Author: NZ Freight

We hope this message finds you well. We’re reaching out to provide you with an important update regarding the CN-NZ trade lane, which has seen significant activity lately.

Due to five vessel cancellations in the Australia trade lane, including a major one connecting CN to NZ in the first half of April, the freight market on the CN-NZ route has become much busier. In response, shipping lines are keen to capitalize on this increased demand.

Here are some key points to note:

  1. Increased Activity: With vessel cancellations impacting the CN-AU trade lane, there’s been a noticeable effect on the CN-NZ route as well. Shipping lines are adjusting their space allocations to maximize profits, leading to heightened activity in the CN-NZ trade lane.
  2. Rate Adjustments: As a result of these changes, we’ve seen slight rate increases on shipments from China to New Zealand. 
  3. Market Conditions: Typically, April sees sliding rates; however, due to vessel cancellations, rates are trending upwards instead. This trend is also influenced by the better freight market in April compared to the quiet period experienced in March.
  4. Upcoming Challenges: With China’s Golden Labour holidays approaching in the first week of May and ongoing space allocation shortages in late April, we anticipate a hectic freight market in the coming weeks. There’s a possibility of another General Rate Increase (GRI) notice, with rates potentially increasing in May.
  5. Long-term Outlook: While the current market dynamics may seem challenging, it’s important to note that shipping lines are focused on recovering from previous setbacks and restoring a healthy freight market. Our mission remains unchanged: to provide you with the most competitive freight rates and highest level of service.

As always, we’re committed to supporting you through these changes and ensuring smooth sailing for your shipments. For updated rates and further information, please refer to the attached documents.

Thank you for your continued trust and partnership. Should you have any questions or concerns, please don’t hesitate to reach out to us.

 

1. General Market Overview:

In this edition, we bring you the latest updates and insights from the dynamic world of container shipping. From market rates to strategic alliances and digital transformation, we’ve got you covered.

2. Ocean Freight Market Rates:

COSCO’s ASAX Service Upgrade:

Exciting news from COSCO as they enhance their ASAX service, offering a smoother connection from Port Klang to Fremantle with increased capacity, doubling the previous limit to over 3500 TEUs. The Ocean Alliance’s east-west liner services vessel-sharing agreement has also been extended until March 31, 2032, putting an end to speculations about potential shifts.

Industry Outlook for 2025:

Anticipate a challenging year for container shipping in 2025, with over 2 million TEU of newbuilding deliveries, resulting in a 5% fleet growth. However, efforts to manage capacity amid supply growth are underway, with projections of a 3% increase in container trade volume. Digitalization is becoming crucial for staying competitive in this evolving landscape.

New Feeder and Short-Sea Shipping in Saudi Arabia:

Saudi Arabia introduces Folk Maritime, its first dedicated feeder operator, connecting key ports in the Red Sea. Services include connections between Jeddah, Neom, Yanbu, Ain Sokhna, and Sudan.

3. Market Rates & Economic Conditions:

Upcoming Weakness in Market:

Expect a weaker market next week as stable vessel capacity becomes a concern. FAK rates from CNMP are predicted to be lower than USD 1000/TEU after e-commerce spot rates, particularly in the range of USD 850-900/TEU to AUEC.

Competitive Rates to Australia:

FAK rates from SEA origins and Australia West Coast remain stable, with rates around USD 600-800/TEU and 550-700/TEU, respectively. COSCO’s ASAX service upgrade, now at 7 days from Singapore to Fremantle, contributes to the competitive edge.

Container Imbalances and Trade Challenges:

Growing trade imbalances highlight the struggle to reposition empty containers, exceeding the growth in paying container volumes. This inefficiency poses economic burdens on multiple parties, impacting the overall container system.

Guangzhou Accident Update:

An accident in Guangzhou has led to temporary traffic control and delays for ships and trucks. Repair work is expected to take four to five months, with temporary docks available in the meantime.

4. Global Economic Outlook:

Equity Markets and Inflation Trends:

Despite gloomy economic conditions, equity markets, particularly the tech-heavy NASDAQ, have reached all-time highs. Inflation is decreasing, encouraging potential rate cuts in the European Central Bank (ECB). Economic challenges in the European economic zone call for stimulus and interest rate cuts.

Commodity Currencies and Economic Data:

The softer reserve has led to a recovery in commodity currencies, with the AUD surpassing 0.6500 and the NZD aiming to regain 0.6100. The upcoming week promises a wealth of global economic data, providing insights into growth and inflation measures.

Stay tuned for more updates and insights in our next newsletter. As the container shipping landscape evolves, we’re committed to keeping you informed. If you have any questions or topics you’d like us to cover, feel free to reach out.

Safe sailing,

  • The continuous delays in booking VBS (Vehicle Booking System) slots for dehiring empty imports and uplifting export empties are causing a detrimental effect on FCL (Full Container Load) turn times. This means that the delays in securing slots for these activities are resulting in longer turnaround times for FCL shipments. As a consequence, there may be challenges in meeting delivery schedules and maintaining efficient operations within the logistics chain. It’s crucial for stakeholders to address these delays promptly to minimize disruptions and optimize the flow of cargo.

 

  • The scheduled road maintenance closures on SH1 at the Brynderwyns and the Desert Road are affecting the delivery schedules of some linehaul services. These closures mean that certain routes are temporarily unavailable or subject to delays, which can disrupt the transportation of goods along those corridors. As a result, businesses relying on linehaul services may experience extended delivery times or adjustments to their logistics plans to accommodate the road closures. It’s essential for affected parties to stay informed about alternative routes and plan accordingly to mitigate the impact of these maintenance closures on their operations.

 

  • KiwiRail is planning to close the rail link from the Port of Tauranga to Metroport during the Easter period for maintenance purposes. As a result of this closure, there will be significant implications for cargo movements:
    • Affected Export Containers from Metroport: Export containers originating from Metroport will face an earlier cutoff time due to the closure of the rail link. This means that exporters will need to adjust their schedules to ensure their containers are ready for shipment before the cutoff deadline.
    • Delay in Transit Time for Import Containers: Import containers destined for Metroport from the Port of Tauranga will experience delays in transit following the Easter period. The closure of the rail link will disrupt the regular transportation schedule, resulting in extended transit times for these import containers.

Stakeholders involved in the transportation and logistics chain should plan accordingly to minimize the impact of these disruptions on their operations and ensure timely delivery of goods. Communication between relevant parties, including shippers, carriers, and port authorities, will be crucial to manage the logistical challenges posed by the rail link closure effectively.

 

  • The local trucking Fuel Adjustment Factor (FAF) for March will remain unchanged at 22.5%. This factor is significant for the transportation industry as it helps to account for fluctuations in fuel prices, ensuring that transportation costs remain reflective of current market conditions. By keeping the FAF stable for March, stakeholders in the trucking industry can maintain consistency in pricing and budgeting for fuel-related expenses during this period. It’s essential for businesses and logistics operators to monitor FAF updates regularly to adjust their cost projections and effectively manage transportation expenses.

 

  • Starting from March 1st, a Tyre Stewardship Fee will be applied to all new tyres sold, whether they are sold loose or already installed on a vehicle. The fee has been set at $6.65 excluding GST for a standard passenger tyre, but it may vary depending on the type of tyre being purchased. For instance, different fees will apply to motorbike tyres compared to tractor tyres. Customers will be informed of the specific fee applicable to the tyres they purchase by the retailer or garage.

    Additionally, it’s important to note that disposal fees may still be applicable to old end-of-life tyres until September 1st. This fee structure aims to support tyre stewardship and promote responsible disposal practices within the industry. Consumers and businesses should be aware of these changes and factor them into their purchasing decisions and budgeting processes accordingly.

 

  • The changeover to the new MPI BACC (Biosecurity Authority Clearance Certificate) format is scheduled for Friday, March 29th. This transition marks the culmination of a project undertaken by MPI over the past two and a half years to replace the main system for managing cargo and mail into New Zealand.

    The primary objective of this project has been to effect a like-for-like replacement, aiming for minimal impact on the industry. However, due to the adoption of different technology, there will be some minor changes to the look and feel of the BACC, as well as adjustments to pre-invoice procedures and the XMLs that are transmitted.

    Stakeholders should anticipate these changes and prepare for the transition accordingly. Further details regarding the specifics of the new MPI BACC format are expected to be released shortly, allowing businesses and individuals involved in cargo and mail management to adapt their processes accordingly. It’s important for affected parties to stay informed and be proactive in implementing any necessary adjustments to ensure smooth operations following the transition.

Ocean Freight Market Rate: Carriers have effectively managed equipment supply through strategic evacuation and container control, addressing challenges in their networks. However, tight supply persists in certain regions, particularly in India, where surplus boxes have led to storage charges and heightened lease-hire rates.

Market Projection: Expectations suggest a soft market in the upcoming week, with rates anticipated to remain lower than buying costs. Key consortia, including CAT/CA2, NEAX, and ZIM/MSC, are navigating challenges, while Maersk’s SPoT rate adjusts to cater for increased bookings.

Regional Rate Highlights:

  • FAK rates from SEA origins extend for most carriers, with COSCO making sharp adjustments.
  • FAK rates to Australia West Coast remain stable, with a preference for COSCO, ONE, MSC, or PIL.
  • FAK rates from NEA origins to New Zealand face challenges due to weak demand.

Impact of Red Sea Crisis on Agri Exports: The Red Sea crisis-induced supply chain disruption has significantly affected Indian agricultural exporters. The soaring ocean rates and equipment availability issues have pushed agri trades to commercially unviable conditions. The Indian government’s recent move to liberalize aviation policy aims to facilitate air cargo movements and bolster export capacity.

Economic Impact: The crisis has led to a sharp drop in exports, impacting both the Indian economy and global markets, particularly in crucial commodities like rice and sugar. There are concerns that prolonged challenges may lead to a shift in buyers to alternative sourcing markets.

Aviation Policy Shift in India: In a significant development, India has liberalized its aviation policy to allow foreign cargo airlines to operate from all international airports for three years. This move aligns with the government’s ambitious target of achieving 10 million tonnes of air cargo trade by 2030, attracting new freight-only airline startups.

Stay tuned for further updates as the global logistics landscape continues to evolve. 🌍🚚✈️ #LogisticsUpdate #ShippingIndustry #GlobalTrade

We want to inform you about recent updates to Neptune Pacific Direct Line’s (NPDL) services in the South Pacific islands region. In response to changing dynamics and customer needs, who have reshuffled their intra-South Pacific loops.

Here are the key changes:

  1. Tahiti Express Loop:
    • The ‘Samoa and Tonga Express’ service, which linked Auckland, Nuku’alofa, Pago Pago, and Apia, has been suspended.
    • The New Zealand-Tahiti ‘Tahiti Express’ loop has now incorporated the Nuku’alofa call once again, providing improved connectivity. The updated loop will turn in three to four weeks, with the NPDL TAHITI vessel calling at Auckland, Papeete, Nuku’alofa, and Auckland. NPDL plans to replace this ship with the NPDL CALIFORNIA, a 1,103 TEU vessel scheduled to phase in later this week.
  2. INTRAPAC Loop:
    • The ‘INTRAPAC’ loop, which previously covered Fiji, Tuvalu, Wallis & Futuna, and Kiribati, has undergone adjustments.
    • Noumea has been added to the loop, while Funafuti (Tuvalu) and Tarawa have been removed. These two ports will now be served by the reinstated ‘Fiji-Tuvalu-Kiribati’ service.
    • The revised ‘INTRAPAC’ loop will now serve Lautoka, Noumea, Suva, Mata-Utu (Wallis Island), and Leava (Futuna Island) using the 600 TEU SOUTHERN PEARL vessel every three weeks.
  3. Reinstated Fiji-Tuvalu-Kiribati Loop:
    • The ‘Fiji-Tuvalu-Kiribati’ service, covering Lautoka, Suva, Funafuti (Tuvalu), Tarawa, and Lautoka, has been reinstated.
    • The 679 TEU CAPITAINE KUPE vessel will offer sailings every three weeks between these ports.

Thank you for your support ex New Zealand to the Pacific Islanders, and welcome your enquiries.

The ongoing move count restrictions at Lyttelton and Tauranga ports are having notable effects on port operations and shipping schedules. Here are some key points to consider:

  • Move Count Restrictions:
    • Move count restrictions typically refer to limitations on the number of container movements or handling operations at a port within a specific timeframe. These restrictions can be imposed due to various factors, including infrastructure constraints, labor issues, or operational challenges.
  • Impact on Port Rotations:
    • The move count restrictions are causing late changes to port rotations. Shipping lines and logistics providers may need to adjust their planned routes and schedules to accommodate the restrictions. This can lead to increased uncertainty and challenges in coordinating shipments.
  • Port Omissions:
    • The move count restrictions are resulting in some port omissions, meaning that certain vessels may need to skip or bypass scheduled stops at Lyttelton and Tauranga ports. This can disrupt the regular flow of cargo and may lead to delays in cargo delivery.
  • Supply Chain Disruptions:
    • Late changes to port rotations and port omissions can create disruptions in the supply chain. Importers and exporters may face challenges in ensuring the timely movement of goods, potentially impacting production schedules and inventory management.
  • Operational Planning Challenges:
    • The restrictions necessitate careful operational planning by shipping lines, port authorities, and logistics providers. Efficient coordination and communication are crucial to adapt to the dynamic situation and minimize the impact on the overall logistics network.
  • Customer Communication:
    • Effective communication with customers, including importers, exporters, and other stakeholders, becomes essential during such disruptions. Transparent communication about changes in schedules and potential delays allows for better planning and management of expectations.
  • Collaboration Among Stakeholders:
    • Collaboration among port authorities, shipping lines, and other stakeholders is vital to address and mitigate the impact of move count restrictions. Finding collaborative solutions to optimize port operations and enhance efficiency is crucial in overcoming these challenges.
  • Monitoring and Adaptation:
    • Given the dynamic nature of the situation, continuous monitoring and adaptation to changing conditions are necessary. Stakeholders in the supply chain should remain vigilant to updates from port authorities and adjust their strategies accordingly.

In summary, the move count restrictions at Lyttelton and Tauranga ports are contributing to changes in port rotations and omissions, with potential implications for the broader supply chain. Stakeholders must collaborate, communicate effectively, and implement adaptive strategies to navigate these challenges and minimize disruptions.

The recent increase in the cost of Vehicle Booking System (VBS) slots at the Port of Auckland, coupled with the decision by Metroport and several empty depots to follow suit, indicates a notable shift in pricing dynamics within the logistics and port operations. Here are some key considerations regarding this development:

  • Cost Impact on Shippers:
    • The rise in VBS slot costs directly affects shippers and logistics providers who utilize these services. Increased costs can contribute to higher overall transportation expenses, potentially impacting profit margins for businesses involved in importing and exporting goods.
  • Supply Chain Cost Considerations:
    • Businesses operating within the supply chain will need to reassess their cost structures and factor in the increased expenses associated with VBS slots. This may necessitate adjustments to pricing models and financial planning.
  • Collaborative Decision-Making:
    • The synchronized increase in VBS costs by both the Port of Auckland and other depots suggests a coordinated or interconnected decision-making process within the local logistics ecosystem. Stakeholders may be responding to shared challenges or cost pressures.
  • Communication Challenges:
    • Changes in costs, especially when implemented simultaneously by multiple entities, can pose communication challenges. Shippers and logistics companies may need to adapt quickly to the new pricing environment and ensure clear communication with their clients and partners.
  • Potential Industry Trends:
    • The decision by multiple entities to increase VBS costs might indicate broader industry trends or challenges. It could be reflective of rising operational costs, the need for infrastructure investment, or other factors influencing pricing decisions in the logistics sector.
  • Impact on Port Competitiveness:
    • Increases in costs, if not justified by corresponding improvements in services or infrastructure, could potentially impact the competitiveness of the Port of Auckland and associated depots. Ports and logistics hubs often compete for business based on efficiency and cost-effectiveness.
  • Regulatory and Stakeholder Oversight:
    • Given the critical role of ports and logistics in facilitating trade, regulatory bodies and stakeholders may closely monitor such pricing decisions to ensure they are fair, transparent, and do not unduly burden businesses or consumers.

In summary, the simultaneous increase in VBS costs by the Port of Auckland, Metroport, and other depots suggests a significant development in the local logistics landscape. Businesses should carefully evaluate the impact on their operations and engage with stakeholders to navigate these changes effectively. Additionally, ongoing monitoring of industry trends and regulatory developments will be crucial in adapting to the evolving logistics environment.

The persisting issue of overall container depot capacity, despite lower overall volumes, presents a set of challenges for the logistics and shipping industry in the Auckland region. Here are some key points to consider:

  • Capacity Challenges:
    • Despite a decrease in overall container volumes, the container depot capacity remains insufficient. This could be due to various factors such as infrastructure limitations, operational constraints, or increased demand during peak periods.
  • Restricted Dehire Slots:
    • The mention of restricted dehire slots at several large Auckland sites indicates limitations on the availability of spaces for returning empty containers. This restriction can lead to delays in the container return process, affecting the overall efficiency of the supply chain.
  • Operational Delays:
    • With restricted dehire slots, delays in the return and retrieval of containers are likely to occur. This, in turn, can disrupt the smooth flow of goods through the supply chain, impacting the timely delivery and dispatch of shipments.
  • Impact on Businesses:
    • Businesses relying on the efficient movement of goods may face challenges in meeting deadlines and maintaining optimal inventory levels. This can have financial implications and affect customer satisfaction.
  • Need for Resolution:
    • The unresolved nature of the container depot capacity issue suggests that a comprehensive solution has not been identified or implemented. It is crucial for stakeholders, including port authorities, logistics companies, and relevant authorities, to work collaboratively to address and resolve these capacity challenges.
  • Collaboration and Planning:
    • Collaboration among stakeholders is essential for effective planning and resource allocation. This may involve investing in infrastructure improvements, optimizing operational processes, and implementing strategies to enhance overall container depot efficiency.
  • Risk Mitigation:
    • Businesses operating in the region should consider implementing risk mitigation strategies, such as diversifying transportation routes or maintaining higher safety stock levels, to buffer against potential disruptions caused by capacity issues.

Addressing the container depot capacity challenges requires a holistic approach involving coordination, investment, and strategic planning. Stakeholders should engage in ongoing dialogue to find sustainable solutions that support the smooth functioning of the logistics and supply chain ecosystem in the Auckland region.

The deepening industrial action by DP World in Australian ports, particularly in Sydney, is likely to have wide-reaching consequences for vessel arrivals at New Zealand ports. Industrial actions, such as strikes or work stoppages, can disrupt the normal flow of operations at ports, affecting the loading and unloading of cargo containers from ships.

Here are some potential impacts:

  • Vessel Delays: The ongoing industrial action is expected to cause delays in the arrival of vessels at New Zealand ports. This delay can lead to a backlog of shipments, affecting the timely delivery of goods and potentially disrupting supply chains.
  • Supply Chain Disruptions: The disruption in vessel arrivals can have a domino effect on the entire supply chain. Importers and exporters may experience delays in receiving or sending out goods, impacting production schedules and inventory levels.
  • Increased Costs: Delays and disruptions often result in increased costs for businesses. Additional expenses may be incurred due to storage fees, expedited shipping charges, or penalties for not meeting contractual obligations.
  • Uncertainty for Businesses: The uncertainty created by the ongoing industrial action can make it challenging for businesses to plan and execute their logistics operations effectively. It may lead to a reevaluation of supply chain strategies to mitigate risks associated with such disruptions.
  • Negotiation Challenges: The deepening of the industrial action suggests a prolonged dispute between DP World and the workforce. Prolonged disputes can be challenging to resolve, and ongoing negotiations may further complicate the situation.

Stakeholders, including businesses relying on maritime transportation, logistics companies, and government authorities, will need to closely monitor the situation and take proactive measures to minimize the impact of the industrial action on their operations. This may involve contingency planning, alternative transportation routes, and open communication with all parties involved in the supply chain.

Gemini Cooperation: Hapag-Lloyd and Maersk enter into an operational partnership from February 2025

 

 
 
I hope this message finds you well and let me start by still wishing you, your businesses, colleagues and families a happy, healthy and prosperous New Year and 2024 – despite the global supply chain challenges we are facing at the moment.

Today, I would like to inform you that Hapag-Lloyd and Maersk have signed an agreement for a new long-term operational partnership called the “Gemini Cooperation”, which will start in February 2025. Hapag-Lloyd has therefore given notice to end its membership of THE Alliance at the end of January 2025.

The “Gemini Cooperation” will cover the main East-West Trades

The “Gemini Cooperation” will cover seven global (sub)trades and offer 26 mainline services.  The network will be centered around 12 key hub ports (10 owned and/or controlled terminals and two highly efficient operations in Singapore and Cartagena). We will in addition run 32 dedicated regional shuttle services to and from these key hubs to ensure seamless connections to many major ports. The fleet of our new partnership will consist of some 290 modern and efficient vessels with an overall standing capacity of 3.4 million TEU, many ready to adopt cleaner fuels.

The partnership will bring tangible benefits to our customers

We are entering into this partnership to improve the quality of operational service we provide you. In partnership with Maersk, we will create an interconnected ocean network that offers you:

  • Industry leading schedule reliability of >90% (once fully implemented) to enable significantly higher on-time delivery of your cargo
  • Excellent network coverage with efficient connections and competitive transit times to be your global ocean carrier partner-of-choice
  • Acceleration of our sustainability efforts to faster decarbonize our operations and your supply chains

Let me be very transparent here, this is not a decision against THE Alliance, which has been a long-standing, trusted and successful partnership for us. It is a next step to build something new that we believe will enable us to generate even more value for our customers by pairing our Hapag-Lloyd customer service with much higher operational quality in a robust and resilient network.

This does not represent a change of strategic direction for Hapag-Lloyd. We remain fully focused on liner shipping and the closely connected terminal and inland operations. We have no intention to become a logistics integrator. We do believe, however, that with Maersk we have found a like-minded partner who shares our passion for quality and sustainability.

Continuity in 2024 and a smooth transition to the new partnership

We of course remain fully dedicated to serving you and your supply chains seamlessly throughout 2024 and will honor our existing agreements with you also beyond February 2025. We will continue to work as a full member of THE Alliance over the coming year and be a trustworthy partner for our customers, vendors, and others. The transition to our new operational collaboration will be carefully planned and prepared throughout 2024. We are committed to ensuring a seamless transition that puts meeting your requirements first. We will keep you regularly updated with more details about the Gemini Cooperation and our new, future schedules.

Thank you for your continued loyalty as a Hapag-Lloyd customer. We are very aware that we need to earn your trust every day and we look forward to continuing to serve you in future as we aspire to become your undisputed “Number One for Quality”.

Best regards,

Rolf Habben Jansen

CEO of Hapag-Lloyd