China-Australia Freight Market Update

The current freight rate environment for shipments from China to Australia remains uncertain. Carriers continue to issue regular notices announcing proposed rate increases effective on the 1st and 15th of each month. However, despite the implementation of multiple blank sailings, these rate hikes have largely not been enforced.
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It had been anticipated that demand for space on services to Australia would increase, particularly as carriers redeployed some capacity to the China–USA trade lane to take advantage of the temporary 90-day tariff window. Contrary to expectations, this shift has not resulted in stronger demand on the Australia trade lane. The market remains soft, with many vessels still departing under capacity despite reduced sailings.
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Further rate increases have been scheduled for July. It remains to be seen whether these adjustments will be implemented, as carriers continue to seek ways to drive rates upward in a challenging market environment.
Additional rate increases have been announced for July (click here for 1st July notice). While it is unclear whether these will be applied, it’s likely that carriers will continue efforts to lift rates in the coming weeks.

China Export Controls Update

1. Background on China's Export Controls on Rare Earth Elements
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‍In the past year, China has gradually tightened export control regulations over certain rare earth materials, particularly those classified as “critical” or “strategic” to national security and high-tech industries.

This tightening aligns with China’s broader efforts to secure supply chains and protect resources deemed vital to its long-term technological and military development.

The most recent directive from China’s Ministry of Commerce, now requires exporters to obtain licenses for materials used in high-end permanent magnets—especially heavy rare earths like dysprosium and terbium.

These are critical components in electric vehicle (EV) motors, wind turbines, advanced military equipment, batteries, magnets and various types of industrial and electrical equipment.

2. Global Impact and Strategic Importance

‍China currently accounts for more than 70% of global rare earth production and an even higher share in rare earth refining and processing capacity.

This makes China a dominant player in the global rare earth supply chain.

Recent global events—such as production halts and supply disruptions reported by overseas EV manufacturers—highlight just how dependent the world is on Chinese rare earths.

Additionally, the growing geopolitical tension, especially between China and the U.S., has pushed both countries to focus on securing their own strategic mineral supplies.

In particular, rare earths are now seen not only as industrial resources, but also as a matter of national security given their importance in the defence sector (e.g., fighter jets, missile guidance systems).

Exporters are now required to obtain licenses for commodities deemed to fall under the category of critical mineral exports. This licensing process is often complex and time-consuming. As a result, a growing number of shipments ‘potentially’ containing rare earth elements, are being impacted by these enhanced controls.

There has also been an increase in the number of consignments being delayed or held for additional physical commodity inspections. In many cases, exporters are required to provide supplementary documentation before cargo can be cleared for export.

Recent Shipping Incidents Prompt Stricter Hazardous Cargo Measures

In light of several serious recent incidents, including explosions involving containers on one vessel off the coast of India and a fire onboard a car carrier in the North Atlantic Sea, many shipping lines are implementing stricter protocols for the acceptance of hazardous cargo. These measures are expected to include enhanced inspection procedures, more rigorous verification of declared hazardous materials, and significantly increased penalties for non-compliance.
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As a result, we strongly advise all parties involved in the shipping and handling of hazardous cargo to ensure their documentation is fully accurate, compliant, and aligned with the latest regulatory requirements.

Red Sea Situation Update

There had been cautious optimism within the shipping community that conditions in the Middle East might stabilize, allowing for the resumption of safe transit through the Suez Canal. However, given the recent escalation in regional hostilities, any near-term improvement in the security situation appears increasingly unlikely.
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As a result, carriers will be required to continue rerouting vessels via the Cape of Good Hope for voyages between Europe, Asia, and Australia both outbound and on the return leg until further notice.

EU-Australia Free Trade Agreement Update

In light of ongoing tariff challenges and trade barriers with the United States, discussions between the European Union and Australia regarding a free trade agreement have regained momentum.

Negotiations previously stalled in 2023, primarily due to disagreements over agricultural access, specifically the reluctance of several EU member states to permit Australian beef exports into their markets. However, in response to the rapidly evolving global trade environment, both parties have re-engaged in dialogue with renewed focus.
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It is hoped that these longstanding issues can be resolved, paving the way for the successful conclusion of a comprehensive agreement in the near future.

Notice of Upcoming Transport Cost Adjustments

In recent weeks, we've been notified of further cost increases from several of our key transport partners, including carriers, port operators, and shipping lines. These increases primarily relate to domestic handling charges, fuel levies, and general freight movement costs across the supply chain.

As always, we are committed to maintaining transparent and fair pricing. We will be carefully reviewing these adjustments and updating our transport rates accordingly, on a case-by-case basis, where necessary.

We appreciate your understanding as we continue working to provide the most efficient and cost-effective service possible. If you have any questions or concerns, please don’t hesitate to reach out to our team.

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