China-US container rates continue to slump despite being in peak season
HOUSTON (ICIS)–Shipping container rates from east Asia and China to the US continued to slump this week despite being in what is typically the peak season as many importers ordered goods earlier than normal to avoid delays from congested ports.
Rates to the west coast fell by 11%, according to data from online freight shipping marketplace and platform provider Freightos and are now below $6,000/FEU (40-foot equivalent unit).
Rates to the east coast fell by 6% this week and are nearing the $9,000/FEU level.
Rates remain elevated compared with pre-pandemic levels but are down by 62% to the west coast compared with the same time a year ago, and down by 47% to the east coast year on year.
Judah Levine, head of research at Freightos, said market participants are not expecting rates to firm or a surge in volume, but the floor is likely to remain well above pre-pandemic levels.
Data from the National Retail Federation (NRF) indicates that volumes peaked in May, setting a new monthly record, as June volume declined by 6%.
July imports are expected to be level with June volumes, the NRF said.
This data aligns with the reduction of container ships waiting to unload at the west coast ports of Los Angeles and Long Beach, which together account for about 40% of all containerized imports into the US.
According to the Marine Exchange of Southern California (MESC), the backlog hit a new record low on Monday of 10 vessels, and fell even lower to nine container ships on Wednesday.
The record high was 109 vessels waiting to unload, set on 9 January.
Some of the reduction is from shippers sending container ships to other ports because of the backup at LA/LB.
German container shipping major Hapag-Lloyd said in an operational update that the backlog at the Port of Savannah has lengthened to 48 ships at anchor with 14- to 18-day waiting times.
Container ships are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.
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Thumbnail shows containers. Image by Vincent Thian/AP/Shutterstock.