KONNECT - JUNE 2025

Contents

• Executive Summary & Business Tip
• Market Trend
• Spotlight
• Ocean Freight Updates
  • Ocean Freight Snapshot
• Air Freight Updates
  • Air Freight Snapshot
• Customs, Inland Transport, Terminal & Regulation Alerts

Executive Summary

We are now KLN.

Kerry Logistics Network Limited has rebranded to KLN Logistics Group Limited. This strategic move aims to establish a more unified corporate identity and strengthen the company's brand positioning in the global logistics market. This change reflects the company's commitment to evolving its operations and services.

You can learn more about our rebranding here.

Global freight markets are experiencing renewed volatility as shifting U.S. tariff policies trigger a sudden rebound in trade volumes. Following a temporary reduction in duties between the U.S. and China, ocean and air freight demand surged sharply, particularly on Transpacific lanes. Spot rates have increased by up to 50%, driven by importers front-loading shipments ahead of the August 14 deadline. This rebound has created bottlenecks at U.S. ports and sparked rate pressure across non-Transpacific lanes, including Asia–Oceania.

Carriers have responded by reinstating suspended services, upsizing vessels, and reallocating capacity to high-demand corridors. As a result, space is tightening across other trade routes, with some carriers pushing Named Account Contract (NAC) volumes onto spot pricing. In Oceania, shippers are facing increased costs and potential rollovers as equipment shortages and congestion intensify across origin ports in Asia. Rate volatility is expected to continue through Q3, especially as peak season demand overlaps with geopolitical and legal uncertainties.

Air freight markets are also shifting. Spot rates remain elevated as e-commerce drives volume surges on Transpacific routes, while forwarders avoid long-term contracts in favour of short-term flexibility. Carriers are expanding capacity selectively, yet infrastructure constraints and unpredictable demand are keeping upward pressure on rates. Oceania exporters reliant on air cargo should be prepared for scheduling challenges and pricing fluctuations.

On the domestic front, both Australia and New Zealand have implemented interest rate cuts to stimulate growth amid trade uncertainty. Meanwhile, changes to border compliance and fee structures—particularly in New Zealand and at Auckland port—require businesses to revisit cost models and inland planning. As regulatory changes take effect and shipping dynamics evolve, supply chain resilience, flexible planning, and close coordination with providers will be key to navigating the months ahead.

Business Tip

Plan early, stay flexible, and lock in space before volatility peaks: With freight markets reacting sharply to tariff changes and peak season overlap, securing space early is critical. Accurate forecasting allows carriers to plan capacity, while flexibility in routing and scheduling can help navigate shifting allocations, rollovers, or delays. Given the move toward short-term repricing and the reallocation of capacity to Transpacific routes, proactive engagement with your logistics partners ensures you maintain service continuity and cost control as disruptions ripple across trade lanes.

KLN Oceania can help you discuss strategies and support you in negotiations.

Spotlight

KnowledgeHub: Insights to Keep Your Supply Chain Moving

Our KnowledgeHub goes beyond updates — it breaks down key logistics and supply chain concepts, explains industry shifts, and offers practical advice you can use. Whether you're managing freight, planning around peak seasons, or navigating global disruptions, this is your go-to resource to stay informed and make better decisions. 

Visit the KnowledgeHub and subscribe for updates:

Market Trend

Recent trade developments between the United States and China have caused significant disruption across global shipping lanes, with sharp increases in freight rates, port congestion risks, and capacity pressures that are already extending beyond the Transpacific trade.

Trade Volatility and Rebound Effect

Last week, global freight markets saw a sharp spike in demand and ocean freight rates due to uncertainties surrounding newly introduced tariff policies. Initially, the tariff shock caused trade volumes between China and the U.S. to drop by up to 60%, but this was quickly followed by a “rebound effect,” with some lanes experiencing volume growth of up to 150%. As a result, freight rates surged rapidly—not only across the Transpacific, but across non-TP trade lanes as well.

This rapid turnaround has created significant logistical stress, with congestion already being reported on the U.S. West Coast. These conditions echo the early months of the COVID-19 pandemic, when severe port delays and vessel backlogs impacted global trade for months.

Tariff Changes and Timeline

Under the U.S. Executive Order dated April 9, 2025, country-specific tariffs (excluding those on China) have been suspended until 12:01 a.m. EDT on July 9, 2025. What happens after that date remains uncertain.

As for China, while the U.S. and China have agreed to reduce their respective tariffs (effective May 14), they have not eliminated them:

• U.S. tariffs on Chinese goods are dropping from 145% to 30%.
• China’s tariffs on U.S. goods are decreasing from 125% to 10%.

However, the May 2 Executive Order that ended the de minimis exemption for China and Hong Kong remains in effect:

• Chinese and Hong Kong goods are no longer eligible for duty-free entry, regardless of value.
• Postal shipments from China and Hong Kong are subject to a flat $100 fee or 54% duty, whichever is higher.
• A proposed increase to a $200 postal fee (from June 2) has been cancelled.

Surge in Ocean Freight Demand and Rates

With the 90-day tariff suspension window in place, U.S. importers are rushing to bring in as much inventory as possible before the August 14 peak season cargo deadline. This has triggered a strong front-loading effect and pushed up freight rates sharply—particularly on the China–U.S. West Coast trade lane.

Spot rate trends:

• Rates from China to the U.S. West Coast have increased by 20–50% in recent weeks.
• This follows a Q1 decline of more than 50%, according to Xeneta data.

Carriers had previously reduced capacity in response to weaker demand, but now they are rapidly reintroducing sailings to meet the demand surge. Port congestion, vessel delays, and container shortages (especially in Asia) may intensify in the weeks ahead.

Peak Season Outlook

The 2025 peak season is expected to "run hard" through Q3, with strong volumes and continued rate pressure across key lanes. Demand is concentrated in the short-term window created by tariff suspensions and the traditional retail inventory cycle. As a result:

• Rates are likely to remain elevated at least through mid-August.
• Carrier capacity constraints could intensify, particularly on core Asia–US lanes.
• Delays and rollovers are expected if forecasts are not accurate and space isn’t secured early.

This pattern may also create ripple effects across other regions, including Oceania, as carriers prioritize the Transpacific and redirect vessels accordingly.

Spillover Effects on Oceania

Due to this redirection of capacity toward the Transpacific, we are also seeing rate pressure and reduced space availability in non-TP lanes, including Asia–Oceania.

Impacts include:

• Rate increases of 20%+ on non-TP lanes.
• Shift in allocation from Named Account Contracts (NAC) to FAK (Freight All Kinds) and spot pricing.
• Carriers renegotiating or withdrawing rate offers issued in May for June onward.
• Rollovers expected due to high booking volumes.

Manufacturing Relocation Still Limited

Although discussions on shifting manufacturing away from China are ongoing, most businesses remain cautious and are holding off on major changes until there is greater long-term clarity. Risk mitigation and flexible sourcing strategies will continue to be essential for managing tariff-driven volatility.

Recommendations for Customers

To help mitigate risks and secure space during this volatile period, we strongly recommend the following:

• Provide firm and accurate volume forecasts at least 2–3 weeks in advance.
•  Avoid double bookings or speculative holds, which can waste valuable space.

• Discuss allocation plans and space requirements with your KLN product contact.
• Ensure booking teams and origin contacts are looped into planning.

• Be prepared for short-term surcharges such as Peak Season Surcharges (PSS) and General Rate Increases (GRIs), especially on long-term rate agreements.

• Keep in mind that some NAC space may be reduced or repriced.
• Flexibility in vessel schedules and ports of loading may help secure space.

• Carriers are currently prioritising the Transpacific trade and may divert capacity temporarily. This could result in fewer options and higher rates on Asia–Oceania lanes.

• Maintain open communication with your supply chain partners to adjust quickly to space constraints, cancellations, or booking adjustments.

KLN continues to work closely with our Tier-1 carrier partners to secure space and capacity for our customers. As always, we’ll keep you informed and supported throughout the peak season planning cycle.

​

Shippers Embrace Dual-Sourcing as Supply Chain Disruptions Become the Norm

In response to the persistent and unpredictable disruptions characterizing the 2020s, shippers are increasingly adopting dual-sourcing strategies to enhance supply chain resilience. The volatility of trade policies, exemplified by the recent revocation and reinstatement of U.S. tariff policies within a 24-hour period, has underscored the necessity for diversified sourcing to mitigate risks associated with geopolitical and economic uncertainties.

The frequency and severity of supply chain shocks have compelled businesses to reevaluate their procurement strategies, moving towards more flexible and diversified models to ensure continuity and stability.

However, the shift towards dual-sourcing and reshoring is not without its challenges. The OECD(Organisation for Economic Co-operation and Development) warns that aggressive reshoring efforts could lead to significant economic drawbacks, including a potential 18% reduction in global trade and up to a 12% decrease in GDP for affected countries. The organization advocates for a balanced approach that combines openness with geographical diversification to enhance resilience without incurring substantial economic costs.

Implications for Oceania:

• Supply Chain Diversification: Oceania-based businesses should consider diversifying their supplier base to include multiple regions, reducing dependency on single sources and enhancing resilience against regional disruptions.
• Risk Assessment and Management: Implementing comprehensive risk assessment frameworks can help identify potential vulnerabilities in the supply chain, allowing for proactive mitigation strategies.
• Investment in Technology: Leveraging advanced technologies such as AI and real-time data analytics can provide greater visibility into supply chain operations, facilitating quicker responses to disruptions.

Uncertainty for Global Shippers stemming from legal uncertainty around US Tariffs

The U.S. Court of International Trade ruled on May 28, 2025, that President Trump's "Liberation Day" tariffs exceeded his authority under the International Emergency Economic Powers Act (IEEPA), effectively blocking their enforcement. However, a federal appeals court has temporarily reinstated these tariffs pending further legal proceedings, with briefs due by June 9.

This legal back-and-forth has left shippers in a state of uncertainty. Importers are unsure whether to pay the tariffs or await potential refunds, which could take years to process. The ambiguity is affecting supply chain decisions, with some businesses delaying shipments or seeking alternative sourcing options.

The Trump administration is considering appealing to the Supreme Court and exploring other legal avenues to maintain the tariffs. Meanwhile, the situation continues to impact global trade dynamics, with businesses and markets closely monitoring developments.

Implications for Oceania:

• Trade Strategy Adjustments: Oceania exporters to the U.S. may need to reassess their strategies, considering potential tariff implications and exploring alternative markets.

• Supply Chain Diversification: Importers in Oceania sourcing from the U.S. should evaluate their supply chains for vulnerabilities and consider diversification to mitigate risks.

• Monitoring Legal Developments: Businesses should stay informed about the legal proceedings, as outcomes will influence trade policies and economic conditions.

Developments in Oceania

As of early June 2025, the Reserve Bank of Australia (RBA) has implemented two interest rate cuts this year, bringing the cash rate down to 3.85% from 4.35%. These decisions are primarily aimed at mitigating the economic uncertainties arising from escalating global trade tensions, notably the recent U.S. tariff increases under President Donald Trump's administration.

The RBA's cautious approach reflects a balance between supporting domestic economic growth and maintaining inflation within its target range. While inflation has moderated to 2.9%, aligning with the RBA's objectives, the central bank remains vigilant about potential external shocks that could impact Australia's economic stability.

For the freight and logistics sector, these rate cuts present both opportunities and challenges.

Opportunities:

• Reduced Financing Costs: Lower interest rates can decrease borrowing costs for freight companies, facilitating investments in fleet upgrades, warehousing, and technological enhancements.
• Stimulated Demand: Easier monetary conditions may boost consumer spending and business activities, leading to increased demand for freight services.

Challenges:

• Persistent Inflationary Pressures: Despite the rate cuts, global supply chain disruptions and geopolitical tensions continue to exert inflationary pressures, potentially affecting operational costs.
• Market Volatility: The uncertain global economic environment may lead to fluctuating demand patterns, requiring freight companies to remain agile and responsive.

Looking ahead, the RBA has indicated a readiness to adjust monetary policy further if global economic conditions deteriorate. However, any additional rate cuts will be carefully considered to avoid undermining the progress made in controlling inflation.

Freight and logistics businesses should monitor these developments closely, adapting their strategies to navigate the evolving economic landscape effectively.

Australia's Economic Outlook

Australia's economy is navigating a complex landscape marked by global trade tensions and domestic policy adjustments. The Reserve Bank of Australia (RBA) reduced the cash rate by 25 basis points to 3.85% in May, citing concerns over the impact of U.S. tariffs on global economic activity. The RBA indicated readiness for further rate cuts if international developments threaten Australia's economic stability.

Inflation continues to moderate, with headline inflation at 2.4% and core inflation at 2.9%, both within the RBA's target range for the first time since 2021. However, the housing market remains robust, with home prices projected to grow steadily by 4-5% annually through 2027, driven by strong population growth and limited housing supply.

On the international front, Prime Minister Anthony Albanese plans to address Australia's inclusion in broad U.S. tariffs during the upcoming G7 summit, emphasizing the need for fair trade practices.

New Zealand's Economic Developments

New Zealand's economy is showing signs of recovery amid global uncertainties. The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate by 25 basis points to 3.25% in May, marking the sixth consecutive rate cut since August. The RBNZ signaled a slightly deeper easing cycle due to mounting global risks, particularly from U.S. trade policies.

Inflation remains within the target band at 2.5%, providing the RBNZ with flexibility to support economic growth. The central bank anticipates the rate to reach 2.92% by Q4 2025.

In the realm of international trade, New Zealand is actively pursuing a Free Trade Agreement (FTA) with India. Deputy Prime Minister Winston Peters described recent negotiations as a "breakthrough," highlighting the potential for strengthened bilateral economic relations.

Trade and Industry Highlights

Australia and New Zealand continue to adapt to shifting global trade dynamics. Australia achieved a historic breakthrough in negotiations with the European Union, potentially paving the way for a comprehensive Free Trade Agreement after a decade-long deadlock.

New Zealand is also expanding its international trade relations. In addition to the FTA discussions with India, New Zealand is engaging with Sri Lanka to deepen bilateral ties in trade, tourism, and agriculture.

These developments underscore both countries' commitment to enhancing economic resilience through diversified trade partnerships amid global uncertainties.

Ocean Freight Updates

• Carriers booking utilization sits at 85%-90% to both AU and NZ, with irregular blank sailings and cargo rolling.
• COSCO shipments to AU Transshipment via Singapore keep waiting times around 2-3 weeks in SIN, under their FIFO operational policy.
• Blank Sailings expected with average 8% capacity cut for the rest of June 2025.
• Service upgrade on A3N (ANL, COSCO, OOCL): The vessel sizes will be upgraded from about 6500 TEU to 7000 TEU capacity, plus there will be an extra vessel added to the service, which will enable the service to maintain a better schedule reliability.  As a consequence they are also able to add an extra port call to the service = NINGBO. ANL, COSCO and OOCL will now be offering 2 Ningbo calls per week across both A3N and A3C services.
• North China is facing increased waiting times caused by strong winds and dense fog.
  

Carriers Impose Emergency Surcharges on Pakistan Cargo Amid Rising Geopolitical Tensions

In response to escalating geopolitical tensions between Pakistan and India, major global shipping lines have implemented Emergency Operational Surcharges (EOS) on cargo moving to and from Pakistan. These surcharges, ranging from $300 to $800 per container, are aimed at offsetting increased operational costs and risks associated with the current volatile environment.

Key Developments:

• Surcharge Implementation: Starting May 15, 2025, carriers such as MSC, CMA CGM, and Maersk have introduced surcharges on Pakistan-bound and outbound cargo. For instance, MSC has levied an $800 per container fee for exports to major westbound routes, including Europe, the US, and Africa, and a $300 per container charge for intra-regional trades, including the Middle East and Indian subcontinent.
• Trade Restrictions: The surcharges coincide with India's restrictions on access to its ports for vessels carrying Pakistani cargo, effectively discouraging port calls to Pakistan. In retaliation, Pakistan has banned Indian-flagged vessels from docking at its ports and restricted Pakistani ships from calling at Indian ports.
• Operational Adjustments: To maintain service continuity, carriers are rerouting cargo via alternative hubs such as Colombo and Salalah, leading to increased transit times and costs.

Implications for Oceania:

• Increased Shipping Costs: Businesses in Oceania importing from or exporting to Pakistan may face higher shipping costs due to the imposed surcharges.
• Supply Chain Disruptions: The rerouting of cargo and port access restrictions could lead to delays and disruptions in supply chains involving Pakistan.
• Strategic Planning: Companies should proactively assess their logistics strategies, considering alternative routes and suppliers to mitigate potential risks associated with the ongoing geopolitical tensions.

Wan Hai Expands Regional Services Amidst Strategic Fleet Enhancements

Taiwanese carrier Wan Hai Lines is actively expanding its regional services to strengthen its presence in key trade corridors. In April 2025, Wan Hai launched the Tamil Nadu–Thailand Express (TTX), a new intra-Asia loop connecting Vietnam and Thailand to India's east coast, deploying four 2,200 TEU vessels on a 28-day rotation.

Furthering its regional expansion, Wan Hai, in collaboration with Ocean Network Express (ONE) and Regional Container Lines (RCL), introduced the CS2 service in May 2025. This service connects China to Indonesia, enhancing Wan Hai's intra-Asia network.

Looking beyond Asia, Wan Hai is set to commence the India–East Mediterranean 2 (IM2) service on June 1, 2025, in partnership with Emirates Shipping Line. This service will link India to key Eastern Mediterranean ports, including Jeddah, Alexandria, and Mersin, operating on a 28-day round-trip rotation.

To support these service expansions, Wan Hai is investing in fleet enhancements. The company has placed orders for four 16,000 TEU container vessels, scheduled for delivery between 2026 and 2030, as part of its strategy to add 380,000 TEU capacity by 2030.

Transpacific Freight Rates Surge Amid Tariff Uncertainty and Peak Season Rush

Transpacific container shipping rates have escalated sharply as shippers expedite imports ahead of the August 14 expiration of the U.S.–China tariff reprieve. The temporary reduction of U.S. tariffs on Chinese goods from 145% to 30% has spurred a significant increase in bookings, with some freight forwarders reporting a 275% week-over-week surge in mid-May.

Following the U.S.–China tariff truce announced on May 14, 2025, which reduced U.S. tariffs on Chinese goods from 145% to 30% for 90 days, there has been a notable surge in transpacific shipping demand. Importers are expediting shipments to capitalize on the reduced tariffs before the window potentially closes on August 14. This urgency has led to increased container bookings and a rebound in freight rates, although these rates have not yet reached the peaks observed during the COVID-19 pandemic.

Carriers have responded by reinstating previously suspended services and introducing additional sailings to accommodate the heightened demand. For instance, ZIM Integrated Shipping Services Ltd. has resumed its ZX2 express service, and other major carriers are upsizing vessels on key routes. Despite these efforts, capacity constraints persist due to equipment shortages and port congestion, particularly in Chinese ports.

The surge in demand has led to capacity constraints, with carriers reinstating previously suspended services and deploying larger vessels to accommodate the increased volume. However, port congestion and equipment shortages in Asia are contributing to delays and further rate volatility.

Spot rates for 40-foot containers from Shanghai to the U.S. West Coast have risen by 58%, while rates to the East Coast have increased by 46% to $6,243. Carriers have announced General Rate Increases (GRIs) effective June 1, with additional hikes anticipated on June 15.

General Rate Increases (GRIs) have been announced, with carriers implementing mid-May hikes of $1,000–$3,000 per 40-foot container and planning additional increases on June 1 and June 15. These adjustments aim to push rates closer to $8,000 per container, depending on demand and capacity dynamics.

Implications for Oceania:

• Competitive Pressure: Oceania exporters may face increased competition for vessel space as carriers prioritize transpacific routes experiencing higher demand.
• Rate Volatility: The shifting focus of carriers could lead to rate fluctuations on Oceania-bound routes, necessitating proactive contract negotiations and capacity planning.
• Strategic Planning: Businesses should monitor developments closely and consider diversifying shipping routes or adjusting schedules to mitigate potential disruptions.

European Port Congestion Intensifies Amid Labour Strikes and Inland Disruptions

European ports are experiencing escalating congestion, with average vessel waiting times now reaching 5 to 6 days and further delays anticipated. Key ports such as Antwerp, Bremerhaven, Hamburg, and Rotterdam are particularly affected, leading to significant disruptions in global supply chains.

Key Factors Contributing to the Congestion:

• Labour Strikes and Workforce Shortages: Recent industrial actions, including a nationwide strike in Belgium on May 20, have severely impacted operations at major ports. The Port of Antwerp-Bruges, for instance, faced a complete shutdown during the strike, exacerbating existing backlogs. Additionally, workforce constraints in ports like Bremerhaven have exceeded forecasts, limiting the ability to clear congestion effectively.
• Inland Transport Bottlenecks: Low water levels on the Rhine River have restricted barge capacity, shifting more freight to already strained rail and road networks. Inland connections are struggling under the pressure, with average barge handling wait times of 75 hours in Antwerp and 72 hours in Rotterdam.
• Terminal Overcapacity: Container yards at several major ports are operating at full capacity, further hampering efficiency. For example, Antwerp is experiencing yard utilisation at 96%, with reefer plugs over capacity at 112%.
• Carrier Alliance Restructuring: The phasing in and out of new shipping alliances, such as the Gemini Cooperation between Maersk and Hapag-Lloyd, has disrupted established flows and increased port calls, leading to extended berthing times.

Implications for Oceania:

• Extended Transit Times: Shipments from Oceania to Europe may face prolonged transit times due to the congestion at European ports.
• Increased Shipping Costs: The congestion may lead to higher shipping costs as carriers implement surcharges to offset delays and rerouting expenses.
• Supply Chain Disruptions: Businesses in Oceania relying on European imports or exports should anticipate potential disruptions and consider diversifying their supply chain routes or increasing inventory levels to mitigate risks.

Ocean Freight Snapshot (June 2025)

Check our snapshot for a quick glance on space, rate, equipment and transit times for Oceania

Air Freight Updates

E-Commerce Drives Transpacific Trade Surge Amid Temporary Tariff Relief

A recent 90-day tariff reduction agreement between the U.S. and China has catalyzed a significant resurgence in transpacific trade, with e-commerce leading the charge. The U.S. has lowered tariffs on Chinese goods to 10%, excluding a 20% fentanyl-related levy, while China has reciprocated with a 10% tariff on U.S. imports and the removal of various countermeasures .

This temporary easing has prompted a swift response in the logistics sector. Air cargo capacity from China to the U.S. surged by 60% within 24 hours, and capacity from the U.S. to China and Hong Kong increased by 35% . Despite the previous imposition of a 145% tariff following the end of the de minimis exemption, demand for low-cost Chinese products remains robust, with consumers continuing to make purchases .

However, the resurgence is tempered by existing inventory levels. The National Retail Federation reported a 14.7% year-over-year increase in imports for 2024, totaling 25.5 million TEUs, as retailers had preemptively stocked up ahead of potential tariff hikes . Analysts suggest that while e-commerce is rebounding rapidly, other sectors may experience a delayed response due to these inventory surpluses.

Freighter Capacity Expands Amid Anticipated Air Cargo Demand Growth

Global freighter capacity has seen a notable uptick, with a 4% increase over the past week compared to the previous four-week average. Significant gains were observed on the Asia-Europe route (+11%), Asia Pacific to North America (+8%), and Middle East to Asia (+11%).

This expansion aligns with the International Air Transport Association's (IATA) projection of a 5.8% growth in air cargo volumes for 2025, reaching 72.5 million tonnes. The anticipated growth is primarily driven by booming e-commerce and geopolitical factors influencing sea shipments.

However, the market remains volatile due to fluctuating trade policies. For instance, the suspension of the U.S. de minimis exemption led to a 30% drop in China-U.S. air freight capacity. Although a temporary tariff agreement between the U.S. and China provided some relief, the long-term outlook remains uncertain.

Air Cargo Forwarders Favor Spot Rates Amid Market Uncertainty

In the current volatile air cargo market, freight forwarders are increasingly relying on spot rates rather than committing to long-term contracts. This shift is primarily driven by the unpredictable nature of global trade policies and economic conditions.

Key Factors Influencing the Shift:

• Geopolitical Uncertainty: The temporary 90-day 'reciprocal tariff' pause between the U.S. and China has introduced significant unpredictability. Brandon Fried, Executive Director of the Airforwarders Association, noted that forwarders are hesitant to enter long-term agreements, stating, “anything can come out of the White House right now”.
• Market Volatility: The air cargo industry has experienced substantial fluctuations in demand and rates. For instance, global air cargo volumes increased by 11% year-over-year in December 2024, with average spot rates rising by 15% . Such volatility makes long-term rate commitments risky for forwarders.
• Capacity Constraints: Ongoing capacity limitations, exacerbated by geopolitical tensions and infrastructure challenges, have led to elevated spot rates. For example, transatlantic spot rates surged to $3.61 per kilogram in December 2024, doubling since September.

Implications for Oceania:

• Export Strategy Adjustments: Oceania exporters may need to adapt their strategies, considering the preference for spot rates. This could involve more dynamic pricing models and flexible logistics planning.
• Risk Management: The reliance on spot rates introduces greater exposure to market fluctuations. Businesses should implement robust risk management practices to mitigate potential cost increases.
• Supply Chain Resilience: To navigate the uncertain landscape, companies might explore diversifying their supply chains and investing in digital tools for better market visibility and responsiveness.

Air Freight Snapshot (June 2025)

Customs, Inland Transport, Terminal and Regulation Updates

New Zealand Customs Updates Goods Clearance Fees Effective 1 July 2025

The New Zealand Customs Service has announced revised goods clearance fees, effective from 1 July 2025, as part of a broader initiative to align charges with the actual costs of managing goods crossing the border. These adjustments aim to ensure a fair and sustainable cost recovery framework for both importers and exporters.

Key Fee Changes (Effective 1 July 2025 – 31 March 2026)

• Import Entry Transaction Fee (IETF): Increased from NZD 34.85 to NZD 46.47 (excluding GST).
• Inward Cargo Transaction Fee (ICTF):
  • Sea: Reduced from NZD 467.03 to NZD 207.53 (excluding GST).
  • Air: Increased from NZD 81.26 to NZD 104.36 (excluding GST).
• Export Entry Transaction Fee (EETF):
  • Secure Exports Scheme (SES): Increased from NZD 3.44 to NZD 3.64 (excluding GST).
  • Other Exports: Reduced from NZD 7.20 to NZD 5.44 (excluding GST).
• Outward Cargo Transaction Fee (OCTF) for Outward Cargo Reports:
  • Sea: Increased from NZD 19.61 to NZD 37.01 (excluding GST).
  • Air: Increased from NZD 15.15 to NZD 39.59 (excluding GST).
• Outward Cargo Transaction Fee for Cargo Report (Export):
  • Sea: Increased from NZD 5.87 to NZD 11.47 (excluding GST).
  • Air: Increased from NZD 42.20 to NZD 60.82 (excluding GST).

These fee adjustments reflect a shift towards a more equitable distribution of costs associated with border processing activities. Notably, the significant reduction in the sea-based ICTF suggests a realignment of charges to better match the actual costs incurred in processing sea freight, while the increases in air freight-related fees indicate higher resource allocation for air cargo processing.

Future Structural Changes (Effective 1 April 2026)

From 1 April 2026, the current fee structure will be replaced by a levy-based system. This new framework will introduce separate rates for air and sea consignments, implement charges for low-value goods per consignment, and eliminate per cargo report charges. Additionally, commercial vessels, international transhipments, and empty shipping containers will be brought within the scope of the charging regime. These changes aim to fully recover the costs of border management activities and reduce taxpayer subsidies.

Implications for Businesses:

• Cost Planning: Importers and exporters should review the updated fees to assess the financial impact on their operations and adjust their budgeting accordingly.
• Contractual Agreements: Businesses may need to revisit contracts with logistics providers to account for the revised fee structure and avoid unexpected charges.
• Operational Adjustments: Companies should consider the upcoming shift to a levy-based system and plan for potential changes in their supply chain processes to accommodate the new charging mechanisms.

For a detailed breakdown of the updated fees and further information, please refer to the official New Zealand Customs Service page: Goods Clearance Fees.

Australian Border Force May 2025 Compliance Update: Key Highlights for Importers and Exporters

The Australian Border Force (ABF) has released its May 2025 Goods Compliance Update, outlining critical compliance areas and regulatory changes affecting importers, exporters, customs brokers, and licensed operators.

Compliance Focus Areas

1. Cargo Reporting Accuracy

The ABF emphasizes the importance of accurate and timely cargo reporting. Common errors identified include:

• Tariff Classification Errors: Misclassification of goods leading to incorrect duty assessments.
• Valuation Date Inaccuracies: Incorrect reporting of the date of export, affecting customs value calculations.
• Delivery Address Discrepancies: Providing intermediary addresses instead of the final destination.
• Invoice Term Type Misreporting: Incorrectly stating terms of trade, impacting the determination of customs value.

Importers and brokers are urged to review documentation thoroughly to ensure compliance.

2. Tariff Concession Orders (TCOs)

When claiming TCOs, it's essential to provide comprehensive Illustrative Descriptive Material (IDM) that matches the goods' physical characteristics to the TCO description. Failure to do so may result in processing delays or rejection of claims.

Customs Licensing Reforms

The Customs Amendment Legislation, effective from 5 March 2025, introduces significant changes:

• Electronic Processing: Licensing applications, variations, and renewals can now be submitted electronically, streamlining administrative procedures.
• Standardized Fit and Proper Checks: Enhanced background checks for individuals in trusted positions within the supply chain to prevent criminal infiltration.
• Aligned Licensing Requirements: Uniform requirements across depot, warehouse, and broker licenses to ensure consistency and integrity.

Enforcement Actions

The ABF has taken decisive actions against non-compliant customs brokers:

• License Cancellations and Suspensions: Brokers found negligent in due diligence, leading to the importation of illicit goods, have faced license cancellations or suspensions.
• Mandatory Training: Brokers are now required to complete Continuing Professional Development (CPD) modules developed by the ABF to stay updated on compliance obligations.

Future Developments

1. Transition to Levy-Based Fee Structure

Starting 1 April 2026, the ABF will implement a levy-based system for goods clearance fees, replacing the current transaction-based model. This change aims to better reflect the costs of border management activities.

2. Enhanced Data Integrity Measures

The ABF is focusing on improving data accuracy in the Integrated Cargo System (ICS), particularly concerning the registration of overseas suppliers. Importers and brokers should ensure consistent and accurate data entry to facilitate efficient cargo processing.

Implications for Businesses:

• Review Compliance Procedures: Regularly audit cargo reporting and classification processes to align with ABF requirements.
• Stay Informed on Regulatory Changes: Keep abreast of upcoming reforms, such as the levy-based fee structure, to adjust financial planning accordingly.
• Invest in Training: Ensure that staff, especially customs brokers, are enrolled in mandatory CPD programs to maintain compliance standards.

For detailed information, refer to the full Goods Compliance Update – May 2025 on the Australian Border Force website.

DP World Opens New Empty Container Park at Port of Melbourne

DP World has officially launched its new Coode Road container park at the Port of Melbourne, marking a significant enhancement to the region's logistics infrastructure. The facility, which commenced operations on 12 May 2025, spans over 25,000 square meters and is designed to handle approximately 4,000 TEU. Strategically located adjacent to the West Swanson Terminal, the park focuses on empty container management, offering services such as container surveying, repairs, washing, and dedicated truck parking.

To streamline operations and improve efficiency, DP World has partnered with OneStop to implement the OneStop Modal and Vehicle Booking System (VBS) at the Coode Road facility. This integration aims to optimize truck scheduling, reduce congestion, and enhance servicing capabilities, thereby providing greater transparency and control across the supply chain.

The Coode Road container park complements the existing Melbourne Logistics Park (MLP), which primarily handles full container services. By concentrating on empty container logistics, the new facility alleviates pressure on MLP during peak operations, contributing to more efficient container flow within the port precinct.

In addition to the opening of the Coode Road facility, DP World has announced plans to reconfigure truck in-gates at the West Swanson Terminal. The current entry point on Coode Road will be shifted to Mackenzie Road, with the transition occurring in three phases starting later this month. The new gates are expected to be operational in the first quarter of 2026, aiming to improve traffic flow and provide carriers with easier access to and from the terminal.

These developments underscore DP World's commitment to enhancing Australia's port infrastructure and streamlining logistics operations to meet the evolving demands of global trade.

New Zealand - Upcoming VBS Fee Increases at PoAL – What You Need to Know

At KLN, we are committed to keeping our customers informed about important developments that may affect their supply chains. One such change is the significant increase in the Vehicle Booking System (VBS) charges at the Port of Auckland (PoAL) that will affect your logistics planning.

High level summary:

1.  Upcoming VBS Fee Changes
   Starting 1 January 2026, peak-hour VBS fees will increase by 35%, and off-peak fees by 15%. From 1 July 2026, peak-hour fees will see an additional 28% increase, while off-peak fees will rise by another 33%. These changes aim to reduce congestion and encourage off-peak usage.
2. Industry Concerns and KLN’s Position
   Stakeholders have raised concerns, labeling the fee increase as excessive and calling for transparency and accountability. KLN Oceania advocates fair pricing that is aligned with service improvements and promises to support clients through these changes.
3. Planning and Mitigation Strategies for 2026
   We recommend considering alternative routing through the Port of Tauranga, scheduling off-peak deliveries, and exploring Dynamic FCL Hubbing to control costs and minimize disruptions. Our team is ready to discuss tailored strategies to help you adapt.

We have a detailed blog post about this changes and how to mitigate them in our KnowledgeHub. You can access the full article here.

Why Partner with KLN

Selecting KLN Oceania as your trusted partner isn't just a choice—it's a strategic move towards ensuring your success. Our commitment to excellence is not just a promise; it's a guarantee. With a global network that's both vast and meticulously managed, we stand head and shoulders above the competition. This means you benefit directly from unparalleled service quality, ensuring your supply chain needs are met with precision, efficiency, and minimal hassle.

Are you ready to elevate your logistics game and experience seamless support tailored to your unique needs? Let's discuss how we can bring unparalleled value to your business.