Important Ocean Freight Update

27th May, 2024

Dear Customers,

It seems each day in shipping brings a new challenge currently. We will detail below the many global issues affecting rates and transit items, however from the top we want to let you know that that ocean freight services will be bumpy for a while yet.
 
We want to impress again the need to be sharing your orders with the SCC team at the earliest possible time, to ensure the best possible sailing it is optimum for us to have your orders on hand at least two weeks prior to the goods being ready. If you are not sharing orders with us until the time the cargo is ready it may take a few weeks to secure the booking that you require.
 
Our purpose at SCC is to provide the services to our customers to ensure that cargo is received by you when it is required, by including us earlier in the process we can better manage this for you.
 
The global supply chain issues affecting sea freight are many and, in some way, each affects the other.
 
Here are some of the issues and as you can see knowing when each might be resolved cannot be estimated, all we can do is plan for the moment we are currently in.

• Blank sailing ex China to Australia to continue in June and July, this removes capacity on our trade lane.
• Rate increases announced for June and indications are they will continue increasing in July.
• Ocean freight rates on EU, USA and South American trade lanes ex China are double the rate than the AU trade lane, some vessels have been moved to lanes that make more margins for the shipping lines. 
• Sailings to and from Europe are not going via the Red Sea due to the attacks in these waters, this extends the lead time by two weeks as vessels need to sail around the Cape of Good Hope.
• Longer transit times are impacting the availability of empty containers, 40’s in particular ex China are a problem.
• Shipping lines will make empties more readily available to trade lanes with higher margins, this alone confirms above point that rates to AU will increase further. 
• With rates increasing the gap between Name Account (NAC) rates and market rates is extensive, some shipping lines are already advising those on NAC’s that rates will need to increase from the agreed levels, the issue will be if not agreed then market rate containers will take priority on the bookings, again the margin wins.
• Volumes globally are up on previous years for the same period, this could be due to many businesses running down stock from 2022 and now needing to catch up. 
• The idle fleet is less than 1%, so know extra capacity to call up.

With these matters and others in play we are starting to see port congestion again, as a result where possible, we always recommend direct sailings to Australia, transhipment ports such as Singapore and Port Klang will be have delays.
 
As always, the SCC team is here to support you in anyway, please reach out to us if you would like further details or would like to arrange a call or meeting to discuss in greater details.

Please contact us on sales@sccargo.com.au