Upcoming Australia Public Holiday

Dear valued clients,

We'd like to bring to your attention an upcoming public holiday.

Australia Day, a national public holiday, is scheduled for January 26th, and our Australian offices will be closed on this day.

Your understanding and cooperation during this period are greatly appreciated. Should you have any specific concerns or require assistance, please don't hesitate to contact our team in advance.

Contact Information:

• SILA Imports: imports@sila.net.au
• SILA Exports: exports@sila.net.au
• SILA Sales: sales@sila.net.au
• Phone: (+61) 07 3908 1690

Thank you for your continued partnership.

Best regards,

SILA Global Pty Ltd

by SilaAdmin

VICT Remains Closed Due to Continued Protests: FTA Update 3

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VICT Remains Closed Due to Continued Protests

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DP World ​​Industrial Action - FTA Update 35

Dear Valued Customers & Partners,

According to FTA, the latest DP World update sees a continuation of bans and stoppages for the period from Monday 15 January now extended to Tuesday 30 January 2024.

Regrettably, we received an early morning update stating that DP World will not be opening at 0600hrs as previously communicated. Consequently, all slots for the day have been canceled.

For those whose containers have been impacted, we will be reaching out to you directly. We are actively exploring alternative slots, which may extend into the weekend or early next week. Please note that there is no guarantee of reopening at 1400hrs, considering their recent pattern of opening the following morning when a similar situation occurred last week.

We sincerely apologise for any inconvenience caused and assure you that we are diligently working to reschedule all collections and deliveries. Your continued support and understanding during this time are greatly appreciated.

FULL LIST OF UPCOMING PROTECTED INUSTRIAL ACTIONS

SILA would like to remind our clients that transport companies have communicated that surcharges for weekends, public holidays and after-hours will be applied as they strive to retrieve containers within their allotted free time.

These bans & stoppages continue to significantly impact our services, and we appreciate your understanding and flexibility during this period. Our team is committed to minimising disruptions and ensuring the smoothest operations possible. We will keep you updated on any further developments.

We acknowledge the potential impact of these disruptions; however, please be advised that SILA will not assume liability for any additional charges arising from these industrial actions.

Thank you for your continued trust and partnership and should you have any questions or concerns, kindly reach out to our dedicated team!

SILA Imports - imports@sila.net.au
SILA Exports - exports@sila.net.au
SILA Sales - sales@sila.net.au
T: (+61) 07 3908 1690

SILA Global Pty Ltd

by SilaAdmin

DP World Industrial Action - FTA Update 33

by SilaAdmin

Insight - January 2024

Air strikes in Yemen - impacts on global shipping

Navigating the Ripple Effects: Global Shipping Challenges Amidst Air Strikes in Yemen

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have received the following from James Hookham, Director Global Shippers Forum (GSF), proving a reaction and expectations of the impacts following the air strikes in Yemen.

The latest event that have dramatically shifted the calculations on the Red Sea situation - while avoiding commentary on the political and military aspects, James has provided the following points as to what it could mean for shippers and supply chains reliant on this route :

1. The risks of retaliatory strikes on merchant shipping in the Red Sea area are now extreme, and all carriers can be expected to divert their ships away from the Red Sea and Suez Canal route, if they haven’t already;
2. A working assumption must be that avoidance of the Red Sea and diversions around the Cape of Good Hope will now be the rule rather than the exception, unless or until there is a political settlement which specifically includes the cessation of actions against merchant shipping in the Red Sea; 
3. Therefore, all else being equal, shippers (i.e. importers in North America and Europe) should expect a one-off adjustment to schedules and port calls over the next few weeks but after that service patterns should settle into the new longer routes and adjusted port calls, with some stability returning to predicted arrival times of ships and delivery of containers;
4. The same will apply to east-bound sailings, which may affect the availability of empty containers in Asia in the short-term. But, again, this should stabilize over time; 
5. Rates on affected trades will inevitably adjust to the higher costs incurred, bearing in mind the greater fuel burn, additional crewing time, insurance and chartering costs. But offsetting these to some extent will be the very substantial savings made in Suez Canal transit fees. These are of several hundreds of thousands of dollars for a typical container ship and these savings should be accounted for by shipping lines when justifying their surcharges and higher rates;
6. The narrative now being heard is that because the Red Sea is effectively closed to shipping, Asia-Europe/USEC shipping rates are going to repeat the sustained spike of 2020-22 (and, by implication, shipping lines will get another big profit windfall). GSF does not believe this is supported by the circumstances. There is no chronic shortage of shipping capacity in the way there was during the Covid pandemic, and there is substantial new capacity expected to be delivered throughout the first half of 2024. Demand for shipping space is also stable, if not declining;
7. Furthermore, the cost increases that will be incurred by shipping lines diverting around Africa are known and finite and should not be talked up into a second shipping crisis on the scale of the first one in 2021. Shippers should check demands for payment of additional surcharges, given that the first vessels affected by the diversion are only just arriving at their destination ports. (The first diversions commenced between 13-15 December, and not every vessel immediately diverted);
8. There have already been substantial increases in quoted spot rates on Asia Europe/USEC trades, but it is important to distinguish between rates that are quoted in hope by carriers and those that are actually being paid in cash by shippers; and
9. Shippers commencing contract renewal negotiations over the next few weeks should avoid being ‘locked-in’ to rates based on currently quoted spot prices. Following a satisfactory resolution of the situation, costs and rates on affected trades can be expected to ‘normalise’ even quicker than they did in 2022. Although it may seem a dim prospect today, this eventuality should be provided for in any agreements made with carriers for 2024-25.

The next few days are critical in whether the Red Sea situation is contained or develops into a much longer-term regional conflict, which would have much wider and profound consequences for international trade. GSF will continue to report and interpret events from a shipper’s perspective.

The recent air strikes in Yemen are reshaping global shipping dynamics, prompting a shift away from the Red Sea and Suez Canal route. Director James Hookham of the Global Shippers Forum advises shippers to brace for short-term disruptions, with vessels likely diverting around the Cape of Good Hope. While increased costs are expected, potential savings in Suez Canal fees may offset these. GSF emphasises differences from past crises, citing stable demand and upcoming capacity additions. Shippers are urged to stay vigilant as the situation unfolds, with GSF committed to providing ongoing insights from a shipper's perspective.

Source: FTA Red Sea Media Update 4
Source: US, Britain launch new strike on Yemen's Hodeidah: media - Chinadaily.com.cn
Source: What do Red Sea assaults mean for global trade? - BBC News

DPW MUA Protected Industrial Action

Latest on DPW MUA Protected Industrial Action

The landscape of the Protected Industrial Action (PIA) unfolding across DP World Australia terminals is characterised by its inherent fluidity, marked by a constant ebb and flow of bans, stoppages, and announcements that are subject to frequent changes and withdrawals. The negotiation table between DP World and the Maritime Union of Australia (MUA) is dominated by substantial media commentary, with particular emphasis on the 8% workers' claim year on year for three consecutive years.

This ongoing industrial dispute is not without repercussions, as the actions taken within this context continue to exert a significant impact on the maritime industry. The operational disruptions stemming from the protected industrial actions are causing ripples throughout the supply chain, affecting port efficiency, cargo handling, and overall logistics operations.

Furthermore, IFCBAA have been in direct contact with MUA senior management and requested that they provide an update to IFCBAA on the current status of the EA negotiations with DPW.

The MUA has responded to that request by directly providing to IFCBAA the following documents which they have now provided to members and the wider industry:

• Current status of DP World EA Negotiations
• Exerts from the content ACCC’s Annual Stevedoring Report for 2022-23 (as considered relevant by the MUA to these current EA negotiations)

In the midst of these challenging circumstances, SILA remains steadfast in its commitment to keeping a vigilant eye on the evolving situation. We are dedicated to staying abreast of the latest announcements, ensuring that our valued clients receive real-time updates and insights. As a reliable partner in the industry, SILA strives to navigate these turbulent waters and provide our clients with the necessary information and support to mitigate potential disruptions and optimise their logistics strategies.

Source: FTA Industrial Action at DP World Updates
Source: IFCBAA National News # 2024/020

Chinese New Year 2024: How to maximise supply chain and logistics efficiency

Strategies for Seamless Operations: Optimising Supply Chain and Logistics During Chinese New Year 2024

As we approach the Chinese New Year, also known as the Lunar New Year or Spring Festival, it's vital to recognise its immense cultural significance in China and across East Asian countries. This celebration, however, brings specific logistical challenges for shippers and businesses, with production slowdowns, operational limitations, disrupted schedules, and transportation delays impacting the supply chain significantly.

For businesses involved in shipping, meticulous preparation is crucial as we navigate the complexities of the Lunar New Year. Here's a comprehensive guide to help you strategise:

1. Chinese New Year 2024 Dates:Understanding the exact dates of the Lunar New Year in 2024 is essential for effective planning.
2. Impact on Shipping and Supply Chain:Explore how the Lunar New Year festivities can affect shipping and overall supply chain operations, considering factors like limited resources and disruptions.
3. Preparation Strategies:Gain insights into preparing shipments effectively to navigate the challenges posed by Chinese New Year 2024, covering aspects from booking timelines to handling specific cargo considerations.

Anticipating the forthcoming festivities, it's crucial for businesses to stay well-informed and strategically plan for the logistical intricacies accompanying this significant cultural celebration.

Source: Chinese New Year 2024: Planning for Supply Chain Disruptions | Maersk

Note: It takes 4-6 weeks for factories and port operations to return to normal levels after the CNY holidays.

Logistical Considerations:

Ocean Export from China: Container space is currently tighter than in previous years due to the Red Sea crisis and the Panama Canal drought. The return challenges for container ships have led to a shortage of container resources in China. The impending Chinese New Year, coupled with the Red Sea crisis, has substantially increased export pricing, with rates doubling or tripling. Carriers are exercising caution regarding shipments containing batteries, necessitating confirmation with the operations team. To secure cargo space, it is advisable to book early, at least 14 days before the preferred departure date.

Air Export from China: Similar to ocean freight, flight cancellations are expected during the holiday period, emphasizing the importance of early bookings to secure space. Resources for air exports will be in short supply. While air freight costs spiked in December due to heightened e-commerce shipments, they have returned to normal levels in January. Though a slight increase is anticipated during the Chinese New Year period, it is expected to be relatively insignificant. Operations, including pickups, may experience delays.

Imports to China: Deliveries requiring service may face delays due to a truck driver shortage during the holiday season. Providing advance notice is recommended for urgent shipments. While customs generally maintain daily staffing, certain special events may not be handled during the holiday period. Early leave by factory workers and a potential shortage of truck drivers before the Chinese New Year may impact operations. Staying vigilant and planning ahead will be key to navigating the challenges posed by imports during this time.

SILA is dedicated to assisting our clients in effectively navigating the challenges associated with the upcoming Chinese New Year and the intricate logistics it entails. Recognising the complexities of the Lunar New Year, our commitment is to offer comprehensive support and seamless solutions to ensure the continuity and efficiency of your supply chain operations during this period.

As a trusted partner, we understand the significance of meticulous planning and proactive measures in the face of potential disruptions. Our experienced team is poised to provide valuable insights, strategic guidance, and timely updates to help you make informed decisions and optimize your logistics strategies. Whether it's addressing the limited container space in ocean exports, anticipating flight cancellations in air exports, or mitigating delays in imports to China, SILA is committed to being your reliable ally.

In the spirit of collaboration and adaptability, SILA stands ready to work closely with you, leveraging our expertise to overcome challenges and enhance the resilience of your operations. As we collectively prepare for the festive season, SILA reaffirms its commitment to delivering excellence, ensuring that your shipments move smoothly, and your supply chain remains robust. Trust us to be your partner in navigating the complexities of the Chinese New Year, providing unwavering support for a successful and seamless logistics experience.

AUSTRALIAN TRUSTED TRADER

Australian Trusted Trader reduces red tape for Trusted Traders at the border, improves certainty in export markets, and expedites the flow of their cargo in and out of Australia, which means faster access to market.

Administered by Home Affairs with the Australian Border Force, Trusted Trader is free and accredits Australian businesses with compliant trade practices and a secure supply chain. Once accredited, businesses have access to a growing range of benefits that simplify their customs processes.

SILA Global is an Australian Trusted Trader (ATT) and we encourage our clients to explore the benefits of being an ATT. If you would like to discuss this further or be guided through the process, our in-house customs broker, Nic Demo, is happy to help!

Nicoll Demo
nicoll@sila.net.au
(07) 3908 1622

Find goods currently subject to measures in the dumping commodity register (DCR)

by SilaAdmin

DP World Industrial Action Update - FRIDAY R&D CANCELLED

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DP World Industrial Action Update

by SilaAdmin

DP World Industrial Action Update

Dear Valued Customers & Partners,

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) continue to be in contact with DP World senior management in terms of thy latest information on the Protected Industrial Action (PIA) impacting their container terminals nationally.

DP World have outlined advice received from the Maritime Union of Australia (MUA) division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) in terms of work bans and stoppages associated with the PIA for the period Tuesday 2 January to Monday 15 January 2024.

Full list of upcoming protected industrial actions HERE

SILA would like to remind our clients that transport companies have communicated that surcharges for weekends, public holidays and after-hours will be applied as they strive to retrieve containers within their allotted free time.

These bans & stoppages continue to significantly impact our services, and we appreciate your understanding and flexibility during this period. Our team is committed to minimising disruptions and ensuring the smoothest operations possible. We will keep you updated on any further developments.

We acknowledge the potential impact of these disruptions; however, please be advised that SILA will not assume liability for any additional charges arising from these industrial actions.

Thank you for your continued trust and partnership and should you have any questions or concerns, kindly reach out to our dedicated team!

SILA Imports - imports@sila.net.au
SILA Exports - exports@sila.net.au
SILA Sales - sales@sila.net.au
T: (+61) 07 3908 1690

SILA Global Pty Ltd

by SilaAdmin

Market Update - January

Greetings from SILA Global!

We trust you had a joyful Christmas break surrounded by your loved ones!

As we conclude the year 2023, staying informed about developments in the global shipping and logistics sector becomes paramount. At SILA, our commitment is to keep you well-informed and provide expert solutions, ensuring you stay well-prepared to navigate the dynamic landscape of the shipping and logistics industry.

General Shipping Update

Improved prospects for future demand in both major and secondary trade routes are enticing ocean carriers back into the charter market, eager to secure available tonnage. According to various brokers, there is still a high demand for Panamax vessels in the range of 4,000 to 5,400 TEU, specifically needed for deployment in secondary or niche trades. The positive outlook has prompted carriers to intensify their rate restoration programs, leading to a notable enhancement in six-week booking visibility forecasts. The approaching Chinese New Year, starting on February 10, is expected to have an impact, but there is optimism about the strength of forward bookings from Asia, and the hope is that this trend will continue well beyond the holiday.

Despite December traditionally being a quiet month in the container charter market, brokers are reporting new inquiries almost daily, even in the midst of the holiday season. The surge in boxship demolitions, initially predicted for 2026 and 2027, has not materialized, as liner operators continue to deploy older vessels. This has resulted in an increase in the average scrapping age to 27.3 years, up from the 24.2 average observed between 2010 and 2020. Drewry's forecast of 600,000 TEU demolitions in 2022 has not come to fruition due to various factors, including the reluctance of mainline operators to withdraw substantial capacity while still competing for market share.

Several carriers are contemplating the introduction of a peak season surcharge in January to reflect an anticipated tight booking situation before the Chinese New Year. This may also lead to the revival of premium surcharges on routes, last witnessed during the supply-demand crunch of 2021 and early 2022. Notably, Maersk has already initiated this by introducing a Premium Quality Container (PQC) surcharge of an additional $100 per 40ft for its Indian export services. The specifics of what shippers receive for the PQC, such as priority booking or guaranteed equipment provision, are not clarified in Maersk's advisory, but it is described as an optional product selectable at the time of booking.

ANL has imposed temporary restrictions on certain reefer or time-sensitive cargo, preventing it from being transshipped over Hong Kong. Bookings for early next year have been suspended due to the expiration of local permissions under the Hong Kong Transshipment Cargo Exemption Scheme. This scheme typically covers six specific temperature-controlled commodities, including pharmaceuticals, medicines, frozen meat, and poultry. The disruption in transshipment coincides with increased cargo volumes moving between India and intra-Asia markets, driven by the trade diversification or China-plus-one trends in Asia.

To capitalize on the growing demand, even major mainline carriers are expanding their intra-Asia networks, connecting Indian ports and joining niche regional or feeder operators. Intra-Asia trade has consistently outpaced world trade growth in recent years, fueled by the economic expansion in China and India. India, in particular, remains a bright spot with increased consumption and economic growth, contributing to the overall surge in trade.

Red Sea attacks & Panama Canal drought

We want to bring your attention to recent developments impacting global trade and shipping, which may have implications for your investments.

The ongoing conflict in the Middle East has introduced significant disruptions to global trade flows, leading to a surge in shipping costs. Particularly, Iran-backed Houthi militants in Yemen have targeted commercial shipping in the Red Sea with anti-ship missiles and drones, aiming to exert pressure on Israel and its supporters. In response, the U.S. is coordinating an international naval force to ensure the safety of shipping lanes in the region.

The Red Sea, a crucial shipping corridor, is home to Egypt's Suez Canal, handling around 12% of global trade flows and 21% of container-ship traffic. Major shipping lines such as Maersk, CMA CGM, and Hapag-Lloyd have temporarily halted transits through this area due to security concerns.

In a separate challenge, the Panama Canal, situated some 7,000 miles away, is contending with a drought. The region recently experienced its driest October on record since 1950, prompting authorities to limit daily canal crossings. By February, they plan to allow only 18 daily crossings, half of the normal capacity. The Panama Canal contributes to about 5% of global trade volume.

These disruptions have forced ships to take longer routes, impacting shipping times and reducing available supply. This, in turn, has offset the easing of port congestion witnessed in recent months, resulting in higher shipping rates.

The Baltic Dry index, tracking dry-bulk shipping rates, has more than doubled since the summer. Similarly, the Freightos Baltic Index, which measures container-shipping rates, has risen by 20% in the past two months, signaling potential opportunities for investors.

Container-shipping line stocks have experienced significant gains in response to these market dynamics. Maersk and Hapag-Lloyd have seen notable increases in their stock prices. Additionally, dry-bulk shipping companies such as Star Bulk Carriers, Golden Ocean Group, and Genco Shipping & Trading have witnessed stock surges as dry-bulk rates strengthen.

Speaking of opportunities, Genco Shipping & Trading, with its unique dividend structure tied to cash flow, currently offers a yield of around 6%. Analysts anticipate a rise in the payout next quarter, reflecting the company's efforts to enhance its financial position.

As we navigate these dynamic market conditions, we remain committed to keeping you informed about developments that may impact your investments. Please feel free to reach out if you have any questions or if you would like to discuss your portfolio in light of these changes.

SOURCES:

• Red Sea attacks, Panama Canal drought: How trouble at two shipping choke points could impact global trade | Explained News - The Indian Express
• Shipping Is Disrupted by Red Sea Attacks, Panama Drought. It Means Higher Rates. (msn.com)
• The Red Sea Crisis (msn.com)
• Red Sea attacks: How will global trade be affected? (msn.com)
• Yemen's Houthis claim responsibility for Red Sea container ship attack (msn.com)
• Saving Suez: As Red Sea attacks threaten global trade, what it means for India - The Economic Times (indiatimes.com)

Chinese New Year Holiday

Stepping into the new year of 2024, it's crucial to be mindful of the upcoming Chinese New Year festivities, also known as the Spring Festival, which is a significant event that traditionally marks a period of heightened business activity and disruptions in the shipping and logistics industry. This festive season may impact shipping schedules, lead times, and overall supply chain dynamics.

Officially, China will have a 7-day holiday from Chinese New Year’s Eve to the sixth day of the lunar new year. In 2024, the New Year public holiday is from Feb. 9th to Feb. 15th and some companies may extend the holiday up to 16 days. During the Chinese New Year holiday, office buildings are closed. Shops may close for 1 to 3 days usually from New Year's Eve to the 3rd day.

At SILA, we are proactively monitoring and adapting to potential challenges associated with the Chinese New Year, ensuring our clients are well-prepared for any adjustments necessary to optimise their logistics operations during this period. Stay tuned for further updates as we navigate through the implications of the Chinese New Year in the global shipping landscape.

To ensure smooth operations and to accommodate the potential disruptions during Spring Festival, we strongly recommend that you get your booking requests in early and be sure to request a minimum of 14 days of free time on containers. Ideally, we encourage seeking 21 days' free time to allow for any unforeseen delays or increased demand during this festive period.

We wish you a safe & happy New Year!

Now, we bid farewell to 2023 and embark on the cusp of a new year, the team at SILA extends our heartfelt gratitude for your continued trust and partnership.

As we take a brief pause to celebrate the transition into 2024, we want to express our sincerest wishes for a safe, joyous, and prosperous New Year's Eve. May this upcoming year bring you success, growth, and smooth sailing in all your endeavors.

Thank you for choosing SILA as your logistics partner. We look forward to serving you with even greater dedication and expertise in the coming year. Happy New Year!

Feel free to get in touch with our dedicated team for help and solutions tailored to your needs.

SILA Global Commercial Team
CCO - jason@sila.net.au
BDM - johann@sila.net.au | BDM - monowar@sila.net.au
T: (+61) 02 9556 4866 | E: sales@sila.net.au

by SilaAdmin