China-Australia rates: “Gone bonkers”

SHIPPER shock appears unlikely to abate soon, with rates on the main East Asia-Australia route on an absolute tear over the past couple of weeks, even with up to 8,000 TEU of extra weekly capacity joining the trade this month.

“Relentless”, was one customer’s description as the SCFI mean spot rate for Shanghai-Sydney shipments this week, Week 27, jumped an astounding 15% to USD 4,156/FEU. This follows successive increases every week since Week 13, when the SCFI was USD 1,242/FEU. There was a 10% rise in Week 25.

In South East Asia trades, there was a further 2% rise this week, following recent increases of 10%, 3% and 6%. But at USD 2,061/FEU the average rate is still less than half North & East Asia.

There are reports that some N&EA carriers have virtually no space available for weeks to come, and a scattering of extra-loaders are finding it difficult to obtain terminal windows. This is thanks to congestion- and weather-disrupted schedules putting ships way out of whack, plus the advent of the new Maersk Qilin and A3 Express services. Some lines are applying weight limitations on southbound containers.

As noted in last Friday’s Bradford Bulletin in DCN, Ningbo/Shanghai, Singapore, Qingdao, Shenzhen and Port Klang all appear in the current list of the world’s most congested ports.

Ship supply is also restricted, carriers say, as while the China-Australia rates have exploded they’re still not rising as fast as some trans-Pacific routes and Asia-South America, making those more attractive deployment options. Congestion in East and South East Asian ports is effectively chewing up further capacity.

Additionally, Asia-USA and Asia-Europe – the latter still taking the long way around the Cape of Good Hope thanks to Middle East unresolved turmoil – are enjoying early peak seasons, ensuring the predicted container biz over-capacity remains at arms’ length.

A good measure of changing fortunes was AP Moller-Maersk’s Monday [29 June] announcement that it was substantially upgrading its guidance for full-year 2026.

The company said it now expects Underlying EBITDA of USD 8-10 billion (previously USD 4.5-7.0bn); Underlying EBIT of USD 2-4bn (previously USD -1.5-1.0bn) and Free cash flow of at least USD -1.5bn (previously at least USD -3bn).

Maersk attributed the upwards revision to continued strong demand in the container market, particularly in the Far East, and a recent sustained increase in spot market rates. It is now also forecasting a volume growth outlook for the global container market of about 4% (previously 2-4%) for full-year 2026.

Still, if shippers are finding all this “absolutely bonkers” as DCN was told it’s not surprising. In BAF notifications for August issued yesterday, MSC’s went down while PIL’s went up.

Recent notifications

ANL has announced it is replacing its peak season surcharge on the East Asia-Australia & New Zealand routes with a new emergency space surcharge (ESS): “In continuation of our previous communication regarding Peak Season Surcharge (PSS02), we would like to provide an update on the measures we will implement to manage the current market situation on our North East Asia–Oceania services.

“To safeguard service stability and ensure continued access to capacity on the North East Asia–Oceania network, the ESS will override & replace the previously announced Peak Season Surcharge #2 (PSS02).

“PSS02 will therefore not be applied; instead, the ESS will be implemented until 30 September. The ESS is intended to help us serve you better during this period by supporting stable vessel deployment and consistent sailing schedules on the Asia–Oceania trade,” ANL said.

The ESS will be as follows: N&E Asia to Australia, effective 22 July, USD 350/TEU dry & reefer, 700/FEU dry & reefer. N&E Asia to New Zealand, effective 1 August, USD 250/TEU dry & reefer, 500/FEU dry & reefer.

Meanwhile ANL is also going for a further from 15 July at USD 300/TEU dry and USD 600/FEU for all shipments from Asia/Indian Subcontinent/Middle East to New Zealand.

And on the N&E Asia-New Zealand trade, a rate restoration is to be imposed from 22 July: USD 300/TEU dry & reefer, 600/FEU dry & reefer.

Furthermore, on 1 August ANL will be implementing a rate restoration at USD 500/TEU dry & reefer and 1,000/FEU dry & reefer for all shipment from Asia to Australia. As usual, this increase will apply on top of current Spot/FAK rates subject to all applicable surcharges valid on time of shipment.

On 15 July COSCO Shipping will rate-restore on both the North East Asia-Australia and South East Asia-Australia trades, the quantum of both rises being USD 500/TEU, 1,000/FEU.

MSC late last week became the first carrier in Australian trades to announce a 2026 congestion surcharge, effective 15 July: “Please be advised that due to extensive waiting time in most of Asian ports and additional cost to move the cargo, a CGS will be implemented on all cargo moving from China, Hong Kong, Taiwan, Japan, Korea and South East Asia to Australia as follows: USD $500/TEU.”

Maersk Line says with approximately 20% of global fuel passing through the Strait of Hormuz, “current developments have created an unprecedented cost environment affecting Landside (Inland) and Intermodal operations.

“To ensure service continuity, safeguard cargo integrity, and secure sufficient vendor capacity across our network, A. P. Moller – Maersk will implement temporary, cost reflective energy/fuel price adjustments on Landside Transportation.

“Effective from 16 March Maersk implemented an Intermodal Fuel Fee (EFS/IFS) … current monthly starting from 1 July 2026 is outlined below and will review monthly in line with costs and how the global situation develops.

• Victoria: +13%
• New South Wales: +13%
• Queensland: +13%
• South Australia: +13%
• Western Australia: +12%
• New Zealand: +17%

“Given the volatility of the current energy market, further adjustments may be required as conditions evolve,” Maersk said.