New Zealand Overview
- Road User Charges for trucking is due to increase at the end of June. The direct additional cost particularly affects long haul routes. A number have advised rate increases over the next 2 months in the order of 5-6%.
- Diesel pump prices have eased slightly.
- Due to reduced capacity OOCL, COSCO, and MSC can no longer accept bookings via Auckland Metroport (rail yard). All cargo must load at Auckland.
Export rail capacity from Metroport to Tauranga has been reduced. Affected shipping lines are re- directing bookings to either Auckland or Tauranga port for loading direct.
We will advise once capacity improves.
Airfreight Update
Asia
In the Asia market, ecommerce demand is solidifying, contributing to ongoing activity levels. However, there was a slight deceleration in general cargo during China’s recent May Day holidays. Despite this, we expect a rapid return to regular operations. To mitigate congestion concerns and maintain operational efficiency, consider advanced notice on bookings.
A rise in export demand from high-end computer chips and servers from other Asian countries relating to the booming artificial intelligence (AI) industry has mitigated that effect. The demand from the AI boom is expected to persist steadily throughout the year. Due to favourable weather conditions, the Panama Canal restrictions have eased, though the situation has not fully recovered to normal level.
The ongoing conflict in the Middle East has caused airlines to re-route. These re-routings take longer than usual, significantly affecting cargo payload between Asia and Europe. Throughout June, ecommerce demand is expected to decrease compared to May. While capacity has not increased as fast as forecasted, rates will remain elevated.
LATAM
Capacity remains widely available with stable pricing due to modest demand in the U.S.-LATAM trade lane. Delays in cargo release at GRU Terminal Operator in Sao Paulo have led to a backlog—consider alternatives like Viracopos/Campinas Airport.
Mexico inbound lanes from Asia face challenges similar to the Trans-Pacific market, expect higher rates and reduced capacity to persist. Aggressive spot pricing is available for Mexico exports, while Brazil to North America remain in high demand with limited negotiation opportunities for small deliveries.
North America
The Trans-Atlantic westbound market is relatively balanced. The introduction of summer passenger aircraft has effectively aligned supply and demand for lower deck cargo. However, tight main deck capacity has propelled spot market rates upward. Despite these fluctuations, the market for U.S. exports remains open and stable, offering a degree of consistency amidst the shifting dynamics. Rates should remain stable with cargo moving freely through the summer months.
Capacity conditions have improved in India as backlogs’ shrink and rates trend down slightly. Expect continued improvement in the coming weeks, but the Red Sea challenges could bring volatility back to the market.
The Asia Pacific region continues to see robust demand for ecommerce, creating an elevated baseline for year-round demand. General cargo demand is also trending up, driven primarily by Red Sea challenges.
South Asia, Middle East, and Africa
The increased peak pricing due to the Red Sea conflict is continuing for the Europe and Americas trade lanes. Though the demand out of South Asia has tapered, the demand for capacity from other Asian countries, like China, has kept rates at a higher level.
Airlines are not offering rates for extended validity. There is no major increase in capacity besides a few non-scheduled operations. Expect prices to remain at the same levels even though capacity is now relatively easier to find compared to the situation in May.
Ocean Freight Update
Asia
Container shortages in Asia are now beginning to reach a critical point with most major ports in China being impacted by shortages. Especially 40’HC equipment (but certainly not limited to just that). We are also seeing 20’GP availability issues throughout South-East Asia. As a result of these shortages, similar to late 2020 – mid 2022, we are seeing some shipping lines prioritise containers for higher paying cargo (whether that be higher paying trade lanes or higher paying cargo within the same lane).
Strong container freight continues to improve with carriers pushing for further rate hikes. With the mid-May general rate increase (GRI), demand on the Trans-Pacific trade lane, Asia-Europe, Asia- LATAM and Asia-Oceania trade lane seems to hold steady.
The recent strong rate rally in freight rates to LATAM has drawn additional capacity to the route. Several steamship lines have launched new services to Mexico in May. Expect these new capacity injections to the LATAM trade lane to absorb some 300,000 TEU of incremental vessel capacity, which will relieve some of the capacity pressure from new ships entering the market.
Asia-North Europe freight is expected to increase further in the next two months, with the collapse of the Middle East peace talks and capacity utilisation hitting a three-year high on this route.
LATAM
The ongoing strike at the port of Coronel in Chile has caused significant congestion and equipment shortages for exports, particularly 40′ containers. Negotiations with port entities have yet to resolve the conflict, exacerbating the situation.
Improved passage regularity through the Panama Canal is anticipated for the upcoming month due to favourable weather conditions, minimising delays, and cancellations.
In Brazil, intra-Americas delivery services continue to face space constraints. Bookings are required three to four weeks in advance to secure space. Carriers are seeking equipment repositioning in U.S. East Coast ports and are flexible in directing freight to these destinations. Meanwhile, European, Asian and Oceania trade lanes remain stable with flat rates.
Southern ports are experiencing delays due to congestion, affecting schedules despite efforts to maintain reliability—this is most prevalent for 20′ containers and special equipment for Port of Vitória, Navegantes and Santos.
Recent heavy rains in the southern Brazil region are adding to the existing port delays and congestion. Many carriers are choosing to omit south Brazil ports with their main vessels and instead tranship into the region via Santos port.
Major destinations are sustaining 80-90% capacity availability. Despite a drop in bulky export commodities like wood and oats, rates remain stable overall. There have been no GRIs reported, only fuel adjustments. However, services to the Middle East from the West Coast are seeing declining quotes.
Exports
United States-Asia
The new AP1ONE joint service, operated by ONE and Wan Hai Lines between the U.S. West Coast (USWC) and Asia, has launched. The transit times from USWC to Vietnam ports of Haiphong and Cai Mep are expected to be some of the best in the market. The first call for exports from the USWC is June 5th.
With the shift in demand to the USWC and the rising volumes being delivered during Q1 2024, the number of blank sailings has been reduced. Demand has continued to show some strength on the Trans-Pacific eastbound (TPEB) lane after the Lunar New Year and leading up to the Labour Day holidays in Asia, therefore the number of blank sailings continues to be relatively low.
Severe weather events in the past several weeks have added to the port congestion at transhipment ports such as Busan and Singapore.
United States-Europe
Demand is improving on the Trans-Atlantic westbound (TAWB) trade lane as traditional high season approaches. Nevertheless, there continues to be a significant overcapacity from the U.S. East Coast (USEC) to Europe.
Space (i.e., USWC) to Europe has improved but is still tight. Carriers have solid load factors due to limited-service options and a strong resin export market.
There is an increasing congestion issue at key west Mediterranean ports such as Valencia, Algeciras and Tanger Med due to quickly rising volumes. The volume increases are largely due to carriers having to tranship cargo via west Mediterranean ports, connecting with feeder vessels into the Middle East to continue to service that market.
United States-Oceania
Demand in Oceania has softened in many sectors since Q4 2023, and some economists state the economy is currently in recession.
Vessel space to Oceania is relatively open and rates are stable/softened slightly during the first quarter of 2024. Rates are expected to remain stable to slightly downward in the second quarter.
Trans-Tasman
Imports
- As mentioned above, also specific to the Trans-Tasman trade are the road closures and roadworks in Melbourne, which will affect the delivery schedule during June as strengthening works continue on the West Gate Freeway overpass, that connects the Bolte Bridge and West Gate Freeway, adding difficulties for container transport operators accessing the Port of Melbourne.
- Currently Maersk has no 20′ stock available for exports from Australia and have forecasted short 20′ supplies into June. Contact your Customer Service Representative for options.
Exports
- ANL have reinstated a fortnightly Auckland direct call on the ANZ Shuttle service to Brisbane.
- Equipment availability has been an issue for 40′ containers country wide recently, and reefer equipment is also impacted by peak season.
- DAFF (Department of Agriculture, Fisheries, and Forestry) has initiated an annual review and indexation cycle to regulatory fees for biosecurity and imported food regulatory activities effective 1st July 2024. Full Import Declaration (FID) – Sea – increasing per FID.
SAMA
Cargo demand is likely to pick up beginning in June, after the general assembly election in India. There is currently a shortage of 20′ dry containers at major inland container depots in India.
The export market to North America remains stable with minor fluctuations, while the intra-Asia market is seeing continued blank sailings.
Rates are expected to remain flat or drop further due to excess capacity and low cargo demand. Rates for the Asia to Europe/Mediterranean trade lane show slight increases amid weak demand. In June the market will likely go up due to high season surcharges, especially for Europe/U.S. Lane.
ONE/HMM/COSCO has launched a brand-new service called WIN (e.g., India to North America) effective this month. This will be an additional ocean service from India to USEC.
For ISC to Oceania, there are some challenges at transhipment ports. Transit times and vessel schedules will remain volatile until the situation in the Red Sea improves.
Inland Drayage Update
Asia
With the slow recovery of the domestic economy, the supply of vehicles is sufficient and inland transportation demand keeps growing slightly, returning to the normal operation of the market. The freight index fell month over month (M/M) due to capacity oversupply, but it is estimated to return gradually to a more stable situation from April.
Oceania
Australian port logistics and landside container transport services are operating at below optimum following industrial action.
There are continued delays of de-hiring empty containers in Fremantle, Western Australia, which is also building in other states due to the imbalance of import over export. Expect this to continue throughout April.
Melbourne, Victoria, is seeing increased lead times due major infrastructure road works as transport companies deal with delays in and around the port precinct.
New Zealand port logistics and landside container transport services are delayed by approximately one day, on top of port delays in Australia (e.g., Sydney and Melbourne).
Customs Update
Oceania
Australia is expected to experience delays throughout the second quarter, with timeframes for the assessment of import documentation of non-urgent commodities.
In New Zealand, customs and processing times are currently operating at levels within capacity with no reported delays.
UK Customs Roll Out New System
UK Customs have installed a new customs platform to cover all import and export declarations to and from the UK. The system is called the Customs Declaration Service (CDS) and will be implemented for all export declarations made from the 1st June 2024.
In terms of exports from the UK, one major change is that all clearing agents must now show on the customs declaration how they are representing the exporter of the goods from the UK. This requires that they receive authority to act as the direct customs agent. This is called a Direct Representation (DR) letter (similar to a Letter of Authority for New Zealand). This DR letter must be completed on the exporters letterhead, signed by a company director, and returned before agents can progress with any export declaration and booking processes.
Once the letter is signed, it will remain valid for 2 years. If you import from the UK, it’s important to ensure that your suppliers provide this letter to their Harders agent to avoid any delays and ensure the export clearance can be completed on their behalf as early as possible as the export will not be able to proceed without a completed DR letter on file.
Our agent will send the Direct Representation letter to your supplier on confirmation of any new bookings if one is not in place already.
If you have any questions, please feel free to reach out to your Key Account Manager to discuss further.
Customer Advisory
(Repeat from May Update) Dangerous Goods Surcharge 1st May 2024
Following customer feedback, the implementation of the Dangerous Goods Container Surcharge on import containers (outlined in November) was placed on hold so we could undertake further consultation on the DG Surcharge.
These discussions have concluded, with the two Trucking Industry Associations providing a view on how the Port of Auckland could recover specific costs associated with administering dangerous goods. After consulting with the industry, the port has decided that a ‘Dangerous Goods Container Surcharge’ will be applied.
Port of Auckland will continue to meet all its legal requirements pertaining to dangerous goods handling and administration across rail, road and sea, Effective 1 May 2024.
For more specific information / requirements please ask your Harders NZ Key Account Manager.
We will continue to evaluate all market options and work with you to provide individual solutions for your business.