Ocean spot rates ranging from Asia from Asia to North Europe and the Mediterranean are expected to decline in the last week. They are now at more than 20% less than July’s highs which suggests a possible earlier ending to the summer season. A fear of prolonged durations of transit because of Red Sea diversions and delays in Asian ports led shippers to make orders earlier and imports of goods from Asia reaching their peak in June and into July. When the date to European importers to deliver their products in time for the Christmas season was set in the latter part of September, the decrease in rates increased, which suggests that there could be further reductions in demand decreases.

Along the Transpacific route, a early beginning of the peak season was noted also, with the volumes exceeding monthly records in August. There is the only slight decrease anticipated in September, before an increase that is more evident in the month of October. The rates for shipping from Asia towards and from the East Coast of the United States remain relatively constant because of the earlier shipping ahead of the possibility of a strike from the International Longshoremen’s Association (ILA) in the first week of October. As the deadline for strikes is nearing and carriers reportedly discounting rates, which is which could lead to the possibility of a substantial drop of East Coast rates.

West Coast rates may see some relief as the volumes shift away from East and the Gulf Coasts. The ILA and port operators are split over wage and automation and strike-related issues, which make a strike probable. Strikes could lead to delayed exports and imports, delays in capacity, as well as queues that could cause rates rising and congestion at other ports. Maersk believes that a one-week shut down could require between four and six weeks to recover and the effects could be worsening when the strike continues for a longer period of time.

ILA president Harold Daggett has suggested that West Coast port workers might not be able to process vessels that are that are diverted from ships that are diverted from the East Coast, which could create more disruptions to supply chain. There is a possibility that the White House could intervene with cooling off periods when the strike is considered to be as a risk to security or health. However, the ILA is opposed to such an intervention.

Furthermore, a super storm in the northern part of Vietnam and severe rainfall in the southern part of China are causing delays to maritime logistics, impacting the container terminals of Hong Kong. Air Canada is also preparing to deal with disruptions resulting due to a strike by a pilot, and air cargo is getting crowded throughout Asia in advance of the demand growth in Q4. Freightos Air Index levels for China from China to North America and Europe remain very high, indicating the peak-season levels.

Source: Container News