Transatlantic shipment prices were 44% higher during the recent US port strikes as carriers anticipated an increase in port backlogs and longer travel times according to new analysis by freight marketplace company Freightos.
Averages prices for transatlantic container shipments reached $2,331/kg during the week of the strikes according to Judah Levine, Freightos’ head of research, despite the strikes on the US East and Gulf Coasts’ only lasting three days, ending late on Thursday.
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Due to the short nature of the industrial action further rate hikes are unlikely to now come into play, though some carriers will seek to manage capacity to ensure prices remain higher, Levine warned.
He said: “Carriers are also planning to reduce deployed capacity on this lane later in the month in the hope of preventing rates from falling back to the $1,600 – $1,800/FEU level they had maintained for much of the year.”
While some port operators, such as the Port Authority of New York and New Jersey, expressed optimism that the backlog of around 45-60 vessels waiting to enter affected ports could be cleared within a week, some experts have also warned of two to three weeks of disruption caused by the three-day strike.
This disruption could extend outside of the US market as vessels are delayed returning to ports on the other side of the Atlantic and some European hubs, such as Hamburg in Germany, experience congestion delaying their own operations.
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By GlobalDataThe strike-lead disruption, while milder than expected, comes amid a tumultuous year for the shipping industry, which has largely settled into a new normal of diverting from the Red Sea and Suez Canal region as vessels seek to avoid the growing conflict in the Middle East.
According to Levine, decreased global capacity from these diversions means that freight rates are also unlikely to drop below the lows seen in April, when transpacific rates dropped to $3,000FEU for West Coast journeys and $4,000FEU for East Coast routes.
However, shipments to the US Gulf Coast and lower East Coast are likely to see notable disruption again in the coming weeks as the region deals with the effect of Hurricane Milton, which is expected to be one of the largest storms to hit Florida in a century when it lands on Wednesday night.
