Container freight rates on major Asia-Europe and trans-Pacific routes continued to climb last week despite signs of cooling demand, supported by port congestion, blank sailings and a potential labor dispute at US West Coast ports.
What Happened
According to a Freightos update, the Asia-North Europe rate stood at $3,551 per 40-foot equivalent unit (FEU) last week, up 3% week on week, while the Mediterranean rate rose 8% to $4,252 per FEU. On the trans-Pacific, Asia-US West Coast rates increased 3% to $8,368 per FEU and East Coast rates jumped 9% to $10,565, a high for the year. Freightos said daily East Coast prices have since retreated but remained about $200 per FEU above the previous week's level.
Carriers' return to the Red Sea is reshaping schedules. According to Alphaliner, about 63% of capacity deployed between Asia and Europe is now routing through the Red Sea; among the 10 largest carrier networks surveyed, 24 of 46 direct services used the passage, representing 63% of deployed capacity. The share was 70% on Mediterranean routes and 58% on North Europe services. Some services are using the Suez Canal on voyages toward Europe while continuing to sail around Africa on return journeys, highlighting continued caution.
Typhoon Champi also disrupted East Asia last week, closing Taiwanese container ports including Kaohsiung, Keelung and Taipei on Friday. The storm largely spared East China port operations before weakening as it moved toward Japan. Major Chinese container hubs are still recovering from earlier summer storms, with many yet to return fully to normal operations.
Background
Demand normally eases after the peak shipping season, but congestion and carriers' efforts to restrict available capacity through blank sailings have supported rates. Drewry reported eight blank sailings scheduled on Asia-Europe routes for the following week, compared with two in the current week. Carriers are seeking further increases in November, although forwarders have reported discounted offers and questioned whether the higher prices will hold.
Meanwhile, approximately 250 port watchmen at Los Angeles-Long Beach have authorized a strike that could begin Nov. 1 if contract negotiations fail. Although the workers account for only about 2% of the ports' International Longshore and Warehouse Union workforce, the Pacific Maritime Association said terminals employing the watchmen handle roughly 85% of Long Beach's cargo and 33% of Los Angeles' cargo. Other ILWU members were not expected to cross Local 26 picket lines, potentially stopping vessel, yard and gate operations at affected terminals. Negotiations remain underway, and a strike has not been confirmed.
Impact on Shippers
On transit times, the return to the Red Sea could shorten Asia-Europe voyages, but ships arriving ahead of schedule may bunch together at destination ports, adding to terminal backlogs. Combined with the potential work stoppage at US West Coast ports, shippers may face longer waits for container pickup and rail connections on the US lane. On costs, US East Coast rates are at a year-to-date high, and with November increases and blank sailings running in parallel, spot booking costs are unlikely to fall in the near term; however, discounted forwarder offers provide some room for rate negotiation. On customs clearance, US port fees on China-linked vessels remain formally scheduled to resume Nov. 10. The US Trade Representative has opened a request for comments on postponing them until January, but the fees have not been formally suspended, so shippers should budget for and prepare documentation on the assumption that they may resume.
Recommendations
Shippers are advised to lock in space on US East and West Coast lanes two to three weeks in advance and to specify rate validity and blank-sailing rebooking terms in contracts. They should monitor negotiations at Los Angeles-Long Beach and, if necessary, diversify US West Coast discharge ports. Shippers should also verify the applicability of US port fees on China-linked vessels and confirm cost allocation and declaration details with customs brokers in advance to avoid extra demurrage or detention costs after arrival.