Average global rates for shipping containers fell significantly this week, including a 21% decrease from Shanghai to New York, as shippers are shifting cargo deliveries to the US West Coast to avoid the planned strike on 1 October.
A strike by union dock workers at East Coast and US Gulf ports seems more likely after International Longshoremen’s Association (ILA) Wage Scale Delegates voted unanimously last week to support leadership’s intentions to walk off the job if a new labor deal is not agreed to when the contract expires on 30 September.
Supply chain advisors Drewry said the shift has led to a decrease in demand that has pressured prices lower. Average global rates for 40-foot containers fell b y13% as shown in the following chart.
As much of the peak-season demand has been pulled forward either to avoid tariffs or the labor issues, Drewry expects east-west rates to fall further in the upcoming weeks.
The following chart from Drewry shows the decrease from Shanghai to both US coasts, as well as from Shanghai to Rotterdam and Genoa which have also fallen significantly.
Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said rates from Asia to the US West could face upward pressure the deadline to make the decision to shift coasts has about passed.
“Transatlantic shippers still have a little time left to move containers, and the approaching cutoff may be supporting the $300/FEU (40-foot equivalent units) increase in daily rates so far this week,” Levine said.
ontainer ships and costs for shipping containers 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), are shipped in pellets.
They also transport liquid chemicals in isotanks.
LIQUID TANKER RATES STEADY
Rates for liquid chemical tankers ex-US Gulf were unchanged this week.
On the transatlantic eastbound trade lane contract cargoes are keeping things steady with owners looking to fill holes of open space.
October contract volumes on the transpacific route remain tentative but a shipping broker expects part cargo space to be available across the regular players.
The USG-South America east coast trade lane was quiet this week, but the regular owners have space for prompt loading.
Source: By Adam Yanelli, ICIS.
