APAC Freight Market Update: January 22nd

‍In this Update.

1. Asia Market.
2. USA/Canada Market.
3. Europe Market.
4. Airfreight Update.
5. General News.
6. Interesting Articles.

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Rates:

• For the first time in over a decade, market pricing is declining ahead of Chinese New Year.
• We are seeing spot rates dip below USD1000 per TEU for the first time for cargo ex China to the East Coast.
• Rates are likely to reduce further in the first half of February, with carriers still chasing volume to fill vessels ahead of the holiday. 
• Rates out of Southeast Asia are now in excess of Northeast Asia. On most lanes, they are currently sitting 50-60% higher than China FAK prices. 
• While rates are still higher than their China counterparts, carriers are still chasing bookings and capacity looks favourable moving into February. 
• Starting January 1, 2025, Container Inspection Fees will apply to all ANL Imports, in line with existing CMA shipments.
  • This fee, which applies to all ANL Australian import shipments (Including AU Coastal and excluding TRANZTAS Service), will be as follows:
  • Container Inspection Fee at Destination (FEE85): AUD 13.25  (per unit | for imports)

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NACs:

• Named Account (NAC) season is upon us, however, this looks a little different this year. ANL, Maersk, and Cosco are not entertaining any contract business for forwarders out of China in 2025. 
• NAC business will be scrutinized this year, with SME volume (below 1000 TEU) likely not considered. Alternatives are available, with extended validity on FAK pricing, as well as the option for commodity-based bundles. 

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Rate Indicator:

• China Base Ports to AU East Coast: USD950 - 1500 per TEU. Premium services are still higher, with AUN/CAT/CA2 services highly competitive. 
• China Base Ports to AU West Coast: USD1200 - 1800 per TEU. 
• Southeast Asia pricing varies based on origin port. Majority are sitting at USD1500-1600 per TEU with Korea sitting slightly higher at USD2000-2100 per TEU.
• The Drewry WCI composite index decreased 3% to $3,855 per 40ft container, 63% below the previous pandemic peak of $10,377 in September 2021, but was 171% higher than the average $1,420 in 2019. Source: Drewry

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Australian Ports:

• Pilbara Ports Authority closed the Ports of Dampier, Ashburton, Varanus Island, and Cape Preston West late Saturday as Tropical Cyclone Sean formed off the coast of Western Australia. Source: G Captain
• Terminal operations have been disrupted in SYD and MEL due to high winds. This has caused a backlog and delays are to be expected.

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Capacity:

• Maersk and Hapag-Lloyd AG are set to launch their collaborative effort, Gemini Cooperation, in February 2025. The initiative aims to provide an interconnected ocean network with schedule reliability exceeding 90 percent once fully implemented.

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Schedule Reliability:

• In November 2024, global schedule reliability improved by 4.1 percentage points M/M to 54.8%, which is the highest point it has been at in 2024 so far. That said, even with that M/M improvement, schedule reliability has largely remained within the 50%-55% range in 2024. The average delay for LATE vessel arrivals improved, decreasing by -0.43 days M/M to 5.41 days. Despite the improvement, this is the second-highest figure for the month, only surpassed by the pandemic high of 2021.

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• Maersk was the most reliable top-13 carrier in November 2024 with schedule reliability of 61.9%. There were 8 carriers with schedule reliability of 50%-60%, with the remaining 5 carriers within a narrow 47%-50% range. Wan Hai was the least reliable with 47.3% schedule reliability. In November 2024, the difference between the most and least reliable carrier dropped to under 15 percentage points. All top-13 global carriers recorded a M/M improvement in schedule reliability, with PIL recording the largest increase of 14.6 percent points. Source: Sea Intelligence

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Asia Pacific Market

• With Ramadan approaching (27th Feb - 29th Mar 2025), rail operators prioritise passenger services, and there are suggestions that rail freight movements could be halted for up to a week, resulting in as many as 3,000 TEU of imports idling at Chittagong’s inland container depot by the end of April. At present, due to ongoing shortages of rolling stock and manpower, Bangladesh Railway is operating just a single service a day, and with a backlog building the operator would need to quadruple this if it is to clear the backlog, or risk huge bottlenecks at both Chittagong and Dhaka. Source: The Loadstar
• We are seeing congestion across some ports in China ahead of Chinese New Year due to overbooking. This has caused some shipments to be rolled and ETDs to be pushed out. Many carriers are hoping to load this cargo on vessels departing over the holiday period. 
• While this may seem contradictory to what prices are doing, we are likely to see a large deficit in demand from early February with carriers offering very low rates to secure bookings

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• The ILA and USMX came to a ‘tentative’ agreement  – on all items  – on a new six-year master contract. With the ILA having the backing from President Trump, they have credited this win to his support. This is a relief for all shippers who were apprehensive on industrial action from 15th January. Source: The Loadstar
• Trump has advised that his administration will impose 25% tariffs on Mexico and Canada, effective 1st February. A 25% tariff for Canadian goods would be catastrophic for businesses, as 75% of their trade comes from the United States. 
• President-elect Donald Trump is preparing more than 100 executive orders starting Day One of the new White House, in what amounts to a shock-and-awe campaign on border security, deportations, and a rush of other policy priorities. Source: AP News
• The White House looks to exclude e-commerce goods from duty-free import. U.S. Customs and Border Protection on Friday proposed that low-value imports no longer qualify for duty-free entry if the products are subject to tariffs or other national security restrictions. International trade professionals say consumers likely won’t be deterred if their $10 jeans from China now cost $12. And Chinese marketplaces are likely to adapt by fulfilling orders and labeling each box at origin, bringing them to the United States in containers under a consolidated entry and handing them to national or regional couriers for final-mile delivery to the buyer. Or they could set up warehouses in the U.S. and Mexico to do order fulfillment, with inventory arriving by ocean vessel. Source: Freightwaves
• Rates on the TPEB trade remained firm in late 2024 and early 2025. There is potential for rate restorations after the holiday period. Capacity is limited, with roll pools for most vessels. 
• Freight rates from Shanghai to Los Angeles decreased 5% or $248 to $5,228 per 40ft container. Similarly, rates from Shanghai to New York fell 4% or $260 to $6,825 per 40ft container. Source: Drewry

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• Since 1 January, carriers have had to increase the surcharge on their vessel emissions, from 40% to 70%, with the introduction of new EU ETS rules and the FuelEU regulation, which sets targets for the greenhouse gas (GHG) intensity of the energy used on a ship. This will filter down to consumers as the costs of sustainable shipping add to their bottom line. Source: The Loadstar
• Rates from Shanghai to Rotterdam dropped 3% or $144 to $4,231 per 40ft container. Those from Shanghai to Genoa also reduced 2% or $124 to $5,086 per 40ft container, and rates from Rotterdam to Shanghai shrank 1% or $4 to $518 per 40ft container. Source: Drewry

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• Rates ex Europe to Australia remain consistent and competitive. Rates vary from USD800 - 1200 per TEU into the East Coast. 
• With congestion now clearing in Singapore, transhipment services are in line with the more direct options.

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• Global Cargo Tonne-Kilometers (CTK) grew by 8.2% year-on-year (YoY) in November, marking the 16 th consecutive month of growth. However, month-on-month (MoM), demand dropped by 0.5 % after seasonal adjustments. 
• Yearly growth rates have been decelerating since September to single digits, indicating a move back to pre2021 values. Meanwhile, the latest CTK volumes were the highest of any November on record. 
• International CTK expanded by 9.5% compared to last year with most regions, excluding Africa, and all major trade lanes seeing growth. North American carriers led with a 13.4% YoY increase. Among major trade lanes, Asia-North America trade led with a 13% annual rise in cargo demand. 
• Global air cargo capacity, measured in Available Cargo Tonne-Kilometers (ACTK), grew by 4.6% YoY in November. 
• Jet fuel prices rose in MoM terms for a second month, while global air cargo yield continued to increase in MoM terms, for its ninth consecutive month. Source: IATA
• In November, international air traffic rose by 9.5%, fueled by increased e-commerce demand in the US and Asia Pacific, and continued restriction in ocean shipping. Most airline regions saw growth, with changes ranging from a 13.4% increase to a minor 0.7% decrease. Source: IATA

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• Annual international cargo traffic showed growth across all major route areas. The Asia-North America route, the largest market based on CTK volumes, saw the highest increase at 13%, marking 13 straight months of growth. Europe - Asia followed with 12.9% YoY growth, sustaining growth for 21 months, including the past 12 months in double digits. Within Asia ranked third, rising 12.2% YoY, maintaining 13 consecutive months of growth, and the latest 9 of which were double digits. Europe, North America, the third largest market, grew more moderately at 5.6% in its 13th consecutive month of growth. Source: IATA

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General News.

• A potential ceasefire between Israel & Hamas could lead to a cessation of Red Sea attacks. Israel says it has released 90 Palestinian prisoners as part of the ceasefire deal with Hamas. According to recent Drewry estimates, business-as-usual in the Red Sea and Suez Canal would see container shipping capacity increase by around 25% overall.  Source: The Loadstar & CNN
• Wildfires raging across Southern California this week pose significant risks to supply chains throughout the region. Since first sparking on January 7, the fires have taken advantage of dry conditions and howling Santa Ana winds to spread fast, Exiger said. To date, widespread fires have been burning in Los Angeles County, the Inland Empire, Orange County, and Ventura County. Affected areas include the Pacific Palisades, Malibu, Altadena, Pasadena, and Sylmar. Businesses should anticipate delays, shortages, and increased operational costs. Those will come because power outages, evacuations, and closures of key transportation routes have disrupted production and distribution networks in the Southern California region and beyond. Source: DC Velocity

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Interesting Articles:

• Shipping Australia calls for reform of industrial relations (Loadstar)
• As CNY and slack season approach, the ocean price-cutting begins (Loadstar)
• War, weather and global tension the chief threats to 2025 supply chains (lLoadstar)
• U.S. Blacklists COSCO Shipping Over Alleged Military Ties, Straining Greece-China Relations (MoreThanShipping)
• Shippers embrace painful start to 2025 as Transatlantic air cargo spot rate spiral 100% (Xeneta)
• Tariffs on the move? A guide for CEOs for 2025 and beyond

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With 17 years of expertise in fixing and improving supply chains across Australia and the globe, I know what insights businesses need to stay proactive and ahead of disruption. Consider this your go-to resource for staying informed and making smarter logistics decisions. Ready to strengthen your logistics operations? Let's get started!

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