Transpacific spot rates are skyrocketing while Asia-North Europe tells a completely different story, and the Strait of Hormuz remains closed to most container traffic after a week of missile exchanges between Iran and the US. In this episode, Lars Jensen and Caroline Weaver cover: Why Asia-US West Coast spot rates are approaching East Coast levels and what that historically signals about market instability What the $1,600 gap between current Pacific spot rates and July futures is telling the market The latest in the Hormuz crisis, including the attack on the Ever Lovely and what the &quot;evacuation&quot; language from IMO actually means for container shipping Port connectivity winners and losers: how Khor Fakkan, Fujairah, and Sharjah are absorbing volume while Gulf ports go dark Tariff uncertainty heading into July 24, when Section 122 tariffs expire with no clear successor Subscribe to weekly podcast highlights sent directly to your inbox.

West Coast Rates Entangle East Coast: What That Signal Means

Supply Chain Secrets

# Full Transcript

**Podcast:** Supply Chain Secrets

## Participants

- **Caroline Weaver** (NYSHEX)

## Transcript

You're now listening to the Supply Chain Secrets, the ultimate insider's guide for all things ocean shipping. Brought to you by NYSHEX, helping you deliver through volatility. Hello everyone, you're listening to the Supply Chain Secrets Podcast. I'm your co-host Caroline Weaver and with me is Lars Jensen. Lars, how's it going? It's going great. As you can see, I'm in my home office today, which is likely going

to be the last time in a year and a half you're going to see this background. Tomorrow morning I'm moving up the timetable, the Synchros Alley Voyage to Africa kicks off then. That's a long time to be away from home. Do you ever get homesick? Usually I don't and I'm cheating. I'm going home for a short Christmas vacation as well as a small summer vacation in 27. Alright, gotcha. Cool. We look forward to hearing about all of the adventures on the trip. Hopefully it starts off without a hitch. Let's go ahead and get started. So I'll pull up the knife

and let's get a read on where we're at with rates. That's actually the sub-indices on the Trans-Pacific. And there are two things that are important to take away from this. One is laryingly obvious that rates continue to skyrocket rapidly. That follows in what we've seen in recent weeks. Seems very much to be fueled by a lot of US importers that basically try to get through the door at the same time. They all wanted to pull forward. The cargo they wanted to move and now they're tripping over

each other. Easy to be the Monday morning quarterback on that. Of course, I'm sure all of them are reckoning they were ahead of the curve. Turns out they weren't. But there's another thing that's also very illustrative here because when we look at it, it is obvious that there's a huge gap between the US West Coast and US East Coast rates. There usually are. But when you look at the last few weeks, that gets a lot more muddy. Basically you get

some of these lines almost entangled. So where you usually have a significant pricing gap between the East Coast and the West Coast, you are now at a point here where especially Southeast Asia to US West Coast is basically getting up to US East Coast rates. This might sound odd because clearly US East Coast, it's a much longer route. You have to go through the Panama Canal or have to go all the way

around Africa. But that just shows the extremely unsettled nature of the market. Now, what we're looking at here are the rates over the last 12 months. I didn't want to pollute the picture by taking too much in. I did the analysis beforehand. I was going to say, fine, does it ever happen that some of these West Coast rates, so to speak, get entangled with the US East Coast rates? And actually

it does. It happened twice last year. It happened right around when the US trade war started. And it happened also right around when you then had this massive spike ...

West Coast Rates Entangle East Coast: What That Signal Means

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

West Coast Rates Entangle East Coast: What That Signal Means

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.