Sea Freight Market Update
The commencement of the off-peak season, often referred to as the “slack season,” has adversely affected trade this month, leading to weaker than anticipated booking forecasts.
Due to the earlier-than-usual Chinese New Year holiday, factories have only recently returned to full operational capacity.
Consequently, demand has taken a notable downturn, leading to a widespread feeling of uncertainty and low confidence within the Northeast Asia to Australia trade.
Plans to increase freight rates, which were initially scheduled to take effect on March 1st, are now deemed less likely to succeed, especially considering emerging news regarding enhanced vessel capacity.
In response to these market conditions, shipping lines have instead reduced freight rates to mid three-digit figures after a prolonged period of maintaining four-digit rates.
It is important to recognize that the market dynamics are heavily influenced by imbalances between supply and demand.
Shipping lines have demonstrated adeptness in managing their supply by strategically removing capacity from the berths.
It is confirmed that at least three blank sailings will be scheduled between weeks 9 and 12 by smaller consortiums.
Shipping lines are optimistic that these measures will aid in stabilizing trade and mitigating further rate erosion.
Our passionate team of experts is ready to guide you through these challenging times, ensuring you feel supported every step of the way. Let us help you overcome any obstacles together!
We are dedicated to aligning our sailing schedules and competitive pricing with your supply chain needs, ensuring that you have access to the most effective solutions available in the market.
Tropical Cyclone Alfred – Shipping Update
Further to our Important Shipping update yesterday, there have been a number of updates received regarding Tropical Cyclone Alfred that will be important for Shippers to be aware of this week.
Following is the latest on operational changes that have been implemented, along with updates highlighted:
- Vessel Movement Suspensions:
- Maritime Safety Queensland (MSQ) has suspended inbound vessel arrivals to the Port of Brisbane due to heavy swells since late yesterday under direction from Maritime Safety Queensland’s (MSQ) Regional Harbour Master.
- Final outbound transits have occurred this morning for a number of vessels.
- Most likely no shipping movements from Wednesday evening with potential port closure Thursday and Friday.
- Looking to priority of vessels once BAU returns on Saturday.
- Port of Brisbane have released a stakeholder update in light of MSQ announcements
- Terminals:
- Patrick:
- Imports: Expecting to close for Imports from completion of Day Shift today, 4 March 2025. Patrick advise industry to ensure they take delivery of all available imports within these shifts with slots currently available.
- Exports: Cargo receivals suspended until further notice.
- DP World:
- Imports: DP World have revised forward their closure time, with the DP World Brisbane terminal now to be closed from this afternoon, Tuesday 4 March 2025 @ 15:00. Last slot will be 14:00, with In-Gates closed from Tuesday 4 March 2025 @ 15:00. Terminal operations are planned to resume from Saturday 8 March 2025 at 07:00 if safe to do so. DPW advise industry to ensure they take delivery of all available imports within these shifts with slots currently available.
- Exports: Cargo receivals suspended until further notice.
- Hutchison Ports:
- Imports: Currently operating as normal until further notice.
- Exports: Cargo receivals suspended from 10am today until further notice.
- AAT:
- Imports: Currently operating as normal until further notice.
- Exports: Cargo receivals suspended until further notice.
- Patrick:
- Empty Container Park Closures: Several empty container parks across the port precinct have already ceased operations due to safety concerns. We encourage members to liaise with relevant service providers to assess potential disruptions to their supply chains.
Further to the above updates, Port of Brisbane through their latest update have stressed to stakeholders that there is no intention of altering landside access to Fisherman Islands or other Port of Brisbane Pty Ltd precincts as a result of the weather event. All port tenants/businesses have been advised to implement their own severe weather preparedness plans, adhere to State and Local Government/Emergency Management directions, and make decisions regarding their own operations.
The expectation at present is that terminal operations may resume on Saturday 8 March 2025 based on current forecasts. We will continue to monitor the situation and provide further updates as they become available.
MSC Baltic III Catastrophe
Last week cargo ship MSC Baltic III reported a loss of power and opted to run aground on the western coast of Newfoundland, Canada.
The 20 crew members aboard were safely airlifted from the vessel on Saturday February 15, after The Marine Communications and Traffic Services in Port aux Basques received a mayday call from the ship early that morning.
The Coast Guard said the weather and sea conditions were “unfavorable”, which prevented the ship from securing its anchor.
MSC Baltic was roughly 12 nautical miles outside of the entrance to Bay Islands when it lost power.
Approximately 470 containers were onboarding the vessel, however, more than half of them were empty. According to The Canadian Coast Guard, the loaded containers were packed with food, lumber and paper supplies.
Now, with the crew safely rescued, the focus shifts to creating an effective salvage and marine environmental response. In fact, the owner of MSC has contracted Texas-based T&T Salvage to devise a plan to recover MSC Baltic before it breaks up.
Tariff turmoil
Since the last newsletter, Trump has continued to threaten tariffs, which could have serious economic implications on numerous economies across the globe.
Canada, Mexico and China are already victims of the tariff war, and now with his claims to impose a 25 per cent tariff on steel and aluminum imports, Australia has ended up in the firing line.
Tariffs on steel and aluminum could hurt Australia’s economy considerably, as the nation exports $1 billion worth of steel, aluminum and iron each year.
Last week the Albanese Government attempted to convince President Trump to exempt Australia from the 25 per cent tax on imports.
The Prime Minister and President Trump discussed not only Australia’s significant investments in the US but also how those investments contribute to the creation of thousands of jobs for Americans.
Speaking at a news conference shortly after their conference call meeting, Albanese said that he and Trump agreed on how he would address the press.
“I presented Australia’s case for an exemption, and we agreed on wording to say publicly, which is that the US president agreed that an exemption was under consideration in the interests of both of our countries,” he said.
Despite Albanese’s optimism, Trump is yet to decide if Australia will have special treatment.
Reciprocal tariffs
In addition to increasing aluminum and steel imports, President Trump has also been sharing his thoughts on reciprocal tariffs.
In theory, a system of reciprocal tariffs would be straightforward: The same levies that American companies face in exporting their goods to another country would apply to imports from that same country.
However, international trade expert Ted Murphy told the New York Times that the logistics of a reciprocal tariff policy would be anything but straightforward.
“It’s potentially a herculean task,” said Mr Murphy.
“For every widget, every tariff classification, you can have 150 different duty rates. You’ve got Albania to Zimbabwe.”
According to President Trump’s Commerce Secretary Howard Lutnick, reciprocal tariffs would also aim to counteract non-tariff trade barriers such as burdensome regulations, value-added taxes, government subsidies and exchange rate policies that can erect barriers to the flow of US products to foreign markets.
Protectionist ideologies
Trump’s thoughts on tariffs fall squarely in line with his protectionist ideologies – taxing imports to shield America’s industries from foreign competition. According to University of Technology chief economist Tim Harcourt, this is “the worst thing that could happen to Australia.”
That said, Professor Harcourt wasn’t entirely pessimistic, alluding to Trump’s recent deal with Columbian President Gustavo Petro, where the two leaders agreed to drop tariffs on Colombian coffee in exchange for the South American nation’s acceptance of US deportees.
Through an optimistic lens, Trump use of tariffs could be just one part of a bigger strategy, with the possibility that they could be removed shortly after being applied.
Innovating Southeast Asian FTAs
A comprehensive review of Australia’s Free Trade Agreements (FTAs) in Southeast Asia is underway to ensure Australian businesses can maximise trade and investment opportunities.
Driven by the middle class’ increasing demand for quality products and services, Southeast Asia is expected to become the world’s fourth-largest economy by 2040.
In fact, according to data published in the Asian Development Outlook last September, the Gross Domestic Product (GDP) in Southeast Asia is expected to increase by 4.7 per cent by September 2025, with the Philippines, Vietnam and Cambodia growing the fastest.
To ensure that the current FTA meets demand and innovations emerging in Southeast Asia, The Department of Foreign Affairs and Trade will review the following:
- Market access commitments, to ensure that Australian and Southeast Asian partners can maximise the benefits of modern trade agreements.
- Emerging issues such as digital trade and the net zero economy to ensure that the FTA addresses international developments.
- Possible improvements could be made to support Australia’s trade diversification agenda, strengthen economic integration and tighten supply chain resilience.
DFAT is accepting public submissions to inform the review. It is encouraging contributions from a variety of groups including The Australian Community, NGOs, the Private sector, Trade and Investment exposed industries and Representative organisations. The more constructive feedback, the more likely it is that effective actions will be taken.
The department has already begun consulting with Australian stakeholders and will continue to do so throughout the year.
Global air cargo capacity rises 6% YoY in January 2025
Air cargo rates on key east-west routes declined in January but remained above last year’s levels as an early Lunar New Year and pre-tariff shipments helped guard against a drop off in e-commerce volumes.
Meanwhile, e-commerce demand had slowed in January and the pre-tariff ramp-up of inventories affected the market later in the month.
Air freight rates remained elevated in January despite a seasonal dip in pricing following the peak Christmas period.
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.
Selecting the right 3PL partner for your business model
When selecting the right third-party logistics (3PL) partner, it is essential to consider several key factors that align with your business model. First, assess expertise and experience in your industry. According to a report by McKinsey, 75% of supply chain professionals consider industry-specific knowledge crucial for effective logistics management.
Ensure your potential 3PL provider has a strong understanding of your market and can handle your product’s unique requirements.
Next, evaluate the technology capabilities. A robust technology infrastructure, including real-time tracking, reporting tools, and integration with your existing systems, is essential for operational efficiency. In fact, 60% of 3PL providers invest in technology to improve visibility and operational performance, according to Cerasis. This ensures you can optimize routes, reduce shipping costs, and improve overall customer experience.
Also, consider scalability and flexibility. As your business grows, your logistics needs may change. A 3PL partner should offer scalable solutions that can adapt to fluctuations in demand. A survey from PwC reveals that 43% of companies prioritize flexibility in their logistics operations to accommodate seasonal or demand-driven shifts.
Cost efficiency is another vital consideration. According to Deloitte, 58% of companies select 3PL partners based on the ability to reduce logistics costs. However, while cost is important, it should not outweigh service quality and reliability. Be sure to strike a balance between competitive pricing and high-quality service to ensure long-term success.
Feel free to give your HARDERS representative a call to discuss your 3PL requirements.