Dear Clients, MARKET UPDATE APR-26 North Asia - AU market overview The North Asia to Australia trade for April can best be described as "stable but strained". While basic ocean freight rates have mostly levelled out, we are seeing post Lunar New Year increases that are being associated with rising surcharges associated with fuel prices. Capacity Pressure Emerging in the Oceania Trade Over the last few weeks, we have started to see a change in how global shipping lines are allocating their fleets and it's starting to impact the Oceania Trade. Due to the ongoing disruptions to services in the Middle East, shipping lines have started to redeploy larger vessel to trades that service the Middle East as rates are higher and thus returns for the shipping line greater. We saw a similar strategy during the Covid pandemic. What does this mean for Australian imports and exporters? Even though demand hasn't surged, space is tightening. Blank sailings are very much in the carriers planning. Rate increases more than likely. Schedule disruptions, potentially. Middle East Conflict The major shock the Middle East conflict is having on the Australian logistics segment is fuel surcharges at a local level. The obvious and most notable here is the fuel surcharge on local trucking however, like all industries, any machinery using diesel or petrol equipment can see prices being impacted. Australian Economy With the "R" word (Recession) being discussed in a majority of conversations around the Australian economy, the question must be asked, is this going to be good or bad for shipping? If we look at what a slower economy could do to shipping, the first impacts could be a consolidation of services and or a reduction of capacity. Neither of these outcomes are ideal for Australia. These decisions could be on top of shipping lines decisions to already "SLOW STEAM" to save fuel due to the Middle East conflict. Or could the slowing economy put downward pressure on freight rates, and we see low freight rates throughout 2026? Quite possibly, but is that a win? In today's market, low freight rates will almost certainly see a quick reaction by shipping lines to cancel services that are not profitable. This is the last outcome the market needs. We already have limited options, therefore we need as many shipping lines participating in the Australia market as possible for healthy competition and not an oligopoly held by a select few shipping lines that may hinder competition. Should you wish to discuss any of these points, please don't hesitate to reach out to your key contact @ Transways Logistics International.

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