Shipping Outlook

The pressure is building again as we head towards China’s Golden Week, with congestion, vessel delays and tightening capacity creating another challenging period for Australian importers.

China’s upcoming Mid-Autumn Festival and National Day holidays will create an extended holiday period from 25 September to 7 October. While some businesses will continue operating between the two holidays, many will take advantage of the extended break. This is expected to create a rush of cargo in the lead-up, with peak shipment volumes expected around Week 38, so we may not have seen the full impact yet.

East China is already under pressure. At Shanghai, average vessel waiting times have increased to around 5.2 days, with more vessels sitting at anchor and terminal handling under strain. This is contributing to delays on some services and making already unreliable schedules even harder to predict.

Ningbo is facing similar issues, with yard occupancy reaching 92-95% of available capacity. The port is still working through backlogs from recent typhoons, while tighter controls are being placed on the gate-in of laden containers.

When yards become this congested, it can have a direct impact on the local supply chain. Truck queues increase, drop-off costs rise and there is a greater risk of containers being rejected if terminals simply do not have the space to accept them.

Trucking costs are also expected to increase by around USD 150 per truck before and after the holiday, adding further cost to shipments moving through China.

It’s feeling a little bit like Groundhog Day for the industry. Higher freight rates, vessel delays, blank sailings and schedules that are becoming increasingly difficult to rely on are once again creating uncertainty.

Typhoon-related congestion across China, combined with bottlenecks at Busan, Hong Kong and Singapore, continues to tie up vessel capacity and put further pressure on rates and schedules.

Despite the challenges, global container volumes remain strong, with July volumes reaching a record 17.3 million TEU, up 4.5% on the same month last year. Strong demand means there is little room for the network to absorb further disruption.

The Suez Canal is also gradually seeing an increase in vessel transits, with some carriers cautiously testing the Red Sea route again. It is still too early to call this a return to normal, but it is something worth watching.

For Australian importers, the message is much the same as last month .. plan early. With the Golden Week cargo rush still ahead, bookings are tightening and further rate increases are possible as we move into Q4.

If you have cargo moving from China around this period, it is worth getting bookings in early and allowing additional time for delays.

The next few weeks could be particularly busy.

Thanks - Amanda