Rates for shipping containers from east Asia and China to the US continue to fall amid soft demand for goods, while a port strike in Canada’s British Columbia province entered its seventh day and could force some chemical producers to curb production, leading this week’s logistics roundup.
Average global container rates have fluctuated slightly over the past few months but have remained below $2,000/FEU (40-foot equivalent unit) since mid-February, according to the Drewry World Container Index.
Drewry also has rates from China and East Asia rising slightly but remaining below recent highs.
Rates at online freight shipping marketplace and platform provider Freightos edged lower over the week and are down by 78-84% from year-ago levels.
Judah Levine, head of research at Freightos, said rates are likely to continue in this range because of minimal volume growth on the ex-Asia lanes.
Levine said there is not much optimism for a peak season surge in demand, and carriers will need to manage capacity more strictly than they did after June general rate increases (GRIs) if they hope to be successful with future rate increases.
Freightos rates were down by 1% on the West Coast and by 4% on the East Coast. Container ships are relevant to the chemical industry because, while most chemicals are liquids and are shipped in tankers, container ships transport polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.
LIQUID CHEMICAL TANKERS
Rates for liquid chemical tankers were largely unchanged this week, with just a slight decrease from the US Gulf to Brazil.
Activity was limited as the typical summer slowdown began to emerge.
Rates remain well off the peaks seen in the first quarter of this year, but they remain higher than they were in late 2021.
CANADA PORT LABOUR ISSUES
About 7,000 port workers at Vancouver and other ports in Canada’s British Columbia province remained on strike as the work stoppage entered its seventh day.
Vancouver, Canada’s largest port by far, is an important export hub for petrochemicals, fertilizers, and other commodities.
The trade group Chemistry Industry Association of Canada (CIAC) said if the strike continues, some chemical producers may be forced to curb production.
NORFOLK SOUTHERN RAILROAD LAWSUIT
US railroad Norfolk Southern (NS) has filed a third-party complaint against vinyl chloride monomer (VCM) producer Oxy Vinyls and railcar owners including Dow Chemicals to help share the costs to clean up after a February derailment in East Palestine, Ohio.
The defendants who commented on the lawsuit called it meritless and vowed to vigorously defend themselves.
Source: Hellenic Shipping News
