Transpacific container freight rates increase due to strike at Canadian ports

Port of Vancouver, Canada (Photo: Globalnews)

Transpacific container freight rates rebounded as congestion increased on the US West Coast due to a strike by ports on Canada's west coast. Many shipping lines have also blanked sailings when demand is gloomy.

The Shanghai Containerized Freight Index (SCFI) shows freight rates on the Asia-US West Coast and Asia-US East Coast trades at $1,771/FEU and $2,662/FEU, respectively, up 26% and 12%, respectively compared to 7/7.

Linerlytica, in a note released on July 17, said, "Momentum is strong for another transpacific rate hike on 1 August, aided by capacity cuts and peak season demand, with disruptions from the two-week port closure on the Canadian pacific coast also helping to the keep capacity utilisation sufficiently high for the rate increases to stick."

A 13-day worker's strike at Canada's Pacific coastal ports ended on July 13, following a standoff between the British Columbia Maritime Employers Association and International Longshore and Warehouse Union (ILWU) Canada reached tentative agreement on a new four-year agreement that still needs ratification by members from both sides.

Port operations at Vancouver and Prince Rupert resumed the next day, with back-up to 13 container ships in Vancouver and six at Prince Rupert. Port congestion on the US West Coast hit a nine-month high of more than 200,000 TEUs last week and a backlog of ships that will take weeks to clear, including ships diverting to Seattle and Tacoma to avoid traffic jams. However, the settlement of ILWU contracts in the US and Canada will pave the way for a full restoration of normal West Coast port operations.

The worry, however, is that as ports continue to operate, easing congestion could put more supply-side pressure on the market. Last week, ZIM predicted a loss for the full year, while transport operators have noticed that there will be no peak season this quarter.

Read more:

• Forecast of the container shipping market in the second half of 2023
• Port of Rotterdam reduces container volume and profit in the first half of 2023
• International shipping and logistics market update - Week 29/2023

Source: Phaata.com (According to ContainerNews)

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