Rates for shipping containers from east Asia and China to the US edged higher this week and remain at the highest since mid-2022 on congestion at global ports.

Shipping market intelligence firm Linerlytica said more than 4.3 million TEU (20-foot equivalent unit) is waiting to berth at container ports globally, driven mainly by delays across east Asia as fresh storms continued to disrupt vessel schedules.

“In terms of total TEU, the stranded capacity is higher now compared to the previous peak of 4.0m TEU reached during the COVID pandemic in 2022,” Linerlytica said.

The current stranded capacity accounts for 12.6% of the global fleet at 34.4m TEU, which is lower than the peak of 15.7% recorded in 2022 when the total fleet stood at just 25.3m TEU, Linerlytica said.

The firm said congestion at the Panama Canal is also starting to build up with transit slots set to be cut further in September, although delays for containerships with pre-booked transit slots remain minimal.

The disruptions have created a shortage of vessels that continue to support freight rates with the SCFI (Shanghai Containerized Freight Index rising further last week. It is now 156% higher since the start of the Iran war.

Rates to the West Coast are now between $6,300/FEU (40-foot equivalent unit) and $7,500/FEU, while rates to the East Coast are between $8,200/FEU and $10,500/FEU.

Rates from supply chain advisors Drewry were essentially flat week on week from Shanghai to Los Angeles and fell by 2% from Shanghai to New York, as shown in the following chart.

Drewry said there have been four blank sailings announced for the next week, down from seven this week, indicating an increase in capacity.
With demand remaining resilient and carriers continuing to manage capacity, Drewry expects freight rates to remain less volatile next week.

Rates from online shipping marketplace and platform provider Freightos rose by 1% to the West Coast and by 2% to the East Coast.
Judah Levine, head of research at Freightos, said that in addition to resilient demand, transpacific rate behavior is also supported by some carrier capacity reductions, as well as constraints from significant congestion at several major hubs in China.

Rates on the SCFI, which tracks rates for containers leaving Shanghai, rose by 2.9%, the fifth weekly gain in a row following three consecutive down weeks.

Rates on the NYSHEX Freight Index (NYFI) rose by 5.4% to the West Coast and fell by 4.0% 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 steady this week with rates remaining relatively unchanged week over week despite continued downward pressure across several trade lanes.

Rates from the US Gulf (USG) to Europe remain unchanged, although prompt and early September space availability remains relatively limited, particularly for cargoes that require stainless steel tonnage.

Most of those cargoes quoted were for the second half of September as is typical during the summer season with fewer prompt inquiries. Overall, the market remains tight keeping the freight rates firm, while demand from the region continues to be led by ethanol and caustic soda.

Along the USG to Asia route there continues to be glycols quoted for September, and most of the activity seems to be for South Korea and Thailand, although notably there are fewer cargoes being quoted to China and to the region.

Tonnage remains tight, keeping rates steady week on week. However, contract of affreightment (COA) nominations have softened slightly for September, which could create additional space and therefore pressure rates for smaller parcels lower. However, the Panama Canal Authority has issued additional restrictions in daily transits because of below normal water levels, causing increased waiting times and the cost of transit slots. Ethanol and EDC were seen quoted in the market.

From the USG to Brazil the market seems a bit balanced. Spot space for smaller parcels appears available right now and COA volumes remain steady, supporting the market overall. However, the market was quiet this week as most market participants await the outcome of the war in the Middle East. A few cargoes of UAN, caustic soda and ethanol were seen quoted in the market. Freight rates are now expected to remain relatively flat for the time being.

For the USG to India trade lane, most market participants remain cautious due to the geopolitical uncertainty. However, most of the interest continues to be for glycols and acetic acid. Overall, rates along this trade lane remain unchanged on steady demand and sufficient tonnage.

On the bunker side, fuel prices have retreated, on the back of weaker energy prices, as a result week by week were lower.

Source: ICIS by Adam Yanelli, Additional reporting by Kevin Callahan