Author: NZ Freight

The air freight market was expected to be strong in 2022 and continue its growth in 2023. The reason behind this was the prognosis that the congestion of seaports and shortage of containers would lead to an increase in air freight. Moreover, it was believed that the belly capacity would not return in 2022 or early 2023 due to travel restrictions.

However, things took a different turn as most countries lifted travel restrictions much faster than expected. This resulted in an increased belly capacity and a reduction in seaport congestion and delays. The increased air freight capacity led to a surplus and the fear of recession, coupled with the war in Ukraine, caused a slowdown in the air freight market.

Another factor contributing to the weakening air freight market was the return of travel as people started to spend less on consumer goods and electronics. The positive news was the lifting of zero covid policy (lockdowns) and travel restrictions in Hong Kong and China. These two major markets in Asia are now returning to the market. The impact of this on the air freight market in Asia is yet to be seen as all Asian economies are slowly returning from Chinese New Year festivities.

The air freight market has been on a roller coaster ride in 2022 and 2023, with unexpected turns and twists. It remains to be seen how the market will perform in the future as economies continue to recover from the pandemic.

 

The world of international trade is constantly evolving, and India has emerged as a major player in recent years. With the fastest growing major economy in the world, India is experiencing increased trade activity and a rising demand for large boxships to transport its exports. In 2022, the nation managed to beat its government’s export target of $400 billion with $422 billion in exports. The share of machinery and electricals in India’s exports has overtaken the legacy textiles and apparel sectors, further solidifying its place in the global market.

S&P Global Market Intelligence predicts that India’s trade economy will experience rapid growth in 2023, thanks to the country’s diversification of its manufacturing base and the active use of trade policy measures under the ‘Make in India’ program. The recent construction of the Galathea Bay Transshipment Port is expected to save Indian ports $200m to $220m a year on transshipment cargo and create an opportunity for India to become a major hub in the industry. The terminal is expected to be completed by 2028 and will attract Indian and regional transshipment traffic, reducing logistics inefficiencies and risks to the country’s export competitiveness.

Ocean carriers are also recognizing the growth potential in India, as they pull capacity from Chinese export routes and redirect their ships to more robust tradelanes with growth potential, including Middle East and India-related services. The shift in capacity has seen a boost of 320,600 TEU or 11% of the fleet capacity in these regions.

In addition to the physical infrastructure, digital solutions are also gaining ground in India’s ports. The Nhava Sheva Port is using a tech-enabled imaging system to significantly reduce cargo dwell times for import loads. This high-speed container scanner has a throughput capacity of 100 containers an hour and has been introduced after trial runs. CMA CGM has also adopted a “digital forwarding system” across major depots in northern India, improving turnaround times for rail-related documentation and reducing the need for paper-based processes.

In conclusion, India is making significant strides in the global trade market and is poised for even greater growth in the coming years. Its investments in both physical infrastructure and digital solutions make it a key player in the industry and a destination for businesses looking to tap into the growth potential of the region.

New Zealand’s import and export industry is facing several challenges that are impacting delivery schedules and causing delays. With immediate weather events having a significant impact on rail and linehaul, it is becoming increasingly difficult for the country to handle its import and export cargo. In this blog post, we will take a closer look at the challenges facing New Zealand’s import and export industry and what shippers and exporters can expect in the coming months.

Imports

Auckland container depot congestion continues to be a major problem for the country’s import industry. With capacity in the main centres, especially Auckland, operating at an overcapacity level, it is becoming increasingly difficult to handle the volume of empty containers. Key depots have shut down or restricted the number of acceptance bookings issued, which has resulted in a backlog of hubbed containers waiting to be dehired.

The ongoing resourcing issue in the New Zealand supply chain, driven by a long-term lack of skilled and semi-skilled labour, is also impacting the ports, warehousing, and trucking companies’ ability to cope with existing volumes. The recent resurgence of Covid-19 and sick leave is only adding to the problem.

VBS (container booking) charges are set to increase again in February, and NZ Customs has announced that it will no longer allow goods under $25.00 to be grouped under the “parts” heading for shipments without individual classification. This will result in additional detail lines for some importers of equipment parts.

Exports

Congestion at the Port of Tauranga continues, although there has been some slight easing. Vessel arrival and close-off dates are constantly changing, so it is crucial to monitor the Port of Tauranga’s website closely and aim to have your containers on port at the first opportunity.

Equipment shortages continue to be a problem for several shipping lines, including Hapag Lloyd, ANL, CMA CGM, Maersk, Nelson, Port Chalmers, and Napier.

In conclusion, the import and export industry in New Zealand is facing several challenges that are impacting delivery schedules and causing delays. Shippers and exporters should be aware of the issues and plan accordingly to avoid potential delays and disruptions.

The global shipping industry is experiencing a significant change with ocean freight rates continuing to fall in the first quarter of the year. This trend is expected to lead to a shift from air to ocean transport, as air volume growth remains relatively stagnant. The slowdown in air freight demand during the Chinese New Year is a traditional factor that contributes to this trend.

Maersk, one of the world’s leading shipping companies, has taken note of this shift and is taking steps to accommodate its liner shippers. The company has recently launched a new insurance product that provides coverage for container cleaning expenses and protection against damage. This is a crucial development as one in three containers globally sustain damage or require cleaning, leading to avoidable delays and costs for shippers.

The recent economic and geo-political shocks have exposed weaknesses in supply chains and are expected to change trade patterns. To prepare for these changes, shippers are encouraged to closely monitor the situation and plan their resources accordingly.

In conclusion, the decline in ocean freight rates and the shift from air to sea transport is a significant development in the global shipping industry. Maersk’s new insurance product is a step in the right direction, providing shippers with the protection they need to navigate these changes effectively.

As the economy continues to recover from the effects of the COVID-19 pandemic, businesses and consumers alike are feeling the strain of increased import and export activity. Regrettably, congestion at mainly Auckland Container depots has deteriorated further since the last update. Capacity in the main centres, especially Auckland, are operating at an overcapacity level and unable to handle the volume of empty containers for dehire or turn around units to make them available for export use.

Key depots have either shut altogether for lengthy periods or greatly restricted the number of acceptance bookings issued. Often the only option for trucking companies is to uplift the empty container(s) from importers premises and then hub the containers called in until they can obtain an active acceptance with a matching booking, many days later. The backlog of hubbed containers waiting to be dehired is significant. It will take some time to redress the imbalance even with a concerted effort to reuse containers for export, evacuate unused empties out of New Zealand as the latter requires redirection of scarce resources away from handling import containers.

We are taking issue with Shipping Lines currently not offering any relief on detention due to the unavoidable delay in dehires. This is a major concern for importers, as it results in additional costs and delays in receiving their shipments.

There is an ongoing resourcing issue in the New Zealand supply chain driven by a long-term lack of skilled & semi-skilled labour. A resurgence in covid, along with staff absenteeism for other reasons, is and will continue to be a major factor hindering the Ports, warehousing, and trucking companies’ ability to cope with existing volumes. With warehouse storage capacity for imports at a premium coupled with no relief on demurrage or detention, importers should plan to have resources available to receive incoming shipments over the upcoming short weeks.

On top of that, VBS (Container booking) charges will increase again in February with a rise in Metroport VBS charges closely following announced adjustments to be billed by Ports of Auckland from 1st January 2023. This is a significant increase for importers and exporters and will further add to the financial burden caused by the delays and congestion at the ports.

Exporters are also facing their own set of challenges. Congestion at the Port of Tauranga continues with slight easing. Vessel arrival and close off dates constantly change. Exporters should monitor the Port of Tauranga website closely and aim to have their containers on port at the first opportunity.

Equipment shortages continue for Hapag Lloyd, ANL, & CMA CGM & Maersk, Nelson, Port Chalmers, and Napier are the most impacted. This is causing delays in the loading and unloading of containers and further adding to the congestion at the ports.

In conclusion, businesses importing and exporting goods to and from New Zealand are facing significant challenges due to the ongoing congestion at the ports and the lack of skilled labor. As a result, importers and exporters should expect delays and additional costs and plan accordingly.

As we head towards Christmas we are still experiencing large volumes inbound to New Zealand. Some shipping lines are refusing bookings for a month in advance, and not offering rates beyond that.

The best course of action is to get bookings in as early as possible and our team can let you know the best current options.

China will be back from their Mid Autumn Festival today so expect these issues to carry on until Christmas.

Sydney continues to clear congestion after their industrial action, again with backlogs but at least things are moving now.

Export space is still ok. If you are looking to negotiate rates for your 2021 export season now is the time. Don’t leave it much longer because the shipping lines will have committed their space allocations before Christmas.

As we head into the import peak season the shipping lines are continuing to control space to increase rates. The August 1st GRI’s have partially held and the shipping lines have issued notices advising of a USD 300/20′ and USD 600/40′ increase from Asia from sailings after September 1st.
There is still some space with some shipping lines, but to obtain the preferential rates it is best to book 2 – 3 weeks in advance.

Air freight rates have stabilized as the air lines have transitioned to a new model of cargo only flights, though the most important airline for us (Singapore Airline / SQ) is full and experiencing delays hubbing freight in Singapore.

Again the key is to get requests and orders in as early as possible as this gives the most options for your shipments.

New Zealand will move into level 2 lockdown from 11:59pm on the 13th of May.
This continues to ease restrictions on business with schools and restaurants also being allowed to operate.
There are still sanitary requirements and it may take some time for manufacturers to become fully operational again, but most businesses we work with are now running.
Sea freight continues to have capacity with rates stable or marginally lower after the Chinese New Year period.
Air freight is still at a premium for imports but we do have good options ex China, USA and Australia for you. Exports are the beneficiary of more airlines offering cargo only services on a scheduled basis – including Emirates (EK) now having 3 scheduled flights per week. They provide a major gateway to Europe and the Middle East via Dubai.

Air New Zealand and other airlines have re purposed their passenger aircraft to carry freight only. This means that we now have access to space to move your air freight shipments to/ from Shanghai, Hong Kong and Frankfurt to Auckland.

The aircraft that we are using for Shanghai have maintained their passenger status so we are able to move some forms of hand sanitiser (or unlimited quantities if it is not DG).

The reason Shanghai, Hong Kong and Frankfurt airports are so important is because they are gateways. So even if your airfreight shipment is not destined or from these areas it is likely we can connect with other airlines at these ports and move your shipments on.

Please contact us today to get your air freight shipments moving again.

Recently a client asked us to investigate the charges they had received from another freight company. Previously this client had used our services but had been presented with rates that appeared to be very competitive.

The Background

The client does buyer consolidations (BCN) shipments, where we collect goods from multiple suppliers in Europe and consolidate them in our partners store in Rotterdam. We then work out the most cost effective method of shipping products to New Zealand as they need them, and according to the projects they have on the go. We have multiple tools in our arsenal for this, including air freight, economy air freight, air / sea (we can fly the goods to a major hub in Asia and then sea to Auckland which saves about 3 – 4 weeks on the transit), premium sea freight and economy sea freight. We have very open dialogues with the client on this and keep the communication transparent.

The Story

This very large European freight company received the stock into their store ok, but with very little (and very confusing) communication with the client they shipped 23 cubic meters of product in a 40′ container. To put this into perspective we generally expect to get 28 cubic meters into a 20′ container, and up to 60 cubic meters into a 40′ container. They then shipped the goods on an economy sea freight service to Auckland. We remeasured and double checked the configuration of the freight and there would have been no issues loading in to a 20′ container. All product was loaded onto pallets so loading into a container would be straight forward.

On arrival into Auckland the Auckland office of this freight company invoiced the client at the premium 40′ sea freight rate (effectively doubling the cost of the shipment) and denied all responsibilities around having only a partly loaded container, lack of communication and not advising the client of the additional costs involved. The freight company still had control of the shipment so our poor friend had no access to his stock to even sell on and begin to cover the extra costs.

After two months of trying to negotiate a favorable outcome they asked NZ Freight to kindly to look into this for them. We read through all the correspondence and made note of the above points to them, and requested we reach some common ground and move on. They responded by saying that they had charged the 20′ rate even though the goods moved in a 40′ (this would mean that their 20′ rate is about 3 x the market rate) and threatened to get their “corporate lawyers involved”.

Wow! It is fair to say our friends have learnt their lesson!

In Conclusion

So in wrapping up the moral of the story is that bigger isn’t always better, at least when it comes to freight companies. Our advice is to work with some one local that really does have your best interests at heart, and are not just trying to fit your shipments into their corporate machine. Sometimes there is value that isn’t reflected in a nicely packaged quote.