Tremendous Demand USWC / Proposed May 15 GRI
There is tremendous demand for the following reasons:
1. Carriers and importers are stopping to ship to North America via Canada due to the pending Canadian Rail and Port strikes. Most of the cargo that previously moved over Canadian Ports has been diverted to move over the US West Coast Ports. Now there is more than a 2 week back up for fresh bookings to USWC,
Below is a quick synopsis.
A) Rail Strike. The Teamsters of the Canadian Rail voted yes to go on strike. The cooling off period ends May 21st so they are expected to not report to work on May 22nd at both the CN and CP so Canadian rail service is expected to stop.
B) Canadian East Coast Port Strike. The longshore workers of Montreal have been working without a contract since January 1st and have been threatening to strike. It is anticipated that they will support the Teamsters of the Canadian rail and go on strike with them.
C) Canadian West Coast Port Strike. The ILWU longshore workers of the Canadian West Coast have been negotiating a contract for an extended period of time. The last three days they have had mediation managed by the Canadian Government. If an agreement is not reached today, management can lock them out and the longshore workers can go on strike. We are awaiting the outcome of today’s final day of meetings.
2. Replenishment of depleted inventories is happening. Many companies ran down their stock of goods and are feverishly trying to bring in more goods. Q1 2024 Transpac container shipments are up 33% over Q1 2023. Q2 2024 vs Q2 2023 is trending the same way.
3. Ocean carriers canceled 20% of all sailing for the first two weeks of May to drive up demand and selling costs.
With this tremendous demand we have seen climbing high spot rates including a likely upcoming $1,000 GRI on May 15th. The carriers are doing everything possible to make more profit including delaying implementation of fixed rates and starting to apply early peak season surcharges on fixed rates.
If you have any questions about this information, please contact your local BOC representative.
