Container freight rates from east Asia and china to the US climbed modestly this week and remain at their highest levels since mid-2022, as congestion at ports worldwide continues to constrain vessel availability. For shippers and importers, the elevated rate environment means continued cost pressure on transpacific supply chains more than three years after pandemic-era disruptions first pushed freight costs to record highs.

Shipping market intelligence firm Linerlytica reported that more than 4.3 million TEU (twenty-foot equivalent units) is waiting to berth at container ports globally, driven mainly by delays across east Asia, where fresh storms have 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 represents 12.6% of the global fleet of 34.4m TEU — a lower proportion than the 2022 peak of 15.7%, when the total fleet stood at just 25.3m TEU, the firm noted. That the congestion share of the fleet is smaller this time reflects the substantial new vessel capacity delivered to the global container fleet since the pandemic, even as absolute waiting volumes have surpassed the earlier record.

Congestion is also beginning to build at the Panama Canal, where transit slots are set to be cut further in September, although delays for containerships holding pre-booked transit slots remain minimal, according to Linerlytica.

The disruptions have produced a vessel shortage that continues to underpin freight rates. The SCFI (Shanghai Containerized Freight Index) rose again last week and now stands 156% higher since the start of the Iran war.

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

Assessments from supply chain advisors Drewry were essentially flat week on week from Shanghai to Los Angeles and declined 2% from Shanghai to New York.

Drewry said four blank sailings have been announced for 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 be less volatile next week. The pace of blank sailings and whether east Asian port delays clear in coming weeks will be key signals for where transpacific rates head into the autumn shipping season.

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

The SCFI, which tracks rates for containers leaving Shanghai, advanced 2.9% — its fifth consecutive weekly gain after three straight down weeks.

Rates on the NYSHEX Freight Index (NYFI) rose 5.4% to the West Coast and fell 4.0% to the East Coast.

Container shipping costs matter to the chemical industry because, although most chemicals are liquids moved on tankers, container ships carry polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellet form. Titanium dioxide (TiO2) is also shipped in containers, along with liquid chemicals transported in isotanks. For polymer producers and traders, sustained elevated container rates translate into higher landed costs and can influence export competitiveness on Asia-US trade flows.

Liquid Tanker Rates

US chemical tanker freight rates assessed by ICIS were steady this week, remaining largely unchanged week over week despite continued downward pressure across several trade lanes.

Rates from the US Gulf (USG) to Europe were unchanged, although prompt and early-September space availability remains relatively limited, particularly for cargoes requiring stainless steel tonnage. Most quoted cargoes were for the second half of September, as is typical during the summer season, with fewer prompt inquiries. Overall, the market remains tight, keeping freight rates firm, while demand from the region continues to be led by ethanol and caustic soda.

Along the USG–Asia route, glycols continue to be quoted for September, with most activity apparently destined for South Korea and Thailand, though notably fewer cargoes are being quoted to China and the wider region. Tonnage remains tight, holding rates steady week on week. However, contract of affreightment (COA) nominations have softened slightly for September, which could free up additional space and pressure rates lower for smaller parcels. The Panama Canal Authority has also issued additional restrictions on daily transits due to below-normal water levels, increasing waiting times and the cost of transit slots — a recurring constraint in recent years when drought conditions have lowered Gatun Lake levels that feed the canal. Ethanol and EDC were seen quoted in the market.

From the USG to Brazil, the market appears somewhat balanced. Spot space for smaller parcels is currently available, and steady COA volumes are supporting the market overall. Activity was quiet this week, however, 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. Freight rates are expected to remain relatively flat for the time being.

On the USG–India trade lane, most participants remain cautious amid geopolitical uncertainty, though interest continues to center on glycols and acetic acid. Rates along this lane are unchanged on steady demand and sufficient tonnage.

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

Source: By Adam Yanelli, additional reporting by Kevin Callahan, ICIS —