A potential strike by US rail workers is threatening to delay consumer goods sailing from China on one of the world’s most lucrative trade routes.
(Bloomberg) — A potential strike by US rail workers is threatening to delay consumer goods sailing from China on one of the world’s most lucrative trade routes.
American freight-rail companies and unions are in talks to avert a walkout of workers on Friday, a situation that would create ripple effects across global supply chains trying to recover from disruptions caused by the pandemic and the war in Ukraine.
Even before this week, containers have been stuck at railway yards in the US due to manpower and equipment shortages. Waiting times there have grown to more than two days currently, up from less than a day at the start of this year, according to supply-chain data provider project44.
The US imported about $47 billion of goods from China in July, making the Trans-Pacific crossing one of the key routes for the world’s economy. Containers from Asia are typically unloaded from ships on the West Coast and then carried inland via rail.
Any further disruption on the sea route threatens to drive freight rates back up as vessels get delayed and trucking demand goes up, said freight forwarders, ship owners and analysts.
Freight rates have dropped steadily from a record last year as consumer demand has waned. Inflation is hitting personal spending and retailers are running out of warehouse space to store inventory, curbing appetite for more cargoes of furniture and digital equipment. The cost of shipping a 40-foot box from Shanghai to the US fell to $4,782 last week, the lowest since April 2021, according to Drewry.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
