Shipping rates may fall after US strikes averted
Strikes at US ports along the East Coast and Gulf Coast have been called off following a tentative agreement on a new six-year master contract between the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX).
The strikes, set to begin on 15 January, would have led to the closure of ports from Maine to Texas, disrupting the vital flow of goods.
Had the strikes proceeded, data from Xeneta, the freight intelligence platform, indicated a potential further rise in freight rates, which had already increased by 26% since mid-December.
Ocean container freight rates from the Far East to the US East Coast were expected to climb even more, with disruption surcharges potentially adding up to $3,000 per container.
“The agreement between the ILA and USMX must be welcomed because a strike had the potential to be a supply chain and economic disaster, but it still highlights the difficulties facing shippers in managing supply chain risk,” said Emily Stausbøll, Xeneta senior shipping analyst, adding that despite the agreement, shippers face ongoing challenges in the unpredictable freight market.
“Looking ahead, it is likely spot rate growth will now soften on trades into the US from the Far East, suggesting a brighter outlook for shippers negotiating new long-term contracts,” Stausbøll said.
However, she cautioned that global supply chain risks remain high, citing potential escalation in geopolitical tensions.
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