Container rates between Asia and the US continue to fall; This trend is expected to continue after the ILA strike

HOUSTON: Tariffs for shipping containers from East Asia and China to the US fell further after a prolonged strike at Gulf and US East Coast ports was averted and volumes were largely brought forward during peak season.

The International Longshoremen’s Association (ILA) The strike lasted only three days, and market analysts expect the backlog created by the work stoppage at the Port of New York/New Jersey to clear in two to three weeks or even less.

Some ports extended gate opening hours to allow more time for container delivery or collection.

Nathan Strang, director of Southwest U.S. ocean freight at Flexport, said the company is seeing relatively smooth terminal operations and rail operations.

Strang said all detention and demurrage rules apply Federal Maritime Commission (FMC) remain in effect, but it was noted that the arrest and demurrage time frames restarted on October 7 after the strike ended.

CONTAINER PRICES FALL

Global average shipping container prices have continued to fall, according to several analysts.

Supply Chain Consultant Drewry The World Container Index (WCI) is at $3,349/FEU (40-foot equivalent unit), down 4%, shown in the chart below.

Drewry said container rates from Shanghai to Los Angeles fell 5% and rates from Shanghai to New York fell 3%, as shown in the chart below.

Following the preliminary agreement between the ILA and the ports, Drewry expects rates outside of China to continue to decline slightly in the coming weeks.

Online marketplace and platform provider for freight shipping Freightos said interest rates fell more, but interest rates were higher.

Judah Levine, Research Director at Freightos, The airlines in question also plan to reduce deployed capacity on the transatlantic trade route later in the month in the hopes of preventing tariffs from falling back to the $1,600-$1,800/FEU level they have maintained for much of the year year.

“As we emerge from the strike and with peak season demand largely behind us as volumes have risen significantly over the last few months, transpacific container rates are likely to continue to decline due to the seasonal lull in volumes between peak season and Lunar New Year. “ Levine said.

Container ships and the costs of transporting containers are relevant to the chemical industry because while most chemicals are liquid and transported in tankers, polymers such as polyethylene (PE) and polypropylene (PP) are transported in pellets on container ships.

They also transport liquid chemicals in isotanks.

PRICES FOR LIQUID TANKERS UNCHANGED

Freight rates for U.S. chemical tankers remained stable again this week on most trade routes, even as shipping demand increases on some routes.

Most of the prices of the major chemical centers remain sideways as a large part of the market took part in the European Petrochemical Association (EPCA) conference in Berlin.

There was also calm on the USG route to Asia after the holidays.

Although it is likely that exports outside the US to Europe and Asia will increase, particularly as clean petroleum products (CPP) tonnage continues to focus on alternative cargoes in the petrochemical sector, increasing the already well-supplied spot availability.

On the transatlantic front, the eastern leg is expected to warm up with cargoes including styrene destined for ARA arriving from several US Gulf ports.

source : ICIS