Workers’ union issues misleading claim of container shipping rates prompting strikes at US ports

The International Longshoremen’s Association (ILA) has gone ahead with strike action at US ports from Maine to Texas and accused ocean container carriers of "gouging customers".

The ILA confirmed the strike in an announcement on Monday, September 30, while at the same time claiming ocean container carriers are now charging US$30,000 per container in a "whopping increase from US$6,000 just a few weeks ago".

Xeneta data – which is based on more than 450 million crowdsourced datapoints – shows the ILA claim is misleading. Average spot rates on the major fronthaul from the Far East to US East Coast stand at around US$7,000 per 40-foot container (FEU) on Tuesday, October 1. While average spot rates from North Europe to the US East Coast have increased 50 per cent since the end of August, they are still only US$2,800 per FEU.

"The union is representing its members and clearly has grievances to raise, but muddying the waters with misinformation does nothing to help resolve the situation," said Peter Sand, Xeneta Chief Analyst.

"More than 40 per cent of containerised goods enter the US through the East and Gulf Coast so this strike will cause carnage across supply chains and damage the US economy. Now is the time for cool heads and diplomacy rather than scaremongering and fake news."

To provide further context to the ILA’s claim of US$30,000 per FEU freight rates, the all-time record average spot rate on the trade from North Europe to the US East Coast was set during the Covid-19 period in May 2022 at US$8,790 per FEU.

The all-time record on the trade from the Far East to US East Coast was also set during the Covid-19 era when it reached US$12,400 per FEU in January 2022.

"This claim by the ILA must be corrected because we have seen in the past how rumor and false information causes panic in the market and spiralling freight rates as shippers rush to protect supply chains," said Sand.

"If a shipper does not have access to data to benchmark their own freight rates, they may believe the ILA’s claim of US$30,000 per container and the market enters a vicious circle of higher and higher rates being paid."

Sand remarked that the latest statement by the ILA suggests there is very little prospect of the ILA and the US Government reaching a mutually-agreeable resolution.

"To stop trade from entering the US on such a scale for a prolonged period of time is unthinkable so the government will need to step in for the good of its people and economy," Sand concluded.