28/9/2020

Dear Valued Client,

With Auckland’s returns to Level 2, and the rest of New Zealand enjoying the relative freedom of Level 1, we find ourselves in the midst of peak season once again.

Whilst it’s an annual occurrence - You could be forgiven for feeling like that this one came around quickly or even where did that come from!?

Thanks to all the disruptions to our business norm’s that has seen both New Zealand and our global partners lose months out of our year due to Government implemented lockdown periods we now find ourselves in the midst of peak season all of a sudden experiencing all the normal complexities that peak season brings to our supply chains plus the additional of the added global disruption that is Covid-19.

Throw in congestion at tranship ports, local ports and even a harbour bridge - You could well consider this the perfect storm – But let’s not view this out of context…. None of these are unprecedented as singular events, and most of these are actually common occurrences of peak season i.e.

• Supply / Capacity restrictions mean there is only so much space and equipment available at any one given moment.
• Limited supplied coupled with Increased demand, provides the platform for price increases from the carriers and airlines.

o   This is simple economics. When demand outstrips supply, the resulting price can command a premium, and this happens every year at peak season.

o   One thing to consider on this. Who honestly would want to be an Airline this year? They have experienced unprecedented demand for their services plummet in reaction to global pandemic. Their services and routes are shadows of their former selves as they were forced to withdrawn service in reaction to the pandemic, whilst at the sometime trying to retain some form of continuity of service to their freight and restricted passenger services and ultimately their businesses – Now they have had a tough year!

• Peak season also seems coincides with storm season in South East Asia, so ports already under pressure to due peak season volume increase, are literally exposed to the elements seeing vessels delays into/ out of port and increased congestion as a result.
• Peak Season also seem to provide opportunity for strike action to ensure those striking get their message across through disruption, so can also be the Strike Season.
• Locally here in New Zealand, we experienced a tragic fatality here at the Ports of Auckland, seeing Liners omit Auckland Port whilst the Port manages that tragedy and its roll-on effect on their process and ability to retain normal service levels in the short term.

o   The re-routing of vessels and Cargo to Port of Tauranga, has resulting in a massive increase of volume for Tauranga to manage within their already stretched resources but under the circumstances they are performing well all things considered.

• Last week freak winds saw a truck damage Auckland Harbour Bridge, repairs are a work in progress, but this effects transport between the greater Auckland and Northland regions.

None of these circumstances are new to the industry – You will all recall similar occurrences within your supply chains over the years, and therefore know these can and will be managed by BRi to reduce your exposure to the delays these events incur, even within these unpresented times of Covid that we find ourselves in at the moment.

BRi is constantly and proactively seeking solutions on these hurdles rather than just accepting these as the norm – Through constant review of options and solutions available to the market we retain a proactive approach with examples being:

• BRI’s promotion and utilisation of priority services options available – Which simply put is for a premium we can often secure space on vessel that effectively sold out weeks if not months in advance.
• Utilising the power of out network by seek space not just off local contracts, but via our partners local contracts to insure we have the most appropriate solution available at any given time as we operate in a market that is so short of available space this peak season.
• Drawing on our relationships with clients to have advance notice on hand on pending orders to enable us time to seek solutions proactively.
• If there is a solution available… we will find it for you!

 

AIRFREIGHT

Airfreight continues to be the same story of the previous six months and remains significantly affected by a lack of supply/ space at the moment. We have and continue to experience some slight improvement in space availability though, due to increased passenger flights, and the slow reestablishment of regular freighter services.

These gains whilst providing increased capacity and in turn slowly reducing costs incurred during the height of the Covid situation, are still a long way off the levels available this time last year – But this improving under the continued threat of C-19 and our closed boarders so this is our new norm for the time being.

OCEANFREIGHT

Peak Season is well and truly upon us.

Demand is up! Prices are up!, Space is beyond tight! Equipment’s in short supply! Ports are congested! Transhipments are delays! Ports are on Strike! – None of this is new or even news!

These headlines are simply the result of every peak season there ever was and will ever be – This is simply Peak Season.

Sure, Covid’s complicated it – A global pandemic will do that…. but we as an industry face, take on and survive Peak Season every year, and this year will be no exception.

Through proactive order management made possible by YOU, our clients have been providing us with increased notice on upcoming orders, enabling us the opportunity to seek pre-booking space rather than trying to book space a week with liners/ airlines that have already over sold their space a month ago, and the resulting disappointment of the delays of a market that has literally no space available. We’ve been strong advocates and supporters of liner Priority options – Paying a premium over the tariff rates avoids delays of what currently could be a month and gets shipments here for you to sell accordingly. The option to spend a little more upfront and be in a position to sell your goods on time, whilst your competitors wait on that illusive booking losing weeks is available and yours to consider on Asian trade lanes, and something to strongly consider.

Liners have advised they will not affect their normal blank sailing programs that we typical incur over the upcoming Chinese Golden Week period which commences on the 1st of October 2020 as not to create further space pressure during and over this holiday period – It will pay for you to confirm your suppliers availability over this time to ensure this holiday period does not affect their ability to fulfil their commitments to you over this period as this holiday is has a similar effect to the industry as the higher profile Chinese New Year Period.

BMSB season is currently in effect till April 2020. If you are importing from a Risk County, it is imperative you are aware and compliant with the current MPI BMSB requirements. Please use these links for access to the current information for your reference:

Import Health Standard for Vehicles, Machinery and Parts

Import Health Standard for Sea Containers from All Countries

GRI’s have been announced by the Liners EX Asia of up to USD 300.00 per TEU for October Sailings.

Port Congestion surcharges have been announced by both Port Authority’s in additional to separate Liners notifications in Australia in relation to Port and Empty Depot congestion - with particular focus on Sydney. Due to severe congestion issue in Australian Ports and strike action also forcing Port Omissions.

It is BRI’s policy that any GRI/RR/ PSS/ Associated Infrastructure increases are passed onto our clients as disbursed and will be confirmed once the quantum’s are finalised accordingly.

 

BRi NEW ZEALAND

All off our team has returned to the office since the Auckland’s return to Level 2.5

For our clients North of the Bridge, please aware we will incur some trucking delays around the current restriction of usage of the Harbour Bridge in place whilst the Bridge is under repair. We don’t not expect services to be severely affected, but access to the bridge and alternative routes will affect us accordingly and any significant issues are incurred during the repair stage we will communicate these to you accordingly on a case by case basis - We appreciate your understanding on this.

As a valued customer of BRi, we truly appreciate your support, and we will continue to source the best options and solutions for your supply chain needs now, and into the future.

Take care and stay safe,

Keeping You Informed!

BR International

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