Table of Contents
Sea Freight Market Update
In last month’s update, we highlighted the volatility in freight rates on the Northeast Asia to Oceania route as carriers adjusted SPOT/FAK pricing to attract cargo amid weaker-than-expected demand.
Over the past week, demand has surged as customers prepare for the pre-Chinese New Year (CNY) rush, prompting carriers such as TS Lines, ANL CMA CGM, and ZIM to deploy extra loaders to handle the increased volumes.
Although carriers initially signalled confidence in implementing a December 15 Rate Restoration (RR) of USD 500 per TEU, market conditions prevented full enforcement. Some carriers introduced smaller increases, while others remained competitive to secure market share.
Looking ahead, carriers are positioning for another USD 500 per TEU RR effective January 1, 2025, aiming to strengthen rates before long-term contract negotiations begin post-CNY.
Operational challenges persist, with adverse weather disrupting major Chinese ports like Shanghai and Ningbo, resulting in delays, congestion, and vessel sliding. However, congestion in Singapore shows signs of improvement.
On the Transpacific trade, early December trends showed mixed performance, with Asia-to-Europe rates rising by 1%, while Transpacific eastbound and Transatlantic westbound rates declined by 1%.
In broader developments, the launch of the Premier Alliance has been delayed to late December pending Federal Maritime Commission (FMC) approval. The alliance will consist of ONE, HMM, and YML, replacing THE Alliance following Hapag-Lloyd’s departure to join the Gemini Alliance with Maersk. MSC, now collaborating with ZIM and the Premier Alliance on key routes, continues to adapt to these structural changes in the global shipping landscape.
Carriers remain focused on balancing supply and demand; particularly as additional capacity comes online ahead of CNY.
Our valued clients should prepare for rate fluctuations and operational challenges caused by adverse weather and labour unrest attributing to port congestion. Proactive planning and flexibility will be essential to navigating the volatility ahead.
As we approach the end of another dynamic year in global shipping, we want to take this opportunity to express our heartfelt gratitude for your continued trust and partnership. On behalf of the entire Harders family and staff, we wish you a joyous holiday season filled with peace, happiness, and quality time with loved ones.
United Kingdom’s Accession into CPTPP
Australian Border Force released ACN 2024/43 to advise that the United Kingdom of Great Britain and Northern Ireland will access the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) from 24 December 2024.
Australia and the United Kingdom has a reciprocal free trade agreement (AUKFTA) that has been in place since May 2023. Importers and exporters should investigate requirements for each agreement as it relates to their products to ensure they are claiming preference under the best suited agreement.
The CPTPP agreement also allows for regional cumulation of materials which may allow goods manufactured in the United Kingdom containing materials from multiple CPTPP countries to be eligible for preferential duty.
Please contact your Key Account Manager or Harders Advisory for further information.
New Import Control on Engineered Stone
From 1 January 2025, Engineered stone containing more than 1% crystalline silica (e.g., benchtops, panels, and slabs) will beprohibited unless a valid permit, confirmation of end use, or exemption is obtained.
The import prohibition complements the domestic ban on the supply, manufacture, processing and installation of engineered stone under the Work Health and Safety Regulations. Engineered stone products, when cut or processed, release crystalline silica dust, which can cause significant health problems. Prolonged exposure to this dust can lead to silicosis, a serious and often fatal lung disease.
For any imports of Engineered stone slabs or related products, Customs will need to see evidence that links the sample tested and testing certificate with the goods being imported, i.e. the samples collected must be from the batch being imported. Written evidence of the sampling process, photographs and accurate records of decisions (what was and what was not sampled and why) will enhance assurances provided to Customs that the goods are not engineered stone. If Customs suspects the consignment contains prohibited engineered stone, the importer will be provided the opportunity to have the goods tested at their expense, or re-exported.
For the ABF to be confident that the goods are not prohibited engineered stone, testing of goods must be carried out by a laboratory using suitable analytical means, such as petrographic analysis and x-ray diffraction, and should be carried out by a laboratory accredited by the National Association of Testing Authorities (NATA), or similar. Additionally, sampling must be conducted by a competent person. For any importers looking to import Stone products, its important that you:
- Obtain Approval: Ensure you have the necessary permits or exemptions before shipping goods.
- Conduct Testing: If unsure, have the goods tested to confirm the silica content.
- Documentation: Include clear and complete details on all import declarations to avoid delays or re-exportation.
Please be sure to contact your Key Account Manager to work through the above steps prior to importation.
US Dockworker Strike Looms Again
The ongoing negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance, Ltd. (USMX) are at a critical juncture, as both parties work toward a resolution on their long-standing labour contract. With the current agreement set to expire in the coming weeks, industry experts are closely monitoring the situation, aware that any significant disruptions could severely affect port operations and international trade.
The negotiations, which have been in progress for several months, have seen some progress but are still mired in disagreements over key issues such as wages, safety protocols, and the modernisation of port facilities. The ILA, representing thousands of dockworkers along the East and Gulf coasts, has raised concerns over the impact of automation and changing job demands on their workforce. The union is seeking job security measures and a fair share of the economic benefits generated by advancements in technology.
On the other side, the USMX, which represents major shipping companies and port operators, has pushed for more flexible working conditions and concessions to allow for smoother integration of technological upgrades, including automation and artificial intelligence, into port operations. These advancements are seen as essential to maintaining global competitiveness but also raise fears of job displacement and reduced working hours for longshoremen.
The latest round of talks, which resumed earlier this month, has seen both sides engage in intensive bargaining sessions. Reports from both unions and industry groups indicate that while a number of smaller issues have been resolved, the more contentious points regarding wages and automation remain unresolved. Labor leaders have warned that a failure to reach an agreement soon could lead to labour stoppages or slowdowns at key U.S. ports, which would likely create significant disruptions to the supply chain, especially during the holiday season when shipping volumes are typically high.
Industry insiders have expressed concerns that a work stoppage, especially at major hubs such as the Port of New York and New Jersey or the Port of Savannah, could ripple across global shipping routes, causing delays in cargo deliveries and driving up costs for both consumers and businesses. The maritime industry, already facing challenges from rising fuel prices and fluctuating demand, could be dealt a severe blow if the deadlock continues.
Both sides have emphasized their commitment to reaching a fair and balanced agreement the USMX has expressed optimism that a deal can be reached in the coming days.
As of now, the parties are expected to meet in the coming days to continue discussions. Both the ILA and USMX are under pressure to finalize the deal, with the potential for federal intervention if the situation worsens. The U.S. government, which has closely monitored the talks, may step in with a mediator if there is a significant risk of work stoppages or strikes.
The outcome of these negotiations will be closely watched by stakeholders across the global supply chain, with the resolution likely to set the tone for labour relations in the maritime industry for years to come.
ACCC – Container Stevedoring Monitoring Report
The ACCC released its Container Stevedoring Monitoring Report late last week with some interesting insights into the current landside stevedoring operations, extending to Empty Container yards and parks.
- Global and Domestic events caused major disruption in 2023-2024 causing Australian importers to pay up to 11 times more on Asia-Australia trade routes than in the previous year 2022-2023
- Enquiries reveal likely market failures in the supply chain as Stevedores and Empty Parks appear to have little incentive to actively increase market share by discounting landside charges, while Australian Importers and Exporters are constrained in responding to price increases.
- Stevedores uses landside charges to significantly increase prices due to limited competition between stevedores.
- Concerns that ‘weight misdeclaration fees’ appear to be levied on parties that are not responsible for the weight declaration and the stevedores and not aligned with the Maritime Safety Regulations.
- Rising Empty Park notification fees to transport operators have increased significantly since 2018 in line with Stevedore landside charges. This indicates a lack of competitive tension in relation to these charges and requires closer scrutiny.
- Reforms will be required to improve efficiency in container stevedoring and empty container park markets. These reforms should extend to measures in addressing the market failures relating to landside charges levied by Stevedores and notification fees charged by Empty parks and yards.
Will this report be the trigger now for the Federal Government to intervene on the landside operations of Stevedores and now Empty Parks?
The full report can be found via this link: Container stevedoring monitoring report 2023-24 | ACCC
Air Freight Update
Global air freight market continues to experience robust growth, driven by eCommerce and the peak season, but faces capacity constraints due to reduced belly cargo capacity and a limited supply of wide-body freighters, particularly on key trade routes.
Demand rose 10% year on year in November, marking the 13th consecutive month of double-digit growth. However, capacity has only increased by 2%, pushing the cargo load factor to its highest level in over 30 months at 63%, with average spot rates 22% up year-on-year.
Global air cargo volumes are projected to rise by 5.8% year on year in 2025, reaching 72.5 million tonnes. This growth will be supported by booming eCommerce originating in Asia, although any changes by the U.S. to the current ‘de minimis’ thresholds, could have a profound impact.
Geopolitical uncertainty will continue to play a significant role in shaping air freight dynamics. The Red Sea crisis is expected to persist, influencing routing decisions and costs. Potential tariff changes in the United States could impact trade volumes, though benefits from deregulation under a business-friendly administration may offset some of the negative effects.
Air freight rates are likely to remain elevated if demand continues to outpace capacity.
Whatever your cargo size, type, or deadline, we deliver the best rate and service combinations to meet your needs.
We have weekly consoles from USA, Europe, China, and South Africa into AU. Please contact our team of supply chain professionals who will continue to provide you with the most competitive options to support your supply chain needs.