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.
Port Strikes USA East Coast and Gulf Ports
The International Longshoremen’s Association and the United States Maritime Alliance (USMX) announced a deal only three days into strike action. Sources revealed that the agreement includes a wage increase of approximately 62% over six years, raising the average hourly wage from US$39 to around US$63. The tentative wage agreement has brought an end to the strike, but it only extends the current contract until January 15. Both parties will continue negotiations on other issues, including the use of automation at the ports, which workers fear could result in job losses.
With the contract now set to expire in January, some market uncertainty remains, but this will occur after the busy pre-Christmas season when shipping volumes are typically lower. The new deadline also aligns more smoothly with the political landscape, leaving any potential challenges for the newly elected president to address. The clearing of the backlog of cargo continues.
- ISSUES: US East Coast / Gulf Ports under tentative wage agreements
- CAUSES: Increased port congestion, vessel arrival delays, increased costs
- EFFECTS: possible further strike action in January
North East Asia to Australia Rates
China has returned from their week long holiday – Golden Week. Demand has been soft on their return, however it is expected that manufacture and bookings will ramp up in the coming weeks.
Port congestion in main ports China and delays due to typhoons have seen some shipping line schedules slide. Pushing estimated times of departure (ETD) or sliding is also common practice for lines during this long holiday.
For Fremantle destined cargo, we are expecting a slight, welcomed reduction in rates for the second half of October. The rumours of the new direct service from Shanghai and Shekou to Fremantle entering the market have materialised, with a slight change in the ports of call. The service has been announced quietly as Shanghai – Hong Kong (to allow for China feeder connections) – Jakarta – Fremantle. This new service will avoid any congestion in Singapore.
This weak demand has dictated a drop, or stabilisation in the freight rates for Fremantle.
The East Coast of Australia shows the tale of two services (actually multiple services). Some rates have risen, with carriers attempting to introduce GRIs (or General Rate Increases), while other carriers are holding their rates in the coming weeks. East Coast has a lot more services on offer and we will likely recommend several services with alternate rate levels.
- ISSUES: Rate reduction in wake of Golden Week
- CAUSES: Lack of volume upon Chinas return
- EFFECTS: Possibility of blank or sliding vessels
South East Asia to Australia Rates
Rates from South East Asia have seen a stabilisation of rates for this next fortnight with all lines seeing steady demand. The below still remains relevant however, as the space on this trade lane is less than it’s Northern Asia counterparts.
- 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
When our last notice was released (04.10.24) Fremantle Ports was under evacuation order due to adverse weather. As you will know, that weather is now clear with operations having resumed quickly in the inner harbour. With any delay like this, there is residual delays with vessel bunching occurring (vessels arriving back to back with little or no chance to clear the cargo from the land side). This has caused some delays on the transport side.
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 due to weather or port congestion issues in China) 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 all sailings when relevant.
- ISSUES: Delays at Fremantle Port have caused vessel bunching and issues with some sailings/voyages
- CAUSES: Adverse weather conditions/port congestion
- EFFECTS: Possible delays with local transport and availability in Fremantle / delays through transshipment
Red Sea Crisis
The situation in the Red Sea remains the same as the Houthis continue to fire upon merchant vessels. There have been no change to the vessels diverting around the Cape of Good Hope in Africa. There have been a few container ships lose containers around this area recently due to bad weather.
- 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.
