New Transport Tax in China Effective August 1st

Please note that beginning August 1st, 2013 the Ministry of Finance and the State Administration of Taxation of China have released a new tax regulation for the transportation industry and other selected service industries on a nationwide basis.

The tax will be levied on all charges remitted to carriers in China, including ocean freight and all surcharges. The tax does not apply when bill of lading charges are prepaid outside of China. For example, the Chinese government will not assess the tax when ocean freight and/or accessorial charges are prepaid in the U.S. or Canada.

The new VAT will be applied on all import and export cargo to/from China, and the tax will impact all Trade lanes – not just the Transpacific. This may lead to increase of rates for the whole transport sector in China related to inbound, outbound and transit cargo.

Ocean freight carriers have begun issuing  notices advising customers that as international transport agencies in China and as the general taxpayer of the logistics auxiliary industry, they are therefore subject to the 6% VAT from the Chinese government. At the start of peak season shipping and coupled with general rate increases from ocean freight carriers, this will be a huge burden on international shippers.

Please also note the new VAT is not a carrier surcharge. It is a government tax and, as such will be collected on all applicable tariff-rated and contracted cargo. RCL Agencies  will keep you advised regarding any changes to this tax program in China.

CSCL to Order 18,000 TEU Ships

According to  Dow Jones Newswires, China Shipping Container Lines (CSCL)  plans to order five 18,000 TEU (20-foot-equivalent unit) container ships.  These will be the  world’s largest, making CSCL he first carrier to challenge Maersk Line, which will deploy the first vessel of this size in the Asia-Europe trade in June.

In a statement to the Shanghai stock exchange, CSCL said it needs the new ships to “raise its core competitiveness”.

Hong Kong-based CSCL, the world’s ninth-largest carrier, said, “Further details will be disclosed after a firm contract is signed.”

The South Korean shipbuilding giant Hyundai Heavy Industries has won the bid to build the massive container ships and discussions are taking place between CSCL and Hyundai to finalize shipbuilding contracts for five vessels. China Shipping management agreed to the order at a board meeting last Sunday. The container ships will be deployed on the Asia-Europe route.

Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering have  also submitted bids, but as an insider at Daewoo Shipbuilding and Marine Engineering said “it wasn’t enough to win”.

Each triple-E ship is expected to cost around US$140 million for a combined sum of $700 million.

Stay informed with RCL updates.

Qingdao Dispatch Situation Update, October 24th

Our Chinese agents advised us that the current dispatch situation at the railway statition Qingdao is not very optimistic. After the holiday, the disagreement between Railway Bureaus was somewhat relieved by the Ministry of Railways.

However, with the current stock in Qingdao of 1,900 FEU,  it can be expected that the whole volume will be dispatched only after 60+ days.

We will continue to keep you informed. Please be guided accordingly

Rail Stoppage at Shenzen Station in China

Our Chinese agents have advised us that due to congestion at Alashankou, Guangdong Railway Bureau has announced a stoppage at Shenzhen station from  20.10-31.10 for all type of containers. We are checking if there will be stoppage/delays at other Guangdong stations, such as Foshan, Guangzhou,etc.  RCL Agencies continues to monitor the situation and will keep you updated. Please be guided accordingly.

Dispatch Problems at Qingdao

As our Chinese partners have advised us, currently the container volume in Qingdao has risen to 2000 FEU due to some internal cooperation problems between the Railway Bureaus.  Only a few containers have been dispatched since September 23rd. With the current stock in Qingdao, it is expected that the backlog will take 60 + days to clear up.

Please be guided accordingly . We will keep you informed on further development.

New Zealand Strike Surcharge

US Lines have advised that they will file a New Zealand Strike Surcharge of $110/TEU, effective for cargo received on or after September 1, 2012. This has been done to protect incremental costs associated with possible work stoppages due to contract discussions  between the Maritime Union of New Zealand and the Ports of Auckland. The contract discussion began in November of 2011 and  is still not finalized. Despite progress in the negotiations the threat of resumed labor disruption looms.

RCL will  continue to monitor the situation. Please be guided accordingly.

The threat of floods in Bangkok still remains

According to the Paris-based consultancy, Alphaliner, the threat of floods remain in Bangkok as the Chao Phraya river overflows and rises to its highest level in seven years.

Due to the ongoing threat of flooding in Thailand, shipments to and from the kingdom have been affected. Western Digital, Honda Motor and many other companies have been forced to suspend production in central Thailand because of the floods. Most of the factory closures are due to disruptions to local supply chain.

As of 25. October 2011, reports from shipping agents in Bangkok state that Bangkok Port has already stopped receiving discharged containers due to yard congestion. Container liners are therefore considering shifting incoming vessels to other private ports in Bangkok or Laem Chabang. In addition, due to flooding of numerous Container Terminals and ICD’s, their ability to accept additional laden containers is also in doubt. Some carries have already started to issue warnings to their customers and advising to some of them not to return laden export containers to Bangkok. Besides some of the operations could be temporarily suspended and cargo may miss its intended sailings.

Experts have stated that at that moment the impact on most companies is not huge, but it might get worse if the factories stay closed.

The flooding is expected to subside by next month.