SHIPPING: Asia-US container rates still rising as tariff threat replaces strike concerns

HOUSTON (ICIS)–The tentative agreement between US Gulf and East Coast ports and dockworkers has taken some of the pressure off rates for shipping containers from Asia to the US, but the threat of tariffs proposed by President-elect Donald Trump is likely to support higher prices moving forward.

Supply chain advisors Drewry expect importers to continue front-loading volumes ahead of anticipated tariff hikes.

Global average rates from Drewry rose by 2% this week, as shown in the following chart.

Rates from Shanghai to Los Angeles surged by more than 13%, and rates from Shanghai to New York jumped by almost 10%, as shown in the following chart from Drewry.

Rates from online freight shipping marketplace and platform provider Freightos showed a similar surge, with rates to the West Coast soaring by 23% and rates to the East Coast jumping by 13%.

Upward pressure on rates persists as imports are expected to continue to surge because of potential increases in tariffs, according to the National Retail Federation (NRF).

“The new [ILA] contract brings certainty and avoids disruptions, and we hope to see it ratified as soon as possible,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.

But Gold said because the agreement came at the last minute, retailers were already bringing in spring merchandise early to ensure that they would be well-stocked to serve their customers in case of another disruption, resulting in higher imports.

“The surge in imports has also been driven by President-elect Trump’s plan to increase tariffs because retailers want to avoid higher costs that will eventually be paid by consumers,” Gold said. “The long-term impact on imports remains to be seen.”

The Global Port Tracker from the NRF and Hackett Associates, shows in the following chart that US ports handled 2.17 million TEUs (20-foot equivalent units) in November, although the ports of New York and New Jersey have yet to report final data.

That was down 3.2% from October but up 14.7% year over year.

Ports have yet to report December data, but Global Port Tracker projected the month at 2.24 million TEU, up 19.2% year over year. That would bring 2024 to 25.6 million TEU, up 15.2% from 2023.

January is forecast at 2.16 million TEU, up 10% year over year; February at 1.87 million TEU, down 4.5% because of Lunar New Year factory shutdowns in China.

Thumbnail image shows a container ship. Photo by Shutterstock