Threat of a US Rail Strike Pose Delays on $47 Billion Shipping Route

US Rail Strike
One of the most valuable trade routes in the world could be delayed by a prospective strike by US rail employees. This would affect consumer products leaving China.

One of the most valuable trade routes in the world could be delayed by a prospective strike by US rail employees. This would affect consumer products leaving China.

American freight-rail businesses and unions are negotiating to avoid a workers’ strike on Friday, which would have an impact on supply networks around the world that are still trying to recover from the epidemic and the crisis in Ukraine.

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Due to a lack of labour and necessary equipment, containers have been stalled at railway yards in the US since last week. According to supply-chain data source project44, waiting times there have increased to more than two days right now from less than a day at the start of this year.

In July, the US bought commodities worth around $47 billion from China, making the Trans-Pacific route one of the major trade lanes for the entire world. On the West Coast, containers from Asia are often discharged from ships before being transported inland by train.

According to freight forwarders, ship owners, and experts, any further disruptions on the maritime route run the risk of raising freight rates once again as vessels are delayed and trucking demand rises.

As consumer demand has decreased, freight rates have progressively declined from a record high last year. Personal spending is being affected by inflation, and retailers are running out of warehouse capacity to hold inventory, which is reducing demand for more shipments of furniture and other devices.

According to Drewry, the price of shipping a 40-foot box from Shanghai to the US dropped to $4,782 last week, which is the lowest price since April 2021.

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