India-Australia container rates nearly double in 2 months on scarce supply, congestion

New Delhi — Container rates for shipments sailing from India to Australia have have nearly doubled in the last two months due to congestion issues at Australian ports and equipment shortages in Asia, market sources said.

Major shipping liners are currently charging nearly $1,500 per twenty-foot-equivalent unit (TEU) and $2,700 per forty-foot equivalent unit (FEU), sources in India said. This is nearly double the average price around two months back.

Even at these high prices, most of the top companies are reluctant to take bookings to Australia.

"We are currently seeing congestion at Australian ports...We don't exceed awarded volumes and honor bookings already made whilst we are carefully looking into additional business on a case-by-case basis," a Hapag-Lloyd spokesperson said.

The companies which are taking bookings now are not committing to a fixed schedule.

"I was able to make a booking after trying for over one month, but the shipping line hasn't given me a schedule...The client said let's somehow get the vessel sailing, we will see whenever it arrives," a freight-forwarder based in India said.

There is a roll-over with the bookings and carriers are also trying to be cautious with the commodity being loaded and some of them refused to accept a heavy cargo, the freight-forwarder said.

The congestion issues in Australia intensified in September after the Maritime Union of Australia suspended its industrial action at port operator DP World's Sydney Terminal following a dispute over fair work norms.

The port strikes have now been suspended till Oct. 26. However, the shipping schedules remain off-window at all ports and may take a couple of months for schedule integrity to be restored, NSW Ports CEO Marika Calfas said in a statement earlier this month.

Congestion, delays at key Australian ports continue

Even though the MUA, suspended industrial action against port operator DP World and Australian port operator Patrick Terminals in late September, congestion and delays to the berthing of container ships continue.

There is currently a 21-day delay for some vessels calling at Patrick Terminals in Sydney, and all vessel schedules are disrupted to some extent. For vessels calling at DP World Australia, the situation is improving, but the average delay in Sydney is still three or four days, Australia's shipping industry body Shipping Australia Limited said in a statement on Oct. 22.

The backlog of empty containers initially caused by bad weather and later aggravated by industrial action is contributing to the congestion at Sydney port terminals. However, helping to clear out empties is disrupting schedules further, according to the industry body.

Meanwhile, many shipping liners have introduced shipping surcharges either at Port Botany or across all Australian container ports of $285-$350/TEU. Also, some shipping liners have bypassed the Port of Sydney and are delivering shipments via Melbourne.

The industrial action initiated by MUA had led to severe congestion at Port Botany, which is the largest container port in New South Wales and handles 99% of all container movements out of the region.

"Following the suspension of industrial action at DP World Australia and Patrick Terminals, shipping schedules remain off-window at all ports and may take a couple of months for schedule integrity to be restored, NSW Ports CEO Marika Calfas said in a statement earlier this month.

"Containers that should have been handled at Port Botany during September will now be handled during October and November," Calfas added.