Asia-US Container shipping rates remain stable or decline and Panama Canal will permit slot swaps according to the Independent Commodity Intelligence Services (ICIS).
Rates for shipping containers from Asia to the US East Coast were largely flat and rates to the West Coast fell by 5%, and the Panama Canal will begin allowing swapping of slots on 1 January.
Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. They also transport liquid chemicals in isotanks.
Global average rates ticked lower by 1% this week, according to supply chain advisors Drewry.
Rates from Asia to New York were largely stable on the week while rates from Shanghai to Los Angeles fell by 5%.
Drewry expects spot rates to remain stable over the coming week. Drewry’s assessment has rates to the East Coast about $700/40-foot equivalent units (FEU) higher than to the West Coast.
Moreover, online freight shipping marketplace and platform provider Freightos has rates to both coasts nearly at parity slightly higher than Drewry’s East Coast rate.
Transpacific ocean rates are about 35%-45% below peak levels seen in July now that the peak season has ended.
said Judah Levine, head of research, Freightos.
Levine said upward pressure remains from stronger than normal demand as some shippers are frontloading volumes ahead of expected tariff increases from the new administration as well as the possibility of another work stoppage at US East Coast ports as the 15 January deadline to finalize a new collective bargaining agreement nears.
Furthermore, Judah Levine noted that Lunar New Year starts at the end of January this year, which is earlier than usual.
The unusual parity of transpacific rates to both coasts may point to some shift of demand to the West Coast due to January strike concerns, according to Levine.
LIQUID TANKER RATES – USG-BRAZIL TICKS HIGHER
Overall, US chemical tanker freight rates was largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane as that market picked up this week following activity during the APLA conference in Columbia.
Part space has limited availability as most owners are awaiting COA nominations.
USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market.
Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh inquiries for small specialty parcels stemming from the USG bound for Antwerp.
Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher.
Additionally, ethanol, glycols and caustic soda were seen in the market to various regions.
However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm.
The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable.
Bunker prices rose, mainly due to the increase in energy prices following continued geopolitical concerns.
PANAMA CANAL TO ALLOW SWAPPING OF SLOTS
The Panama Canal will begin allowing swapping and substitutions of booking slots between container vessels with some conditions beginning 1 January, the Panama Canal Authority (PCA) said.
The conditions are that both vessels must be the same type and must belong to the containership segment, both vessels must belong to the same vessel classification (Neopanamax, Super or Regular), and both vessels must be transiting in the same direction.
Also, for swaps, vessels must have similar transit restrictions, and for substitutions, the new vessel must have similar or lesser transit restrictions, both vessel operators must belong to services under the same cooperative working agreement (Global Alliances or VSA), and the booking date of the vessels involved in the swap or substitution must be within the effective date of the services and of the Alliance or VSA.
All other Long Term Slot Allocation method (LoTSA) and ordinary booking slots rules remain in effect.
