<div class="phx-topic abstract-wrapper">Hauling containers between Mexico and US comes with additional regulations and potential disruptions that could make the 95% on-time performance promise more challenging for Hunt’s new cross-border service.</div>

Hauling containers between Mexico and US comes with additional regulations and potential disruptions that could make the 95% on-time performance promise more challenging for Hunt’s new cross-border service.

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<div class="phx-topic">J.B. Hunt wants to do what few have pulled off in long-haul intermodal: achieve 95% on-time performance. That’s incredibly difficult for any 2,000-mile haul, but even more so on cross-border freight in Mexico, where the journey for J.B. Hunt requires two railroads, a manual customs clearance process, and a single-track bridge that routinely clogs one of North America’s busiest trade corridors. It’s a daunting task facing the intermodal giant as it handles the first <a href="https://www.joc.com/article/jb-hunt-launching-quantum-de-mexico-for-time-sensitive-cross-border-freight-6014579">Quantum de México</a> containers in the coming months. J.B. Hunt will team up with BNSF Railway and Grupo México Transportes (GMXT), the majority owner of Mexican railroad Ferromex. The <a href="https://www.joc.com/article/j-b-hunt-bnsf-launch-new-intermodal-service-to-grab-time-sensitive-freight-5215574">Quantum product</a> was introduced in 2023 as a US domestic service by Hunt and BNSF, promising tight delivery windows. According to J.B. Hunt, the service has consistently met or exceeded its on-time targets, though the company declined to provide performance data. The value proposition behind Quantum is simple: promise reliability and on-time performance to shippers using a mode that has struggled with both. Intermodal rail can be fast and dependable, but every few years, service degrades significantly for a multitude of reasons. “Most customers have appointment windows, so once we understand their expectations, we design transit and pickup schedules all the way back to the initial tender,” Spencer Frazier, executive vice president of sales for J.B. Hunt, told the Journal of Commerce. “For Quantum de México, it's how our customers define 95% on-time, not Ferromex, BNSF or us.” The formula can work in the US, where BNSF and J.B. Hunt are closely aligned and can fall back on J.B. Hunt’s 19,000-truck fleet to make up for rail hiccups. Cross-border service, though, is a different beast. Nevertheless, the market potential in Mexico is significant. In 2024, Mexico’s trade surplus with the US for automotive goods hit a record $137.8 billion, a 6% increase from the previous year, according to the US Department of Commerce. Total US imports from Mexico reached $505.9 billion, up 6.4% year over year. With nearshoring trends gaining momentum, Hunt’s competitors are investing aggressively. Last October, Hub Group formed a <a href="https://www.joc.com/article/hub-group-boosts-cross-border-business-in-jv-with-mexican-dray-carrier-5745355">joint venture with Easo</a>, a leading intermodal operator in Mexico. Schneider National has expanded its relationship with Canadian Pacific Kansas City (CPKC), offering service from <a href="https://www.joc.com/article/cpkc-csx-to-launch-joint-mexico-southeast-us-service-dec-1-5790107">Mexico to the US Southeast</a>, and boasts the only single-rail service between Mexico and Chicago. <h3>Getting out of Mexico </h3>One of the most immediate hurdles for Quantum de México is the customs clearance process. Before a container can even be loaded, physical paperwork must be presented and stamped at the terminal. Outside of Monterrey, customs offices are open only during weekday business hours and a few hours on Saturdays. That leaves a narrow daily window to get freight cleared and loaded. “We're not running Quantum de Mexico service at wacky hours when there's no customs office open,” Luis Hernández, GMXT’s vice president of intermodal, told the Journal of Commerce. “We’re working within the existing process to clear cargo during office hours and move it accordingly.” But miss that limited processing window and achieving the service guarantee becomes difficult. If there is a problem while the train is in transit, a new set of issues arise. In the US, BNSF can unload the container and place it onto J.B. Hunt’s extensive truck fleet. In Mexico, however, J.B. Hunt does not own trucks or employ company drivers in Mexico. It must rely on third-party trucking companies. Jon Gabriel, BNSF’s group vice president for consumer products, said contingency plans are ready if a disruption occurs between Monterrey and the border. “It includes lift capability at Eagle Pass (Texas) itself,” he said. “We can drop a container there and use the J.B. Hunt truck fleet to recover if something happens enroute. We have many of the same levers and processes in place as we do in US.” <h3>Crossing into the US </h3>Having a backup plan in Eagle Pass is important because the US-Mexico border comes with its own set of complications. Crossing the old, single-track bridge between Piedras Negras, Mexico, and Eagle Pass requires three separate crews: a Mexican crew to bring the train to the border, a second to take it across the bridge, and a third US crew to haul it north. “Trains come to a complete stop so the hand-off crew can disembark and walk back to their side of the border,” Union Pacific wrote in a recent <a href="https://www.up.com/aboutup/community/inside_track/safer-border-operations-it-250523.htm">online post</a>. The process can take up to 40 minutes and increases the risk of cargo theft and congestion trickling down to other trains. CPKC and Schneider <a href="https://www.joc.com/article/cpkcs-bridge-expansion-boosts-us-mexico-capacity-reliability-5908449">bypass these delays entirely</a> with the bridge in Laredo that opened a second span last December. UP last month <a href="https://www.up.com/aboutup/community/inside_track/safer-border-operations-it-250523.htm">completed a pilot program</a> in which Mexican crews were allowed to bring trains directly into its Eagle Pass terminal, reducing its exposure to theft, border delays and crew changes easily taking a half hour. BNSF hasn't tested such options with customs agencies on both sides of the border, but says the single-track bridge isn't limiting operations. “Physical bridge capacity is not a constraint,” BNSF’s Gabriel said. “The train from Monterrey to [Fort Worth] is consistently beating its schedule. The route will not limit our ability to meet the service commitments to our customers.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

J.B. Hunt wants to do what few have pulled off in long-haul intermodal: achieve 95% on-time performance. That’s incredibly difficult for any 2,000-mile haul, but even more so on cross-border freight in Mexico, where the journey for J.B. Hunt requires two railroads, a manual customs clearance process, and a single-track bridge that routinely clogs one of North America’s busiest trade corridors. It’s a daunting task facing the intermodal giant as it handles the first Quantum de México containers in the coming months. J.B. Hunt will team up with BNSF Railway and Grupo México Transportes (GMXT), the majority owner of Mexican railroad Ferromex. The Quantum product was introduced in 2023 as a US domestic service by Hunt and BNSF, promising tight delivery windows. According to J.B. Hunt, the service has consistently met or exceeded its on-time targets, though the company declined to provide performance data. The value proposition behind Quantum is simple: promise reliability and on-time performance to shippers using a mode that has struggled with both. Intermodal rail can be fast and dependable, but every few years, service degrades significantly for a multitude of reasons. “Most customers have appointment windows, so once we understand their expectations, we design transit and pickup schedules all the way back to the initial tender,” Spencer Frazier, executive vice president of sales for J.B. Hunt, told the Journal of Commerce. “For Quantum de México, it's how our customers define 95% on-time, not Ferromex, BNSF or us.” The formula can work in the US, where BNSF and J.B. Hunt are closely aligned and can fall back on J.B. Hunt’s 19,000-truck fleet to make up for rail hiccups. Cross-border service, though, is a different beast. Nevertheless, the market potential in Mexico is significant. In 2024, Mexico’s trade surplus with the US for automotive goods hit a record $137.8 billion, a 6% increase from the previous year, according to the US Department of Commerce. Total US imports from Mexico reached $505.9 billion, up 6.4% year over year. With nearshoring trends gaining momentum, Hunt’s competitors are investing aggressively. Last October, Hub Group formed a joint venture with Easo , a leading intermodal operator in Mexico. Schneider National has expanded its relationship with Canadian Pacific Kansas City (CPKC), offering service from Mexico to the US Southeast , and boasts the only single-rail service between Mexico and Chicago. Getting out of Mexico One of the most immediate hurdles for Quantum de México is the customs clearance process. Before a container can even be loaded, physical paperwork must be presented and stamped at the terminal. Outside of Monterrey, customs offices are open only during weekday business hours and a few hours on Saturdays. That leaves a narrow daily window to get freight cleared and loaded. “We're not running Quantum de Mexico service at wacky hours when there's no customs office open,” Luis Hernández, GMXT’s vice president of intermodal, told the Journal of Commerce. “We’re working within the existing process to clear cargo during office hours and move it accordingly.” But miss that limited processing window and achieving the service guarantee becomes difficult. If there is a problem while the train is in transit, a new set of issues arise. In the US, BNSF can unload the container and place it onto J.B. Hunt’s extensive truck fleet. In Mexico, however, J.B. Hunt does not own trucks or employ company drivers in Mexico. It must rely on third-party trucking companies. Jon Gabriel, BNSF’s group vice president for consumer products, said contingency plans are ready if a disruption occurs between Monterrey and the border. “It includes lift capability at Eagle Pass (Texas) itself,” he said. “We can drop a container there and use the J.B. Hunt truck fleet to recover if something happens enroute. We have many of the same levers and processes in place as we do in US.” Crossing into the US Having a backup plan in Eagle Pass is important because the US-Mexico border comes with its own set of complications. Crossing the old, single-track bridge between Piedras Negras, Mexico, and Eagle Pass requires three separate crews: a Mexican crew to bring the train to the border, a second to take it across the bridge, and a third US crew to haul it north. “Trains come to a complete stop so the hand-off crew can disembark and walk back to their side of the border,” Union Pacific wrote in a recent online post . The process can take up to 40 minutes and increases the risk of cargo theft and congestion trickling down to other trains. CPKC and Schneider bypass these delays entirely with the bridge in Laredo that opened a second span last December. UP last month completed a pilot program in which Mexican crews were allowed to bring trains directly into its Eagle Pass terminal, reducing its exposure to theft, border delays and crew changes easily taking a half hour. BNSF hasn't tested such options with customs agencies on both sides of the border, but says the single-track bridge isn't limiting operations. “Physical bridge capacity is not a constraint,” BNSF’s Gabriel said. “The train from Monterrey to [Fort Worth] is consistently beating its schedule. The route will not limit our ability to meet the service commitments to our customers.” Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Rail News

North-American rail

Intermodal providers

Surface

Mexico presents obstacles to meeting J.B. Hunt’s ‘Quantum’ guarantee

<div class="phx-topic abstract-wrapper">Despite sustained and pending capacity injections, major liners have the ability to alleviate short-term losses and produce healthy profits, writes Jeremy Masters.</div>

Despite sustained and pending capacity injections, major liners have the ability to alleviate short-term losses and produce healthy profits, writes Jeremy Masters.

<div class="phx-topic">The next two years are widely forecast to bring some lean times to carriers — even periods of red ink. Sustained injections of tonnage — new and secondhand — and a strong order book have been encouraged by a combination of money in the bank, the need for critical mass in new alliance structures and the drive toward alternative fuels. Unless world trade growth reaches unprecedented levels, there will be significant overcapacity for an extended period. And if the Red Sea fully reopens, that overcapacity will only be exacerbated. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6016882_0.1.jpg"></img></div>Why then, should carriers be optimistic about their ability to alleviate short-term losses and produce healthy profits over the cycle? For long-term watchers of the industry, the turning point for the carriers was the bankruptcy of Hanjin in 2016. Up until that point, carriers had a very poor return on capital and very little control over their future profits in a highly fragmented industry. The COVID-19 pandemic, and more recently the Red Sea crisis, were unusual events that gave an unexpected boost to carriers’ results. But Hanjin’s collapse was the catalyst for a consolidation which, alongside organic growth of the bigger players, means that today the top five carriers control 64.5% of global capacity, according to Alphaliner, while the top 10 control 84.1%. We can only speculate on the ultimate ambitions of Mediterranean Shipping Co., but most of the rest of the top 10 have ambitious fleet expansion plans — particularly CMA CGM and Cosco Shipping. Outside the top 10, there are few carriers that have significant growth plans, so the top 10’s percentage of world fleet will continue to rise. <h3>Controlling supply — and price </h3>The degree of consolidation that has taken place does not mean that carriers can defy rate gravity if there are unbridgeable gaps between supply and demand. But it does mean that in a down market, the biggest carriers can provide leadership by withdrawing whole strings. And in an up market, the carriers can act very quickly to increase rates, and as we have seen, amass big war chests. We will see some rocky periods ahead, but the carriers’ collective ability to control the supply lever, and thus price, has significantly increased. There is the less talked about factor that has also helped control the free supply of capacity — the reduction of the non-operating carrier fleet. The non-operating fleet and the leasing companies’ container fleets can be viewed as the elastic in the container shipping industry — helping carriers to meet incremental short-term capacity needs in different geographies, but on a bigger scale providing the opportunity to launch new products, especially for asset-poor new entrants. Alphaliner recently reported that the most traded sector of the charter market — 7,000- to 9,000-TEU ships — lost a massive 2.3 million TEUs of capacity in the last five years. It further reported that more than 3.7 million TEUs of non-operating capacity was sold to end-users between Aug. 20 and March 25, although this was partially offset by 1.2 million TEUs of new capacity delivered to non-operators and 221,000 TEUs bought from end-users. The biggest buyers were MSC and CMA CGM. How does this affect the charter market, the carriers who bought the tonnage, and the fluidity of the industry? <h3>Buoyant charter market </h3>Pundits have been shocked that the charter market has stayed as buoyant as it has. The Red Sea issue, the move from three to four east-to-west carrier groupings (counting MSC as a grouping) and intermittent congestion have all been important incremental demand generators. The fact that there have been shortages of ships available for charter in non-operating fleets, however, has also been pivotal. Carriers can be more creative with surplus assets and currently, at least, can bear less-than-optimal deployments. If non-operators get in a surplus position, they may have more need to be price-reactive. Ironically, then, the loss of some of their fleet to carriers has been a good thing for those non-operators who have held onto their assets. There is now less elasticity of supply in the charter market and more capability for non-operators to hold a firm line on price even when markets appear unfavorable, although similar to their operating carrier clients, they will not ultimately defy heavy gravity. We can assume the motives of MSC, CMA CGM and others for buying secondhand tonnage in smaller sizes from non-operators was based purely on perceived low asset prices and a desire to have greater control over north-to-south trades and regional feeders. The fact that this has limited the capability and the drive of the charter market to provide sharply priced tonnage to their competitors and any aspiring new entrants is, however, a helpful bonus. Contact Jeremy Masters at <a href="https://www.joc.com/article/jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>.</div>

The next two years are widely forecast to bring some lean times to carriers — even periods of red ink. Sustained injections of tonnage — new and secondhand — and a strong order book have been encouraged by a combination of money in the bank, the need for critical mass in new alliance structures and the drive toward alternative fuels. Unless world trade growth reaches unprecedented levels, there will be significant overcapacity for an extended period. And if the Red Sea fully reopens, that overcapacity will only be exacerbated. Why then, should carriers be optimistic about their ability to alleviate short-term losses and produce healthy profits over the cycle? For long-term watchers of the industry, the turning point for the carriers was the bankruptcy of Hanjin in 2016. Up until that point, carriers had a very poor return on capital and very little control over their future profits in a highly fragmented industry. The COVID-19 pandemic, and more recently the Red Sea crisis, were unusual events that gave an unexpected boost to carriers’ results. But Hanjin’s collapse was the catalyst for a consolidation which, alongside organic growth of the bigger players, means that today the top five carriers control 64.5% of global capacity, according to Alphaliner, while the top 10 control 84.1%. We can only speculate on the ultimate ambitions of Mediterranean Shipping Co., but most of the rest of the top 10 have ambitious fleet expansion plans — particularly CMA CGM and Cosco Shipping. Outside the top 10, there are few carriers that have significant growth plans, so the top 10’s percentage of world fleet will continue to rise. Controlling supply — and price The degree of consolidation that has taken place does not mean that carriers can defy rate gravity if there are unbridgeable gaps between supply and demand. But it does mean that in a down market, the biggest carriers can provide leadership by withdrawing whole strings. And in an up market, the carriers can act very quickly to increase rates, and as we have seen, amass big war chests. We will see some rocky periods ahead, but the carriers’ collective ability to control the supply lever, and thus price, has significantly increased. There is the less talked about factor that has also helped control the free supply of capacity — the reduction of the non-operating carrier fleet. The non-operating fleet and the leasing companies’ container fleets can be viewed as the elastic in the container shipping industry — helping carriers to meet incremental short-term capacity needs in different geographies, but on a bigger scale providing the opportunity to launch new products, especially for asset-poor new entrants. Alphaliner recently reported that the most traded sector of the charter market — 7,000- to 9,000-TEU ships — lost a massive 2.3 million TEUs of capacity in the last five years. It further reported that more than 3.7 million TEUs of non-operating capacity was sold to end-users between Aug. 20 and March 25, although this was partially offset by 1.2 million TEUs of new capacity delivered to non-operators and 221,000 TEUs bought from end-users. The biggest buyers were MSC and CMA CGM. How does this affect the charter market, the carriers who bought the tonnage, and the fluidity of the industry? Buoyant charter market Pundits have been shocked that the charter market has stayed as buoyant as it has. The Red Sea issue, the move from three to four east-to-west carrier groupings (counting MSC as a grouping) and intermittent congestion have all been important incremental demand generators. The fact that there have been shortages of ships available for charter in non-operating fleets, however, has also been pivotal. Carriers can be more creative with surplus assets and currently, at least, can bear less-than-optimal deployments. If non-operators get in a surplus position, they may have more need to be price-reactive. Ironically, then, the loss of some of their fleet to carriers has been a good thing for those non-operators who have held onto their assets. There is now less elasticity of supply in the charter market and more capability for non-operators to hold a firm line on price even when markets appear unfavorable, although similar to their operating carrier clients, they will not ultimately defy heavy gravity. We can assume the motives of MSC, CMA CGM and others for buying secondhand tonnage in smaller sizes from non-operators was based purely on perceived low asset prices and a desire to have greater control over north-to-south trades and regional feeders. The fact that this has limited the capability and the drive of the charter market to provide sharply priced tonnage to their competitors and any aspiring new entrants is, however, a helpful bonus. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Container lines

Maritime

Current market allows top ocean carriers to strengthen long-term position

<div class="phx-topic abstract-wrapper">While traditional energy projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace amid tariffs and investment uncertainty.</div>

While traditional energy projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace amid tariffs and investment uncertainty.

<div class="phx-topic">Project cargo specialists are voicing escalating concerns about the pervasive impact of tariffs and a reluctance by shippers to invest, casting a shadow over the midterm project cargo pipeline.While traditional energy and power generation projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace, creating a bifurcated market. Andreas Menzel, managing director for Germany and Benelux for Trans Global Projects (TGP), highlighted the key cargoes as “oil and gas and power in general, such as power generation and nuclear power.” He described nuclear projects as a “steady market for us,” as is the development of hydrogen projects in Benelux countries, particularly the Netherlands.Echoing the diversified nature of current projects, Boris Dykiert, commercial director with dteq Transport Engineering Solutions, noted a range of projects for the energy transition in Europe and cargoes moving in Australia. Hagen Hennig, dteg’s technical director, added he is still seeing a lot of conventional energy, oil and gas, gas turbines and nuclear cargoes, alongside mini power plants to serve the burgeoning datacenter market. “It’s not only wind that is benefiting from the ever-growing energy demand,” Hennig said.However, the pace of these various sectors differs significantly. Speaking on a panel at Breakbulk Europe in mid-May, Richard Kaladji, head of the project logistics department at Air Liquide, pegged the fastest-moving industry verticals from a final investment decision perspective as power generation, traditional energy, oil and gas, and mature renewals such as solar and wind. “The slowest are energy transition projects [such as] hydrogen, carbon capture [and] sustainable aviation fuel,” Kaladji.<h3>Tariff impact on project pipeline</h3>Meanwhile, the impact of tariffs and broader economic instability looms large over the project industry’s cargo pipeline. TGP’s Menzel noted that tariffs on various products and countries are a crucial factor in the development and realization of projects. At the same time, decreased and canceled funding for renewable projects in the US has led to one client’s project being held, with several others in abeyance. “We see that wherever there’s instability, there is a lack of willingness to invest,” Menzel told the Journal of Commerce. “Unless there is clarity, you simply cannot invest, and we see this on projects. There won’t be large investment in the US because of this uncertainty.”Despite these concerns, some are pushing forward with existing projects. Daniel M. Kjaer, director of global renewable chartering at deugro, told the Journal of Commerce that it is “full steam ahead.” “The outlook for offshore wind in the United States is currently marked by a mix of significant growth potential and emerging political and economic challenges,” he said, adding that there is a need to get projects done and delivered before potential political and economic headwinds.Kjaer also noted a shift in market reliance. He said that while global offshore wind capacity is expected to reach up to 500 gigawatts (GW) by 2035, with the US projected to contribute about 9%, future progress “depends heavily on stable and supportive policies.” “Political uncertainty remains a key risk to realizing the sector’s full potential,” he said. Kjaer pointed to ongoing production in Asia and the movement of wind offshore components between Europe and Asia as an indicator of continued project cargo demand. He expressed confidence in the project cargo pipeline to 2029.However, TGP’s Menzel said that while there were “quite a few projects in quite a few sectors,” the pipeline for the next three to five years is “more of a concern.”Economic challenges were underscored by Tim Killen, head of growth for the project sector at Fracht Group. Speaking on a panel at Breakbulk Europe, Killen said that projects are facing ongoing fiscal scrutiny in this environment. Andy Young, corporate manager of logistics and manager at Bechtel Global Logistics, added that the biggest disruptor is economic instability. “That’s the biggest ticket at the moment,” he said.Young stressed the need for adaptability.“We have got to go back and look at quality, safety and surety of delivery,” he said. “A supply chain has to be agile and adaptable. The problem is how to stay ahead. You have got to be vigilant.” Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Project cargo specialists are voicing escalating concerns about the pervasive impact of tariffs and a reluctance by shippers to invest, casting a shadow over the midterm project cargo pipeline. While traditional energy and power generation projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace, creating a bifurcated market. Andreas Menzel, managing director for Germany and Benelux for Trans Global Projects (TGP), highlighted the key cargoes as “oil and gas and power in general, such as power generation and nuclear power.” He described nuclear projects as a “steady market for us,” as is the development of hydrogen projects in Benelux countries, particularly the Netherlands. Echoing the diversified nature of current projects, Boris Dykiert, commercial director with dteq Transport Engineering Solutions, noted a range of projects for the energy transition in Europe and cargoes moving in Australia. Hagen Hennig, dteg’s technical director, added he is still seeing a lot of conventional energy, oil and gas, gas turbines and nuclear cargoes, alongside mini power plants to serve the burgeoning datacenter market. “It’s not only wind that is benefiting from the ever-growing energy demand,” Hennig said. However, the pace of these various sectors differs significantly. Speaking on a panel at Breakbulk Europe in mid-May, Richard Kaladji, head of the project logistics department at Air Liquide, pegged the fastest-moving industry verticals from a final investment decision perspective as power generation, traditional energy, oil and gas, and mature renewals such as solar and wind. “The slowest are energy transition projects [such as] hydrogen, carbon capture [and] sustainable aviation fuel,” Kaladji. Tariff impact on project pipeline Meanwhile, the impact of tariffs and broader economic instability looms large over the project industry’s cargo pipeline. TGP’s Menzel noted that tariffs on various products and countries are a crucial factor in the development and realization of projects. At the same time, decreased and canceled funding for renewable projects in the US has led to one client’s project being held, with several others in abeyance. “We see that wherever there’s instability, there is a lack of willingness to invest,” Menzel told the Journal of Commerce. “Unless there is clarity, you simply cannot invest, and we see this on projects. There won’t be large investment in the US because of this uncertainty.” Despite these concerns, some are pushing forward with existing projects. Daniel M. Kjaer, director of global renewable chartering at deugro, told the Journal of Commerce that it is “full steam ahead.” “The outlook for offshore wind in the United States is currently marked by a mix of significant growth potential and emerging political and economic challenges,” he said, adding that there is a need to get projects done and delivered before potential political and economic headwinds. Kjaer also noted a shift in market reliance. He said that while global offshore wind capacity is expected to reach up to 500 gigawatts (GW) by 2035, with the US projected to contribute about 9%, future progress “depends heavily on stable and supportive policies.” “Political uncertainty remains a key risk to realizing the sector’s full potential,” he said. Kjaer pointed to ongoing production in Asia and the movement of wind offshore components between Europe and Asia as an indicator of continued project cargo demand. He expressed confidence in the project cargo pipeline to 2029. However, TGP’s Menzel said that while there were “quite a few projects in quite a few sectors,” the pipeline for the next three to five years is “more of a concern.” Economic challenges were underscored by Tim Killen, head of growth for the project sector at Fracht Group. Speaking on a panel at Breakbulk Europe, Killen said that projects are facing ongoing fiscal scrutiny in this environment. Andy Young, corporate manager of logistics and manager at Bechtel Global Logistics, added that the biggest disruptor is economic instability. “That’s the biggest ticket at the moment,” he said. Young stressed the need for adaptability. “We have got to go back and look at quality, safety and surety of delivery,” he said. “A supply chain has to be agile and adaptable. The problem is how to stay ahead. You have got to be vigilant.” Contact Carly Fields at carly.fields@spglobal.com .

Energy projects

Project cargo

Breakbulk News

Conventional power drives project cargo pipeline, but midterm worries persist

<div class="phx-topic abstract-wrapper">While terminal operators had hoped that problems stemming from the mid-May work stoppage would be mostly over, forwarders are still reporting cargo delays.</div>

While terminal operators had hoped that problems stemming from the mid-May work stoppage would be mostly over, forwarders are still reporting cargo delays.

<div class="phx-topic">Shipments are still facing delays though Manzanillo, Mexico’s largest port, following a four-day strike in mid-May, forwarders say, although one terminal operator is telling customers to expect a return to normal cargo flow as early as this week. Following the strike by workers from the Manzanillo Port Customs Office, vessel arrivals at berth are currently delayed by one day, according to Kuehne + Nagel. However, data from maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet show vessels calling Manzanillo taking about two weeks, on average, between arrival and gate out. While terminal operators had initially earmarked June as the projected end date for interruptions, forwarders are still reporting cargo delays. “There’s a headache there — strikes, system collapsed, customs is struggling and chaos with coordination of trucks,” said Nicolas Portenza, president of Eternity International Freight Forwarder México. Kuehne + Nagel’s SeaExplorer visibility platform classifies the port as “heavily disrupted” with an average vessel waiting time of 1.08 days. <h3>Rail delays </h3>Manzanillo marine terminals Contecon and SSA are still congested, and high export volumes have resulted in rail delays of about 72 hours for both imports and exports, according to Kuehne + Nagel. Terminal operator SSA Marine told customers last week that unscheduled requests for import appointments would be deleted to purge their system, but that scheduling would return to normal over the weekend, according to a notice shared by Eternity International Freight Forwarder México. Still, forwarders told the Journal of Commerce that congestion has not yet eased. “Some ocean carriers are submitting offices notices to their customers that there might be extreme delays or cancellations due to the delays at the port,” said Ernesto Hernandez Jr., a customs broker at HEMA Logistics. AIS data shows vessel calls decreasing at Manzanillo, with 11 ships calling Sunday compared with 19 on May 25 and 18 on May 18, the first Sunday after the strike ended. A forwarder said it will be difficult for vessels to avoid Manzanillo. “It’s hard for some services to blank Manzanillo,” the source said. “It will depend on if they can shift Mexican cargo to other services.” Impacts from the delays might be quantified in higher product costs, said Hernandez. “[Much] of the cargo being sent directly to Mexico is part of a manufacturing process that will end up in the US as a finished product,” he said. “Delays and cost increases at these ports will increase the landed costs of products coming into the US.” Manzanillo terminal operators Contecon and SSA declined to comment. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Shipments are still facing delays though Manzanillo, Mexico’s largest port, following a four-day strike in mid-May, forwarders say, although one terminal operator is telling customers to expect a return to normal cargo flow as early as this week. Following the strike by workers from the Manzanillo Port Customs Office, vessel arrivals at berth are currently delayed by one day, according to Kuehne + Nagel. However, data from maritime visibility provider Vizion and data and analytics company Dun & Bradstreet show vessels calling Manzanillo taking about two weeks, on average, between arrival and gate out. While terminal operators had initially earmarked June as the projected end date for interruptions, forwarders are still reporting cargo delays. “There’s a headache there — strikes, system collapsed, customs is struggling and chaos with coordination of trucks,” said Nicolas Portenza, president of Eternity International Freight Forwarder México. Kuehne + Nagel’s SeaExplorer visibility platform classifies the port as “heavily disrupted” with an average vessel waiting time of 1.08 days. Rail delays Manzanillo marine terminals Contecon and SSA are still congested, and high export volumes have resulted in rail delays of about 72 hours for both imports and exports, according to Kuehne + Nagel. Terminal operator SSA Marine told customers last week that unscheduled requests for import appointments would be deleted to purge their system, but that scheduling would return to normal over the weekend, according to a notice shared by Eternity International Freight Forwarder México. Still, forwarders told the Journal of Commerce that congestion has not yet eased. “Some ocean carriers are submitting offices notices to their customers that there might be extreme delays or cancellations due to the delays at the port,” said Ernesto Hernandez Jr., a customs broker at HEMA Logistics. AIS data shows vessel calls decreasing at Manzanillo, with 11 ships calling Sunday compared with 19 on May 25 and 18 on May 18, the first Sunday after the strike ended. A forwarder said it will be difficult for vessels to avoid Manzanillo. “It’s hard for some services to blank Manzanillo,” the source said. “It will depend on if they can shift Mexican cargo to other services.” Impacts from the delays might be quantified in higher product costs, said Hernandez. “[Much] of the cargo being sent directly to Mexico is part of a manufacturing process that will end up in the US as a finished product,” he said. “Delays and cost increases at these ports will increase the landed costs of products coming into the US.” Manzanillo terminal operators Contecon and SSA declined to comment. Contact Laura Robb at laura.robb@spglobal.com . 

Container Shipping News

North American ports

International ports

Port News

Disruption lingers at Mexico’s Manzanillo port weeks after brief strike

<div class="phx-topic abstract-wrapper">Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe. </div>

Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe.

<div class="phx-topic">Ocean shipping rates from Asia to Europe shot up ahead of this week’s June 1 freight-all-kinds (FAK) increases by carriers, with the substantial price hikes supported by mounting delays at severely congested port hubs at both ends of the trade lane. While port bottlenecks absorb capacity on Asia-Europe, surging demand on the trans-Pacific is prompting carriers to shift vessels to the booming China-US trade lane, putting further upward pressure on Asia-Europe rates. “Carriers are redeploying ships from Asia-Europe and other routes to the trans-Pacific routes, with the capacity in Asia-Europe dropping 17% in the week starting June 16 vs. the end of May,” HSBC noted in its weekly transportation update. “However, we think these are insufficient to address the cargo rush [on the trans-Pacific], while capacity reallocation could cause shortages in other corridors,” according to the bank’s analysts. Drewry highlighted in a recent market update that since late March, labor shortages and low Rhine River water levels have pushed up berth waiting times by 37% in Antwerp, 49% in Hamburg and 77% in Bremerhaven. In Asia, Shanghai and Singapore, the world’s busiest and second-busiest ports, respectively, are battling congestion driven by a rush of exports to the US during a 90-day tariff cooldown. <h3>Rate hikes, surcharges </h3>As capacity tightens, carriers are rolling out significant rate increases from Asia to both North Europe and the Mediterranean, as well as implementing “peak season surcharges” on some Mediterranean routes. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates rose 23% on June 1 to $2,353 per FEU, with Asia-Mediterranean rates up 24% to $3,720/FEU. Data assessed by Platts, a sister company of the Journal of Commerce within S&amp;P Global, shows North Asia to North Europe rates rose $600 in the past week to $2,400/FEU, while Asia-Mediterranean rates increased $1,400 in the past week to $4,300/FEU. Several carriers are also raising their backhaul rates that have been below $200 per FEU since January. Mediterranean Shipping Co., Hapag-Lloyd and CMA CGM have set their Europe to Asia rate between $500/FEU and $530/FEU, with Cosco asking for $1,500/FEU. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean shipping rates from Asia to Europe shot up ahead of this week’s June 1 freight-all-kinds (FAK) increases by carriers, with the substantial price hikes supported by mounting delays at severely congested port hubs at both ends of the trade lane. While port bottlenecks absorb capacity on Asia-Europe, surging demand on the trans-Pacific is prompting carriers to shift vessels to the booming China-US trade lane, putting further upward pressure on Asia-Europe rates. “Carriers are redeploying ships from Asia-Europe and other routes to the trans-Pacific routes, with the capacity in Asia-Europe dropping 17% in the week starting June 16 vs. the end of May,” HSBC noted in its weekly transportation update. “However, we think these are insufficient to address the cargo rush [on the trans-Pacific], while capacity reallocation could cause shortages in other corridors,” according to the bank’s analysts. Drewry highlighted in a recent market update that since late March, labor shortages and low Rhine River water levels have pushed up berth waiting times by 37% in Antwerp, 49% in Hamburg and 77% in Bremerhaven. In Asia, Shanghai and Singapore, the world’s busiest and second-busiest ports, respectively, are battling congestion driven by a rush of exports to the US during a 90-day tariff cooldown. Rate hikes, surcharges As capacity tightens, carriers are rolling out significant rate increases from Asia to both North Europe and the Mediterranean, as well as implementing “peak season surcharges” on some Mediterranean routes. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates rose 23% on June 1 to $2,353 per FEU, with Asia-Mediterranean rates up 24% to $3,720/FEU. Data assessed by Platts, a sister company of the Journal of Commerce within S&P Global, shows North Asia to North Europe rates rose $600 in the past week to $2,400/FEU, while Asia-Mediterranean rates increased $1,400 in the past week to $4,300/FEU. Several carriers are also raising their backhaul rates that have been below $200 per FEU since January. Mediterranean Shipping Co., Hapag-Lloyd and CMA CGM have set their Europe to Asia rate between $500/FEU and $530/FEU, with Cosco asking for $1,500/FEU. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Pacific

Asia-Europe

Asia-Europe ocean rates spike on congestion, capacity shift

<div class="phx-topic abstract-wrapper">Ocean carrier profits this year are expected to be less than half of what they were in 2024 amid an uncertain macroeconomic outlook. </div>

Ocean carrier profits this year are expected to be less than half of what they were in 2024 amid an uncertain macroeconomic outlook.

<div class="phx-topic">The container shipping industry is on track for a profitable year, although not as strong as 2024, as higher operating expenses dampen rate momentum driven by tariff uncertainty, according to analysts. Among nine publicly traded ocean carriers, revenue for 2025 is expected to reach $138.2 billion, according to Capital IQ Estimates, down from $155.5 billion reported for 2024. Capital IQ is a sister company of the Journal of Commerce within S&amp;P Global. The main driver for last year’s results were steadily strengthening freight rates spurred by resilient consumer and industrial demand, with the Platts Global Container Index rising from $2,300 per standard container to almost $5,000 by the end of 2024. And while rates remain elevated, particularly in the trans-Pacific, the outlook for earnings is dimmer. Industry-wide net income is expected to be $11.6 billion in 2025, compared with $28.6 billion in 2024, data from Capital IQ Estimates shows. After most carriers reported first-quarter earnings for 2025, analysts trimmed collective earnings forecasts for ocean carriers by $600 million since the beginning of April. Even with the recent tariff turmoil, most ocean carriers saw few, if any, market catalysts to create a repeat of 2024. Other industry watchers also see a tougher comparison for ocean carriers this year. Alphaliner noted the average first-quarter operating margin for ocean carriers fell to 18.1%, the lowest in four quarters. Maritime consultancy Drewry sees operating profit for the container shipping industry falling to $20 billion this year, down from about $50 billion in 2024. Ocean carriers are flagging higher operating expenses in 2025 as ships get delayed and the costs of container repositioning become more burdensome. Hapag-Lloyd highlighted a 9% increase in handling and haulage costs for the first quarter, primarily because of having to secure storage for empty containers and higher drayage expenses for door moves. <h3>Muted rate outlook </h3>While higher freight rates can offset those increases, carrier chief executives remain cautious on how far the current rally will go. Maersk Chief Executive Vincent Clerc offered a forecast of global container demand ranging anywhere from a decline of 1% to growth of 4% during the company’s second-quarter earnings call on May 8, down from a forecast of 4% in February. Clerc said President Donald Trump’s trade policies are forcing more Maersk customers to reconsider where they source goods. While some shippers highly dependent on China are looking to frontload goods, others are drawing inventory in North America or looking at how to exit China. “The increased macroeconomic and geopolitical uncertainties since we shared our guidance in February inevitably affects our outlook for the rest of the year, especially on the back of the escalation we saw of the US-China trade tensions as well as the unresolved questions around the other tariffs currently under the 90-day reprieve,” Clerc said. Even though container freight bookings out of China saw a resurgence following the 90-day tariff reprieve, Hapag-Lloyd Chief Executive Rolf Habben Jansen said during a May 14 earnings call he expects only a “little bit of a surge” over the next two or three months. He said Hapag-Lloyd is maintaining its current 2025 outlook based on the “assumption that we expect to see freight rates declining based on the trends that we have seen in the market over the last couple of months.” “I think [the] demand trend for 2025 at the moment is pretty uncertain,” Habben Jansen said. “We see new developments every day. I think the only thing we know for sure is that the first quarter was pretty good.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The container shipping industry is on track for a profitable year, although not as strong as 2024, as higher operating expenses dampen rate momentum driven by tariff uncertainty, according to analysts. Among nine publicly traded ocean carriers, revenue for 2025 is expected to reach $138.2 billion, according to Capital IQ Estimates, down from $155.5 billion reported for 2024. Capital IQ is a sister company of the Journal of Commerce within S&P Global. The main driver for last year’s results were steadily strengthening freight rates spurred by resilient consumer and industrial demand, with the Platts Global Container Index rising from $2,300 per standard container to almost $5,000 by the end of 2024. And while rates remain elevated, particularly in the trans-Pacific, the outlook for earnings is dimmer. Industry-wide net income is expected to be $11.6 billion in 2025, compared with $28.6 billion in 2024, data from Capital IQ Estimates shows. After most carriers reported first-quarter earnings for 2025, analysts trimmed collective earnings forecasts for ocean carriers by $600 million since the beginning of April. Even with the recent tariff turmoil, most ocean carriers saw few, if any, market catalysts to create a repeat of 2024. Other industry watchers also see a tougher comparison for ocean carriers this year. Alphaliner noted the average first-quarter operating margin for ocean carriers fell to 18.1%, the lowest in four quarters. Maritime consultancy Drewry sees operating profit for the container shipping industry falling to $20 billion this year, down from about $50 billion in 2024. Ocean carriers are flagging higher operating expenses in 2025 as ships get delayed and the costs of container repositioning become more burdensome. Hapag-Lloyd highlighted a 9% increase in handling and haulage costs for the first quarter, primarily because of having to secure storage for empty containers and higher drayage expenses for door moves. Muted rate outlook While higher freight rates can offset those increases, carrier chief executives remain cautious on how far the current rally will go. Maersk Chief Executive Vincent Clerc offered a forecast of global container demand ranging anywhere from a decline of 1% to growth of 4% during the company’s second-quarter earnings call on May 8, down from a forecast of 4% in February. Clerc said President Donald Trump’s trade policies are forcing more Maersk customers to reconsider where they source goods. While some shippers highly dependent on China are looking to frontload goods, others are drawing inventory in North America or looking at how to exit China. “The increased macroeconomic and geopolitical uncertainties since we shared our guidance in February inevitably affects our outlook for the rest of the year, especially on the back of the escalation we saw of the US-China trade tensions as well as the unresolved questions around the other tariffs currently under the 90-day reprieve,” Clerc said. Even though container freight bookings out of China saw a resurgence following the 90-day tariff reprieve, Hapag-Lloyd Chief Executive Rolf Habben Jansen said during a May 14 earnings call he expects only a “little bit of a surge” over the next two or three months. He said Hapag-Lloyd is maintaining its current 2025 outlook based on the “assumption that we expect to see freight rates declining based on the trends that we have seen in the market over the last couple of months.” “I think [the] demand trend for 2025 at the moment is pretty uncertain,” Habben Jansen said. “We see new developments every day. I think the only thing we know for sure is that the first quarter was pretty good.” Contact Michael Angell at michael.angell@spglobal.com .

Global uncertainty to erode ocean carrier profits in 2025

<div class="phx-topic abstract-wrapper">The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince. </div>

The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince.

<div class="phx-topic">Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. <h3>Yanqui go home! </h3>I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. <h3>Voluntary restraint </h3>In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. <h3>The Plaza Accord </h3>The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. <h3>China and the WTO </h3>Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>. </div>

Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. Yanqui go home! I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. Voluntary restraint In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. The Plaza Accord The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. China and the WTO Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at ted@tricitiesintermodal.com .

Supply chain

Transport, Trade and Regulation News

A history lesson while we watch current US trade policy unfold

<div class="phx-topic abstract-wrapper">The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.</div>

The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.

<div class="phx-topic">This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. <h3>‘Roulette game’ </h3>You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">to avoid Chinese-built, -owned, and -operated ships</a> will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">removal of de minimis</a> has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. ‘Roulette game’ You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response to avoid Chinese-built, -owned, and -operated ships will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the removal of de minimis has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Navigating the current supply chain is a matter of choosing your poison

Notes: Z-Scores of train speeds, trains holding, and idling railcars. Positive values reflect greater fluidity relative to historical averages. Each railroad is benchmarked against its own past performance.

2023

2023: {CSX_service_score_2023.formatNumber('#.##')}

2024

2024: {CSX_service_score_2024.formatNumber('#.##')}

2025

2025: {CSX_service_score_2025.formatNumber('#.##')}

Weekly CSX intermodal service performance (STB)

<div class="phx-topic abstract-wrapper">Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.</div>

Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.

<div class="phx-topic">A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it is needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines…” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, and was causing lengthy delays and port omissions on some long-haul and intra-Asia services. <h3>Congestion stretches throughout Asia </h3>Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia, where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">it had seen an increase of more than 50% in China-US cargo bookings</a> since the two countries signed a preliminary trade deal slashing tariffs for 90 days following meetings on May 11–12. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it is needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines…” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, and was causing lengthy delays and port omissions on some long-haul and intra-Asia services. Congestion stretches throughout Asia Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia, where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday it had seen an increase of more than 50% in China-US cargo bookings since the two countries signed a preliminary trade deal slashing tariffs for 90 days following meetings on May 11–12. Contact Keith Wallis at keithwallis@hotmail.com .

US tariff-linked cargo rush causes port congestion, box shortages in China

<div class="phx-topic abstract-wrapper">The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.</div>

The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.

<div class="phx-topic">Excess capacity and weakening demand continue to exert downward pressure on Asia-North Europe container rates with the various indices showing the spot market has lost more than 60% of its value since the beginning of the year. Several carriers have announced rate increases for more than $3,000 per FEU from June 1 to try to slow the spot market slide but may struggle to find much support in an oversupplied market. CMA CGM will be setting its freight all kinds (FAK) rate from Asia to North Europe at $3,100 per FEU on June 1, while MSC and Hapag-Lloyd will set their rate on that route at $3,200/FEU. MSC and Hapag-Lloyd are also raising their Asia-Mediterranean FAK prices, with MSC rates of about $5,000/FEU and Hapag-Lloyd at $4,500/FEU. The asking prices are significantly higher than current rate levels. Average spot rates from Asia to North Europe on May 15 were $1,994/FEU, down from just over $5,000/FEU on Dec. 31, while Asia-Mediterranean rates of $3,156/FEU were down 42% so far this year, according to the rate benchmarking platform Xeneta. Platts, a sister company of the Journal of Commerce within S&amp;P Global recorded spot rates from Asia to North Europe at $1,600/FEU this week, an almost 70% decline since the beginning of January. Asia-Mediterranean rates this week were at $2,700/FEU, a drop of 50% since the start of the year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="aa85df16-b8fe-4e63-9181-65cba329e464"></dynamic-object></div>The supply chain director for a Germany-based Asia-Europe shipper said he was seeing offers in the market as low as $1,200/FEU, which was putting pressure on carriers to slow the decline. "I can understand the pressure carriers are under, and they are asking for more cargo but many BCOs (beneficial cargo owners) have declining cargo flows, so the market is really imbalanced,” the source said, adding that there was little chance the rate hikes would stick. “Our demand is the same as it was at this time last year, which is a slack period. The rate increases will not be 100% but may stabilize falling prices. Whether there will be another advanced peak season is impossible to gauge, but everything is possible in this market.” <h3>Mismatch between supply and demand </h3>Peter Sand, chief analyst at Xeneta, said the mismatch between offered capacity and demand was keeping spot rates under pressure. “While rates and demand are going up on trans-Pacific, spot rates are sliding into Europe,” he told the Journal of Commerce Friday. The container shipping orderbook of 8.6 million TEUs in capacity is about 27% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce. Just under 1 million TEUs in capacity will be delivered this year, most of it large ships that can only be deployed on Asia-Europe, while only 4,000 TEUs are set to be scrapped by the industry this year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b2f271aa-d66e-49e2-9bc8-99469f7fc20e"></dynamic-object></div>Only 6.5% of the available capacity is being blanked in May while carriers are deploying a record 1.12 million TEUs in the month, according to data from ocean visibility provider eeSea. Sand noted that the tariff cuts on the China-US trade following a 90-day deal between Washington and Beijing last weekend has “changed the picture” with some cargo diverted from the trans-Pacific to Asia-Europe. ”One month of ‘frustrated cargo’ that didn’t go from China to the US and is on its way to Europe, the Middle East and South America. The congested northern European ports will be facing a rush in June on the back of this,” Sand added. North Europe’s largest port gateways <a href="https://www.joc.com/article/no-end-to-the-congestion-choking-gateway-ports-in-north-europe-5995853">continue to struggle with persistent congestion</a> that has delayed vessels and hampered container operations at the hubs for months. The reasons include full container yards, port strikes and slowdowns, labor shortages because of several public holidays in May, crane engineering works in some terminals and changing carrier alliance networks. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Excess capacity and weakening demand continue to exert downward pressure on Asia-North Europe container rates with the various indices showing the spot market has lost more than 60% of its value since the beginning of the year. Several carriers have announced rate increases for more than $3,000 per FEU from June 1 to try to slow the spot market slide but may struggle to find much support in an oversupplied market. CMA CGM will be setting its freight all kinds (FAK) rate from Asia to North Europe at $3,100 per FEU on June 1, while MSC and Hapag-Lloyd will set their rate on that route at $3,200/FEU. MSC and Hapag-Lloyd are also raising their Asia-Mediterranean FAK prices, with MSC rates of about $5,000/FEU and Hapag-Lloyd at $4,500/FEU. The asking prices are significantly higher than current rate levels. Average spot rates from Asia to North Europe on May 15 were $1,994/FEU, down from just over $5,000/FEU on Dec. 31, while Asia-Mediterranean rates of $3,156/FEU were down 42% so far this year, according to the rate benchmarking platform Xeneta. Platts, a sister company of the Journal of Commerce within S&P Global recorded spot rates from Asia to North Europe at $1,600/FEU this week, an almost 70% decline since the beginning of January. Asia-Mediterranean rates this week were at $2,700/FEU, a drop of 50% since the start of the year. The supply chain director for a Germany-based Asia-Europe shipper said he was seeing offers in the market as low as $1,200/FEU, which was putting pressure on carriers to slow the decline. "I can understand the pressure carriers are under, and they are asking for more cargo but many BCOs (beneficial cargo owners) have declining cargo flows, so the market is really imbalanced,” the source said, adding that there was little chance the rate hikes would stick. “Our demand is the same as it was at this time last year, which is a slack period. The rate increases will not be 100% but may stabilize falling prices. Whether there will be another advanced peak season is impossible to gauge, but everything is possible in this market.” Mismatch between supply and demand Peter Sand, chief analyst at Xeneta, said the mismatch between offered capacity and demand was keeping spot rates under pressure. “While rates and demand are going up on trans-Pacific, spot rates are sliding into Europe,” he told the Journal of Commerce Friday. The container shipping orderbook of 8.6 million TEUs in capacity is about 27% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce. Just under 1 million TEUs in capacity will be delivered this year, most of it large ships that can only be deployed on Asia-Europe, while only 4,000 TEUs are set to be scrapped by the industry this year. Only 6.5% of the available capacity is being blanked in May while carriers are deploying a record 1.12 million TEUs in the month, according to data from ocean visibility provider eeSea. Sand noted that the tariff cuts on the China-US trade following a 90-day deal between Washington and Beijing last weekend has “changed the picture” with some cargo diverted from the trans-Pacific to Asia-Europe. ”One month of ‘frustrated cargo’ that didn’t go from China to the US and is on its way to Europe, the Middle East and South America. The congested northern European ports will be facing a rush in June on the back of this,” Sand added. North Europe’s largest port gateways continue to struggle with persistent congestion that has delayed vessels and hampered container operations at the hubs for months. The reasons include full container yards, port strikes and slowdowns, labor shortages because of several public holidays in May, crane engineering works in some terminals and changing carrier alliance networks. Contact Greg Knowler at greg.knowler@spglobal.com .

Ocean carriers line up hefty rate hikes on oversupplied Asia-Europe trade

<div class="phx-topic abstract-wrapper">Container lines are looking to capitalize on a ramp-up in Asia-US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.</div>

Container lines are looking to capitalize on a ramp-up in Asia-US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.

<div class="phx-topic">Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to approximately $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">a 50% increase in bookings</a> from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upward of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia-East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&amp;P Global. Last year, spot rates <a href="https://www.joc.com/article/carriers-to-deploy-extra-loaders-to-los-angeles-long-beach-amid-import-surge-5714861">peaked at $8,133 per FEU to the West Coast</a> and $10,133 per FEU to the East Coast in the week of July 5. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="db2a41f2-e1d4-498c-bda1-401715921660"></dynamic-object></div>Carriers Hapag-Lloyd, Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” <h3>Bookings from China surge </h3>The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Similar to Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to approximately $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen a 50% increase in bookings from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upward of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia-East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&P Global. Last year, spot rates peaked at $8,133 per FEU to the West Coast and $10,133 per FEU to the East Coast in the week of July 5. Carriers Hapag-Lloyd, Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” Bookings from China surge The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Similar to Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Forwarding

Trans-Pacific carriers announce massive June rate hikes

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">The US Court of International Trade on Wednesday stated that President Donald Trump’s tariffs exceed his authority. </div>

The US Court of International Trade on Wednesday stated that President Donald Trump’s tariffs exceed his authority.

<div class="phx-topic">A federal trade court’s striking down of President Donald Trump’s series of tariffs against most of its trading partners resets shipping expectations after months of whiplash but adds yet more uncertainty for importers. The US Court of International Trade on Wednesday blocked Trump’s use of emergency powers to impose a 10% tax across most countries and the 145% tariff hanging over US imports from China amid a 90-day reprieve. The decision will almost certainly be appealed, adding uncertainty to importers. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court stated. The decision, if upheld, would draw a close to more than six months of uncertainty on the future of US tariffs and retaliatory measures against US exporters. The Trump administration may find other ways to impose leverage in trade negotiations. Anticipation of Trump’s second term and his reelection spurred importers to frontload cargo for months, before pulling back on orders after he announced a 145% tariff on April 9. The US and China agreed on May 12 to a 90-day cooling off period in which reciprocal tariffs on Chinese goods were reduced to 30%. Before the decision Wednesday, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August. This is a developing story. </div>

A federal trade court’s striking down of President Donald Trump’s series of tariffs against most of its trading partners resets shipping expectations after months of whiplash but adds yet more uncertainty for importers. The US Court of International Trade on Wednesday blocked Trump’s use of emergency powers to impose a 10% tax across most countries and the 145% tariff hanging over US imports from China amid a 90-day reprieve. The decision will almost certainly be appealed, adding uncertainty to importers. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court stated. The decision, if upheld, would draw a close to more than six months of uncertainty on the future of US tariffs and retaliatory measures against US exporters. The Trump administration may find other ways to impose leverage in trade negotiations. Anticipation of Trump’s second term and his reelection spurred importers to frontload cargo for months, before pulling back on orders after he announced a 145% tariff on April 9. The US and China agreed on May 12 to a 90-day cooling off period in which reciprocal tariffs on Chinese goods were reduced to 30%. Before the decision Wednesday, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August. This is a developing story.

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Federal court ruling blocking tariffs resets shipping outlook

<div class="phx-topic abstract-wrapper">Whether the expected capacity injection on tap for June is enough to stem further rate increases remains unclear.</div>

Whether the expected capacity injection on tap for June is enough to stem further rate increases remains unclear.

<div class="phx-topic">Maersk and Hapag-Lloyd are adding a new trans-Pacific express service to the US West Coast, while Mediterranean Shipping Co. looks to restart a suspended East Coast service. The moves signal new confidence about trans-Pacific demand as rates continue to strengthen going into June. Maersk and Hapag-Lloyd said in statements Monday that the Gemini Cooperation vessel-sharing agreement between them would offer a new express service connecting China and South Korea to the West Coast, branded respectively as the TP9/WC6. The first voyage from Xiamen, China, will take place June 24 on the 4,622-TEU Rhone Maersk, with subsequent calls at Busan and Long Beach. The Gemini partners said the service would offer an 18-day transit from Xiamen to Long Beach. The new Gemini service launches after a two-month turnaround in trans-Pacific shipping demand that saw ocean <a href="https://www.joc.com/article/asia-us-blank-sailing-forecast-for-may-increasing-amid-cancellations-5988996">carriers quickly remove ships</a> after President Donald Trump’s tariffs on China halted container bookings, then rapidly restore capacity amid the 90-day tariff reprieve that expires in mid-August. The demand whipsaw over that time has <a href="https://www.joc.com/article/eastbound-trans-pac-spot-rates-in-revival-mode-in-wake-of-us-china-trade-deal-6004803">almost doubled spot freight rates</a> from China to the West Coast. Platts, a sister company of the Journal of Commerce within S&amp;P Global, assessed North Asia to US West Coast container freight rates at $3,840 per FEU as of May 23, up from $1,960 per FEU on April 11. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7536dc3e-05bb-456c-bdd0-bcc5c4f332a4"></dynamic-object></div>June is expected to see the most container ship capacity in the trans-Pacific since last November, according to data from ocean visibility provider eeSea. It expects 1.268 million TEUs of vessel capacity between Asia and the US West Coast next month, up 34,000 TEUs from May. The amount of “blanked” capacity removed from the market will be 113,234 TEUs, the lowest since June 2024. <h3>‘Sufficient space available’ </h3>Whether the expected capacity injection for June will be enough to stem further rate increases remains unclear. A US-based executive for a Taiwanese ocean carrier told the Journal of Commerce that because some ships have been repositioned to serve other trade lanes, it will be early July before he expects meaningful capacity additions to affect the trans-Pacific market. However, Alphaliner analyst Tan Hua Joo told the Journal of Commerce some carriers, such as Maersk and Hapag-Lloyd, are in a better position to respond to resurgent demand because they did not remove ships during the recent turmoil. Other carriers may also be better able to add capacity quickly to the trans-Pacific market. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="672dcba4-2aca-447a-9d9e-a3c419bbb174"></dynamic-object></div>“I expect there will be sufficient space available in the market as trans-Pacific capacity will return very quickly and all carriers are adding ships over the next three weeks, apart from the Gemini carriers who have not withdrawn any ships from the trans-Pacific during the turmoil of the last five weeks,” Hua Joo said. Along with the trans-Pacific West Coast, the US East Coast should also see more ships in service by June. MSC appears ready for a mid-June restart of its Empire service from north China to the East Coast after announcing a suspension of the service in early May amid the demand downturn. According to MSC’s vessel schedule, the Empire service will offer direct voyages from Shanghai to the Port of New York and New Jersey starting with the June 18 departure of the 6,730-TEU MSC Barbara. There are six other ships nominated for weekly departures on the service through the end of July. Contact Michael Angell at <a href="michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Maersk and Hapag-Lloyd are adding a new trans-Pacific express service to the US West Coast, while Mediterranean Shipping Co. looks to restart a suspended East Coast service. The moves signal new confidence about trans-Pacific demand as rates continue to strengthen going into June. Maersk and Hapag-Lloyd said in statements Monday that the Gemini Cooperation vessel-sharing agreement between them would offer a new express service connecting China and South Korea to the West Coast, branded respectively as the TP9/WC6. The first voyage from Xiamen, China, will take place June 24 on the 4,622-TEU Rhone Maersk, with subsequent calls at Busan and Long Beach. The Gemini partners said the service would offer an 18-day transit from Xiamen to Long Beach. The new Gemini service launches after a two-month turnaround in trans-Pacific shipping demand that saw ocean carriers quickly remove ships after President Donald Trump’s tariffs on China halted container bookings, then rapidly restore capacity amid the 90-day tariff reprieve that expires in mid-August. The demand whipsaw over that time has almost doubled spot freight rates from China to the West Coast. Platts, a sister company of the Journal of Commerce within S&P Global, assessed North Asia to US West Coast container freight rates at $3,840 per FEU as of May 23, up from $1,960 per FEU on April 11. June is expected to see the most container ship capacity in the trans-Pacific since last November, according to data from ocean visibility provider eeSea. It expects 1.268 million TEUs of vessel capacity between Asia and the US West Coast next month, up 34,000 TEUs from May. The amount of “blanked” capacity removed from the market will be 113,234 TEUs, the lowest since June 2024. ‘Sufficient space available’ Whether the expected capacity injection for June will be enough to stem further rate increases remains unclear. A US-based executive for a Taiwanese ocean carrier told the Journal of Commerce that because some ships have been repositioned to serve other trade lanes, it will be early July before he expects meaningful capacity additions to affect the trans-Pacific market. However, Alphaliner analyst Tan Hua Joo told the Journal of Commerce some carriers, such as Maersk and Hapag-Lloyd, are in a better position to respond to resurgent demand because they did not remove ships during the recent turmoil. Other carriers may also be better able to add capacity quickly to the trans-Pacific market. “I expect there will be sufficient space available in the market as trans-Pacific capacity will return very quickly and all carriers are adding ships over the next three weeks, apart from the Gemini carriers who have not withdrawn any ships from the trans-Pacific during the turmoil of the last five weeks,” Hua Joo said. Along with the trans-Pacific West Coast, the US East Coast should also see more ships in service by June. MSC appears ready for a mid-June restart of its Empire service from north China to the East Coast after announcing a suspension of the service in early May amid the demand downturn. According to MSC’s vessel schedule, the Empire service will offer direct voyages from Shanghai to the Port of New York and New Jersey starting with the June 18 departure of the 6,730-TEU MSC Barbara. There are six other ships nominated for weekly departures on the service through the end of July. Contact Michael Angell at michael.angell@spglobal.com .

Ocean carriers bring in more trans-Pacific container services amid rate surge

<div class="phx-topic abstract-wrapper">That the port is the largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services. </div>

That the port is the largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services.

<div class="phx-topic">Singapore has joined Shanghai, the world’s second-busiest and busiest ports, respectively, in facing congestion driven by a rush of exports to the US during a 90-day tariff cooldown, according to forwarder and carrier sources. Operations in Singapore have been “heavily disrupted,” with transshipment cargo delayed by up to two weeks, forwarder Kuehne + Nagel said in an update Wednesday on its SeaExplorer visibility platform. According to a Monday update from container carrier Hapag-Lloyd, ships are waiting up to three days to berth at Singapore’s primary terminals due to vessel bunching and congestion. That Singapore is the world’s largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services. Congestion at other Asian ports is also contributing to a backlog of ships in Singapore. “PSA Singapore has seen a high concentration of container vessel arrivals in recent weeks, attributable to several factors, including some service reconfigurations by shipping lines in response to various business changes and global issues to optimize their network operations, as well as ripple effects from congestion and delays at other locations,” a PSA spokesperson told the Journal of Commerce. The spokesperson said the port’s spare capacity and resources are being utilized to mitigate the impact of the rise in vessel arrivals. <h3>Shanghai congestion worsens</h3>The situation has also deteriorated in Shanghai, with carriers reporting wait times of up to five days, compared with about three days last week, according to K+N. The largest global forwarder said shippers are diverting cargo away from Shanghai to Ningbo to avoid delays, slowing operations in Ningbo. Similarly, congestion has worsened at Port Klang, Malaysia’s gateway terminal complex, with “heavily disrupted operations” and vessel wait times of up to three days, K+N said in its SeaExplorer update. Tan Hua Joo, co-founder of shipping data platform Linerlytica, told the Journal of Commerce, “Both Singapore and Port Klang are experiencing longer berthing delays due to heavy vessel traffic and bunching of arrivals due to delays at upstream ports.” And in South Asia, the ports of Colombo, Sri Lanka; Mundra, India; and Chittagong, Bangladesh, “are also seeing increased waiting times at the moment,” Hua Joo said. Vessel schedules from Ocean Network Express (ONE) this week provide an example of how the additional pressures in Singapore and Port Klang are impacting network fluidity. ONE’s 3,000-TEU Wan Hai 331, deployed on its Japan-Straits-Malaysia service, was four days late departing Hong Kong last Friday, but berthing delays in Singapore and Port Klang have increased these delays to eight days, with the ship scheduled to arrive in Singapore on June 3. Schedules for June and July indicate ONE has lengthened the estimated time of arrival from four days to up to seven days from Hong Kong to Singapore for a raft of vessels operating on intra-Asia and Europe-Mediterranean services to account for berthing delays in Singapore. Other ports in Asia, including Tianjin, Qingdao, Shenzhen, Nansha and Hong Kong in China; Busan, South Korea; Yokohama, Japan; Ho Chi Minh, Vietnam; and Manila, Philippines, are also dealing with declining port performance, K+N said. The number of vessels waiting at key ports in Asia has been trending upward again in the last two weeks after plunging from a high at the start of May, according to Portcast’s ship tracking index. There were 62 ships waiting to berth at Shanghai on Wednesday, approximately double the number in mid-May. The vessel backlog outside Singapore hit 55 on May 14, before plunging as low as 23 on May 21, Portcast data shows. <h3>Attention turns to US West Coast</h3>During Evergreen Marine’s annual general meeting Thursday, chairman Chang Yen-yi said port congestion would spread to US West Coast ports next month as vessels from Asia, including extra capacity that carriers are deploying during the current tariff pause, start arriving at Los Angeles and Long Beach. Gene Seroka, executive director of the Port of Los Angeles, is confident that the nation’s busiest US container gateway is ready to handle what he expects to be a relatively minor surge in volumes compared with previous sudden demand increases, such as during the COVID-19 pandemic. “You won’t see a deluge of freight here at the Port of Los Angeles,” Seroka said in a May 18 briefing. “We will not be caught off guard.” Similar to during the pandemic, the sharpest limits to capacity during an import surge will be outside the truck gates, not at the marine terminals. As containers exit the ports, the influx of international intermodal shipments will test rail car supply, and importers and consignees could face less availability of warehousing and chassis. Contact Keith Wallis at <a href="keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Singapore has joined Shanghai, the world’s second-busiest and busiest ports, respectively, in facing congestion driven by a rush of exports to the US during a 90-day tariff cooldown, according to forwarder and carrier sources. Operations in Singapore have been “heavily disrupted,” with transshipment cargo delayed by up to two weeks, forwarder Kuehne + Nagel said in an update Wednesday on its SeaExplorer visibility platform. According to a Monday update from container carrier Hapag-Lloyd, ships are waiting up to three days to berth at Singapore’s primary terminals due to vessel bunching and congestion. That Singapore is the world’s largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services. Congestion at other Asian ports is also contributing to a backlog of ships in Singapore. “PSA Singapore has seen a high concentration of container vessel arrivals in recent weeks, attributable to several factors, including some service reconfigurations by shipping lines in response to various business changes and global issues to optimize their network operations, as well as ripple effects from congestion and delays at other locations,” a PSA spokesperson told the Journal of Commerce. The spokesperson said the port’s spare capacity and resources are being utilized to mitigate the impact of the rise in vessel arrivals. Shanghai congestion worsens The situation has also deteriorated in Shanghai, with carriers reporting wait times of up to five days, compared with about three days last week, according to K+N. The largest global forwarder said shippers are diverting cargo away from Shanghai to Ningbo to avoid delays, slowing operations in Ningbo. Similarly, congestion has worsened at Port Klang, Malaysia’s gateway terminal complex, with “heavily disrupted operations” and vessel wait times of up to three days, K+N said in its SeaExplorer update. Tan Hua Joo, co-founder of shipping data platform Linerlytica, told the Journal of Commerce, “Both Singapore and Port Klang are experiencing longer berthing delays due to heavy vessel traffic and bunching of arrivals due to delays at upstream ports.” And in South Asia, the ports of Colombo, Sri Lanka; Mundra, India; and Chittagong, Bangladesh, “are also seeing increased waiting times at the moment,” Hua Joo said. Vessel schedules from Ocean Network Express (ONE) this week provide an example of how the additional pressures in Singapore and Port Klang are impacting network fluidity. ONE’s 3,000-TEU Wan Hai 331, deployed on its Japan-Straits-Malaysia service, was four days late departing Hong Kong last Friday, but berthing delays in Singapore and Port Klang have increased these delays to eight days, with the ship scheduled to arrive in Singapore on June 3. Schedules for June and July indicate ONE has lengthened the estimated time of arrival from four days to up to seven days from Hong Kong to Singapore for a raft of vessels operating on intra-Asia and Europe-Mediterranean services to account for berthing delays in Singapore. Other ports in Asia, including Tianjin, Qingdao, Shenzhen, Nansha and Hong Kong in China; Busan, South Korea; Yokohama, Japan; Ho Chi Minh, Vietnam; and Manila, Philippines, are also dealing with declining port performance, K+N said. The number of vessels waiting at key ports in Asia has been trending upward again in the last two weeks after plunging from a high at the start of May, according to Portcast’s ship tracking index. There were 62 ships waiting to berth at Shanghai on Wednesday, approximately double the number in mid-May. The vessel backlog outside Singapore hit 55 on May 14, before plunging as low as 23 on May 21, Portcast data shows. Attention turns to US West Coast During Evergreen Marine’s annual general meeting Thursday, chairman Chang Yen-yi said port congestion would spread to US West Coast ports next month as vessels from Asia, including extra capacity that carriers are deploying during the current tariff pause, start arriving at Los Angeles and Long Beach. Gene Seroka, executive director of the Port of Los Angeles, is confident that the nation’s busiest US container gateway is ready to handle what he expects to be a relatively minor surge in volumes compared with previous sudden demand increases, such as during the COVID-19 pandemic. “You won’t see a deluge of freight here at the Port of Los Angeles,” Seroka said in a May 18 briefing. “We will not be caught off guard.” Similar to during the pandemic, the sharpest limits to capacity during an import surge will be outside the truck gates, not at the marine terminals. As containers exit the ports, the influx of international intermodal shipments will test rail car supply, and importers and consignees could face less availability of warehousing and chassis. Contact Keith Wallis at keithwallis@hotmail.com .

Asia port disruption wave reaches Singapore

<div class="phx-topic abstract-wrapper">The Marseille-based carrier has finalized operational plans to shift vessels deployed on its MEDEX service back to the normal sailing journey through the Suez Canal beginning next month, sources say. </div>

The Marseille-based carrier has finalized operational plans to shift vessels deployed on its MEDEX service back to the normal sailing journey through the Suez Canal beginning next month, sources say.

<div class="phx-topic">CMA CGM appears to be the first carrier among mainline heavyweights making a firm bid to return to the traditional — and significantly shorter — Suez Canal route that remains a tricky proposition for the industry despite recent reports of a de-escalation of hostilities in the Red Sea. The Marseille-based carrier has finalized operational plans to shift vessels deployed on its India-Middle East-Mediterranean service, named the MEDEX, back to the normal sailing journey through the Suez beginning next month, new schedule data obtained by the Journal of Commerce from industry sources reveals. The first vessel marking the routing change will be the CMA CGM Palleas, departing India’s Nhava Sheva Port on June 7 and transiting the Suez June 28. That sailing will be followed by the CMA CGM Nabucco and CMA CGM Titus, due to transit the Suez on July 5 and July 12, respectively, sources say. The weekly MEDEX deploys a fleet of 10 CMA CGM ships, with Cosco Shipping co-loading on the service through slot charter rights that sources put at approximately 1,000 TEUs per week out of the Indian region, including Sri Lanka’s Colombo Port. Sources at CMA CGM and Cosco in India who spoke with the Journal of Commerce confirmed the resumption of the Suez rotation for the MEDEX service. “This is a permanent shift as of now,” said a consortium executive who didn’t want to be identified. With the recent omission of Karachi Port (Pakistan), the MEDEX now rotates Khalifa Port, Jebel Ali, Mundra, Nhava Sheva, Colombo, Jeddah, Piraeus, Malta, Genoa, Fos-sur-Mer, Barcelona, Valencia, Jeddah and Khalifa. “CMA CGM has reshuffled its fleet operating between the Indian Subcontinent, Middle East and the Mediterranean by reallocating ships on a service/trade already using the Suez route. CMA CGM is not deploying any additional service via the Red Sea/ Bab El Mandeb passage,” the carrier said in a statement to the Journal of Commerce. “CMA CGM is closely monitoring the ongoing developments in the region and while it hopes for a return to stability and security for all, the group’s top priority remains above all the safety of its seafarers, its vessels, and its customers’ cargo.” The MEDEX Suez return comes on the heels of the Egyptian canal authority doling out a 15% discount on container ship transit fees for 90 days from May 15. And it comes just weeks after <a href="https://www.joc.com/article/apparent-houthi-ceasefire-raises-container-shipping-overcapacity-risk-5999930">US President Donald Trump said Houthi militants operating from Yemen had agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea</a>. The attacks have forced ocean carriers to divert around southern Africa since late 2023, adding time and cost to their voyages. Despite CMA CGM’s apparent return to the Suez, the route is still viewed as a risk by other major liners. <a href="https://www.joc.com/article/us-houthi-ceasefire-claim-not-sufficient-for-carrier-return-to-red-sea-maersk-6001686">Maersk has ruled out a return to Red Sea transits this year</a>, saying Trump’s announcement about the Houthis standing down was still “pretty far” from the threshold that would make the carrier comfortable in resuming Suez transits. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM appears to be the first carrier among mainline heavyweights making a firm bid to return to the traditional — and significantly shorter — Suez Canal route that remains a tricky proposition for the industry despite recent reports of a de-escalation of hostilities in the Red Sea. The Marseille-based carrier has finalized operational plans to shift vessels deployed on its India-Middle East-Mediterranean service, named the MEDEX, back to the normal sailing journey through the Suez beginning next month, new schedule data obtained by the Journal of Commerce from industry sources reveals. The first vessel marking the routing change will be the CMA CGM Palleas, departing India’s Nhava Sheva Port on June 7 and transiting the Suez June 28. That sailing will be followed by the CMA CGM Nabucco and CMA CGM Titus, due to transit the Suez on July 5 and July 12, respectively, sources say. The weekly MEDEX deploys a fleet of 10 CMA CGM ships, with Cosco Shipping co-loading on the service through slot charter rights that sources put at approximately 1,000 TEUs per week out of the Indian region, including Sri Lanka’s Colombo Port. Sources at CMA CGM and Cosco in India who spoke with the Journal of Commerce confirmed the resumption of the Suez rotation for the MEDEX service. “This is a permanent shift as of now,” said a consortium executive who didn’t want to be identified. With the recent omission of Karachi Port (Pakistan), the MEDEX now rotates Khalifa Port, Jebel Ali, Mundra, Nhava Sheva, Colombo, Jeddah, Piraeus, Malta, Genoa, Fos-sur-Mer, Barcelona, Valencia, Jeddah and Khalifa. “CMA CGM has reshuffled its fleet operating between the Indian Subcontinent, Middle East and the Mediterranean by reallocating ships on a service/trade already using the Suez route. CMA CGM is not deploying any additional service via the Red Sea/ Bab El Mandeb passage,” the carrier said in a statement to the Journal of Commerce. “CMA CGM is closely monitoring the ongoing developments in the region and while it hopes for a return to stability and security for all, the group’s top priority remains above all the safety of its seafarers, its vessels, and its customers’ cargo.” The MEDEX Suez return comes on the heels of the Egyptian canal authority doling out a 15% discount on container ship transit fees for 90 days from May 15. And it comes just weeks after US President Donald Trump said Houthi militants operating from Yemen had agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea . The attacks have forced ocean carriers to divert around southern Africa since late 2023, adding time and cost to their voyages. Despite CMA CGM’s apparent return to the Suez, the route is still viewed as a risk by other major liners. Maersk has ruled out a return to Red Sea transits this year , saying Trump’s announcement about the Houthis standing down was still “pretty far” from the threshold that would make the carrier comfortable in resuming Suez transits. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM unveils plans for Suez return on India-Mediterranean service

<div class="phx-topic abstract-wrapper">Within a span of roughly 24 hours, one court decision blocked the US tariffs and a separate ruling restored the tariffs through June 9, if not longer. </div>

Within a span of roughly 24 hours, one court decision blocked the US tariffs and a separate ruling restored the tariffs through June 9, if not longer.

<div class="phx-topic">US importers ended Thursday with little clarity on the permanence of sweeping tariffs after an appeals court allowed President Donald Trump’s tax to go forward for a least a week-and-a-half. The US Court of Appeals for the Federal Circuit’s decision Thursday to pause the International Trade Court’s <a href="https://www.joc.com/article/federal-court-ruling-blocking-tariffs-resets-shipping-outlook-6013402">rejection of the tariffs Wednesday</a>, citing a lack of constitutionality, comes in the early days of peak season and with inbound capacity from Asia generally booked through next month.The appeals court laid out a briefing schedule through June 9 but did not detail its reasoning for the pause.The Trump administration has said it is also looking at other ways to maintain tariffs, suggesting importers won’t have clarity on the permanence of tariffs in the foreseeable future. The rulings don’t apply to US tariffs of aluminum and steel, which put downward pressure on US breakbulk demand.Amid a flurry of mixed signals, smaller shippers may be gauging whether to rush or slow shipments, logistic consultant Kevin Parkerson told the Journal of Commerce. But, he said, the largest retailers are keeping their strategies consistent with how they’ve operated since tariffs were announced in April: maintain imports to keep goods on shelves, whatever the tariff rate. US importers had little time to change their booking plans given that the two rulings occurred within roughly 24 hours of each other. Before this week, container lines warned that container space from Asia to the US <a href="https://www.joc.com/article/ocean-carriers-bring-in-more-trans-pacific-container-services-amid-rate-surge-6012725">would be tight through June</a> as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August, though it has moved to other windows in recent years due to various external dynamics. US retail imports are <a href="https://www.joc.com/article/us-retailers-project-first-year-over-year-import-cut-in-19-months-as-tariffs-bite-6001817">forecast to end this month with the first decline</a> in more than a year and a half, according to Global Port Tracker (GPT) published in early May by Hackett Associates on behalf of the National Retail Federation. US imports will end May down 13% May 2024, and will mark the first year-over-year decline in 19 months. </div>

US importers ended Thursday with little clarity on the permanence of sweeping tariffs after an appeals court allowed President Donald Trump’s tax to go forward for a least a week-and-a-half. The US Court of Appeals for the Federal Circuit’s decision Thursday to pause the International Trade Court’s rejection of the tariffs Wednesday , citing a lack of constitutionality, comes in the early days of peak season and with inbound capacity from Asia generally booked through next month. The appeals court laid out a briefing schedule through June 9 but did not detail its reasoning for the pause. The Trump administration has said it is also looking at other ways to maintain tariffs, suggesting importers won’t have clarity on the permanence of tariffs in the foreseeable future. The rulings don’t apply to US tariffs of aluminum and steel, which put downward pressure on US breakbulk demand. Amid a flurry of mixed signals, smaller shippers may be gauging whether to rush or slow shipments, logistic consultant Kevin Parkerson told the Journal of Commerce. But, he said, the largest retailers are keeping their strategies consistent with how they’ve operated since tariffs were announced in April: maintain imports to keep goods on shelves, whatever the tariff rate. US importers had little time to change their booking plans given that the two rulings occurred within roughly 24 hours of each other. Before this week, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August, though it has moved to other windows in recent years due to various external dynamics. US retail imports are forecast to end this month with the first decline in more than a year and a half, according to Global Port Tracker (GPT) published in early May by Hackett Associates on behalf of the National Retail Federation. US imports will end May down 13% May 2024, and will mark the first year-over-year decline in 19 months.

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