- The global shipping industry has been hit hard by the COVID-19-linked border restrictions with seafarers and ship operators facing multiple challenges.
- Australian industry bodies AMOU and AIMPE filed a joint submission to the committee which evaluated the Australian maritime industry. The submission concluded that Australia’s dependence on foreign operations needs to be addressed.
- Maritime Australia suggested re-creating the Australian tanker fleet to restore fuel safety transport capability and offer a stage for preparation.
- SeaLink Travel Group was recently included in the S&P/ASX 300 index in the quarterly rebalance; Wiseway sustained COVID-19 pressure as its services fall under ‘essential’ category.
In the past few weeks, the global shipping industry has been in the limelight because of the challenges faced by the ship operators and the seafarers amid the COVID-19 crisis. In a press release by the International Chamber of Shipping or ICS, there were a few instances where the seafarers, who were experiencing medical situations not associated with COVID-19, were not permitted to enter the port.
More than 400,000 crew members are stuck at the sea or house because of the travel restrictions imposed by the nations due to COVID-19 outbreak. Most of the crew members have worked beyond their contract limits and some beyond one year.
The present situation is alarming as it would not only affect the health of seafarers and crew members but could also be a risk to the global supply chain.
On that front, the International Labour Organization called for crucial and organised action to release 150k to 200k seafarers stuck on ships.
For further details do read: How is the Global Shipping Industry Placed Amid COVID-19 Crisis?
Australian Shipping Industry Amid COVID-19
With the increasing cases of coronavirus in the country, albeit at a much lower rate, the Department of Health has issued COVID-19 information for the maritime industry. The country remains open for business and would provide to its customers as well as the wider community. On 19 June 2020, there were 20 new cases of COVID-19 in the last 24 hours.
In the Australian Parliament, the Australian Institute of Marine and Power Engineers (AIMPE) and the Australian Maritime Officers Union (AMOU) filed a joined submission to the committee which reviewed the experience in the Australian maritime industry. It was concluded that there was a need for a policy to address this problem.
The main suggestion of the “Maritime Australia” plan was to re-create the Australian tanker fleet which would not only repair certain fuel safety transport capability but also give a stage for preparation.
The international Nautilus Federation announced a message related to the trouble of international seafarers impacted by the coronavirus pandemic. The Federal Executive of AIMPE backed the message together with approximately 20 other unions on behalf of maritime professionals.
Nautilus Federation Message:
There have been three extensions to the maximum duration of work on board ships since the coronavirus crisis started. As per the Maritime Labour Convention, the max duration a member can perform the duty is of 11 months. On that note, it was found that around 50,000 seafarers were impacted due to the restrictions related to pandemic worldwide. As of now, many seafarers have completed 14 months on their ships. Currently, the International Nautilus Federation is asking govt across the globe to take measures on this front to enable crew changes required to lessen this terrible condition.
Tasmanian Government Exemption Update:
The Tasmanian government, on 18 May 2020, released a new info sheet which explains the exception given for the crew members. The government applied the National Cabinet judgment of 9 April 2020 which would facilitate seafarers to return home without staying 14 days in hotel isolation. Tasmania was amongst the first states to shut down the borders and enforce 14-day mandatory hotel isolation. These bans are in place, but the class exception for non-cruise seafarers was applied with effect from 5 May 2020 twelve o'clock.
AIMPE was urging for the class exemption to be applied in Tasmania each week since 9 April 2020, and it took four weeks for exceptions to be put in place.
With this backdrop let us look at two ASX-listed stock from this industry and see their recent updates.
SeaLink Travel Group Limited (ASX:SLK)
SeaLink Travel Group Limited offers travel and tourism services. The Company provides superior customer service & excellent holiday experience. SLK has well-established global operations and carries over 360 million passengers per year.
Recent Update; Quarterly Rebalance of the S&P/ASX Indices:
On 12 June 2020, S&P Dow Jones Indices revealed adjustments in the S&P/ASX indices, with effect at the commencement of trade on 22 June 2020. In the quarterly rebalance, SeaLink Travel Group Limited has been added to the S&P/ASX 300 Index.
By the end of the day’s trade on 19 June 2020, SLK shares settled at A$4.720, up 2.609% from the previous close. SLK has a market cap of approximately A$1.0 billion and ~218.4 million outstanding shares.
Wiseway Group Limited (ASX:WWG)
Headquartered in Sydney, Wiseway Group Limited is amongst the top freight forwarding corporations in Australia. The Company offers a range of services including air freight, sea freight, transportation, customs clearance, distribution, warehousing, and logistics solutions.
Agfood Virtual Conference: A Glance at WWG’s position amid COVID-19
In the Agfood Virtual Conference presentation released on 29 April 2020, WWG updated that during the COVID-19 pandemic, continued to operate its import and export services between Australia and Asia.
Flight restrictions disrupted established Australia-Asia trade pathways. Wiseway recognised the prospect in this disruption to show its leadership in Australian-Chinese trade relations. It used its relationships with airlines and shipping lines as well as local trucking companies to ensure customers’ cargo get in and out of Asia via a blend of alternate routes.
Customers from Australia and China looked Wiseway for help in looking for solutions to the problematic logistical challenge.
Trading Update Q3 FY20
As a provider of essential services, Wiseway was able to continue operating during the COVID-19 crisis, which had a favourable impact on its financials. The key highlights for Q3 include:
- Sales revenue grew 17% to reach A$25.1 million, aided by new business division growth.
- Freight volumes up by 10% at 19,127 tonnes, driven by improved sea freight.
- Significant customer wins in Australia.
By the end of the day’s trade on 19 June 2020, WWG shares closed flat on ASX at A$0.120. WWG has a market cap of A$16.84 million and ~140.32 million outstanding shares.