced by much cheaper deals.