Global freight markets are navigating sharply rising rates, geopolitical challenges, and operational disruptions. Despite record-high container trade in 2024, volumes dipped in September, while global port congestion persists, particularly in Asia. Geopolitical tensions, such as trade policy shifts under the US President-elect and security threats in the Baltic and Red Seas, further complicate the landscape.
In air freight, rising demand and capacity expansions highlight a recovery, especially in the Asia-Pacific region, driven by e-commerce and seasonal peaks. Sustainability efforts are gaining traction, with initiatives like green methanol adoption and expanded emissions trading in the EU.
Ongoing terminal delays, congestion, rate restoration activities and infrastructure challenges continue to underscore the need for adaptive strategies.
Rates / Rate Restorations
Drewry’s World Container Index rose 3.7% in the past month but dropped 2% last week. Freight market rates are 141% higher than last year. The average index is $3,966, exceeding the 10-year average by $1,116.
ZIM and ANL announced rate restorations for shipments from North East Asia to Australia. ANL increased its Hazardous Cargo Surcharge, OOCL raised its Documentation Fee, and MSC adjusted its Australian Import Detention tariff, effective January 2025.
Supply / Demand
Container trade hit record highs this year, with August seeing peak volumes. September experienced a 5.9% drop, the first significant decline, but YoY volumes are still over 2% higher.
Geopolitical Issues
US Election Fallout
Following the November election, President-elect Donald Trump has signalled plans for protectionist trade policies, impacting global trade and economic relations. He intends to impose tariffs on imports from China, Mexico, and Canada and has threatened high tariffs on BRICS nations if they move away from the US dollar. Canadian Prime Minister Justin Trudeau has engaged with Trump to address potential trade impacts. These announcements have caused market volatility, particularly in the automotive sector. The administration aims to protect American industries, reduce trade deficits, and address national security concerns.
Baltic Sea
The Chinese bulk carrier Yi Peng 3 is being investigated for allegedly damaging undersea data cables in the Baltic Sea, affecting connections between Finland, Germany, Sweden, and Lithuania. Swedish authorities have requested cooperation from China and inspection of the vessel, which is currently monitored by Danish naval forces. The investigation, suspected to involve Russian intelligence, may increase regional tensions and lead to stricter shipping regulations.
Red Sea
Israel and Hezbollah have agreed to a US-mediated ceasefire in Lebanon, but it doesn’t address Houthi demands about Gaza, leaving Red Sea shipping threats unresolved. Houthi attacks remain steady, with 110 incidents reported since November 2023. Trade between India, the Middle East, and the Red Sea is expanding, with new shipping services despite security risks. Companies are avoiding the Suez Canal to cut costs, highlighting growing competition and opportunities in the region’s shipping market.
Panama Canal
The Panama Canal Authority is considering a costly land bridge targeting cargo on ultra-large container vessels, facing scepticism due to high costs. Industry leaders prefer ships over land transport. Concurrently, Mexico’s rail project competes for regional cargo needs, while ACP plans a $1.6 billion reservoir and dam to boost canal capacity and drought resilience.
Schedule Reliability
Schedule reliability improved slightly to 51.5% but remains lower than last year. Average delays for late arrivals decreased to 5.72 days, still higher than last year’s 4.58 days. Maersk led in reliability among top carriers, while Maersk and Hapag Lloyd are releasing schedules for their Gemini Cooperation in February 2025.
Cancellations / Blank sailings
Cancellations of sailings are on the rise, with a global cancellation rate of 10% and an 8.5% rate for routes from China to Australia.
Equipment
The Port of Los Angeles and Long Beach are dealing with a surge in empty containers, with over 120,000 awaiting removal. Key shipping routes, like Asia-Europe, are hindered by a shortage of containers at Chinese ports, and congestion in Shanghai is worsening the situation.
Global Port Congestion Hotspots
- Container ship upsizing is causing global port congestion by tying up fleet capacity and creating yard bottlenecks. Ports must adapt, and collaboration between terminals and shipping lines is crucial. Southeast Asia, especially Singapore, is a congestion hotspot. CMA CGM and partners are seeking solutions to improve yard fluidity.
- Shanghai, Ningbo and Qingdao are still facing severe congestion. Congestion at Shanghai and Ningbo has increased in the past month, with a significant rise in the vessels at anchorage.
Global Air Freight Market
Spot Rate Increase
In November 2024, air freight rates rose due to strong seasonal demand, with global rates hitting $2.79 per kilogram. North America and Europe saw significant increases, while spot rates rose by 4% globally. Despite a 10% year-on-year rise in average rates, some routes, like China to the USA, experienced declines, illustrating regional rate complexities.
Tonnage
Global air freight tonnages remained stable in November, with notable regional differences. North America saw a 22% year-on-year increase due to the Thanksgiving holiday, while Central and South America experienced a 3% weekly rise. Africa, however, reported a 3% decline, highlighting the impact of regional demand and events on tonnage levels.
Market Trends
The air freight market is shifting capacity from Transatlantic to Asia-Pacific routes due to increased e-commerce from China and Hong Kong. Transatlantic capacity dropped by 10%, while Asia-Pacific increased by 7%. Forwarders securing early capacity have stabilised rates, reflecting dynamic market changes and strategic management.
Capacity
Air cargo capacity to and from Australia has consistently grown for 14 months, driven by a more than 10% increase in international belly capacity. This growth supports the transport of high-value, time-sensitive goods as passenger services recover and add belly space to air freight.
In the Asia-Pacific region, demand increased by 11.7% and capacity by 8.5%, highlighting the recovery and improvement of freight networks. E-commerce growth and seasonal peaks have effectively utilised this capacity, crucial for maintaining trade flows to and from Australia.
Sustainability
- Hapag-Lloyd has partnered with Goldwind to secure 250,000 tonnes of green methanol annually, aiming to cut emissions by 70% and support its Strategy 2030 for net-zero operations by 2045. Goldwind will build a plant in China, with production starting in 2026, aiding Hapag-Lloyd’s investment in low-emission technologies.
- From 2025, the EU Emissions Trading System will expand to cover 70% of emissions, up from 40% in 2024, significantly impacting operational costs and increasing surcharge amounts by an estimated 75%. Members should engage with carriers to adapt to these changes.
- Maersk retrofitted the Maersk Halifax for dual-fuel methanol use, adding a 15-metre extension to increase capacity and support net-zero goals. The ship returned to service, testing retrofit feasibility for decarbonisation.
- The Global Maritime Forum highlights the need for government support to make green shipping corridors viable, as high fuel costs and limited backing threaten progress. Despite launching 18 new initiatives in 2024, the industry risks missing its zero-emission targets without subsidies and innovative agreements.
Terminal and Port Update
Increases to Landside Tariffs
On 1 November, Patrick, VICT, and DP World issued 60-day notices advising of landside tariff increases set to take effect on 1 January 2025.
Patrick Terminals
- Brisbane: Delays approx. 0 – 0.5 day
- Fremantle: Delays approx. 1 – 2 days
- Sydney: Delays approx. 1 – 2 days
- Melbourne: Delays approx. 1 – 2 days
DP World Terminals
- Brisbane: Delays approx. 3 – 4 days
- Fremantle: Delays approx. 2 – 3 days
- Sydney: Delays approx. 1 – 2 days
- Melbourne: Delays approx. 3 – 4 days
VICT
- Melbourne: Delays approx. 0.5 day
- VICT is now accredited to handle 14.4 Rural Tailgate Inspections within their terminal
AAT
- Brisbane: Vessel bunching evident, but working with minimal delays
- Port Kembla: Berth congestion expected up until 8 December
- Melbourne: Working with minimal delays.
MIRRAT
Melbourne: Working with minimal delays
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
Port of Melbourne Protesters disrupted operations at Port of Melbourne, with pro-Palestine protesters on 22 November causing significant disruption, targeting trucks and port infrastructure. Protesters reportedly vandalised traffic lights, graffitied shipping containers, set rubbish alight, and sabotaged trucks by slashing tyres and cutting air lines, rendering vehicles immobile and posing safety risks.
Magellan Logistics provides freight and logistics services to all industries, including sea freight, air freight, customs clearance and the all-important digital freight portal, providing 24/7 visibility of all your shipments. Keeping customers abreast of changing market conditions is critical in what we do.
Our dedicated and professional team would love an opportunity to assist your business. If you have questions about the freight market update, please get in touch with one of our freight specialists at AUS 1800 595 463 or NZ (09) 974 4818.
Sources: With thanks to the FTA for their freight market update.
