Large freight forwarding companies pointed out that shipping companies have started to implement measures to reduce sailings this week, especially on the West Coast routes, coupled with the threat of a possible strike on the East Coast on October 1, some cargoes originally planned to be shipped to the East Coast have been rerouted to the West Coast, leading to a rapid convergence of freight rates between the West and East Coasts. According to Maersk's official website, the freight rate to Savannah on the East Coast has dropped to USD 4,900 per FEU, lower than the USD 5,000 for the West Coast route, indicating a sharp fluctuation in market freight rates with the expectation of continued turbulence.

According to industry experts, the voyage from South China to Savannah via direct shipping is approximately twice as long as that to Los Angeles, which explains why freight rates on the East Coast route are usually higher. However, recent market disruptions have led to price chaos. While a shipping company quoted USD 8,800 for the East Coast route, after considering the ratio between spot rates and long-term contract rates (including peak season surcharges) at USD 4,500, the actual freight rate dropped to USD 6,650. The ratio mechanism is flexible, allowing large shippers to obtain even greater discounts.

Currently, the actual freight rates on the East Coast route generally range between USD 5,900 and USD 6,000, while those on the West Coast are within the range of USD 4,300 to USD 4,800. Non-alliance vessels offer lower quotes due to their smaller pool of long-term contract customers. Meanwhile, although alliance vessels quote higher prices, they can ultimately offer freight rates comparable to those of non-alliance vessels through the ratio mechanism, in response to the current situation of excess shipping capacity and limited cargo volume, to prevent the loss of cargo.

As a representative of online quoting, Maersk has a flexible pricing strategy, currently quoting USD 5,300 for shipments to New York. Unlike in the past when freight forwarders could provide instant freight rates, now due to daily price fluctuations, rates need to be confirmed online before a quote can be given.

In the domestic market, freight rates remain lower than those in Taiwan. The freight rates from Shanghai and Ningbo to the US West Coast are approximately USD 4,200, while those from southern China can reach USD 4,500. A shipping company executive revealed that a client in Ningbo has around 100 TEUs ready to ship, but the company believes that current market freight rates are still too high and are expected to fall, indicating that they will wait for freight rates to drop significantly to a level where they can avoid losses before shipping.

Container shipping lines were originally scheduled to increase freight rates on September 15, but most freight forwarders are pessimistic about the feasibility of such an increase. However, some also argue that given the near-full capacity of some sailings to the US West Coast, there may be an opportunity for an adjustment next week. Nevertheless, given that the attempted rate increase in mid-August only led to a brief market rebound, the industry remains skeptical about the success of subsequent rate increase plans.

The contract between North America's largest dockworkers' union and port operators is set to expire at the end of September. However, negotiations for a new contract have reached an impasse, sparking deep concerns among American businesses and logistics operators about the potential for a large-scale strike in October that could disrupt supply chains.

Industry experts point out that whether it's a slowdown or a full-blown strike, both would have a significant impact on the current supply-demand relationship in the container shipping market. Considering that the supply chain is already under attack from the "red ocean" crisis, with the logistics chain already quite fragile, even if the strike lasts only two weeks, the recovery of port operations could take two to three months. More worryingly, the impact of such a strike would not be limited to East Coast ports but would ripple through all shipping schedules and ports, causing disruptions in logistics chains worldwide.

The International Longshoremen's Association (ILA), which oversees trade activities at ports on the US East Coast, the Gulf of Mexico, and Puerto Rico, would directly affect 43% of US imports if it initiates a strike, potentially blocking billions of dollars in trade each month.

In recent years, frequent union actions, from Europe to the US West Coast and last month's railway strike in Canada, have had a ripple effect on ports, railways, and global supply chains. According to Sea Intelligence analysts' estimates, East Coast ports are projected to handle 2.3 million twenty-foot equivalent units (TEUs) in October, or approximately 74,000 containers per day. Assuming each container is valued at 50,000,the daily freight value amounts to an astonishing 3.7 billion. In the event of a strike, Sea-Intelligence predicts that each day of the strike would require an additional five days to clear the backlog of containers.

The National Association of Manufacturers (NAM) has expressed grave concerns, with its Vice President, Neil Humes, emphasizing that any disruption in negotiations between the US Maritime Alliance (USMX) and the ILA would immediately deal a heavy blow to the manufacturing supply chain. Shutdowns at East Coast and Gulf Coast ports would severely disrupt logistics operations for American businesses, impede the movement of goods, and ultimately affect the supply of essential items for millions of Americans. Delayed deliveries of parts and supplies would not only increase costs but could also lead to the loss of manufacturing jobs.

Furthermore, Rick Helfenbein, President of the American Apparel & Footwear Association (AAFA), issued a statement noting that any disruptions at East Coast and Gulf Coast ports would significantly impact the costs and supply of apparel, footwear, and travel goods, as over half of these products are transshipped through these ports.

Given this dire situation, the National Retail Federation (NRF) has actively called on the government to intervene and assist both parties in returning to the negotiating table, with the aim of reaching a new agreement as soon as possible to stabilize supply chains and ensure the smooth functioning of market supply and economic activities.