US news updates

By Paul Kelly in News Posted: 17th, May, 2024

The supply chain press have been accusing some container shipping lines of ignoring contracted ex-Asia volume allocations, in favour of carrying higher-yielding cargo at spot rates that have increased by more than 50% in Q2.

It is likely that contracted fixed-rate bookings will diminish even further as spot rates from Asia to the US will continue to increase.

Carriers implemented a general rate increase (GRI) on the 15th May, which will double average spot rates (MoM) from Asia to the US West Coast, if successful. And with space on vessels leaving Asia in May extremely tight, and carriers rolling containers onto subsequent voyages, they are likely to be successful.

In anticipation of their success, carriers have already filed a further GRI for the 1st June, mimicking the rapid escalation of pricing that was triggered by the 2021–22 COVID-19 pandemic.

West Coast congestion
Imports from Asia into Los Angeles-Long Beach increased by almost 1/3 in Q1 2024 to 1.96 million TEUs, creating container backlogs at marine terminals, a sharp increase in eastbound intermodal train movements and a chronic shortage of returning railcars, which exacerbates delays.

Most backlogs have cleared and terminal operators insist they have successfully supported first quarter volumes, but their challenge is not over with imports forecast to increase 5.5% in May, 8.9% in June, 6.6% in July and 6.9% in August.

Baltimore Bridge Accident
The collapse of the Francis Scott Key Bridge in Baltimore created some disruption, but activity pretty swiftly shifted to nearby ports, so its impact has been limited.

A criminal investigation by the FBI will determine if the crew left port knowing that the ship had serious system problems, while the ship’s owners eventually declared general average, which means that shippers with goods on board become financially jointly and severally liable for the incident, which could be very expensive without appropriate marine cover.

The Port of Baltimore expects to restore normal capacity by the end of May.

Threat of East Coast strikes growing
The International Longshoremen’s Association’s labour contract on the East Coast expires on the 31st September, with the 17th May the cut-off date set by the union for local contracts to be agreed, so an overall master contract can then be negotiated.

No deal has been agreed and the threat of strikes loom closer.

Ports brace for Canada rail strike
After talks between management and unions at the port of Vancouver broke down, the Teamsters union voted overwhelmingly to strike as early as the 22nd May, with warnings of disruption, backlogs and extended knock-on effects. We have contingency plans in please and are contacting any customers that are likely to be affected, to discuss their options.

Global Forwarding USA leverage our long-term airline and ocean carrier relationships and $Billion buying-power to deliver cost-effective, resilient and reliable solutions, that optimise every supply chain.

If you have concerns or questions regarding any of the issues highlighted here, we can provide insights, advice and guidance. EMAIL Adam Davies, Global Forwarding USA, Vice President.

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