The Merchant · n°213 · November 5, 2026

The Merchant - Air rates take off, West Coast strike threat returns

Figure of the week

250

A potential port strike at Los Angeles and Long Beach could affect 250 watchmen. That is significantly fewer than the 22,000 longshoremen involved in the last major contract dispute. But officials warned that even this relatively small action could rapidly spread and halt port operations.

Quote of the week

“The regulations seem to be changing at such a fast pace that we can’t keep up because it takes X, Y, Z amount of time and capital to build a facility, to build a runway, to build a terminal. The implementation guidance isn’t ready, so there’s no way for the industry to be ready.”

The Air Cargo industry lacks sufficient guidance to be able to prepare for new stricter CBP requirements on providing data in advance, according to Brendan Sullivan, IATA Global Head of Cargo.

Global conflict pushes up air cargo spot rates

Trans-Pacific air freight rates have been rapidly rising during October and high demand looks set to push them even higher. “With demand yet to reach the top of peak season highs, and jet fuel supplies so tight, sources suggest that pressure for rates to rise further is still very much increasing,” said TAC. Indexes showed global air cargo spot rates rising by 5% in the latest week. Spot rates from Asia Pacific to the US rose by 7% week on week. The biggest increases came from South Korea, where rates were up by 26%. This was followed by mainland China (15%) and Japan (14%). Overall average spot rates from Asia Pacific to the US were 41% higher than this time last year. High jet fuel prices have been pushing up rates. One reason is ongoing hostilities between the US and Iran. Another is the Ukraine war. This is a particular problem for air freight shippers as the “crack spread” is widening. This occurs when refined fuels, such as jet fuel, become more expensive relative to the overall crude oil price. Recent Ukrainian attacks on Russian oil refineries have disrupted Russia’s ability to produce and export refined fuels. Ocean freight shippers might be about to see a calmer month ahead, but the exact opposite is likely for US air freight shippers.

West Coast port strike threat rears its head again

The end of the container shipping peak season is set to usher in a relative period of calm for shippers, but a threatened West Coast strike could upset their peace of mind. An initial strike by the International Longshore and Warehouse Union (ILWU) Local 26 watchmen could have gone ahead as early as November 1. That has now been averted. The unions have signed a contract extension up to Wednesday, November 4. This temporarily postpones a potential stoppage at the ports of Los Angeles and Long Beach and allows for further negotiations. Many shippers will remember new contract negotiations with longshoremen in 2022-23 where strike threats were ultimately averted after the intervention of the White House. That might have seemed like a far greater threat to port operations as talks concerned 22,000 port workers rather than 250. However, any strike by the watchmen has the potential to cause major disruption as other ILWU members could honor any potential picket line. This would cause significant delays and congestion. It is too late for shippers to reroute freight to avoid the potential strike. But they will be keeping their fingers crossed that if worst comes to worst, the White House might step in.

November set to bring calmer ocean rates

After a Q2 and Q3 marked by an unexpectedly high peak season, November is shaping up to be a month of stable rates and greater reliability for shippers. In fact, Drewry recorded the steepest one-week fall on the Trans-Pacific since June 2025 this week. Shanghai-to-Los Angeles rates were down 6% week on week, while Shanghai-to-New York rates saw a 5% fall. And with the NRF predicting an 11% month-on-month decrease in volumes in November, we are likely to see more of the same over the next four weeks. So far, industry insiders are reporting stability and slight declines rather than any dramatic slide in rates. Vessel schedules are becoming more consistent as space availability improves. Urgent pre-holiday shipments are now transferring to air freight. All this means that GRIs scheduled for Sunday are unlikely to stick. With nearly two-thirds of capacity deployed between Asia and Europe now routing through the Red Sea, a new influx of capacity will start to help ease rates. But for now, schedule changes as a result of the new routings are causing vessels to bunch together at destination ports and creating backlogs. On the other hand, lingering effects from a series of typhoons are continuing to tie up some capacity at Chinese ports. This is acting to support higher rates and prevent any more significant drop. Carriers haven’t entirely given up on their GRIs. They are planning more November blankings. Overall, however, November is likely to represent an easier month for shippers than what they have dealt with over the past two quarters.

Did you know?

MSC and Zim have become the first ocean carriers to reroute their Asia-to-US services through the Suez Canal. Zim said in a statement that its Seven Star Express service would no longer divert around the Cape of Good Hope. While many Asia-to-Europe routings have resumed Suez transits, the only other US services to have done so are those serving the Middle East and Indian subcontinent.

Sources

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