Shipping
25-10-2007
Australia
4th Quarter 2007 freight rates have remained on hold for SE Asia with no noticeable change for the same period 2002. The stability, however may not last with the recent push by a united shipping company front for increases seen from Europe US$12-15/MT, and to a lesser extent USA $3-5/MT affective mid January 08 . Generally in the past this has proved unsustainable for shipping companies with individual lines breaking ranks & negotiating silent rates with exporters to reposition their containers into the burgeoning Asian markets, in order to gain a ten fold rate for containers on the reverse leg.
 
2007 China waste paper freight rates have continued to be reduced in this highly competitive market, with the addition of new routes by shipping companies wishing to take advantage of the east/west trade rates.
Chinese rates have basically been reduced to a quarter of 2002/3 rate levels.
 
The Indian market is predictably increasing for Australian waste paper, however with monsoon activity, coupled with ports crippled with congestion, lines are reluctant to carry waste paper export. Most Indian mills are located away from port areas and as such request Final Destinations of containers to be an ICD closer to their proximity. Again lines are reluctant as it is difficult for them to extract the containers from the ICDs without added costs, and long turn around times further eroding profitability on the reverse leg.
 
New Zealand
Again SE Asia rates have been reasonably steady since 2003, with the occasional cheaper spot rates available, which is offset during the peak produce export season. Chinese rates have fallen similar to the Australian trend but not to the same extent.
 
Free Time periods, THCD prepaid, and BAF inclusive continue to be on demand by all Asian paper mills in pricing. This is a result of US & European shipping companies initially granting such conditions, which has led to them being common practice in all contracts to the detriment of exporters and more importantly shipping companies.