Neptune Pacific Line's South Pacific Island Shipping Dominance Grows

Neptune Pacific Line (Neptune) announced it has acquired Pacific Direct Line (PDL) from PDL’s parent holding company, Pacific International Lines (PIL) four days ago. This is further consolidation of the shipping market that I have long been saying in this blog is necessary for rate restoration and therefore financially healthy shipping services.

PDL's "Melanesian Pride"

The combined resources of Neptune and PDL will enable transport, warehousing, depots and customs services to be linked and will be another step closer toward integration of shipper's supply chains across 18 South Pacific markets.

The acquisition of PDL will strengthen Neptune’s Melanesian and Polynesian network, provide a link to Micronesia and the French territories. Global market connectivity will also be enhanced as they intend to hub cargo through ports in Fiji and New Zealand.

For PIL this divestment enables them to focus more on their key liner shipping markets in Asia, the Middle East, Africa and South America.

PDL currently operates throughout the South Pacific region and specialises in providing liner shipping services from New Zealand and Australia to the South Pacific Islands. My company, Depth Logistics , has enjoyed a close working relationship with PDL, particularly with break bulk cargo, which we believe will continue under Neptune's ownership.

Please contact me if you would like any further information or to discuss your South Pacific shipping needs.

All for now,

Brad Skelton

Green and Sustainable RoRo Shipping

With the urgent scrutiny for the shipping industry to reshape the maritime transportation into a greener and more sustainable business, shipping providers are making every effort to explore all alternative options for zero emission powered vessels.

Making their way as a world leader in emissions-free solutions at sea, Norway, through their leading short sea RoRo operator, United European Car Carriers (UECC), and sustainable marine biofuel pioneer GoodFuel have launched a joint trial of GoodFuels Bio-Fuel Oil(BFO) on UECC’s roll-on/roll-off (RoRo) vessel M/V Autosky.

The trial will take 3 months and will test 3,000 metric tons of sustainable biofuel on the 140-meter, 2,080-vehicle carrier. This is a significant move in advancing marine biofuel for the RoRo shipment. The bio-bunkering will take place in the Port of Rotterdam, it will be the first in a series of bunkering operations between March and May 2020. The BFO will be tested on M/V Autosky's normal route between Zeebrugge, Belgium and Santander, Spain.

UECC expects a reduction of more than 6,500 metric tonnes of CO2 emissions on a well-to-wake basis.

With scalability, sustainable marine biofuel effectively allows shipowners and operators to comply with both the 2020 0.50% sulphur cap, as well as future regulations on carbon reduction by 2030 and 2050. GoodFuels’ BFO is the first residual-fuel-equivalent biofuel, requiring no changes to marine engines.

This is an immense lead towards decarbonisation and green shipping. It is a great example for other shipping providers to continue marine biofuel uptake within the industry.

All for now,
Brad Skelton

Piracy at Sea is Still a Reality

Piracy at sea is still a commercial reality for shipping and the pirates are going further offshore than ever. They are also more frequently kidnapping crew members to try and collect ransom.

In the past week Tianjin Xinhai International Ship Management has lost contact with it's general cargo vessel "Huanghai Glory" (pictured) after the vessel sent a piracy alert using its Ship Security Alert System (SSAS). 

An unknown number of pirates are believed to have boarded the vessel, which is currently drifting off the coast of Nigeria. The vessel’s manager has not been able to get in touch with the vessel and its 23 Chinese crew members since the initial incident alert, reports maritime security consultant Dryad Global. The Nigeria Navy has been informed and has dispatched a vessel to investigate.

The attack is the third incident off the Nigerian coast in 24 hours, with all incidents happening in close proximity of each other. Five hours earlier a tanker was boarded 45 nautical miles south of Cotonou and this incident itself followed another approach of a vessel 50 nautical miles south of Lomé.

In the first incident, the vessel reported being approached by a skiff containing 9-10 people. In the second incident, the vessel was believed to have been boarded by 5-6 people. It is highly likely that the perpetrators of all three incidents are the same group of pirates and probably originated from within Nigeria.

Piracy off the coasts of Nigeria, Benin and Togo have increased sharply in recent years with more incidents being reported further out at sea.

It is imperative that the shippers always take out marine insurance on each and every shipment to protect themselves from piracy risks.

All for now

Brad Skelton

Coronavirus Update - China Returns to Work Slowly & Shipping Services Normalising

China is making slow but steady progress to return to work and fight back with their economy. Shipping services should start normalising soon as a consequence.

Industrial and manufacturing activities seem to be picking up with the eastern provinces mainly back to work. As some internal restrictions are still in force, most of the manufacturers are still not operating normally at this stage due to staff shortages. Despite this it is still good news for China's and the world's economy they are gradually ramping up again.

Here are some of the latest updates on the progress of what is actually happening in China, according to logistics sources I have there.

• Most of the eastern provinces such as Zhejiang, JiangSu, Fujian, Guangdong, Shanghai, Shangdong are back to work. Henan province has announced 16 March as the return to work date
• Most state owned manufacturers are at 80% productivity and logistics companies back to running around 95%
• Zhejiang 99% of companies and manufacturers are back to work. However, the productivity is around 50% and forecast to pick up to about 80% by late March
• Guangdong 99% companies and manufacturers are back to work. Productivity for many companies is around 50% and expected in increase to about 80% by late March. However the top 300 companies there are running at 91% productivity. The province is using high speed trains and charter flights to get workers back from inner Chinese provinces where there are still some restrictions.
• The furniture industry in Guangdong province is now back to 80% productivity and the car parts industry in Shangdong province has been fully operational since mid February.
• The textile industry in Zhejiang province is now back to 80% productivity since 29/02/2020. 
• In Jiangsu province 78.7% companies and factories are back to work, worker numbers are at approx. 6.25 million which is 76% of the normal number.
• The Chinese government is encouraging the use of trains to carry containers rather than rely on trucks between cities and provinces.
• Most provinces have reduced their control restriction from level one to level two, this means other provinces’ workers, if fit and well, are able to travel into most of the provinces. 

Please don't hesitate to contact my team at Depth Logistics or I if you need advice about your own shipping situation.

All for now,

Brad Skelton

List of the Top 10 Container Ports in the World

Being the world's second largest economy, and its rapid growth in manufacturing and infrastructure developments, China, has dominated the world's shipping markets. It is no surprise that 6 of the world's largest container ports in the world are located in China.

Forbes have listed the top 10 container ports in the world, according to the data from the World Shipping Council.

1. Port of Shanghai, China.
   It handled 33.62 million TEUs of cargo in 2013, up from 32.53 million in 2012 and the 31.74 million TEUs reported in 2011.

   

   
   

2. Singapore.
   It is no longer No. 1, but container traffic remains strong.  Last year, the port recorded 32.63 million TEUs compared with the 31.65 million in 2012 and 29.94 million TEUs in 2011.

   

   
   

3. Shenzhen, China.
   Shenzhen is now the second largest Chinese port. Last year it handled 23.28 million TEUs, up from 22.94 million in 2012 and 22.57 million TEUs in 2011, according to the World Shipping Council.

   

   
   

   
   
4. Hong Kong.
   The port of Hong Kong used to be the biggest of all Chinese ports, but not anymore.  Last year, Hong Kong continued to handle a dwindling number of containers as more and more ships head north to the mainland instead.  The Hong Kong container port terminal handled 22.35 million TEUs in 2013, down from 23.12 million in 2012 and 24.38 million TEUs in 2011.

   

   
   

5. Busan Port, South Korea.
   Continued growth in shipping at Busan. Last year saw 17.69 million TEUs go through the port, up from the 17.04 million in 2012 and 16.18 million in 2011.

   

   
   

6. Ningbo-Zhoushan Port, China.
   The Ningbo-Zhoushan Port handled 17.33 million TEUs in 2013, up from the 16.83 million in 2012 and the 14.72 million TEUs in 2011.

   

   
   

7. Qingdao, China.
   Qingdao handled 15.52 million TEUs last year, up again from the 14.5 million in 2012 and the 13.02 million TEUs recorded in 2011. Not bad for a country supposedly going through a hard landing.

   

   
   

8. Guangzhou Harbor, China.
   Despite a slowdown in exports out of China, the Guangzhou port continues to handle more cargo.  In 2013 it handled 15.31 million TEUs of cargo, up from 14.74 million in 2012 and 14.42 million in 2011.

   

   
   

9. Jebel Ali Port in Dubai, U.A.E.
   This Dubai port handled 13.64 million TEUs last year, up from 13.3 million in 2012 and 13 million TEUs in 2011, according to the World Shipping Council.  The U.A.E. has successfully positioned itself as the hub between East and West shipping lanes, with more capacity currently being built out at the Khalifa Port outside of Abu Dhabi, the U.A.E. capital.

   

   
   

10. Tianjin, China.
    The Tianjin port in China recorded 13.01 million TEUs in 2013, up from 12.3 million in 2012 and 11.59 million in 2011. TEU stands for "twenty-foot equivalent units". A standard cargo carrier equals two TEUs.
    
    

All for now,

Brad Skelton

World's Greatest Shave 2020

Today, blood cancer is an immensely big problem in Australia. It is one of the leading causes of death by cancer in Australia. Every day another 35 Australians are diagnosed with blood cancer. That's one Aussie every 41 minutes. Although research is improving survival, sadly an Australian loses their life to blood cancer every two hours.

There are 110,000 Australians living with blood cancer or related diseases, and unfortunately, my brother in law is one of them and sadly not the first person I know who has been affected by this awful disease. He has been fighting leukaemia for about six months now and with the support of a wonderful medical team and the Leukaemia Foundation he has it on the run. He and my sister are setting wonderful examples of resilience and determination. I am very proud of them and love them both and am confident this health challenge will soon be overcome completely.

In support of my Brother in law, this year, I have joined the 2020 World’s Greatest Shave campaign to raise money for the Leukaemia Foundation on 13th March 2020. Please join us in the fundraiser, no amount is too small to give, every cent helps. Your donation will help the Leukaemia Foundation care for families like mine facing blood cancer and research in advancements in diagnosis, treatments, and ultimately a cure. Please donate here: http://my.leukaemiafoundation.org.au/bradskelton

Being the only national organisation that represents the needs of all people living with any blood cancer in Australia, the Leukaemia Foundation have set a bold new goal to create real change for people living with blood cancer: Zero Lives Lost to Blood Cancer by 2035. This is an incredibly powerful and bold goal that all of us should get behind.

Thank you for your generosity and for joining us in this great cause, together we can beat cancer.



All for now,

Brad Skelton

Coronavirus Impacts on Shipping

The coronavirus outbreak in China is now playing havoc with global supply chains and is worsening. Many carriers ex China are cancelling sailings and the handful that did depart have left about ten percent full.

As the number of deaths is now in excess of 1,300 and confirmed cases rising over 63,000, some provinces and cities in China have extended movement restrictions until 1 March. This means that most supply chains in China are grinding to a halt.

This week one vessel that is capable of carrying 23,000 TEU departed from China to North Europe with less than 2,000 TEU so the freight contribution is too small to make the voyage profitable. Carriers simply cannot carry on much longer like this and some have begun anchoring their biggest vessels and deploying smaller ships with lower operating costs.

Cargo that is able to be delivered to the port is often not able to be uplifted reliably as shipping line schedules are in increasing turmoil.

Initially there was some discounting of rates but the reality is there is virtually no cargo there so in effect for cargo to travel shippers should really be forced to pay a premium in freight to prevent huge losses on the voyages by the carriers.

Rate levels have become fairly immaterial to most shippers as they just desperately need their cargo shipped to sustain their businesses. Many of them are giving up on China for the time being and trying to source their goods from other countries that are not currently badly affected by the virus.

I predict that as the Coronavirus crisis passes that there will be an unprecedented spike in demand so my team at Depth Logistics and I are proactively trying to lock in rate agreements with carriers for clients now. There will certainly be "peak season" like surcharges carriers will be charging.

All for now,

Brad Skelton

What documents are required for customs clearance?

Customs clearance of cargo is required for imports and exports.

To facilitate cargo customs clearance here are the primary documents that you require to prepare an import declaration or an export declaration.

For exported cargo:

• The vessel name, voyage number for sea freight cargo and the flight number and departure date for air freight cargo
• The Export Invoice for the goods

For imported cargo:

• Bill of Lading for sea freight cargo or an Airwaybill for air freight cargo. These are issued by the carrier document showing details of the cargo and the ship or aircraft that is transporting it.
• Suppliers Commercial Invoice to evidence the price paid for the goods and there value for import duty and GST calculation
• If your cargo is being imported from a country where a free trade agreement exists then a Certificate of Origin needs to be provided by your supplier so that duty free concessions can be claimed. If this document is not available or your goods originate from a country where no free trade agreement exists then import duty might be payable
• Marine Insurance Certificate if your cargo is insured
• Packing List
• For Quarantine Clearance of goods that might be used or of plant or animal origin to avoid treatment and inspections on arrival various treatment certificates and declarations. These include a Packing Declaration, Fumigation Certificate, Heat Treatment certificate or Biosecurity Import Permit
• If you are a commercial importer then we need your Business Number/Registration or if this shipment is a personal importation then photographic identification would be required

This is a generalised, non-exhaustive shipping documents guide and you should contact my team at Depth Logistics or I for more specific advice about the goods you are importing or exporting to be sure you have everything you need for smooth customs clearance and delivery.

All for now,

Brad Skelton

Marine Insurance & Freight Rates Rise with Middle East Tensions

While tensions between the US and Iran have lessened in recent days the events in the Middle East have made their mark in the insurance industry in particular.

Ships are navigating longer routes to avoid dangerous areas, Ships’ crew wages will rise owing to the heightened risks of attacks to Vessels in the Strait of Hormuz, adding costs to end consumers for commodities transported globally, hampering trade.

The recent tensions are leading to insurers and reinsurers imposing new conditions in policies, significantly increasing the costs of insurance. Industry experts forecast significant increases of about 10% over the coming months.

Similarly as ships need to steam further the owners will need to recover their operating costs in this region of the world.

The attacks on two Saudi Arabian tankers, a Norwegian and a UAE flagged vessel have led to the Joint War Committee, made up of representatives from the Lloyd’s and company markets, adding the Gulf to its list of high-risk waters.

Navy vessels of various nations are now escorting merchant ships through high risk waters to reduce the risks to shipping as part of Combined Military Force. Australia has deployed HMAS Toowoomba, a frigate, to region as part of this effort.



Other participating nations include Canada, Denmark, France, Germany, Italy, Republic of Korea, Netherlands, New Zealand, Pakistan, Portugal, Singapore, Spain, Turkey, the United Kingdom and the United States

If you would like any advice on your situation on shipping through this region please contact me.

All for now,

Brad Skelton

Incoterms 2020 coming into force January 2020

The International Chamber of Commerce has made changes to Incoterms to bring them more into line with modern world trade and shipping.

Incoterms are essential for international shippers and consignees to understand and agree responsibilities for shipping arrangements, costs and liability.

The main changes flowing through into Incoterms 2020 are as follows:

• Incoterms® 2020 provides for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms® rule.
• Incoterms® 2020 aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
• Incoterms® 2020 includes arrangements for carriage with own means of transport in FCA, Delivered at Place (DAP), Delivered at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
• There is a change in the three-letter name for Delivered at Terminal (DAT) to DPU.
• Incoterms® 2020 includes security-related requirements within carriage obligations and costs.

If you would like more information please contact myself or my team at Depth Logistics.

All for now,

Brad Skelton

IMO Low Sulphur Regulation Compliance & Freight Increases 1 January 2020

Effective from January 1st, the new IMO (International Maritime Organization) 2020 Low Sulphur Regulation will come into force, requiring all sea-going vessels to comply and reduce sulphur emissions by 85%.

In order to sufficiently comply with the Regulation, sulphur in fuel oil must be reduced from 3.50% to 0.50% in addition to the 0.10% sulphur limit already enforced in Emission Control Areas (ECA).

The objective of this regulation is to reduce the amount of sulphur oxide emissions which is expected to deliver major health and environmental benefits, including improvement of air quality and reducing risks of acidification in the oceans.



Ship owners are responding to this and seeking their compliance with some or all of the following solutions:

- Using liquid natural gas-powered (LNG) vessels

- Installing IMO approved exhaust gas cleaning systems(scrubbers)

- Using compliant fuels with 0.50% or 0.10% sulphur as the main solution

The new IMO 2020 Low Sulphur Regulation is impacting the shipping industry globally, with shipping costs set to increase worldwide. The cost of the Very Low Sulphur Fuel Oil (VLSFO) is expected to be significantly higher than the present High Sulphur Fuel Oil (HSFO).

Projections are that the VLSFO price will be at about US $531/mt in Rotterdam as compared to US $309/mt for HSFO. This equates to a 72% increase in fuel costs.

As a consequence carriers are introducing various sulphur surcharges to recover their higher operational costs. Most are using the BAF (Bunker Adjustment Factor) as the primary mechanism to pass these costs onto shippers.

For RoRo carriers we are seeing Sulphur Recovery Charges from USD 0.23 to USD 35.00 per revenue tonne plus BAF between USD 5.50 to USD 13.00 per revenue tonne.

Container carriers have surcharges per TEU (Twenty foot Equivalent Unit) ranging from USD 60.00 to USD 260.00 depending on the trade lanes concerned and the vessels serving them.

Please feel free to contact me if you would like some specific advice about your own circumstances and shipping contracts.

All for now,

Brad Skelton

RoRo ship loading cars in time lapse

Filipino Sailors send home over USD 6 Billion annually

Over 400,000 Filipino sailors serve on bulk carriers, container ships, oil, gas, chemical and other product tankers, general cargo ships, pure car carriers, cruise ships and tugboats around the world. They are renowned seamen and the preferred crew of the majority of ship owners internationally.

A fairly staggering statistic is the amount of money they send back home to family. They wired home a total of 6.14 billion U.S. dollars through via banks during 2018 which was a 4.5 percent increase from 5.87 billion U.S. dollars in 2017.

In January this year Filipino sailors sent home a total of 533 million U.S. dollars which was up 12.7 percent from 473 million U.S. dollars in January 2018.



The Philippines Government is supportive with training and certification standards for sailors so the job prospects of locally educated ship officers should remains strong.

Depth Offshore and Depth Logistics have wonderful Filipino people in our teams in both our Australian and Clark, Philippines offices. We understand why they are in demand.

All for now,

Brad Skelton

Dark Ships

Ocean conservationists from watchdog group Oceana have started tracking illegal activity of commercial fishing vessels through satellite data.

This data comes from a public tracking system called the Automatic Identification System (AIS), which was originally designed as a safety mechanism for vessels to avoid collisions at sea. Over time, it can also be used to monitor and track vessel movements.

Using Global Fishing Watch, which provides a never-before-seen view of commercial fishing activity worldwide, the following events that occurred in illegal fishing hotspots where a ship’s AIS device was possibly turned off have been identified:

A Panamanian commercial fishing vessel went dark for 15 days on the west side of the Galápagos Marine Reserve before it began transmitting signals again on the east side.

An Australian commercial fishing vessel appeared to disable its AIS near the Heard Island and McDonald Islands Marine Reserve on 10 separate occasions over one year.

A Spanish commercial fishing vessel appeared to repeatedly go dark for at least 21 times when leaving the port of Dakar in Senegal and approaching the Gambia’s national waters over a one-and-a-half-year period.

Another Spanish commercial fishing vessel appeared to turn off its AIS signal consistently over a seven-month period while operating in the national waters of at least five African countries and on the high seas.

Though it’s hard to identify between intentional disabling of the AIS, equipment malfunction, or satellite coverage issues, this question is now being raised: Is going dark from public tracking systems illegal?

The quick answer to that question is NO. Oceana noted that going dark is not necessarily illegal, but this behaviour may indicate that the ships are doing something suspicious. To answer that question with another question: Why would a vessel hide its tracks if its operations are in good faith?

A ship’s crew may turn off its AIS broadcast for legitimate reasons such as evading detection by pirates, but this may also indicate that a vessel is hiding its illegal activities like fishing in no-take protected areas or entering another country’s waters without authorisation.

Oceana is now urging governments around the world to require all commercial fishing vessels to be equipped with and continually transmit tamper-resistant AIS technology. Increased transparency can help deter illegal fishing, prevent unauthorised fishing in a nation’s waters and improve monitoring of fishing around the world. It can also improve maritime safety, help combat illegal fishing and increase compliance of laws and regulations.

All for now,

Brad Skelton

Smart Containers for Full Supply Chain Visibility

Further digitalization in the logistics industry is happening with "Smart Containers" being introduced that enable 24/7 end to end visibility and supply chain optimisation on land and at sea for more transparency, safety and cost-efficiency.

Smart containers make it possible to generate near real-time data and monitor the movement and condition of your cargo at any given point in time, anywhere through this permanent, electronic high-tech device.

There is no doubt that this cutting-edge connective technology will rapidly becoming the new shipping standard to improve shippers experiences. It's user-friendly hub allows efficient analytics, easy set-up of alerts and personalised notifications.

Its tracking capabilities include:

At this stage only a few carriers have these available and they are charging about USD90 to USD120 per container per trip.

This level of visibility has long been sought after by my clients, particularly for high value cargo, and will definitely be a game changer in the logistics industry and no doubt highlight where efficiencies can obtained.

Please contact me to learn more.

All for now,

Brad Skelton

I am doing the CEO Sleepout® again this year

On Thursday 20 June, I will make a stand and join hundreds of business, community and government leaders who will be spending the longest and coldest night of the year sleeping on the concrete outside the Brisbane Powerhouse as part of the Vinnies CEO Sleepout® 2019 to raise funds and awareness to address homelessness in our community.

More than 116,000 Australians, including almost 22,000 Queenslanders, experience homelessness every night and 32 per cent are children. That’s not a reality I’m comfortable with.

Last year, a record 6.9 million dollars was raised to help break the cycle of homelessness and poverty in Australia, which made a huge impact. That's:

• 1,949,673 support programs;
• 689,819 beds; and
• 1,590,554 meals.

Help me fight homelessness this year by donating at: https://www.ceosleepout.org.au/fundraisers/brad-skelton-depth-industries/brisbane

I am striving to raise $5,000 to help the St Vincent de Paul Society Queensland (Vinnies) provide support to people in crisis. This money will go towards crisis accommodation and affordable housing solutions for families and individuals at risk of homelessness, food vouchers for people who would otherwise go without food, and personal care packages containing everyday essentials.

To reach my fundraising goal, I need your help. Donations are tax deductible and can be processed online.

Thank you for your support. I will keep you updated on my fundraising progress.

All for now,
Brad Skelton