9:48pm 15th May 2022
Australian shippers are battling a double-whammy of spiralling supply chain inflation, container detention fees and delays to manufacturing in China.
Not shy of criticising the “foreign-owned” shipping lines serving Australia, today the Freight & Trade Alliance (F&TA) has again called for greater regulation of the shipping industry, because of “unreasonable fees”.
It said: “Australians are paying more than one billion dollars a year in unreasonable international shipping fees, in addition to record high freight rates and a spate of surcharges.”
The lobby group has submitted evidence to the government’s productivity commission, claiming container detention fees are “unfairly applied in the current environment of vessel bunching, limited operating hours, delays in biosecurity releases and inspections, extreme supply chain labour shortages and, in many cases, the detention clock starting at a time when cargo is physically unavailable for collection from the wharf.”
F&TA director Paul Zalai added: “We are operating in incredibly difficult times and adding salt to the wounds is this container detention charging regime – a massive blow for Australian commerce and a windfall for foreign-owned shipping lines, contributing to their multi-billion dollar annual profits.”
He said the shipping fees “draw a parallel” with the cost of living and “inflationary pressures being felt across Australia, with charges being passed down the supply chain, adversely affecting manufacturers, farmers, rural communities and consumers.
“Everyone from major retailers to small businesses are affected. Freight forwarders, customs brokers and transport companies are left in the unenviable position of trying to explain an unbudgeted and unreasonable fee to importers and exporters, costing anywhere from hundreds of dollars per consignment, up to hundreds of thousands of dollars in some circumstances.”
The Covid lockdowns in China are also having a major impact on importers’ businesses. According to David Aherne, MD and founder of Across the Ocean Shipping, they are having a “seemingly greater impact” on Australian importers, due to the country’s many manufacturing ties.
He explained: “Although we are observing inflation rising rapidly in Australia, consumers will not experience the full result of these supply chain delays until Q3.
“It is not only those that require finished commodities from manufacturers in this region that will be hit by delays, but also Australian importers who rely on parts being manufactured there.”
Furthermore, Mr Aherne said, with manufacturing delays in Shanghai increasing to upwards of three months, it was “anticipated that more and more manufacturers will gradually move their business to neighbouring Asian countries, to help rectify such delays”.
Liner lobby group Shipping Australia, meanwhile, says the country’s shipping problems lie closer to home, adding in a recent blog post: “While there may be higher costs for some shippers, importers and exporters who have cargo routed through Shanghai, it appears that, generally, overall costs in the ocean supply chain are currently declining.
“Perhaps of more interest to Australians is that, currently, there are delays of up to three days, five days and 10 days at different Australian ports. Delays unrelated to the issues in Shanghai, and it has long been noted that Australian ports are not internationally competitive.”
By Sam Whelan
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