Rates for shipping containers from east Asia and China to the US rose this week on expanded peak season demand and capacity controls from carriers, while liquid tanker rates ex-US Gulf were mixed.
CONTAINER RATES
Container rates to the US West Coast are between $7,075-$8,330/FEU (40-foot equivalent unit) while rates to the East Coast are between $9,165-$12,000/FEU, at the highest since mid-2022 for both trade lanes.
The following image shows rates from global logistics company Freight Right Logistics.
Robert Khachatryan, founder and CEO of Freight Right Logistics, said capacity has tightened from earlier in September as carriers maintain firm control over available space with blank sailings and booking rollovers (when a container is not loaded onto its originally scheduled vessel and is instead rescheduled for a later sailing).
But Khachatryan said the biggest concern is vessel schedules.
“Vessel schedules have become increasingly unreliable,” Khachatryan said. “A shipment can secure space and still see its scheduled departure pushed back several days. When a booking rollover is combined with a delayed vessel departure, total delays can approach two weeks.”
Rates from online shipping marketplace and platform provider Freightos rose by 3% to the West Coast and by 2% to the East Coast.
Judah Levine, head of research at Freightos, said along with the expansion of peak season demand, congestion at Asia ports is also keeping upward pressure on container rates from Asia to the US.
“Port congestion – as well as blanked sailings over the holiday stretch – could nonetheless mean rates will stay quite elevated even as demand cools,” Levine said.
Other than a general rate increase (GRI) from global container shipping major CMA CGM, Levine said it does not appear that other carriers are planning October increases.
Rates on the SCFI, which tracks rates for containers leaving Shanghai, rose by 0.7%, the eighth weekly gain in a row, an increase of more than 20% over that time.
Rates on the NYSHEX Freight Index (NYFI) rose by 7.5% to the West Coast and by 4.7% to the East Coast.
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), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.
They also transport liquid chemicals in isotanks.
LIQUID TANKER RATES
US chemical tanker freight rates assessed by ICIS were mixed this week with rates on the transatlantic route edging lower on the low side as this trade lane continues to face downward pressure as the usual summer slowness and season comes to an end.
Most of the regular carriers along this route have noted that there are pockets of prompt space and plenty of additional space remaining for September. If this continues, rates could be pressured even lower.
It was noted that lower water levels in the Rhine river have caused some players to remain cautious bringing cargoes to this region. However, large parcels of methanol and caustic soda continue to dominate the market, as several cargoes were reportedly fixed. Contract of Affreightment (COA) volumes remain steady for the balance of the month and into the first half of October.
Rates along the USG-Asia trade lane have climbed a bit as prompt space has become limited, particularly for the balance of the month for smaller parcels. Regardless, steady COA volumes remain the bright spot supporting any significant movement in rates, preventing them from moving any further.
The number of new fixtures continues to drop off this week, as increasing competition for transit slots via the Panama Canal have also contributed to pressure along this trade lane and as winning auction bids have hit record levels. Methanol and ethanol seem to continue to be the most frequently quoted in the market.
From the USG to Brazil, this trade lane experienced an uptick in activity and in turn rates seem to have nudged slightly higher. A few fixtures were noted this week, and the lack of prompt availability seems to indicate supply is somewhat tight and therefore owners appear to be cautious about letting rates decline any further. Much like the other trade lanes, demand seems to be mostly covered by COA volumes; however, large parcels of caustic soda and methanol continue to be seen fixed.
Similarly, the USG to India route has seen an uptick in inquiries over the last week with several confirmed fixtures, leading to higher rates along this trade lane. There were several methanol cargoes fixed with a few new enquiries for VAM. Traders continue to explore a variety of cargoes well into October keeping pressure on any available space.
Source: By Adam Yanelli, Additional reporting by Kevin Callahan, ICIS,
