Critical situation - Shipping Space to Australia
With this article are the following attachments
To all of our Valued Customers
We wish to highlight further what is now becoming a critical situation in regards to capacity (space availability) into Australia.
Australia has been experiencing massive space shortages (shipping line container space) over the last few months and from discussions with all carriers coupled with a surge of demand there is no signs that it will decline as we move through to end of 2020.
In fact we believe that from here onwards it will result in a significant imbalance over the demand vs supply matrix which is in place on the trades affecting NE and South East Asia (China etc)
Typical modelling around capacity by carriers is based on historical averages and what we have seen is that the demand forecasts being worked upon by the Carriers falls well short to what that the actual demand will be.
We can see as it relates to Australia that the current demand is up circa 20-25% above the same period last year.
Please refer to the attached graph detailing the China to Australia trade summary up to June 2020.
Earlier this year when China effectively shut down due to COVID the carriers significantly restricted capacity (shipping space) to match that resulting from the fall in demand.
As previously communicated the carriers have continued with blank sailing programs, return of new ships and the cancellation of any new services (previously planned in 2020) so as to limit available space as we lead into end of 2020 and into 2021
Ultimately what this leads to is spot/market rates increasing and these rates will continue to increase week to week and month to month!
The trend we are seeing here in Australia is being seen worldwide and it follows greater domestic consumer demand bought on by higher than normal consumer spending, which can be expected due to a lack of spending on avenues such as air travel, holidays etc
The issue is this is something the carriers have not foreseen and it has bought about far greater volumes than previous years.
This increase in demand (SEP-DEC 2020) will be exponentially higher and we believe that the actual demand will be 10- 25% up on what the carriers have allowed for (1% above the 2019 volumes).
The Carriers have begun to enforce booking cut offs of as early as 14 days before actual sailing and in addition we are now starting to see instances of carriers ceasing to accept bookings even for spot/market rate cargoes and we are expecting these conditions to deteriorate further over the coming weeks and months.
So, to minimise this impact where possible we ask all customers to provide as much lead time as possible for bookings (preferably +3 weeks in advance).
Please note that additional information provided from carriers around the reduction in services can be linked as per following
We are here to assist you, so please contact us where you have any questions.
Keeping you updated,
BRi Customer Solutions Team
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