Ocean freight rates from China to Australia and China to all routes continue inverting: International freight insights APAC 2024 week 39

It continues; global rates fall as Australia rates increase. Spot ocean freight rates China to Australia had a 6% increase in the past week (rates are up 24% in the past month). Contrast this to rates from China to all global routes, which decreased 4% in the past week (global rates ex China is down 14% in the past month).

Spot ocean freight rates over a longer 3-month chart period show rates from China to Australia and China to all routes inverting:

This spike for the Australia route will likely end soon, as Australia being an outlier can’t remain for long. This prediction is also supported by ocean rates on the China to South East Asia route, which has overlap scheduling with Australia, declining 6% this week. Rates to Australia should steady / start to decline within the next few weeks. Despite this China Containerized Freight Index data, a few carriers are this week offering stable / slightly reduced rates China to Australia. Enquire with shipping lines and / or discuss with an expert to ensure no more increased spot rates are experienced for the remainder of the year.  

There is an increased probability of steep rate falls in the medium term as Australia belatedly follows with the global trend, although carriers may increase blank sailings in an attempt to delay / limit this.

Global airfreight rates have been unusually steady this year, increasing 1% in the past week. Increased air cargo demand with capacity not keeping up means that there is a reasonable risk of airfreight rate increases in the coming weeks. Although these will likely be nothing like the dramatic shifts in the ocean freight market.

Middle East impact now depleted

Disruption in global supply chains through the knock-on effects of the Red Sea diversions is diminishing as supply and demand becomes more balanced and the initial bunching of services, which caused port congestion, has eased significantly, according to Drewry Shipping Consultants.

Offsetting this may be a US East and Gulf Coast union strike. Per Shipping analyst Linerlytica that strike “now looks certain”. This has the potential to see global rates rebound upwards and offset the passing of the Middle East situation.

Global ocean spot rate declines continue, but prices for some long-term ocean contracts soar

The Loadstar explains that despite the global decline in spot rates over the past couple of months, a different trend appears to be under way in the long-term contact rate market. An example is used of rates between Asia and North Europe which over the past few months, saw the average spot rate decline 29%. However, some lanes completely bucked this trend when it came to long-term contract rates. On this trade route  the average long-term rate almost doubled over the same period.

This example shows there is more volatility than is common in the long-term market. Get access to the right information / advice with now not only the ocean freight spot market, but also the longer-term market being all over the place.

Freight Forwarder warns of potential China national holiday supply chain disruption

Air cargo news quotes a German freight forwarder which advises to “start preparing now to minimise potential disruptions” to supply chains ahead of a one-week national holiday that runs October 1 to October 7. Production at businesses in China will be paused for a week and factories may not run at full capacity post-national holiday. Airports will keep operating but with reduced manpower due to lower production volume from factories. This takes place during an already capacity-constrained peak season for airfreight.

Australian government prioritises Port Botany for containerised freight

Per Container news, uncertain trade levels and consequently freight volumes have led to an interim report conclusion from Australia’s Freight Reform Panel. It advised the cutting of government support for a new container facility at Port Kembla (south of Sydney). The report said “Government expenditure to improve port efficiency in relation to containers ought to focus on Port Botany for the foreseeable future …. Current government policy is that Port Botany will be the key container port for NSW until it reaches capacity… It is not anticipated that Port Botany will reach capacity for 20 years.”

Access ZG (access-zg.com) is an Australian company that provides fourth party logistics (4PL) services to international logistics & trade participants, specialising in connecting with Asian markets. Access ZG’s 10 value- ads assist with alleviating issues & navigating this new paradigm of heightened freight & supply chain risks for the international logistics industry.

Please see website and / or read below the email signature for further information & reach out for assistance in this challenging environment.

Thanks for taking the time to read and hope you gained some valuable insights,

Jeffrey Levy CA 

Founder

ACCESS ZG 

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