Hello and welcome,

The first half of July has brought a mix of severe weather, geopolitical tensions, and shifting freight dynamics that are directly impacting Australian importers and exporters. Here’s what’s shaping the global logistics landscape this fortnight:

Trump Tariffs – Impact on Australian Importers

In early July 2025, US President Donald Trump reinstated a 25% tariff on all steel and aluminium imports, including those from Australia. This move, part of a broader protectionist agenda aimed at boosting US manufacturing, has sparked concern across global markets.

Key Impacts for Australian Importers:

• Export Disruption: Australian producers of steel and aluminium face immediate pricing disadvantages in the US market.
• Supply Chain Rebalancing: Importers relying on US-origin steel and aluminium may see price increases as US domestic demand shifts inward. This could prompt Australian businesses to seek alternative sources from Asia or Europe, where pricing and availability may be more favourable.
• Trade Uncertainty: The lack of exemptions—despite previous diplomatic efforts—signals a more rigid stance from the Trump administration. This unpredictability may discourage long-term contracting and investment in US-Australia trade corridors.
• Global Ripple Effects: The tariffs are part of a wider trade strategy that includes levies on Canada, Mexico, and China. Analysts warn this could trigger retaliatory measures and broader economic instability, which may indirectly affect Australian importers through currency fluctuations, freight rate volatility, and shifting demand patterns.

🚢 Red Sea Rerouting & Surcharges

The Red Sea remains a high-risk corridor due to ongoing Houthi attacks, with over 190 incidents recorded since late 2023. Major carriers continue to reroute vessels via the Cape of Good Hope, adding 10–14 days to transit times and significantly increasing fuel and insurance costs. Emergency contingency surcharges are now standard across shipments from Europe, the Middle East, and East Africa. These reroutes are causing ripple effects across global supply chains, particularly for time-sensitive and reefer cargo.

📦 Cargo Operations Snapshot – Australia

Australian cargo volumes continue to grow steadily:

• Sea freight volumes rose 4% year-on-year, although slightly down compared to April.
• Air freight volumes increased 16% year-on-year, with a modest rise from the previous month.
• Overall, combined freight activity (air + sea) remains higher than 2024 levels, indicating strong demand despite global disruptions.

Port congestion and shifting trade flows are influencing spot rate movements, particularly in Asia–Australia lanes. Rate restorations are in effect across major carriers including COSCO, ZIM, MSC, and ANL, with increases ranging from USD 300–400 per TEU and USD 600–800 per FEU for shipments from Northeast and Southeast Asia to Australia.

💨 Sydney Weather Disruption

A bomb cyclone struck Sydney on 1 July, bringing strong winds and heavy rain that disrupted operations at Port Botany. Container handling was suspended, empty container parks were closed, and several vessels omitted Sydney from their schedules. The storm also caused widespread delays in freight movements and led to the cancellation of domestic flights, affecting both sea and air logistics. Recovery is ongoing, with vessel berthing delays and yard congestion still present.

Australian Port Operations

• Port Botany (Sydney): Recovering from weather-related disruptions. Vessel berthing delays and container yard congestion remain.
• Melbourne: Stable operations with minor delays due to peak season volumes.
• Brisbane: Operating normally with occasional equipment-related slowdowns.
• Fremantle: Weather disruptions caused temporary halts in operations.
• Townsville: Infrastructure upgrades continue, with limited access in some areas.

Overall, Australian ports are operational but facing seasonal and weather-related pressures. Importers should monitor vessel schedules and allow for buffer time.

✈️ Middle East Airspace Closures – Impact on Australian Importers

The escalating conflict between Israel and Iran has led to widespread airspace closures across key Middle Eastern transit hubs including Iran, Iraq, Jordan, Israel, and surrounding Gulf states. These closures have triggered a cascade of disruptions across the global air cargo network.

For Australian importers, the consequences are tangible:

• Flight Rerouting and Cancellations: Airlines are avoiding traditional flight paths through the Middle East, leading to rerouted or cancelled services. This affects cargo flights originating from or transiting through Europe, the Middle East, and parts of Asia.
• Extended Transit Times: With carriers forced to take longer routes, transit times for airfreight have increased. This is particularly problematic for time-sensitive goods such as perishables, pharmaceuticals, and electronics.
• Reduced Capacity and Delays: The congestion caused by rerouting has led to reduced lift capacity and significant delays in cargo schedules. Freighter aircraft previously operating through Middle Eastern hubs have been withdrawn or reassigned.
• Cost Implications: Longer flight paths and increased fuel consumption are driving up airfreight costs. Importers should expect elevated rates and potential surcharges for shipments affected by these changes.
• Unpredictability and Risk: The situation remains fluid, with the potential for further escalation. Importers are advised to maintain close communication with freight forwarders and airlines, monitor developments, and consider alternative routing options where possible.

🌍 Europe’s Impact on Shipping

European ports are facing severe congestion. Rotterdam, Antwerp, and Hamburg are experiencing delays of 48–80 hours due to strikes, technical constraints, and overwhelming demand. These delays are pushing up shipping rates and extending transit times for cargo bound for Australia. Shippers are advised to consider alternative ports such as Bremerhaven, Felixstowe, and Gdansk to mitigate delays.

Freight rates from Europe to Australia have climbed sharply. Spot rates from Shanghai to Rotterdam rose 12% in early July, and rates to Genoa edged up 1%. These increases are being driven by Red Sea diversions, port congestion, and strong seasonal demand.

🧪 Lumpy Skin Disease Update

Outbreaks of Lumpy Skin Disease (LSD) in Italy and France have prompted the Department of Agriculture to revise import conditions for dairy products. Italy and France have been removed from the LSD-Free Country List, but pasteurised dairy products are still permitted under updated biosecurity protocols. Cheese imports remain unaffected. Importers are advised to review supply chain arrangements to ensure compliance and avoid clearance delays.

🔮 Industry Outlook

The global logistics sector is navigating a complex landscape shaped by geopolitical risk, weather disruptions, and shifting trade flows. While ocean spot rates are rising, intermodal demand is expected to strengthen in Q3. Port expansions and automation are driving long-term resilience, but short-term volatility remains a challenge. Importers should remain agile, diversify routing options, and maintain close communication with freight partners.

VoxGroup is a market-leading international trade consultancy, customs and logistics company. For further information contact Robert Crabtree, Mike Delfino or Rosalie Kelly on (02) 8036-8450 or send us a message via www.voxgroup.com.au.

Warm regards,
The Team at Vox