Running a tight ship

SHIPPING UPDATE FROM THE PORT OF MELBOURNE

The Port of Melbourne is Australia’s largest container and general cargo port.

Fresh fruit is a growing export category through the Port of Melbourne with a four-year compound annual growth rate of 1.5%. While we may not have visibility of the table grapes category within our fresh fruit data, the export data still tells an important story.

- The decline in volumes in 2022 is largely driven by a decrease in exports to Hong Kong (-44% yearon-year) and Japan (-8% yearonyear), together accounting for a total decline in TEU of 3,947.

- Several factors were influencing this including political tensions, pest concerns in China and COVID related logistical disruptions including labour shortages and lack of equipment availability (e.g. reefers).

- Key growth markets for fresh fruit exports include South Korea (305% growth over 4 years), Vietnam (252% growth over 4 years), Thailand (247% growth over 4 years), the Philippines

(121% growth over 4 years) and Indonesia (91% growth over 4 years).

Shipping supply chain trends

Stabilisation of freight rates

Decreasing volume on key trade lanes (e.g., China to the US) has led to increased equipment availability, vessel capacity and a downward trend on freight rates.

A moderate rebound on these rates may be seen late February into March 2023, once demand from China picks up again post-Lunar New Year closures.

Global schedule reliability continues upward trend

Global schedule reliability keeps improving, currently sitting at 56.6%. Both schedule reliability and average schedule delay days are now better than the 2020 level. This has enabled congestion to reduce also, with average wait times for container vessels before getting onto berth significantly reduced from Q4 CY21.

Shipping lines and decarbonisation

With IMO 2023 regulations coming into effect from January 1, shipping lines are rationalizing trade lanes, resulting in additional vessels per route to allow for slow steaming with fewer port calls. This increases the need for inter-Asia feeders via hub ports, like Singapore.

Softening Southbound cargo flows have created space for empty reefer repositioning to Australia while there has been an increased focus on bringing new reefer equipment onto the market. ZIM line has solidified their position in the market with direct connections into Vietnam.

Source: Bansard International

Landside operations

Softening Southbound volumes has reduced pressure on stevedores’ Vehicle Booking System (VBS) slots, creating more flexibility at the landside interface. Industry-wide truck driver shortages remain in both regional and metropolitan operations, hindering the efficiency of road freight.

Preparation is key

When preparing for the upcoming season, regular discussions with your supply chain are critical.

Key tips for planning ahead:

Communication with your shipping lines is key – setting up processes (plans) early to ensure the best availability for reefers.

1-stop provides the most up-to-date information source for vessel schedules – check schedules constantly.

Forward planning (volumes and market) – engaging with shipping lines or freight forwarders early and often.

Prepare for schedule changes and transhipment, including reefer points at port in the event of schedule changes.

Awareness that with post Lunar New Year celebrations there will likely be blank sailings due to factory shutdowns and reduced outputs through February and March due to projected absenteeism, as China adjusts to the sweeping changes to the Covid-19 policy.

Time to market is critical, see right for transit times to key markets, as at February 2023.

Tina Dreher Business development manager Western Victoria/South Australia Port of

Melbourne tina.dreher@portofmelbourne.com