Due to the current geopolitical volatility and various global events affecting the supply chain, EES Shipping aim to provide updates every two weeks on prevailing conditions.
All of the following events impact YOU as an importer/exporter and ultimately influence:
- Rates
- Space
- Transit times / Delays
- Equipment shortages
Port Strikes USA East Coast and Gulf Ports
Port strikes are crippling the US East Coast and Gulf Ports currently – the action commenced at 1201am on the 1st October. Approximately 45,000 dockworkers at 36 ports along the eastern seaboard, from Maine to Texas, have stopped work, marking the largest terminal industrial action globally this century. The cost to the US is around USD5 billion per day. The USMX (United States Maritime Alliance) and the ILA (International Longshoreman Association) are yet to come to an amicable agreement.
Inevitable vessel queues are now forming at several ports, exacerbated by an ongoing strike at Montreal, Canada’s largest eastern port. Freight rates to the US East Coast have increased with a slew of additional surcharges coming into play. Alternative ports can be suggested for cargo being exported from States. For each day that the ports are closed, it will add at least a week to clear the backlog. Both importers and exporters should expect significant delays for cargo movement to/from these areas.
The effects of this strike are expected to be felt into 2025 – the backlog of vessels will be extreme, and it is expected that there will be a possible lack of equipment in the wake of this stoppage.
- ISSUES: US East Coast / Gulf Ports are closed until further notice
- CAUSES: Increased port congestion, vessel arrival delays, increased costs
- EFFECTS: container shortages, delays in departures/arrivals
North East Asia to Australia Rates
China is currently on their week long holiday – Golden Week. This holiday is due to finish on the 7th October, with most returning to the offices and factories from the 8th. For importers and exporters, disruption is expected. The price war appears to continue for cargo moving from China to the East Coast of Australia with many lines dropping freight rates in order to fill their vessels prior to the holidays. For Fremantle destined cargo, we have seen a slight, welcomed reduction in rates for the first half of October. There are also rumours circulating about a new direct service from Shanghai and Shekou to Fremantle entering the market. More details will follow when schedules are firm.
We will be keeping a close eye on the demand coming out of the holidays. Weak demand will dictate a drop in the freight rate (as carriers fight for whatever cargo there is to move). High demand could lead to an increase in rates.
- ISSUES: Rate instability in wake of Golden Week
- CAUSES: Possibility of lack of bookings on Chinas return
- EFFECTS: Waiting time for confirmed bookings, uncertainty surrounding freight rates
South East Asia to Australia Rates
Rates from South East Asia have seen an increase this fortnight with all lines seeing strong demand.
- ISSUES: Confirmed booking delays, freight rate increases
- CAUSES: Possibility of lack of bookings from all South East Asia Ports
- EFFECTS: Waiting time for confirmed bookings, uncertainty surrounding freight rates
Fremantle Ports, Services and transhipment Issues
As this email goes out, Fremantle Ports is under evacuation orders due to our adverse weather. All vessels alongside the inner harbour have been ordered out to sea, with no vessels being bought into the port during this time. The order will be lifted once the weather conditions improve, which is currently anticipated to be this afternoon / evening. Knock on delays are to be expected.
Transhipment through Singapore is currently running smoothly. Delays of 7-10 days have been experienced, but some of this is due to mis-connections (simply not enough time to connect – or delays in the first vessel) rather than the cargo being rolled.
The team at EES is keeping a close eye on services being offered into Fremantle and will extend offers of ad hoc or new sailings when relevant.
- ISSUES: Fremantle Port Evacuation will cause delays and flow on delays to schedules
- CAUSES: Adverse weather conditions
- EFFECTS: Possible delays with container discharge and availability in Fremantle / delays through transshipment
Red Sea Crisis
The crisis in the Red Sea continues with the yearly anniversary drawing closer. Vessels are still diverting around the Cape of Good Hope in Africa. Since the Gaza war began last October, the Houthis have targeted over 80 merchant vessels with missiles and drones. As a result, most shipping lines consider transit through the Suez Canal too dangerous.
- ISSUES: Houthi Rebels targeting merchant vessels, including container ships
- CAUSES: Vessel delays
- EFFECTS: Longer transit times, additional costs and higher freight rates
We hope that the above summary keeps you well informed. If you have any questions, please do not hesitate to contact the undersigned.
