<div class="phx-topic abstract-wrapper">Two major air cargo carriers announced this week plans to move their hubs to new locations in the Mi</div>

Two major air cargo carriers announced this week plans to move their hubs to new locations in the Mi

<div>Two major air cargo carriers announced this week plans to move their hubs to new locations in the Midwest, enabling each to expand their operations significantly.American International Freight, which operates an overnight service catering to domestic freight forwarders, will move in May to Terre Haute, Ind., from Willow Run International Airport in Ypsilanti, Mich.Bob Hunter, AIF president, said it will be able to double its capacity by moving to Terre Haute. The carrier currently operates 12 aircraft to 18 cities but will expand its network to 18 jets serving 31 cities once it makes the move, he said.Meanwhile, Southern Air...

Two major air cargo carriers announced this week plans to move their hubs to new locations in the Midwest, enabling each to expand their operations significantly. American International Freight, which operates an overnight service catering to domestic freight forwarders, will move in May to Terre Haute, Ind., from Willow Run International Airport in Ypsilanti, Mich.Bob Hunter, AIF president, said it will be able to double its capacity by moving to Terre Haute. The carrier currently operates 12 aircraft to 18 cities but will expand its network to 18 jets serving 31 cities once it makes the move, he said. Meanwhile, Southern Air Transport, which primarily operates as a charter carrier, will relocate from Miami to Rickenbacker International Airport in Columbus, Ohio. Lawrence Garrison, executive director of the Rickenbacker Port Authority, said Southern Air plans to operate freighters between the hub and the Far East. The carrier also will use it for some maintenance operations, he said. Gov. George Voinovich of Ohio was scheduled to announce the move at a press conference Thursday afternoon. Limited Inc., the nation's largest retailer, is based in Columbus, a fact that undoubtedly contributed in large part to Southern Air's decision, said Brian Clancy, a cargo analyst with MergeGlobal Inc., an Alexandria, Va., consulting firm. During the peak fall shipping season, as many as 24 747 freighters arrive each week in Columbus with imported cargo destined for retail shelves around the country. AIF's expansion will benefit domestic forwarders who have become increasingly dependent on AIF to move their cargo because of cutbacks in widebody lift by passenger airlines. "They're our primary carrier for next day overnight freight," said Dave Pillets, vice president of operations at Pilot Air Freight of Lima, Pa. Terms of the agreement have not yet been finalized, "but this is a done deal," Mr. Hunter said in a telephone interview Thursday. The 7,600-foot runway at Willow Run was too short for AIF to operate at full capacity. It had planned to move to Toledo, Ohio, in October, but that would have required the construction of a new ramp to serve the hub building and hangar. Hulman Regional Airport in Terre Haute has a 9,000-ft. runway and a ramp large enough to accommodate AIF's expansion plans, Mr. Hunter said. The airport also serves as the hub for Roadway Global Air, an integrated air carrier that began service in September 1993. Both Mr. Hunter and Donald Berger, RGA president, said the two companies have no plans to merge or form a joint venture. "We're glad they're coming. The more aircraft operating there, the better," he said. The two carriers do not compete because AIF sells to forwarders, while RGA sells directly to shippers. "We'll have to see what the future brings in terms of cooperation," he added. RGA, a subsidiary of Roadway Services Inc., operates 14 aircraft. Mr. Hunter declined to discuss prospects for cooperation, but said, "We intend to be a good neighbor." Freight forwarders hailed the AIF plan. "We can only expect good things to come of it," said Brandon Fried, chief operating officer of Adcom Express Worldwide of Alexandria, Va. Adcom currently books some 15 percent of its traffic with AIF, but Mr. Fried said he expects that figure to reach at least 30 percent as AIF expands its service. Southern Air officials could not be reached for comment, but wire service reports quoted Bill Langton, its president, as saying it was attracted by the twin 10,000-foot-long runways at Rickenbacker and the availability of land for development at the sprawling former Air Force base. One of the busiest carriers at Columbus is Polar Air Cargo, a Long Beach, Calif., all-cargo airline that initially used Southern Air to operate Polar's chartered 747 freighters. Polar took over its own flight operations last fall, but the experience probably encouraged Southern Air's move. Over the past year, it has acquired two 747 freighters formerly owned by Japan Airlines.

2 MAJOR CARRIERS SET TO RELOCATE MIDWESTERN HUBS AIF, SOUTHERN AIR PLAN BIG EXPANSIONS

<div class="phx-topic abstract-wrapper">Inclement weather, the lingering effects of labor disruptions and a January surge in imports contributed to the fifth consecutive month of excessive rail dwells at Canada’s largest port.</div>

Inclement weather, the lingering effects of labor disruptions and a January surge in imports contributed to the fifth consecutive month of excessive rail dwells at Canada’s largest port.

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<div class="phx-topic">Challenged by severe winter weather in the Canadian interior and a backlog of containers from longshore labor disruption in late 2024, marine terminal operators at the Port of Vancouver continue to grapple with a problem that seems ever-present: extended dwell times for containers moving inland by rail. Railroads normally run fewer, shorter trains during Canadian winters, but this season’s weather restrictions were more severe than usual, which has caused eastbound containers to pile up on the docks over the past three months. “Inclement weather across much of Canada in February, including a deep freeze in the prairies and a severe snowstorm in Ontario, affected rail turnaround times and reduced railcar availability on the West Coast,” a spokesperson for the Port of Vancouver told the Journal of Commerce. “Shorter trains mean more people and equipment are required to move the same amount of goods,” a spokesperson for Canadian National Railway said. The average rail container dwell time in March at Vancouver’s four container terminals was 7.7 days. While that was marginally down from 8.5 days in February and 8.3 days in January, according to port statistics, it’s well above the four to five days terminal operators on North America’s West Coast say they can live with in order to keep rail dwells at their facilities manageable. Infor Nexus pegged March rail dwells at seven days, down from nearly 10 days in February.Vancouver’s dwell times have been above five days since last November. <h3>Multiple factors contribute to congestion </h3>In addition to the weather issues, the port spokesperson blamed the rail container backlogs on <a href="https://www.joc.com/article/bc-container-ports-set-for-shutdown-after-foremen-begin-strike-5785499">longshore labor woes in Vancouver last November</a>. That came amid an import surge at North America’s West Coast ports as retailers diverted merchandise from US East and Gulf Coast ports during the <a href="https://www.joc.com/article/ila-usmx-contract-talks-set-for-jan-7-restart-ahead-of-strike-deadline-sources-5913854">prolonged contract negotiations between the International Longshoremen’s Association and maritime employers.</a> Laden import containers in January at Vancouver totaled 239,454 TEUs, up from 201,023 TEUs in January 2024, according to port statistics. However, imports dropped to 183,808 TEUs in February compared to 226,612 TEUs in February 2024. February is traditionally the slowest month of the year in the eastbound trans-Pacific due to factory shutdowns in Asia for the annual Lunar New Year holidays. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0f5acedd-9b85-4984-9584-8948f0f1dd09"></dynamic-object></div>Importers in Canada and the US say rail congestion at Vancouver is a given during the peak shipping season in August through October when the port and inland rail networks must handle greater volumes than they are designed to handle. But Vancouver has struggled with extended rail dwells over the past several months, well beyond the end of the traditional peak season. A forwarder said it has taken him as long as 30 days to retrieve some of his containers from Vancouver, saying whether it’s a weather event or labor action or a peak season surge in imports, excessive rail container dwell times are a condition he’s come to expect at the port, calling it “business as usual.” Stakeholders, however, say they see signs of improvement. A spokesperson for Canadian Pacific Kansas City Southern said its rail container dwell times are improving at the Vanterm and Centerm terminals in Vancouver. According to the port’s website, CPKC’s rail container dwell at Vanterm on Monday was three to five days, with the average Centerm dwell at zero to three days. Still, CPKC’s dwells were seven days or longer at the Deltaport terminal. “Driven by dwell improvements at Centerm and Vanterm terminals, we are seeing elevated volumes that we are now moving with improved network and overall supply chain performance following weeks of sustained extreme winter temperatures that impacted operations across the Canadian supply chain,” the CPKC spokesman said. CN is targeting later this spring for a return to normal at its operations. “Assuming no further weather impacts, CN anticipates the trend line for container dwell to continue downward through the early spring, getting back to more normal dwell times by mid-late spring,” the CN spokesperson said. The Vancouver spokesperson said as April progresses, rail business is returning to seasonal norms, “with on-dock volumes and dwell times both trending positively.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a></div>

Challenged by severe winter weather in the Canadian interior and a backlog of containers from longshore labor disruption in late 2024, marine terminal operators at the Port of Vancouver continue to grapple with a problem that seems ever-present: extended dwell times for containers moving inland by rail. Railroads normally run fewer, shorter trains during Canadian winters, but this season’s weather restrictions were more severe than usual, which has caused eastbound containers to pile up on the docks over the past three months. “Inclement weather across much of Canada in February, including a deep freeze in the prairies and a severe snowstorm in Ontario, affected rail turnaround times and reduced railcar availability on the West Coast,” a spokesperson for the Port of Vancouver told the Journal of Commerce. “Shorter trains mean more people and equipment are required to move the same amount of goods,” a spokesperson for Canadian National Railway said. The average rail container dwell time in March at Vancouver’s four container terminals was 7.7 days. While that was marginally down from 8.5 days in February and 8.3 days in January, according to port statistics, it’s well above the four to five days terminal operators on North America’s West Coast say they can live with in order to keep rail dwells at their facilities manageable. Infor Nexus pegged March rail dwells at seven days, down from nearly 10 days in February. Vancouver’s dwell times have been above five days since last November. Multiple factors contribute to congestion In addition to the weather issues, the port spokesperson blamed the rail container backlogs on longshore labor woes in Vancouver last November . That came amid an import surge at North America’s West Coast ports as retailers diverted merchandise from US East and Gulf Coast ports during the prolonged contract negotiations between the International Longshoremen’s Association and maritime employers. Laden import containers in January at Vancouver totaled 239,454 TEUs, up from 201,023 TEUs in January 2024, according to port statistics. However, imports dropped to 183,808 TEUs in February compared to 226,612 TEUs in February 2024. February is traditionally the slowest month of the year in the eastbound trans-Pacific due to factory shutdowns in Asia for the annual Lunar New Year holidays. Importers in Canada and the US say rail congestion at Vancouver is a given during the peak shipping season in August through October when the port and inland rail networks must handle greater volumes than they are designed to handle. But Vancouver has struggled with extended rail dwells over the past several months, well beyond the end of the traditional peak season. A forwarder said it has taken him as long as 30 days to retrieve some of his containers from Vancouver, saying whether it’s a weather event or labor action or a peak season surge in imports, excessive rail container dwell times are a condition he’s come to expect at the port, calling it “business as usual.” Stakeholders, however, say they see signs of improvement. A spokesperson for Canadian Pacific Kansas City Southern said its rail container dwell times are improving at the Vanterm and Centerm terminals in Vancouver. According to the port’s website, CPKC’s rail container dwell at Vanterm on Monday was three to five days, with the average Centerm dwell at zero to three days. Still, CPKC’s dwells were seven days or longer at the Deltaport terminal. “Driven by dwell improvements at Centerm and Vanterm terminals, we are seeing elevated volumes that we are now moving with improved network and overall supply chain performance following weeks of sustained extreme winter temperatures that impacted operations across the Canadian supply chain,” the CPKC spokesman said. CN is targeting later this spring for a return to normal at its operations. “Assuming no further weather impacts, CN anticipates the trend line for container dwell to continue downward through the early spring, getting back to more normal dwell times by mid-late spring,” the CN spokesperson said. The Vancouver spokesperson said as April progresses, rail business is returning to seasonal norms, “with on-dock volumes and dwell times both trending positively.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com

Surface

Container Shipping News

Port News

Rail News

North American ports

North-American rail

Supply chain

Vancouver still dealing with extended rail container dwell times

<div class="phx-topic abstract-wrapper">Risks in the containerized supply chain are only growing, and futures provide a potentially viable risk mitigation tool, writes Peter Tirschwell.</div>

Risks in the containerized supply chain are only growing, and futures provide a potentially viable risk mitigation tool, writes Peter Tirschwell.

<div class="phx-topic">The industry is about to hear a lot more about futures trading in container shipping – again. An idea born with fanfare around the time of the 2008-09 financial crisis on the premise that container shipping is a commodity awaiting the inevitable conversion into a financial market gained no traction then and laid dormant for years. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5979850_0.1.jpg"></img></div>Then came COVID-19 and the mega-disruptions that followed, together with the recent successful launch of a container freight futures market in Shanghai. The value of contracts traded on a weekly basis on the Shanghai Futures Exchange (SHFE) is many times the value of the underlying freight rate, despite virtually no forwarders, beneficial cargo owners (BCOs) or carriers participating. Only traders. Now, fresh attempts will be made to establish futures markets on Western exchanges, with the idea of de-risking container shipping for forwarders, BCOs and carriers. For BCOs, the premise, at least in theory, makes sense: remove price as a factor putting stress on contracts and carrier relationships by having deals ride the ups and downs of index-linked pricing, thus ensuring contract prices don’t fall out of line with spot prices and put space allocations at risk. With a liquid futures market to trade on, the BCO can then ensure price predictability by buying and selling futures against its index-linked contract pricing. New bets are being placed that this is coming. The New York Shipping Exchange (NYSHEX) <a href="https://www.joc.com/article/nyshex-says-will-launch-ocean-freight-rate-indexes-next-year-5820643">completed a new funding round in November</a> with participation by Goldman Sachs and the Intercontinental Exchange (ICE), based on plans to create a new set of tradeable indices. Contracts based on Freightos indices are already traded on the CME and Singapore Exchange (SGX) markets, though volumes are limited. The Shanghai futures market is based on a tradeable version of the weekly Shanghai Containerized Freight Index called the SCFI-S. The promotion of container freight indices goes beyond creating price transparency for the market and seeing the indices used as the basis for index-linked contracts. It is ultimately to foster the additional step of having the indices be used as the basis for futures trading, with fees attached. Is the conservative shipping industry ready to take that step? Risks in the containerized supply chain are only growing, and futures provide a potentially viable risk mitigation tool. It has long been the case that contracts, space commitments, relationships and trust still come under extreme stress when spot and contract rates diverge, as analysts believe could happen this year if the spot market continues to plunge due to tariffs, recession and excess capacity. For the carrier, the chief benefit could not be more core: using hedging to reduce volatility in its core freight rate revenue stream, eliminate boom-and-bust cycles and create credibility with financial markets. A carrier would sell space in the future, locking in future pricing today. That would enable it to focus on service, which is a competitive battleground among carriers in addition to price. The benefits are similar for non-vessel operating common carriers (NVOs) -- more stable relationships with both BCOs and carriers and less volatile revenues. <h3>Wide gulf to overcome </h3>But even after many years of the concept being bandied about, a wide gulf remains between the shipping industry and the financial players promoting freight derivatives, to the point there is no guarantee futures, despite the potential benefits, will take hold in container shipping. Why? There are many reasons, some practical, others visceral. Carriers have cited multiple issues as to why they distrust the concept, including untested counterparty risk, lack of liquidity and distrust in index methodology. Their hesitation goes deeper, rejecting the idea their industry is a commodity versus a service. At an even deeper level lies the question behind who will control their market, carriers or banks? Carriers know the answer to that one. “(I) don’t see a market for that developing any time soon,” Hapag-Lloyd CEO Rolf-Habben Jansen told the Journal of Commerce in 2023. Another factor that gives doubters pause is the potential for market manipulation based on factors other than supply and demand. Carriers have grown more assertive in managing capacity through blank sailings, slow steaming, idling and other means, which are legal even when coordinated within vessel alliances as the goal is to adjust capacity to meet diminished demand as any business is entitled to do. But that can still have an indirect impact on pricing, and thus futures prices. For BCOs, a key to adaption will be to get CFOs involved. They are the ones within the company often charged with hedging risk in areas like foreign currency, interest rates and energy prices, with risk management often reporting up to them. In the pre-COVID era of only periodic supply chain disruptions, hedging container freight risk was considered an exotic outlier. Maybe no longer. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com.</a></div>

The industry is about to hear a lot more about futures trading in container shipping – again. An idea born with fanfare around the time of the 2008-09 financial crisis on the premise that container shipping is a commodity awaiting the inevitable conversion into a financial market gained no traction then and laid dormant for years. Then came COVID-19 and the mega-disruptions that followed, together with the recent successful launch of a container freight futures market in Shanghai. The value of contracts traded on a weekly basis on the Shanghai Futures Exchange (SHFE) is many times the value of the underlying freight rate, despite virtually no forwarders, beneficial cargo owners (BCOs) or carriers participating. Only traders. Now, fresh attempts will be made to establish futures markets on Western exchanges, with the idea of de-risking container shipping for forwarders, BCOs and carriers. For BCOs, the premise, at least in theory, makes sense: remove price as a factor putting stress on contracts and carrier relationships by having deals ride the ups and downs of index-linked pricing, thus ensuring contract prices don’t fall out of line with spot prices and put space allocations at risk. With a liquid futures market to trade on, the BCO can then ensure price predictability by buying and selling futures against its index-linked contract pricing. New bets are being placed that this is coming. The New York Shipping Exchange (NYSHEX) completed a new funding round in November with participation by Goldman Sachs and the Intercontinental Exchange (ICE), based on plans to create a new set of tradeable indices. Contracts based on Freightos indices are already traded on the CME and Singapore Exchange (SGX) markets, though volumes are limited. The Shanghai futures market is based on a tradeable version of the weekly Shanghai Containerized Freight Index called the SCFI-S. The promotion of container freight indices goes beyond creating price transparency for the market and seeing the indices used as the basis for index-linked contracts. It is ultimately to foster the additional step of having the indices be used as the basis for futures trading, with fees attached. Is the conservative shipping industry ready to take that step? Risks in the containerized supply chain are only growing, and futures provide a potentially viable risk mitigation tool. It has long been the case that contracts, space commitments, relationships and trust still come under extreme stress when spot and contract rates diverge, as analysts believe could happen this year if the spot market continues to plunge due to tariffs, recession and excess capacity. For the carrier, the chief benefit could not be more core: using hedging to reduce volatility in its core freight rate revenue stream, eliminate boom-and-bust cycles and create credibility with financial markets. A carrier would sell space in the future, locking in future pricing today. That would enable it to focus on service, which is a competitive battleground among carriers in addition to price. The benefits are similar for non-vessel operating common carriers (NVOs) -- more stable relationships with both BCOs and carriers and less volatile revenues. Wide gulf to overcome But even after many years of the concept being bandied about, a wide gulf remains between the shipping industry and the financial players promoting freight derivatives, to the point there is no guarantee futures, despite the potential benefits, will take hold in container shipping. Why? There are many reasons, some practical, others visceral. Carriers have cited multiple issues as to why they distrust the concept, including untested counterparty risk, lack of liquidity and distrust in index methodology. Their hesitation goes deeper, rejecting the idea their industry is a commodity versus a service. At an even deeper level lies the question behind who will control their market, carriers or banks? Carriers know the answer to that one. “(I) don’t see a market for that developing any time soon,” Hapag-Lloyd CEO Rolf-Habben Jansen told the Journal of Commerce in 2023. Another factor that gives doubters pause is the potential for market manipulation based on factors other than supply and demand. Carriers have grown more assertive in managing capacity through blank sailings, slow steaming, idling and other means, which are legal even when coordinated within vessel alliances as the goal is to adjust capacity to meet diminished demand as any business is entitled to do. But that can still have an indirect impact on pricing, and thus futures prices. For BCOs, a key to adaption will be to get CFOs involved. They are the ones within the company often charged with hedging risk in areas like foreign currency, interest rates and energy prices, with risk management often reporting up to them. In the pre-COVID era of only periodic supply chain disruptions, hedging container freight risk was considered an exotic outlier. Maybe no longer. Contact Peter Tirschwell at peter.tirschwell@spglobal.com.

Transport, Trade and Regulation News

Container lines

Maritime

Near-constant disruption giving new momentum to freight futures

<div class="phx-topic abstract-wrapper">The parent company of Cosco Shipping and OOCL expects a 72% increase in Q1 net profits, but the rapidly escalating trade war between the US and China is clouding its outlook for the rest of the year.</div>

The parent company of Cosco Shipping and OOCL expects a 72% increase in Q1 net profits, but the rapidly escalating trade war between the US and China is clouding its outlook for the rest of the year.

<div class="phx-topic">Cosco Shipping Holdings, parent of Cosco Shipping and OOCL, told investors Tuesday they can expect a 72% jump in net profit in the first quarter as market growth and high rates drove up the company’s earnings. In a filing to the Hong Kong Exchange, the China state-owned group said it will report net profits of $1.81 billion, and an increase in earnings before interest and tax (EBIT) of $2.27 billion, up 66% year over year. No market outlook was provided in the filing, and Cosco made no mention of the rapidly escalating trade war between the US and China. “In the first quarter of 2025, the global cargo volume of containers maintained a certain degree of growth as compared to the same period of the previous year, and the average value of the China Containerized Freight Index (CCFI) for the first quarter also improved compared to the same period of the previous year,” the company stated. The statement was also short on details, with no revenue, volume or average rate level for the first quarter provided. A filing by subsidiary OOCL, also listed on the Hong Kong Exchange, gave more information on the strength of the container shipping market in Q1. The total volume handled in a robust quarter across its four main trade lanes was up 9.3% at 1.96 million TEUs, and total revenue increased almost 17% to $2.31 billion. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="498c54dd-0a95-436c-922e-263aa4b21cfc"></dynamic-object></div>Despite rate levels on the trans-Pacific falling steadily through the quarter, OOCL’s average revenue per TEU increased 6.9% compared to the first quarter of last year. Meanwhile, the carrier’s Asia-North America volume increased 24% year over year to 556,275 TEUs and revenue on the trade was up 22% at $895 million. Although Asia-Europe volume was down 4% at 344,257 TEUs, revenue on the westbound trade increased 2.3% to $504 million. Trans-Atlantic volume was up 8% at 135,694 TEUs and revenue grew 10.4% to $170 million, while intra-Asia/Australasia routes saw a 7.4% increase in volume to 927,203 TEUs and a 24.2% improvement in revenue of $743 million. <h3>Tariff-related uncertainty grips trans-Pacific </h3>While Cosco Shipping Holdings is on course for a highly profitable first quarter, the profit-driving trans-Pacific trade lane faces growing uncertainty for all parties in the container shipping business. “No supply chain planning is possible at moment when it comes to trade flows with the US, with shippers, forwarders and carriers forced to act from a short-term tactical perspective,” Lars Jensen, CEO and founder of Vespucci Maritime, <a href="https://www.linkedin.com/search/results/all/?heroEntityKey=urn%3Ali%3Afsd_profile%3AACoAAABT06QBma5hiHVSOND3WOHMUNYfxwswFL8&amp;keywords=Lars%20Jensen&amp;origin=ENTITY_SEARCH_HOME_HISTORY&amp;sid=dXS">wrote in a LinkedIn post Monday</a>. The US has threatened to impose additional 50% tariffs on China from Wednesday if Beijing does not remove its 34% retaliatory tariffs on the US. If imposed, that would take total US tariffs on China to 104%. "It is difficult to see China backing down, as giving in to a public ultimatum would cause a significant loss of face for the Chinese leadership,” Jensen, also a Journal of Commerce analyst, noted. “In other words, US importers getting goods from China are facing tariff uncertainty at a level beyond anything seen previously.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Cosco Shipping Holdings, parent of Cosco Shipping and OOCL, told investors Tuesday they can expect a 72% jump in net profit in the first quarter as market growth and high rates drove up the company’s earnings. In a filing to the Hong Kong Exchange, the China state-owned group said it will report net profits of $1.81 billion, and an increase in earnings before interest and tax (EBIT) of $2.27 billion, up 66% year over year. No market outlook was provided in the filing, and Cosco made no mention of the rapidly escalating trade war between the US and China. “In the first quarter of 2025, the global cargo volume of containers maintained a certain degree of growth as compared to the same period of the previous year, and the average value of the China Containerized Freight Index (CCFI) for the first quarter also improved compared to the same period of the previous year,” the company stated. The statement was also short on details, with no revenue, volume or average rate level for the first quarter provided. A filing by subsidiary OOCL, also listed on the Hong Kong Exchange, gave more information on the strength of the container shipping market in Q1. The total volume handled in a robust quarter across its four main trade lanes was up 9.3% at 1.96 million TEUs, and total revenue increased almost 17% to $2.31 billion. Despite rate levels on the trans-Pacific falling steadily through the quarter, OOCL’s average revenue per TEU increased 6.9% compared to the first quarter of last year. Meanwhile, the carrier’s Asia-North America volume increased 24% year over year to 556,275 TEUs and revenue on the trade was up 22% at $895 million. Although Asia-Europe volume was down 4% at 344,257 TEUs, revenue on the westbound trade increased 2.3% to $504 million. Trans-Atlantic volume was up 8% at 135,694 TEUs and revenue grew 10.4% to $170 million, while intra-Asia/Australasia routes saw a 7.4% increase in volume to 927,203 TEUs and a 24.2% improvement in revenue of $743 million. Tariff-related uncertainty grips trans-Pacific While Cosco Shipping Holdings is on course for a highly profitable first quarter, the profit-driving trans-Pacific trade lane faces growing uncertainty for all parties in the container shipping business. “No supply chain planning is possible at moment when it comes to trade flows with the US, with shippers, forwarders and carriers forced to act from a short-term tactical perspective,” Lars Jensen, CEO and founder of Vespucci Maritime, wrote in a LinkedIn post Monday . The US has threatened to impose additional 50% tariffs on China from Wednesday if Beijing does not remove its 34% retaliatory tariffs on the US. If imposed, that would take total US tariffs on China to 104%. "It is difficult to see China backing down, as giving in to a public ultimatum would cause a significant loss of face for the Chinese leadership,” Jensen, also a Journal of Commerce analyst, noted. “In other words, US importers getting goods from China are facing tariff uncertainty at a level beyond anything seen previously.” Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Asia-Europe

Trans-Pacific

Cosco on course for big jump in first-quarter net profit

<div class="phx-topic abstract-wrapper">The rush appears to be linked to shippers scrambling to sidestep a new 26% US import tariff on Indian goods due to kick in April 9, industry sources say.</div>

The rush appears to be linked to shippers scrambling to sidestep a new 26% US import tariff on Indian goods due to kick in April 9, industry sources say.

<div class="phx-topic">Ocean carriers on the India-US East Coast trade have reported a sudden uptick in shipper bookings and/or space inquiries in recent days, helping them push through April rate increase plans that they had been skeptical about attempting. The rush appears to be linked to shippers scrambling to sidestep a new 26% US import tariff on Indian goods due to kick in April 9, industry sources say. “There has been a surge in bookings,” a sales executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “The looming tariff exposure could have fueled that push, but we are analyzing booking data from our team.” The on-board or bill of lading date is generally considered the regulatory yardstick for tariff changes. Lending credence to that, customs authorities at major Indian ports, including air cargo docks, have been working overtime to clear outbound shipments. Ajay Sahai, director-general at the Federation of Indian Export Organizations (FIEO), noted that while cargo shipped on “direct sailings” to the US within the timeline has an exemption window from the higher rate of tariffs, it’s unclear how goods flowing via transshipment — involving multiple sailings — will be assessed. All sailings out of West India for the current week are already full, sources say. “Exporters are trying to fast-track consignments, but logistics challenges remain,” Sahai told the Journal of Commerce. “They could lay their hands only on normally available ocean capacity.” Daniel Krassenstein, global supply chain director of US-based industrial packaging manufacturer Procon Pacific, echoed the point about rushing to load cargo, saying: “US importers are hustling to get their containers with on-board sailing dates [before April 9].” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56199e2b-5df4-468f-a149-b18ae7c32e51"></dynamic-object></div>Spot rates on the India-USEC trade have popped since the US tariff announcement, with prices now at $2,150 per FEU as of April 7, up 13% over the week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. And carriers now appear even more optimistic, lining up another round of rate hikes beginning May 1, including a $1,000-per-container advisory from CMA CGM and a $500-per-box notice from Hapag-Lloyd. Contact Bency Mathew at <a href="https://www.joc.com/article/bencyvmathew@gmail.com.">bencyvmathew@gmail.com</a>.</div>

Ocean carriers on the India-US East Coast trade have reported a sudden uptick in shipper bookings and/or space inquiries in recent days, helping them push through April rate increase plans that they had been skeptical about attempting. The rush appears to be linked to shippers scrambling to sidestep a new 26% US import tariff on Indian goods due to kick in April 9, industry sources say. “There has been a surge in bookings,” a sales executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “The looming tariff exposure could have fueled that push, but we are analyzing booking data from our team.” The on-board or bill of lading date is generally considered the regulatory yardstick for tariff changes. Lending credence to that, customs authorities at major Indian ports, including air cargo docks, have been working overtime to clear outbound shipments. Ajay Sahai, director-general at the Federation of Indian Export Organizations (FIEO), noted that while cargo shipped on “direct sailings” to the US within the timeline has an exemption window from the higher rate of tariffs, it’s unclear how goods flowing via transshipment — involving multiple sailings — will be assessed. All sailings out of West India for the current week are already full, sources say. “Exporters are trying to fast-track consignments, but logistics challenges remain,” Sahai told the Journal of Commerce. “They could lay their hands only on normally available ocean capacity.” Daniel Krassenstein, global supply chain director of US-based industrial packaging manufacturer Procon Pacific, echoed the point about rushing to load cargo, saying: “US importers are hustling to get their containers with on-board sailing dates [before April 9].” Spot rates on the India-USEC trade have popped since the US tariff announcement, with prices now at $2,150 per FEU as of April 7, up 13% over the week, according to Platts, a sister company of the Journal of Commerce within S&P Global. And carriers now appear even more optimistic, lining up another round of rate hikes beginning May 1, including a $1,000-per-container advisory from CMA CGM and a $500-per-box notice from Hapag-Lloyd. Contact Bency Mathew at bencyvmathew@gmail.com .

Tariff-linked export push fuels booking boost for India-USEC sailings

<div class="phx-topic abstract-wrapper">Automakers could be hit with compensation claims if they are unable to fulfill seaborne carrier contracts amid an expected downturn in US volumes.</div>

Automakers could be hit with compensation claims if they are unable to fulfill seaborne carrier contracts amid an expected downturn in US volumes.

<div class="phx-topic">Global car carrier operators could turn to vehicle manufacturers for compensation to offset any drop in volumes into the US following the imposition of tariffs on all vehicle imports from April 2. Carriers are facing months of disruption as vehicle manufacturers assess and react to the impact on future sales and export markets after the Trump administration announced a 25% tariff on all US vehicle and auto part imports. While the tariff on vehicles went into effect April 2, the levy on components is due to be introduced on May 3.Paal Schjerven, managing director/car carriers at shipbroking house Clarksons in Oslo, told the Journal of Commerce that carriers had clauses in their customer shipping contracts that entitled them to compensation payments if shipment volumes were not met.But Lasse Kristoffersen, CEO of carrier Wallenius Wilhelmsen, has said that while customers are obliged to meet the vehicle volumes stipulated under their contracts, there are various options available if they couldn’t meet those commitments.Kristoffersen said if car makers see a reduction in volumes and either postpone shipments to the following year or shift the destination of vehicles, then Wallenius would be flexible to those changes.“We have done business with the same companies for decades,” Kristoffersen said during his company’s annual results briefing with analysts in February. “Meaning that if the product moves, we will carry it under our contract. If it doesn’t move, we will try to find a good solution with our customers.”He wouldn’t speculate about possible contract renegotiations, but added: “We don’t give away things unless we get something back, normally.”The tariffs on vehicles and key automotive parts “are expected to have immediate implications for manufacturers, consumers and markets,” a Wallenius spokesperson told the Journal of Commerce. “The tariffs, and the increasing likelihood of reciprocal measures from import countries, will likely impact global trade flows and have a long-term effect on global automotive supply chains,” the spokesperson added.<h3>Carrier earnings expected to take a hit </h3>Fearnleys Securities said the tariffs are expected to result in a drop in US imports, “negatively affecting seaborne volumes and thus also car carrier earnings.”Britain’s Jaguar Land Rover, which makes the luxury Range Rover SUV, said Saturday it would “pause” shipments to the US. And Volkswagen said Monday it would stockpile its premium Audi sedans at US ports due to tariffs.Esgian, the Oslo-headquartered maritime analyst, said car carrier tracking data showed car manufacturers had frontloaded shipments to US ports, including Brunswick, Georgia, and Baltimore, Maryland, in the first three months of the year to beat the tariff deadline. That, in turn, had created port congestion at those gateways.“We handled about 750,000 cars and light trucks last year, with approximately 641,000 of them being imports,” a spokesperson for the Port of Baltimore told the Journal of Commerce. “As with other cargoes, ultimately any tariff impacts are dependent on if shippers want to reduce or stop shipping into the United States during times of active tariffs.” Clarksons’ Schjerven would not speculate on the wider impact of tariffs on car makers and automotive suppliers, but he thought the Trump administration’s previous unpredictability over car tariffs meant the 25% levy “is a short-term fear.”After initially imposing tariffs on vehicle imports from Mexico and Canada in January, the Trump administration made the countries tariff-exempt after they retaliated, although levies were reimposed amid the global tariff measures unveiled by the White House last week.About 7.3 million imported vehicles were forecast to be sold in the US this year, equivalent to 45% of the total of 16.2 million vehicles expected to be purchased, according to industry estimates quoted by Wilhelmsen. Approximately 3.8 million were imports from Mexico, 2.6 million were from Japan and South Korea and 1 million were from Europe.With US tariffs also applying to imports of automotive components, Wilhelmsen noted 61% of the content in the 45 top vehicle models sold in the US is sourced from outside the US and Canada.Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Global car carrier operators could turn to vehicle manufacturers for compensation to offset any drop in volumes into the US following the imposition of tariffs on all vehicle imports from April 2. Carriers are facing months of disruption as vehicle manufacturers assess and react to the impact on future sales and export markets after the Trump administration announced a 25% tariff on all US vehicle and auto part imports. While the tariff on vehicles went into effect April 2, the levy on components is due to be introduced on May 3. Paal Schjerven, managing director/car carriers at shipbroking house Clarksons in Oslo, told the Journal of Commerce that carriers had clauses in their customer shipping contracts that entitled them to compensation payments if shipment volumes were not met. But Lasse Kristoffersen, CEO of carrier Wallenius Wilhelmsen, has said that while customers are obliged to meet the vehicle volumes stipulated under their contracts, there are various options available if they couldn’t meet those commitments. Kristoffersen said if car makers see a reduction in volumes and either postpone shipments to the following year or shift the destination of vehicles, then Wallenius would be flexible to those changes. “We have done business with the same companies for decades,” Kristoffersen said during his company’s annual results briefing with analysts in February. “Meaning that if the product moves, we will carry it under our contract. If it doesn’t move, we will try to find a good solution with our customers.” He wouldn’t speculate about possible contract renegotiations, but added: “We don’t give away things unless we get something back, normally.” The tariffs on vehicles and key automotive parts “are expected to have immediate implications for manufacturers, consumers and markets,” a Wallenius spokesperson told the Journal of Commerce. “The tariffs, and the increasing likelihood of reciprocal measures from import countries, will likely impact global trade flows and have a long-term effect on global automotive supply chains,” the spokesperson added. Carrier earnings expected to take a hit Fearnleys Securities said the tariffs are expected to result in a drop in US imports, “negatively affecting seaborne volumes and thus also car carrier earnings.” Britain’s Jaguar Land Rover, which makes the luxury Range Rover SUV, said Saturday it would “pause” shipments to the US. And Volkswagen said Monday it would stockpile its premium Audi sedans at US ports due to tariffs. Esgian, the Oslo-headquartered maritime analyst, said car carrier tracking data showed car manufacturers had frontloaded shipments to US ports, including Brunswick, Georgia, and Baltimore, Maryland, in the first three months of the year to beat the tariff deadline. That, in turn, had created port congestion at those gateways. “We handled about 750,000 cars and light trucks last year, with approximately 641,000 of them being imports,” a spokesperson for the Port of Baltimore told the Journal of Commerce. “As with other cargoes, ultimately any tariff impacts are dependent on if shippers want to reduce or stop shipping into the United States during times of active tariffs.” Clarksons’ Schjerven would not speculate on the wider impact of tariffs on car makers and automotive suppliers, but he thought the Trump administration’s previous unpredictability over car tariffs meant the 25% levy “is a short-term fear.” After initially imposing tariffs on vehicle imports from Mexico and Canada in January, the Trump administration made the countries tariff-exempt after they retaliated, although levies were reimposed amid the global tariff measures unveiled by the White House last week. About 7.3 million imported vehicles were forecast to be sold in the US this year, equivalent to 45% of the total of 16.2 million vehicles expected to be purchased, according to industry estimates quoted by Wilhelmsen. Approximately 3.8 million were imports from Mexico, 2.6 million were from Japan and South Korea and 1 million were from Europe. With US tariffs also applying to imports of automotive components, Wilhelmsen noted 61% of the content in the 45 top vehicle models sold in the US is sourced from outside the US and Canada. Contact Keith Wallis at keithwallis@hotmail.com .

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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