In the face of the ongoing Red Sea Crisis, businesses are turning to alternative multimodal solutions such as Sea-Air, Air-Sea, and Rail-Road to ensure their supply chains remain uninterrupted. The crisis has necessitated rerouting, with carriers opting for longer paths like the Cape of Good Hope, leading to increased transit times and costs, particularly affecting the Asia-Europe trade lanes. To combat these challenges, companies are advised to secure comprehensive cargo insurance and book shipments well in advance. Kerry Logistics, leveraging its expertise and strategic hubs, offers innovative solutions to navigate these disruptions effectively.
The maritime sector is witnessing significant shifts due to the Red Sea Crisis and other global economic factors. MSC has expanded its lead in the carrier fleet ranking, showcasing a robust growth strategy through fleet expansion and charter activities. Meanwhile, the industry grapples with the implications of rerouting and the need for efficient multimodal transport solutions. The DP World Industrial action's resolution promises some stability, but the logistics and shipping sectors must remain vigilant to navigate ongoing challenges and ensure timely cargo delivery.
Economic indicators suggest a slow recovery for Australia's economy, with expectations of growth as fiscal and monetary policies take effect. In contrast, New Zealand focuses on controlling inflation through stringent monetary measures. The air freight market is adjusting after a surge in demand, with rates stabilizing but expected to fluctuate based on capacity and regional dynamics. Regulatory changes, particularly concerning vape product imports into Australia, reflect the evolving landscape of trade compliance. Amidst these developments, Kerry Logistics continues to adapt, offering tailored solutions to meet the dynamic needs of the global supply chain.
With the ongoing Red Sea Crisis, alternative multimodal solutions are key. Utilizing Sea-Air, Air-Sea and Rail-Road multimodal solutions for shipments to/from Europe could be an alternative to make sure supply chains don’t get disrupted. On top of this, comprehensive cargo insurance and booking in advance are having tangible results for keeping supply chains flowing.
The Red Sea Crisis (RES) is still ongoing, with no signs of immediate relief. Carriers continue to re-route via Cape of Good Hope.
Demand in EU is not showing significant growth, while Transpacific (TP) Trade is showing a growth in volume in the double digits. As a high level summary, this is what we are observing:
With above into consideration, we are experiencing an uprise in Multimodal Solutions. Several Freight Forwarders have deployed solutions using the middle east as a hub from Europe to China/Oceania. Kerry is no exception. Our solution utilizes our Hong Kong prowess as a hub, backed by our expertise in airfreight leveraged by SF Group. If you are interested in discussing a solution to mitigate these impacts in your supply chain, click here:
You might want to read:
Despite the delivery of newbuild capacity this year, Ocean carriers are struggling to maintain sailings on a weekly basis from Asia to Europe due to the Rerouting via Cape of Good Hope forced by the Red Sea Crisis.
Regarding the DP World Industrial action, the Maritime Union of Australia (MUA) reached a four-year agreement with DP World, marking the end of all industrial action. This development comes as a relief to the logistics and shipping sectors, promising stability and improved operations. The backlog and disruptions during the industrial action will take some time to normalize, thus keeping informed on potential risks is key to ensure your cargo remains on time.
If you would like to subscribe to our customer advisories, that let you know of any significant operation risks as they happen, click here:
Australia’s economy is likely to slow until about the middle of 2024 until a combination of tax cuts, interest rate cuts and easing inflation begin to lift spending, according to Commonwealth Bank’s chief economist. The CommBank Household Spending Insights index rose 3.1% in January, reversing most of December’s 3.5% slide, with the rebound led by a 13.5% rise in travel and recreation spending for the month, thanks in large part to record crowds at the Australian Open in Melbourne. Household goods spending was also up 10.5%. Australia’s gross domestic product likely expanded 1.5% in 2023 with household consumption up just 0.4%, according to the Reserve Bank. Annual GDP growth will slow further to 1.3% by June before reviving to 1.8% by the end of 2024.
The Reserve Bank of New Zealand has made inflation its top priority and the Bank’s steep rate-hiking cycle has brought inflation lower. Still, at the current clip of 4.7%, inflation is more than double the 2% midpoint of the target band of one to three percent. Earlier this week, New Zealand released inflation expectations, which eased to 2.5% in the first quarter, down from 2.7% in Q4 2023 and lower than the forecast of 2.6%. This was the lowest level since Q3 2021. The RBNZ has paused rates at 5.5% for four straight times and the markets have priced in a rate cut May. The central bank has pushed back against these expectations and Orr’s comments about inflation expectations was the latest instance of the central bank pouring cold water on rate-cut expectations.
The situation in the Red Sea remains with no signs of immediate relief. The increase in transit times due to the reroutings and container availability can be seen here:
Check our snapshot for a quick glance on space, rate, equipment and transit times for Oceania
The latest figures show that the air cargo market is beginning to cool after a brisk start to the year caused by the Red Sea crisis and pre-Lunar New Year (LNY) rush. This slowdown follows a “recent surge” in cargo volumes out of China as shippers “rushed to get goods shipped before the LNY holiday”. Several key Asia-Europe Sea-air hubs have recorded a strong surge in tonnages in the last few weeks, as shippers continue to seek alternative logistics solutions due to the disruptions to container shipping caused by the attacks on ships in the Red Sea. Freight sources have reported, anecdotally, that some Asia-Europe sea-air hubs such as Dubai, Colombo and Bangkok have been inundated with air cargo in recent weeks, as cargo owners seek to replenish stocks in Europe that have run low – because containerships that would normally transit via the Suez Canal have been forced make the longer voyage around the Cape of Good Hope.
Expanding the comparison period to two weeks, total combined tonnages for weeks 6 and 7 this year were down by -14%, globally, compared with the preceding two weeks (2Wo2W), with average rates stable and capacity down by -4%. The dominant effect of LNY on these figures can be seen in the -25% drop in tonnages, 2Wo2W, from origin region Asia Pacific. Even after that -25% drop, 2Wo2W, those tonnages are still at almost the same level as in weeks 6 and 7 last year (-1%), despite LNY occurring almost three weeks later this year, pointing towards a structural improvement compared with last year.
Sea-Air and Air-Sea solutions are at the forefront for time-sensitive cargo and are providing a solid alternative to planning transit times. Choosing the right hub for imports into Oceania is key, as well as understanding the implications in terms of availability and congestion for such Hubs. As we saw in Feb, the flow into Dubai was suspended for 48 hours due to the surge in air cargo volumes.
Kerry Logistics has deployed a solution utilizing our Hong Kong prowess as a hub, backed by our expertise in airfreight leveraged by SF Group. If you are interested in discussing a solution to mitigate these impacts in your supply chain, click here:
On the 18th of December 2023 the Department of Agriculture, Fisheries and Forestry (DAFF) issued a notice to inform industry on documentation delays. There has been significant discussion between our industry groups recently around Chinese New Year as this situation appears not to have improved. Brokers are seeing delays of up to 7 days after lodgment of documents with DAFF.
Our recommendations are ensuring all your paperwork is channeled ASAP to mitigate any delays. We hope to avoid these, however we have had instances whereby cargo has had to be moved under bond in certain circumstances.
Australia has entered into FTA’s recently with India and the United Kingdom over the last 18 months. Many types of products are now covered. If you do ship from these countries, please speak with our Customer Service and Customs Teams to make sure these FTA’s are available to you.
Please see the below links for further information and if you have any questions, please reach out to us to discuss how we may assist.
Do you import goods which are not manufactured in Australia? We may be able to assist in obtaining a tariff concession which could result in zero duty payments. Currently there are 15000 items covered, with more announced weekly.
If you would like experts to review your customs process and see if you have overpaid or are overpaying Customs Duties, click below. We have a track record of helping companies succeed with the complexities of Customs in Oceania.
Vaping goods into Australia are entering a second phase of strict regulations on imports. Stage one commenced on January 1st, 2024, banning the import of disposable vapes from overseas, with exception of limited circumstances and clinical trials.
On Marth 1st, 2024, all other types of vaping goods will be prohibited unless the importer has an import permit. This regulation will cover all types of device whether it contains nicotine, is therapeutic or is used to deliver drugs or medicines.
Further details on the new laws can be found on the ABF website Australian Customs Notice - Vaping goods
Despite the end of the DPW Industrial Action, Container transport operators across Australia are urging their customers to fully appreciate operational realities as container logistics chains in every capital city container port in Australia try to recover from cargo delays caused by industrial actions, port protests, terminal maintenance & IT outages, traffic congestion and weather-related events, and now a heavy container freight demand.
Operations are still to return to normal – costs are still higher (by between 15% to 20%), and delays persist.
You can access the CTAA’s analysis here.
The Maritime Union of Australia (MUA) reached a four-year agreement with DP World, marking the end of all industrial action. This development comes as a relief to the logistics and shipping sectors, promising stability, and improved operations. The backlog and disruptions during the industrial action will take some time to normalize, thus keeping informed of potential risks is key to ensure your cargo remains on time.
Although the recent Industrial Action has stopped, we are faced with another Industrial Action with the Electrical Trades Union (ETU) causing disruptions at DPW Brisbane.
Would you like to understand more about the situation? Check our snapshot here.
If you would like to receive updates on the situation, we invite you to subscribe to our customer advisories, where we let you know of events that can affect your supply chain as they happen:
For our list of past advisories and keeping an eye on what’s happening, you can follow our advisories on our website in here.