Average spot rates in the eastbound trans-Pacific trade stayed flat this week after a jump of 8.6 percent last week fueled by demand for space. Shippers seeking to avoid any possibility of labor disruption on the East Coast turned to West Coast services.
When the International Longshoremen’s Association and United States Maritime Alliance agreed to extend the existing contract for another 90 days, importers breathed easier, because they could get their remaining peak-season shipments in through East Coast ports, so demand slacked off.
The Drewry benchmark for shipping a 40-foot-equivalent unit container from Hong Kong to Los Angeles stayed at $2,711 this week, signaling a leveling off of demand.
“Now that the (strike) threat has receded, rates will fall back as load factors deteriorate, even taking account of anticipated winter service suspensions,” Drewry Supply Chain Advisors said in a bulletin released Wednesday.
Nevertheless, trans-Pacific spot rates this week remained at their third-highest weekly level of the year. The benchmark is 35 percent above the level it was in mid-April prior to the commencement of this year’s contracting season.
Other U.S. import trades have also seen strong rate inflation. “Pricing between South Asia and the U.S. East Coast is now at its highest since Drewry first started publishing rates on this trade in the Container Freight Rate Insight back in 2006,” it said.
Drewry said weakening market conditions bode well for importers and exporters approaching the 2013 contracting season. “Next year’s shipping bill will not be as high as it looked a few months ago. But cargo owners should still expect to pay more than they have in 2012.”