In this month’s edition, learn the current state of the import sea freight Australia market including the shortage of space out of North East Asia to Australia which is expected to continue through to mid-November.

We also share details on the new International Maritime Organisation (IMO) container weight verification requirement that will come into force from 1 July 2016. 

Read on to learn about the current full sea freight Australia market conditions.

North East Asia to Australia

The traditional rush to ship stock left behind due to Golden Week coupled with the cuts to supply with blank sailings have indeed had an adverse effect on the available supply of space in the market.

In last month’s edition we advised that confidence in the sea freight market was pointing to a healthier outlook with vessels sailing fully utilised and that we would see immense space pressures in October as a consequence.

Some carriers have since reported they are overbooked, some as high as 120% of their capacity. The lack of space for sea freight to Australia inevitably has caused cargo to be rolled to other vessels as all cargo booked has materialised with minimal late cancellations. This has caught the market by surprise and Shipping Lines have finally achieved the peak that the trade has longed for.

Carriers will therefore capitalise on the increased volumes and changes in market conditions as their last chance to pursue over 50-75% of the advertised 15 October GRIs, especially on port pairs that fell to record low rate levels. It is important to note that space will be compromised at least until 14 November and that a premium on sea freight rates will now be more prevalent than before.

South East Asia to Australia

This trade continues to be plagued by failed attempts to restore rate levels as another GRI has been unsuccessful. Carriers were hoping that the blank sailings implemented by MSC on their Capricorn services in Week 39/41 would make an impact. Whilst this has caused some delays in Singapore with vessels missing connections, the effects have not lead to rate increases.

As some carriers utilise Singapore as their main hub for cargo from Central Asian origins, Europe and USA, this hub as well as Port Kelang is subject to congestion, especially at this time of year. Destinations more likely to be impacted by these delays are Adelaide and Fremantle as most cargo is hubbed in Singapore to these final Australian ports.

United States to Australia

While the Port of Los Angeles had a dip in container volumes of 5.8 per cent in comparison to last year’s figures in the same month, it was nevertheless a strong month considering the challenges faced in the past six months. Congestion has eased from Long Beach, however there are still issues out of Tacoma/Seattle and Oakland/San Francisco. These problems though are not as bad as they were a few months ago.

Maersk Line has announced a GRI from North America to Australia and New Zealand effective 1 November. These are covering both East and West Coast USA ports. However no other carrier will push through with any increases from West Coast ports at this time.

The East Coast vessels on the other hand are reportedly starting to fill up and a rough winter is on the horizon, therefore we do expect carriers to push through with advertised GRIs from this trade lane as follows:

• East Coast USA and Gulf Coast to Australia only, effective 15 November

Europe to Australia

This trade remains stable with no planned GRIs on the horizon. A huge surplus in capacity continues to weigh heavily on Far East Trades to Europe and freight rates are set to remain under constant pressure.

Europe to Australia rates remains steady on direct service routes. This is mainly due to the shift from transhipment options via Singapore or Port Kelang to direct services from Europe to avoid delays.

Blank sailings adopted by some carriers in Singapore have subsequently caused transhipment delays and therefore pressure on space on direct routes may become more evident as last minute orders are placed.

To discuss any items included in this market update and to discuss your specific needs, contact BCR. BCR is an Australia-owned privately held business that delivers freight forwarding, 3PL warehousing services and expert advice from Customs Brokers to businesses in Sydney, Melbourne, Brisbane, Adelaide and Perth or anywhere across Australia.