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Ocean freight rates are undergoing significant fluctuations this week, driven by multiple factors including labour disputes, pre-Lunar New Year demand, and weather-related disruptions. 

The Freightos Baltic Index reported the following week-on-week changes in booking rates:

Key takeaways: 

The impending expiration of the interim agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) on January 15 has heightened concerns across the shipping industry. With negotiations stalled over the contentious issue of port automation and semi-automation, the possibility of a labour strike looms, threatening significant disruptions to US East Coast port operations.

In anticipation of potential delays, carriers are implementing surcharges ranging from $850 to $2,000/FEU. Shippers are being urged to expedite container pickups and returns to minimise disruptions.

A prolonged shutdown at East Coast ports could have a global ripple effect, reducing vessel and container availability at origin ports in Europe and Asia. This scenario may lead to further delays and increased freight rates in these regions.

Transpacific container rates have surged sharply this week, driven by pre-Lunar New Year demand and frontloading in anticipation of possible tariff increases. The addition of disruption surcharges has further intensified upward pressure on rates. While some carriers are contemplating a mid-month General Rate Increase (GRI), industry experts question its viability due to the timing too close to the holiday lull.

In the meantime, congestion at key Asian ports, exacerbated by adverse weather conditions, is causing delays of up to four days at major hubs, including Shanghai, Qingdao, and Ningbo, as well as ports in the Philippines and Vietnam.

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