Industry news

New Zealand, Australia's long-term shipping costs rise sharply

Published by July 27,2022


New data from box-price platform Xeneta shows long-term interest rates in New Zealand and Australia traded "surging", with some contracts up more than 400% since 2019.

The latest figures highlight a sharp rise in long-term sea freight costs into Australasia, with prices on all major routes more than double what they were at the same time last year.

The global container shipping market is in overdrive, causing great pain for shippers and adding huge profits to our leading carriers. This is most evident in major trade from China, Southeast Asia and Northern Europe to Australia and New Zealand.

Although data on the platform shows that the average rate for long-term agreements has stabilized in recent months, the fact that they are replacing older agreements at a much lower level means that the average rate for all active contracts has been pushed up to Pinnacle for many shippers already cash-strapped.

Data from Xeneta shows that despite a drop in imports in the first five months of the year - 7.6% in Australia and 13.5% in New Zealand - imports are still at record highs. 

This is illustrated by the largest trade entering the region from the Far East, with an average long-term exchange rate of $7,600 per FEU on July 1. This is more than double what it was in July 2021 and 375% higher than July 2019.

Long-term rates in northern Europe, the most expensive of the major trades - and the only one above $8,000 per FEU - have risen 160% since last July. That's despite the fact that sales here are down 4.2% year-on-year in the first five months of 2022.

It's tough, from what we can see here, especially for shippers with their sights set on these key Australian markets.

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