Here’s How Much Asia-to-US Container Rates Could Jump on a 1-Week Port Strike

Glenn Taylor
5 min read

Container vessels are piling up on the U.S. East and Gulf Coasts on day three of the ILA dockworkers strike as there appears to be very little to no progress in the contract negotiations.

As of Thursday morning, at least 54 container ships were waiting outside nine major U.S. ports affected by striking members of the International Longshoremen’s Association (ILA), according to data from Everstream Analytics. Fifteen have called at the Port of Savannah, while another 14 are lingering near the Port of New York & New Jersey.

More from Sourcing Journal

The supply chain risk management firm had noted on Wednesday that the line across the ports could easily grow to 100 by the end of the week as more vessels are on the way.

In the first week of the strike, the capacity loss will be at its highest, according to data from maritime trade advisory service Sea-Intelligence. This total will tally roughly 775,000 20-foot equivalent units (TEUs) tied up on the East and Gulf Coasts, and would represent 2.5 percent of the global container fleet.

In the subsequent three weeks, another 443,000 TEUs on average would be stuck at sea.

A four-week strike would result in a tie-up of 6.8 percent of the worldwide container shipping fleet along the East and Gulf Coasts.

In total, Sea-Intelligence said there are 331 deep-sea container vessels scheduled to make a total of 981 distinct port calls in 20 distinct East Coast ports across the U.S. and Canada from Oct. 1 to Oct. 30.

With all these ships set to strain capacity worldwide, the maritime service expects an accompanying hefty bump in ocean freight rates. Throughout both the Covid-19 pandemic and the Red Sea crisis, Sea-Intelligence says it “consistently proved a 90-plus percent correlation between the loss of global fleet capacity and spot rates” for both global and individual trade-lane-level indices.

“We found that for each percentage point increase in the loss of global fleet capacity, spot rates on Asia to U.S. East Coast would increase $993 per 40-foot container, while Asia to U.S. West Coast spot rates would increase $805 per 40-foot container,” Sea-Intelligence said in a blog post.

If this data upholds, the first week of strike would see spot rates increase $2,000 per 40-foot container from Asia to the U.S. West Coast, and $2,500 from Asia to the U.S. East Coast. For each subsequent week of the strike, the model suggests that spot rates will increase by $1,100 per TEU on the trans-Pacific route and $1,400 per TEU on the Asia-to-U.S. East Coast trade lane.

Recommended Stories