Home » Asia-US Container Rates Pull Back; Uswc Ports, Dockworkers Agree to New Deal
Economy Featured Global News News

Asia-US Container Rates Pull Back; Uswc Ports, Dockworkers Agree to New Deal

Shipping container rates from east Asia and China to the US pulled back after surging last week, West Coast ports and dockworkers reached agreement on a new six-year deal, and trucking analysts said the spot market likely bottomed out in April, highlighting this week’s logistics roundup.

Last week’s surge in rates was because of a combination of factors – June general rate increases (GRIs), reduced capacity along the trade lanes, some slowdown in traffic related to work actions at West Coast ports, and additional surcharges for vessels passing through the Panama Canal, according to Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos.

But soft demand for goods continues to weigh on freight markets and continues to keep downward pressure on rates.

Rates to the West Coast fell by 9%, as shown in the following chart.

The decrease follows the announcement this week of a tentative agreement between the International Longshore and Warehouse Union (ILWU) and the 29 West Coast ports.

The agreement must still be ratified by union membership.

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 tanker rates from the US were stable to softer, with slight decreases on the US Gulf to Asia trade lane and the US Gulf to the Caribbean.

Transatlantic activity was weak, according to a broker, keeping downward pressure on rates.

The broker said that the amount of partial cargo space available could lead to some deals being fixed off-market.

On the transpacific trade lane, partial space is available through June, and contract business is expected to be steady into the first half of July.

The trucking market has been struggling through a freight recession, but volumes rallied modestly in May and national average spot rates were stable for a second straight month, according to DAT Freight & Analytics, a freight exchange service and data provider.

Similar data was seen from Cass Information Systems in its May Freight Index – Shipments.

Cass said the freight market continues to work through the downcycle and that previous downcycles have ranged 21-28 months.

“Declining real retail sales trends and ongoing destocking remain the primary headwinds to freight volumes, but dynamics are shifting as real incomes improve and the worst of the destock is in the rearview,” Cass said.

ACT Research said this week in its freight and transportation forecast that April likely was the low point of the downcycle in spot rates, but elevated Class 8 build rates will limit the near-term upside.

Data from Freightwaves Sonar showed slight improvement in contract rates and no change in spot rates this week, as shown in the following chart.

Source : Hellenicshippingnews