Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have prepared the following report using practical efforts to ensure that the commentaries are accurate, generally using source intelligence and publicly available data.

NOVEMBER 2023 - SNAPSHOT

Drewry's composite World Container Index increased by 3.13% in the past month to $1,384.00 per 40ft container as at 23 November 2023. It is now 3% below the average 2019 (pre-pandemic) rates of $1,420 and is the lowest for 3 years.
The average composite index for the year-to-date is $1,688 per 40ft container, which is $986 lower than the 10-year average rates of $2,674 (which was inflated by the exceptional 2020-22 Covid period).
The composite index decreased by 6% this week and has dropped by 42% when compared with the same week last year :

ANL announce Rate Restoration for both December & January :

from December 1st, 2023 at USD200/teu for all shipments from North East Asia to Australia East Coast.
from January 1st, 2024 at USD300/teu for all shipments from North East Asia to Australia East Coast.

The Panama Canal will further reduce daily ship crossings in the coming months due to the severe drought. Booking slots have been cut to 25 per day since 3 November from an already reduced 31 per day, and will be gradually reduced further over the next three months to 18 slots from 1 February.

MSC has implemented a USD$297/teu surcharge effective 15 December on shipments transiting the Panama Canal due to to the increasing capacity reductions.
CMA CGM's announced a USD$150/teu 'Panama Adjustment Factor' valid from 1 January.

Shipping Line Q3 Financial Results

OOCL - revenue plunged 65%, compared with the same period of 2022, to €1.75bn, from €5.04bn, despite 13.6% growth in the carrier's operating capacity. Average revenue per teu across all its tradelanes collapsed to just $943/teu, compared with $2,886 in Q3 2022.
CMA CGM - revenue contracted 43% in Q3, compared with the same period of last year, resulting in net income plunging to $388m, contrasting with the huge $7bn profit posted for Q3 2022.
Maersk - Maersk reported a $27 million loss at an EBIT level for its ocean business in Q3 2023 compared to an $8.34 billion profit in the same period a year earlier. Revenues from the ocean business in Q3 2023 were $7.9 billion less than half the $18 billion reported in the same quarter in 2022. Maersk plans to eliminate 10,000 jobs due to what it described as a challenging environment for container trade and logistics services.
ZIM - reported a net loss of $2.27 billion for Q3 2023 compared to net income of $1.17 billion the year before. However, the adjusted net loss excluding the non-cash impairment charge was $207 million — a slight improvement compared to a net loss of $213 million in the second quarter of this year.
ONE - saw net profit slump to just $187m from $5.5bn in same period of last year. ONE's EBIT for the period fell to just $58m, as voyage results slid into the red. For the six-month period, ONE recorded a net profit of $700m, down 96%, but said it now expected a full-year profit after tax of $851m, compared with $15bn in the prior year, "due to the deterioration in the freight market caused by declining demand".
Hapag Lloyd - posted a group net profit of $293m for Q3, compared with $5.1bn in Q3 22, for a cumulative profit of $3.2bn at 9M, versus $13.8bn previously.
Yang Ming - revenue for Q3 was $1.13 billion, with an after-tax net profit of $90.73 million.
COSCO - earnings fell by 95% during Q3 2023 to $655 million. Revenue fell from $14.45 billion during Q3 2022 to $5.84 billion during Q3 2023.
Evergreen - net income of $30m in the third quarter (Q3) of 2023, a decline of 82.9% from $176m in Q3 2022.
HMM - net income amounted to 95.4 billion won ($72.3 million) in the July-September period, down 96 percent from a year earlier

Shipping Competition

Strategic Fleet - The Australian Government in November published the "Strategic Fleet Taskforce—final report" and announced at the same time the Government response to the report. Putting in place a process to get 12 vessels and identifying its recommended fleet composition. The vessels will be the start of what is hoped to be a fleet that will grow to be in the order of 30–50 in number, sufficient to provide a sustainable pool of capability. The aim of the fleet is to respond to disruption events, to support sovereign manufacturing industries and to support the Defence Forces. This fleet model provides for a range of specific vessel capabilities consistent with these three prime purposes.

Mergers/Acquisitions

HMM - reports suggest HMM are down to two bidders, with expectation a preferred bidder is meant to be announced this month with the state creditors keen to get the sale completed by the end of the year.
Harim Group, which controls Korean line Pan Ocean has teamed with a local private equity firm for its bid. It is joined by Dongwon Group, a firm with interests in seafood and logistics.
Border Express has been acquired by Singapore Post Limited (SingPost) through subsidiary Freight Management Holdings (FMH) in a sale worth $210m. SingPost says the Australian integrated logistics market is estimated at more than $120b.
Ocean Network Express (ONE) has acquired significant stakes in three major container terminals on the US West Coast (Los Angeles and Oakland) and in Rotterdam.
Ceva Logistics has successfully acquired 96% of Mumbai's Stellar Value Chain, a company with 6,000 employees, expanding its reach to 35 cities in India.
MSC increased it's focus on European rail, having formed a new joint venture company to expand the freight transport logistics network between ports in Italy and the rest of Europe.

Geopolitical Issues

Ro/Ro vessel "Galaxy Leader" (pictured below) owned by Ray Car Carriers and chartered by NYK was hijacked in the Red Sea with Houthi rebels claiming responsibility for the attack and releasing video of a military style operation to take control of the Bahamas-flagged ship. The vessel at time of report remains under control of the Houthi militia and 25 crew are being held hostage. Isle of Man based Ray Car Carriers was founded by Abraham "Rami" Ungar, who is known as one of the richest men in Israel. Israeli-linked vessels are being targeted by the Houthi militia in relation to the conflict between Israel and Hamas in Gaza.

Schedule Reliability

Global schedule reliability increased by 1.2% month-to-month in September to 64.4%. 19% higher than the same period last year.
The average delay for late vessel arrivals decreased by 0.09 days month-to-month to 4.58 days, yet is still 1.3 days better than same period last year.
Maersk & Hamburg Sud have surpassed MSC as the most reliable carriers in September 2023, with 71.3% schedule reliability. MSC down in September to 69.8%.

Cancellations

Between weeks 48 (27 Nov-3 Dec) and week 52 (25 Dec-31 Dec), 53 cancelled sailings have been announced out of a total of 650 scheduled sailings, representing 8% cancellation rate (down 1% month-on-month). During this period, 51% of the blank sailings will occur on the Transpacific Eastbound, 25% on Asia-North Europe and Med, and 24% on the Transatlantic Westbound trade.
Over the next five weeks OCEAN Alliance has announced 23 cancellations, followed by THE Alliance and 2M with 10 and 4 cancellations respectively. During the same period, 16 blank sailings have been implemented in non-Alliance services.

Orderbook / Scrapping

Alphaliner's data shows MSC remain clearly atop the rankings of container shipping lines based on current TEUs, with 23.3% of market share of the Top 10. CMA-CGM aiming to move into second place with significant orderbook activity.

Sustainability

EU Emissions Trading Scheme (ETS) - ministers from seven southern EU countries including Spain and Italy in November have called for the option to pause plans to include shipping in the EU's Emissions Trading Scheme (ETS) from January. In a letter to the European Commission, the countries said the move risks driving business away from European ports, while offering limited environmental benefit. Estimates suggest that if the EU carbon price remains between €80 to €90 per tonne of CO2, total tax revenues from the coverage of shipping by the ETS could amount to more than €11bn annually.
Maersk has signed a deal with a methanol producer from China to supply 500 kiloton of methanol annually. With the first volume expected in 2026, the volume is enough to annually propel more than half the methanol-enabled vessels Maersk currently has on order. Maersk claim the deal "significantly de-risks" the initial stages of its journey toward being net zero across its business by 2040 and supported expectations for a competitive green methanol market toward 2030.

Innovation

CMA CGM Group have invested €100 million to co-found "Kyutai", a Paris-based AI research lab in partnership with ex-Google CEO Eric Schmidt and Xavier Niel of iliad Group. Kyutai aims to lead AI research in focusing on large multimodal models and new algorithms.

Terminal and Port Update -

Patrick terminals

Brisbane: Delays approx. 0.5 day
Fremantle: Delays approx. 0.5 day
Sydney: Delays approx. 0.5 day
Melbourne: Delays approx. 2 days
Patrick Terminals in collaboration with OneStop have announced Optibook will be implemented in the Patrick Melbourne terminal as of 3 December. The introduction of which will see 'Availability' and 'Storage Start' dates now to be set at the container level, not against the vessel, Once the container has been made available by the terminal, the carrier will have 72 hours from the 'Available' date and time to collect the container prior to the commencement of 'Storage Start' date and time. FTA / APSA strongly recommends that members actively collaborate with their transport providers to facilitate the seamless integration of the process changes.

* DP World Terminals (*ongoing protected industrial action)

Brisbane: Working with delays approx. 7 days
Fremantle: Working with delays approx. 7 days
Sydney: Working with delays approx. 7days
Melbourne: Working with delays approx. 6 days
DP World were forced to shutdown it's systems and operations on 10 November until 13 November as a result of a major cyber security incident, calling on the government appointed National Cyber Security Coordinator for assistance on the issue. As a result crippling about 40 per cent of the country's import and export capacity as trucks could not collect containers from DP World facilities. It has since restarted operations however ongoing protected industrial action continues to hamper recovery.
DPW announce significant increases to their Terminal Access Charges effective 1 Jan 2024, up 52% in MEL, 38% in SYD and 37% in BNE.

VICT

Melbourne: Working with delays of 0.5 days

Brisbane: Working with minimal delays.
Port Kembla: Working with minimal delays.
Melbourne: Working with minimal delays.

MIRRAT

Melbourne: Congestion until 30 November.

New Zealand

Lyttleton: Approx. 1 day delay
Napier: Working with minimal delays approx. 0.5 day
Tauranga: Working with minimal delays approx. 0.5 day
Auckland: delays approx. 2 days

US Department of Transportation's Maritime Administration (MARAD) announced over USD$653 million to fund 41 port improvement projects across the nation under the Port Infrastructure Development Program (PIDP). The funding aimed to help grow capacity and increase efficiency at coastal seaports.

Enterprise Agreements -

DP World (Australia) - Maritime Union of Australia (MUA) protected industrial action which commenced on 6th October 2023 continues into it's third month, with action planned until at least 11 December 2023 at time of reporting. Vessel turnaround times now exceed 7 days at most terminals with stakeholders not expected to resume negotiations again until 4 December and mediation expected due to a stalemate in negotiations.
Hutchison Ports fast approaching the end of their current enterprise agreements.

Global Air Freight

The average air cargo spot rate for the month was USD$2.28 per kg in October, a rise of 2% month-on-month.
October air cargo volumes were also up 2% month-on-month. In comparison to last year, the global air cargo spot rate declined at its slowest pace of -30% in October.
Qantas Freight service issues arising from a failed system cutover have largely recovered to normal levels, however Qantas Freight are still yet to reconcile invoicing for the affected period. Qantas Freight have since offered customers a 50% reduction in Terminal Service Fees for a 2 week period in early November as a show of appreciation to customers.

TRADE DATA UPDATES

Latest Updates as at 27 November 2023 (FTA / APSA LOGIN REQUIRED)

AUSTRALIAN PART X SHIPPING NOTICES

APSA is the designated peak shipper body granted status by the Federal Minister for Infrastructure and Transport under Part X of the Consumer & Competition Act to represent the interests of Australian shippers generally in relation to liner cargo shipping services. Notices have been received and are available for members' reference HERE (FTA / APSA LOGIN REQUIRED)

FTA / APSA IN THE MEDIA

14 NOVEMBER 2023 : India Shipping News - DP World gradually restarting operations around its Australian Ports after cyber-attack
14 NOVEMBER 2023 : DP World Cyber Incident - Peak industry alliance leads the way with extensive media campaign
13 NOVEMBER 2023 : The Age - Cyberattack threatens to spark Christmas goods shortage
13 NOVEMBER 2023 : ABC (Perth) - Nadia Mitsopoulos interviews Paul Zalai (FTA/APSA)
13 NOVEMBER 2023 : The Australian - Concerns over supply chains in lead-up to Christmas following cyber incident
13 NOVEMBER 2023 : Sky News - Ed Boyd interviews Paul Zalai (FTA/APSA)
13 NOVEMBER 2023 : AFR - Wharfies stick with strike action despite DP World hack
13 NOVEMBER 2023 : The Guardian - DP World hack: port operator gradually restarting operations around Australia after cyber-attack
13 NOVEMBER 2023 : Sydney Morning Herald - Cyberattack threatens to spark Christmas goods shortage
13 NOVEMBER 2023 : ABC - Freight giant DP World recovers from cyber attack
12 NOVEMBER 2023 : AFR - DP World hack strands 30,000 shipping containers
10 NOVEMBER 2023 : Journal of Commerce - Rising marine terminal charges stir ire of Australian shipper groups
8 NOVEMBER 2023 : DCN - A legacy relic
7 NOVEMBER 2023 : AFR - Why goods meant for Sydney are ending up elsewhere
2 NOVEMBER 2023 : The LoadStar - "Daylight robbery" – Fury at huge hike in terminal fees by DP World Australia
2 NOVEMBER 2023 : The LoadStar - Daylight robbery – Fury at huge hike in terminal fees by DP World Australia
2 NOVEMBER 2023 : The LoadStar - "Daylight robbery" – Fury at huge hike in terminal fees by DP World Australia
2 NOVEMBER 2023 : AFR - DP World's 52pc fee rise at Port of Melbourne labelled exorbitant
2 NOVEMBER 2023 : The Weekly Times - Port fee spike to have alarming impact on agriculture
31 OCTOBER 2023 : Journal of Commerce - Carriers, shippers face Australia cargo delays from DP World stevedore strikes

Please note that this will be the final FTA / APSA Monthly Shipping Report for 2023.

Tom Jensen - Head of International Freight & Logistics - FTA / APSA

FTA / APSA Monthly Shipping Report - November 2023