September 2024 brings rising air freight demand, rate increases across Asia, and capacity challenges in Southeast Asia. Learn how the latest shipping trends and upcoming peak seasons could impact your logistics strategy.
AIRFREIGHT
Global air cargo demand has grown by 12% year-on-year in the first seven months of 2024, primarily due to strong e-commerce activity in Asia and ongoing disruptions in ocean freight. Taiwan continues to face congestion, leading to higher rates, particularly for direct services. In Vietnam, demand is expected to increase throughout September as the country’s e-commerce market expands rapidly.
Rates out of Shenzhen (SZX) and Shanghai (PVG) have remained stable, though e-commerce demand is filling up cargo space quickly with certain carriers. China Eastern (MU) has limited availability, with flights to Brisbane fully booked this week, and rates fluctuate depending on demand. China Southern (CZ) offers competitive rates to the East Coast, while Singapore Airlines (SQ) has seen tight space on the second leg of its flights from China, despite competitive pricing.
ASIA
Rates:
- As of 1st September, General Rate Increases (GRIs) have pushed spot rates to USD 4,700–5,200 per 40′ from base ports in China to Australia.
- MSC has revised its GRI from USD 500 to USD 1,000 per TEU for all cargo from China, Hong Kong, Taiwan, Japan, Korea, and other Asian countries to Australia and New Zealand.
- OOCL and ANL have both implemented a GRI of USD 500 per TEU from North East Asia to Australia, with Gold Star Line planning a mid-month GRI of USD 500 per TEU.
The market remains highly competitive, with spot rates dominating for now. September is expected to bring more stability, but it’s still recommended to quote per shipment to ensure space availability. Additionally, the earlier Chinese New Year in 2025 (29th January) will likely push contract negotiations forward, so it’s advisable to begin discussions in late Q4 2024 to secure carrier support for next year.
For shippers looking for cost-effective solutions, Non-Operating Reefer (NOR) containers can offer lower rates compared to general equipment. While NOR containers have slightly less internal capacity, they can be a useful option for spot shipments to reduce costs.
Capacity:
Currently, many carriers are fully booked or rolling bookings, which is particularly challenging with lower-cost carriers. Space out of Southeast Asia remains tight, especially in Vietnam, the Philippines, and Thailand. However, September is showing signs of improved capacity, with carriers like TSL, YML, PIL, and ANL adding extra vessel loaders in early September, offering a total of 9,239 TEU across five extra vessels. Most of these vessels will serve Shekou and Nansha, with only one calling at Shanghai and Ningbo.
Additional capacity may become available later in the month, with OOCL and YML considering deploying extra vessels by the end of September. If confirmed, this could have a positive effect on freight rates.
However, challenges remain in specific routes. For example, ocean freight to Fremantle and Adelaide has seen significant rate increases, with space constraints affecting all shippers. Out-of-gauge (OOG) shipments are particularly difficult to accommodate, with many carriers restricting these bookings.
China’s Mid-Autumn Festival from 15th to 17th September, followed by Golden Week in early October, may lead to a surge in bookings towards the end of September, further tightening space.
EUROPE
Freight rates from Asia to Europe (FEWB) are beginning to stabilize, with some prices even starting to decline. It is expected that Europe’s peak shipping season will arrive earlier this year as businesses rush to get goods to ports ahead of the traditional period. This trend is driven by a combination of summer consumer demand and efforts to avoid disruptions from vessels diverting around the Cape of Good Hope.
As of 1st September, the Brown Marmorated Stink Bug (BMSB) season has begun, and fumigation requirements may add an additional 5-7 days to overall transit times for applicable commodities.
Rates from Europe to Oceania have mostly remained stable, though marginal increases have been observed across certain carriers. Looking ahead to 2025, FuelEU Maritime regulations will take effect from 1st January, with companies required to either pay penalties or take steps to reduce their greenhouse gas intensity. Options include burning biofuels or pooling overachieving vessels to offset underperforming ones.
Port Congestion and Global Updates
Several global ports are facing congestion and operational challenges.
- Shanghai is experiencing vessel wait times of 3-7 days due to port congestion.
- Bangladesh, particularly Chittagong, is dealing with delays of up to 7 days, exacerbated by political unrest and flooding, which has affected both port operations and overland transport.
- In India, potential nationwide port strikes could disrupt cargo movements significantly if wage disputes are not resolved. A full-scale strike could halt about 2.3 million tonnes of cargo movement each day.
LCL Market
While the Full Container Load (FCL) market remains highly volatile, Less than Container Load (LCL) shipments offer more stability for importers and exporters in Australia. We continue to offer stable, competitive pricing and regular sailings across key global routes. Our direct sailings from China, Vietnam, Hong Kong, India, Korea, Singapore, Taiwan, and Thailand to the East Coast provide businesses with reliable shipping options during this fluid market situation.
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For all your freight forwarding solutions, internationally and Australia-wide, you need TFG Global.
Phone: 1300 (693 734) MY FREIGHT | +61 3 9090 7546
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