Ocean freight rates Asia to Australia spike: International freight insights APAC 2024 week 35

An 8% spike in ocean freight rates Asia to Australia was recorded in the past week! (Rates are up 15% in the past month). Contrast this to ocean freight rates from Asia to all global routes which decreased 3% in the past week (rates are down 8% in the past month).

Despite this, as can be seen in the 3-month chart, ocean freight rates have increased more for all trade lanes (+35%) than they have been to Australia (+29%). In the past few weeks this trend has been reversing with Australia trade lane rising as most others fall.  

Basic technical analysis as well recent trend data suggests a further divergence for the next few weeks between Asia to Australia freight rates compared with Asia to the rest of the world; i.e. rates to Australia continuing to increase while global rates fall. As I’ve been saying for the last month or so “there is more possibility of increasing rates to Australia as shipping lines monitor their gross profit margins for different routes and adjust.” I’ve also been warning that due to rates from China to South East Asia increasing more aggressively than to Australia in the past 3-months being another indicator of more upside in rates to Australia.

Per Linerlytica “Far East-Australia rates are enjoying a mini rally as capacity rationalisation on the Australia routes has kept space tight.”  

It remains to be seen how long ocean freight rates to Australia will continue increasing or level out. My anecdotal information from certain shipping lines is that China -> Australia route as of now is showing a further increase of up to 2% to 3% in spot rates this week.

Airfreight rates have been unusually steady the past few months.

Ocean Peak Season Trends 2024

The ocean peak season marks a crucial annual event for companies preparing to import freight ahead of the holiday shopping period. Per Freightos “Traditionally spanning from August to October, this period has, in recent years, begun as early as June. This shift results from several factors, including more advanced planning and ordering processes to smooth supply chains, past delays due to COVID-19-related disruptions, and general increases in transit times due to ongoing tensions in the Red Sea.”

Maersk says Q3 will be the peak of the year as it adjusts contract rates

Per World Cargo News “The container shipping market is currently grappling with high levels of uncertainty, leading to significant volatility in container rates. Maersk expects Q3 to be the peak of the year, building on the momentum from Q2. However, this period of uncertainty makes it challenging to predict the rate trends for Q4. Maesrk’s CFO said “Overall, right now, we do not see that rates would come back to pre-Red Sea in Q4. But we see them coming down sequentially, and then we can debate the rate of the decrease, depending on the volume situation in Q4,”. Looking ahead, it's expected for spot rates to continue falling into Q4, with contract rates adjusting more slowly.”

China exports rise at fastest pace in more than a year

Per Financial Times, falling imports drive record trade surplus in June as Beijing leans on manufacturing to support economy. Factory prices remained in deflationary territory for the 21st consecutive month. Policymakers in Beijing have increasingly relied on exports and manufacturing as China’s economy has grappled with weak domestic demand and a prolonged property sector slowdown.

American port & Canada rail strikes loom as shipping’s next major chokepoint

“With the looming strikes at Canadian railways and US ports, we may see an immediate uptick in freight rates as market participants brace for significant disruptions. This is a common reaction to potential disruptions, as uncertainty drives up costs,” commented Christian Roeloffs, cofounder and CEO of Container xChange.

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