Container shipping lines serving the U.S.-to-Asia market are confronting new market dynamics.
The strong U.S. dollar and tepid Asian economies have together led to a decline in westbound containerized freight. “The market slowdown has been unprecedented,” said Brian Conrad, executive administrator of TSA, an alliance of 15 of the world’s largest shipping lines.
As a result, shipping rates have plummeted, with some recycling shippers reporting paying just $450 to move a container from Los Angeles to Asia. According to Conrad, freight rates have fallen to a level where it’s more economic for some lines to ship back empty containers to Asia, rather than move loaded units, such as those used to ship recovered paper, plastics and metals.
Due to the status of shipping economics, TSA is urging its members to boost the cost of moving a 40-foot container from the U.S. West Coast by $100 beginning Feb. 1. The alliance also recommends that the charge for a container moving to Asia from Gulf Port and East Coast piers rise by $200 on that date.
