US Port Strike Threats Over, Container Rates Stable

Strike fears at US East and Gulf Coast ports have ended, and trans-Pacific container rates to the US are now stable.

“Frontloading ahead of the possible January strike had helped keep North America container rates elevated into November but were no longer a driver of rates as the strike deadline got closer,” Judah Levine, head of research for analyst Freightos, said in a weekly report.

For the week ending January 10, the Baltic Freightos index recorded rates from Asia to the US West Coast remaining stable at $5,924 per 40-foot container (FEU). Rates from Asia to the US East Coast fell 1% to $6,898 per FEU.

“Though trans-Pacific prices to both coasts were level last week, rates had climbed sharply to start the month as demand is increasing ahead of the Lunar New Year holiday which starts Jan. 29,” Levine wrote. “Asia-West Coast prices climbed 52% compared to late December up to the $6,000 per FEU level, with East Coast rates at about $7,000 per FEU for a 30% gain.”

Similar stability was seen on Asia to North Europe and the Mediterranean trades.

Asia-North Europe rates rose 1% to $5,640 per FEU. Asia-Mediterranean rates also rose 1% to $5,685 per FEU.

“For Asia-Europe and Mediterranean shippers Lunar New Year demand started earlier than usual due to longer lead times from Red Sea diversions,” Levine wrote. “Rates that had increased about 60% from early November into December to about the $5,500 per FEU level have been stable since then, with daily rates this week already starting to ease.”

Levine also pointed to reports that some carriers are planning to cut rates to around $4,000 per FEU, suggesting that the Chinese New Year holiday may end earlier than usual this year and expectations for post-holiday rate increases are low.

“Asia-Europe prices may soon fall all the way back to the Red Sea crisis-era floor of $3,000-$4,000 per FEU hit in the low demand periods last year,” Levine said. “But trans-Pacific rates may not recede as significantly once Lunar New Year demand eases, since frontloading ahead of expected U.S. tariff increases may be keeping volumes higher than they otherwise would be in Q1,” he said, citing a report from the National Retail Federation, which forecasts January volumes to rise 10% year-on-year.

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Source: Phaata.com (via FreightWaves)

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