Port strikes threatened to load goods ahead of time and increased pressure on freight prices caused immediate shipping rates for Asian containers to the East Coast to plummet faster than usual on trade routes. Immediate shipment prices for containers from Asia to the U.S. East and Gulf Coast of Mexico fell by $2,300 per FEU this week, a much faster decline than in years, as peak season freight fell on Whole Sea Freight Services, and retailers worried that a strike by dock workers in the Eastern and Gulf regions will move nonessential cargo to the West starting Oct. 1 Coast. In addition, this year carriers are taking advantage of special or bullet rates to compete for freight from the slowing markets of Asia to the East Coast. “It is the bullet rate that drives the behavior.” An anonymous operator executive told MondayBusiness Magazine。
Based on S&P Energy Information (S&P Global)“Business Magazine”sister company) data showed that the East Coast immediate rate paid by importers and the various freight (FAK) rates paid by freight agents fell to $6,200 per FEU from $8,500 per FEU last week. “Now that carriers are willing to make a deal, some carriers, worried about excess momentum later this year, are reaching out to some customers to lock these new rates into service contracts that will last until April 30, 2025. Many service contracts for trans-Pacific routes will take effect on May 1 next year.” Shipless Carrier (NVO) Consultant Jon Monroe on Monday for “Business MagazineRepresents.
Typically, about 60% of goods are imported from the East to the Trans-PacificTransportation at a lower cost contract rateBut when the cabin is tight, this percentage can be as low as 45%. The West Coast immediate/FAK rate fell $600 to $4,800 per FEU, according to Platts. However, West Coast fares are likely to stabilize or even rise in the coming weeks as retailers ship holiday merchandise to the West Coast via shorter trans-Pacific routes and retailers respond to the growing threat of a strike from the International Terminal Workers Association (ILA).
“Interest rates on the West Coast will definitely go up, depending on the ILA situation,” Monroe said. Over the past two years, East Coast instant shipping rates have dropped by about $1,000 per FEU from late August to mid-September, marking the end of the East Coast's traditional peak season. In 2021, as the U.S. economy recovered from the COVID-19 pandemic, the immediate exchange rate rose by about $1,000 compared to the end of August.
However, this year, carriers have been offering a large number ofSpecial rates— Bullet rates, commodity rates, specific cruise rates, and hybrid rates to ensure business acquisition in the fiercely competitive trans-Pacific market. “It's too confusing. Everyone is chasing lower rates,” another operator executive told The Associated Press on FridayBusiness Magazine》.
Last month, carriers said they intended to compete fiercely for business this peak season through West Coast bullet prices, and now those special prices are pouring into East Coast trade routes. “This is nothing unexpected. We have seen signs that operators are not able to maintain rates and the bullet discount is already there.” said Christian Sur, Executive Vice President of Marine Freight/Contract Logistics at NVO Unique Logistics International.
This year, the carrier launched or resumed 10 services from Asia to the West Coast and deployed dozens of “extra cargo” vessels in the trade. In addition to smaller importers and shipless carriers, most carriers across the Pacific are eligible for special rates offered by large alliance carriers and discounted rates offered by smaller non-union carriers.
Although the airline did not offer any new services to the East Coast, retailers loaded holiday merchandise ahead of schedule in June and July as ILA strike threats intensified. AS OF LAST WEEK, SEVERAL CARRIERS ANNOUNCED BULLET PRICES FROM ASIA TO THE EAST COAST OF $5,500 TO $5,800 PER FEU, ANOTHER NVO THAT DID NOT DISCLOSE NAMES. BULLET PRICES ON THE WEST COAST RANGE BETWEEN $4,400 AND $4,900 PER FEU.
Retailers forecast that U.S. imports in September will be particularly strong, growing 14% compared to September 2023. October is the busiest month of 2023.
