Title: Navigating the Seas of Global Trade: Market Insights for the Week Ahead

In the ever-shifting landscape of international trade, foresight is key. As we approach the holiday season, anticipation looms over the market’s expected softening. This week, we delve into the intricate details of various trade routes, exploring fluctuations in Freight-All-Kinds (FAK) rates, airfreight dynamics, and the evolving world of e-commerce.

Maritime Market Update

NEA Origins: A Dance of Rates

The North East Asia (NEA) origins present a mixed bag of FAK rates. Notable carriers like Maersk SPoT, YML, and PIL are witnessing a slight dip, offering stable rates n the first half of December. However, Maersk stands out with a competitive edge in routes to Fremantle and Adelaide.

Meanwhile, rates from NEA origins to Australia West Coast (AUWC) vary, with COSCO, PIL, OOCL, and ZIM maintaining a range slightly higher than the other carriers. 

New Zealand remains a stable market, with FAK rates from NEA origins holding steady. 

SEA Origins: Navigating Challenges

FAK rates from South East Asia (SEA) origins are expected to rise to due to port congestion in Singapore and Malaysia. Despite frequent delays in DP World, carriers, including COSCO, are opting for transshipment sailings from China to Australia East Coast, diverting from direct calls.

Airfreight Insights: Festive Demand Boost

Indian airfreight forwarders note an upward trend in rates to/from major global markets, driven by festive demand. E-commerce volumes are a significant contributor, with rates holding firm post the festive rush. Anticipation builds for the upcoming perishables trade season, set to further boost rates.

Global E-commerce Trends: Challenges and Opportunities

E-commerce continues to reshape the logistics landscape. Indian fruit exporters benefit from an expanded market reach, driven by the festive season. While geopolitical unrest in West Asia casts a shadow of uncertainty, its impact on India’s export/import flows remains limited.

The challenge lies in the intricacies of e-commerce logistics. Many forwarders are opting to collaborate, creating expansive networks and outsourcing various aspects of the supply chain. The next frontier in e-commerce involves global-to-global (G2G) trade, marking a shift from the traditional China-to-global (C2G) model.

Amazon Faces Scrutiny: Make Amazon Pay Campaign

Amidst the bustling trade updates, Amazon faces global scrutiny through the “Make Amazon Pay” campaign. The e-tailer, despite facing disruption, reassures its Black Friday operations. The campaign aims to hold Amazon accountable for its impact on workers, communities, and the environment.

Air Cargo Dynamics: China Takes Flight

Trade DataService reports a substantial increase in tonnage for Chinese international air cargo during the holiday season. Chinese customs statistics align with this uptick in weight, showcasing the impact of e-commerce on airfreight. E-commerce forwarders in China are diversifying trade routes, expanding to Japan, Singapore, Australia, the Middle East, and Mexico.

As the year concludes, the global trade landscape remains dynamic, responding to market forces and adapting to the evolving nature of commerce. Stay tuned for more insights as we navigate the seas of international trade together.


  • There is industrial disruption at the three main Australian ports, causing delays in the scheduled arrival time of import vessels into New Zealand. Specifically, the Port of Auckland is also experiencing resourcing issues, but it is currently managing its vessel operations satisfactorily despite the challenges at the Australian ports. These disruptions at Australian ports can have a ripple effect on supply chains, leading to delays and impacting import operations in New Zealand. 


  • There has been an increase in Customs exams in New Zealand over the past few weeks. These exams are leading to delays in getting cargo released, with some shipments experiencing several days of delay. It’s mentioned that efforts are being made to work with New Zealand Customs to expedite the release of these shipments as soon as possible.

           Customs exams are routine inspections conducted by customs authorities to ensure compliance with import regulations and to verify the accuracy of documentation. Increased Customs exams can be a response to various factors, including changes in regulations, heightened security measures, or other operational considerations.



  • It appears that move count restrictions are still impacting the ports of Lyttelton and Tauranga. These restrictions are leading to late changes in port rotations and, in some cases, causing ports to be omitted from the shipping schedules. Move count restrictions are typically implemented to manage the flow of cargo and ensure operational efficiency at these ports.

    These restrictions may be due to various factors such as labor issues, equipment availability, or congestion, which can affect the overall operations and scheduling of vessels. It’s important for shipping companies, logistics providers, and import/export businesses to stay informed about these developments and adjust their supply chain strategies accordingly to minimize disruptions.

A Look at current challenges and trends

The global shipping industry has been facing unprecedented challenges and changes in recent years. As concerns about potential supply chain disruptions and market volatility continue to shape the strategies of cargo owners, one thing becomes increasingly clear – the importance of relationships with established forwarders. In this blog, we’ll delve into the significance of these relationships and explore the current state of the shipping industry, including key trends and predictions for the future.

The Power of Relationships

In the world of shipping, relationships matter more than ever. While technology has undoubtedly revolutionized the industry, it’s when challenges arise that the value of trust and well-established connections truly shines. Digital-first or digital-only forwarders, as promising as they may seem, have struggled to navigate the rough seas of the volatile market. Why? Because relationships are built on trust, developed through execution, and proven in times of crisis.

Forwarders who have earned their stripes in the industry offer more than just technology solutions. They provide a wealth of experience, personal connections, and a deep understanding of the market’s intricacies. As we move forward into an uncertain future, these relationships will be invaluable in finding solutions to the numerous challenges that lie ahead.

Market Outlook

Looking ahead to 2024, there are both hopeful signs and stormy weather on the horizon. The global economy is expected to stabilize and recover, with the World Trade Organization estimating a 3.3% growth in global trade. However, the container shipping market will remain oversupplied. The current tonnage overhang will peak next year but is expected to be fully resolved by 2028, thanks to scrapping and slow-steaming.

Drewry’s latest container forecaster predicts an industry-wide $15 billion loss for the following year, painting a rather pessimistic outlook. The liner industry is expected to see a 60% reduction in global freight rates this year, followed by a 33% drop in 2024. Carriers will face an ongoing challenge to keep rates above their operational costs.

The Rise of Niche Players

The pandemic-induced supply chain disruptions have boosted the niche less-than-container-load (LCL) NVOCCs and traditional freight forwarders. However, the acute equipment and vessel space scarcity problems are fading in some regions as ocean capacity now outstrips demand, and freight rates have dropped to levels below those seen before the COVID-19 crisis.

Ongoing Challenges and Regulatory Changes

Asian box lines, in contrast to their European counterparts, have fewer large containerships and may be more adversely affected by the European Commission’s decision not to renew consortia block exemption regulation (CBER) after April 25, 2024. The Asian Shipowners’ Association (ASA) disagrees with this decision and argues that liner operators should be immune from antitrust prosecution to provide efficient services and frequent port calls.

Airfreight Trends

While the ocean cargo industry faces headwinds, the airfreight sector presents a more optimistic picture. Global airfreight indices indicate a stabilizing market, with some trade routes even showing rate increases. Although there are no clear signs of a significant fourth-quarter peak, there is a slight seasonal tightening in some regions, particularly in the e-commerce segment.

Airfreight benefits from the rise of AI and quantum computing, which drive demand for components, servers, and racks. Additionally, the revival of Chinese exports has led to increased capacity out of China, particularly in the B2C segment.

Looking Forward

As we navigate the tumultuous waters of the shipping industry, it’s clear that the importance of relationships and industry knowledge cannot be understated. While the challenges are substantial, opportunities for growth and adaptation exist. The ability to weather the storm and emerge stronger on the other side will depend on how well industry players can navigate these challenges and embrace the changes to come. Stay tuned as we keep you updated on the evolving landscape of the global shipping industry.


  • Synthetic Greenhouse Gas (Goods) Levy Rate Changes: The levy rate is set to change from January 1, 2024, as per the Climate Change (Synthetic Greenhouse Gas Levies) Amendment Regulations 2023 (Schedule 1 and 2). Minor updates to item descriptions and tariff codes are included in Schedule 2.
  • Port of Tauranga Rail Connection: The rail connection to and from Metroport was temporarily closed for maintenance over the Labour weekend from October 21st to 23rd. This may lead to short-term delays for import containers destined for Metroport.
  • Labour Resourcing Issues at Port of Auckland: Labour resourcing issues continue to cause delays at Fergusson container terminal for the Port of Auckland. Vessels arriving outside their allocated window are also causing disruptions. VBS bookings to uplift import containers upon discharge are in short supply.
  • Container Depot Capacity: There are ongoing concerns regarding container depot capacity, with only restricted dehire slots available at several larger Auckland sites, resulting in delays.
  • MPI – BMSB Season: The MPI (Ministry for Primary Industries) BMSB (Brown Marmorated Stink Bug) season is underway. Importers are advised to forward all required documents promptly to avoid any clearance delays.
  • Customs Exams: There has been an increase in Customs exams in New Zealand over the last few weeks. Some of these exams are causing several days of delay in cargo release, and efforts are being made to expedite the release process.



Move Count Restrictions: Lyttleton and Tauranga are experiencing move count restrictions that continue to affect port operations. This is causing late changes to port rotations and some port omissions for exports.

These updates provide valuable information for those involved in the import and export processes in New Zealand, highlighting potential challenges and changes in the logistics and regulatory landscape. It’s important for businesses and individuals to stay informed and plan accordingly to mitigate any disruptions or delays.


  1. The Port of Tauranga rail connection to and from Metroport will be closed for maintenance during the Labour holiday long weekend from October 21st to October 23rd. This temporary closure will have several impacts on container operations:
    • Export Containers: The closure will bring forward the cutoff for the receival of export containers to Metroport. Exporters will need to plan their shipments accordingly to meet this earlier cutoff.
    • Import Containers: Import containers destined to arrive at the Auckland inland port of Metroport towards the end of October will experience longer lead times. Importers should consider this extended lead time when scheduling their shipments and distribution plans.

           It’s important for businesses and individuals involved in shipping and logistics to be aware of this temporary closure and adjust their schedules and plans accordingly to minimize disruptions and ensure a smooth flow of goods during this period.


      2. The issue of overall container depot capacity in Auckland remains unresolved, and it is causing delays in the shipping and logistics industry. Specifically, there are limited dehire slots available at several large sites in Auckland. This shortage of dehire slots is contributing to delays in the handling and processing of containers, which can have a cascading effect on the entire supply chain.

          Dehire slots are crucial for returning containers after they have been used for shipping. When there is a shortage of dehire slots, it can lead to congestion, longer waiting times, and delays in container handling and processing. These delays can impact the timely movement of goods and disrupt supply chain operations.

           Addressing the issue of container depot capacity and the availability of dehire slots is essential for improving the efficiency and reliability of container operations in Auckland. It may require collaboration and coordination among stakeholders in the shipping and logistics industry to find solutions that can alleviate this problem and minimize delays. 


      3. The Port of Auckland is currently facing several challenges that are causing delays and disruptions in its operations:

    • Gantry Crane Mechanical Issues: Mechanical problems with a gantry crane at the Fergusson container terminal in the west are contributing to delays. Gantry cranes are essential for unloading and loading containers from vessels, and when they experience technical issues, it can slow down the entire container handling process.
    • Labour Resourcing Issues: Labor shortages and resourcing problems are also impacting operations. Adequate labor is necessary for various tasks within the port, and a shortage can lead to delays in container handling and logistics operations.
    • Vessels Arriving Outside Allocated Windows: When vessels arrive outside their allocated time windows, it can create congestion and disrupt schedules. Ports typically allocate specific time slots for vessels to ensure smooth operations, but deviations from these schedules can lead to inefficiencies.
    • Shortage of VBS (Vehicle Booking System) Bookings: The shortage of VBS bookings for uplifting import containers is another contributing factor to the disruptions. The VBS is a critical system for managing the flow of vehicles and containers within the port, and when there is a shortage of available bookings, it can lead to delays in container pickup and delivery.

          These issues highlight the complexities and challenges involved in port operations and the importance of effective maintenance, labor management, and scheduling to ensure the efficient movement of goods. Addressing these challenges will be essential to minimize disruptions and improve the overall performance of the Port of Auckland.


      4. The Ministry for Primary Industries (MPI) has announced that the Brown Marmorated Stink Bug (BMSB) season is now underway. If you are involved in the import or export of goods and require clearance from MPI, it’s essential to forward all necessary documents as soon as possible to avoid the possibility of delays. Timely submission of required documentation is crucial to ensure compliance with MPI’s regulations and to prevent any potential holdups in the clearance process related to BMSB inspections and quarantine measures.

           To avoid disruptions in your import or export operations, be proactive in submitting the required documents and adhering to any specific guidelines provided by MPI for managing BMSB during this season. Complying with their regulations and providing the necessary information promptly will help streamline the clearance process and minimize the risk of delays associated with BMSB-related inspections and treatments.


     5. There has been an increase in Customs examinations in New Zealand in recent weeks. These examinations can lead to delays in cargo release, with some delays lasting several days. If you are involved in shipping and logistics, it’s crucial to plan for potential delays and work closely with New Zealand Customs to facilitate the timely release of your cargo.

          Customs examinations are a part of the regulatory process to ensure compliance with import and export regulations. While they are necessary for security and compliance reasons, they can impact the flow of goods. Collaborating with New Zealand Customs to provide accurate and complete documentation and information can help expedite the examination and release process, reducing delays and ensuring the efficient movement of cargo.

          Staying informed about the current customs procedures and any updates or changes in regulations is essential to manage these potential delays effectively and maintain the smooth operation of your supply chain.


      6. It’s important to note that there will be a significant change coming to the Container Checks Portal (CCP) in early 2024, as announced by Biosecurity New Zealand. This change is part of a broader effort to upgrade internal border systems and provide a more stable platform for the future. Here are the key points about this upcoming transition:

    • Introduction of a New CCP Version: Biosecurity New Zealand will introduce a new version of the CCP for the electronic submission of container inspection results by Accredited Persons.
    • Requirement to Use RealMe: The most significant change is the requirement to use RealMe for system access. RealMe is a secure authentication system used for accessing government online services. It will bring the CCP in line with other MPI systems available to external stakeholders.
    • RealMe Login: If you already have a RealMe login, it will work for the new CCP once it’s set up. If you don’t have one, you can set up a RealMe login at any time in preparation for this change.
    • Changes to the User Interface: While there will be changes to the look and feel of the system, the basic functionality remains the same. You will still be able to enter inspection details for your sea and air containers and manage the Transitional Facilities as you do now.
    • Direct Submission for Larger Transitional Facilities: There are efforts to set up an option for larger Transitional Facilities to submit container checks directly from their in-house container record systems.
    • Direct Submission for Larger Transitional Facilities: There are efforts to set up an option for larger Transitional Facilities to submit container checks directly from their in-house container record systems.

          It’s important to stay updated on this transition and prepare for the changes, especially the use of RealMe for accessing the new CCP version. Adapting to these changes will help ensure a smooth transition and continued efficient use of the system for container inspection and management.




        The ongoing move count restrictions in ports like Lyttelton and Tauranga are having significant impacts on shipping operations and port rotations. These restrictions are causing late changes to port rotations and, in some cases, even port omissions. Here’s a breakdown of the situation:

    • Move Count Restrictions: Move count restrictions typically refer to limitations on the number of containers or cargo moves that can be processed within a specific time frame at a port. These restrictions can result from various factors, including labor shortages, equipment limitations, or other operational challenges.
    • Late Changes to Port Rotations: When move count restrictions are in place, shipping companies may be forced to make late changes to their planned port rotations. This can include altering the order of port calls or adjusting the timing of vessel arrivals and departures. These changes are often necessary to accommodate the operational limitations at the affected ports.
    • Port Omissions: In some cases, move count restrictions can lead to port omissions, where a scheduled port call is entirely canceled. This can disrupt supply chains and impact the delivery of cargo to specific regions. Port omissions can be costly and create logistical challenges for both shippers and carriers.

        The effects of move count restrictions are particularly challenging for the shipping industry, as they can lead to delays, increased costs, and a need for flexibility in scheduling and logistics planning. To mitigate these issues, close communication and collaboration between shipping companies, port authorities, and other stakeholders are essential. Finding solutions to alleviate move count restrictions and improve port efficiency is crucial to maintaining the reliability and performance of supply chains.


1. There are several challenges at the Fergusson container terminal West:

  • Gantry Crane Issue: There is a mechanical problem with a gantry crane at the Fergusson container terminal West. This issue is causing delays in working with container vessels due to reduced capacity. Gantry cranes are critical for loading and unloading containers from vessels, so any mechanical issue can disrupt operations.
  • Labor Resourcing Issues: In addition to the mechanical problem, labor resourcing issues are compounding the challenges. It’s likely that there may not be enough skilled personnel available to handle the container operations efficiently, further contributing to delays.
  • Disruptions from Vessels Arriving Late: Vessels arriving outside their allocated windows are causing disruptions. This suggests that there may be scheduling and coordination issues with vessel arrivals and the terminal’s operational capacity.
  • Challenges with VBS Bookings: Obtaining VBS (Vehicle Booking System) bookings in a reasonable time to pick up import containers around the day of discharge is proving to be challenging. This indicates that there may be bottlenecks or inefficiencies in the booking process, which can affect the smooth flow of container pickups.

These challenges collectively impact the efficiency of container handling operations at the Fergusson container terminal West and can lead to delays in the movement of goods. Addressing these issues may require a coordinated effort between the terminal management, labor force, shipping companies, and relevant authorities to ensure smoother operations and improved scheduling and booking processes.


2. These are the highlights a challenge in the container logistics industry related to overall container depot capacity. Specifically:

  • Unresolved Issue: There is an ongoing issue with container depot capacity that has not been fully addressed or resolved.
  • Restricted Dehire Slots: Several large container depot sites in Auckland are experiencing restricted availability of dehire slots. Dehire slots are the time slots allocated for returning containers after they have been used for transport. Restricted availability means that there are limitations on when containers can be returned, which can lead to delays in the logistics and transportation process.
  • Delays: These restricted dehire slots are causing delays in container operations and logistics. Delays can have a significant impact on supply chain efficiency, as timely movement of containers is crucial for businesses and trade.

Addressing this issue may involve discussions and coordination between stakeholders in the container logistics industry, including shipping companies, trucking companies, container depots, and port authorities, to find solutions that can alleviate capacity constraints and reduce delays in container handling and transportation.


3. Effective from the 1st of October 2023, New Zealand Customs is implementing an interim increase in processing fees. However, it’s important to note that these increased fees are not necessarily permanent, as they will be subject to review again in 2024.

The decision to review the fees in 2024 suggests that New Zealand Customs may be assessing the impact of these fee changes and considering whether further adjustments are necessary based on various factors, such as operational costs, economic conditions, and government policies.


4. The pump diesel prices are increasing, and as a result, the local trucking industry is implementing a Fuel Adjustment Factor (FAF) of 26.4% for the month of October.

The FAF is typically used in the transportation industry to account for fluctuations in fuel prices. When fuel prices rise, the FAF may be increased to cover the additional fuel costs incurred by trucking companies. This helps ensure that transportation services remain viable and sustainable even as fuel prices fluctuate.

In this case, a 26.4% FAF for October suggests that the local trucking companies are passing on a significant portion of the increased fuel costs to their customers during that specific month. It’s important for businesses and shippers to be aware of such adjustments, as they can impact transportation costs and logistics planning. If you are involved in the transportation or shipping industry, you may want to stay updated on FAF changes and fuel price trends to effectively manage your operations and budgets.


5. The upcoming changes to the Container Checks Portal (CCP) in New Zealand, scheduled for early 2024. Here’s a summary of the key points:

  • Reason for Change: The changes to the CCP are part of a broader initiative to overhaul internal border systems. The goal is to upgrade technology and create a more stable platform for the future, likely to enhance the efficiency and effectiveness of container inspection processes.
  • Use of RealMe: The most significant change is the requirement for users to use RealMe to access the CCP. RealMe is a secure login system used for accessing government online services in New Zealand. This change aligns the CCP with other Ministry for Primary Industries (MPI) systems available to external stakeholders.
  • Preparing for the Change: Users are encouraged to set up a RealMe login in advance of the CCP’s update. If you already have a RealMe login, it should work seamlessly once the CCP is updated.
  • Changes to System Interface: There will be some changes to the look and feel of the CCP system. Users can expect updates to the user interface, but the basic functionality will remain the same. Users will still be able to enter inspection details for sea and air containers and manage the Transitional Facilities they work with.
  • Direct Container Check Submission: There are plans to provide an option for larger Transitional Facilities to submit container checks directly from their in-house container record systems. This could streamline the inspection process for such facilities.
  • Contact Information: If users have questions or need more information about these changes, they are encouraged to contact info@mpi.govt.nz. Additionally, further information will be provided in the coming months to keep users informed about the updates.
  • Overall, these changes aim to modernize the Container Checks Portal and enhance its security and usability, ensuring that it aligns with current technology standards and government systems in New Zealand. Users should prepare for these changes and stay updated with the provided contact information for any inquiries.



Ongoing challenge in the ports of Lyttleton and Tauranga in New Zealand:

  • Move Count Restrictions: There are move count restrictions in place at these ports. Move count restrictions typically refer to limitations on the number of containers moves or operations that can be performed within a specific time frame.
  • Impact on Port Operations: These move count restrictions are causing several disruptions in port operations, including late changes to port rotations and, in some cases, port omissions. Port rotations refer to the sequence and schedule of vessel arrivals and departures at a port.
  • Operational Consequences: Late changes to port rotations can have a cascading effect on the timing and planning of container shipments. Port omissions may result in some vessels bypassing these ports altogether, which can affect cargo handling, logistics, and the overall flow of goods.

It’s important to note that move count restrictions are often implemented for various reasons, such as managing congestion, maintaining safety, or addressing operational limitations. However, these restrictions can create challenges for shipping companies, port authorities, and those involved in the supply chain.

Stakeholders in the affected ports, including shipping companies, cargo owners, and logistics providers, may need to adapt to these restrictions and plan their operations accordingly to minimize disruptions. Additionally, discussions and coordination among relevant parties may be necessary to address the underlying causes of these restrictions and explore potential solutions.


The second phase of resurfacing work at Fergusson Terminal pad in the Port of Auckland is on track for completion by the end of September. However, there have been delays in working container vessels due to reduced capacity and labor resource issues.

The Port of Auckland has reported a profit of $40.5 million for the full year. It’s mentioned that VBS (Vehicle Booking System) costs are expected to increase soon. There are ongoing concerns about container depot capacity in Auckland, with restricted dehire slots available at several large sites.

There has been a General Rate Increase (GRI) of 9% at the CODA / Tapper freight stations, effective from September 1st. This has led to the need for an increase in local charges for LCL (Less than Container Load) shipments.

In early 2024, Biosecurity NZ plans to introduce a new version of the Container Checks Portal (CCP) for electronic submission of container inspection results by Accredited Persons. This change is part of an overhaul of border systems, and it will require the use of RealMe for access. The functionality of the system will remain the same, but there will be changes in the system’s appearance. Larger Transitional Facilities may also have the option to submit container checks directly from their in-house systems.



Lyttleton and Tauranga ports are experiencing move count restrictions, which are leading to late changes in port rotations and some omissions at these ports.

The narrative surrounding China’s manufacturing prowess facing decline and global supply chains seeking alternatives may be prevalent, but it’s essential to separate fact from fiction. China remains a manufacturing giant, driven by its size, capabilities, product quality, and long-standing reputation. While discussions about decoupling and reshoring often arise in the context of tensions with Taiwan, experts suggest that China’s economic position would prevent a drastic shift due to its reliance on exports.

Supply chain analyses do not support claims of a significant global shift either, but they do highlight some subtle movements, primarily by the United States and Europe. These shifts hinge on countries like India and Southeast Asian nations developing their manufacturing capabilities and transportation infrastructure to match China’s.

One region making strides in this direction is India, particularly its east coast ports. Container carriers have rushed to establish new connections, capitalizing on India’s resurgence as a manufacturing hub. Freight forwarders in Chennai, in particular, are optimistic about the growing options for shipments, creating predictability and shorter transit times.

Chennai Port, featuring DP World’s CCTPL and PSA’s CITPL terminals, has faced infrastructure bottlenecks, particularly on the land side. Crane productivity rates and cargo flow have been concerns for carriers. Emerging alternative terminals, however, offer modern infrastructure and flexible tariff advantages, attracting volumes traditionally handled by Chennai.

China boasts a massive domestic market, which has grown since the onset of the COVID-19 pandemic. However, it prefers not to rely solely on its domestic market. Diversification efforts by Western companies are mirrored by Chinese counterparts, reflecting a desire to expand and complement China rather than replace it.

India, with a larger population than China, faces workforce challenges due to differences in governance. China’s long-term planning, spanning 50-100 years, contrasts with India’s electoral democracy, which can lead to delays and changes in economic plans. Nevertheless, India recognizes the need for improved infrastructure and investments in roads, railways, ports, and airports to provide viable alternatives to China.

This diversification process has been ongoing for over two decades and is not about distancing from China but about expanding and collaborating. As we look ahead to the end of 2023, some key trends in the global shipping industry come into focus.

Container Shipping Trends in 2023: Weak Demand vs. Capacity Expansion

In the container shipping industry, the dynamics of supply and demand play a critical role in shaping the landscape. In 2023, several major players in the industry, including MSC, Maersk, ANL, and ZIM, are navigating the challenges of a market marked by weak demand and an abundance of capacity.

MSC, the world’s largest container line, is embarking on a new alliance with ZIM, the tenth-ranked carrier, spanning multiple trade routes. This collaboration marks a significant shift as both carriers prepare to transition away from their partnership with Maersk within the 2M Alliance. The agreement with MSC includes vessel sharing, slot purchases, and slot swap arrangements, signaling a commitment to optimizing their operations in a competitive environment.

One notable development is Zim’s decision to withdraw ships from its Asia-Australia/New Zealand trades in favor of a vessel-sharing agreement with MSC’s Panda loop. Pending regulatory approval, Zim will rebrand this service as ZAX and contribute three of its approximately 5,000 TEU vessels to the route. Additionally, Zim will become a slot charterer on MSC’s Kiwi Express and Capricorn loops, freeing up ten vessels in the 2,500-2,800 TEU range for redeployment or subletting. This strategic move reflects ZIM’s proactive approach to navigating the challenges in the container shipping market.

As the shipping industry adapts to these changes, the foreign exchange market is experiencing fluctuations. The Australian dollar has eased, while the New Zealand dollar has depreciated due to various factors, including a labor strike in Western Australia’s natural gas facility.

Furthermore, global energy prices are on the rise, contributing to inflationary pressures in Europe. Chinese demand for commodities has been sluggish, impacting the global economic rebound. In the coming weeks, attention will focus on monitoring inflation, energy markets, and economic growth as these factors continue to shape the container shipping industry and the broader global economy.

In conclusion, while reports of China’s manufacturing decline and supply chain shifts persist, the reality is more nuanced. China remains a manufacturing powerhouse, but diversification efforts by Western and Chinese companies reflect a desire to expand and collaborate rather than replace one another. In the container shipping industry, strategic alliances and capacity adjustments are essential strategies in a market characterized by weak demand and ample capacity. The global economic landscape is influenced by various factors, including energy prices, inflation, and Chinese commodity demand, all of which continue to evolve as we move further into 2023.

Zim’s decision to withdraw its ships from the Asia-Australasia trades and enter into a vessel-sharing agreement (VSA) with MSC (Mediterranean Shipping Company). This move involves several changes to Zim’s services in the region:

  1. Suspension of Oceania-related Services: Zim will suspend its three Oceania-related services: Asia-Australia CAX, South China/South-east Asia-Australia TFX, and Trans-Tasman N2A services.
  2. Replacement for CAX Service: Zim plans to join MSC on its Panda loop, which will be branded as ZAX by Zim. This replacement for the CAX service will deploy seven 5,000 twenty-foot equivalent unit (TEU) ships, with Zim contributing three of these vessels.
  3. Introduction of ZAO and ZOX Services: Zim will replace its TFX and N2A loops with two new services: ZAO and ZOX. These services will help maintain connections to New Zealand.
  4. Asia-Australasia VSA: The vessel-sharing agreement with MSC is expected to enhance Zim’s position in the Asia-Australasia region. The EVP (Executive Vice President) of Intra-Asia, Danny Hoffman, expressed excitement about this new phase for Zim. The restructuring of Zim’s Oceania services network, in cooperation with MSC, aims to improve reliability and enhance customer offerings.
  5. Impact on MSC’s Panda Service: MSC stated that the VSA with Zim would enhance its Panda service. Alongside its Capricorn and Kiwi Express loops, the Panda service will continue to provide premium direct services between Asia, Australia, and New Zealand.
  6. Zim’s Current Status: Zim is currently ranked as the 10th container line globally. It operates with a capacity of 584,000 TEU across a fleet of 134 ships, most of which are chartered. Zim also has a significant order book of 38 long-term chartered vessels with a nominal capacity of 306,000 TEU.

This move represents a strategic decision by Zim to restructure its services and collaborate with MSC to strengthen its presence in the Asia-Australasia trades. The partnership is expected to offer improved services, reliability, and options for customers in the region.

The announcement from Ports of Auckland’s CEO, Roger Gray, regarding plans to increase fees for their vehicle booking system (VBS) reflects a strategic move to address the ongoing financial challenges the port has been facing in its container operations. The historical undercharging practice has contributed to consistent financial losses, and Gray’s goal of achieving a net profit between $80 million and $100 million indicates a significant shift in the port’s financial strategy.

The substantial increase in VBS fees, including the speculated surge to $95 or $98 by December, is a clear attempt to rectify the undercharging issue and bring the port’s pricing more in line with economic realities. Gray’s assertion that these fee hikes are justifiable when compared to global standards suggests that the port aims to maintain its competitiveness while also improving its financial performance.

The implementation of incentives for stakeholders to book services during off-peak periods is a thoughtful approach. By offering lower fees during times of reduced demand, the port can encourage a smoother flow of operations and help mitigate congestion during peak hours. This strategy aligns with broader urban efforts to manage traffic-related challenges and demonstrates a willingness to work collaboratively with stakeholders to find solutions.

However, the significant fee hikes are likely to raise concerns within the logistics sector, as they can impact the cost structure of businesses that rely on the port’s services. While the port’s financial recovery is crucial for its sustainability and ability to invest in infrastructure, finding a balance between profitability and maintaining a competitive environment will be key to the long-term success of these changes.

It will be interesting to observe how these adjustments in pricing strategies and fee structures unfold, especially in terms of their impact on trade volume, stakeholder relationships, and the overall financial health of Ports of Auckland.