Importers welcome competition

Transhipment costs and additional lifts that burden importing companies are negated somewhat with a new route that calls into Bell Bay before Melbourne.

While Tasmanian exporters have been living in a sweet spot with the plethora of services available and competing ex-Tasmania, coupled with the assistance of the TFES extension, our importers have experienced the opposite with higher freight rates and limited space availability – especially ex-Asia.

Importers would be happy to know that MSC Line have recently changed the rotation of their Capricorn service with Asia being connected via Singapore into Bell Bay without first discharging in Melbourne.

With a weekly service that calls Singapore, Fremantle, Adelaide and then Bell Bay before Melbourne port, the transshipment costs and additional lifts that burden importing companies are negated somewhat – in some cases significantly.

While this new service promises some much needed competition on the Southbound sector (internationally) importers should be wary of the seasonal space restrictions ex the Asian countries and whilst we are seeing some reduced rate levels at the moment, there is constant pressure from all lines to increase and maintain higher freight rates particularly for import cargoes.

We have recently been advised of a new general rate increase declaration for May of US$200.00 per TEU ex-Asian ports – whether this is successful or not is yet to be seen, however importers should, as a matter of course, be mindful of the pressure of space ex-Asia and the effects this can have on pricing as well as timing of shipments (in peak times, the Capricorn Service will be in high demand and if space is not available, the history of the support of the other lines will be a consideration).

Cheaper rates are great if there is space available – absolutely useless without the space though.

The subject of coastal shipping has been discussed recently with a major shipping representative body undertaking a study into the viability of coastal shipping around Australia.

The Coastal shipping research, in the context of this discussion, is the ability for international shipping lines to be able to carry domestic shipments around the coast of Australia (cabotage). This discussion generates mixed feelings from different camps and there are some deep emotions that emerge when talking about this topic – the Federal Government have been discussing reform for some time, but not much has changed since cabotage came to a grinding halt in 2012.

There have been times in the past, if you care to look, where I have called for cabotage to be reinstated (especially when the reform was one of the reasons for the withdraw of our international AAA service back in the day), but I have to admit that I am a little more cautious these days. Consider my first report of the MSC service via Singapore into Bell Bay, cheaper freight rates – but what about the space – these lines are monsters and carry the majority of the freight around the planet – how can the commitment be cemented to Tasmania?

Who is to say that if there is something shiny somewhere else they won’t simply pull up stumps and say ‘so long and thanks for the fish’ (Hitchhikers Guide reference!).

Whereas the likes of Toll, Searoad and TT Line have a vested and committed infrastructure and commitment to the Bass Strait trade that works and is indeed being invested with new vessels. We need to be careful to consider all aspects of the debate (in everything of course).

By Agility Logistics Tasmanian General Manager Brett Charlton