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The latest Weekly Ocean Freight Index from Freightos revealed an accelerated decline in booking fees from Asia to Northern Europe and the Mediterranean, plunging over 10% due to persistently weak demand. Despite this, the looming port strike on the US East Coast that threatens to lock up vessels and containers may alter the shipping landscape by October.

The Freightos Baltic Index, dated September 25, reported the following week-on-week changes in booking rates:

Key takeaways: 

With the International Longshoremen's Association (ILA) contract set to expire in less than five days, negotiations with the US Maritime Alliance (USMX) remain deadlocked, particularly on crucial issues such as wage increases and port automation. This impasse significantly heightens the likelihood of a major strike on October 1, 2024. Anticipating disruption, international shipping lines have begun diverting vessels away from the US East Coast. A modest 1% uptick in ocean freight rates from Asia to the US West Coast reflects this shift in traffic patterns.

East Coast ports have extended hours in a bid to clear backlogs, while carriers impose deadlines for final shipments ahead of the strike. Hapag-Lloyd, among others, has halted new export bookings, and surcharges on shipments to this region are already scheduled for October.

The potential consequences of a prolonged strike are severe. ILA ports, which handle half of the US container traffic, would create bottlenecks across the supply chain, overwhelming alternative routes and exacerbating delays. Such disruptions could drive up freight rates globally, with profound ripple effects throughout international shipping networks.

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