Last week, Canada's Labor Minister intervened to end labor disputes at the country's key container ports, including Vancouver, Prince Rupert, and Montreal. The Industrial Relations Board has mandated a return to operations and initiated binding arbitration between operators and port worker unions, with the ILWU Local 514 in British Columbia planning to challenge these orders legally. Despite these actions, the disputes on both coasts have temporarily ceased.
Transpacific ocean rates have maintained stability for approximately a month, with a noticeable decrease following the peak season, now 35% to 45% lower than the highest rates in July. However, rates still remain elevated compared to previous years, indicating a sustained demand possibly due to anticipated tariff hikes by the US and potential strikes. The parity in rates to both US coasts suggests a strategic shift in shipper preferences in anticipation of labor disruptions.
In the Asia-Europe sector, after a period of stability, rates have surged by 30% with carriers implementing General Rate Increases (GRIs). This rise is in anticipation of the Lunar New Year rush and the upcoming tendering season for annual contracts. Adjustments in port call rotations are also underway in preparation for alliance reshuffles.
Air cargo rates have seen significant increases, with Middle East - North America routes hitting a yearly high, driven by peak season demand and a shift towards sea-air transport to mitigate higher costs and capacity constraints. China-North America and China-Europe rates have also risen, though not as sharply as expected, suggesting that effective planning by shippers may be alleviating some of the anticipated peak season pressure. Transatlantic rates have escalated due to reduced capacity and a reallocation of freighter capacity to more in-demand routes.
Source: Container News