Shipping container rates from East Asia and China to the U.S. retracted in June, following a previous surge. In the same time frame, West Coast ports and dockworkers reached a consensus on a new six-year deal, a major development this month. Additionally, trucking analysts noted the spot market likely reached its low point in April, a notable point in this month’s logistics roundup.
June’s surge in rates can be attributed to a confluence of factors, including general rate increases (GRIs) in June, decreased capacity along the trade lanes, a slowdown in traffic related to labor actions at West Coast ports, and additional surcharges for vessels traversing the Panama Canal, explains Judah Levine, head of research at online freight shipping marketplace and platform provider, Freightos.
Yet, persistent weak demand for goods continues to be a burden on freight markets, applying downward pressure on rates. Rates to the West Coast saw a 9% reduction, as depicted in the subsequent chart.
The dip in rates comes on the heels of this month’s announcement of a provisional agreement between the International Longshore and Warehouse Union (ILWU) and the 29 West Coast ports, still pending ratification by union membership.
Container ships bear significance for the chemical industry. While the majority of chemicals, being liquids, are transported in tankers, container ships ferry polymers like polyethylene (PE) and polypropylene (PP), which are transported in pellet form.
In related news, Saudi Arabia’s Foreign Minister Prince Faisal bin Farhan voiced the country’s desire for heightened maritime security in the critical Gulf region, part of its reconciliation with long-time rival Iran, during a statement last Saturday.
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