Sea container freight rates between the US and Asia drop due to inflation and the risk of economic recession
Container shipping prices from East Asia and China to both US coasts continued to decline sharply in the last week of September 2022 due to reduced demand amid inflation, economic recession concerns and many analysts. Distributors have taken advantage of increasing the stock of goods before the annual peak season.
Rates to the Pacific Coast are down 17% and are now 80% lower than they were a year ago, while rates to the Atlantic Coast are down 14% and 61% lower than last year, according to the report freightos platform provider container shipping market database.
China's Golden Week, a week-long National Day celebration starting on October 1, workers are off and some factories will relax/reduce production.
On an annual basis, Golden Week typically sees an increase in freight rates, but Judah Levine, head of research at Freightos, said the holiday is unlikely to provide any support. for this year's rates. Carriers have begun canceling trips to try to keep ships full in an attempt to stem the slide in rates, but to no avail.
With the peak season over, the market will move to a new level of freight rates, ship owners may consider options for adjusting supply to prevent the decline in freight rates like when the pandemic first appeared presently. Chartering rates - the price that carriers pay to charter a ship are also falling. pare
Congestion and cargo volume at the port are still high, although the speed of cargo clearance has improved but is still slow, basically the price level is still likely to remain above the 2019 level. The dropcould put pressure on some smaller carriers, who are currently stuck with contracted charter rates at a time of rising prices, now having to adjust their prices for cross-border services. Pacific Ocean following market signals.
Congestion at U.S. West Coast ports continues to ease, largely due to reduced demand and also because shippers have chosen to send large volumes to East Coast ports to avoid having to pay additional storage fees at ports. Port of Los Angeles (LA) and Long Beach (LB).
The container ship backlog rate in LA/LB hit a new record low in mid-September 2022, according to the Marine Exchange of Southern California (MESC) when there were only six container ships in the queue. Previously, the record high was on January 9, 2022 when there were 109 container ships waiting to be unloaded.
In an operational update, German container shipper Hapag-Lloyd said the East Coast backlog continued. The Port of Savannah continues to have the largest backlog of container ships waiting to be unloaded, with 42 vessels moored, down only 1 vessel from last week.
Waiting time is 12 days for class I ships and 17-20 days for class 2 ships.
The backlog at the Port of Houston is 18 ships, down 3 ships from last week.
At the port of New York / New Jersey, there were 19 container ships moored at the beginning of the last week of September 2022, up from 15 ships the previous week, with waiting times for berths up to 32 days.
Not just conventional containerized goods, container ships are also involved in the chemical industry as most chemicals are liquids and are transported by tankers, container ships transport polymers such as polyethylene. (PE) and polypropylene (PP), shipped in pellets.
Source: SeaDragon International Logistics Company.