SHIPPING: Asia-US container rates surge as port strike deadline looms; tanker rates flat to softer

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US surged this week as the deadline to avoid a strike at US Gulf and East Coast ports nears, while rates for liquid chemical tankers were flat to softer as ship owners await contract nominations.

CONTAINER RATES
Global average rates for shipping container rose by 3% this week, according to supply chain advisors Drewry, with rates to both US coasts topping that.

The following chart from Drewry shows rates from Shanghai to New York rose by 6% and rates from Shanghai to Los Angeles rose by 7%.

Drewry expects rates on the transpacific trade to rise in the coming week, driven by front-loading ahead of the looming International Longshoremen’s Association (ILA) port strike in January and the anticipated tariff hikes under the incoming Trump Administration.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said rates could continue to be pressured higher by January general rate increases (GRIs) from ship owners and from increased volumes ahead of the Lunar New Year holiday.

“Pre-Lunar New Year demand will combine with higher-than-normal volumes for this time of year into the US,” Levine said. “And the post Lunar New Year dip in volumes will likely be less pronounced than usual too as many US shippers continue to frontload ahead of expected tariff increases.”

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets.

They also transport liquid chemicals in isotanks.

A strike could have a direct impact on US PE exports.

Year-to-date through November, PE exports accounted for 46.6% of overall PE sales with an average of 2.4 billion lb/month.

Through October, 73% of seaborne US PE exports utilized ports that are facing the work stoppage threat.

LIQUID TANKER RATES
US chemical tanker freight rates held steady for most trade lanes this week, with only a few exceptions.

Commentary was quiet again this week amid the start of the new year as most players are still on extended holidays.

However, the USG to Brazil and West Coast India is starting 2025 off slightly lower.

From the USG to India, there has been a slow start to the new year with limited activity on the market. There is some prompt space available for few prospects to fill.

A broker said that most contract of affreightment (COA) charterers are or have been nominating their cargoes to move in January, while the spot market is virtually nonexistent.

However, this does not mean that putting a ship on berth would be cheap.

Sentiment for this route is slightly down, as some owners with partial space available are not able to reach full cargo currently.

From the USG to Rotterdam, rates are facing some downward pressure in the new year compared to where they were at the end of December.

It is likely that the market will pick back up in the next couple of weeks.

Freight rates remain steady and will likely stay unchanged for the beginning of the year.

With additional reporting by Kevin Callahan and Harrison Jacoby