News / Strike swell hits transatlantic rates – transpac shippers hold their breath

The supply chain ripples from the US east and Gulf coast port strike have largely still to make themselves felt in global spot freight rates, according to this week’s indices.

Despite predictions that the transpacific eastbound headhaul trade might see a surge of demand into US west coast ports, the major spot rate indices saw freight rates decline on the trade: the Drewry World Container Index’s (WCI) Shanghai-Los Angeles leg declined 4% week on week, to $5,258 per 40ft, while the Xeneta XSI transpacific route declined 7%, to $5,630 per 40ft.

The WCI’s Shanghai-New York leg also fell, by 2% week on week, to finish at $5,922 per 40ft.

Despite the strike being relatively short-lived, the build-up of ships at anchor during the three-day stoppage will take some time to clear – according to Xeneta, this morning there were 44 ships waiting to berth and a further 120 en route to US east and Gulf coast ports. The fallout could take a while to become apparent.

“Closing all ports on the US east and Gulf coasts – even for just three days – comes with severe consequences,” said Xeneta chief analyst Peter Sand.

“We must now wait to see how quickly the returning workers are able, and willing, to deal with the huge backlog of ships waiting to offload thousands of containers carrying billions of dollars of goods.

“The dozens of ships delayed on the US east and Gulf coasts will also be late arriving back in the Far East. This will impact schedules towards the end of this year, and possibly into 2025 in the run-up to lunar new year at the end of January, which traditionally sees an increase in goods shipped out of the Far East.

“You cannot miss a scheduled weekly sailing for a ship carrying 15,000 containers and not expect repercussions for carriers and importers,” he added.

The biggest pricing impact of the strike was seen on the transatlantic, where the XSI jumped 20% in a single day, with the outbreak of industrial action on 1 October, to $2,345 per 40ft. By today, it had climbed to $2,900, representing an increase of 58% since the end of August.

Xeneta noted that the much smaller North Europe-US west coast trade had also been impacted, with average spot rates increasing 48% since the end of August, to stand at $4,450 per 40ft.

“There has already been a financial impact for shippers through increasing freight rates on transatlantic trades, at a time when markets on other major trades out of the Far East remain elevated due to conflict in the Red Sea,” Mr Sand added.

That said, the Asia-North Europe trades both saw spot rates continue to fall – the XSI’s Far East-North Europe trade saw a 20% week-on-week decline, to £3,829 per 40ft, while the WCI’s Shanghai-Rotterdam leg was down 8% week on week, to $3,825 per 40ft, an Shanghai-Genoa was down 9%, to $3,848 per 40ft.