Market Update: Rates Yo-Yo…All Eyes on ILA

• To USEC – With healthy inventory levels, shippers can delay bookings and monitor the ILA contract negotiation. Urgent shipments to the U.S. East Coast (USEC) can be rerouted via the U.S. West Coast (USWC), but USEC volumes are likely to weaken in September. A resolution with the ILA could prompt a freight surge to East Coast ports after Golden Week in early October. While the GRI helps stabilize rates, sustaining them without a volume increase will be tough. This may prompt carriers to introduce blank sailings. Adverse weather near Cape of Good Hope may cause further delays and capacity issues for USEC.
• To USWC – The USWC is a bit of a different story. As the labor disruptions on USEC/Gulf and Canada rail have pushed volumes to USWC, along with the consideration of cargo rushes before China’s Golden Week holiday, a GRI is still possible for September 15.   Our transloading options with our partner LAX warehouse and intermodal partnerships may be a solution worth exploring.  For long-term named account business, carriers continue to restrict space and equipment availability as a priority measure.

Canada Rail
It could take the two largest Canadian railroads a week or more to recover from the effects of a shutdown.  While train movements were halted for less than 24 hours, CN and CPKC had embargoed shipments for more than a week leading up to the lockout deadline.

Panama Canal
Water levels at Gatun Lake have recovered, leading local authorities to ease weight restrictions for the Panama Canal.  To address future droughts, the ACP proposed a $1.6 billion project to dam the Indio River and build a 5-mile tunnel linking a new reservoir to Gatun Lake, which supplies water to the canal. This could enable 15 more ship transits daily, but the project has faced criticism from local farmers and communities whose land may be flooded.

India to North America
Rates have peaked and with new capacity we have seen some decreases.

US Exports
Ocean rates for Q3 continue to increase, driven by a surge in global demand. It’s recommended to book 3-4 weeks in advance, especially if the origin is inland.  Capacity from the U.S. to the Indian subcontinent and Middle Eastern ports has tightened, related to vessel omissions and blank sailings.

Asia to Europe
European container markets faced bearish sentiment as added capacity from liner companies caused rates to drop.  Extra loaders have come in from other trade loops and tipped capacity supply.