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.

Edition 7, 2024 - SNAPSHOT

Rates

Drewry's composite World Container Index (WCI) has decreased for the 5th consecutive week, down 10.4% in that period to $5,319.00 per 40ft container as at 22 August 2024.
Rate levels are up 201% when compared with the same period last year.
The average composite index for the year-to-date is $4,077 per 40ft container, which is $1,273 higher than the 10-year average rate of $2,803 (which was inflated by the exceptional 2020-22 Covid period).
Despite the Drewry WCI decreasing for the past 5 weeks, the Australian market has not yet felt any flow-on effects, with rates still on the increase as per the latest shipping line notices listed below.

Source: Drewry

MSC announce a Rate Restoration effective for all cargo from China, Hong Kong, Taiwan, Japan, Korea, Cambodia, Thailand, Vietnam, Malaysia, Myanmar, Singapore, Philippines and Indonesia to Australia and New Zealand of USD$1000/TEU effective 1 September 2024.
CMA CGM / ANL announce a Rate Restoration effective for from North East Asia to Australia East Coast, Fremantle, Adelaide & New Zealand of USD$500/TEU into Australia and USD$300/TEU into NZ effective 1 September 2024.
GSL announces North East China to Australia Rate Restoration Program of USD$300/TEU effective 1 September 2024.
GSL announces North East China to Australia Rate Restoration Program of USD$500/TEU effective 12 September 2024.
Hapag Lloyd announce PSS ex China, Japan, South Korea, Hong Kong and Macau to Australia effective August 22, 2024 of USD 500 per TEU for all container types.
Hapag Lloyd announce PSS ex Taiwan to Australia effective September 6, 2024 of USD 500 per TEU for all container types.
COSCO announce a Rate Restoration applicable to all southbound shipments from all POLs to Townsville, Darwin, Lae, Port Moresby, Suva and Lautoka effective September 1, 2024 of USD 300 per TEU.
ANL announce revised Export and Import Terminal Handling Charges effective 15th August 2024.
MSC confirmed the cancellation of their Capricorn & Kiwi Express transhipment services from Europe to Australia, reducing the capacity to the Australian market and forcing customers onto a direct only offering.

Supply / Demand

The supply and demand dynamics within the global shipping industry remain heavily influenced by the Red Sea conflict. This ongoing geopolitical issue has seen the continuation of ships routing around the Cape of Good Hope, significantly increasing TEU miles and contributing to widespread congestion across major ports.
While overcapacity was initially expected to dominate the market until 2027, the crisis has shifted the balance of power in favour of carriers, allowing them to capitalise on the current conditions. Additionally, macroeconomic factors and shifting global trade patterns, particularly involving China, continue to play a crucial role in shaping demand.
Indian sub-continent (ISC) is extremely impacted at present, with significant space issues causing headaches in trying to secure bookings from AU into the ISC.
Demand remains high with Container Trade Statistics for June 2024 showing growth of 6.33% YoY. It's a slight decline of 1.7% MoM, however May's figures were the highest on record, with 15.9m TEU shipped globally which beat the previous record of 15.7m TEU set in May 2021. 74m TEU were shipped in the first five months of this year, which beats the previous record set in 2021 by 0.15m TEU.
ABF cargo reporting data suggests Sea Cargo reporting for July 2024 was close to par with 2023, only up 1% YoY, however Air Cargo demand still increases considerably, up in July by 28% YoY.
The graph below illustrates that the rise in supply from the addition of new ships has been offset by the increased TEU miles resulting from the extended sailing routes around the Cape of Good Hope :

Shipping Line Financial Results

Q2 Results -
ZIM August update reports 11% volume growth in Q2 with record carried volume of 952,000 TEUs. Net income for the second quarter was $373 million (compared to a net loss of $213 million in the second quarter of 2023). Adjusted EBITDA for the second quarter was $766 million, a year-over-year increase of 179%. Average freight rate per TEU in the second quarter was $1,674, a year-over-year increase of 40%.
Hapag Lloyd reported a strong H1 2024, reporting results above the initial expectations due to higher demand and rising spot rates in the second quarter of 2024. volumes increased by 5 percent compared to the prior-year period. Hapag Lloyd confirmed that given the fact that demand and freight rates have recently exceeded expectations, the Executive Board raised its forecast for the current financial year.
CMA CGM Q2 reported results suggesting Group revenue stood at USD 13.1 billion in the second quarter of 2024, up 6.8% in it's shipping interests. Logistics interests grew 26.8% for Q2 YoY, as a result of the Bollore acquisition (now rebranded under their Ceva Logistics brand), and their revenue results suggests Logistics now account for 35% of their overall revenues, despite accounting for lower margins (shipping 23.9%, logistics 9.4%) :

Panama Canal - Drought Recovery

Panama Canal Authority (ACP) announced beginning August 5, 2024, they have increased total transits to 35 vessels per day (of a usual 36 per day) as a result of increasing the maximum allowable draft to 49 feet.

Red Sea Crisis

The issues plaguing the Red Sea continue, with a major environmental issue unfolding due to an attack involving the Greek-flagged tanker "Sounion" in the Red Sea on August 21 2024. An explosion as a result of an attack caused fires on the main deck and superstructure. This incident is part of a broader series of attacks in the region, with the "Sounion" being the third tanker from Delta Tankers targeted within a two-week period by Houthi forces. The attacks have resulted in significant damage, and while no immediate oil spill has been detected, the potential for a major environmental disaster remains extreme, as the vessel is carrying over a million barrels of crude oil.
This incident adds to a total of four other attacks on merchant vessels in the region over recent days (eight in total for August), making this a particularly dangerous time for shipping in the Red Sea. The ongoing crisis underscores the ecological vulnerability of the Red Sea, a "special area" under the International Convention for the Prevention of Pollution from Ships (MARPOL).
The CMA CGM Jules Verne on August 13 2024 successfully completed its eastbound passage through the Suez Canal. After a scheduled stop at Jeddah, the vessel continued its journey, passing through the Bab al-Mandab Strait on August 19 without incident. This marks a significant milestone as the largest containership (16,022 TEU) to return to the Suez/Red Sea route since February 2024, amidst ongoing security concerns. Most other major carriers have been avoiding the area to mitigate the risk of attacks by Houthi militants in Yemen.

Shipping Competition

US Federal Maritime Commission (FMC) has introduced new regulations, effective from 23 September 2024, to prevent ocean carriers from denying contracted cargo space to shippers in favour of more profitable spot market transactions. This crackdown follows widespread complaints during the COVID-19 pandemic, where carriers allegedly breached contracts, causing significant financial losses for shippers. The rule defines "vessel space accommodations" and establishes clear criteria for assessing violations, with the burden of proof shifted to carriers. Carriers are now required to submit an annual confidential export policy to the FMC, detailing their pricing and service strategies.

Mergers/Acquisitions

Qube Logistics has acquired West Australian company Coleman's Transport for approximately $119 million, finalising the deal on August 21, 2024. This acquisition includes high-security storage facilities in key mining regions and specialised infrastructure for the ammonium nitrate supply chain, crucial for mining explosives.
DB Schenker - The latest developments in the bidding war for DB Schenker have seen final offers submitted by DSV and a consortium led by CVC Capital Partners. Both bids value DB Schenker at approximately €14 billion. The CVC-led group has also proposed an alternative offer of up to €16 billion, which would involve the German government reinvesting for a 25% stake in DB Schenker.

Schedule Reliability

Schedule reliability has reduced by 1.2% month-on-month down to 54.4%, keeping YTD trends at the 50-55% mark. On a year-on-year basis, schedule reliability was 9.8% lower than the previous year.
The average delay for LATE vessel arrivals has deteriorated, increasing to 5.19 days. This is now the third-highest figure for the month, only surpassed by the pandemic highs of 2021-2022.
Hapag Lloyd was the most reliable top-13 carrier in June 2024 with schedule reliability of 55.4%, CMA CGM & Maersk weren't far behind.
ZIM was the least reliable of the top 13 with schedule reliability of just 44.4%.
As a sign of the times, during the same period last year, MSC topped the chart with just over 70% reliability, however they have suffered an 18.5% decline in performance YoY.

SOURCE: SEA-INTELLIGENCE

Cancellations - Blank sailings increasing

Global - Between week 35 (26 Aug-1 Sep) and week 39 (23 Sep-29 Sep), 54 cancelled sailings out of a total of 697 scheduled sailings, representing 8% cancellation rate. During this period, 56% of the blank sailings will occur on the Transpacific Eastbound, 24% on the Transatlantic Westbound trade, and 20% on Asia-North Europe and Med.
THE Alliance have announced 14.5 cancellations, followed by Ocean Alliance & 2M with 12.5 and 4 cancellations respectively. During the same period, 23 blank sailings have been implemented by non-Alliance services.
Australia - Based on September schedule data ex China to Australia, only 1 cancelled sailing has been announced out of a total of 73 scheduled sailings, representing a 1.37% cancellation rate.

Orderbook / Scrapping

LNG the way to go? Container newbuilds are favouring large LNG-fuelled ships based on an analysis of the container shipping orderbook including builds up to 2029 deliveries. Data reveals that the top 10 vessel operators are convinced that LNG is the most appropriate fuel in the immediate future. The world's biggest shipping lines have a total of 371 vessels on order, of which 162, totalling 2.2 million teu, are LNG powered, 80 of these vessels are over 15,000 teu in size, representing 1.44 million teu.
Hapag-Lloyd in early August predicted they expect the 18% orderbook volume to grow a little without impacting rates due to the lengthy lead times: "I expect the 18%, which as such is not worrying, to nudge up a bit, but delivery windows are long and so it does not have to be a problem," said Rolf Habben Jansen, CEO Hapag Lloyd.
Newbuilding orders exceed 2m TEU YTD, with PIL becoming the latest carrier to place a new order. On August 19, 2024, PIL announced an order for five LNG dual-fuel vessels, each with a capacity of 13,000 TEU. These ships are intended for the Latin America trade, with deliveries starting in late 2026. Wan Hai also confirmed letters of intent (LOIs) for 16 new methanol dual-fuel vessels, ranging from 8,000 to 8,700 TEU.
CMA CGM's latest orders would see them overtake Maersk in 2nd position (behind MSC) in terms of TEU capacity available.
The following graphs highlight the rate of growth of the global container fleet, and the increase in size of the aging fleet as a result of growing demand leading to a reduction in scrapping :

MSC continue their dominance in the orderbook rankings, now reaching 20% market share :

Sustainability

Methanol support declines - Despite new methanol builds still rolling off the production lines, the shipping industry is showing signs of growing uncertainty and hesitation in committing to green fuel initiatives, as evidenced by Maersk shifting away from methanol and Ørsted's abandonment of its e-methanol project. Despite initial enthusiasm, economic pragmatism and market challenges are driving companies to prioritise more cost-effective options like LNG, as the development of green fuel markets and supporting infrastructure lags. The situation underscores the industry's lack of confidence in current fuel choices and the need for stronger policy frameworks, financial incentives, and industry-wide support to make environmental sustainability economically viable.
Maersk having pivoted away from methanol towards LNG dual-fuel vessels, has now teamed up on a project to explore the regulatory assessment of a next-generation nuclear-propelled feeder container ship. The joint study also involves classification society Lloyd's Register and UK maritime and technology nuclear innovation start-up Core Power.
Dual Fuel Engines - July statistics indicate the number of Container vessels ordered with dual fuel engines saw a 241% rise, from 29 in 2023 to 99 in 2024.
Sustainable Aviation Fuel (SAF), a key factor for airlines to meet the 2050 net-zero carbon emissions target, accounts for less than 1% of aviation fuel consumption in 2024 according to IATA statistics.

· Terminal and Port Update -

o Patrick terminals

§ Brisbane: Delays approx. 0 - 0.5 day

§ Fremantle: Delays approx. 1 - 2 days

§ Sydney: Delays approx. 2 - 3 days

§ Melbourne: Delays approx. 0 - 0.5 day

o DP World Terminals

§ Brisbane: Delays approx. 0.5 - 1 day

§ Fremantle: Delays approx. 0 - 0.5 day

§ Sydney: Delays approx. 2 days

§ Melbourne: Delays approx. 0 - 0.5 day

o VICT

§ Melbourne: Delays approx. 0.5 day

o AAT

§ Brisbane: Working with minimal delays.

§ Port Kembla: Working with minimal delays.

§ Melbourne: Working with minimal delays.

o MIRRAT

§ Melbourne: Working with minimal delays. Berth maintenance 26 - 27 August.

o New Zealand

§ Auckland: delays approx. 1 - 2 days

§ Tauranga: minimal delays approx. 0.5 day

§ Napier: minimal delays approx. 3 days

§ Lyttleton: minimal delays approx. 0.5 day

· Global Port Congestion Hotspots

o Singapore congestion has eased. Port congestion remains an issue elsewhere however, particularly in North Asia and South America, where delays are most pronounced. Chinese ports, especially Ningbo and Shanghai, are grappling with significant congestion. The situation at Ningbo has been further exacerbated by the explosion on August 9 aboard the 6,588 TEU vessel YM Mobility.

Equipment

Container equipment shortages continue, particularly in Asia and North America. This issue stems from a combination of extended transit times, rising global demand, and port congestion, which has significantly impacted container availability. In Asia, carriers are reallocating vessel space to meet strong Trans-Pacific Eastbound (TPEB) demand, leading to fewer containers being left in North America to support exports. This shortage is compounded by congestion at major transhipment ports like Shanghai and Singapore, where delays of late have ranged from 14 to 21 days. The situation is causing significant disruptions as carriers struggle to maintain schedule integrity and meet demand. In North America, the shortage has been exacerbated by high intermodal demand and extended inland journeys for containers. The equipment shortage is being closely monitored as the situation evolves, with the possibility that demand pull-forwards related to peak season and geopolitical factors could eventually ease the strain later in the year. However, for the time being, the global shipping industry is navigating through a period of significant logistical challenges.

Enterprise Agreements

Fremantle Ports were impacted by protected industrial action, with the Australian Maritime Officers Union WA (AMOU) providing notice of protected industrial action (PIA) at Fremantle Port for 48hrs from 18 August. The industrial action is being taken as a result of protracted negotiations on a new Marine Services Enterprise Agreement, with vessel traffic service officers and small craft personnel taking 48 hours PIA from 5.30am, Sunday August 18. The AMOU lodged notice for a further 48hrs from 25 August, however the parties managed to reach an in-principle agreement at the 11th hour, stopping the planned action.
Canadian Rail Lockout/Strike - After Canadian National Railway and Canadian Pacific Kansas City locked out workers from the early hours of Thursday 22 August due to failing to come to an agreement. the Canadian Government stepped in and the Canada Industrial Relations Board (CIRB) ruled to allow federal Labour Minister Steven MacKinnon to end job action in Canada's rail sector and impose binding arbitration. Rail workers were as a result ordered back to work.
The union announced they would lawfully comply with the CIRB decision, whilst the Teamsters will also appeal the ruling to federal court. The country's two largest railroad operators issued lockout notices to the Teamsters union that represents nearly 10,000 workers, marking the first time that the country has faced a simultaneous labour stoppage at the railroad firms as they normally negotiate their labour agreements in alternate years. .
US East & Gulf Coast Ports - With only weeks remaining until the International Longshoremen's Association (ILA) contract expires on October 1st, expectations that a strike is looming as the ILA and the United States Maritime Alliance (USMX) have taken their disagreements public despite earlier commitments to keep negotiations private. The ILA President issued a warning that if a new contract is not reached by the deadline, the union is prepared to strike at all ports from Maine to Texas. In response, USMX released a statement on August 9th, outlining their latest offer, which includes significant wage increases, improved retirement contributions, and enhanced health care coverage. However, the ILA remains firm in its opposition to increased automation and insists on rolling back certain technological advancements they believe violate their Master Agreement. As preparations for a potential strike intensify, the ILA plans to establish strike committees at a meeting scheduled for September 4th and 5th. Analysts are warning that even a one-week strike could result in significant delays, with backlogs potentially lasting until mid-November, and a two-week strike could disrupt port operations well into 2025. Major carriers, including Maersk and Hapag-Lloyd, are now bracing for the potential impact of this looming labour dispute.
VICT are the next of the major Australian terminals approaching the end of their current enterprise agreement, with negotiations expected to commence from October 2024 :

Global Air Freight

Spot Rate Increase: Global air cargo spot rates rose 12% year-on-year and 2% month-on-month in July to $2.50 per kg. The surge in demand during the first seven months of 2024 was driven by a sharp increase in cross-border e-commerce demand from Asia, disruptions in ocean shipping caused by the Red Sea crisis, a broader rise in general cargo demand fueled by high-tech semiconductors for high-performance computing and the AI boom
Global Air Cargo Growth: Tonnages are still comfortably up, by 9% compared with last year. This despite capacity increasing by only 3% YoY.

TRADE DATA UPDATES

Latest Updates as at 26 August 2024 (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

29 July 2024 : Australian Financial Review - Importers opt for flights and rail as pirates push up shipping costs
23 July 2024 : DCN - International e-commerce at Australias border
23 July 2024 : DCN - Structured ordering and compliance
17 July 2024 : FTA / APSA Appear of ABC Country Hour - Media Coverage Underpins Ministerial Briefings
12 July 2024 : Channel 10 News - International Freight Rates adding to Cost of Living
12 July 2024 : Channel 7 News - Tim Lester on International Shipping
11 July 2024 :  Australian Financial Review - Shipping Crisis A "Spanner in the Works" for Inflation War
02 July 2024 :  Country Radio Rural Report - Skyrocketing International Shipping Costs
02 July 2024 :  The Land : Freight fright: Red Sea rockets and trade panic hit our ag costs
27 June 2024 : Sky News - International shipping costs fuel Australian inflation results

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

FTA / APSA Monthly Shipping Report - 2024 Edition 7