APAC Freight Market Update: Oct 23rd, 2024

‍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:

• Demand unexpectedly rebounded  after the Chinese Golden Week holiday. Pessimism loomed that October pricing would be lacklustre amid slow uptake in September. This has now flipped and vessels are at high utilization, alongside some carriers rolling bookings. 
• Drewry’s World Container Index decreased 4% to $3,216 per 40ft container in mid-October. The average composite index for the year-to-date is $4,058 per 40ft container, which is $1,225 higher than the 10-year average rate of $2,834 (inflated by the exceptional 2020-22 Covid period). Source: Drewry 

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• All carriers have increased freight rates from levels between USD150 - USD300/TEU  from 15/Oct. This is due to increased demand after Golden Week. 
• Base Port China to the East Coast is sitting at approximately USD3800-4200  per FEU, while the West Coast sits higher at approximately USD4700 per FEU. 
• Some carriers are already advertising GRIs for the 1st November.
• OOCL has announced a GRI of USD300/TEU ex North East Asia to Australia, from the 1st November. 
• MSC has announced a GRI of USD300/TEU ex China, Hong Kong, Taiwan, Japan, Korea, Cambodia, Thailand, Vietnam, Malaysia, Myanmar, Singapore, Philippines, and Indonesia to Australia. This takes effect on the 1st November.

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Capacity:

• New Service from Maersk/Hapag Lloyd: They have announced the operation of a new direct service from CN to Australia - the Northern Star service. This is a direct service from Shanghai and Hong Kong, with direct coverage to and from NZ ports including Auckland, Nelson, Timaru, Port Chalmers, Napier, and Tauranga. 
  • Key Highlights: First Sailing: Maersk Innoshima 443S departing Shanghai on 21st October 2024. Full rotation: Shanghai - Hong Kong - Brisbane - Auckland - Nelson - Timaru - Port Chalmers - Napier - Tauranga

• New Service from MSC: MSC has announced that it will operate a new service from China and Indonesia, which will be introduced to Fremantle - The Koala Service. The first sailing will be the MSC KYUNGMING, departing  Shanghai on 29/Oct. Routing is Shanghai - Shekou - Jakarta - Fremantle. The vessel capacity is 1500-1800  TEU per sailing. 
• TS Lines will arrange  2 extra loader vessels in the 2nd half of Oct. They will only call Shekou/Nansha ports and will call BNE port first. Their vessel capacity is limited, less than 2000 TEU per vessel. 
• Cosco / OOCL / ANL will have a blank sailing in Shenzhen in week 43.
• MSC/ZIM has a blank sailing in week 42, resulting in limited space ex Shenzhen overall.
• HMM has to offload all fresh bookings from week 40 to week 41.
• Strikes commenced at Chittagong Port this morning - with transport operators beginning a 48-hour standoff. This will impact up to 4000 TEU daily.

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Schedule Reliability:

• Due to several strong typhoons in the South China Sea, all vessels have been delayed 3-12 days from mid-September to the first week of Oct. This has caused a lot of problems for shippers. 
• Vessel dwell times extend in some areas - Shanghai has delays of up to 7 days, Qingdao approximately 5 days, and Chennai & Bangladesh also have delays of 2-3 days. 
• Port congestion in Australian east coast ports is starting to cause delays. As a result, over the last few weeks, the A3 service has made several port rotations to avoid dwell time waiting for berth availability.

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• The Port of Long Beach moved 2.63 million TEU in the third quarter of 2024 the highest container volume it has ever handled in a single quarter. It was also the busiest September for the port handling 829,499 TEU some 70 TEU higher than the record set in September 2023. Source: Seatrade Maritime 
• Rates from Shanghai to New York fell 3% or $152 to $5,609 per 40ft container and those from Shanghai to Los Angeles declined 2% or $78 to $4,941 per 40ft container. Source: Drewry
• The official inauguration day for the elected President of the United States will take place on January 20th, 2025. If Trump is elected, we can expect increases in tariffs on Chinese imports, which will significantly impact demand. 
• Although the US Port Strikes that impacted the East Coast and Gulf ports lasted only 3 days, the ripple effects linger. This includes more cargo routed via the West Coast, airfreight demand increasing, and a likely 4-6 week recovery period. 
• For nearly two weeks, the Montreal Longshoremen’s Union CUPE Local 375 has been rejecting all overtime assignments in a pressure tactic for the long-running dispute with the Maritime Employers Association. The longshoremen’s union announced starting on October 10 it would stop all overtime work as the latest step in the prolonged negotiations. The current strikes may slow down or disrupt the handling of around 50 percent of goods transiting through the Port of Montreal, both imports and exports. Source: Maritime Executive
• The railroad interchanges at the ports of Los Angeles & Long Beach have been experiencing extremely high levels of congestion recently. This congestion is causing delays for shipments that depart from or arrive at inland points such as Chicago, Kansas City, Dallas, Houston, & Memphis. Off-dock import shipments are experiencing delays > 10 days in being moved from the port terminal to the rail staging area, followed by 7-10 days to be loaded onto a railcar & moved out on a train. Export shipments are being delayed 7-10 days as outbound trains wait for clearance to depart for the port terminals. Source: CaroTrans

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• Severe weather conditions throughout Europe indicate the end of the summer season. Storm Boris stalled over Central Europe from 12 to 16 September, inundating Poland, Romania, Slovakia, Austria, Czechia, Italy, and Germany with torrential rain. The storm killed 24 people. 
• Freight rates from Shanghai to Genoa decreased 9% or $346 to $3,438 per 40ft container, while rates from Shanghai to Rotterdam dropped 6% or $218 to $3,373 per 40ft container. Source: Drewry
• From 31st October 2024, reporting on the EU’s Carbon Border Adjustment Mechanism (CBAM) is changing. This means that actual emissions must be reported, rather than using default values.

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• Airfreight space was extremely tight post-Golden Week. Shenzhen particularly was fully booked until the 15th October. 
• Rates are rising rapidly, with forward bookings encouraged. Some direct services do not have space for 7 days ahead. 
• Air cargo has entered peak season with momentum expected to carry into the first quarter of 2025. Spot rates this month reached new highs as demand (mostly from e-commerce) continued to fill aircraft. Source: Freightwaves
• Dynamic load factor continued to rise due to the persistent imbalance between supply (+3%) and demand (+9%) year-on-year growth. It increased by 3 percentage points year-on-year and 2 percentage points month-on-month, reaching 60% in September. As a result, September’s average global spot rate increased +26% to USD 2.71 per kg, the fourth straight month of double-digit growth and the highest increase this year. Source: Xeneta

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General News.

• Deutsche Bahn’s agreed sale of its logistics arm DB Schenker to DSV has received approval from the Supervisory Board. The sale is expected to be completed in 2025 and will result in the world’s largest global freight forwarder, exceeding DHL and Kuehne & Nagel. Source: Project Cargo Journal
• Chinese New Year - also known as the Spring Festival - is a huge disruptor for global supply chains. Customers must plan ahead and ensure they have sufficient inventory on hand to cater for the shutdown of factories throughout  China for a week, up to a month in some cases. The holiday falls earlier than usual this coming year - beginning on the 29th January until the 3rd February. Many workers will take an extended break during this time to visit family and friends inland. Typically, contract rates commence after this holiday period for 12 months or more. It is advisable to start negotiations in Q4 to be prepared for the coming season. 
• Singapore suffers its second oil spill in four months. Oil major Shell, which has a refinery in Singapore, said on 21 October that 30 to 40 tonnes of slop, a mixture of oil and water, leaked from its land-based pipeline into the sea. Source: Container News

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Interesting Articles:

• https://www.scmr.com/article/election-year-effect-the-scenarios-that-could-impact-the-supply-chain
• https://www.seatrade-maritime.com/containers/gemini-vs-msc-titans-look-to-reshape-container-market 
• https://www.seatrade-maritime.com/ports-logistics/dp-world-buys-fleet-of-own-containers 
• https://www.seatrade-maritime.com/ports-logistics/ningbo-zhoushan-port-targets-60m-teu-container-volume-by-2035 
• https://www.aircargonews.net/airlines/drones/air-white-whale-unveils-biggest-unmanned-cargo-aircraft/ 
• https://www.aircargonews.net/services/freighter-conversions-mro/conversions-in-demand-as-all-cargo-flights-continue-to-soar/ 
• https://www.supplychaindive.com/news/biden-harris-china-tariffs-exclusion-process-solar-equipment/730123/
• https://www.supplychainbrain.com/articles/40538-un-report-future-proofing-supply-chains-a-strategic-necessity

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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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