Container freight charges from East Asia and China to the U.S. ticked up this week, holding at levels not seen since mid-2022 amid port congestion worldwide. Linerlytica, a shipping analytics firm, noted that over 4.3 million TEU (twenty-foot equivalent units) are currently queued at global container ports, largely due to disruptions in East Asia where recent storms have thrown off vessel schedules. The firm highlighted that the volume of idle capacity now exceeds the prior record of 4.0 million TEU set during the 2022 COVID period. This stranded capacity represents 12.6% of the global fleet, which totals 34.4 million TEU, a lower share than the 15.7% peak in 2022 when the fleet was only 25.3 million TEU.

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Linerlytica also pointed to growing congestion at the Panama Canal, with transit slots slated for further reductions in September, though delays for vessels with pre-booked slots remain minor. These disruptions have led to a vessel shortage that continues to prop up freight rates, as reflected in the latest Shanghai Containerized Freight Index (SCFI), which climbed again last week and now stands 156% above its level at the start of the Iran conflict. West Coast rates are currently between $6,300 and $7,500 per FEU (forty-foot equivalent unit), while East Coast rates range from $8,200 to $10,500 per FEU.

Drewry, a supply chain consultancy, saw rates from Shanghai to Los Angeles essentially unchanged week-over-week, but those to New York dipped by 2%. Drewry noted that four blank sailings are scheduled for the coming week, down from seven this week, signaling more available capacity. With demand staying robust and carriers continuing to adjust capacity, Drewry anticipates less volatility in freight rates next week.

Freightos, an online logistics platform, reported a 1% increase in rates to the West Coast and a 2% rise to the East Coast. Judah Levine, head of research at Freightos, attributed the transpacific rate strength not only to solid demand but also to carrier capacity cuts and severe congestion at several major Chinese ports. The SCFI, which measures rates for containers departing Shanghai, advanced 2.9%, marking its fifth consecutive weekly increase after three straight declines. The NYSHEX Freight Index (NYFI) saw a 5.4% jump to the West Coast but a 4.0% drop to the East Coast.

Container shipping is significant for the chemical sector because, while most chemicals are liquids moved in tankers, container vessels carry polymers like polyethylene (PE) and polypropylene (PP) in pellet form, as well as titanium dioxide (TiO2).

In the liquid tanker market, ICIS-assessed U.S. chemical freight rates held steady this week, with minimal changes despite ongoing downward pressure on several routes. Rates from the U.S. Gulf (USG) to Europe were unchanged, though availability for prompt and early September shipments remains tight, especially for cargoes needing stainless steel. Most inquiries were for second-half September loadings, typical for the summer when prompt demand is thin. The market stays firm, with ethanol and caustic soda leading regional demand.

On the USG-to-Asia lane, glycols are being quoted for September, with most activity directed to South Korea and Thailand, though fewer cargoes are heading to China and other parts of the region. Tonnage remains tight, keeping rates stable week-on-week. However, contract of affreightment (COA) nominations have eased slightly for September, potentially freeing up space and pressuring rates for smaller parcels. The Panama Canal Authority has imposed additional daily transit restrictions due to low water levels, leading to longer waits and higher transit slot costs. Ethanol and EDC are being quoted in the market.

The USG-to-Brazil route appears balanced, with spot space for smaller parcels available and COA volumes steady, supporting the market. Activity was subdued this week as participants await developments in the Middle East conflict. A few UAN, caustic soda, and ethanol cargoes were quoted. Freight rates are expected to stay relatively flat in the near term.

For the USG-to-India lane, caution prevails due to geopolitical uncertainties, but interest remains focused on glycols and acetic acid. Rates are unchanged, supported by steady demand and adequate tonnage. Bunker fuel prices have declined, following weaker energy costs, and were lower week-over-week.

Source: IndexBox Market Intelligence Platform