Roy's Forecast

01-Apr-2011 Wow! What a quarter! The Boss has finally let me loose to offer my interpretation of my highly accurate crystal ball, and about time too. Container rates ex China are at one of the lowest levels for some time, and as a result, some shipping lines are reducing space to try and force up prices. I haven’t seen where this has happened yet, but stay tuned. Book now if you can to take advantage.

 BAF (Bunker Adjustment Factor – a surcharge dependant on the oil barrel price) is increasing almost weekly, with some routes now are charging as much for the BAF as they are for ocean freight. Given the unrest in the Middle East, there doesn’t seem to be relief in the near future. And of course, this is also being felt by the airlines with resulting Fuel Surcharges increasing Globally.

Air freight volumes ex China and Hong Kong (Hong Kong is now the world’s busiest cargo airport) have also seen extraordinary growth in the last quarter, so expect price increases there as space is also very tight. Freight cargo grew by 6.5% in the last 12 months at January in the Asia-Pacific region and it looks to continue.

The aftermath of the recent terrible tragedy that has befallen Japan will yet to be reckoned, and as Australia’s second largest trading partner, there will sure to be short term economic ramifications to Australia, but knowing the amazing resilience and inner strength of the Japanese, I am sure they will rebound quickly. Our thoughts are with them and we wish them all the best.

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