According to The Loadstar, spot freight rates on major container lanes continued to decline over the past week due to flat demand and mounting concerns over a potential strike on the US East and Gulf coasts. Despite expectations of a short-term increase ahead of China’s Golden Week in October, no such surge has materialized, contributing to the ongoing drop in rates.
East Coast Rates Plunge Amid Strike Concerns
One of the most significant drops was on the Shanghai-New York route, where rates plummeted 21% to $6,661 per 40ft container. The steep decline is attributed to shippers rerouting cargo to the West Coast to avoid delays caused by the impending ILA strike on the East and Gulf coasts. As the deadline to move containers to the East Coast has passed, demand has dropped sharply, leading to a dramatic fall in rates.
Modest Declines on West Coast and European Routes
On the West Coast, the Shanghai-Los Angeles route experienced a 7% decline, while routes from Asia to North Europe and the Mediterranean also saw double-digit drops. The Shanghai-Rotterdam and Shanghai-Genoa legs decreased by 17% and 10%, respectively. These declines suggest that the 2024 peak season has ended earlier than expected, with reduced consumer demand contributing to the overall decrease in freight volumes.
Long-Term Outlook Suggests Further Rate Drops
With negotiations between the ILA and port operators stalled, a strike on the US East and Gulf coasts seems increasingly likely. The situation is expected to further affect demand for East Coast shipments, leading to additional rate reductions. However, analysts suggest the strike may not significantly impact holiday goods availability, as many importers have already moved peak-season shipments forward.
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Source: THE LOADSTAR
