November Industry Update

AUSTRALIA

• Government Announcements were made this month regarding significant processing delays for import entry lodgments. The Department of Agriculture, Fisheries and Forestry reports ongoing high volumes of import entry lodgments, with delays expected to rise due to the Christmas peak period and for this season's biosecurity requirements of the 2024-25 Brown Marmorated Stink Bug management. This surge is currently limiting the government's ability to meet inspection timeframes for non-urgent commodities.?Continued diligence for ensuring import documentation is accurate and confirming shippers' fumigation providers' validity is essential to avoid compounding delays.
• Increases in airfreight capacity for the USA-Australian route: 1) American Airlines launched its longest route from Dallas-Fort Worth to Brisbane, boosting tourism, trade, and freight with five weekly flights, increasing to daily from December to March. 2) Delta Air Lines will start three weekly flights from Los Angeles to Brisbane from December 4, enhancing Queensland’s tourism and export sectors, and increasing seat capacity to 144% of pre-COVID levels.
• Streamlined Biosecurity: Victoria International Container Terminal (VICT) at the Port of Melbourne has received approval to conduct on-site Rural Tailgate Inspections. This new capability enhances biosecurity compliance for containers destined for rural Victoria, streamlining the import process by reducing the need for off-site transfers. The inspections, performed by VICT’s certified staff, ensure faster release and lower logistics costs, benefiting customs brokers, importers, and biosecurity professionals. This follows a policy update by Australia’s Department of Agriculture.
• An Eye on Road Transport - Australia’s Truck Driver Shortage Revealed: Over 26,000 Positions Unfilled Australia faces a truck driver shortage of 26,049 positions according to the International Road Transport Union’s truck driver shortage survey. The average driver age is 49, and nearly half are over 55. National Road Transport Association's (NatRoad) survey highlights severe recruitment difficulties, with 38% of companies expecting the problem to worsen. To address this, NatRoad proposes an eight-pillar action plan, including national standards, apprenticeships, and training incentives.

AMERICAS

USA - Earmarked Tariff Impacts for Canada & Mexico

• President-elect Trump announced plans to impose a 25% tariff on all goods from Mexico and Canada on his first day in office, citing concerns over illegal drugs and immigration. Additionally, he proposed a 10% tariff on imports from China, though no date was specified. Implementing these tariffs could take several months due to legal requirements, including investigations and recommendations from various trade bodies. The tariffs are expected to increase the cost of goods, particularly vehicles and automotive parts, as well as crude oil, which are major imports from Canada and Mexico. Importers may frontload shipments to avoid tariffs, leading to higher freight volumes and rates initially, followed by a decrease. The tariffs could also shift trade volumes, reducing imports from China and increasing trade with other countries. This move marks a significant shift from the USMCA trade agreement established during Trump’s first presidency.

The United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020. This agreement aims to create a more balanced and reciprocal trade environment, benefiting workers, farmers, ranchers, and businesses across North America. Key highlights include:

• Improved rules of origin for automobiles and other products.
• Modernized food and agriculture trade provisions.
• Enhanced protections for intellectual property.
• New chapters on digital trade, anticorruption, and good regulatory practices.
• Support for small and medium-sized enterprises.

PORT STRIKES | NORTH AMERICA

• USA In the US, negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have stalled over automation disagreements. The ILA opposes semi-automation, citing job threats, while USMX argues for technology to meet future supply chain demands.?
• CANADA Labour Minister Steven MacKinnon intervened earlier this month to end lockouts at ports in British Columbia and Montreal, directing the Canada Industrial Relations Board to resume all operations and move talks to binding arbitration. The International Longshore and Warehouse Union in B.C. criticized this move, calling it an insult to workers’ bargaining rights and vowed to fight it in court.

CHILE

Terminal Graneles del Norte (TGN) Port’s First Trial Shipment of Copper Concentrate confirmed the system’s operability and underscored the project’s commitment to safety, efficiency, and sustainability. This month TGN completed the first trial shipment of 10,800 tons of Codelco’s calcine in Mejillones Bay, Chile.

Project Highlights:

• Expansion: Features a new berthing site equipped with automated handling systems.
• Technology: Incorporates automation technology to minimize human-machine interaction.
• Sustainability: Operates entirely on renewable electric power.
• Environmental Standards: Utilizes a pipe conveyor to prevent material dispersion and pollution.
• Future Plans: Full operations are set to commence in January 2025, with an annual capacity of 4 million tons.

EUROPE

• Operational Delays were Experienced in Spain and Italy as they each recover from recently experienced disruptive flooding. In Valencia, Spain, historic floods impacted residents and infrastructure. Torrential downpours caused severe flooding, leading to significant damage and disruptions. Similarly, in Italy’s Emilia-Romagna region, severe weather caused major flooding. Torrential rains led to river overflows requiring subsequent evacuations. These weather incidents caused significant disruptions in transportation and government services this month.

ASIA

• Singapore Ports Construction & Congestion Update By 2027, Tuas Port (Phase 1) will be fully operational with 21 deep-water berths, handling 20 million TEUs annually. By the 2040s, all container port operations will be consolidated in Tuas, with an estimated annual throughput of 65 million TEUs. Currently, Pasir Panjang Terminal has 37 berths with a capacity of 34 million TEUs annually. Tuas Port (Phase 1) officially opened on 1 September 2022, with the first two berths starting operations in December 2021 and three more in December 2022. Interim handling measures include reopening Keppel Terminal to increase throughput and trials for night movements of container barges to reduce congestion. Reports show that port congestion is now approximately 1 day, a vast improvement. These efforts aim to enhance Singapore’s port operations and address congestion during upgrades.

GLOBAL TRANSPORT UPDATE

AIRFREIGHT

Airfreight is proving to be a viable option in 2024/2025 as ocean freight disruptions have led many shippers to turn to an alternative. With double-digit growth in volumes, especially from Asia, and stable freighter capacity, airfreight has proven reliable. Rates have increased but are more stable than ocean rates, with the cost ratio narrowing from 25.9x to 5.6x.

SEAFREIGHT

Container spot freight rates continued to decline slightly across major trade routes, as carriers were unable to raise prices ahead of the 1 December general rate increases (GRIs). Despite former President Donald Trump’s announcement of new tariffs on imports from Canada, Mexico, and China, there was no significant impact on spot rates. The World Container Index (WCI) showed a 5% drop on the Shanghai-Los Angeles route and a 1% decrease on the Shanghai-New York route. Analysts noted that many US shippers had already front-loaded imports due to previous disruptions, which may explain the lack of a spike in demand.

During this month, around 10% of all scheduled weekly sailings have been blanked, which failed to prevent rates from dropping since a raft of GRIs were introduced at the beginning of November. Drewry’s Cancelled Sailings Tracker currently shows that approximately 10% of sailings globally – 72 out of 719 – will be blanked from the beginning of December through to the end of the first week of January. This includes 50% of transpacific eastbound trade, 27% of transatlantic westbound, and 23% of Asia-Europe westbound routes. With uncertainty over sustaining GRIs next month, stricter cancellations may be needed to keep the rates elevated.

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