VICT Protests Add to Landside Disruption
Adding to the issues facing shippers at Stevedores across Australia due to the DP World Industrial Action, VICT terminal in Melbourne was subject a 5 day closure last week after Pro-Palestinian protestors blockaded the terminal’s entry.
The closure and backlog came at a time when the terminal was experiencing a surge in container throughput, trying to ease the pressure brought on by the Industrial Action at DP World terminals.
In a statement, the group behind the port protests, Free Palestine Melbourne, said its aim was to stop workers from unloading cargo ships. The activist group wrote that it was “blocking worker shifts from entering the terminal and stranding four ships with 30,000 containers”.
On Wednesday, the blockage was removed and container throughput resumed and carriers now face an uphill battle to clear out the backlog of containers.
Air Cargo Volumes on the Rise as Seafreight Rates Soar
Air cargo volumes are rebounding in early 2024, surpassing previous years’ trends as shippers look to avoid lengthy delays brought on by the DP World Industrial Action and long transit times through the Red Sea.
Global air cargo tonnages witnessed a strong recovery in the second week of January 2024, rising by 24% compared to the previous week, countering the typical end-of-year slowdown.
Year-on-year data shows a global increase in demand by 2%, with a notable 6% surge ex-Asia Pacific, despite lower rates that remain 24% below the levels from the same time last year but 31% above pre-COVID levels.
The increase in tonnages to Europe from Asia Pacific and Middle East & South Asia did not lead to higher average prices, indicating a complex interplay between demand, capacity, and pricing in the global air cargo market.
Time will tell if the airfreight rates will remain steady, especially if the industry disruptions persist and supply of empty containers and space starts to dwindle in key shipping areas.
On the other end of the spectrum, Seafreight rates have begun to soar as shipping conditions worsen for containerised cargo importers and exporters.
Shipping lines have acted swiftly to increase their rates as they look to recoup the additional vessel running costs brought on by the ongoing terminal delays and Red Sea attacks as can be seen in the latest Shanghai Containerised Freight Index.
Red Sea Escalation puts Marine Insurers on Notice
As attacks on cargo vessels continue off the coast of Yemen, Marine Insurers have started to issue notices of cancellation in relation to their War and Strikes Risks cover on insurance policies for any sailings that transit through heavily affected areas in the Red Sea, namely the below coordinates:
- on the northwest, by the Red Sea, south of Latitude 18°N
- on the northeast, from the Yemen border at 16°38.5’N, 53°6.5’E to high seas point 14°55’N, 53°50’E
- on the east, by a line from high seas point 14°55’N, 53°50’E to high seas point 10°48’N, 60°15’E, thence to high seas point 6°45’S, 48°45’E
- and on the southwest, by the Somalia border at 1°40’S, 41°34’E, to high seas point 6°45’S, 48°45’E excepting coastal waters of adjoining territories up to 12 nautical miles offshore unless otherwise provided.
It is important to note that cover for all other risks remain in place, it is only the War and Strikes Risks that will be voided by some insurers if the cargo transits through the Red Sea.
With almost all carriers avoiding the Red Sea at present, not many shipments should be affected, but if you have concerns, please contact your Insurer or Key Account Manager to discuss further.