In this month’s BCR Global Market Update, learn about the effects of Chinese New Year on the North East Asia to Australia trade lane and how congestion on the South East Asia to Australia trade lane has eased.

Find out more on the extreme situation in the US and the way it is impacting Sea Freight from the USA to Australia. Read how the congestion issues are on the road to recovery since the ILWU and PMA finally came to an agreement and how the weather is still impacting major areas in North America.

Lastly, learn about the first indications of rate increases on the Europe to Australia trade lane.

International Sea Freight - North East Asia (China) to Australia

In last month’s edition we mentioned that traditional increased demand was evident in anticipation of the Chinese New Year (CNY) celebrations as China prepared for this long awaited holiday presenting industry with challenges.

With the celebrations coming to a close and the market resuming business as usual, factories re-open expecting new shipping orders which were delayed prior to CNY due to the effects of early closures and lack of truckers, which we reported about in last month’s Market Update.

The expected backlog of cargo from prior CNY was above what reality shows. Also the current Slack Season Program (SSP) did not have the impact carriers were hoping for.

It is expected that the rates will fairly stabilise. Market forces including global economic conditions will keep dictating these processes.

Any increases that may occur will continue to be momentary as we keep being challenged by significant capacity pressures affecting the global supply and demand.

International Sea Freight - South East Asia to Australia

The congestion issues that were plaguing the South East Asian trade lane in the last few months have showed signs of easing. However, delays still have to be expected and we recommend to highlight your shipments on this trade lane to your international freight partners so initial scheduled arrivals can be kept.

We can report that this trade remains relatively stable. Although some carriers are still facing challenges caused by the rising costs in feeder vessels.

International Sea Freight - United States to Australia

In previous editions we have reported on the continued port congestion affecting West Coast USA which had paved the way for successful implementations of GRI‘s.

At this point in time there are no further rate hikes being announced. The next round of increases are expected to take place in July 2015.

After 10 months of negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA), US Labor Secretary confirmed that an agreement has been reached on a new five year contract. All are grateful with the outcome which was lead by the White House’s intervention and which should improve sea freight from the USA to Australia over the next month.
Now the focus is to clear the crisis level congestion and backlog that exists at the ports. We can expect a wave of cargo will start hitting the West Coast ports which means that the congestion from offshore will now move to the terminals. Our valued partner in the USA assumes a return to normal operations in the next 4-6 months.

Since the announcement has been made we can advise that overall terminal operations on the West Coast have continued to improve. While there have been improvements prevalent at the ports, all parties are aware that factors such as supply of chassis and rail / road availability may impede some of the operations. Therefore, patience is required as all parties are trying to keep the terminals as fluid as possible.

One of our valued carriers has shared with us the current impacts on their work flows with a port by port summary to assist in gaining a better understanding of the current situation as follows:
“The availability of long haul trucks is still a challenge and this will be the case for at least the next two weeks. Also, some long haul moves are being delayed by as much as two days due to the weather conditions on the East Coast where snow storms have had adverse effects with accumulations of 5 to 9 inches of snow across the northeast.”
“Local trucking at all West Coast ports is still limited; however, we have been seeing some improvements in finding additional drivers. While we have power at this time, if the terminal becomes further congested and chassis are held out for longer periods of time, we could see the availability of power dissipate at an extreme rate.”

Oakland: The Oakland Terminal continues to remain congested as the vessels are being worked. The UP Rail in Oakland has improved in the past 48 hours. At this time we anticipate the congestion at the rail to continue to improve over the next couple weeks as some lines look at putting Oakland back in their rotation. Local Trucking in the Oakland area has also improved in the past 24 hours, the wait time for appointment now is down to less than 24 hours.

Tacoma: The overall situation in the Pacific Northwest (PNW) continues to improve at the ports. The Union Pacific Railroad (UP) and Burlington Northern Santa Fe Railway (BNSF) work to insure sufficient car supplies are put into place in order to cover the extra volume arriving. Chassis in the area, however, are causing major disruptions with our trucking vendors. The local operations group is working with the local chassis providers to address the problem at hand. Truck power in the area has remained the same, but we are anticipating this may decline if the terminals continue to face further chassis challenges.

Vancouver: Congestion in Vancouver continues, we are experiencing five plus day delays for a large portion of our rail traffic moving through the Vancouver area. The Canadian Pacific Railway (CP) continues to work through the significant backlog of dwelling units as quickly as possible. The local and national staff continues to monitor the traffic and review alternative routing options if available.

Inland facilities in the Midwest and Ohio region have improved over the past 48 hours. There has been a strong improvement in the rail operations at a number of the IPI terminals in the Midwest Region. Truckers are turning equipment and the majority of the Rails are quickly turning the drivers at each of their facilities. The weather is anticipated to improve in the next 24 hours, however, this will be short lived as colder weather is anticipated to arrive early next week. While there has been a positive improvement in the Midwest, we need to be aware that as more and more traffic moves inland, the volumes could cause congestion issues at a number of the smaller Midwest terminals.

New York: The port operations in the New York / New Jersey area report slight improvements, truck availability has improved. The lines entering and exiting the ports are still tight but traffic remains fluid in comparison to late last week into this week. At this time we are anticipating 24 hour delay in setting up appointments for local moves.

Savannah: Additional delays expected in SAV due to heavy volumes and vessel bunching, which will create a backlog of cargo on terminal. Winter Storm “Remus” has delayed deliveries and loading appointments for areas in Tennessee and North Carolina.

Norfolk: Port congestion due to heavy volumes coupled with winter weather delays had caused Port closures during weeks 8 and 9 which will now result in heavy delays on rail and local cargo. The Norfolk Southern has announced a rail embargo for rail cargo en route to Norfolk which will likely result in a number of exports missing intended vessel sailings. The ports in Norfolk will be closed Thursday 26/2 and Friday 27/2. They are currently scheduled to re-open for gate and terminal operations on Saturday 28/2 and will remain open on Sunday 29/2 as well.

Wilmington: Port operations remain fluid however Winter Storm “Remus” will cause delays to cargo throughout parts of the Carolinas and Southern Virginia.

Charleston: Heavy volumes continue, however, truck power is adequate for the port of Charleston. Winter Storm “Remus” has resulted in some minor delays for destinations in Tennessee and portions of the Carolinas.

International Sea Freight - Europe to Australia

The first signs of some carriers trying to increase the rates on this trade have been received. Hapag Lloyd and Maersk announced increases to take place on this trade lane with effect from 1 April 2015 for all cargoes and all container types.

While the above has been received from only two carriers thus far, others may follow suit depending on the market conditions.
BAF (Bunker Adjustment Factor) on this trade continues to be reviewed on a monthly basis and will fluctuate in accordance to the changes to oil prices.

As a logistics company specialised in 3PL and international freight forwarding, we advise our customers and you to inform us / your international logistics partner about shipping requirements as soon as possible in advance. This way we can provide the best solution for your freight based on the current market situation.

Do you wish to discuss any item included in this month’s BCR Global Market Update? Do you have any issue with your current international shipment? Please contact us and one of our international freight specialists will assist you.

We value our reader’s opinion and would appreciate feedback on the BCR Global Market Update. Please feel free to leave a comment or send us an email to let us know what additional information you would like to read about.