• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 11 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day How Far Have We Really Gotten With Alternative Energy
  • 6 days By Kellen McGovern Jones - "BlackRock Behind New TX-LA Offshore Wind Farm"
  • 1 day Solid State Lithium Battery Bank
  • 13 days Natron Energy Achieves First-Ever Commercial-Scale Production of Sodium-Ion Batteries in the U.S.
  • 38 mins Bad news for e-cars keeps coming
  • 12 days The United States produced more crude oil than any nation, at any time.
Stuart Burns

Stuart Burns

Stuart is a writer for MetalMiner who operate the largest metals-related media site in the US according to third party ranking sites. With a preemptive…

More Info

Premium Content

Surge in Demand Drives Up Shipping Costs for U.S. Importers

  • A surge in demand for imports from Asia is straining global shipping capacity and driving up costs for U.S. importers.
  • Disruptions at major ports, such as Los Angeles-Long Beach, are exacerbating the situation, with further increases in imports expected in the coming months.
  • Importers are advised to secure fixed rates or require suppliers to agree to fixed U.S. port-delivered prices to mitigate the impact of rising costs.
Shipping Port

Via Metal Miner

An unexpected surge in demand could complicate global import logistics, raising prices for U.S. importers. So far, global GDP growth has remained broadly positive this year, with growth rates consistently above expectations. Reports also indicate that manufacturing PMIs are at their highest level in almost two years, and a rising demand for shipping space seems to reflect this.

The increase in demand has taken the market by surprise. Normally, the peak season would be in the fall, and spring would be considered a quieter time. There is no clear explanation for why demand has suddenly picked up, whether it is re-stocking or concerns over geopolitical issues, but U.S. imports from Asia surged over 19% in 2024 so far. And with retailers forecasting continued strong demand, the expectation is that the increase could continue.

As a result, the tightening of vessel space from Asia has sent the Shanghai Containerized Freight Index (SCFI) to its highest level since September 2022. The index rose 19% this month, resulting in spot rates rising, carriers rolling containers into subsequent voyages, and the implementation of general rate increases (GRI) across multiple routes, particularly Asia to the West Coast. There is another GRI scheduled for June 1, and it seems likely to hold.

Import Logistics Face Hurdles on Multiple Fronts

Importers can expect a degree of disruption from a number of quarters over the coming months. Apart from tight vessel space potentially delaying shipments from origin, a number of U.S. side import logistics threats also remain. 

Disruption in Los Angeles-Long Beach following an almost 1/3 increase in imports from Asia in Q1 recently began to ease. Nearly 2m TEU’s were imported in Q1, resulting in backlogs at terminals, an increase in eastbound rail movements, and a chronic shortage of returning rail cars. But the disruption is not over. Analysts currently expect imports to rise a further 5.5% in May, 8.9% in June, 6.6% in July, and 6.9% in August. 

East Coast Braces for Labor Turmoil

Meanwhile, the East Coast faces its own challenges, particularly with the expiration of the International Longshoremen’s Association labor contract looming in late September. So far, neither party has agreed to a deal. And amid strong demand and an election year, unions may feel they have the whip hand to play hardball.

Unless there is a sudden softening in demand, which seems doubtful, rates will likely continue to rise into H2, meaning importers on contracts may face steep rises at renewals. To the extent importers can fix rates or require suppliers to agree to fixed U.S. port-delivered prices, early action may avoid later pain.

By Stuart Burns

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News