Australia
New Zealand Overview
The global freight market is currently facing a turbulent period, with volatility affecting both ocean and air freight services. Australia and New Zealand, in particular, are experiencing fluctuating spot rates, capacity constraints, and persistent port congestion. As we approach the peak shipping season, it’s crucial to stay informed and strategically plan ahead. This market update provides an in-depth look at current conditions and offers guidance to help navigate the challenges ahead.
Ocean Freight Market Overview
Rates and Capacity
Ocean freight routes to and from Australia and New Zealand continue to experience significant volatility. Although global spot rates have eased slightly, they remain substantially higher than at this time last year. Rate fluctuations on these routes are driven primarily by ongoing capacity constraints and escalating operational costs. Carriers have responded with rate restorations and peak season surcharges, especially for shipments from Northeast Asia. Additionally, the suspension of some Southeast Asia-to-Australia services has further tightened capacity, emphasizing the importance of strategic planning for shipments during this period.
Supply and Demand Dynamics
Geopolitical events and shifting trade patterns are exerting pressure on global shipping. Rates on key routes, such as Asia to North America, have surged amid concerns over potential port strikes and increased demand. Shipping lines are investing in new vessels, including those equipped with dual-fuel technologies, to meet evolving market demands and regulatory requirements. However, these efforts will take time to alleviate current market pressures. Despite some signs of balance returning to major trade lanes, such as the Asia-Europe routes, rate fluctuations are expected to persist due to continued market uncertainty.
Port Congestion and Delays:
Port congestion remains a significant challenge, contributing to vessel delays worldwide. In Australia, ports like Melbourne and Adelaide are experiencing delays of 2–3 days, while Brisbane and Sydney face shorter delays of around 1 day or less. New Zealand ports, including Port Chalmers and Timaru, report minimal delays, although Napier is facing longer wait times. In Asia, key ports such as Ningbo and Shanghai continue to struggle with congestion, further compounded by recent incidents that have disrupted operations.
Equipment Availability
Container availability remains tight, particularly for 40-foot containers in the Greater China Area, with manufacturers pausing new orders until at least the end of October. Southeast Asia offers more flexibility, with an adequate supply of 20-foot containers across key ports. To minimise potential disruptions during this period, early planning and securing equipment in advance are crucial steps.
Air Freight Market Overview
Rates and Growth
The air freight sector is experiencing robust growth, with Australian freight volumes up by 21% year-on-year. Globally, air freight demand has surged, driven by the boom in e-commerce, ocean shipping disruptions, and strategic efforts to counter changing tariffs. As a result, air freight rates have reached peak season levels earlier than usual, particularly on routes from Asia. Rates are expected to remain high due to strong demand and ongoing capacity constraints, with 70% of air cargo space already presold for the third and fourth quarters.
Capacity and Challenges
Capacity in the air freight market remains tight, with carriers reporting significant forward bookings into the fourth quarter. The dominance of e-commerce in air freight has led to market imbalances and challenges in equipment utilisation. Analysts predict continued capacity constraints and elevated rates through the remainder of 2024 and into early 2025. Potential industrial actions on the US East Coast could further disrupt global supply chains, leading to increased costs and limited available capacity for shippers.
Planning Ahead for Peak Season
With the holiday season and peak shipping period upon us, early booking and strategic planning are essential to ensure a resilient supply chain. Given the current market dynamics, including tight capacity, rising rates, and port congestion, proactive measures are necessary. Seabridge is here to help you explore flexible shipping options and secure space early, ensuring your supply chain remains efficient and cost-effective during this challenging period.
Contact Us
Seabridge remains committed to providing reliable ocean and air transport solutions during these uncertain times. Our team offers tailored strategies to meet the evolving demands of the freight market. For more information or to discuss your shipping needs, please contact your Seabridge account representative.
