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.
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.
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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.
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.
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:
However, the May 2 Executive Order that ended the de minimis exemption for China and Hong Kong remains in effect:
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:
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.
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:
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:
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.
To help mitigate risks and secure space during this volatile period, we strongly recommend the following:
1. Forecast ProactivelyKLN 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.
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:
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:
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:
Challenges:
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.
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:
Implications for Oceania:
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 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:
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:
Implications for Oceania:
Check our snapshot for a quick glance on space, rate, equipment and transit times for Oceania
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.
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.
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:
Implications for Oceania:
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)
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:
For a detailed breakdown of the updated fees and further information, please refer to the official New Zealand Customs Service page: Goods Clearance Fees.
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:
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:
Enforcement Actions
The ABF has taken decisive actions against non-compliant customs brokers:
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:
For detailed information, refer to the full Goods Compliance Update – May 2025 on the Australian Border Force website.
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.
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:
We have a detailed blog post about this changes and how to mitigate them in our KnowledgeHub. You can access the full article here.