February Connected

14th February, 2023

Welcome to our first edition of Connected for 2023, we hope you all had an enjoyable and restful break over the recent holiday period. The SCC team did manage some time off, but we always had a crew on hand managing your important shipments. 2023 has started slowly in regard to volumes, this is due to the recent Chinese New Year Holidays. However, with inflation still increasing there is strong indication of a reduction in consumer spending, which will have an impact on shipping volumes as the year progresses.   

Ocean freight

Our previous edition of Connected detailed the dramatic decrease in China FCL rates. This decrease has continued into the New Year with rates ex main China ports to Australia approaching lows not seen in a very long time. If as expected, volumes do not escalate to what they were in previous years, we will be seeing increasing blank sailings from the shipping lines. The intent of blank sailings is to manage volumes and capacity in a manner that does not see rates go below the costs of shipping. At SCC we are managing rates daily with our Chinese partners, always ensuring the best transit time and rate for every booking. For those with LCL bookings, rates have reduced in line with the FCL reductions.

Rates are also reducing ex EU and other Asian countries, however not at the same level as seen ex China.

Air Freight

It has been a while but very pleased to let you know there has been a slight decrease in air freight rates ex the USA to Australia, whilst it is not a significant decrease it is the first in a long time. Air rates are driven by capacity, we are not back to pre-covid capacity with many airlines not yet dusting off all their parked planes. It is important to note that 70% of air freight cargo into Australia flies in the belly of passenger planes, we are hearing of the high price for overseas travel and bookings increasingly difficult, if this continues, we expect more planes up in the air and a corresponding reductions of air freight cargo rates in time.

There has also been air rate reductions ex EU and Asian countries, we are heading in the right direction after the covid air rates peaks.  

Air and Sea Freight Arrival charges

Air and sea freight handlers including port operators and airline CTO’s have announced increases to their fees. The increases from port providores (stevedores) have the attention of the Productivity Commission, freight industry bodies are actively participating in the review of these always increasing charges, we will keep you advised of the outcome.

Vietnam Manufacturing

We recently referenced manufacturing opportunities in Vietnam, particularly for those seeking a backup to current Chinese made arrangements. The Vietnamese Government is reacting to increased interest and has announced a USD800M infrastructure investment, to be targeted at better management of container movements, with a particular focus on inland container depots. If you are needing advice and or introductions to potential Vietnamese suppliers, please reach out to our team in sales@sccargo.com.au With reference to Vietnam made, we have strong partners in Vietnam and introductions to the right supplier for you can be arranged.

Travellers

Two of our Director’s Vanessa Richards and Greg McKillop are travelling to Singapore this month to attend the annual WCA World meetings. Like most meetings of this kind they have been on hold or via zoom the last few years. Many of our overseas freight partners will be in attendance, it is an ideal time for us to catch up and discuss trade lanes, services, rates and the continued care of all of our customers. They are both looking forward to the 60+ plus meetings they have booked in.

New Team Members

Our SCC team has grown again recently, we are very pleased to welcome Joshua and Tayla to the SCC warehouse team. These are both new positions which have resulted from the growth in our e-commerce warehouse offering. A huge congratulations to our warehouse team and support staff for implanting two new customers into our facility throughout January.

Sustainability at SCC

At SCC we are very proud of the work being done to ensure that we are a proactive sustainable business, whilst not limited to the following our focus in recent times has been on our people, social, human capital, governance, charity and community and green initiatives. Our 2023 SUSTAINABILITY REPORT will be available for publishing soon. Recent sustainability initiatives from SCC include.

• 13.28kw solar system being installed on our Brisbane warehouse in February 2023 to reduce our emissions. We will be powered completely by renewable energy and also looking at a 600% ROI based on current energy usage.

• Received Bronze Level EcoVadis certification by validating our non-financial management systems including environmental, ethics, sustainable procurement, and human rights. Diligent focus on increasing this ranking across 2023.

• Committed to the Ten Principals of the United Nations Global Compact (UNGC) which covers Human Rights, Labour, Environment and Anti-Corruption. 

• Building a carbon emissions tracker to roll out to our customers and partners so they too can track and monitor their carbon footprint. 

• Repurposed racking and shelving in our warehouse that would have otherwise been sent to landfill.  This forms part of our sustainable procurement strategy where we aim to ensure that the majority of our purchases are recycled, repurposed or reused. 

• Conducting a full audit on our packaging materials used in our e-commerce business to understand where we can offer our customers options that are better for the environment.

• Rolling out a training plan for all of our staff to retrain and upskill all of our staff across 2023.

• Recent charity support includes the Dayanami Foundation School in Tenali India, Ozharvest and Amal Al-Salihah is a local not-for-profit organisation based in Sydney raising much needed funds to assist those who have been left without homes after the tragic earthquake in Turkey and Syria.

Thank you to all of our customers for your continued support, we look forward to being an extension to your teams in 2023.