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Important Shipping Updates

Table of Contents

Auckland Trucking Delays 

Please be aware that a significant portion of the container carriers in the Auckland region are currently working on a 3-4 business day dehire policy. Meaning if an empty advice is received the 1st of March, the first truck available to uplift would be on the 6th or 7th of March. This will lead to an increased amount of detention fees for containers due to late dehires as majority of shipments are coming in on a 7 free day policy (which includes weekends). The alternatives are to either allow for night time deliveries/collections or to request an extension of free time at destination when booking freight.

Auckland VBS Increase

Following the recent increase to the Vehicle Booking System (VBS) announcement from Metroport and ContainerCo Ltd effective as of the 1st of February 2023, LCL Co-Loaders have decided to increase the VBS to cover the extra costs. As of the 13th of February, LCL Co-Loaders will increase the VBS fees on both Import and Export LCL shipments. The increase would be around NZD 2.00 per Bill of Lading. 

Airfreight Update

Demand is expected to increase gradually as production returns as of mid-February. There is ample volume capacity availability, leading to lower rates which are trending downward. As passenger travel restriction have mostly been discarded in China, we expect to see an increase on flight demands in the coming months, leading to even greater capacity options. South China/Hong Kong border crossing restrictions have been lifted and cargo is free to flow without issue. 

North America
Transatlantic capacity has remained relatively stable. The low demand for capacity is keeping the market fairly stable for both U.S. and Europe exports. 

Latin America
Conditions for exports are mixed. The export market from Brazil remains stable. The fruit season in Chile continues to apply pressure on space availability. Poor growing conditions and strong competition continue to challenge the Argentinian produce marker, with demand trending downwards. Seed season is also approaching, and this will bring further pressures on capacity, although it remains to be seen how strong the harvest will be. 

Additional capacity is returning to the Oceania market, adding extra options leading to a decrease in inbound rates down. Capacity has increased to most markets to support the growing passenger demand. Meanwhile, a decrease in cargo demand has led to greater outbound spot rate availability to the majority of market sectors. 

Global Freight Update

The demand for ocean freight on most trade lanes has continued to decline or remain stable, with freight rates following the same pattern. 

Shipping lines continue to adjust schedules and incorporate void sailings in an effort to control the supply. While congestion, space and rate levels have seen an improvement for shippers, the need remains for everyone to allow room for flexibility as blank sailing and service adjustments continue to be the current norm. 

Throughput Growth: 2000 – 2025F (Forecast)

The Asia-Europe trade lane is the only lane with a healthy utilization of capacity and substantial roll pool. However, the utilization is not substantial enough to maintain the current rates. Shipping lines are very wary at the moment of introducing new ships to this trade lane at least for the next few months. 

The utilization of capacity on the Trans-Pacific trade lane is much weaker forcing the rates to the U.S. West Coast and Gulf Coast to soften, whilst inland rates remain steady. The increase to the market rates for Asia-LATAM trade post Chinese New Year may be only temporary due to weaking capacity utilization on that specific route., 

Even though the volume has not increased after the Chinese New Year celebrations, congestion has increased at the main Chinese ports as a result of longer wait times, reduced productivity and intentional vessel berthing delays caused by some shipping lines. 

The European market is showing a significant amount of service changes as shipping lines try to optimize coverage and differentiate their services. As an example, MSC, which operates the largest fleet of vessels in the world, has proactively optimized the use of their vessels. In February alone, MSC updated the port rotation of their Mediterranean to West Africa and India to West Mediterranean services. MSC will also be launching a new service to connect the Indian Subcontinent and Middle East to South Africa, as well as a new Intra-Europe service. 

North America
Imports remain soft year-over-year due to inflation and normalizing demand from the largest importers, including retail, furniture, electronics, and home improvement, representing over 50% of U.S. imports. 

The congestion in the U.S. has improved overall, with only a small bottleneck occurring at some inland rails. As long as the demand remains relatively soft and port negotiations do not trigger and significant stoppages, congestion should remain stable. 

The Trans-Tasman market continues to be reliable as further space and servicing options open up. The shuttle service out of Sydney and Brisbane has had a positive impact to the trade lane adding additional tonnage to the lane. 

The U.S. to Oceania market will most likely weaken further, and we expect rates to continue declining as carriers compete for market share. However, space continues to be tight, but has started to ease on the West Coast. The typical peak season on the U.S.-Oceania trade lane is expected to wind down in the next few weeks which will alleviate some space constraints. Port calls to New Zealand for export from the West Coast continue to be on a fortnightly basis, and transhipment services are increasing. 

The European export market continues to remain stable, with space and equipment readily available for general cargo. Rates are slowly reducing as supply continues to outweigh demand. 

The Northeast Asia to Oceania trade continues to be in flux. Shipping lines are attempting to increase rates, but the demand is not at a level to support this. The post-Chinese New Year will most likely indicate whether shipping lines can sustain increased rates or whether they have to resort to more frequent blank sailings. 

Southeast Asia is in a steady decline due to weakened demand. Shipping lines are amending services, such as rationalizing port calls, to limit space and increase demand. Singapore and Malaysia lines are operating normally without significant delays.

South Asia, Middle East, and Africa 
Demand out of these regions continue to be soft. India and Bangladesh are fairly steady, however much lower in comparison to last year. Pakistan demand has decreased a considerable amount. Shipping lines are implementing changes to their services in this area of the world. 

We will continue to evaluate all market options and work with you to provide individual solutions for your business. 

For more details on any of these articles please contact your Henning Harders Key Account Manager. 

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