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Henning Harders Shipping Update

Table of Contents

BMSB 2022-2023 Season – Effective 1 September

This is a reminder that Heat Treatment/Fumigation will be required on all seafreight containers loading after 1st of September 2022 from the below list of countries.
The 38 countries are:

BMSB Season 2022 – 2023 List of target countries

NZCS Fee Implementation – Domestic Transshipment Request

Please note the New Zealand Customs Service has implemented a new requirement for how shipments are declared on imports. The domestic transshipment request is a new requirement implemented by NZCS and covers the transfer of uncleared consignments to an approved facility. Uncleared cargo refers to any freight importation not released by customs and MPI.


Ocean Freight Update / Global

While still very low, schedule reliability continues to show gradual improvement month over month. Overall, schedules will continue to remain challenged because of port congestion. Additional considerations to remember:

  • Forecast 6-8 weeks minimum
  • Prioritize freight
  • Maintain variability in SKU’s/parts
  • Smooth volumes week to week
  • Add routing flexibility when possible
  • Communicate clearly with trade partners

Ocean Freight Update / Europe

Germany
Unionized port workers and the association representing the seaport operators agreed to terms for a new contract after one of the longest running labor disputes in Germany in decades.
The tentative agreement came just three days before a cooling-off period imposed by the Hamburg Labor Court was due to expire.

This agreement removes the threat of further strikes, which have been disrupting operations in all Northern Sea ports since June.

UK Port Strikes continue
The Port of Liverpool labor strike is expected to last through to the 3rd of October 2022. The port handles an average of 700,000 TEU’s of cargo per year. Barring a resolution, these stoppages over a pay dispute will strongly affect all port operational processes. Truck deliveries will only be possible to a very limited extent, if at all.

Europe Congestion Issues
Congestion in European ports has caused significant delays in vessel schedules-an average of 10- 15 days. Carriers have increased their blank sailing program in response to the persistent lower demand, with the intent to increase rates and prevent a further slide in spot rates.

European capacity additions and slowing demand have softened market conditions. Demand is manageable in the current environment, however expecting less capacity in the fourth quarter.


Ocean Freight Update / Asia, Middle East, Africa

Asia
Export demand out of Asia remains slow because of high inventory levels and inflation in North America and Europe. While the first week of October is the Golden Week Holiday, no significant pre-freight rush is expected. Rates are expected to keep trending downwards slowly.

South Asia, Middle East, and Africa
Monsoon weather has been affecting operations in India and Pakistan over the last couple of weeks. There has been heavy rainfall throughout Pakistan, which has led to widespread severe flooding in a large percentage of the country. This will certainly impact the movement of cargo through Pakistan in the coming weeks and months, and delays should be expected.

Congestion at Bangladesh ports is worsening. Many shipping lines have either suspended or severely limited available space to this destination. Congestion surcharges are also being applied by shipping lines at Chittagong/Chattogram port. These costs must be paid at origin.

Space out of South Asia and Middle East has eased on all trade lanes, but schedule reliability issues to destinations affected by congestion (US and Europe mainly) continue.

Challenges out of Africa continue as well, including equipment availability issues, congestion, and blank sailings/limited berth times. Yet, space options seem to be improving slightly.


Ocean Freight Update / America

North America
Congestion continues to grow throughout the US East Coast due to a diversion of carrier capacity/vessels from the US West Coast on the Trans-Pacific Eastbound trade lane.

The main reasons for sending more vessel capacity to the East Coast are the ongoing congestion issues at West Coast ports. Plus, there is demand from importers to diversify their supply chains against possible risk of labor disruption at Los Angeles/Long Beach ports.

The East Coast congestion is currently the same if not worse than the congestion being experienced at the West Coast ports.

South America
Services to East Coast South America ports have reduced capacity by approximately 25% and blank sailings to West Coast South America have increased to approximately 32% of capacity, due to constraints and severe congestion at the transshipment hubs.

Exports out of South America continue to be strong. For Europe, Asia, and South Asia services priority is given to specific commodities by the shipping lines. Oceania, Africa, and Middle East services are experiencing frequent schedule changes and service rearrangements as those lanes are not being prioritized by the shipping lines.

Demand to North America remains strong with congestion-related issues plaguing services at both origin and destination.


Ocean Freight Update / Oceania

There is some softening of the market in Southeast Asia. Demand is expected to remain steady, and capacity is opening up. Pre-planning is still essential. Book AT LEAST 3 weeks, or more, in advance to avoid interruptions. Equipment availability remains tight, particularly for 40ʹ high cube containers.

The Northeast Asia market has softened. There are some changes taking place in the market with extra capacity now bedded in. Both added capacity and new services have had a negative impact on rates, but with demand still soft, carriers are starting to use omissions/blank sailings to halt rate declines.

Expect this lane to remain challenging into the last quarter of 2022. Repositioning equipment has alleviated some of the difficulties in prior weeks.

The Trans-Tasman (TTZ) market remains strong with limited capacity—the addition of the new shuttle service out of Brisbane, Australia will add tonnage to the lane. Carriers continue to replace smaller vessels with larger ships. Even with service changes, the TTZ eastbound/westbound remains significantly challenged for sufficient space.

North Europe, Mediterranean, Oceania (NEMO) services are experiencing heavy vessel delays. With the recent addition of a fourteenth vessel on the Direct (NEMO/Australia Express) service, expect some improvement in the scheduling over the next quarter.

Demand for Direct services should continue to be relatively strong for the remainder of the year, with elevated rate levels. Transshipment services are showing some signs of weakening demand, but rate levels remain fairly stable with some lower spot rates available on specific ports and sailings.

Advanced bookings are still required 5–6 weeks out for the United States. Equipment availability in the main ports has improved, however chassis shortages continue to be an issue. Decreased import volumes from Asia will continue to impact equipment availability.

Cosco has announced the resumption of the U.S. to Australia trade lane and OOCL has indicated they will remove volume restrictions, which will add capacity to the lane.

Demand is steady, however, there has been a shift in export volumes, which may help to ease congestion at rail and port terminals.


Oceania Landside Issues

Oceania continues to experience congestion across the landside sector of the supply chain. The largest choke point is the empty container network that continues to deteriorate. Continued lack of capacity to return empty containers results in additional costs for transport operators that are forced to double handle containers and equipment back through their yard and await suitable return appointment times. Expect additional transport costs and the increased risk of incurring container detention.

New Zealand ports remain congested with delays continuing. Tauranga is experiencing resource shortages and Auckland high yard utilization with wait time currently 4-5 days. Berthing windows across New Zealand ports are expected to remain suspended until March 2023.


Importance of Maritime Insurance

Shipping freight overseas almost always goes smoothly, with cargo being safely delivered on-time in most cases. However, in a small number of instances, cargo can be damaged or lost due to theft, fire, natural disasters, and this could be detrimental to your business.

Importers mistakenly believe that loss or damage to their shipment will be covered by the freight carrier, forwarder, or supplier, but this simply isn’t the case.

Billions of dollars’ worth of cargo is damaged or stolen every year, and insurance will mitigate your loss in the even of an incident.

International laws require shipping companies to carry a certain minimum amount of cargo insurance. However, this insurance covers a meager dollar amount, making it insufficient for most shippers.

Sudden loss of cargo can immediately and dramatically cut into profits and case a domino effector on business operations for months to come.

Purchasing additional cargo insurance is the best way to protect shipments, as it can cover the full cost of the cargo regardless of carrier liability.

If an importer has purchased under CIF basis, they may only be covered to the Port/Arrival CFS. We recommend importers look at purchasing further insurance to cover them from the Port or CFS to Door (and especially when devanning & loose delivery is applicable). Importers should always consult with their Insurance Broker on all insurance matters.


We will continue to evaluate all market options and work with you to provide individual solutions for your business.

For more details on any of these articles please contact your Henning Harders Key Account Manager.

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