Aussie/NZ ocean spot rates head south as demand softens


Long-term freight rates to Australia and New Zealand have reached “new highs”, but spot rates are down and forwarders are expecting a sluggish peak season.


According to Xeneta, while in recent months the average rate for new long term contracts has stabilised, they are replacing older ones which were at much lower levels.


The company explained: “For example, on by far the biggest trade into Australia and New Zealand, the average long-term rate from the Far East on 1 July stood at $7,600 per feu, 375% more than shippers were paying in July 2019, and more than twice as high as in July 2021.”


Both countries witnessed a drop in containerised imports during the first five months of the year, Xeneta noted, with Australia’s volumes down by 7.6% and New Zealand’s by 13.5%.


David Aherne, MD and founder of Across the Ocean Shipping, said the market was softening as consumers adjusted spending more towards travel and entertainment.


He told The Loadstar: “I expect a sluggish peak season this year. We saw a lot of companies panic with space issues last year and build up inventory which they have carried over. With the cost of borrowing going up across the board, I see more of a return to just-in-time shipping and importers thinking twice before committing big spend on inventory.”


While demand has slowed, Mr Aherne said shipping lines were holding up rates with blank sailings.


“This is again showing how the lines control shipping rates globally and influence the ocean rates without regulation,” he claimed.


“The shipping lines are aggressively pushing spot rates and very reluctant to enter NACs [named account contracts], given the opportunities that exist in them maximising ocean rate revenues.”


Nevertheless, Neolink director Sean Crook said spot rates had been falling in recent months.


“What we have seen since the beginning of the year, is a steady decline from peak freight rates largely in line with the SCFI,” he said. “Rates increased from around $2,000 per teu to Australia in April/May 2021, to just under $5,000 per teu at their peak in January.


“However, since the market peak in January, we have seen a steady decline to around $3,000 per teu, depending on service and port. The current market rates, heading into August, are actually anywhere from 20% to 30% less than what they were the same time last year.”


Credit The Loadstar by Sam Whelan

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