Transpacific freight rates have surged on the back of fears of prolonged strike action by US port workers.
Rates from Asia to the US west coast were $1,681 per 40-foot equivalent unit (feu) on 6 June, up 30% from $1,294 a week earlier, according to the Freightos Baltic Index.
The increase reflected the modest success of a transpacific general rate increase on 1 June as well as fear over the impact of a prolonged labour dispute.
A smaller but significant rise of 17.5% in rates was also recorded from Asia to the US east coast. The rate rose to $2,714 per feu, up $405 from a week earlier.
The trade to the US east coast is also impacted by low-water surcharges for containers using the Panama Canal.
While rates rose this week, Linerlytica said “sentiment remains poor” and carriers continue to offer discounts with cargo demand still insufficient to support rate hikes.
Analysts said carriers are casting an eye on the impact that port delays in the US could have regarding effective capacity levels.
The labour disruption that started on 2 June, after port workers on the west coast downed tools, and continued in the early part of this week, according to the Pacific Maritime Association, which represents employers.
That led to the shutdown of Long Beach’s largest container terminal — Total Terminals International — and several other facilities on the west coast.
Judah Levine, lead analyst with Freightos, said the resulting slowdown is increasing concern over the impact the delays will have on effective container shipping capacity levels.
A previous strike by dockworkers of the International Longshore & Warehouse Union in early 2015 resulted in a peak of 30 ships waiting for a berth and took up to six months for operations to return to normal.
So a prolonged dispute would cause delays and congestion in the form of ships waiting to dock, which would tie up capacity and put upward pressure on freight rates, Levine said.
So far, there are no reports of a build-up of ships waiting to dock.
But shippers’ groups representing major retailers have asked the White House to intervene to resolve the labour dispute.
“We urge the [Biden] administration to mediate to ensure the parties quickly finalise a new contract without additional disruptions,” David French, senior vice president of government relations at the National Retail Federation, told Reuters.
The industry it represents accounts for about half of the volume at the nation’s container ports and is gearing up for the back-to-school season, Christmas and other key sales events.
