Leaders in Papua New Guinea’s shipping sector tell Business Advantage PNG that demand is holding firm. But they acknowledge that high global freight rates and any further delay to the Papua LNG project could get in the way of growth.

Consort’s Papuan Coast sails from Port Moresby to Lae. Credit: Steamships Logistics

Shipping volumes in and out of Papua New Guinea are holding firm in a time of volatility, but it will take a calming of geopolitical tensions and a final investment decision on Papua LNG for substantial growth to happen.

That is the conclusion Business Advantage PNG can draw from interviews conducted with three leaders in PNG’s shipping sector.

Food imports into the Motukea (Port Moresby) and Lae international shipping terminals rose 11 per cent year on year in the first 10 months of 2024, while exports of agricultural products rose 15 per cent in the same period, according to Robert Maxwell, CEO of port operator ICTSI South Pacific.

Exports were driven by cocoa and coffee shipments to Japan, Australia and the United States, Maxwell says.

“We remain confident in the PNG market and continue to see strong demand from customers for reliable and efficient liner services.”

Meanwhile, imports were led by construction and consumer goods from China and Southeast Asia as well as some “specialised” shipments from Europe.

“Some of this volume is preparatory material for Papua LNG. There are a few hundred containers a month coming in related to [the project],” he says.

Although delays to the TotalEnergies-led Papua LNG project (a final investment decision – FID – for which is now expected at year-end) have had “a flow-on effect” on demand for international shipping, “the baseline cargo [demand] is still there,” Isabel Maguire, Country Manager PNG at Swire Shipping, tells Business Advantage PNG.

On the domestic shipping front, poor weather conditions in Lae impacted schedule reliability at times in 2024, according to Nick Fisher, CEO of Steamships Logistics.

Steamships’ bottom line was also hit by the cessation of imports of Jet-A1 fuel by Puma Energy, “as we’ve been the primary carrier for a lot of that,” he says.

However, Fisher says volumes were strong towards the end of 2024 and are expected to increase heading into 2025.

“It’s difficult to say what the total market growth is, but our year-on-year growth has been satisfactory.”

Rates stay high

Global freight rates have been high since the coronavirus pandemic, and the attacks on Red Sea shipping by the Iran-backed Houthis in Yemen have kept on the pressure, according to Maxwell.

“Vessels now have to go around the Cape [of Good Hope] and avoid the Red Sea,” Maxwell says.

However, he says PNG is somewhat protected from global trends due to its position away from major shipping routes.

“The majority of PNG’s cargo comes from Asia and Australia – north to south.”

Maguire explains that the Red Sea crisis has reduced global shipping capacity, leading to higher freight rates around the world.

“Other regional factors such as port congestion across the Asia-Pacific and rising stevedoring and feeder rates have also had an impact,” she says.

“In spite of these disruptions, we remain confident in the PNG market and continue to see strong demand from customers for reliable and efficient liner services.”

Preparing for growth

Meanwhile, the wait for Papua LNG’s FID “has really put everything on hold,” according to Fisher.

Steamships’ maritime assets that were brought in to cater to the project “have had to find alternative employment, which we have done, but obviously this wasn’t part of the original plan,” he says.

For now, Steamships’ focus is on being ready for a final investment decision on the gas project.

“Those additional assets are deployed to other customers right now, but we can bring them back when we’re ready. We’re looking to bring in additional tonnage as well to supplement our existing products when needed to make services more reliable,” he says.

“Our key objectives for 2025 are ontime performance and maintaining our connectivity, particularly between Port Moresby and Lae, but also out to the islands.”

Swire Shipping is also waiting to see what happens with the gas project.

“Shipping comes at a bit of a later stage to other plans that need to be approved,” Maguire says.

“But Swire Shipping is well set-up to support the needs of the project when it is ready,” she says, noting that it can bring in additional tonnage through sister brand Swire Projects.

A version of this article was first published in the 2025 annual edition of Business Advantage Papua New Guinea.