May Industry Update

Oceania

• The Australian Government revealed the federal budget for the 2024-2025 financial year. Australia's maritime and logistics will benefit from its $1 billion for rail, $26 million for the development of Australia's strategic fleet, and $237 million over seven years to support aviation, road, rail and maritime transport priorities. Additionally, $22.7 billion will be distributed throughout five industries, including renewable hydrogen, critical minerals processing, green metals, low-carbon liquid fuels, and clean energy manufacturing. This initiative is facilitated by the Future Made in Australia Act (FMIA) to bolster private sector investment into clean energy projects in Australia.
• The West Gate Tunnel Project will enter its new phase in June, constructing a new 2.5-kilometre cycling path above Footscray Road. During this construction period, the surrounding area will experience several road closures and traffic disruptions, along with limited access to the Port of Melbourne.

• Container shortage is a major problem now, including in Australia. Due to the substantial increase in sea freight in the Middle East and Southeast Asia, shipping lines are prioritizing equipment for these routes. Forwarders are unable to pick up containers in main ports, especially 40HQ. Shipping to Western Australia has become particularly challenging as most shipments to WA transit through Southeast Asia. This high demand for Middle East and Southeast Asian bookings has caused one-way sea freight costs to exceed those from China to WA directly, and equipment allocation for WA shipments has also diminished.
• Average delays at Australian ports are reducing. The biggest drop was at DPW Brisbane, from five days of average delays down to two, followed by Patricks Fremantle, dropping from 3 to 1,5 days. DPW Fremantle, however, went from no delays in April to 2 days in May. Most terminals are experiencing delays of two days or less in May, but this is still too excessive for services seeking fixed-day reliability. None of the top 13 carriers recorded a year-over-year increase in schedule reliability.

• Operations at the port of Noumea are returning back to normal after the recent unrest in New Caledonia. Carriers said at this stage it was unclear what damage customers may have suffered during the riots and whether they are in a position to collect containers from the port.

Asia

• Singapore Port, the second busiest globally, is facing severe congestion with a total capacity of 450,000 TEU awaiting and delays stretching up to 7 days. This congestion is primarily a result of ongoing vessel diversions linked to the Red Sea crisis. Some carriers have omitted their planned Singapore calls, resulting in increased volumes at downstream ports, especially in the Asia-Europe trade lanes.
• The shipping peak season commenced earlier this year. Several shipping lines, such as Maersk, ANL, and CMA CGM, have recently announced Peak Season Surcharge (PSS) rates of up to $1,000 for 20ft containers and reefers, and $2,000 for 40 ft containers, depending on the trade lane.
• In May, bad weather led to varying degrees of port congestion in Asia, causing delays of 4-7 days and rolling issues. Ports in China, including Shanghai and Ningbo, were impacted by fog, whereas Malaysia and Singapore experienced torrential rain and poor visibility.
• Container production reached a post-Covid peak of 521,000 TEU in April 2024 due to the surge in container demand. Since the manufacturing slots in container factories are fully booked until the end of July, Evergreen Marine Corporation (EMC) is turning to its in-house container manufacturer for more containers. The Taiwanese shipping company is ordering 17,500 containers from Evergreen Heavy Industrial Corp. in Malaysia, for a total price of US$65.17 million.

America

• President Joe Biden has announced significant tariff increases on various Chinese imports, including EV batteries, solar cells, computer chips, ship-to-shore cranes, some critical minerals and medical products. The measures are scheduled to take effect on 1 August as part of a broader trade strategy to combat unfair Chinese trade practices and intellectual property theft. New duty rates will also affect over 380 other product categories, each with its own timeline for implementation.
• The Panama Canal Authority (PCA) will increase the daily transit slots for vessels to 32, up from the previous 31 slots set on May 16. Although this falls short of the usual average of 37-39 per day during normal operations, the PCA aims for full operational recovery by early 2025.
• After more than 60 days since the collapse of the Key Bridge, Dali was successfully refloated and returned to the Seagirt Marine Terminal, its initial departure before the incident in March. However, the vessel's 21 crew members remain onboard without a firm timetable for their release. In early May, the main section of the channel of the Patapsco River was cleared, allowing commercial vessels to embark from the Port of Baltimore.

Europe

• French ports are facing strikes until the end of June on days 4, 6, 10, 12, 14, 18, 20, 24, 26 and 28, with four-hour stoppages from 10:00 to 16:00. Organised by the Union of Transport and Logistics Companies of France in light of pension and labour concerns, these strikes will prompt seafarers to pause work during the scheduled periods. In addition to disrupting container removal operations and docking, these work stoppages are making the gate-in of containers very difficult, and some containers are being rolled from vessel to vessel.

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