Spot rate gap widens amid US labour fears
Spot rates for shipping from Asia to the US East Coast have surged to their highest differential compared to West Coast rates in nearly two years, reflecting growing concerns over potential labour strikes and a significant shift in import volumes.
As of 12 August, the spot rate to the East Coast stood at US$9,000 per feu, while the West Coast rate was US$6,000 per feu, according to S&P Global Platts. This US$3,000 gap is the widest seen since late 2022.
The disparity is largely driven by a rush to move goods to the East and Gulf coasts ahead of the end of September expiration of the current labour contract covering dockworkers from Maine to Texas.
Importers are anxious to avoid potential disruptions that could arise from labour actions, which could significantly impact supply chains during the critical holiday season. As one carrier executive told the Journal of Commerce, 15 August marks ‘the last hurrah for the East Coast’, after which it becomes too late for shipments to reach store in time for Black Friday.
The surge in East Coast volumes is expected to taper off after mid-August, as importers finalise shipments to avoid the risk of a strike. This could lead to a ‘reverse diversion’, with shippers redirecting cargo back to the West Coast, where there have been few signs of congestion or delays at key ports like Los Angeles-Long Beach.
Unlike last year, when West Coast labour concerns led to widespread shipping disruptions, recent months have seen smooth operations and ample landside capacity at these ports.
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