Transpacific – Asia/North America Update

June 14, 2023

Transpacific – Asia/North America Update

 

An ongoing labour dispute, along with issues in the Panama Canal, appear to have contributed to a spike in Transpacific ocean freight rates this month.

Despite demand being relatively low for this time of year, rates between Asia and North America have been rising in the past fortnight by up to 16% on some routes, due to challenges on the trade.

On the West Coast, the bitter labour dispute between the dockers’ ILWU union and the PMA employers trade association is reported to be the cause for slow operations.

A war of words has broke out this week with the ports accusing the union of “orchestrating disruptive work actions”, which has followed talks breaking down in the past fortnight.

The dispute has been ongoing since labour contracts expired last year, and have been constantly stalling over the critical issues of wages and port automation.

Meanwhile, on the East Coast, all water services from Asia have been impacted by capacity restrictions in the Panama Canal. A harsh drought season in Central America has led to low water levels in artificial lakes that are used to operate the waterway.

The restrictions are believed to have caused Asia to US East Coast rate levels to spike this month, especially considering the recent introduction of a Panama Canal Surcharge (PCS) of around $500.

Atlantic Pacific are monitoring the situation closely. Please do not hesitate to contact our team for more information.

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