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Despite the onset of a significant US port strike on 01 October 2024, ocean freight rates from Asia to the US have continued to decline, reflecting the ongoing off-peak season. However, the market is still weighing the potential impact of this disruption.

The Freightos Baltic Index, dated October 1, reported the following week-on-week changes in booking rates:

Key takeaways: 

The strike, led by the International Longshoremen’s Association (ILA) and its 47,000 members across major Eastern US and Gulf Coast ports, is primarily driven by demands for higher wages and safeguards against automation. As a result, most ports in these regions have effectively shut down. While there has not yet been a corresponding spike in ocean freight costs, suppliers of perishable goods have responded by shifting to air cargo, causing airfreight rates from Asia to North America to surge by 9%.

Attention now turns to the strike's duration. A prolonged shutdown on the US East Coast could trigger global ripple effects, including capacity constraints and empty container shortages. In response, international shipping lines are diverting vessels to West Coast ports, raising concerns over potential congestion there. Any significant delays or bottlenecks on the West Coast could, in turn, exacerbate equipment shortages at Asian origin hubs, thereby disrupting not only trans-Pacific shipping but also trade flows across Asia and Europe.

The situation remains fluid, with the global shipping industry bracing for further fallout should the strike persist.

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