May 3, 2013

 

 

Due to confusion over new quarantine certificates, delays in meat shipments to China are costing Australian exporters up to US$20,000/day.

 

It was learnt that several hundred containers of meat from 20-30 exporters have been delayed for around a week, after some Chinese officials refused to accept new bilingual health certificates.

 

Director of meat exporter Sanger Australia, Stuart Hanna, says the temporary solution has been to return to the old certificates.

 

"China's just coming back off a public holiday. A lot of our customers have requested the old certificates which we have since sent to them," he said.

 

"We should know today or tomorrow, as China comes back from those holidays, whether they are being accepted for clearing the containers, but we believe they will be."

 

According to the Australian Meat Industry Council's John Langbridge, only some Chinese ports have refused the new certificates.

 

"Some of the sea freight was turning up last week and the officials had not been aware that the change in certificates had happened. We think we have resolved the problem, but we still do not know how long it will take for the containers to arrive," he said.

 

The report added that 400-600 containers have been issued the new certificates, but Langbridge says while it is not clear how many containers have been delayed, the actual numbers are likely to be much less than that.

 

He said while the meat is likely to be unaffected by the delays, there will be demurrage costs and contract penalties for exporters. Delayers per container amount to about US$100-150 a day and Hanna believes total demurrage costs could be as much as US$100,000.

 

"In our industry, and the fact that margins are so slim, you do not like to be running into multiple day delays. But the containers are certainly plugged in and on power and the meat will all be fine," he said.

 

John Langbridge warned that while demurrage costs are significant, contract penalties could be even more costly for some exporters.

 

"Some of these companies have very significant contract arrangements and it's all based on supplies being delivered on time. If they are delayed there can be quite sizeable contract penalties."