Prices for shipping containers from Asia to the US rose this week as carriers have successfully pushed through mid-October increases, but most analysts think the rise will be short term and rates continue to face downward pressure.
Rates from supply chain advisors Drewry showed a 6% increase from Shanghai to Los Angeles, and a 4% increase from Shanghai to New York, as shown in the following chart.
Drewry said this momentum is likely to be short-lived, with rates expected to decline soon after.
Rates from online freight shipping marketplace and platform provider Freightos rose by 20% to the West Coast and by 14% to the East Coast.
Judah Levine, head of research at Freightos, said an increase in blanked sailings helped support the increased rates.
“These increases push prices back to about mid-September levels on these trades, when rates likewise rebounded briefly on GRIs (general rate increases),” Levine said. “Prices are now well above October 2023 levels after approaching parity with pre-Red Sea crisis rates a couple weeks ago.”
Levine said some carriers may introduce additional GRIs for 1 November whose success may likewise depend on effective capacity management.
Rates from ocean and freight rate analytics firm Xeneta also rose this week.
Peter Sand, chief analyst at Xeneta, said the increases go against the underlying fundamentals of weak US demand.
“The 12-month trade truce between the US and China announced this week, including the lowering of tariffs and removal of port fees, could prompt some shippers into action but it is unlikely to spark a surge in imports,” Sand said. “Many shippers did their work earlier in the year frontloading goods, now inventories are high they will be in no rush to take advantage of lower tariffs.”
He said the outcome of the recent meeting between US President Donald Trump and Chinese President Xi Jinping could improve market sentiment, which could ease the rate of decrease in ocean freight rates.
“Once again, the container shipping industry is having to react to chaotic and unpredictable geo-political games,” Sand said. “Removal of port fees is positive news for carriers, but they have already carried out the disruptive work to rearrange services to reduce the financial impact of these new levies – in that sense the damage has already been done.”
Rates from global logistics company Freight Right on its TrueFreight Index (TFI) showed weekly increases from about $400-700/FEU.
Robert Khachatryan, founder and CEO of Freight Right Logistics, said US exporters are facing mixed signals, meaning that while tariff risk remains elevated, there may also be windows opening for favorable deals or supply-chain shifts, especially in Southeast Asia or in sectors like rare earths and critical minerals.
“With each passing week, the era of passive trade policy looks to be over,” Khachatryan said. “We are now, more than ever, in a regime of active, targeted tariffs and geostrategic trade deals, which are creating both risk and opportunity for cross-border sellers.”
Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.
They also transport liquid chemicals in isotanks.
LIQUID TANKER RATES TICK HIGHER ON TRANSATLANTIC
US chemical tanker freight rates assessed by ICIS were flat to higher this week with increases for parcels from the US Gulf (USG) to Europe and relatively unchanged on the other trade lanes.
For the USG to Rotterdam, there are limited bits of cargo space still available for November for small parcels. A lack of interest has prompted clean petroleum products (CPP) tonnage to focus on higher rates in the clean market, leaving limited availability for chemicals. It has been difficult for owners to accommodate larger parcels which has prompted rates to increase for those size cargoes.
However, there seems to be more interest in monoethylene glycol (MEG) from USG to ARA, with at least three cargoes of 5-10,000 tonnes for various November dates.
Rates from the USG to Asia remained steady both for smaller parcels and for larger parcels. Overall, this trade lane remains dependent upon contract of affreightment (COA) volumes. However, with tariffs being paused, there has been some uptick in this trade lane, but the market has seen some tightness pressuring rates slightly upward. Most players remain hesitant to take the opportunity due to the risk and uncertainty. Most cargoes discussed in the market were MEG and ethylene dichloride (EDC) to Southeast Asia.
The temporary tariff pause between the US and China has potentially opened arbitrage opportunities as traders scramble to work possible cargoes.
From the USG to Brazil, the market has not been very active this week except for smaller parcels. Overall, spot chemical trade on this route is relatively slow, however a tighter positions list is supporting the freight rates.
Despite the uptick in inquiries there is not enough significant activity that would suggest any increase in demand. Most of the regular owners have space remaining and are trying to fill space while supporting current freight levels.
COA volumes remain steady as there were some inquiries for caustic soda, MEG, and styrene moving to Brazil.
Freight rates are now expected to remain steady for the time being.
Along the USG to India route demand to WC India for MEG, methanol and ethanol continue to prevail as several large parcels are looking for any available space. For the time being rates remain stable.
Source: By Adam Yanelli, Additional reporting by Kevin Callahan, ICIS,
