Whale Logistics Experts have taken the time to study numerous sources and compiled a review of 2020 and included some expectations for 2021. Of course, this information is subjective and in no way advice, but information you can use to come to your own experience judgements as a Manager.
Global Economic Results
2020 marks the start of the first decade where the U.S. ($22.32T) does not have the largest economy in the world . First place belongs to China by a long shot ($29.47T). India’s economy continued to grow and surpassed both the United Kingdom and France in 2019 to become the fifth largest in the world at $2.88T.
Global Freight Results
The global sea freight forwarding market was 7.6% smaller at the end of H1 2020 compared to the start. The sharpest contraction was related to North America.
In 2020, industry-wide capacity (ACTKs – Available Cargo Tonne Kilometers) fell by 24,2% year-on-year, with Latin America experiencing the largest decline. Over the same period, volumes (CTKs) fell 14,1%, which led to a strong increase in cargo load factors.
A total of 300,000 TEU demolished in 2020. The reopening of demolition yards on the Indian subcontinent, and the poor conditions in the container shipping charter market, saw owners pushed to getting rid of some of their
older and substandard ship.
Freight rate development has started at a higher base compared to one year ago. Applied capacity management in combination with returning volumes are causing a dramatic jump in freight rates.
The grounding of passenger flights worldwide has removed the capacity carrying as much as 50% of all air freight volumes.
Although freighter utilization was increased, on most markets it could not compensate the
Australia Freight Analysis:
- Container rates have increased by 75 - 200% on Asian trade routes to Australia for the same period last year.
- Air space was restricted as soon as international boarders where closed, producing up to 300% increase in air rates.
Sydney Port Congestion & Industrial Actions
- Import container volumes were 17% higher in August 2020 than August 2019
- Re-route to Melbourne and Brisbane, at importers expense.
- Industrial actions caused berthing delays of up to 10 days in the same port.
- 40% of the South East Asia vessels to Sydney where cancelled for Q4.
- 20% of the South East Asia Vessels to Australia where cancelled for Q4
- A USD 250-350/TEU Port Congestion Surcharge was implemented to all Sydney Containers by all Shipping Lines.
Empty Park Congestion
- Empty container parks are full and refusing to accept empty container returns.
- Equipment was not returning to China quick enough to maintain the demand for China Exports to Australia.
Lack of Container Equipment in China
- As USA trade increased in the last half of 2020, containers were not return to China in time for Exports.
- Lack of container equipment specially 40HC made Australian Importers have to ship in 20gp and reduce their profit margins or in some cases not ship at all and reduce their inventories for Q4 2020.
Extended Lead Times
- We saw shipping lines delaying bookings up to 3-4 weeks. This meant that importers couldn’t achieve their schedules lead times with their customers, causing penalizations and reduction of bottom line.
- Factories in China Prioritized production of USA stock so some Australia Importers had their orders manufacturing pushed back 2-4 weeks added to their lead times commitments.
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