<div class="phx-topic abstract-wrapper">The announcement comes less than a month after FedEx said it would spin off FedEx Freight, which would be the largest standalone LTL provider in North America by revenue. </div>

The announcement comes less than a month after FedEx said it would spin off FedEx Freight, which would be the largest standalone LTL provider in North America by revenue.

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<div class="phx-topic">Lance Moll, who has led FedEx Freight — the largest US trucking company — as president and CEO for nearly four years will retire at the end of January, FedEx announced late Friday. Moll will take an advisory role with the company until July 31 to ensure a smooth transition, FedEx said in a statement that did not mention a successor. Moll’s departure comes as FedEx prepares to spin off its US less-than-truckload (LTL) division, a process the company said in December would take 18 months. That separation remains on track, FedEx said in the statement, and will be overseen by John Smith, COO of US and Canadian surface operations at FedEx. Smith is the former president and CEO of FedEx Ground and FedEx Freight. Moll joined American Freightways as a dock worker in 1992. By the time American Freightways became FedEx Freight in 2001, he was an LTL terminal manager. He became senior vice president of operations in 2018 and president and CEO in 2021. FedEx Freight had $9.4 billion in revenue in its fiscal year that ended May 31; for calendar year 2023, the revenue figure was $10.2 billion. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Lance Moll, who has led FedEx Freight — the largest US trucking company — as president and CEO for nearly four years will retire at the end of January, FedEx announced late Friday. Moll will take an advisory role with the company until July 31 to ensure a smooth transition, FedEx said in a statement that did not mention a successor. Moll’s departure comes as FedEx prepares to spin off its US less-than-truckload (LTL) division, a process the company said in December would take 18 months. That separation remains on track, FedEx said in the statement, and will be overseen by John Smith, COO of US and Canadian surface operations at FedEx. Smith is the former president and CEO of FedEx Ground and FedEx Freight. Moll joined American Freightways as a dock worker in 1992. By the time American Freightways became FedEx Freight in 2001, he was an LTL terminal manager. He became senior vice president of operations in 2018 and president and CEO in 2021. FedEx Freight had $9.4 billion in revenue in its fiscal year that ended May 31; for calendar year 2023, the revenue figure was $10.2 billion. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

FedEx Freight says CEO Moll to retire Jan. 31

<div class="phx-topic abstract-wrapper">The largest intermodal provider in the US says it’s time for shippers to talk about higher rates for service but understands the shift is not likely to occur until the second half of the year.</div>

The largest intermodal provider in the US says it’s time for shippers to talk about higher rates for service but understands the shift is not likely to occur until the second half of the year.

<div class="phx-topic">J.B. Hunt Transport Services is warning shippers to prepare for higher rates for intermodal rail service in 2025 but acknowledges that market conditions may not favor carriers until the third quarter. The company on Thursday reported a 5% increase in fourth-quarter volume compared with the year-ago period as it moved 560,132 loads between October and December — the highest fourth-quarter volume in the company’s history. Still, revenue fell 2%, reflecting lower contract prices compared with the fourth quarter of 2023. Nonetheless, J.B. Hunt CEO Shelley Simpson said the US’ largest intermodal provider “will be coming out of the freight recession from a position of strength.” Simpson, during an earnings call Thursday, emphasized what she says is the value J.B. Hunt brings to customers, citing the company’s capacity and service levels. “We believe the value we create for our customers ... is unique in the market, and our returns should mirror that value,” she said. “[Both] we and our customers understand this.” J.B. Hunt’s fourth-quarter performance was bolstered by handling over 200,000 loads in October, a company record for any month. On a year-over-year basis, volume grew 4% in October, 7% in November and 3% in December; for the fourth quarter overall, West Coast shipments increased 4% and eastern US shipments were up 6%. Darren Field, president of J.B. Hunt’s intermodal division, expressed optimism about the company’s pricing strategy going forward. The company last week <a href="https://www.joc.com/article/intermodal-providers-navigate-tough-pricing-environment-at-start-of-year-5922679">sent a letter to customers</a> calling for transparent pricing discussions that reflect the company’s value and costs. “I’m very confident that the service product we’ve offered over the last two years has really earned us the right to have really strong confidence in what we’re providing value for and we’re going to share that with the customers and work on our price,” Field said. “How we think about this pricing cycle, it’s a conversation with one customer at a time.” <h3>Securing rate increases a challenge </h3>While some rate increases have been secured in Northern and Southern California, gains have been smaller than expected. Elsewhere, contract rates have remained flat or fallen, according to industry sources. Brad Delco, J.B. Hunt’s vice president of finance and investor relations, noted that first-quarter intermodal pricing is already set. The company is now focused on the second wave of shipper bids, typically implemented between late March and May. “There’s really not tremendous opportunities to move the intermodal price [in Q1],” Delco said. “...The work we’re doing right now will be reflected in how we look at Q3 and certainly the exit out of ’25 in ’26.” For intermodal rates to increase, leverage in truckload pricing must first shift toward carriers, according to data from the Journal of Commerce Intermodal Savings Index. So far, that shift has not occurred. Freight demand weakened in November and December year over year, according to DAT Freight and Analytics and the Cass Freight Index. While some shippers have agreed to small truckload rate increases to maintain partnerships, others have held firm on flat or reduced rates for 2025, with a willingness to revisit the issue mid-year if market conditions change. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

J.B. Hunt Transport Services is warning shippers to prepare for higher rates for intermodal rail service in 2025 but acknowledges that market conditions may not favor carriers until the third quarter. The company on Thursday reported a 5% increase in fourth-quarter volume compared with the year-ago period as it moved 560,132 loads between October and December — the highest fourth-quarter volume in the company’s history. Still, revenue fell 2%, reflecting lower contract prices compared with the fourth quarter of 2023. Nonetheless, J.B. Hunt CEO Shelley Simpson said the US’ largest intermodal provider “will be coming out of the freight recession from a position of strength.” Simpson, during an earnings call Thursday, emphasized what she says is the value J.B. Hunt brings to customers, citing the company’s capacity and service levels. “We believe the value we create for our customers ... is unique in the market, and our returns should mirror that value,” she said. “[Both] we and our customers understand this.” J.B. Hunt’s fourth-quarter performance was bolstered by handling over 200,000 loads in October, a company record for any month. On a year-over-year basis, volume grew 4% in October, 7% in November and 3% in December; for the fourth quarter overall, West Coast shipments increased 4% and eastern US shipments were up 6%. Darren Field, president of J.B. Hunt’s intermodal division, expressed optimism about the company’s pricing strategy going forward. The company last week sent a letter to customers calling for transparent pricing discussions that reflect the company’s value and costs. “I’m very confident that the service product we’ve offered over the last two years has really earned us the right to have really strong confidence in what we’re providing value for and we’re going to share that with the customers and work on our price,” Field said. “How we think about this pricing cycle, it’s a conversation with one customer at a time.” Securing rate increases a challenge While some rate increases have been secured in Northern and Southern California, gains have been smaller than expected. Elsewhere, contract rates have remained flat or fallen, according to industry sources. Brad Delco, J.B. Hunt’s vice president of finance and investor relations, noted that first-quarter intermodal pricing is already set. The company is now focused on the second wave of shipper bids, typically implemented between late March and May. “There’s really not tremendous opportunities to move the intermodal price [in Q1],” Delco said. “...The work we’re doing right now will be reflected in how we look at Q3 and certainly the exit out of ’25 in ’26.” For intermodal rates to increase, leverage in truckload pricing must first shift toward carriers, according to data from the Journal of Commerce Intermodal Savings Index. So far, that shift has not occurred. Freight demand weakened in November and December year over year, according to DAT Freight and Analytics and the Cass Freight Index. While some shippers have agreed to small truckload rate increases to maintain partnerships, others have held firm on flat or reduced rates for 2025, with a willingness to revisit the issue mid-year if market conditions change. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

J.B. Hunt preparing customers for boost in contract rail rates in 2025

<div class="phx-topic abstract-wrapper">With plenty of truck capacity still available, US shippers are trying to tamp down rising truck rates without driving off their current truckload carriers. </div>

With plenty of truck capacity still available, US shippers are trying to tamp down rising truck rates without driving off their current truckload carriers.

<div class="phx-topic">US shippers, concerned by the prospect of higher trucking costs later this year, are looking to keep rate hikes low in the current round of annual contract talks while trying to maintain their roster of incumbent trucking providers. That means striking a delicate balance. Shippers say they aren’t interested in taking rate increases at a time when their own demand is soft. But they also don’t want to lose truck capacity they may need in the second half of 2025. Risk management is rising to the fore, with uncertainty about the impact on demand of potential Trump administration tariffs and whether carriers will tighten capacity. Discussions with several shippers point to trucking contract rate increases in the low single-digit percentage range in this bidding cycle, both for truckload and less-than-truckload (LTL) providers, with fewer shippers keeping rates flat or gaining additional savings. “We have seen some stabilization in terms of truckload rates, but it’s not because demand is stronger, it’s because capacity has left the marketplace,” said Mike Regan, chief relationship officer at TranzAct Technologies, which helps shippers negotiate contracts. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="cd8d5a74-098f-439c-b972-aae97c9da91a"></dynamic-object></div>The Journal of Commerce average shipper-paid truckload spot rate, including surcharges, <a href="https://www.joc.com/article/us-truckload-spot-rates-rising-but-shippers-keeping-lid-on-contract-rates-5919921">rose 8 cents to $2.28 per mile</a> on a weighted basis in December from November. But contract rates tracked by DAT Freight &amp; Analytics have been flat. Freight demand slipped at the end of 2024, with US freight volumes dropping 6.5% in December year over year and 7.3% from November, according to the Cass Freight Shipments Index. For the full year, the index declined 4.1% following a 5.5% drop in 2023. Truckload capacity contracted as well at the end of 2024, but enough excess capacity remains to keep pricing power in shippers’ hands. “When truckload carriers are willing to accept 120-day payment terms, that tells you something,” said Regan. <h3>Keeping bridges in place </h3>But pushing for rate cuts after two years of falling truckload rates risks alienating suppliers that shippers will need when freight demand picks up. “There’s no need to burn bridges in this market,” one retailer who asked not to be identified told the Journal of Commerce. To keep incumbents in their networks, some shippers said they are not pressing their carriers hard for additional savings even when they may be available. “You could press for an additional 1% or 2% reduction, but would that carrier stay with you when the market turns?” said a manufacturer who asked not to be identified. For one trucking executive, the answer is “no.” “A 2% increase doesn’t get you where you need to be,” Kent Williams, executive vice president of sales and marketing for Averitt, told the Journal of Commerce. “Carriers are going to be after more than that.” Williams said Averitt has lost a few customers during this bidding cycle. “We’ve agreed to part ways,” he acknowledged. “We can’t continue to handle business at a loss or break-even. Shippers know carriers can’t sustain the rate levels they’ve had the last few years.” <h3>Expecting higher volumes </h3>Averitt, which has LTL and truckload operations, released a survey this week of more than 1,000 shippers that found more logistics managers are willing to accept some level of rate increase, with 70% of those surveyed expecting higher volumes. The 2025 State of the North American Supply Chain survey found 57.4% of shippers anticipate rate increases, compared with 51.9% in 2024. Only 26.2% said they expect no change in freight rates, while 16.4% believed rates would fall again in 2025. “Shippers are expecting rate increases, but different shippers will have different opinions on the size of those increases,” Williams said. “Obviously, supply chain managers are doing all they can to limit the size of the increases.” Shippers have yet to feel the pinch of tightening capacity, and that’s put carriers in a more difficult bargaining position, he said. “This isn’t like 2021 when shippers were willing to take double-digit increases to lock down capacity,” said Williams. Carriers are increasingly acknowledging the recovery from the freight downturn will take more time than initially expected, with higher rates more likely in the second half of 2025. “We will be living with the vast majority of our current [intermodal] pricing through the first half of 2025,” Darren P. Field, executive vice president and president of intermodal at J.B. Hunt Transport Services, said during a fourth quarter earnings call Thursday. “While we see capacity exit the industry every day, overall, there is still some excess capacity available in the [truckload] market,” Spencer Frazier, J. B. Hunt’s executive vice president of sales and marketing, said during the call. “Some customers are securing capacity a little earlier than normal, which has historically been a good indication that supply and demand dynamics are shifting,” Frazier said. With the trajectory of the freight market uncertain, some shippers are willing to spend a little more now in hopes they can avoid higher costs later. Spot truckload rates are expected to rise anywhere from 10% to 20% or higher by the end of the year. “Rates are going up. How fast and to what degree is the unknown,” Chris Pickett, chief commercial officer at digital shared truckload provider Flock Freight, said during a Jan. 7 LinkedIn podcast organized by logistics consultant Samantha Jones. “The shippers that leaned into innovation and strategic carrier programs during the downturn will be in a much better position in this shifting market,” Pickett said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US shippers, concerned by the prospect of higher trucking costs later this year, are looking to keep rate hikes low in the current round of annual contract talks while trying to maintain their roster of incumbent trucking providers. That means striking a delicate balance. Shippers say they aren’t interested in taking rate increases at a time when their own demand is soft. But they also don’t want to lose truck capacity they may need in the second half of 2025. Risk management is rising to the fore, with uncertainty about the impact on demand of potential Trump administration tariffs and whether carriers will tighten capacity. Discussions with several shippers point to trucking contract rate increases in the low single-digit percentage range in this bidding cycle, both for truckload and less-than-truckload (LTL) providers, with fewer shippers keeping rates flat or gaining additional savings. “We have seen some stabilization in terms of truckload rates, but it’s not because demand is stronger, it’s because capacity has left the marketplace,” said Mike Regan, chief relationship officer at TranzAct Technologies, which helps shippers negotiate contracts. The Journal of Commerce average shipper-paid truckload spot rate, including surcharges, rose 8 cents to $2.28 per mile on a weighted basis in December from November. But contract rates tracked by DAT Freight & Analytics have been flat. Freight demand slipped at the end of 2024, with US freight volumes dropping 6.5% in December year over year and 7.3% from November, according to the Cass Freight Shipments Index. For the full year, the index declined 4.1% following a 5.5% drop in 2023. Truckload capacity contracted as well at the end of 2024, but enough excess capacity remains to keep pricing power in shippers’ hands. “When truckload carriers are willing to accept 120-day payment terms, that tells you something,” said Regan. Keeping bridges in place But pushing for rate cuts after two years of falling truckload rates risks alienating suppliers that shippers will need when freight demand picks up. “There’s no need to burn bridges in this market,” one retailer who asked not to be identified told the Journal of Commerce. To keep incumbents in their networks, some shippers said they are not pressing their carriers hard for additional savings even when they may be available. “You could press for an additional 1% or 2% reduction, but would that carrier stay with you when the market turns?” said a manufacturer who asked not to be identified. For one trucking executive, the answer is “no.” “A 2% increase doesn’t get you where you need to be,” Kent Williams, executive vice president of sales and marketing for Averitt, told the Journal of Commerce. “Carriers are going to be after more than that.” Williams said Averitt has lost a few customers during this bidding cycle. “We’ve agreed to part ways,” he acknowledged. “We can’t continue to handle business at a loss or break-even. Shippers know carriers can’t sustain the rate levels they’ve had the last few years.” Expecting higher volumes Averitt, which has LTL and truckload operations, released a survey this week of more than 1,000 shippers that found more logistics managers are willing to accept some level of rate increase, with 70% of those surveyed expecting higher volumes. The 2025 State of the North American Supply Chain survey found 57.4% of shippers anticipate rate increases, compared with 51.9% in 2024. Only 26.2% said they expect no change in freight rates, while 16.4% believed rates would fall again in 2025. “Shippers are expecting rate increases, but different shippers will have different opinions on the size of those increases,” Williams said. “Obviously, supply chain managers are doing all they can to limit the size of the increases.” Shippers have yet to feel the pinch of tightening capacity, and that’s put carriers in a more difficult bargaining position, he said. “This isn’t like 2021 when shippers were willing to take double-digit increases to lock down capacity,” said Williams. Carriers are increasingly acknowledging the recovery from the freight downturn will take more time than initially expected, with higher rates more likely in the second half of 2025. “We will be living with the vast majority of our current [intermodal] pricing through the first half of 2025,” Darren P. Field, executive vice president and president of intermodal at J.B. Hunt Transport Services, said during a fourth quarter earnings call Thursday. “While we see capacity exit the industry every day, overall, there is still some excess capacity available in the [truckload] market,” Spencer Frazier, J. B. Hunt’s executive vice president of sales and marketing, said during the call. “Some customers are securing capacity a little earlier than normal, which has historically been a good indication that supply and demand dynamics are shifting,” Frazier said. With the trajectory of the freight market uncertain, some shippers are willing to spend a little more now in hopes they can avoid higher costs later. Spot truckload rates are expected to rise anywhere from 10% to 20% or higher by the end of the year. “Rates are going up. How fast and to what degree is the unknown,” Chris Pickett, chief commercial officer at digital shared truckload provider Flock Freight, said during a Jan. 7 LinkedIn podcast organized by logistics consultant Samantha Jones. “The shippers that leaned into innovation and strategic carrier programs during the downturn will be in a much better position in this shifting market,” Pickett said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Truckload

Shippers balance near-term market, long-term forecasts in trucking bids

<div class="phx-topic abstract-wrapper">International automakers are putting much-needed investment into Indian manufacturing facilities to increase export capacity.</div>

International automakers are putting much-needed investment into Indian manufacturing facilities to increase export capacity.

<div class="phx-topic">Demand for roll-on/roll-off (ro/ro) vessels out of India is set to climb in 2025, building on the strong rebound in finished vehicle exports that started in 2024.A 14% rise in made-in-India vehicles shipped out in the first half of fiscal year 2024–25 marked a welcome rally from a 5.5% decline in full year 2023–24 exports, according to industry statistics released by the Society of Indian Automobile Manufacturers (SIAM). The Indian fiscal year runs from April to March.Port data seen by the Journal of Commerce confirms the upswing. Between April and November 2024, automobile loads by tonnage from government-run Ennore, Chennai, Mumbai and Kandla ports nearly doubled to 2.3 million tons from 1.3 million tons year over year. Ro/ro volumes at APM Terminals Port of Pipavav terminal rose to 116,000 units in the first three fiscal quarters, up from 62,000 units year over year, as it aggressively taps spillover demand.“Key markets like Latin America and Africa, which had slowed for various reasons, have bounced back,” SIAM President Shailesh Chandra said in a statement. “This has been the main reason for exports coming back.”According to S&amp;P Global Mobility Light Vehicle Production Forecasts, production capacity is expected to rise from 6.8 million units in 2023 to 10 million by 2031, solidifying India’s role in the global automotive landscape. S&amp;P Global is the parent company of the Journal of Commerce.“A significant driver of this growth is the anticipated increase in exports from major manufacturers like Maruti Suzuki and Hyundai, which may benefit from the growing demand for affordable vehicles in emerging markets,” said Gaurav Vangaal, associate director of the light vehicle production forecast for the Indian subcontinent at S&amp;P Global Mobility.Maruti Suzuki, a subsidiary of Japanese automaker Suzuki Motor Corporation and responsible for 40% of India’s auto exports, currently ships 300,000 units a year via Mundra and Pipavav ports. The company aims to ramp up its annual exports to 750,000 units by 2030–31, according to a statement from the manufacturer. To meet demand, Maruti Suzuki plans to increase the annual production capacity in India to 4 million units by an unspecified date.“India will be a production hub for electric vehicles,” Toshihiro Suzuki, representative director and president for Suzuki Motor Corp., said at a press conference at the January Bharat Mobility Show in India. “Scale in India is our strength. We will fully leverage this advantage to supply vehicles to Europe, Japan, the Middle East, Africa, Central and South America [and] Asian countries.”<h3>Urgent need to invest in ro/ro facilities</h3>Still, the ro/ro trade “continues to remain underrated in India,” according to a senior Indian executive at a major car carrier. “There’s a lot of ‘catch up’ to do to make OEMs more export oriented,” the source said, adding that India lacks dedicated ro/ro terminals, which could hold back progress.“With the container business increasingly prioritized by Indian ports, including multipurpose gateways, ro/ro vessels face significant berthing delays and other bottlenecks,” said an industry source who did not want to be identified. “Ro/ro cargo is a niche activity requiring specialized infrastructure support, which is limited at the moment.”The source called for further investment in port infrastructure and shipping capacity to accommodate rising volumes of Indian-made vehicles heading to markets worldwide.The exit of US auto giants General Motors in 2017 and Ford Motor Co. in 2021 over sales and labor troubles dealt a heavy blow to the Indian auto industry, wiping out an annual 250,000 units for ro/ro carriers. That hole has since been filled by other entrants, including South Korea’s Kia Motors, with industry exports now pegged at 650,000 cars and targeted to hit 1 million units over the next two to three years.NYK Line, “K” Line, MOL, Hoegh Autoliners, Hyundai Glovis and EUKOR Car Carriers dominate the Indian ro/ro market, primarily serving Maruti Suzuki, Hyundai Motor, Volkswagen, Nissan Motor and Honda Cars for their export flows. MOL and Glovis together represent approximately 50% of India’s vehicle carrier market.Contact Bency Mathew at <a href="mailto:bencymathew@gmail.com">bencymathew@gmail.com.</a></div>

Demand for roll-on/roll-off (ro/ro) vessels out of India is set to climb in 2025, building on the strong rebound in finished vehicle exports that started in 2024. A 14% rise in made-in-India vehicles shipped out in the first half of fiscal year 2024–25 marked a welcome rally from a 5.5% decline in full year 2023–24 exports, according to industry statistics released by the Society of Indian Automobile Manufacturers (SIAM). The Indian fiscal year runs from April to March. Port data seen by the Journal of Commerce confirms the upswing. Between April and November 2024, automobile loads by tonnage from government-run Ennore, Chennai, Mumbai and Kandla ports nearly doubled to 2.3 million tons from 1.3 million tons year over year. Ro/ro volumes at APM Terminals Port of Pipavav terminal rose to 116,000 units in the first three fiscal quarters, up from 62,000 units year over year, as it aggressively taps spillover demand. “Key markets like Latin America and Africa, which had slowed for various reasons, have bounced back,” SIAM President Shailesh Chandra said in a statement. “This has been the main reason for exports coming back.” According to S&P Global Mobility Light Vehicle Production Forecasts, production capacity is expected to rise from 6.8 million units in 2023 to 10 million by 2031, solidifying India’s role in the global automotive landscape. S&P Global is the parent company of the Journal of Commerce. “A significant driver of this growth is the anticipated increase in exports from major manufacturers like Maruti Suzuki and Hyundai, which may benefit from the growing demand for affordable vehicles in emerging markets,” said Gaurav Vangaal, associate director of the light vehicle production forecast for the Indian subcontinent at S&P Global Mobility. Maruti Suzuki, a subsidiary of Japanese automaker Suzuki Motor Corporation and responsible for 40% of India’s auto exports, currently ships 300,000 units a year via Mundra and Pipavav ports. The company aims to ramp up its annual exports to 750,000 units by 2030–31, according to a statement from the manufacturer. To meet demand, Maruti Suzuki plans to increase the annual production capacity in India to 4 million units by an unspecified date. “India will be a production hub for electric vehicles,” Toshihiro Suzuki, representative director and president for Suzuki Motor Corp., said at a press conference at the January Bharat Mobility Show in India. “Scale in India is our strength. We will fully leverage this advantage to supply vehicles to Europe, Japan, the Middle East, Africa, Central and South America [and] Asian countries.” Urgent need to invest in ro/ro facilities Still, the ro/ro trade “continues to remain underrated in India,” according to a senior Indian executive at a major car carrier. “There’s a lot of ‘catch up’ to do to make OEMs more export oriented,” the source said, adding that India lacks dedicated ro/ro terminals, which could hold back progress. “With the container business increasingly prioritized by Indian ports, including multipurpose gateways, ro/ro vessels face significant berthing delays and other bottlenecks,” said an industry source who did not want to be identified. “Ro/ro cargo is a niche activity requiring specialized infrastructure support, which is limited at the moment.” The source called for further investment in port infrastructure and shipping capacity to accommodate rising volumes of Indian-made vehicles heading to markets worldwide. The exit of US auto giants General Motors in 2017 and Ford Motor Co. in 2021 over sales and labor troubles dealt a heavy blow to the Indian auto industry, wiping out an annual 250,000 units for ro/ro carriers. That hole has since been filled by other entrants, including South Korea’s Kia Motors, with industry exports now pegged at 650,000 cars and targeted to hit 1 million units over the next two to three years. NYK Line, “K” Line, MOL, Hoegh Autoliners, Hyundai Glovis and EUKOR Car Carriers dominate the Indian ro/ro market, primarily serving Maruti Suzuki, Hyundai Motor, Volkswagen, Nissan Motor and Honda Cars for their export flows. MOL and Glovis together represent approximately 50% of India’s vehicle carrier market. Contact Bency Mathew at bencymathew@gmail.com.

Ro/ro cargo

Breakbulk News

Rebounding Indian car exports nourish country’s ro/ro trade

<div class="phx-topic abstract-wrapper">A new report from the Biden administration alleges that Beijing has a poor compliance record with the WTO, practices duplicitous trade policies that give the country unfair advantages, and operates with an overall lack of transparency.</div>

A new report from the Biden administration alleges that Beijing has a poor compliance record with the WTO, practices duplicitous trade policies that give the country unfair advantages, and operates with an overall lack of transparency.

<div class="phx-topic">China’s manipulation of market policies and practices gives the country an unfair advantage in global trade, including control of 95% of the world’s shipping containers, according to a new White House report. “China’s so-called ‘socialist market economy’ has evolved and turned decidedly predatory in nature,” said the report, released by the Biden administration late Wednesday. Maritime trade is particularly impacted by China’s business practices, which have resulted in a boom for the country’s shipbuilding market, said the report. While Chinese shipbuilders contributed only 5% of global merchant tonnage produced in 1999, that figure leapt to over 50% in 2023, “increasing China’s ownership of the global commercial fleet to 19%, while securing control of 95% of shipping containers and 86% of the world’s supply of intermodal chassis, among other components and products,” the report said. China’s control over the global commercial shipping fleet has been a hot topic of late in Congress. The White House report comes after the introduction of <a href="https://www.joc.com/article/legislation-aims-to-mandate-rising-share-of-china-imports-on-expanded-us-flag-fleet-5909698">two bills that aim to expand the US-flag commercial shipping fleet</a> to bolster national security. The House’s SHIPS for America Act bill has <a href="https://www.joc.com/article/us-flag-vessel-owners-investors-tout-wave-of-support-for-expanding-fleet-5819921">gained bipartisan support</a> and aims to expand the US-flag international fleet by more than 200% in the next decade. “In China’s shipbuilding sector, non-market policies and practices have led to a significant build up in excess capacity, undercutting foreign competition and consolidating China’s dominant position globally,” the White House report said. The report also alleges that China has a poor compliance record with the World Trade Organization (WTO), practices duplicitous trade policies that give the country unfair advantages, and operates with an overall lack of transparency. Those practices include predatory pricing, investment restrictions, self-serving responses to excess capacity of product and forced labor, according to the White House. While the fundamental issues are problematic, the report points to China’s recalcitrance as an increasingly alarming threat to trade, as it “continues to take steps designed to increase, not decrease, the role of the Chinese state in the market.” The report recommends continuing to “refine and fortify” the US’ existing multifaceted strategy to address its concerns with China, including investing domestically, utilizing domestic trade tools, and bolstering relationships with allies. “With China’s strong embrace of predatory behavior, it is apparent that the US strategy needs to evolve,” said the White House. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com. ">laura.robb@spglobal.com</a>.  </div>

China’s manipulation of market policies and practices gives the country an unfair advantage in global trade, including control of 95% of the world’s shipping containers, according to a new White House report. “China’s so-called ‘socialist market economy’ has evolved and turned decidedly predatory in nature,” said the report, released by the Biden administration late Wednesday. Maritime trade is particularly impacted by China’s business practices, which have resulted in a boom for the country’s shipbuilding market, said the report. While Chinese shipbuilders contributed only 5% of global merchant tonnage produced in 1999, that figure leapt to over 50% in 2023, “increasing China’s ownership of the global commercial fleet to 19%, while securing control of 95% of shipping containers and 86% of the world’s supply of intermodal chassis, among other components and products,” the report said. China’s control over the global commercial shipping fleet has been a hot topic of late in Congress. The White House report comes after the introduction of two bills that aim to expand the US-flag commercial shipping fleet to bolster national security. The House’s SHIPS for America Act bill has gained bipartisan support and aims to expand the US-flag international fleet by more than 200% in the next decade. “In China’s shipbuilding sector, non-market policies and practices have led to a significant build up in excess capacity, undercutting foreign competition and consolidating China’s dominant position globally,” the White House report said. The report also alleges that China has a poor compliance record with the World Trade Organization (WTO), practices duplicitous trade policies that give the country unfair advantages, and operates with an overall lack of transparency. Those practices include predatory pricing, investment restrictions, self-serving responses to excess capacity of product and forced labor, according to the White House. While the fundamental issues are problematic, the report points to China’s recalcitrance as an increasingly alarming threat to trade, as it “continues to take steps designed to increase, not decrease, the role of the Chinese state in the market.” The report recommends continuing to “refine and fortify” the US’ existing multifaceted strategy to address its concerns with China, including investing domestically, utilizing domestic trade tools, and bolstering relationships with allies. “With China’s strong embrace of predatory behavior, it is apparent that the US strategy needs to evolve,” said the White House. Contact Laura Robb at laura.robb@spglobal.com . 

Supply chain

Container Shipping News

International ports

Maritime

China’s ‘predatory’ maritime policies threaten global trade: White House

<div class="phx-topic abstract-wrapper">The question is not whether the market will be strong in the first quarter, but rather how high rates will climb, writes analyst Richard Bright. </div>

The question is not whether the market will be strong in the first quarter, but rather how high rates will climb, writes analyst Richard Bright.

<div class="phx-topic">While a projection for the short-term developmental trends of the global reefer charter market is relatively straightforward, it is becoming increasingly difficult to forecast a medium-term trend. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5923843_0.1.jpg"></img></div>That is because that even though there is broad consensus and plenty of supporting evidence that the global volume of perishable and other temperature-sensitive goods will continue to rise, a forecast for the reefer market is no longer contingent on the traditional supply and demand levers for reefer cargo. Instead, there are other variables, often entirely unrelated to the trade in perishable goods, that now determine the state of the reefer market, particularly for containers. This in itself is important because the pricing of reefer containers is the most critical variable in determining the strength of the specialized reefer charter market. In terms of market share, the specialized reefer holds less than 3% of global reefer capacity. Consequently, the mode is a price taker. That it holds an estimated 15% to 18% share of globally transported perishable goods is a testament partly to its greater efficiency and partly because there is a degree of demand inelasticity for the mode. That is to say in some trades and for specific reasons, cargo has legitimate commercial reasons to prefer the specialized alternative and is prepared to pay a premium for the privilege. However, while it may occupy an ever-shrinking niche and have some resistance to the shift in competitive reefer rates offered by the carriers because of this demand inelasticity, the mode is unsurprisingly not entirely immune to the behavior of the container market. What complicates matters is that in contrast to the logical manner in which specialized reefer rates are determined, how the carriers price reefer is something of a mystery. Rates often seem arbitrary and/or bear little relation to commercial or reefer market reality. This is not only because the list of direct and indirect reefer rate-determining variables for the carriers is long, but also because container shipping is vulnerable to “Black Swan,” “Grey Rhino,” “White Elephant” and “Black Jellyfish” events. The other major factor, or variable, is the competition among carriers in general and on specific trade lanes in particular. The latter is more important: The more service strings offered on a certain voyage, the greater the competition. This maintains pressure on individual carriers and keeps the cost to ship cargo realistic. However, the same is true vice-versa — the fewer the services, the lower the competition. This is why in the short-term, cargo (both reefer and general) is right to fear the growing consolidation of the container shipping industry. In the medium-to-long term, the disappearance of the specialized alternative will further rationalize options, at least for reefer cargo. <h3>Feeding on disruption </h3>What then of the reefer? It is not extreme to suggest that the specialized mode feeds on disruptions in the reefer container supply chain and well beyond. For example, during the COVID-19 pandemic, demand for the specialized reefer mode soared — not because of an increase in the trade in perishable products, but because the carriers were using their equipment as non-operational reefers (NORs) to transport better-paying general cargo, thereby creating a reefer capacity shortage. Meanwhile, the Russian invasion of Ukraine led to the abandonment of all containerized services, bar those from Mediterranean Shipping Co. This has led to the absorption of more specialized reefer capacity of which Cool Carriers continues to be the major beneficiary. Since October 2023, when the Houthi rebels in Yemen first attacked commercial vessels, the carriers have been forced to divert away from Suez and sail around the Cape of Good Hope. This had added time and expense to east-west carrier services. It has also, therefore, tied up more dry vans and reefer containers for longer, creating localized shortages where demand is strong. As an example, the combination of inventory shortages and the start to the Chilean cherry season saw container lines temporarily blank some reefer services out of Ecuador at the end of October. It also led to all the carriers announcing indefinite and hefty peak season surcharges (PSSs) for reefer exports from the West Coast of South America. Meanwhile, in the first quarter of the year, just the threat of a container port strike in the US has benefitted the specialized mode. Cargo had already factored in the potential for a strike: The combination of a shortage of equipment, high reefer container rates and concerns about the consequences of a stoppage led to a surge in interest for specialized reefer capacity among Peruvian table grape shippers in December and the launch of Seatrade’s Andes Express Service. There are other reasons to suggest that the first quarter of 2025 will see strong demand for reefer capacity. Most significantly is the return of Seatrade tonnage to Chile. Last season, which was complicated by the Panama Canal transit restrictions and slot reservation difficulties, no Seatrade vessel was employed in the Chilean trade to the US East Coast. This season, Seatrade is planning 11 to 15 sailings. The question, therefore, is not whether the market will be strong in the first quarter — it is how high rates will climb. Given that such a large proportion of the reefer fleet is fixed into liner schedules and Contracts of Affreightment (COAs), operators are not going to reap the full benefit. However, if it is true that the principal cause for the shortage of reefer equipment is the increase in Chilean cherry and Peruvian grape and blueberry volumes, the short- to medium-term future for the mode is actually quite secure. If the carriers cannot service the extraordinary peak in demand from the West Coast of South America (WCSA) in December and January without sacrificing custom in other trade lanes, the reefer mode can justify its existence and retain its relevance. More importantly, it might just occur to the carriers that a genuine inability to cover all the bases on the WCSA in December through March could have a positive collateral impact on their contract rates for reefer globally for the full 12 months. Contact Richard Bright at <a href="mailto:richard.bright@spitfireuk.net">richard.bright@spitfireuk.net</a>.</div>

While a projection for the short-term developmental trends of the global reefer charter market is relatively straightforward, it is becoming increasingly difficult to forecast a medium-term trend. That is because that even though there is broad consensus and plenty of supporting evidence that the global volume of perishable and other temperature-sensitive goods will continue to rise, a forecast for the reefer market is no longer contingent on the traditional supply and demand levers for reefer cargo. Instead, there are other variables, often entirely unrelated to the trade in perishable goods, that now determine the state of the reefer market, particularly for containers. This in itself is important because the pricing of reefer containers is the most critical variable in determining the strength of the specialized reefer charter market. In terms of market share, the specialized reefer holds less than 3% of global reefer capacity. Consequently, the mode is a price taker. That it holds an estimated 15% to 18% share of globally transported perishable goods is a testament partly to its greater efficiency and partly because there is a degree of demand inelasticity for the mode. That is to say in some trades and for specific reasons, cargo has legitimate commercial reasons to prefer the specialized alternative and is prepared to pay a premium for the privilege. However, while it may occupy an ever-shrinking niche and have some resistance to the shift in competitive reefer rates offered by the carriers because of this demand inelasticity, the mode is unsurprisingly not entirely immune to the behavior of the container market. What complicates matters is that in contrast to the logical manner in which specialized reefer rates are determined, how the carriers price reefer is something of a mystery. Rates often seem arbitrary and/or bear little relation to commercial or reefer market reality. This is not only because the list of direct and indirect reefer rate-determining variables for the carriers is long, but also because container shipping is vulnerable to “Black Swan,” “Grey Rhino,” “White Elephant” and “Black Jellyfish” events. The other major factor, or variable, is the competition among carriers in general and on specific trade lanes in particular. The latter is more important: The more service strings offered on a certain voyage, the greater the competition. This maintains pressure on individual carriers and keeps the cost to ship cargo realistic. However, the same is true vice-versa — the fewer the services, the lower the competition. This is why in the short-term, cargo (both reefer and general) is right to fear the growing consolidation of the container shipping industry. In the medium-to-long term, the disappearance of the specialized alternative will further rationalize options, at least for reefer cargo. Feeding on disruption What then of the reefer? It is not extreme to suggest that the specialized mode feeds on disruptions in the reefer container supply chain and well beyond. For example, during the COVID-19 pandemic, demand for the specialized reefer mode soared — not because of an increase in the trade in perishable products, but because the carriers were using their equipment as non-operational reefers (NORs) to transport better-paying general cargo, thereby creating a reefer capacity shortage. Meanwhile, the Russian invasion of Ukraine led to the abandonment of all containerized services, bar those from Mediterranean Shipping Co. This has led to the absorption of more specialized reefer capacity of which Cool Carriers continues to be the major beneficiary. Since October 2023, when the Houthi rebels in Yemen first attacked commercial vessels, the carriers have been forced to divert away from Suez and sail around the Cape of Good Hope. This had added time and expense to east-west carrier services. It has also, therefore, tied up more dry vans and reefer containers for longer, creating localized shortages where demand is strong. As an example, the combination of inventory shortages and the start to the Chilean cherry season saw container lines temporarily blank some reefer services out of Ecuador at the end of October. It also led to all the carriers announcing indefinite and hefty peak season surcharges (PSSs) for reefer exports from the West Coast of South America. Meanwhile, in the first quarter of the year, just the threat of a container port strike in the US has benefitted the specialized mode. Cargo had already factored in the potential for a strike: The combination of a shortage of equipment, high reefer container rates and concerns about the consequences of a stoppage led to a surge in interest for specialized reefer capacity among Peruvian table grape shippers in December and the launch of Seatrade’s Andes Express Service. There are other reasons to suggest that the first quarter of 2025 will see strong demand for reefer capacity. Most significantly is the return of Seatrade tonnage to Chile. Last season, which was complicated by the Panama Canal transit restrictions and slot reservation difficulties, no Seatrade vessel was employed in the Chilean trade to the US East Coast. This season, Seatrade is planning 11 to 15 sailings. The question, therefore, is not whether the market will be strong in the first quarter — it is how high rates will climb. Given that such a large proportion of the reefer fleet is fixed into liner schedules and Contracts of Affreightment (COAs), operators are not going to reap the full benefit. However, if it is true that the principal cause for the shortage of reefer equipment is the increase in Chilean cherry and Peruvian grape and blueberry volumes, the short- to medium-term future for the mode is actually quite secure. If the carriers cannot service the extraordinary peak in demand from the West Coast of South America (WCSA) in December and January without sacrificing custom in other trade lanes, the reefer mode can justify its existence and retain its relevance. More importantly, it might just occur to the carriers that a genuine inability to cover all the bases on the WCSA in December through March could have a positive collateral impact on their contract rates for reefer globally for the full 12 months. Contact Richard Bright at richard.bright@spitfireuk.net .

Cool Cargo News

Global reefer market set to soar amid disruption, strong demand

<div class="phx-topic abstract-wrapper">After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons v. Ogden, no one has been reckless enough to try to upend it. </div>

After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons v. Ogden, no one has been reckless enough to try to upend it.

<div class="phx-topic">Last year marked 200 years of the Commerce Clause jurisprudence that underpins the modern, national American economy. In 2025, we may need to protect it. In 1824, the US Supreme Court decided Gibbons v. Ogden, the first major case to interpret the constitutional power of Congress to “regulate commerce among the several states,” or commonly known as the Commerce Clause. To reach this decision, the Court struck down a significant restriction on which ships were allowed access to navigation and an individual state’s seaports. And, as a result, Gibbons created the legal underpinnings of a unified national economy.  The specific legal question at issue in Gibbons was whether one state could deny access to ships from other states based on their means of propulsion: the use of a steam engine instead of sail. But the bigger implication of the question was whether the country would return to the fractured multi-state economy that existed under the Articles of Confederation. In 2024, however, Gibbons’ bicentennial was not celebrated by the environmental advocacy group Pacific Environment, who started advocating for the state of California to institute a “port access fee” based on “the carbon intensity of ship engines.”  This is literally advocating for a Gibbons-like state imposition of a restriction on navigational access to a port based on a ship’s use of a certain type of propulsion system.  In a May 2024 report, Pacific Environment also proclaimed that California should “lead the world to reduce emissions from ocean cargo ships, lower climate impacts, and improve air quality around ports.” The justification? The California “State Legislature is relatively nimble compared to the US Congress and less affected by national politics.” In the early 1800s, before canals and railroads opened up the interior of the continent, the introduction of steam propulsion on ships revolutionized commerce by virtually eliminating physical constraints on river trade. The State of New York wanted to limit the means of propulsion of ships calling on its ports, at the expense of free trade, competition, consumers and the burgeoning US economy. As a result, the Supreme Court in Gibbons needed to decide if New York could constitutionally restrict navigation by barring certain types of vessels from its ports based on their use of a steam engine. And to answer this, the young nation’s highest Court first had to grapple with another, larger question: If the Constitution guarantees free rights of navigation to ships under the Commerce Clause, then is New York’s ban preempted? Gibbons minced no words: “All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation.” The Constitution granted the federal government authority over “commercial intercourse between nations, and parts of nations,” and “the power over commerce with foreign nations, and among the several states is vested in Congress as absolutely as it would be in a single government,” the court said.   <h3>California proposals </h3>In 2025, after two centuries of giving Chief Justice John Marshall the final word on the matter, should we reopen this fundamental question of whether states should be able to decide which ships are allowed to call on their ports based on a vessel’s system of propulsion?   In Southern California in 2023, the staff of the South Coast Air Quality Management District (AQMD) started a process to consider indirect regulation of ship propulsion systems. The staff was musing about the adoption of a regulation that would penalize ports or marine terminals that did not “route cleaner ships” or require “new, cleaner vessel designs” for vessels calling at the nation’s busiest container port complex in Los Angeles and Long Beach. AQMD’s board has yet to decide if the staff’s proposed concepts will proceed. California State’s air regulators are also starting a discussion in 2025 around reducing emissions from oceangoing vessels in transit. But whether they stick to incentives and voluntary measures in support of federal and International Maritime Organization (IMO) standards or they take the bait of the ship engine regulations proposed by Pacific Environment remains to be seen.  If either the state or a local air district acts directly to restrict the means of vessel propulsion as a condition of access to state seaports, it would be a novelty — the first direct tests of Gibbons’ rules and its conclusion that the right of navigation is commerce, and therefore the province of Congress and the federal government. And these would be novel cases for good reason. After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons, no one has been reckless enough to try to upend it. Contact Mike Jacob at <a href="mailto:mjacob@pmsaship.com">mjacob@pmsaship.com.</a></div>

Last year marked 200 years of the Commerce Clause jurisprudence that underpins the modern, national American economy. In 2025, we may need to protect it. In 1824, the US Supreme Court decided Gibbons v. Ogden, the first major case to interpret the constitutional power of Congress to “regulate commerce among the several states,” or commonly known as the Commerce Clause. To reach this decision, the Court struck down a significant restriction on which ships were allowed access to navigation and an individual state’s seaports. And, as a result, Gibbons created the legal underpinnings of a unified national economy.  The specific legal question at issue in Gibbons was whether one state could deny access to ships from other states based on their means of propulsion: the use of a steam engine instead of sail. But the bigger implication of the question was whether the country would return to the fractured multi-state economy that existed under the Articles of Confederation. In 2024, however, Gibbons’ bicentennial was not celebrated by the environmental advocacy group Pacific Environment, who started advocating for the state of California to institute a “port access fee” based on “the carbon intensity of ship engines.”  This is literally advocating for a Gibbons-like state imposition of a restriction on navigational access to a port based on a ship’s use of a certain type of propulsion system.  In a May 2024 report, Pacific Environment also proclaimed that California should “lead the world to reduce emissions from ocean cargo ships, lower climate impacts, and improve air quality around ports.” The justification? The California “State Legislature is relatively nimble compared to the US Congress and less affected by national politics.” In the early 1800s, before canals and railroads opened up the interior of the continent, the introduction of steam propulsion on ships revolutionized commerce by virtually eliminating physical constraints on river trade. The State of New York wanted to limit the means of propulsion of ships calling on its ports, at the expense of free trade, competition, consumers and the burgeoning US economy. As a result, the Supreme Court in Gibbons needed to decide if New York could constitutionally restrict navigation by barring certain types of vessels from its ports based on their use of a steam engine. And to answer this, the young nation’s highest Court first had to grapple with another, larger question: If the Constitution guarantees free rights of navigation to ships under the Commerce Clause, then is New York’s ban preempted? Gibbons minced no words: “All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation.” The Constitution granted the federal government authority over “commercial intercourse between nations, and parts of nations,” and “the power over commerce with foreign nations, and among the several states is vested in Congress as absolutely as it would be in a single government,” the court said.   California proposals In 2025, after two centuries of giving Chief Justice John Marshall the final word on the matter, should we reopen this fundamental question of whether states should be able to decide which ships are allowed to call on their ports based on a vessel’s system of propulsion?   In Southern California in 2023, the staff of the South Coast Air Quality Management District (AQMD) started a process to consider indirect regulation of ship propulsion systems. The staff was musing about the adoption of a regulation that would penalize ports or marine terminals that did not “route cleaner ships” or require “new, cleaner vessel designs” for vessels calling at the nation’s busiest container port complex in Los Angeles and Long Beach. AQMD’s board has yet to decide if the staff’s proposed concepts will proceed. California State’s air regulators are also starting a discussion in 2025 around reducing emissions from oceangoing vessels in transit. But whether they stick to incentives and voluntary measures in support of federal and International Maritime Organization (IMO) standards or they take the bait of the ship engine regulations proposed by Pacific Environment remains to be seen.  If either the state or a local air district acts directly to restrict the means of vessel propulsion as a condition of access to state seaports, it would be a novelty — the first direct tests of Gibbons’ rules and its conclusion that the right of navigation is commerce, and therefore the province of Congress and the federal government. And these would be novel cases for good reason. After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons, no one has been reckless enough to try to upend it. Contact Mike Jacob at mjacob@pmsaship.com.

Transport, Trade and Regulation News

Protecting navigation and the Commerce Clause in 2025

<div class="phx-topic abstract-wrapper">MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with the Premier Alliance and ZIM.</div>

MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with the Premier Alliance and ZIM.

<div class="phx-topic">When it became clear that the restructuring of the industry in the east-west trades in early 2025 meant moving from three major networks — 2M, Ocean Alliance and THE Alliance — to four major networks — Ocean, Gemini, Premier and a standalone Mediterranean Shipping Co. — radical overcapacity was in the cards. Even though the carriers knew they were moving into dangerous territory, they didn’t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships. The most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks. Maersk and Hapag-Lloyd made it clear at the outset that the Gemini Cooperation alliance could not entertain more members or slot agreements if it was to deliver the kind of quality level it aspires to. This left it to MSC, Ocean and Premier to take some initiatives; as we have seen, MSC has led the charge. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="bc8c7bab-e415-4fea-861b-3926a4691794"></dynamic-object></div>With the dissolution of the 2M alliance, many industry observers assumed that MSC would operate entirely independently in the east-west trade. This was based on its clear desire to control its own destiny and be nimble in building products to answer client needs. Pundits underestimated MSC’s history of balancing its longer-term objectives with the realities and opportunities of the immediate market. We don’t know the number of slots bought and sold in MSC’s deal with Premier, but with the number of loops MSC will be operating to North Europe and the Med and the capacity it has deployed, it’s a reasonable assumption it is selling more slots than it’s buying, which probably suits the carrier well at this point of evolution. Conversely, the ZIM Integrated Shipping Services deal has helped reduce the capacity injection that MSC needed to make post-2M. (Maersk has been a much bigger contributor of tonnage to the US East Coast than MSC within 2M.) Furthermore, in as much as it has reduced the overall injection of capacity, which reduces overall oversupply in the east-west trade, that will also help rates stay up longer, which MSC also benefits from. It’s hard to see — once all the 25 new deployments are bedded in — that it will stem the capacity influx tide sufficiently to defy rate level gravity. Short, of course, of labor troubles becoming long term or other black swan events over and above the Suez problem. <h3>‘Competitive edge’ for MSC </h3>Meanwhile, the other benefit of the slot agreements MSC has made — particularly for the USEC and Gulf — is that it has enhanced the quality of its network and thus given it more of a competitive edge. The charts don’t give the full picture on service, and every shipper will look at their particular mix of port pairs and what service combo of frequency, transit time and reliability they want. Gemini will point out that this dry set of numbers does nothing to factor in the reliability they will be targeting. It would be correct, but the charts do highlight the fact that shippers will often have to make their pick between frequency and more direct port pairs on one side and dependable departures/arrivals on the other. What the charts also confirm is that in the trades where it has made slot deals, MSC has a competitive overall product that has been enhanced by the slot arrangements. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="886ef5d7-6ed6-45c1-b099-a851968de973"></dynamic-object></div>MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with Premier and ZIM. If MSC carries on accumulating tonnage at the rate it is now, it’s an open question whether the deals with Premier and ZIM will look as attractive for them in the future as they do now. Of course, Premier — or its individual carriers — and ZIM may also have other options when the time comes. Contact Jeremy Masters at <a href="https://www.joc.com/article/jeremy@shippingmastershk.com">jeremy@shippingmastershk.com.</a></div>

When it became clear that the restructuring of the industry in the east-west trades in early 2025 meant moving from three major networks — 2M, Ocean Alliance and THE Alliance — to four major networks — Ocean, Gemini, Premier and a standalone Mediterranean Shipping Co. — radical overcapacity was in the cards. Even though the carriers knew they were moving into dangerous territory, they didn’t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships. The most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks. Maersk and Hapag-Lloyd made it clear at the outset that the Gemini Cooperation alliance could not entertain more members or slot agreements if it was to deliver the kind of quality level it aspires to. This left it to MSC, Ocean and Premier to take some initiatives; as we have seen, MSC has led the charge. With the dissolution of the 2M alliance, many industry observers assumed that MSC would operate entirely independently in the east-west trade. This was based on its clear desire to control its own destiny and be nimble in building products to answer client needs. Pundits underestimated MSC’s history of balancing its longer-term objectives with the realities and opportunities of the immediate market. We don’t know the number of slots bought and sold in MSC’s deal with Premier, but with the number of loops MSC will be operating to North Europe and the Med and the capacity it has deployed, it’s a reasonable assumption it is selling more slots than it’s buying, which probably suits the carrier well at this point of evolution. Conversely, the ZIM Integrated Shipping Services deal has helped reduce the capacity injection that MSC needed to make post-2M. (Maersk has been a much bigger contributor of tonnage to the US East Coast than MSC within 2M.) Furthermore, in as much as it has reduced the overall injection of capacity, which reduces overall oversupply in the east-west trade, that will also help rates stay up longer, which MSC also benefits from. It’s hard to see — once all the 25 new deployments are bedded in — that it will stem the capacity influx tide sufficiently to defy rate level gravity. Short, of course, of labor troubles becoming long term or other black swan events over and above the Suez problem. ‘Competitive edge’ for MSC Meanwhile, the other benefit of the slot agreements MSC has made — particularly for the USEC and Gulf — is that it has enhanced the quality of its network and thus given it more of a competitive edge. The charts don’t give the full picture on service, and every shipper will look at their particular mix of port pairs and what service combo of frequency, transit time and reliability they want. Gemini will point out that this dry set of numbers does nothing to factor in the reliability they will be targeting. It would be correct, but the charts do highlight the fact that shippers will often have to make their pick between frequency and more direct port pairs on one side and dependable departures/arrivals on the other. What the charts also confirm is that in the trades where it has made slot deals, MSC has a competitive overall product that has been enhanced by the slot arrangements. MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with Premier and ZIM. If MSC carries on accumulating tonnage at the rate it is now, it’s an open question whether the deals with Premier and ZIM will look as attractive for them in the future as they do now. Of course, Premier — or its individual carriers — and ZIM may also have other options when the time comes. Contact Jeremy Masters at jeremy@shippingmastershk.com.

Container lines

MSC takes measured steps toward long-term goals

S&P Global Platts editors engaging with market participants to assess the current value of freight-of-all-kinds (FAK) rates on major container trades produce container spot rates. The rates include bunker adjustment factors, general rate increases and emergency rare restoration. They also include low-sulfur fuel, equipment imbalance and repositioning surcharges. The rates exclude terminal handling, port security, overweight container, delivery, and detention and demurrage charges. [Platts](https://www.spglobal.com/commodityinsights)

North Asia to US West Coast and East Coast container spot rates (Platts)

Platts North Asia to US East and West Coasts Weekly Gateway

<div class="phx-topic abstract-wrapper">The uncertainty surrounding the Red Sea was highlighted by member OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice.</div>

The uncertainty surrounding the Red Sea was highlighted by member OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice.

<div class="phx-topic">The Ocean Alliance of COSCO Shipping, OOCL, Evergreen Line and CMA CGM has unveiled its new shipping network, expanding direct coverage of both the Asia-Europe and trans-Pacific trades from April. “They [Ocean Alliance] are clearly increasing capacity,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Monday. Ocean Alliance’s so-called “Day 9” product was announced by member carrier OOCL Monday and will comprise 41 service loops and 390 vessels. Three new services will be introduced: the trans-Pacific PSX from Xiamen and Yantian to Long Beach and back via Kaohsiung; the PNW5 from Ningbo and Shanghai to Tacoma and Seattle and back via Lianyungang; and the LL3, an Asia-Europe route calling Shanghai, Xiamen, Hong Kong, Yantian, Cai Mep, Singapore, Rotterdam, Hamburg, Zeebrugge, Felixstowe and back via Port Kelang. The uncertainty surrounding the Red Sea was highlighted by OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice. “In light of the current situation in the Red Sea region, OOCL’s vessels will continue to be diverted to the Cape of Good Hope route to ensure the safety of our crews, your cargo and our vessels,” OOCL noted in a customer advisory. Outside the alliance services, OOCL will also roll out six new trans-Atlantic services from February. All four global networks have now been announced with the carriers in the vessel-sharing agreements repositioning ships in preparation for the launch of the new services. The new Gemini Cooperation between Maersk and Hapag-Lloyd will deploy a hub-and-spoke model connecting regional ports to the hubs by shuttles, while Ocean Alliance, the Premier Alliance (Ocean Network Express, HMM and Yang Ming) and a standalone Mediterranean Shipping Co. will offer direct services. “...The big change will not only be the transition period to the new alliances, but the fact that the networks will be very different,” Verberckmoes said. “Until last year, THE Alliance, Ocean Alliance and 2M were comparable, but now for the first time we will have networks which are not comparable.” While MSC and the alliances prepare for their networks, several carriers <a href="https://www.joc.com/article/ocean-carriers-outline-new-trans-atlantic-services-from-feb-1-5907735">are striking partnerships beyond their own networks</a> to plug coverage gaps. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The Ocean Alliance of COSCO Shipping, OOCL, Evergreen Line and CMA CGM has unveiled its new shipping network, expanding direct coverage of both the Asia-Europe and trans-Pacific trades from April. “They [Ocean Alliance] are clearly increasing capacity,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Monday. Ocean Alliance’s so-called “Day 9” product was announced by member carrier OOCL Monday and will comprise 41 service loops and 390 vessels. Three new services will be introduced: the trans-Pacific PSX from Xiamen and Yantian to Long Beach and back via Kaohsiung; the PNW5 from Ningbo and Shanghai to Tacoma and Seattle and back via Lianyungang; and the LL3, an Asia-Europe route calling Shanghai, Xiamen, Hong Kong, Yantian, Cai Mep, Singapore, Rotterdam, Hamburg, Zeebrugge, Felixstowe and back via Port Kelang. The uncertainty surrounding the Red Sea was highlighted by OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice. “In light of the current situation in the Red Sea region, OOCL’s vessels will continue to be diverted to the Cape of Good Hope route to ensure the safety of our crews, your cargo and our vessels,” OOCL noted in a customer advisory. Outside the alliance services, OOCL will also roll out six new trans-Atlantic services from February. All four global networks have now been announced with the carriers in the vessel-sharing agreements repositioning ships in preparation for the launch of the new services. The new Gemini Cooperation between Maersk and Hapag-Lloyd will deploy a hub-and-spoke model connecting regional ports to the hubs by shuttles, while Ocean Alliance, the Premier Alliance (Ocean Network Express, HMM and Yang Ming) and a standalone Mediterranean Shipping Co. will offer direct services. “...The big change will not only be the transition period to the new alliances, but the fact that the networks will be very different,” Verberckmoes said. “Until last year, THE Alliance, Ocean Alliance and 2M were comparable, but now for the first time we will have networks which are not comparable.” While MSC and the alliances prepare for their networks, several carriers are striking partnerships beyond their own networks to plug coverage gaps. Contact Greg Knowler at greg.knowler@spglobal.com .

Ocean Alliance network to grow trans-Pacific, Asia-Europe coverage

<div class="phx-topic abstract-wrapper">A confluence of factors, including vessel bunching at Asian load ports and a pre-Lunar New Year cargo surge, have combined to cause congestion at the port and reduce its railcar availability.</div>

A confluence of factors, including vessel bunching at Asian load ports and a pre-Lunar New Year cargo surge, have combined to cause congestion at the port and reduce its railcar availability.

<div class="phx-topic">Port of Vancouver stakeholders expect they will have to navigate at least three more weeks of congestion as Canada’s largest port works to clear a backlog of rail containers that built up in December. A confluence of factors — including vessel bunching at Asian load ports, a pre-Lunar New Year cargo surge, <a href="https://www.joc.com/article/bc-container-ports-set-for-shutdown-after-foremen-begin-strike-5785499">a strike by dockworker foremen</a> in November and shorter trains due to winter operating conditions — combined to cause congestion at the port and reduce Vancouver’s railcar availability last month. As a result, the average rail container dwell time at the port’s four container terminals spiked to 6.9 days in December — the highest since last March – and up from 5.2 days in November and 4.5 days in October, according to data on the port’s website. “We are seeing an increase in the number of vessels waiting to enter the Port of Vancouver due to arrival delays associated with winter weather in Asia and the seasonal pre-Lunar New Year impact causing a surge in volume,” a spokesperson for the Vancouver Fraser Port Authority told the Journal of Commerce Wednesday. “As such, we anticipate that high on-dock times will continue for the rest of January.” Terminal operators and the railroads say they are chipping away at the rail container backlog and note conditions will improve further at the end of the month when import volumes are expected to drop significantly due to many factories in Asia closing for a week or two for the Lunar New Year celebrations that start Jan. 29. <h3>Train restrictions during Canadian cold snap </h3>Canadian National Railway (CN) in December was already recovering from a backlog of rail containers from the dockworkers’ strike and vessel bunching when a cold snap in Western Canada resulted in operating restrictions, including running shorter trains, that impacted CN’s network velocity, a CN spokesperson told the Journal of Commerce. “CN is working closely with the port operators to clear out these volumes as the vessel discharge normalizes over the next three weeks,” a spokesperson for the railroad said. “We are already seeing some improvements and are confident that the dwell metric will fall back to normal levels as we catch up on the backlog over the next few weeks.” Canadian Pacific Kansas City (CPKC) said Thursday its railcars are cycling efficiently through its network and that the supply of cars is good. Demand is forecast to remain strong through January, a CPKC spokesperson said. DP World Canada, which operates the Centerm terminal in Vancouver, said it is working with the railroads to handle the increased import volumes leading up to the Lunar New Year on Jan. 29. “We should be back to normal in a few weeks,” said CEO Doug Smith. Meanwhile, the elevated rail container dwell times at the marine terminals have not had an impact on drayage operations in Vancouver, said David Earle, CEO of the British Columbia Trucking Association. The only change Earle said he’s noted in recent days is that a small number of inbound containers that had been booked to leave the terminals by rail are being redirected to long-haul truckers for movement inland. <h3>Prince Rupert back to normal </h3>The Port of Prince Rupert, which faced challenges similar to Vancouver last month, saw its rail container dwell times spike to an average of nearly 10 days in mid-December, said Brian Friesen, vice president of trade development at the port. The average dwell dropped to 6.1 days for the week of Dec. 20 and has continued to slide in January. “The dwells are now below two days,” Friesen said. “It’s all fluid now.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Port of Vancouver stakeholders expect they will have to navigate at least three more weeks of congestion as Canada’s largest port works to clear a backlog of rail containers that built up in December. A confluence of factors — including vessel bunching at Asian load ports, a pre-Lunar New Year cargo surge, a strike by dockworker foremen in November and shorter trains due to winter operating conditions — combined to cause congestion at the port and reduce Vancouver’s railcar availability last month. As a result, the average rail container dwell time at the port’s four container terminals spiked to 6.9 days in December — the highest since last March – and up from 5.2 days in November and 4.5 days in October, according to data on the port’s website. “We are seeing an increase in the number of vessels waiting to enter the Port of Vancouver due to arrival delays associated with winter weather in Asia and the seasonal pre-Lunar New Year impact causing a surge in volume,” a spokesperson for the Vancouver Fraser Port Authority told the Journal of Commerce Wednesday. “As such, we anticipate that high on-dock times will continue for the rest of January.” Terminal operators and the railroads say they are chipping away at the rail container backlog and note conditions will improve further at the end of the month when import volumes are expected to drop significantly due to many factories in Asia closing for a week or two for the Lunar New Year celebrations that start Jan. 29. Train restrictions during Canadian cold snap Canadian National Railway (CN) in December was already recovering from a backlog of rail containers from the dockworkers’ strike and vessel bunching when a cold snap in Western Canada resulted in operating restrictions, including running shorter trains, that impacted CN’s network velocity, a CN spokesperson told the Journal of Commerce. “CN is working closely with the port operators to clear out these volumes as the vessel discharge normalizes over the next three weeks,” a spokesperson for the railroad said. “We are already seeing some improvements and are confident that the dwell metric will fall back to normal levels as we catch up on the backlog over the next few weeks.” Canadian Pacific Kansas City (CPKC) said Thursday its railcars are cycling efficiently through its network and that the supply of cars is good. Demand is forecast to remain strong through January, a CPKC spokesperson said. DP World Canada, which operates the Centerm terminal in Vancouver, said it is working with the railroads to handle the increased import volumes leading up to the Lunar New Year on Jan. 29. “We should be back to normal in a few weeks,” said CEO Doug Smith. Meanwhile, the elevated rail container dwell times at the marine terminals have not had an impact on drayage operations in Vancouver, said David Earle, CEO of the British Columbia Trucking Association. The only change Earle said he’s noted in recent days is that a small number of inbound containers that had been booked to leave the terminals by rail are being redirected to long-haul truckers for movement inland. Prince Rupert back to normal The Port of Prince Rupert, which faced challenges similar to Vancouver last month, saw its rail container dwell times spike to an average of nearly 10 days in mid-December, said Brian Friesen, vice president of trade development at the port. The average dwell dropped to 6.1 days for the week of Dec. 20 and has continued to slide in January. “The dwells are now below two days,” Friesen said. “It’s all fluid now.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

Rail News

North American ports

Marine terminals

Vancouver braces for congestion, high rail dwells through January

<div class="phx-topic abstract-wrapper">With the threat of a US port strike averted, the transition to new global service networks will not be accompanied by widespread disruption, the analyst believes.</div>

With the threat of a US port strike averted, the transition to new global service networks will not be accompanied by widespread disruption, the analyst believes.

<div class="phx-topic">Ocean carriers will roll out their new global networks next month, and while disruption to supply chains is inevitable during the transition period, the extent of that disruption will be limited by a series of factors, not least of which is the longshore contract agreement on the US East and Gulf coasts, according to Alphaliner The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">had reached a tentative agreemen</a>t on a new master contract, avoiding a strike that would have begun Jan. 15. “The carriers must feel relieved that there will not be any striking that would potentially complicate the changes they are preparing,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Thursday. With the threat of a port strike removed, carriers can now focus on preparations for the new networks that will be implemented from Feb. 1 by the Gemini Cooperation (Maersk and Hapag-Lloyd), Premier Alliance (Ocean Network Express, HMM and Yang Ming) and the standalone Mediterranean Shipping Co. Verberckmoes said in the past, reshuffling carrier alliances “normally creates chaos,” but a series of factors would help to smooth the transition this time. He noted that Lunar New Year falls on Jan. 29, and on top of a slowdown in demand, factories in China will close for at least a week, so the new alliance services would only start in the second week of February. That will leave carriers plenty of time to move ships to the right Chinese port. Another factor is that even within the alliances, many services will be operated by a single carrier, and those fleets will continue to operate the new loops without the need for extensive repositioning of vessels. “The new schedules are already published and most of the ships have already been nominated and are in place, so every importer or exporter can already see which ships are available,” Verberckmoes said. “There will be skipped sailings, but it will certainly not be chaos.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="874fb71b-dde8-4286-b65b-1bef7790a9f3"></dynamic-object></div>In preparation for the post-Lunar New Year slowdown, ocean carriers are increasing blank sailings on the Asia-Europe trade lanes in February. Data from visibility provider eeSea shows available capacity from Asia to North Europe is set to drop to 860,974 TEUs from 1.1 million TEUs in January. <h3>Repositioning of ships </h3>Interestingly, disruption to supply chains from the canceled sailings will be mitigated by the repositioning of ships that were doubling as extra loaders moving from Asia to Europe to work the new trans-Atlantic services, Verberckmoes said. “I already see a lot of extra loaders mainly active on the trans-Pacific trade that are now coming to Europe on extra voyages from the Far East to ensure they are in position to join the new trans-Atlantic services starting in February,” he noted. Even though the vessels are 6,000-7,000 TEUs in capacity, they are taking on cargo during their repositioning voyages, which Verberckmoes said was offsetting the capacity impact of blank sailings. Sea-Intelligence Maritime Analysis noted that supply chain disruptions from the Lunar New Year blank sailings might be amplified on the trans-Pacific by the phase-out of existing alliance services and the phase-in of new services. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3af4814e-7307-4298-887b-ce4d0ef124e6"></dynamic-object></div>In its weekly Sunday Spotlight newsletter, Sea-Intelligence said carriers on the Asia-US West Coast trade have so far scheduled blanked capacity of 9% for the Lunar New Year week and the following three-week period compared with the 22.8% blanked in 2024 and the average 2016–19 reduction of 18.3%. This is despite current capacity deployment at just under 1.34 million TEUs for the four-week period covering the Lunar New Year, which corresponds to 33.3% growth in capacity year over year. “Under normal circumstances, this would mean significant blank sailings announcements in the upcoming weeks, since it is highly unlikely that carriers would be satisfied with this level of excess capacity,” Alan Murphy, CEO of Sea-Intelligence, wrote in the newsletter. However, Murphy noted that the phase-in of new networks by MSC, Gemini Cooperation and Premier Alliance introduced a new uncertainty, where carriers might prioritize getting their vessels phased into the new networks at the expense of not blanking as much capacity as usual. Marc Meier, global head of ocean freight for Toll Global Forwarding, believes there are likely to be service disruptions on the major east-west trades in the first half of the year due to the startup of the new alliances. ”Carriers will plan their capacity to meet demand with many blank sailings in the first two weeks of February for all trades,” Meier told the Journal of Commerce this week, noting there would be a gradual pickup in volume expected from Feb. 21. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers will roll out their new global networks next month, and while disruption to supply chains is inevitable during the transition period, the extent of that disruption will be limited by a series of factors, not least of which is the longshore contract agreement on the US East and Gulf coasts, according to Alphaliner The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they had reached a tentative agreemen t on a new master contract, avoiding a strike that would have begun Jan. 15. “The carriers must feel relieved that there will not be any striking that would potentially complicate the changes they are preparing,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Thursday. With the threat of a port strike removed, carriers can now focus on preparations for the new networks that will be implemented from Feb. 1 by the Gemini Cooperation (Maersk and Hapag-Lloyd), Premier Alliance (Ocean Network Express, HMM and Yang Ming) and the standalone Mediterranean Shipping Co. Verberckmoes said in the past, reshuffling carrier alliances “normally creates chaos,” but a series of factors would help to smooth the transition this time. He noted that Lunar New Year falls on Jan. 29, and on top of a slowdown in demand, factories in China will close for at least a week, so the new alliance services would only start in the second week of February. That will leave carriers plenty of time to move ships to the right Chinese port. Another factor is that even within the alliances, many services will be operated by a single carrier, and those fleets will continue to operate the new loops without the need for extensive repositioning of vessels. “The new schedules are already published and most of the ships have already been nominated and are in place, so every importer or exporter can already see which ships are available,” Verberckmoes said. “There will be skipped sailings, but it will certainly not be chaos.” In preparation for the post-Lunar New Year slowdown, ocean carriers are increasing blank sailings on the Asia-Europe trade lanes in February. Data from visibility provider eeSea shows available capacity from Asia to North Europe is set to drop to 860,974 TEUs from 1.1 million TEUs in January. Repositioning of ships Interestingly, disruption to supply chains from the canceled sailings will be mitigated by the repositioning of ships that were doubling as extra loaders moving from Asia to Europe to work the new trans-Atlantic services, Verberckmoes said. “I already see a lot of extra loaders mainly active on the trans-Pacific trade that are now coming to Europe on extra voyages from the Far East to ensure they are in position to join the new trans-Atlantic services starting in February,” he noted. Even though the vessels are 6,000-7,000 TEUs in capacity, they are taking on cargo during their repositioning voyages, which Verberckmoes said was offsetting the capacity impact of blank sailings. Sea-Intelligence Maritime Analysis noted that supply chain disruptions from the Lunar New Year blank sailings might be amplified on the trans-Pacific by the phase-out of existing alliance services and the phase-in of new services. In its weekly Sunday Spotlight newsletter, Sea-Intelligence said carriers on the Asia-US West Coast trade have so far scheduled blanked capacity of 9% for the Lunar New Year week and the following three-week period compared with the 22.8% blanked in 2024 and the average 2016–19 reduction of 18.3%. This is despite current capacity deployment at just under 1.34 million TEUs for the four-week period covering the Lunar New Year, which corresponds to 33.3% growth in capacity year over year. “Under normal circumstances, this would mean significant blank sailings announcements in the upcoming weeks, since it is highly unlikely that carriers would be satisfied with this level of excess capacity,” Alan Murphy, CEO of Sea-Intelligence, wrote in the newsletter. However, Murphy noted that the phase-in of new networks by MSC, Gemini Cooperation and Premier Alliance introduced a new uncertainty, where carriers might prioritize getting their vessels phased into the new networks at the expense of not blanking as much capacity as usual. Marc Meier, global head of ocean freight for Toll Global Forwarding, believes there are likely to be service disruptions on the major east-west trades in the first half of the year due to the startup of the new alliances. ”Carriers will plan their capacity to meet demand with many blank sailings in the first two weeks of February for all trades,” Meier told the Journal of Commerce this week, noting there would be a gradual pickup in volume expected from Feb. 21. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Forwarding

Asia-Europe

Trans-Pacific

Limited disruption likely as new carrier alliances roll out: Alphaliner

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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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<div class="phx-topic abstract-wrapper">The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.</div>

The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.

<div class="phx-topic">The California Air Resources Board (CARB) has rescinded a proposed rule that would have required train locomotives operating in the state to produce zero emissions by 2030, a regulation that would have put a $1.5 billion project by BNSF Railway to expand its terminal in Barstow in serious jeopardy. BNSF can now move forward with the project that should be completed in 2027 or 2028. “Railroads are pleased that the California Air Resources Board has withdrawn its authorization request for the ill-conceived in-use locomotive rule,” the Association of American Railroads (AAR) said in a statement Wednesday. “As we move past this untenable proposal, railroads look forward to focusing on advancing their already strong sustainability profile and further reducing emissions in the years to come.” A US District Court judge last November paused the proposed Jan. 1 implementation of the locomotive emissions rule to determine whether it violated federal pre-emption laws on interstate commerce. The decision by CARB to drop the rule comes after the US Bureau of Land Management on Monday approved the sale of the federal land to BNSF on which the railroad will develop the Barstow Intermodal Gateway, or BIG. BIG will be a transloading hub where ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach. Aside from requiring zero-emission locomotives, the proposed CARB rule would have immediately banned any locomotive 23 years or older from operating in California. BNSF argued that the current technology isn’t viable to meet the zero-emission standards, adding the rule also would have limited the useful life of 25,000 relatively new diesel-electric hybrid locomotives. <h3>Hub would benefit stakeholders </h3>If BNSF’s Barstow hub is successful, it can have a positive impact on several supply chain stakeholders. For the railroad, it would boost transloading of imports into domestic containers using intermodal providers that don’t run into the same equipment challenges as the maritime industry. J.B. Hunt Transport Services, for example, owns its chassis, so BNSF can quickly mount a load off a train and place the unit in a parking spot. A successful Barstow terminal would also benefit shippers in several ways. Domestic intermodal providers are hyper-focused on box turns — meaning the number of revenue-paying loads an average container handles per month — in order to maximize revenue. BNSF partners such as J.B. Hunt are much more likely to send a driver immediately and deliver the load to the customer, rarely letting the box idle in the terminal for more than 24 to 48 hours. Also, customers who don’t transload will benefit because fewer loads would move in ocean containers. Transferring imports into domestic containers would free up the ocean boxes to be railed back to marine terminals in Los Angeles and Long Beach much faster, which benefits exporters requiring empty containers and helps ocean carriers moving boxes back to Asia. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The California Air Resources Board (CARB) has rescinded a proposed rule that would have required train locomotives operating in the state to produce zero emissions by 2030, a regulation that would have put a $1.5 billion project by BNSF Railway to expand its terminal in Barstow in serious jeopardy. BNSF can now move forward with the project that should be completed in 2027 or 2028. “Railroads are pleased that the California Air Resources Board has withdrawn its authorization request for the ill-conceived in-use locomotive rule,” the Association of American Railroads (AAR) said in a statement Wednesday. “As we move past this untenable proposal, railroads look forward to focusing on advancing their already strong sustainability profile and further reducing emissions in the years to come.” A US District Court judge last November paused the proposed Jan. 1 implementation of the locomotive emissions rule to determine whether it violated federal pre-emption laws on interstate commerce. The decision by CARB to drop the rule comes after the US Bureau of Land Management on Monday approved the sale of the federal land to BNSF on which the railroad will develop the Barstow Intermodal Gateway, or BIG. BIG will be a transloading hub where ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach. Aside from requiring zero-emission locomotives, the proposed CARB rule would have immediately banned any locomotive 23 years or older from operating in California. BNSF argued that the current technology isn’t viable to meet the zero-emission standards, adding the rule also would have limited the useful life of 25,000 relatively new diesel-electric hybrid locomotives. Hub would benefit stakeholders If BNSF’s Barstow hub is successful, it can have a positive impact on several supply chain stakeholders. For the railroad, it would boost transloading of imports into domestic containers using intermodal providers that don’t run into the same equipment challenges as the maritime industry. J.B. Hunt Transport Services, for example, owns its chassis, so BNSF can quickly mount a load off a train and place the unit in a parking spot. A successful Barstow terminal would also benefit shippers in several ways. Domestic intermodal providers are hyper-focused on box turns — meaning the number of revenue-paying loads an average container handles per month — in order to maximize revenue. BNSF partners such as J.B. Hunt are much more likely to send a driver immediately and deliver the load to the customer, rarely letting the box idle in the terminal for more than 24 to 48 hours. Also, customers who don’t transload will benefit because fewer loads would move in ocean containers. Transferring imports into domestic containers would free up the ocean boxes to be railed back to marine terminals in Los Angeles and Long Beach much faster, which benefits exporters requiring empty containers and helps ocean carriers moving boxes back to Asia. Contact Ari Ashe at ari.ashe@spglobal.com .

BNSF Barstow project to proceed after CARB emissions rule withdrawn

<div class="phx-topic abstract-wrapper">The twin complaints to the FMC charge that several ocean carriers pushed the shippers into paying surcharges and premium rates totaling $5.5 million, while creating another $76 million in added spot market costs. </div>

The twin complaints to the FMC charge that several ocean carriers pushed the shippers into paying surcharges and premium rates totaling $5.5 million, while creating another $76 million in added spot market costs.

<div class="phx-topic">Two US shippers, including the parent company of retailer Crate &amp; Barrel, want the Federal Maritime Commission (FMC) to investigate ocean carriers for not providing enough vessel space during the pandemic surge, alleging they also extracted surcharges and higher rates for previously agreed-upon container volumes in violation of US shipping law and forced the shippers into the then-costly spot market. The complaints are a further shot across the bow on the enforceability of service contracts and whether service refusals for some customers were a legitimate response to overwhelming demand during the COVID-19 era. In a pair of complaints published by FMC last week, Euromarket Designs, the parent of Crate &amp; Barrel, and housewares and furniture distributor Nielsen &amp; Bainbridge both allege that a host of ocean carriers failed to honor service contracts with the two shippers between 2020 and 2022, resulting in delays and a shortfall in expected cargo volumes. Instead, the shippers claim that carriers sought surcharges for getting their allocated cargo on a ship. All in, Euromarket said its freight bills with Mediterranean Shipping Co., HMM and Ocean Network Express (ONE) increased $5.5 million due to surcharges and higher rates. Nielsen &amp; Bainbridge said it paid $4 million more to ONE, OOCL and Evergreen Line for carrying cargo under its existing contracts.Even with the premiums, the two shippers said they were not able to get all the space they required during the 2020–22 service years. As a result, they were forced into the spot market where they say they paid a combined $76.5 million for capacity they expected to get under their service contracts. Nielsen &amp; Bainbridge filed for bankruptcy last year, turning itself over to private equity lenders KKR &amp; Co. and Silver Point Capital. The company said in its filing the higher freight costs “significantly contributed” to its bankruptcy. Along with an FMC investigation, the complainants asked for reparations from the carriers for the alleged violations. Representatives of the carriers did not immediately respond to the allegations. <h3>Similar complaints lobbed at carriers </h3>The twin complaints mirror similar ones filed in the wake of the pandemic-era container surge alleging refusal of service by carriers, with those cases having mixed success. MCS Industries, another home goods importer, alleged in 2021 that MSC and Cosco Shipping <a href="https://www.joc.com/article/us-importer-complains-of-container-line-collusion-to-fmc-5249085">failed to honor service contracts</a> and agreed-upon rate structures, the first such complaint on the issue of service contract fulfillment. MCS eventually entered into a settlement with Cosco.Food importer MSRF alleged in 2022 that HMM and Yang Ming did not honor service contracts that forced the shipper into the more expensive spot market. An FMC administrative law judge found <a href="https://www.joc.com/article/fmc-judge-rules-in-favor-of-hmm-in-rolled-cargo-complaint-5220361">HMM did try to accommodate MSRF’s cargo</a> by renegotiating contracts, while Yang Ming eventually settled with the shipper. Prior to the two recent filings, the largest complaints about refusal of service have come from Bed Bath &amp; Beyond. The bankrupt retailer alleged in <a href="https://www.joc.com/article/bed-bath-beyond-files-fmc-complaint-against-yang-ming-in-capacity-dispute-5220648">two complaints from 2023</a> that OOCL and Yang Ming caused a combined $40 million in damages for their alleged refusal to provide sufficient vessel space under existing contracts. The two cases are still pending. The alleged violations occurred before the June 2022 implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22), which prohibits ocean carriers from <a href="https://www.joc.com/article/fmc-refusal-of-service-rule-risks-overreacting-to-pandemic-market-5216058">“unreasonable refusals” of cargo space to shippers</a>. In July 2024, the FMC published its final rules on how it would treat instances where carriers refused cargo space to customers. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Two US shippers, including the parent company of retailer Crate & Barrel, want the Federal Maritime Commission (FMC) to investigate ocean carriers for not providing enough vessel space during the pandemic surge, alleging they also extracted surcharges and higher rates for previously agreed-upon container volumes in violation of US shipping law and forced the shippers into the then-costly spot market. The complaints are a further shot across the bow on the enforceability of service contracts and whether service refusals for some customers were a legitimate response to overwhelming demand during the COVID-19 era. In a pair of complaints published by FMC last week, Euromarket Designs, the parent of Crate & Barrel, and housewares and furniture distributor Nielsen & Bainbridge both allege that a host of ocean carriers failed to honor service contracts with the two shippers between 2020 and 2022, resulting in delays and a shortfall in expected cargo volumes. Instead, the shippers claim that carriers sought surcharges for getting their allocated cargo on a ship. All in, Euromarket said its freight bills with Mediterranean Shipping Co., HMM and Ocean Network Express (ONE) increased $5.5 million due to surcharges and higher rates. Nielsen & Bainbridge said it paid $4 million more to ONE, OOCL and Evergreen Line for carrying cargo under its existing contracts. Even with the premiums, the two shippers said they were not able to get all the space they required during the 2020–22 service years. As a result, they were forced into the spot market where they say they paid a combined $76.5 million for capacity they expected to get under their service contracts. Nielsen & Bainbridge filed for bankruptcy last year, turning itself over to private equity lenders KKR & Co. and Silver Point Capital. The company said in its filing the higher freight costs “significantly contributed” to its bankruptcy. Along with an FMC investigation, the complainants asked for reparations from the carriers for the alleged violations. Representatives of the carriers did not immediately respond to the allegations. Similar complaints lobbed at carriers The twin complaints mirror similar ones filed in the wake of the pandemic-era container surge alleging refusal of service by carriers, with those cases having mixed success. MCS Industries, another home goods importer, alleged in 2021 that MSC and Cosco Shipping failed to honor service contracts and agreed-upon rate structures, the first such complaint on the issue of service contract fulfillment. MCS eventually entered into a settlement with Cosco. Food importer MSRF alleged in 2022 that HMM and Yang Ming did not honor service contracts that forced the shipper into the more expensive spot market. An FMC administrative law judge found HMM did try to accommodate MSRF’s cargo by renegotiating contracts, while Yang Ming eventually settled with the shipper. Prior to the two recent filings, the largest complaints about refusal of service have come from Bed Bath & Beyond. The bankrupt retailer alleged in two complaints from 2023 that OOCL and Yang Ming caused a combined $40 million in damages for their alleged refusal to provide sufficient vessel space under existing contracts. The two cases are still pending. The alleged violations occurred before the June 2022 implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22), which prohibits ocean carriers from “unreasonable refusals” of cargo space to shippers . In July 2024, the FMC published its final rules on how it would treat instances where carriers refused cargo space to customers. Contact Michael Angell at michael.angell@spglobal.com .

Two US shippers latest to allege carriers bumped contract cargo to spot market

<div class="phx-topic abstract-wrapper">With the president-elect looking to unwind some Biden administration policies, US port operators want to ensure that maritime transportation funding will not be unduly affected.</div>

With the president-elect looking to unwind some Biden administration policies, US port operators want to ensure that maritime transportation funding will not be unduly affected.

<div class="phx-topic">US ports on Wednesday laid out legislative priorities for the incoming Trump administration and new Congress that include continued federal spending for maritime transportation and navigation. While many of the priorities of the American Association of Port Authorities (AAPA) align with the president-elect’s campaign pledges, issues such as tariffs and clean energy funding at ports may face more challenges. AAPA said it met with Trump’s transition team and <a href="https://www.joc.com/article/former-congressman-tv-host-gets-trumps-nod-to-lead-dot-5820698">US Department of Transportation nominee Sean Duffy</a> to discuss its policy agenda for 2025. Among the group’s asks are permitting reform, easing restrictions on liquefied natural gas (LNG) development and reducing restrictions on vessel speed. AAPA said one of its top priorities is infrastructure spending. It asked Congress “not [to] rescind infrastructure spending” from the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL), two hallmark pieces of legislation from the outgoing Biden administration. BIL earmarked $17 billion specifically for ports through 2026, with the largest portion of that going to the US Army Corps of Engineers for maintenance of coastal and inland waterways. Some $2.25 billion of that law was funneled into the Port Infrastructure Development Program (PIDP), which has already issued $2 billion in grants since the BIL’s passage. The AAPA also asked that <a href="https://www.joc.com/article/port-nola-receives-more-federal-funds-for-proposed-container-terminal-5219974">other funding programs for ports</a>, <a href="https://www.joc.com/article/federal-grant-to-boost-baltimores-on-dock-rail-capacity-5242949">intermodal rail</a>, and <a href="https://www.joc.com/article/dot-offers-44-million-for-ny-nj-port-road-project-5249533">roads</a> be maintained. While Trump has not specifically addressed the BIL he has targeted the $3.5 trillion Inflation Reduction Act (IRA), saying in September he would “rescind all unspent funds” from the law. <a href="https://www.joc.com/article/project-cargo-optimism-buffeted-by-policy-unpredictability-5917316">Offshore wind</a>, and <a href="https://www.joc.com/article/offshore-project-delivers-virginia-cargo-windfall-5780771">breakbulk ports</a> by extension, expect to take the biggest hit from any change in the IRA. But container ports also <a href="https://www.joc.com/article/us-ports-plan-upgrades-to-electric-yard-equipment-after-securing-epa-grants-5782145">availed themselves of IRA funding</a>, chiefly for replacing diesel yard equipment with electric-powered machinery and installing charging stations for electric trucks. The IRA is also expected to help fund the Biden administration’s <a href="https://www.joc.com/article/white-house-counters-risk-of-chinese-port-cranes-with-20-billion-for-us-sourcing-5200230">$20 billion push</a> to establish a US-based manufacturer of ship-to-shore cranes. The program is bolstering electric vehicle battery and auto manufacturing, which is <a href="https://www.joc.com/article/southeast-gulf-ports-expect-container-uplift-from-electric-vehicle-plants-5224276">expected to boost cargo volumes through Southeast and Gulf ports</a>. Trump’s ability to roll back the IRA, though, remains unclear. Funds that have already been pledged to ports and others are considered safe. Additionally, rescinding unspent IRA funds would require an act of Congress. Although no Republicans voted for the IRA, 18 Republican representatives <a href="https://thehill.com/policy/energy-environment/4815990-mike-johnson-ira-clean-energy-tax-credits/">sent a letter last year to Speaker Mike Johnson</a> asking that IRA tax credits for clean energy projects remain intact. The AAPA also joined many other business groups in opposing Trump’s plans for fresh import tariffs, arguing that higher import duties may reduce cargo volumes and affect port revenues. “[But] any existing and expanded tariff revenue should be used to fund port infrastructure, which would strengthen our supply chains and have a deflationary effect on the economy,” the AAPA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ports on Wednesday laid out legislative priorities for the incoming Trump administration and new Congress that include continued federal spending for maritime transportation and navigation. While many of the priorities of the American Association of Port Authorities (AAPA) align with the president-elect’s campaign pledges, issues such as tariffs and clean energy funding at ports may face more challenges. AAPA said it met with Trump’s transition team and US Department of Transportation nominee Sean Duffy to discuss its policy agenda for 2025. Among the group’s asks are permitting reform, easing restrictions on liquefied natural gas (LNG) development and reducing restrictions on vessel speed. AAPA said one of its top priorities is infrastructure spending. It asked Congress “not [to] rescind infrastructure spending” from the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL), two hallmark pieces of legislation from the outgoing Biden administration. BIL earmarked $17 billion specifically for ports through 2026, with the largest portion of that going to the US Army Corps of Engineers for maintenance of coastal and inland waterways. Some $2.25 billion of that law was funneled into the Port Infrastructure Development Program (PIDP), which has already issued $2 billion in grants since the BIL’s passage. The AAPA also asked that other funding programs for ports , intermodal rail , and roads be maintained. While Trump has not specifically addressed the BIL he has targeted the $3.5 trillion Inflation Reduction Act (IRA), saying in September he would “rescind all unspent funds” from the law. Offshore wind , and breakbulk ports by extension, expect to take the biggest hit from any change in the IRA. But container ports also availed themselves of IRA funding , chiefly for replacing diesel yard equipment with electric-powered machinery and installing charging stations for electric trucks. The IRA is also expected to help fund the Biden administration’s $20 billion push to establish a US-based manufacturer of ship-to-shore cranes. The program is bolstering electric vehicle battery and auto manufacturing, which is expected to boost cargo volumes through Southeast and Gulf ports . Trump’s ability to roll back the IRA, though, remains unclear. Funds that have already been pledged to ports and others are considered safe. Additionally, rescinding unspent IRA funds would require an act of Congress. Although no Republicans voted for the IRA, 18 Republican representatives sent a letter last year to Speaker Mike Johnson asking that IRA tax credits for clean energy projects remain intact. The AAPA also joined many other business groups in opposing Trump’s plans for fresh import tariffs, arguing that higher import duties may reduce cargo volumes and affect port revenues. “[But] any existing and expanded tariff revenue should be used to fund port infrastructure, which would strengthen our supply chains and have a deflationary effect on the economy,” the AAPA said. Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

US ports urge Trump, Congress to keep funds in place but tariffs at bay

<div class="phx-topic abstract-wrapper">The decline reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased.</div>

The decline reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased.

<div class="phx-topic">Taiwan's Big Three container lines saw an accelerating decline in revenues over the last six months, although they remain significantly higher than monthly revenues in 2023, filings this week with the Taiwan stock exchange show. Figures from Evergreen Marine, Taiwan’s largest container line, show monthly revenues dropped 30% between the peak in July and December. Yang Ming Marine Transport saw a similar pattern, with monthly revenues falling 32% between July and December, while intra-Asia-focused Wan Hai Lines saw a 28% drop in the same period. The slump reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased. The Shanghai Containerized Freight Index (SCFI), which measures spot container rates on a basket of trades including the trans-Pacific from Shanghai, plunged 43% in the third quarter alone, the biggest third-quarter drop since 2022. That followed an early peak season as shippers forward booked shipments to offset port congestion and voyage delays and the threat of disruption due to industrial action by dockworkers on the US East and Gulf coasts in October. “With the end of the US East [and Gulf] coast port strike, concerns about supply chain disruptions ... eased, leading to increased competitive pressure in the market,” Yang Ming said in market comments about the fourth quarter. Evergreen and Wan Hai Lines did see a slight uptick in December revenues from November on the back of higher freight rates ahead of the Lunar New Year holidays. Overall, Evergreen saw monthly revenues slide from $1.6 billion in July to $1.1 billion in December, stock exchange filings show. Total revenues for the year were $14 billion, up 68% compared with $8.4 billion in 2023. Yang Ming reported monthly revenues of $770 million in July, falling to $521 million in December. But revenues for all of 2024 totaled $6.7 billion, up 58% from $4.2 billion in the year prior. Similarly, Wan Hai Lines recorded revenues of $608 million in July compared with $435 million in December. Full-year revenue of $4.9 billion was up 62% from $3 million in 2023. Other carriers are expected to report a similar slide in revenues after rates peaked in the middle of last year. <a href="https://www.joc.com/article/cosco-forecasts-95-jump-in-2024-net-profit-on-robust-volumes-freight-rates-5920588">OOCL on Friday</a> said revenues fell to $2.5 billion in the fourth quarter, despite an increase in liftings, from $3 billion in the third quarter. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Taiwan's Big Three container lines saw an accelerating decline in revenues over the last six months, although they remain significantly higher than monthly revenues in 2023, filings this week with the Taiwan stock exchange show. Figures from Evergreen Marine, Taiwan’s largest container line, show monthly revenues dropped 30% between the peak in July and December. Yang Ming Marine Transport saw a similar pattern, with monthly revenues falling 32% between July and December, while intra-Asia-focused Wan Hai Lines saw a 28% drop in the same period. The slump reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased. The Shanghai Containerized Freight Index (SCFI), which measures spot container rates on a basket of trades including the trans-Pacific from Shanghai, plunged 43% in the third quarter alone, the biggest third-quarter drop since 2022. That followed an early peak season as shippers forward booked shipments to offset port congestion and voyage delays and the threat of disruption due to industrial action by dockworkers on the US East and Gulf coasts in October. “With the end of the US East [and Gulf] coast port strike, concerns about supply chain disruptions ... eased, leading to increased competitive pressure in the market,” Yang Ming said in market comments about the fourth quarter. Evergreen and Wan Hai Lines did see a slight uptick in December revenues from November on the back of higher freight rates ahead of the Lunar New Year holidays. Overall, Evergreen saw monthly revenues slide from $1.6 billion in July to $1.1 billion in December, stock exchange filings show. Total revenues for the year were $14 billion, up 68% compared with $8.4 billion in 2023. Yang Ming reported monthly revenues of $770 million in July, falling to $521 million in December. But revenues for all of 2024 totaled $6.7 billion, up 58% from $4.2 billion in the year prior. Similarly, Wan Hai Lines recorded revenues of $608 million in July compared with $435 million in December. Full-year revenue of $4.9 billion was up 62% from $3 million in 2023. Other carriers are expected to report a similar slide in revenues after rates peaked in the middle of last year. OOCL on Friday said revenues fell to $2.5 billion in the fourth quarter, despite an increase in liftings, from $3 billion in the third quarter. Contact Keith Wallis at keithwallis@hotmail.com .

Taiwan’s Big Three carriers see 30% slide in H2 monthly revenues after rate slump

<div class="phx-topic abstract-wrapper">The pricing move means a general rate increase planned by carriers for Jan. 15 will not be implemented, forwarders say, because demand is not sufficient to support another boost.</div>

The pricing move means a general rate increase planned by carriers for Jan. 15 will not be implemented, forwarders say, because demand is not sufficient to support another boost.

<div class="phx-topic">Most ocean carriers on the eastbound trans-Pacific are extending their current spot rates through the end of January, a sign that liners are losing pricing power even before the trade enters its weakest month of the year. Three of those carriers — including Hapag-Lloyd — are even taking the uncommon step of offering customers guaranteed rates into mid-February, sources say. Those pricing moves mean a general rate increase (GRI) planned by carriers for Jan. 15 will not be implemented, forwarders told the Journal of Commerce, because demand, while strong enough now to support the current rate level, is not sufficient to support another boost. “We’re not only getting two-week [guaranteed] rates, we’re [also] getting 30-day rates to Feb. 15,” said Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International. The fact that Hapag-Lloyd and two smaller lines that sources identified as Wan Hai and SM Lines have extended their rates for a full month to mid-February is especially significant because carriers normally guarantee rates for only two weeks. The advanced undercutting suggests carriers expect capacity to outpace demand even more in the coming month, further eroding pricing power. <h3>Lunar New Year factory closures </h3>The weakening market is driven by the reality that many factories in Asia will soon close for a week or two for the annual Lunar New Year holiday that begins Jan. 29. By guaranteeing spot rates through the end of the month, carriers are attempting to build “roll pools” of containers at Asian load ports to carry them into February, said James Caradonna, executive vice president at the forwarder M&amp;R Spedag Group. “Space is still OK, but some carriers are not as full as others,” Caradonna said, adding some carriers are willing to provide customers the space they want even if they exceed the minimum quantity commitment (MQC) in their contracts. Carriers confirm that with the Lunar New Year holidays approaching, further rate hikes are unlikely. “Rates are coming down pretty fast to the West Coast,” a carrier executive told the Journal of Commerce. A second carrier source acknowledged: “It seems like rates have crested and are drifting lower.” Spot rates from North Asia to the West Coast were $4,700 per FEU as of Jan. 13, down 10% on the week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. East Coast rates of $6,000 were down 7% from last week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Customers also have access to discounts provided by so-called “bullet” rates, which are special commodity- or trade lane-specific rates that are lower than the posted spot rates and freight-all-kinds (FAK) rates paid by forwarders. “The promotional rates are starting to proliferate,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. Bookings for shipments into February have peaked and will only decline further, he said, adding special rates to the West Coast are in the low $4,000s. An industry consultant who did not want to be identified said the fact that some carriers are extending current spot rates into mid-February indicates the drop in demand is accelerating. And that means some customers may choose to delay bookings of non-essential merchandise to see if spot rates decline further during the factory closures in Asia, the source said. Now that the International Longshoremen’s Association (ILA) has reached a tentative contract agreement with East and Gulf coast employees, <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">averting a second strike</a>, shippers are focusing primarily on what the tariff policy of President-elect Donald Trump will be after he takes office Jan. 20. If the higher tariffs Trump has threatened do not take effect on day one of the new administration but are staggered into the spring and summer, the eastbound trans-Pacific will experience a “massive frontloading” of imports, McElroy said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Most ocean carriers on the eastbound trans-Pacific are extending their current spot rates through the end of January, a sign that liners are losing pricing power even before the trade enters its weakest month of the year. Three of those carriers — including Hapag-Lloyd — are even taking the uncommon step of offering customers guaranteed rates into mid-February, sources say. Those pricing moves mean a general rate increase (GRI) planned by carriers for Jan. 15 will not be implemented, forwarders told the Journal of Commerce, because demand, while strong enough now to support the current rate level, is not sufficient to support another boost. “We’re not only getting two-week [guaranteed] rates, we’re [also] getting 30-day rates to Feb. 15,” said Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International. The fact that Hapag-Lloyd and two smaller lines that sources identified as Wan Hai and SM Lines have extended their rates for a full month to mid-February is especially significant because carriers normally guarantee rates for only two weeks. The advanced undercutting suggests carriers expect capacity to outpace demand even more in the coming month, further eroding pricing power. Lunar New Year factory closures The weakening market is driven by the reality that many factories in Asia will soon close for a week or two for the annual Lunar New Year holiday that begins Jan. 29. By guaranteeing spot rates through the end of the month, carriers are attempting to build “roll pools” of containers at Asian load ports to carry them into February, said James Caradonna, executive vice president at the forwarder M&R Spedag Group. “Space is still OK, but some carriers are not as full as others,” Caradonna said, adding some carriers are willing to provide customers the space they want even if they exceed the minimum quantity commitment (MQC) in their contracts. Carriers confirm that with the Lunar New Year holidays approaching, further rate hikes are unlikely. “Rates are coming down pretty fast to the West Coast,” a carrier executive told the Journal of Commerce. A second carrier source acknowledged: “It seems like rates have crested and are drifting lower.” Spot rates from North Asia to the West Coast were $4,700 per FEU as of Jan. 13, down 10% on the week, according to Platts, a sister company of the Journal of Commerce within S&P Global. East Coast rates of $6,000 were down 7% from last week. Customers also have access to discounts provided by so-called “bullet” rates, which are special commodity- or trade lane-specific rates that are lower than the posted spot rates and freight-all-kinds (FAK) rates paid by forwarders. “The promotional rates are starting to proliferate,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. Bookings for shipments into February have peaked and will only decline further, he said, adding special rates to the West Coast are in the low $4,000s. An industry consultant who did not want to be identified said the fact that some carriers are extending current spot rates into mid-February indicates the drop in demand is accelerating. And that means some customers may choose to delay bookings of non-essential merchandise to see if spot rates decline further during the factory closures in Asia, the source said. Now that the International Longshoremen’s Association (ILA) has reached a tentative contract agreement with East and Gulf coast employees, averting a second strike , shippers are focusing primarily on what the tariff policy of President-elect Donald Trump will be after he takes office Jan. 20. If the higher tariffs Trump has threatened do not take effect on day one of the new administration but are staggered into the spring and summer, the eastbound trans-Pacific will experience a “massive frontloading” of imports, McElroy said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

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