Contents

1. Executive Summary & Business Tip
2. Market Trend
3. Spotlight
4. Ocean Freight Updates
   • Ocean Freight Snapshot
5. Air Freight Updates
   • Air Freight Snapshot
6. Customs, Inland Transport, Terminal & Regulation Alerts

Executive Summary

October 2024 brought both relief and ongoing challenges for global logistics. The U.S. East Coast port strike resolution provides temporary stability, though labor negotiations remain unresolved, with a potential strike looming in January 2025. New shipping capacity continues to enter the market, but geopolitical instability, including the ongoing Red Sea crisis and Suez Canal closures, has forced carriers to reroute vessels via the Cape of Good Hope, increasing transit times and operational costs. Fuel price hikes and carbon taxes are also compounding these disruptions, keeping freight rates elevated.

In Oceania, regional trade shows resilience, with exports from Asia to New Zealand increasing by 23% YoY. Australia’s inflation is forecasted to dip to 3% by the end of 2024, though the IMF projects a rebound to 3.6% in 2025, diverging from the Reserve Bank of Australia’s more optimistic outlook. Despite lingering port disruptions, carriers are cautiously managing capacity to support peak season demand, expecting space to remain tight through December.

Carriers continue to navigate fluctuating global demand by employing blank sailings, slow steaming, and strategic capacity reductions. Sustainability remains a priority, with 95% of new ship orders in 2024 being for vessels powered by alternative fuels. While spot market rates have softened, time-charter rates for larger vessels remain resilient, reflecting efforts by carriers to maintain profitability amid market volatility.

Air freight has seen a resurgence, particularly along routes between Asia-Pacific and North America, driven by e-commerce and holiday season demand. Vietnam has emerged as a growing air cargo hub, significantly increasing capacity for U.S. and European shipments. In parallel, Australian restrictions on air freight from certain European countries are expected to tighten operations for some logistics providers through compliance measures.

With the Chinese New Year and U.S. elections on the horizon, further disruptions may affect trade flows, and businesses should prepare for potential market shifts. Maintaining flexibility in capacity planning and inventory management will be key to navigating the uncertainties in both ocean and air freight markets as the year draws to a close.

 

Business Tip

Plan Ahead: With tight space expected through December and the impact of events like the U.S. elections and Chinese New Year in early 2025, proactive planning is essential. Consider booking shipments 3-4 weeks in advance, diversify between ocean and air freight, and leverage strategic alliances to maintain supply chain fluidity. Staying ahead of disruptions ensures smoother operations and minimizes unexpected costs during high-demand periods.

Our Team of experts can help you craft a strategy that will work for your business:

 

Spotlight

Our Customs Brokerage & Consultancy Services are Top-Notch.

Kerry Logistics Oceania is part of the Australian Trusted Trader program, member of CBAFF in New Zealand, and part of the Biosecurity Business pledge. Our team is composed of highly specialized customs brokers, with decades of trusted industry experience that have saved thousands of dollars to our customers in duties and taxes, by evaluating feasibility of new tariff concessions and keeping up to date with changes in legislation.

Market Trend

The recent resolution of the US East Coast port strike has pushed further disruptions to January 15, 2025. Yet, global markets remain cautious, with the upcoming US elections poised to impact freight policy and movement. Industry watchers like Drewry predict that despite new shipping capacity entering the market, freight rates will remain elevated throughout 2025. The 3 million TEU of capacity expansion will be undermined by operational costs, port disruptions, and potential labor unrest across key trade hubs.

Meanwhile, geopolitical instability continues to disrupt global shipping lanes. The ongoing Red Sea crisis and the closure of the Suez Canal are forcing carriers to reroute vessels via the Cape of Good Hope, escalating shipping times and costs. This, coupled with rising fuel expenses and new carbon taxes, creates further challenges for carriers and logistics planners. Analysts suggest that these disruptions, combined with reorganized shipping alliances in 2025, could foster tight market conditions, preventing freight rates from returning to pre-pandemic levels.

Number Of Ships Transiting Suez Canal:

TEU Capacity Transiting Suez Canal:

Carrier Strategies Amid Supply and Demand Imbalance

Carriers face a fluctuating demand environment, with new capacity arriving faster than the market can absorb. To stabilize rates, carriers are resorting to “blank sailings” – cancellations of scheduled services – while also leveraging slow steaming and service rationalization. Although trade routes such as Asia-Europe and the transpacific have seen some weakening of freight rates, carriers are cautious, monitoring market shifts to adjust capacity further.

A major industry focus is on new fleet investments, driven largely by sustainability goals. Approximately 95% of new ship orders in 2024 were for vessels powered by alternative fuels, continuing the green shift from 2023. Despite falling spot market freight rates, time-charter rates have shown resilience, especially for larger vessels, reflecting carriers' strategic moves to manage profitability amid disruptions.

Global Market Trends and Geopolitical Risks

Global container demand grew 6% YoY in the first half of 2024, with fleet growth reaching 11.2% due to record levels of newbuild deliveries. However, carriers are bracing for a moderation in fleet expansion to 5.2% in 2025, adjusting capacity to manage softer demand and disruptions like the Red Sea crisis. Experts forecast that geopolitical tensions in the Middle East will continue to impact shipping routes, delaying the full reopening of the Suez Canal until at least 2026. This will compel carriers to maintain costly Cape of Good Hope diversions, further tightening capacity.

The recent US East Coast port strike was narrowly averted, providing temporary relief to shippers. However, ongoing labor negotiations leave room for uncertainty in early 2025. Meanwhile, carriers are exploring rate increases through General Rate Increases (GRI) and peak season surcharges to maintain momentum in the freight market.

Regional Growth - Performance per Trade

Impact to Oceania

Oceania is navigating these global dynamics with remarkable resilience. The region recorded a 15% YoY growth in 1H24, outperforming other global markets. Robust trade with Asia, especially exports from Australia to Asia and imports into New Zealand, has bolstered regional port throughput. Exports from Asia to New Zealand surged by 23% YoY, and outbound shipments from New Zealand to Asia grew by 4% YoY, highlighting the importance of trade ties between these regions.

Oceania’s freight market remains strong but complex. Capacity constraints and equipment imbalances, exacerbated by lingering disruptions from the Red Sea crisis and the US port negotiations, are impacting supply chains. FAK (Freight All Kinds) pricing for shipments to Australia and New Zealand remains in the $2,000-$2,275/TEU range, with carriers announcing GRIs of $300/TEU every 14 days. Carriers like ZIM are expanding services, with two new routes connecting Asia with Australia and New Zealand to support rising demand.

Although space availability is expected to improve in late October and early November, the market will likely tighten again in December, driven by peak season demand leading up to Christmas and the Chinese New Year in January 2025. Carriers remain cautious about their capacity planning, ensuring they maintain flexibility to respond to unpredictable shifts in market conditions.

Oceania is well-positioned to navigate these challenges, but logistics players will need to stay agile, anticipate market fluctuations, and build resilient strategies to sustain performance in the face of ongoing disruptions.

Developments in Oceania

Australia’s inflation outlook continues to shift, with the IMF predicting a decline to 3% by the end of 2024, bolstered by government subsidies such as energy rebates. However, the IMF anticipates inflation will rebound to 3.6% in 2025, diverging from the Reserve Bank of Australia’s (RBA) forecast, which expects inflation to fall within the 2–3% range by late 2025 and settle near the midpoint by 2026. The RBA has kept interest rates steady at 4.35%, emphasizing a cautious approach as the easing of inflation is not yet firmly established. Meanwhile, the Energy Bill Relief Fund continues to play a key role in reducing inflationary pressures​.

In New Zealand, the apple and pear industry reported a remarkable $1.96 billion in revenue for 2023, contributing significantly to the national and regional economies. A recent report highlights that the sector not only achieved substantial financial growth but also made sustainability gains by reducing land use and modernizing infrastructure. With over 12,000 permanent and seasonal employees, the industry has seen its export value increase from $347 million to over $892 million in the past decade, outpacing the growth rate of New Zealand’s total exports. These developments reflect the sector’s strategic focus on high-value crop plantings and innovative practices in both orchards and packing facilities, positioning it as a key player in the country's economic landscape.

On the trade front, Australia and New Zealand are both working to diversify their economic engagements. Australia's trade surplus continues to show resilience, supported by steady exports of raw materials like iron ore and natural gas to key Asian markets. However, trade diversification efforts are underway, with Australia eyeing stronger economic ties beyond China, particularly through emerging trade discussions with the UAE and India. The ongoing ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is also reinforcing the region’s trade architecture.

Meanwhile, New Zealand’s trade focus extends toward Southeast Asia, with ministers reaffirming their commitment to trade expansion strategies as outlined in their joint economic engagement plans through 2040. Both countries have also coordinated efforts to maintain high standards in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Additionally, their governments aim to strengthen ties with Pacific Island nations, focusing on shared economic and sustainability goals within the Pacific Islands Forum framework.

These collaborative efforts highlight the region's strategy to build more robust, sustainable, and diversified trade networks, while maintaining critical partnerships within Asia and the Pacific.

Port Strike on U.S. East and Gulf Coasts: What Happened and What’s Next

Overview of the Strike

On October 1, 2024, a major disruption began as workers at over 30 U.S. East Coast and Gulf Coast ports, from Maine to Texas, initiated a strike. The action, stemming from labor disputes between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), severely impacted both import and export operations across these critical hubs.

The strike immediately disrupted cargo flow, leading to extensive congestion, delays, and interruptions in supply chains. Vessels intended for these ports were left stranded offshore, adding to operational challenges. As a ripple effect, congestion began to build at West Coast ports, where shippers tried to reroute their cargo.

The International Longshoremen’s Association (ILA) has reached a tentative agreement with the United States Maritime Alliance (USMA). However, key points such as healthcare and the limited implementation of automation are still under negotiation. The deadline to finalize these discussions is set for January 15, 2025. Until then, there remains a possibility of disruptions, including a potential strike if the remaining issues are not resolved by the deadline.

Impact on Costs

In the interim, carriers had implemented emergency congestion surcharges, including USD 1,500 per TEU, as well as an LCL emergency congestion surcharge of USD 35.00 per CBM. After reaching the tentative agreement, all surcharges, including the Strike Diversion Surcharge were cancelled.

What to Expect Going Forward

Although the strike is on hold, recovery will take time as shipping lines realign their schedules and reroute vessels back to the East Coast. The backlog will likely lead to a brief period of congestion as port operations normalize over the next few weeks.

While the cancellation of these surcharges brings some short-term relief, we encourage our customers to remain prepared for potential disruptions should negotiations fail by mid-January. If a strike were to occur, it could once again impact cargo movement, leading to port congestion, delays, and further changes to surcharges.

Alternative Solutions to Minimize Disruption

Kerry Logistics Oceania remains committed to mitigating disruptions for our customers. We are actively offering:

• Airfreight options as an alternative to ocean freight
• FCL to LCL conversions to optimize shipping strategies
• Inland repositioning services and Buyer Consol solutions to keep cargo moving

If you would like to discuss potential workarounds to these disruptions or explore alternative logistics solutions, please get in touch with us.

Ocean Freight Updates

• GRI and PSS notices from Carriers with effect on  1^st of November 2024.
• Carriers booking utilization sits at 90%-95% to both AU and NZ, with space remaining tight until WK50. We suggest placing bookings at least 3-4 weeks in advance.
• COSCO shipments to AU Transshipment via Singapore keep waiting times around 2-3 weeks in SIN due to renewed congestion, under their FIFO operational policy.

Rate Trend - Asia to Oceania

Extended Trans-Tasman Transit Times Impact Supply Chains

Transit times between Australia and New Zealand are lengthening, particularly from Melbourne and Sydney, with some carriers now taking up to 20 days to reach the Port of Tauranga, far exceeding the usual 8-day schedule. Ongoing congestion at Tauranga exacerbates these delays, posing challenges for importers.

While switching carriers might shorten transit times, many customers are locked into rate agreements with their current providers, limiting flexibility. Businesses must adjust their supply chain strategies to account for these extended timelines to avoid disruptions.

PIL Australia Unveils Brisbane to Fremantle Multimodal Solution

PIL Australia has launched a new multimodal carrier haulage solution designed to enhance connectivity between Brisbane and Fremantle. This service offers a streamlined land-bridging option via Melbourne, coupled with a direct link to PIL’s weekly coastal AA2 service, providing one of the fastest and most reliable transit options to Fremantle.

The new solution promises a 16-day end-to-end transit time, with two weekly rail departures from Brisbane feeding into the coastal service. Key benefits include through bill of lading from Brisbane to Fremantle, flexible pricing based on gross weight slabs, reduced CO2 emissions, and a cost-efficient multimodal option tailored for businesses seeking both speed and sustainability.

Strike Causes Major Disruptions at Chittagong Port

On October 21, operations at Bangladesh's Chittagong Port, a critical logistics hub, came to a halt as trailer workers launched a 48-hour strike. The strike stranded thousands of containers, suspending the flow of cargo between the port and inland depots. Workers demanded compliance with prior agreements on wages and job security from two major transport operators, citing unfulfilled commitments from April. This labor dispute threatened to disrupt shipping schedules and supply chains across the region​.

Following negotiations on October 22, the Chittagong Port Authority (CPA) and the workers' union reached an agreement, bringing an end to the strike. While the port has resumed operations, some delays are anticipated as the backlog of shipments is cleared. Stakeholders are advised to monitor the situation closely, as further disruptions may occur if the agreed-upon demands are not met promptly.

DP World Expands Fleet with 47,000 Containers

DP World has acquired 47,000 new containers, marking the first time the UAE-based port operator has purchased and registered containers under its own brand. This strategic move aims to bolster its cargo handling capacity and enhance service reliability during periods of peak demand or market disruptions.

By expanding its container fleet, DP World aims to provide customers with more consistent access to capacity, mitigating potential shortfalls. This investment aligns with the company’s strategy to strengthen its logistics infrastructure and maintain high service levels across global trade routes.

Chinese New Year 2025 – What to look out for

The 2025 Chinese New Year (CNY) holiday, which runs from January 29 to February 3, will differ significantly from previous years due to two major external factors.

First, if Donald Trump is re-elected and implements new tariffs on Chinese goods, U.S. importers will likely place massive advance orders to bypass these trade barriers before the holiday starts. This rush could lead to additional shipping surcharges and increased congestion as companies try to secure inventory ahead of time​

Second, China’s economic slowdown and limited government stimulus efforts may restrict production capacity during this peak demand period. Many factories have already reduced operations or laid off staff, impacting their ability to respond to a surge in orders. To mitigate potential disruptions, several carriers are advising businesses to increase stock levels, diversify supply chains, and carefully manage inventory ahead of CNY. Preparing for delays and assessing alternate sourcing strategies can help companies navigate the challenges of this volatile season

Ocean Freight Snapshot (up to October 31st, 2024)

Check our snapshot for a quick glance on space, rate, equipment and transit times for Oceania

Air Freight Updates

Air cargo traffic from China to Europe has bounced back to pre-Golden Week levels, while shipments from Hong Kong to Europe have surged, marking a six-week high and pointing to increased e-commerce activity. Data from WorldACD Market Data shows a significant rise in tonnage during week 42 (October 14-20), with volumes up 25% compared to the same period last year. Moreover, average weekly tonnages from Hong Kong between weeks 40-42 were 12% higher than in September, suggesting sustained growth towards the year-end peak.

In terms of pricing, air freight rates have also experienced notable increases. Spot rates from Hong Kong to Europe climbed past the $5 per kilogram mark, fluctuating between $5.04 and $5.31, averaging $5.15 in week 42. Similarly, rates from China to Europe rebounded to $4.29 per kilogram, representing a 13% year-on-year increase. Other Asia-Pacific markets have reported even steeper annual price hikes, reflecting heightened demand and tighter capacity across key air freight routes. These trends hint at a robust final quarter for air cargo, driven by both e-commerce and broader market demand.

Qantas Adjusts Terminal Service Fees

As of October 20, 2024, Qantas has shifted its terminal fees from a per-unit rate to a per-kg rate. This change could lead to cost adjustments for airfreight customers, particularly for bulk shipments. Exporters are advised to revisit their pricing strategies to account for the new rate structure.

[Click here for the new rates]

Air Cargo Capacity Shifts to High-Demand Routes for Holiday Season

Airlines are realigning their cargo capacity toward lucrative routes between Asia-Pacific and North America as the holiday season kicks off. With the National Retail Federation (NRF) forecasting U.S. holiday spending to grow between 2.5% and 3.5%, and e-commerce expected to increase by up to 9%, carriers are boosting flights to meet the demand for consumer goods, particularly electronics and perishables​.

Key routes like Shanghai and Hong Kong to North America have already seen notable capacity increases, with week-on-week growth rates of 17.5% and 11.7%, respectively. Cathay Pacific reports strong growth in September cargo volumes and anticipates further demand driven by e-commerce and seasonal shipments through its specialized Cathay Fresh program​.

Despite the added capacity, rates are holding firm, with the TAC Index showing slight increases out of key hubs like Hong Kong and Shanghai. However, airlines are mindful of potential headwinds, such as new U.S. tariffs, which could dampen consumer spending and affect logistics costs throughout the supply chain​.

With fewer shopping days between Thanksgiving and Christmas this year, retailers are accelerating shipments to avoid disruptions. Carriers like Cathay Pacific are optimistic about leveraging this peak season, focusing on time-sensitive deliveries to capitalize on growing e-commerce flows from China, Southeast Asia, and India to North America and Europe.

For businesses seeking budget-friendly alternatives, multimodal solutions such as air-sea products from Europe offer a cost-effective way to reduce transit times without relying solely on expensive airfreight options. Planning ahead and exploring these alternatives is crucial to mitigating disruptions.

Air Cargo Rates Peak as Vietnam Emerges as a Key Market

Air cargo spot rates have reached their highest levels of 2024, rising 1% to $2.84 per kilogram. The surge in rates comes despite reduced tonnage out of the Asia-Pacific region during China’s Golden Week. Meanwhile, Vietnam has emerged as a new air cargo hotspot, with carriers such as Qatar Airways and Lufthansa Cargo increasing their capacity to meet growing demand from sectors like e-commerce​.

Capacity growth out of Ho Chi Minh City has been remarkable, with North American-bound shipments increasing 359% year-over-year and rates from Vietnam to the U.S. jumping 65.4%. Similar trends are seen in Europe-bound cargo, with rates up 57.5% from the previous year. As more flights connect Vietnam with major global trade hubs, the country is cementing its position as a key logistics player in Asia, especially as retailers gear up for the end-of-year peak season

Air Freight Snapshot (up to October 31st, 2024)

Customs, Inland Transport, Terminal and Regulation Updates

Rail Congestion at Port of Tauranga Delays Imports

Rail congestion at the Port of Tauranga is causing import disruptions, with container transfers to Metroport Auckland taking 9-12 days. The delays result from vessel bunching, unexpected surges in container volumes, and rail maintenance closures. While trucking offers an alternative, it remains costly, particularly when dehiring is involved.

In response, Maersk has launched a coastal vessel service to move containers directly to Auckland, but limited visibility on transfer data complicates planning. The situation is expected to persist for at least two more weeks, adding further strain to logistics operations.

Enhanced Customs Measures at Lyttelton Port

New Zealand Customs is ramping up its activities at Lyttelton Port, working closely with the LPC Security Team to address rising threats from organized crime, both locally and internationally. This increased presence aims to strengthen border security and mitigate risks.

As part of the heightened security efforts, individuals and vehicles entering and exiting the port's Customs Controlled Area (CCA) will undergo screening, including random ID checks and vehicle inspections. Workers, contractors, truck drivers, and ship crew members may all be subject to these measures. The LPC-issued PAC card will be accepted as valid identification for those operating within the port.

Disruptions in Rail-Enabled Ferry Projects in NZ Raise Cost Concerns

The cancellation of rail-enabled ferries by the government of New Zealand has raised operational costs for freight operators. Transporting rail freight containers via road bridges has added up to $200 per container and caused delays of up to three hours, potentially affecting the efficiency of north-south freight movement.

South Port Expands Channel Capacity for Larger Vessels

South Port has completed a dredging project, deepening its channel to 9.7 meters. This upgrade will enable the port to accommodate larger vessels, allowing one-port forestry calls and increasing container load efficiency—optimizing operations for exporters in the region.

US Customs Enforces Detailed Cargo Descriptions Starting November 2024

From November 12, 2024, US Customs and Border Protection will no longer accept vague cargo descriptions for airfreight exports. This policy change will affect all shipments arriving in or transiting through the USA, emphasizing the need for comprehensive and accurate cargo information to prevent delays.

Australian Government Tightens Restrictions on European Imports

The Australian Government recently introduced immediate restrictions on air freight originating from 55 European countries. These measures aim to address aviation security risks, especially for shipments booked by unknown shippers. The restrictions primarily impact cargo exceeding 500 grams that is not tendered by a "Known Consignor." This move aims to tighten security measures and will remain effective until further notice.

Additionally, shipments containing liquids, aerosols, or gels packaged alongside electronic or battery-operated devices are prohibited from being transported on passenger aircraft to Australia.

Such cargo must now undergo additional security checks and can only be transported on freighter aircraft. These changes are expected to affect the operations of freight forwarders and micro-to-medium-sized enterprises due to compliance challenges​.

[Click here for the list of countries]

Grant to Boost Revitalization of Wyndham Port

The Western Australian government has committed $250,000 to create a development plan for the historic Wyndham Port. Open since 1886, the port has served industries ranging from cattle and gold to tourism and agriculture. This investment aims to address infrastructure challenges, including road logistics and wastewater management, while enhancing the port’s recreational areas and business activities. Local stakeholders and traditional owners are collaborating on this effort, which is expected to bring new life to the port and support the local community's economic growth.

Logistics Trends

• Isuzu's Future of Trucking Report indicates shifts in Australian fleet management and sustainability, with 41% of respondents facing tighter profit margins and 91% citing that they are open to zero-emission strategies.
• Maritime decarbonisation is entering an era of economic realism, where rising interest rates and regulatory uncertainty are halting projects, but green fuels like methanol remain the most viable path to achieve net-zero goals.
• Christopher J. Wiernicki, Chairman and CEO of American Bureau of Shipping, stated that AI will revolutionise shipping by enhancing safety and efficiency, emphasising the importance of the human element and sustainability.
• The US-China trade landscape changed due to tariffs, benefitting Mexico with a 61.5% increase in container shipping from China in early 2024, raising concerns about CO2 emissions from cross-border truck traffic.
• The logistics industry is adopting sustainable practices, using reusable and biodegradable containers to reduce waste and enhance operational efficiency.
• An MoU signed by Shanghai Municipal Transportation Commission Hamburg Port Authority, Cosco Shipping Lines, and Shanghai International Port (Group) aims to develop a green shipping corridor, promoting shore power infrastructure and carbon-neutral operations.

Why Partner with Kerry Logistics

Selecting Kerry Logistics as your trusted partner isn't just a choice—it's a strategic move towards ensuring your success. Our commitment to excellence is not just a promise; it's a guarantee. With a global network that's both vast and meticulously managed, we stand head and shoulders above the competition. This means you benefit directly from unparalleled service quality, ensuring your supply chain needs are met with precision, efficiency, and minimal hassle.

Are you ready to elevate your logistics game and experience seamless support tailored to your unique needs? Let's discuss how we can bring unparalleled value to your business.