Industry Update – May 2023

Situation in Asia:

Some shipping lines have been forced to withdraw China-Australia services after rates have dropped around 91%, compared to April 2022.

The expected rebound in China’s exports after the Lunar New Year holiday in January didn’t materialise, ultimately reflected in container freight rates.

Container depots in China are full and having to turn away new customers, following a slowdown in exports.

The increasing number of idle containers at terminals not only means that ports are becoming more congested, but repositioning empty containers has become more expensive and inconvenient.

Some trucking companies have been forced to lay off drivers, with box movements in some of the busiest ports in China less than 80% of pre-covid levels.

China’s May Day holiday, lasting five days from April 29^th, will delay liner operators, planned rate increases and cargo volumes ex-Asia, further hampering contract negotiations with transpacific shippers.  Experts noted that while capacity utilisation on both lanes had been “decent”, as a result of blanked sailings, the May Day holiday in China is expected to affect cargo volumes, especially as capacity is higher than during the Lunar New Year break.

(Source: Freight waves/The Load Star)

• Container shipping decline sees signs of bottom

The Shanghai Containerized Freight Index (SCFI), a closely watched measure of container shipping spot rates, has just risen for the third week in a row after nine months of continuous declines.

However, the various spot indexes don’t paint a clear picture. They show a plateau at very low-rate levels and no direction yet.

(Source: Freight waves)

 

Situation in USA:

• Trucking rise

After a decline in truck transportation jobs in February that looked to signal the end of the long, almost uninterrupted post-pandemic climb in trucking employment, the jobs total in that sector reversed course in March and headed higher yet again.

Seasonally adjusted trucking jobs in March, according to statistics from the Bureau of Labour Statistics, rose to 1,612,000 jobs. That is up 5,700 jobs from the revised figure for February. Since the pandemic sliced 84,500 jobs in April 2020, there have been monthly decreases just four times since then, and total jobs are up 181,000 since that month almost three years ago.

(Source: Freight waves)

• Port congestion

Vessels continue to be pushed off the proforma schedule causing blank sailings, along with port congestion and the continuous increase of import volume.  Operations across the US have been affected.  The East, Southeast and Gulf Coasts are seeing vessel wait times of up to 2 days, and the West Coast is experiencing vessel wait times of up to 4 days.  Due to this persistent congestion across the country, chassis shortages have occurred, resulting in potential delays on pickup and delivery.

 

Situation in New Zealand:

The Lyttleton Port Company (LPC) announced at the beginning of the month that they are experiencing operational challenges with servicing the volumes planned through the port. As a result, LPC has advised that some ocean carriers will be implementing a new berthing protocol for the foreseeable future to manage demand in the best possible manner, despite the critical situation.

 

New website to raise awareness for hitchhiker pests:

Australian Department of Agriculture, Fisheries and Forestry has launched a new website that provides information on key hitchhiker pests, the risks they pose, how to identify them, where to look and what to do if you suspect you have detected one.  Some examples of hitchhiker pests include khapra beetle, giant African snail and brown marmorated stink bug.

The new website can be found at: www.agriculture.gov.au/campaigns/hitchhiker-pests

(Source: Agriculture.gov)

 

WA tropical Cyclone:

Ports in the Pilbara region of WA were closed earlier this month due to Cyclone Isla.  The system was downgraded to a category 3 just after it made landfall, battering the coast with wind gusts up to 300km/h.  Sources have said that this cyclone may weigh on Pacific freight rates and delays could be expected in the region for a few weeks.

(Source: SPG Global)

 

Destination Port Infrastructure Increases: 

Destination Port Infrastructure surcharge has increased for Sydney and Adelaide effective immediately. Updated surcharges are given below:-

Sydney Destination Port Infrastructure surcharge = AUD 205 per container

Adelaide Destination Port Infrastructure surcharge = AUD 170 per container

 

We will keep you updated with further information.