Skip to main content

Rate Related Update and Market Conditions

Market Overview

  • ILA Strike Risk: With no agreement between USMX and ILA, a strike starting October 1 appears likely if no resolution is reached. The strike would impact 14 key ports that handle 15% of global capacity, potentially causing significant disruptions and pushing up ocean freight rates. The timeline for recovery is uncertain.
  • Port Charges: CMA and HMM have announced new LPC (Local Port Charge) and DPC (Destination Port Charge) due to the potential labor unrest. Rates for U.S. imports are set at $1500/3000/3000 for 20GP/40GP/40HQ containers. Evergreen is expected to implement similar charges.
  • Market Outlook: From October to December, carriers remain cautious, anticipating a decline in capacity. If no strike occurs, rate reductions are expected to continue. However, if the strike happens, carriers may resort to Blank Sailings, reducing available capacity.
  • Panama Canal Recovery: The recent recovery from low water levels in the Panama Canal has lowered costs on the USEC route, which is now similar to or cheaper than the USWC. This shift is encouraging carriers to redirect cargo to the USEC.
  • Long-term Contracts: The market is expected to remain soft into next year, leading to the release of long-term fixed contracts. Carriers are adjusting to decreased demand and productivity.

Rate Predictions

YML has announced several General Rate Increases (GRIs) through October 15. These GRIs reflect space constraints and rising operational costs. Carriers are preparing for possible labor disruptions, and shippers are advised to plan and secure bookings early to avoid higher rates and capacity issues.

Port Congestion

Maritime Employers Brace for Potential Longshore Strike

As negotiations between maritime employers and the International Longshoremen’s Association stall, a longshore strike affecting U.S. East and Gulf coasts appears increasingly likely. Ports and ocean carriers are preparing for disruptions that could be the first major strike in almost 50 years. The United States Maritime Alliance (USMX) has expressed concerns over the lack of progress in negotiations, raising the possibility of significant delays in terminal operations, container depots, and chassis availability if the strike proceeds.

  

Ocean Carriers Take Calculated Risk Amid US Port Strike Threat

With no resolution in sight, ocean carriers face increasing uncertainty as a potential strike looms at U.S. East and Gulf coast ports. Unlike in past negotiations, where carriers made concessions to avoid disruptions, the current situation reveals a shift in strategy. Although carriers prefer to keep operations running smoothly, they seem less willing to bend to labor demands this time around, potentially bracing for the significant impact a strike could have on supply chains.

Typhoon Bebinca Halts Operations at Shanghai and Ningbo Ports

Typhoon Bebinca, the strongest storm to hit Shanghai in 75 years, has forced the closure of major Chinese ports, including Shanghai and Ningbo. With winds reaching 95 mph, the storm has caused significant flooding and property damage, disrupting cargo movement and vessel schedules. Ocean carriers like Hapag-Lloyd have warned of deteriorating port conditions, which are expected to worsen due to vessel backlogs. This storm adds further strain to an already stretched global supply chain.

Port of Long Beach Breaks Cargo Volume Records Amid Peak Season

The Port of Long Beach achieved record-breaking cargo volumes in August 2024, processing 913,873 TEUs, marking a 33.9% increase from the previous year. The surge is attributed to retailers rushing to import goods ahead of potential tariff hikes and labor uncertainty at U.S. East and Gulf coast ports. Imports rose 40.4%, while exports and empty container movements also saw double-digit increases. This strong performance highlights the port’s efficiency and preparedness during the busy peak season.