Market Update

 

The ocean freight market is experiencing peak season congestion, equipment shortages, and elevated prices due to early arrival and Red Sea diversions. Spot rates have surged, making long-term contracts unreliable. Nearly 70% of BCOs and forwarders have had containers rolled or pushed to the spot market or are facing contract renegotiations. Container prices have risen 45% in key Chinese ports, but this increase is not sustainable in the long term.

 

Regional Focus

 

– Asia Pacific showed remarkable revenue growth in 2023 and is expected to drive half of the world’s RPK growth this year, thanks to domestic market gains.

– International travel in the region remains subdued.

– India is set to become the world’s third-largest economy by the end of the decade, and the Australian Government is launching consultations on a new roadmap for Australia’s Economic Engagement with India.

 

Ocean Freight Rates

 

– COSCO’s next biweekly CAP direct sailing from China to Brisbane, Townsville, Lae, Port Moresby, and Darwin will have a fast transit time.

– FAK rates from NEA origins to AUEC are struggling at USD 1400-100/TEU, while FAK rates from NEA origins to AUWC have hit USD 800-1000/TEU due to delays in Singapore.

– Market rates to New Zealand vary, with A3 teams pulling rates above USD 1000-1300/TEU out of NEA origins.

 

Port Updates

 

– The Port of Tanjung Pelepas (PTP) and Northport reported record monthly throughput in May 2024, benefiting from the Red Sea crisis.

– PTP handled 1.078 million teu without congestion, while Northport saw a 26% increase year-on-year.

 

Association News

 

– Carmelita Hartoto was appointed as the 34th ASA chairperson, with the next AGM taking place in Bali next May.

 

Currency Update

 

– The AUD barely held 0.6600, while the NZD fell to 0.6120, due to the firmer reserve and commodity currencies.

 

Upcoming Events

 

– RBA and Bank of England interest rate decisions this week, with no changes expected but narrative important.

– European political turmoil and US impacts expected.

– Growth and inflation focus in the coming week.

 

I hope this helps! Let me know if you have any further questions or need any additional assistance.5

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.

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

 

Introduction: The global shipping industry is facing a severe challenge as Maersk, one of the world’s largest shipping companies, issues a warning about potential months-long disruptions in the vital Red Sea trade routes. Vincent Clerc, Maersk’s chief executive, has highlighted the gravity of the situation, emphasizing its serious and dramatic impact on containerized traffic due to ongoing attacks by Yemen’s Houthis.

The Severity of the Situation: Vincent Clerc expressed deep concern over the escalating attacks, labeling the disruption to Red Sea shipping as “extremely serious and dramatic.” The consequences of this disruption extend far beyond the immediate challenges faced by the shipping industry, with potential economic and inflationary repercussions on a global scale.

Economic and Inflationary Impact: As Maersk handles approximately one-fifth of all seaborne cargo, the prolonged closure of Red Sea trade routes poses a significant threat to the global economy. The rerouting of ships around South Africa not only results in longer voyages but also significantly raises operational costs. Vincent Clerc warned that the uncertainty surrounding the reopening of safe access to the Red Sea could have a lasting impact, potentially lasting for months.

Call for International Action: In response to the crisis, Vincent Clerc urged the international community, led by the United States, to take decisive action. The plea is not only for the sake of the shipping industry but also to mitigate the broader economic implications. The need for collective efforts to ensure the safe passage of ships through the Red Sea has become a pressing priority.

Inflationary Pressures and Short-Term Disruptions: Vincent Clerc pointed out the immediate consequences of the disruption, emphasizing the inflationary pressures it creates. With inflation already a significant concern globally, the shipping giant’s CEO highlighted how these disruptions could lead to increased costs for businesses, customers, and ultimately impact European and U.S. consumers. The short-term disruptions, anticipated in late January, February, and early March, could further exacerbate the existing challenges in the market.

Conclusion: Maersk’s warning sheds light on the vulnerability of global trade and the interconnectedness of economies. The call for international cooperation to address the security issues in the Red Sea is not only a plea for the shipping industry but a crucial step to safeguarding the stability of the global economy. As stakeholders brace themselves for potential months of disruption, the urgency for concerted efforts and swift resolutions becomes more apparent than ever.

The maritime industry is undergoing significant transformations, with key players and regions making noteworthy strides in infrastructure development, sustainability, and market dynamics. In this blog post, we will delve into various aspects of the global maritime landscape, ranging from new vessel launches to environmental initiatives and market trends.

New Vessel Launch: COSCO’s Mega Vessel Maiden Voyage to Australia

COSCO’s latest addition, the 24,000 TEU mega vessel, OOCL VALENCIA 001W, embarked on its maiden voyage from Shanghai to Australia West via Singapore. This development signifies the industry’s commitment to expanding capacity and enhancing efficiency.

India’s Maritime Aspirations: A P&I Club and Infrastructure Investments

India is gearing up to establish its Protection and Indemnity (P&I) club, named India Club, focusing initially on domestic shipping. The country’s ambitious plans include becoming one of the top five shipbuilding nations within the next decade, with substantial investments in new ports and maritime infrastructure.

Nhava Sheva Port’s Growth and Sustainable Initiatives

Nhava Sheva Port reported a remarkable 7% year-over-year increase in containerized traffic, defying market challenges. The port is set to double its capacity with the development of a new green-field, deep-water port at Vadhavan. PSA Mumbai, powered by 100% renewable energy, is leading the way in sustainable operations, reducing CO2 emissions significantly.

Bangladesh’s Response to Economic Challenges: VAT Withdrawal on Port Services

In response to the global economic crisis, Bangladesh has withdrawn value-added tax (VAT) on port services for export-oriented industries, aiming to support businesses facing downturns. However, the country faced a decline in container and ship handling, reflecting broader economic challenges.

Global Market Trends and Challenges: Inflation, Supply Constraints, and Geopolitical Issues

The global maritime market faces challenges at the outset of 2024, including inflation concerns due to supply constraints from conflicts in the Middle East and Eastern Europe. The Red Sea blockade by Yemen has led to shipping diversions, impacting costs and raising inflationary pressures. Geopolitical issues, particularly in the Red Sea, pose threats to shipping routes, requiring operators to reroute and impacting capacity.

Market Predictions and Carrier Strategies: Addressing Challenges and Seizing Opportunities

Looking ahead, carriers like Maersk are adapting to challenges by rerouting ships and addressing delays in specific regions. Major carriers have implemented rate increases to counter rising costs, with a focus on key trade routes. As the industry navigates uncertainties, attention remains on geopolitical developments, energy prices, and their potential impacts on future interest rates.

The global maritime landscape is evolving rapidly, with key players making strategic moves to enhance infrastructure, embrace sustainability, and tackle emerging challenges. As we move further into 2024, the industry’s ability to adapt and innovate will play a crucial role in shaping its future. Stay tuned for more updates on the dynamic world of maritime trade.

 

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.