Acute Demand for Space from China into Australia

To our Valued Customers,

We wish to highlight that there is an acute demand for space ex China into Australia.

Earlier this year the shipping lines pulled out a massive amount of capacity from the China to Australia trade as COVID-19 hit to match the fall in demand. They had to do this to protect their balance sheets. The China to Australia trade volume figures for the first four months of 2020 were negative versus the same period last year. The demand situation then changed as follows.

May 2020 – import volumes increased 10.58% versus May 2019.
June 2020 – import volumes increased 24.34% versus June 2019.
July 2020 – import volumes increased 16% versus June 2019.

For weeks now we have seen the shipping line’s push through regular market rate increases every 15 days or so. This will continue as the demand for space exceeds the available supply of space. This demand for space is expected to continue for many months to come as the capacity pulled out of the trade earlier this year has not returned, and the shipping line blank sailings have continued. Meanwhile Australian consumer spending is driving the higher demand for space versus this time last year.

The shipping line’s have begun to enforce booking cut offs of as early as 14 days before actual sailing and in addition we are now seeing some instances of shipping lines ceasing to accept bookings even for spot or market rate cargo. We have always operated in the past on the requirement to receive bookings two weeks in advance in peak season. The reality is this year the peak started in May. To minimise booking delays, we ask all customers to provide as much lead time as possible (preferably +3 weeks in advance).

Please note that additional information provided by the shipping lines around the service capacity reductions can be accessed via the following links.