FTA / APSA Shipping Report - Edition 9 2024

JOIN THE ALLIANCE 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 9, 2024 - SNAPSHOT Rates / Services Drewry's World Container Index (WCI) rose for the first time since mid-July, climbing 3.8% to $3,213 per 40-foot container as of 31 October 2024. This marks a pause in the steep 47.9% decline experienced over recent months. Rate levels are up 139% when compared with the same period last year. The average YTD composite index is $4,017 per feu, which is $1,178 higher than the 10-year average of $2,839 (inflated by the exceptional 2020-22 Covid period)..                                                                                                                                            Source: Drewry ·          The UN Conference on Trade and Development (UNCTAD) highlighted the surge in freight rates in 2024 and projected that, if sustained, this could increase global consumer prices by 0.6% by 2025.             ·          ZIM announce North East Asia to Australia Rate Restoration Program of USD$400/TEU effective 5 November 2024. ANL announce a Rate Restoration effective for all shipments North East Asia to Australia East Coast, Fremantle, Adelaide & New Zealand of USD$300/TEU effective 1 November 2024. ANL announce a Peak Season Surcharge (PSS) effective for all shipments from Australia & NZ to USA, Canada & French Polynesia of USD$300/TEU effective 1 November 2024.   Supply / Demand Positive Result for AU Container Trade - In the first half of 2024, Australasian container trade experienced significant growth, with total trade increasing by 12.7% year-on-year to 3.5 million TEU. Imports rose by 14.7% to 1,965,200 TEU, while exports grew by 11.5% to 1,349,300 TEU. Notably, imports from the Far East surged by 19.3% to 1,404,700 TEU, and exports to the same region increased by 6.5% to 930,300 TEU. However, despite this robust demand, freight rates declined across most trades in the second quarter, with the Middle East/ISC region experiencing the largest average drop of 41%. The only exception was the Far East, where rates saw gains of 9% in May and 20% in June. Purchasing Managers' Index (PMI) :  The latest PMI results show that manufacturing slowed in September with a reading of 48.8, while services stayed in growth at 52.9. Although export orders for manufactured goods dropped, service exports picked up to 51.7. Meanwhile, record-high container traffic in August suggests that actual trade remains strong, especially in sea and air freight.              ABF cargo reporting data shows Sea Cargo reporting for October 2024 was up 59% YoY, and Air Cargo still continues to increase considerably, up by 36% YoY.  eCommerce making up 97% of the Air Cargo reporting. The sea cargo demand was largely attributed to Golden Week demand.    Compliance ICS2 Release 3 - Freight forwarders hold a vital reporting responsibility under ICS2, as they are required to manage and submit accurate house-level data to meet customs obligations effectively, thereby minimising the risk of delays and disruptions within the supply chain. The European Union's Import Control System 2 (ICS2) Release 3, effective from 4 December 2024, brings crucial changes for the freight forwarding industry. This phase requires detailed pre-arrival data for all maritime imports to the EU, increasing the responsibility on freight forwarders to ensure data accuracy and timely submission.        Why ICS2 Release 3 Matters: Enhanced Compliance: Freight forwarders must submit an Entry Summary Declaration (ENS) with detailed cargo information, including HS codes and consignee EORI numbers. Data Control: House-level filing empowers forwarders to control their data, especially as shipping lines expand into logistics services. Deadline for Deployment Requests: Forwarders should request a deployment window by 1 November 2024 to avoid delays.                  FIATA and CLECAT have released guidance material which can be found here.   Shipping Line Financial Results OOCL reported strong financial growth in Q3 2024, with revenue up 73.7% to USD 3.06 billion and average revenue per TEU increasing by 67.6% year-on-year. For the first nine months, total revenue grew by 23.4%, with a 20.3% rise in revenue per TEU.  Cosco reported significant profit growth, with net earnings reaching USD 6.1 billion in the first nine months of 2024, marking a 66.6% increase from the same period in 2023. In Q3 alone, Cosco's profit surged by 280% year-on-year to USD 3.4 billion.  Ocean Network Express (ONE) reported a substantial revenue increase of 65% year-over-year for Q2 of FY2024, reaching US$5.86 billion, with a net profit close to US$2 billion. The Asia-North America and Asia-Europe routes drove growth, bolstered by strong consumer demand and proactive shipments due to potential supply chain issues. For the fiscal year, ONE has revised its net profit forecast to US$3.095 billion, up from US$2.745 billion. Hapag-Lloyd reported strong preliminary results for Q3, with an EBITDA of $3.6 billion and EBIT of approximately $1.9 billion for the first nine months of 2024, despite being down from $4.5 billion and $3 billion, respectively, in 2023. Driven by heightened demand and elevated freight rates, Hapag-Lloyd raised its 2024 forecast to an EBITDA range of $4.6 to $5.0 billion and EBIT of $2.4 to $2.8 billion. However, they noted that volatility in freight rates and geopolitical issues could impact future performance?. Maersk achieved an underlying EBITDA of $4.8 billion and an EBIT of $3.3 billion in Q3 2024. This represents a significant year-over-year improvement from Q3 2023, where Maersk reported an EBITDA of $1.88 billion and EBIT of $538 million. Driven by increased demand and geopolitical factors, Maersk adjusted its full-year forecast to an EBITDA of $11.0 to $11.5 billion and an EBIT of $5.2 to $5.7 billion, anticipating continued demand stability through the rest of 2024?.        Geopolitical Impacts Panama Canal - Drought Recovery Transits through the Panama Canal dropped 29% year-over-year (YoY) in FY2024, totaling 9,936 compared to 14,080 in FY2023. Daily average transits also fell 30% YoY, from 38.6 to 27.1. However, recent month-over-month (MoM) data shows improvement, with daily averages increasing from 30.8 in August to 31.9 in September, the highest since October 2023. Container transits were least affected, down only 0.5% YoY, and their share rose to 27.9%. Somali Pirates Somali pirates are active again, with 13 armed pirates recently departing from Ceel Huur near Hobyo into the Indian Ocean. This marks the first pirate boat sighting since early June, following a resurgence in Somali piracy that began late last year. The Maritime Security Centre – Horn of Africa (MSCHOA) advises vessels to exercise caution and report suspicious activity. Additionally, UK Maritime Trade Operations (UKMTO) reported that a vessel's security team recently fired warning shots after an approach by five small crafts south of Aden. Red Sea The Red Sea crisis has intensified, bringing renewed Houthi attacks and security risks that are reshaping shipping routes and impacting global logistics. According to UK Maritime Trade Operations (UKMTO), recent incidents include three explosions near the bulk carrier Motaro, while Houthis have also claimed missile and drone strikes on Maersk vessels Maersk Kowloon and SC Montreal in the Arabian Sea, though these claims remain unconfirmed. Despite these security threats, CMA CGM has begun cautiously resuming Suez routing for several Asia-Europe services, even as other Ocean Alliance partners continue to divert around the Cape of Good Hope. Key CMA CGM services now returning to the Suez route include the BEX2, FAL1, MEX, EPIC, LMX, and INDAMEX services. Recent transits include vessels like the CMA CGM Jules Verne, which recently sailed via Djibouti enroute to Jeddah, and the CMA CGM Pelleas, scheduled to take the Suez route later in November. These routes have seen repeated risks, with CMA CGM vessels like Groton and Lobivia suffering drone attacks in July and August, causing fires onboard. However, CMA CGM's willingness to continue operations through the Red Sea, while maintaining high risk tolerance, distinguishes it from other carriers that have opted for the longer Cape route. The extensive diversions around the Cape of Good Hope have led to a 17.2% increase in global TEU-mile demand in 2024, setting a new baseline for higher freight rates. With Far East to West Coast U.S. rates now up by 241% from pre-crisis levels, this trend has impacted costs industry-wide, especially in light of extended transit times and growing demand for additional shipping capacity. US importers, adjusting to these shifts, are increasingly routing goods through West Coast ports and relying on rail transport to reach the East Coast, a return to pre-COVID logistics patterns. As carriers explore alternative routes and near-shoring opportunities in Central and South America, the industry anticipates further adaptation into 2025, with higher freight rates and evolving supply chain strategies becoming the "new normal."

World Trade Organisation (WTO) in October released their update of the Global Trade Outlook and Statistics.           Report Highlights:- Trade Growth Forecast: World merchandise trade is projected to grow by 2.7% in 2024, with GDP growth stable at 2.7%. Regional Disparities: Asia leads with a 4.0% economic growth forecast, while Europe lags with 1.1%, particularly due to Germany's weak performance. Price Trends: Trade volumes rose, but flat dollar values indicate a 2.6% drop in export/import prices. Risk Factors: Geopolitical tensions, especially in the Middle East, pose a downside risk, potentially impacting shipping and energy prices. Monetary Policy Easing: Lower inflation allows for interest rate cuts, potentially boosting consumption and investment. Regional Import/Export Shifts: Asia's export growth is robust, while Europe's trade is subdued; European imports from China are declining, shifting towards India and Vietnam. Energy Costs: Energy prices have fallen from 2022 highs but remain elevated in Europe and Japan relative to the U.S. Supply Chain Fragmentation: There is evidence of trade re-orienting along geopolitical lines, especially in low-complexity goods since the Ukraine conflict. United Nations Conference on Trade and Development (UNCTAD) in October released the Review of Maritime Transport.           Report Highlights:- Maritime Trade Growth: Global trade rose 2.4% in 2023; 2024 forecast is 2% with containerised trade at 3.5%. Increased Freight Distances: Ton-miles grew 4.2% in 2023 due to Red Sea and Panama Canal disruptions. Containerised Trade Challenges: Minimal growth (0.4%) in 2023 amid economic uncertainties, with East–West routes holding 36% of volume.

• Coal and Gas Demand: Coal led growth at 7.1%; gas trade expected to grow 8.2% in 2024.
• Chokepoint Disruptions: Suez and Panama Canal issues raised freight rates and rerouted vessels.
• Energy Shift: Investments in LNG infrastructure and cleaner routes boost gas trade.
• Policy Focus: Emphasis on resilient infrastructure, decarbonisation, and global cooperation at chokepoints.

• Shipping Competition
• CMA CGM has voiced reservations regarding the French government's proposed windfall tax, with its CFO Ramon Fernandez warning that the levy would create a "competitive disadvantage" by diverting funds from potential fleet investments. This stance contrasts with CEO Rodolphe Saadé's earlier acceptance of the tax, when he had said CMA CGM would "take its share" if a solidarity measure on profitable companies was imposed. The windfall tax is part of France's effort to address a €60 billion budget gap, alongside tax increases for wealthy households and spending cuts.
  While initially supportive of the tax as a temporary contribution, Saadé's recent comments reveal frustration over perceived inconsistencies in governmental support. Reflecting on times when the company struggled, Saadé remarked in a Senate hearing, "When my freight rates were at $350, where were you?" He pointed out that during difficult times, CMA CGM had to "figure it out" independently, underscoring his position that the company is a "patriotic" French asset that reinvests locally and employs French workers.
• Hapag-Lloyd and Maersk leaders reaffirmed their commitment to the upcoming Gemini Cooperation at a meeting in Amsterdam, targeting 90% service reliability. Launching on 1 February, the alliance will use a hub-and-spoke model to improve mainliner and transhipment stability, significantly above the current industry average of 53%.
  Despite potential route adjustments due to Red Sea conflicts, the alliance's 57 services across seven trade lanes, with structured transhipment hubs, aim to set a new reliability benchmark without compromising service standards. The Gemini network, which will feature 29 mainline services, supported by 28 regional shuttles, using around 340 vessels with a combined capacity of 3.7 million TEU, will also launch via the Cape of Good Hope instead of the Red Sea.
• ACCC is reviewing Qube Holdings' proposed acquisition of MIRRAT's Melbourne automotive terminal due to potential competition concerns. With Qube already operating key terminals, the acquisition could impact competition in automotive services. Qube has offered an undertaking to ensure fair access and prevent discrimination against competitors. Public feedback is open until 7 November 2024 and can be submitted here.

• Mergers/Acquisitions
• SingPost - Singapore Post (SingPost) is still looking to sell its Australian logistics asset, Freight Management Holdings (FMH), which includes key subsidiaries CouriersPlease, Border Express, and efm Logistics. These companies represent crucial components of SingPost's logistics operations in Australia, with CouriersPlease focused on parcel deliveries, Border Express handling pallet and parcel distribution, and efm Logistics providing broader transport and supply chain solutions. The entire FMH portfolio is valued at approximately $1 billion, underscoring its significant role in the Australian logistics sector.
  Equity firm Blackstone has taken a lead in the bidding, having submitted a non-binding offer. SingPost had previously focused on integrating CouriersPlease into FMH to drive synergies, but is now pursuing a sale of its Australian assets amid ongoing investor concerns regarding challenges in its traditional postal business. SingPost's Australian operations have demonstrated strong performance, achieving $921.3 million in revenue and $63.2 million in operating profit over the last financial year, buoyed by new customer acquisitions and volume increases.
• CEVA Logistics has acquired Horoz Bolloré Logistics, a Turkish joint venture between Bolloré Logistics and Horoz Logistics. This acquisition will be fully integrated into CEVA's operations in Turkey, enhancing its service offerings and expanding its international logistics capabilities. CEVA, owned by CMA CGM, expressed confidence that combining the strengths of both firms will allow them to deliver more agile, flexible, and customer-focused logistics solutions in the region.
• MSC has acquired a 56.47% majority stake in Brazilian port and maritime logistics operator Wilson Sons for R$4.352 billion (around US$765 million) from Ocean Wilsons. The deal, expected to close in the latter half of 2025, is subject to regulatory approvals.
• COSCO has invested $110 million to acquire 12.5% and 30% stakes in Thailand's Laem Chabang Port terminals, TLT and HLT, from Hutchison Ports. This acquisition includes several key berths, with a projected annual capacity of 6.7 million TEUs upon completion. COSCO states this move will strengthen trade ties between China and Thailand. PSA Terminal in Singapore is the Chinese firm's only other Southeast Asian port holding. 
• ICTSI - A South African court has temporarily blocked International Container Terminal Services, Inc. (ICTSI) from taking over operations at Durban's container terminal. APM Terminals, which lost the bid, challenged the 25-year contract, arguing ICTSI failed to meet necessary solvency criteria. The court found potential flaws in the awarding process, noting ICTSI may have received allowances not offered to APM and other bidders. This delay stalls South Africa's push toward port privatisation and will likely extend into next year.

• Schedule Reliability
• Schedule reliability has declined by 1.2% month-on-month down to 51.4%, staying in the YTD trend at the 50-55% mark. On a year-on-year basis, schedule reliability was 13% lower than the same period last year (Sep 2023: 64.4%). 
• The average delay for LATE vessel arrivals has deteriorated, increasing to 5.67 days. Which historically is only surpassed by the pandemic highs of 2021-2022. At the same period last year, the figure was 1.09 days lower at 4.58 days. 
• Maersk was the most reliable top-13 carrier in September 2024 with schedule reliability of 55.5%, followed by CMA CGM with 50.9%. All other carriers were below the 50% mark. 
• Maersk has announced plans to finalise schedules by November as it restructures its route network for the new Gemini Cooperation with Hapag-Lloyd, set to launch in February 2025. The alliance aims for a lofty 90% on-time performance by June 2025, a substantial improvement from the current industry standard of 50-55%.
  The Gemini Cooperation will streamline port operations by reducing port calls and focusing on efficient hub-based routes, such as cutting stops from 10-15 to seven on routes like Shanghai to Aarhus. Achieving this goal will require key port improvements; Maersk has highlighted the need for a 10% efficiency boost at major hubs like Shanghai, with efforts focused on better crane management and terminal coordination to enhance performance.

               
                                                                                             SOURCE: SEA-INTELLIGENCE

• Cancellations - Blank sailings increasing
• Global - 64 cancelled sailings have been announced between week 44 (21 Oct-27 Oct) and week 48 (18 Nov-24 Nov), out of a total of 693 scheduled sailings, representing 9% cancellation rate. During this period, 61% of the blank sailings will occur on the Transpacific Eastbound, 27% on the Asia-North Europe and Med and 12% on the Transatlantic Westbound trade.
• OCEAN Alliance have announced 16 cancellations, followed by THE Alliance and 2M with 15 and 11 cancellations, respectively. During the same period, 22 blank sailings have been implemented by non-Alliance services. 
• Australia - Based on October schedule data ex China to Australia, only 1 cancelled sailing has been announced at time of publishing, out of a total of 69 scheduled sailings, representing a 1.5% cancellation rate. 

            
                                                                                             SOURCE: DREWRY

• Orderbook / Scrapping
• OOCL has signed a $1.6 billion in 15-year charters for six 13,000 TEU ships, due between 2026 and 2028, to strengthen its fleet amid rising demand?.
• Record Container Orders in Q3 2024 - Orders for 2.3 million TEU in Q3 2024 set a new record, reflecting high demand for capacity and strong industry growth forecasts?.
• Maersk's LNG Dual-Fuel Investment - Maersk ordered up to twelve 16,000 TEU bio-LNG dual-fuel ships from China, aligning with its decarbonisation strategy and steady fleet renewal plan through 2030.
• Fleet Renewals - facing an ageing fleet with 683 vessels over 20 years old, the top 10 ocean carriers have a record-breaking 5.9 million TEU on order, nearly half of which will replace older ships. This push, fuelled by emissions targets, includes dual-fuel vessels aimed at improving efficiency and reducing carbon output. Maersk and others are investing in dual-fuel vessels to meet these demands?.

• Latest orderbook volumes:

• Sustainability
• IMO's Marine Environment Protection Committee (MEPC) 82, held in October 2024, was anticipated to set a carbon levy for shipping emissions, however any decisions were deferred to MEPC 83 scheduled for April 2025 due to key unresolved issues:
• Diverging Positions Among Nations: While many countries support a carbon levy to fund climate resilience efforts, others expressed concerns about the economic burden it could place on trade.
• Disagreement on Levy Amounts: Proposed amounts vary widely, with vulnerable nations advocating for a high rate of $100 per tonne to address urgent climate risks.
• Revenue Allocation Disputes: Some countries want levy proceeds directed toward climate adaptation and clean energy in vulnerable regions, while others are cautious of potential economic impacts.
• Concerns from Developing Nations: Nations dependent on maritime trade worry the levy might lead to higher shipping costs, affecting food security and essential imports.
• Carbon Emissions Index (CEI) for ocean shipping in Q3 2024 hit a record 107.9 points, driven by Red Sea conflicts, rising freight rates, and global congestion. Routes rerouted around the Cape of Good Hope, particularly between the Far East and the Mediterranean, saw the sharpest emission increases, with fronthaul emissions up 60.1% year-on-year. Reduced carbon efficiency has become a lower priority as carriers face capacity strains, smaller backhaul vessels, and rising speeds to meet schedules, increasing emissions per tonne. The uneven trade balance, with slower growth in exports from Europe and the U.S. to the Far East, further adds to this environmental strain.

·         

• Maritime and Port Authority of Singapore (MPA), overseeing the world's largest vessel refuelling hub, will introduce standards for methanol and ammonia bunkering by 2024 and 2025. These new guidelines will address safety, transfer protocols, and crew training to support safer use of alternative fuels aimed at reducing shipping emissions. 
• CMA CGM and SUEZ have partnered to produce biomethane in Europe, aiming to decarbonise shipping. SUEZ will supply up to 100,000 tonnes of biomethane annually by 2030, while both companies will invest €100 million in production facilities and collaborate on biofuel technology. This aligns with CMA CGM's net-zero carbon goal by 2050, leveraging SUEZ's expertise in sustainable energy from waste.
• Mitsui OSK Lines, K-Line, and Hafnia are in early talks to join the Green and Digital Shipping Corridor (GDSC) between Singapore and Los Angeles/Long Beach, aiming to advance decarbonisation efforts through net-zero fuels and energy-efficient tech. Announced by Singapore's Maritime & Port Authority at the Singapore International Bunkering Conference, this collaboration would boost sustainable shipping innovations along the route. The GDSC, now extending globally, includes partnerships with ports in Rotterdam, Australia, China, Japan, and the US to promote green practices across major shipping corridors.
• Ocean Network Express (ONE) has reported a 62% decrease in scope one emissions intensity, aiming for a 70% reduction on a TEU-km basis compared to 2008 levels. From 2018 to 2023, emissions fell by 21%, with a target of net zero emissions across all scopes by 2050.
  Key initiatives include trials for wind propulsion, onshore power supply, and a successful biofuel program. In January 2024, ONE ordered twelve methanol dual-fuel container ships, scheduled for delivery starting in 2027, highlighting ONE's commitment to addressing climate change and enhancing sustainability.
• EU ETS extension - Shipping companies are now required to submit their initial ETS allowances by 30 September 2025 to account for emissions recorded in 2024. The proportion of emissions that must be offset by allowances will progressively rise each year as follows:
         - 2025: 40% of emissions reported for 2024 must be covered by allowances
         - 2026: 70% of emissions reported for 2025
         - 2027 onward: 100% of emissions must be covered

·        Terminal and Port Update - 

o   Patrick terminals

§  Brisbane: Delays approx. 0 - 0.5 day 

§  Fremantle: Delays approx. 1 - 2 days

§  Sydney: Delays approx. 3 - 4 days

§  Melbourne: Delays approx. 1 - 2 days

§  Patrick's East Swanson Dock in Melbourne recently hosted two record-breaking vessels within a week. Following the previous week handling of the 10,622 TEU "CMA CGM Volga", the terminal welcomed Seaspan Breeze on October 25 marking the largest vessel by length (337m) and width (48.2m) ever to dock there. This milestone demonstrates the terminal's capacity to handle larger vessels.

o   DP World Terminals

§  Brisbane: Delays approx. 1 - 2 days

§  Fremantle: Delays approx. 1 - 2 days

§  Sydney: Delays approx. 3 - 4 days

§  Melbourne: Delays approx. 1 - 2 days

o   VICT

§  Melbourne: Delays approx. 0.5 day

§  VICT have announced that they are now able to offer customers 14.4 Rural Tailgate Inspections within their terminal.

§  VICT have received their 5 millionth TEU since starting operations in 2017 at the Port of Melbourne.

·         

o   AAT

§  Brisbane: Vessel bunching evident, but working with minimal delays.

§  Port Kembla: Working with minimal delays.

§  Melbourne: Working with minimal delays.

§  AAT Brisbane took receipt of a new Liebherr LPS 550 rail-mounted portal crane, delivered onboard MV "UHL Fable." The crane is expected to be fully operational by early November 2024. This addition brings AAT's crane capabilities at Fisherman Islands to two identical LPS 550 cranes, each with a 144T capacity (230T in dual lift), alongside a Pacific 2000 STS crane. The new crane will boost shore-based productivity, aiming to reduce vessel dwell times and improve efficiency at the facility.

o   MIRRAT

§  Melbourne: Working with minimal delays.  

o   New Zealand 

§  Auckland: minimal delays approx. 1 - 2 days

§  Tauranga: minimal delays approx. 1 - 2 days

§  Napier: minimal delays approx. 1 - 2 days

§  Lyttleton: minimal delays approx. 1 - 2 days     

o   DP World Australia has announced a 60-day notice for increased Landside and Ancillary Charges at its terminals, effective 1 January 2025. The changes are said to be driven by a $900 million investment plan over the next three years to enhance efficiency and meet rising landside demand. Key cost drivers mentioned also include a 7% workforce cost increase, 6%+ rises in electricity and security, and a 21% hike in insurance. DPWA invites industry feedback ahead of a final notice, expected by 1 December 2024. Access the announcement here.

§  Terminal Access Charges (TAC) will increase by 5% in Fremantle and 9.89% in Sydney, Melbourne & Brisbane.

§  All other ancillary charges have been increased anywhere between 5-25%.

o   Port of Melbourne have appointed Debbie Goodin as new board chair from 1st March 2025 when Debbie succeeds the incumbent in John Stanhope, who has led the port since privatisation in 2016 when they began their 50 year
lease from the Victorian Government.

o   Los Angeles and Long Beach achieved record-breaking cargo volumes in Q3, surpassing even pandemic peaks. Los Angeles handled 954,706 TEUs in September, a 27% increase from last year, contributing to its busiest quarter ever with 2.85 million TEUs (up 18% year-to-date). Long Beach also set a record, moving 829,499 TEUs in September, a 2% rise in imports, continuing a trend of strong growth across both ports.

·        Global Port Congestion Hotspots

o   Ningbo, Shanghai, and Qingdao are still facing severe congestion. Currently 72 ships are in port across these three locations, however an additional 102 vessels are anchored and awaiting their turn. This represents 18% of all vessels anchored globally!

·         

o   Vessel Bunching - We could soon see more vessel bunching issues in Australia, with Sea-Intelligence's recent analysis highlighting that vessel bunching has surged to levels close to the pandemic era, significantly straining container ports worldwide. This resurgence is largely attributed to the Red Sea crisis, forcing container ships to bypass the Suez Canal and reroute via the Cape of Good Hope, resulting in overlapping vessel arrivals and increased congestion. The Asia-Europe trade lane, particularly affected, now mirrors the COVID-period scheduling chaos. In Singapore, about 90% of vessels are arriving off-schedule, while port stays have extended by 22% compared to 2023. Mounting pressure shows no signs of relief, with congestion likely to persist. 

• Equipment
• Shortages of container equipment remain a challenge but show gradual improvement. Contributing factors include extended transit times, high demand, and ongoing port congestion, particularly impacting Asia and North America. 
• CIMC, the world's largest container manufacturer, anticipates a net profit of USD 200-300 million for the first nine months of 2024—a 233%-304% increase year-on-year. Rising demand pushed dry container sales to 1,382,700 TEUs in H1 2024, up 425% from 263,100 TEUs in 2023. Extended shipping routes around Africa, due to the Red Sea conflict, have fueled this growth. An attempted acquisition of Maersk's container factories by CIMC was halted in April by competition authorities over market concentration concerns in reefer containers.
• DP World Expands with 47,000 Containers - In a strategic move to address container shortages and enhance its supply chain services, DP World has acquired a fleet of 47,000 containers for the first time. This acquisition ensures customers will have consistent access to container capacity, even during peak periods or disruptions. By investing in these containers, DP World aims to cut maintenance costs and improve service reliability, benefiting customers with streamlined, end-to-end cargo handling. 
• CAI International invests $1.35 billion in container expansion amid shipping disruptions - In response to ongoing disruptions, particularly in the Red Sea region, CAI International, backed by Mitsubishi HC Capital, has invested $1.35 billion to add 700,000 new containers to its fleet, expanding by 20% with an additional 10% reserved for refrigerated units. This growth is aimed at meeting high demand in the container leasing market and positioning CAI as a key supplier amidst global shipping challenges. Mitsubishi HC Capital views this investment as essential for adapting to dynamic market needs, ensuring that CAI remains agile and responsive to increased pressure on shipping routes.

• Enterprise Agreements 
• Montreal Port dockworkers from Canadian Union of Public Employees (CUPE) will strike indefinitely starting Thursday, October 31, targeting Termont, the operator of two major container terminals that handle MSC shipments. This comes amid a long-standing dispute over work schedules affecting 40% of Montreal's container traffic. The union, without a contract throughout 2024, claims the schedule changes negatively impact work-life balance, while agreeing to a 20% wage increase over four years if an agreement on work schedules can be reached. 
• US East & Gulf Coast Ports -  Negotiations between the International Longshoremen's Association (ILA) and the US Maritime Alliance (USMX) will resume in November to finalise a master agreement, following a recent interim deal expiring on 15 January 2025. This dispute has led to a historic strike involving 45,000 dockworkers, the first since 1977. A key agreement on 3 October secured a 61.5% wage increase over six years. Remaining issues, including automation and job guarantees for ILA members, will be addressed in the upcoming talks. Based on estimates by the Journal of Commerce (JOC), the tentative wage agreement reached between longshore workers and maritime employers could add up to $5 billion in new labour costs on the waterfront over the six-year duration of the upcoming contract. Meanwhile, President Joe Biden has set aside USD 3 billion for US ports. The funds come as an offshoot of the President's Inflation Reduction Act and will be used to create union jobs and upgrade port infrastructure to "cleaner equipment".
• Qube Ports - Shipping Australia (SAL) reports that a seven-day strike commenced at Brisbane and Darwin ports at 12:01 a.m. on October 25 as part of the Qube Ports and Maritime Union of Australia (MUA) enterprise bargaining negotiations. The strike includes stringent work limitations, with eight-hour shifts starting exclusively at 0700, 1500, or 2300, and prohibits any shift extensions or schedule changes. Additional restrictions include no work during breaks, a speed cap of 15 km/h for PCC and ro-ro operations, and no work outside designated shifts. Daily one-hour stoppages are scheduled at 0530, 1330, and 2130. Qube Ports are expected to communicate with customers directly regarding affected vessels during this period.
• AAT and VICT are the next of the major Australian terminals approaching the end of their current enterprise agreements, with negotiations expected to have commenced at both :                          

• Global Air Freight  
• Spot Rate Increase: Global air cargo spot rate stands at $2.61 per kilogram, reflecting a 3% increase compared to the same period last year ($2.37 per kilogram), indicating a moderate rise in air cargo costs globally. 
• Asia Pacific: Rates in the Asia Pacific region have shown strong momentum, increasing by 7% in the last two weeks compared to the preceding two weeks, reflecting heightened demand or potential constraints in capacity.
• North America and Europe: Rates rose by 2% year-over-year in both regions, indicating a stable but steady increase in pricing across these major markets.
• Volumes continued to surge during October in all regions except North America:
• Asia Pacific: This region experienced a substantial year-over-year surge of 48% in chargeable weight, likely due to seasonal demand, increased exports, or shifts in supply chain dynamics toward Asian hubs. 
• Central & South America: A strong 16% growth in chargeable weight over the last two weeks compared to the previous two weeks highlights increasing activity, fuelled by growth in agricultural or perishables exports.
• Europe: Volumes increased modestly by 3% year-over-year, indicating consistent, steady demand without drastic fluctuations.
• North America: In contrast, North America's chargeable weight saw a 7% decrease year-over-year, potentially reflecting shifts in trade flows, reduced demand, or inventory adjustments in the market.
• Capacity:

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• Global Capacity Growth: Worldwide air cargo capacity expanded by 7% year-over-year, supporting the increased volumes observed in several regions.
• Asia Pacific and North America: Capacity in these regions grew robustly by 8% each year-over-year, suggesting that carriers are scaling up to meet demand.
• Europe and the Middle East/South Asia: Both regions recorded a 7% increase in capacity compared to last year, which may help moderate rate hikes and support market stability amidst increasing cargo needs.
• US Air Cargo Advance Screening (ACAS) Enhancements - From 12 November 2024, US Customs and Border Protection (CBP) will enforce the rejection of vague cargo descriptions in ACAS filings for all air freight to the US. Non-compliant descriptions will result in freight not being loaded at origin until amended, potentially impacting entire shipments. Read more here.
• Four arrested over explosive/incendiary parcels - Arrests over Polish authorities have arrested four individuals accused of endangering DHL aircraft and crew by allegedly dispatching parcels containing hidden explosives to destinations in the EU, Canada, the UK, and the US. These packages were reportedly designed to ignite or explode during transit. The arrests come amid heightened concerns over suspected Russian involvement in planting explosives within European supply chains. In response, Poland has closed Russia's consulate in Poznan, citing these sabotage attempts. 
  This situation has prompted the Department of Home Affairs (DoHA) in Australia, along with US and Canadian authorities, to implement stricter air cargo security measures. These enhanced protocols aim to mitigate potential risks associated with such threats.
• Amazon Air has officially entered the cargo market, now offering its aircraft capacity to third-party customers for ad hoc and charter services across North America, EMEA, and Asia. The service provides freight forwarders and logistics providers with options on over 100 aircraft and 250 daily flights, including partner airlines, and is available to book through blocked space, ad hoc, or charter arrangements with a fleet that includes Boeing 737, Boeing 767, and Airbus A330 aircraft.