The supply and demand relationship in the China-Australia freight transportation market generally maintains a dynamic balance, but it fluctuates due to factors such as trade structure, seasonal demand, and global economic conditions. The core driving forces include the demand for bulk commodities like iron ore, changes in trade policies, and variations in transportation costs. Here is a detailed analysis:
I. Demand Side: China's High Dependence on Australian Resources Drives Freight Demand Growth
Commodity imports dominate demand
China is the world's largest importer of iron ore, and Australia is China's main supplier of iron ore. In 2025, the recovery of China's steel industry demand (such as infrastructure construction and manufacturing recovery) directly drove the growth of iron ore imports, pushing up the freight rates on the route from Western Australia to China. For instance, the average spot freight rate for Capesize vessels reached $16,424 per day in early March 2025, an increase of 8% compared to before, reflecting the tight supply and demand situation.
Stable demand for energy and agricultural products
Apart from iron ore, China's demand for Australian coal, liquefied natural gas (LNG), barley, beef, and other commodities remains consistent. Despite China's adjustments to its coal import policies, Australia, with its geographical advantage and cost competitiveness, remains an important supplier of energy and agricultural products to China.
Seasonal demand fluctuations
Freight demand exhibits seasonal characteristics. For example, in February 2025 (after the Spring Festival), demand on the Australia-New Zealand route remained low, and freight rates dropped by 24.7%; however, in June, demand picked up, and freight rates rebounded. Such fluctuations are closely related to China's industrial production cycle and holiday consumption patterns.
II. Supply Side: Capacity Allocation and Cost Pressures Affect Supply Capacity
Tight shipping capacity
Despite shipping companies' efforts to allocate capacity, they still struggle to fully meet the freight demand between China and Australia. In 2025, the global shipping market faced a supply shortage, exacerbated by external factors such as the decline in water levels at the Panama Canal and the situation in the Red Sea, leading to a concentration of shipping resources in the Chinese market and further driving up freight rates.
Rising transportation costs
Factors such as fuel prices, port fees, and environmental policies (such as carbon emission taxes) have increased transportation costs. For instance, in 2025, the total volume of foreign trade goods handled by coastal ports is expected to reach 4.8 billion tons, but the unit transportation cost will be partially offset by the increase in the electrification rate of railways (to 75%) and the penetration of new energy heavy trucks (expected to be 15%).
Multimodal transport and logistics integration
To address supply chain uncertainties, logistics enterprises have strengthened their multimodal transport capabilities (such as sea-rail-road) and provided "door-to-door" full-chain services. Leading enterprises (such as SF Express and COSCO Shipping) have integrated resources through mergers and acquisitions to enhance scale effects and optimize transportation efficiency.
III. Driving Factors and Challenges for Market Supply-Demand Balance
Core driving factors
China's economic recovery: Infrastructure construction and manufacturing demand growth are the main supports for freight demand.
Trade policies: The China-Australia Free Trade Agreement (ChAFTA) and the Regional Comprehensive Economic Partnership (RCEP) have reduced tariff barriers and promoted the flow of goods.
Transport technology upgrades: Artificial intelligence optimizes route planning, and the Internet of Things enables visualized management of goods, enhancing supply chain efficiency.
Main challenges
Geopolitical risks: Trade frictions may cause fluctuations in shipping prices (such as the maximum amplitude of the BDI index reaching 45% in 2024).
Tougher environmental policies: The goal of carbon neutrality may increase emission standards, raising the transportation costs of traditional fuel vehicles.
Global economic uncertainties: Global trade frictions and the resurgence of the pandemic may affect freight demand.
IV. Future Trends: Intelligence, Greening, and Regionalization Synergy
Intelligence acceleration
The maturity of autonomous truck and drone delivery technologies is expected to drive the related market size to reach 120 billion yuan in 2025, with a compound annual growth rate of 25%. Blockchain technology enhances supply chain transparency and simplifies logistics processes.
Greening transformation
Hydrogen fuel cell heavy trucks and electric ships are key policy support areas, with total subsidies expected to exceed 30 billion yuan in 2025. The application ratio of clean energy equipment such as electric trucks and hydrogen fuel cell ships will further increase.
Regionalization synergy
The RCEP agreement promotes the flow of goods in the Asia-Pacific region, and mechanisms such as the China-Europe Railway Express continue to release dividends. Cross-border e-commerce logistics has become a new growth point, and it is expected that the global market size will exceed 1.5 trillion US dollars by 2025.
