Market Update - December 2024

Overview

As 2024 draws to a close, the Oceania trade market faces intensifying challenges driven by high seasonal demand, tight capacity, and operational disruptions. With the holiday season in full swing and Chinese New Year approaching in late January 2025, supply chains across Australia and New Zealand are under significant strain. This update provides key insights to help businesses manage these complexities and maintain resilient logistics operations.

Ocean Freight Market Insights

Rates and Capacity

The Asia-Oceania trade lanes continue to experience strong demand, with carriers implementing General Rate Increases (GRIs) of USD 150–300 per TEU in November.

• Current rates for China to Australia are hovering between USD 5,500–7,150 per 40ft container, reflecting sustained demand and limited capacity.
• Rates are expected to remain elevated through January 2025, driven by pre-Chinese New Year shipping surges.
• Advance bookings 4–6 weeks ahead remain essential to secure space and manage costs.

Port Congestion Updates

Congestion at major ports across Australia and New Zealand continues to impact schedules:

• Australia:

  • Port	Delay
    Brisbane	4 Day
    Sydney	2 Day
    Melbourne	1 Day
    Adelaide	1 Day
    Fremantle	1 Day

  • Brisbane: Significant delays of up to 4 days, making it the most congested port in the country.
  • Sydney: Moderate delays averaging 2 days.
  • Melbourne, Fremantle, and Adelaide: Relatively stable, with 1-day delays.
• New Zealand:
  • Wellington: The most congested port in the region, with delays of up to 6 days.
  • Auckland: Moderate delays of 2 days.
  • Tauranga: The most efficient port, with 1-day delays.

Rail Disruptions:
The 30-day rail closure at Tauranga Port, scheduled from 27 December 2024 to 27 January 2025, is expected to disrupt inland cargo movements. Businesses should consider alternative road transport or intermodal solutions to mitigate delays.

New Carrier Services

To address capacity constraints and improve transit reliability, carriers have launched several new services tailored to Oceania trade:

• MSC Koala Service: A weekly connection between China, Southeast Asia, and Fremantle, providing much-needed capacity for Western Australian importers and exporters.
• Maersk Northern Star Service: Directly connects Greater China to New Zealand, featuring a 15-day Tauranga-to-Shanghai transit and a southbound Brisbane call, offering improved options for Australian and New Zealand businesses.

These services provide faster, more reliable options for navigating peak-season pressures.

Biosecurity Compliance

The ongoing Brown Marmorated Stink Bug (BMSB) season continues to delay shipments at Australian ports by 48–72 hours. Businesses must ensure strict compliance with documentation and inspection protocols to avoid additional disruptions.

Air Freight Market Insights

Rates and Capacity

Global air freight capacity has increased by 5% year-over-year, driven by widebody passenger aircraft and expanded bellyhold cargo availability. However, high utilisation rates continue to limit space availability on Asia-Pacific routes.

• Australian airports, including Sydney (SYD) and Melbourne (MEL), report delays of 5–6 hours due to staffing challenges and elevated seasonal volumes.

Seasonal Trends

Air freight demand remains strong ahead of Chinese New Year, particularly for e-commerce goods, perishables, and high-value items. Rates are expected to stay elevated through Q1 2025, necessitating early bookings for time-sensitive shipments.

Emerging Global Risks

Potential U.S. Port Strikes in January 2025

The International Longshoremen’s Association (ILA) has signalled potential industrial action at U.S. East Coast and Gulf Coast ports if contract negotiations fail by 15 January 2025.

Implications for Oceania Trade:

• Delays at U.S. ports could cause disruptions at Asian transshipment hubs that serve Australian and New Zealand trade lanes.
• Equipment shortages and rate fluctuations are likely as carriers reallocate capacity to mitigate disruptions.

Shippers should closely monitor this situation and develop contingency plans to minimise risks.

Regulatory Changes: EU Emissions Trading System (ETS)

From 1 January 2025, carriers operating on Europe-bound routes will be required to surrender 70% of emissions allowances, up from the current 40%. This change is expected to:

• Introduce new surcharges on Europe-connected trade lanes.
• Increase overall operational costs for carriers, likely impacting freight pricing globally.

Businesses trading with Europe should factor these additional costs into their logistics budgets and plan accordingly.

Summary

The December logistics market presents significant challenges, including elevated freight rates, congestion, and emerging risks such as U.S. port strikes and biosecurity delays. For businesses in Australia and New Zealand, proactive planning is key to navigating these pressures and maintaining supply chain resilience.

Key Actions for December and January:

• Book early: Secure space and lock in rates for ocean freight well in advance.
• Leverage new services: Take advantage of carrier services like MSC Koala and Maersk Northern Star for faster, more reliable shipping options.
• Stay compliant: Ensure full compliance with biosecurity regulations to avoid costly delays.
• Monitor global risks: Stay informed on potential U.S. port strikes and regulatory changes affecting freight operations.

Contact Us

Seabridge is committed to supporting your logistics needs with tailored solutions, real-time updates, and expert guidance. For more information or assistance, contact your Seabridge account representative today.