<div class="phx-topic abstract-wrapper">Container volume growth slowed in 2018 and early 2019, but analysts are predicting a reversal of that trend in the near term.</div>

Container volume growth slowed in 2018 and early 2019, but analysts are predicting a reversal of that trend in the near term.

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<div>A slowing world economy put the brakes on container growth in 2018, but global volume is expected to reverse this trend over the next two years with a solid increase in throughput forecast on the major trades.Data from IHS Markit show that while 2018 global volume increased by 4 percent to 146.4 million TEU, it was down from the 5.6 percent growth recorded the previous year.<div><img><a>Click to enlarge</a></div>But the declining growth is expected to turn around in 2019, with demand from the five largest container exporting nations — China, the US, South Korea, Japan, and Thailand — growing at a...

A slowing world economy put the brakes on container growth in 2018, but global volume is expected to reverse this trend over the next two years with a solid increase in throughput forecast on the major trades. Data from IHS Markit show that while 2018 global volume increased by 4 percent to 146.4 million TEU, it was down from the 5.6 percent growth recorded the previous year. Click to enlarge But the declining growth is expected to turn around in 2019, with demand from the five largest container exporting nations — China, the US, South Korea, Japan, and Thailand — growing at a rate of about 4.8 percent a year through 2025 before slowing to 4.3 percent by 2030, according to the latest IHS Markit Trends in the World Economy and Trade report. “From a historical point of view, this is a major change compared with the double-digit growth rates the industry became accustomed to, but we must accept that globalization appears to have worked its way through the global sourcing system and that we are now back to depending on straightforward demand,” the report stated. The Shanghai International Shipping Institute (SISI) released its own report this week that found a slowdown in the world economy, escalating trade frictions, and weak consumer markets in 2018 held global volume growth to 4.7 percent, slightly down on the previous year. Mixed growth bag A closer examination of the major trades and the hub ports that handle the majority of international container trade reveals a mixed bag in terms of growth prospects. Click to enlarge IHS Markit has forecast a 3 percent increase in volume on the Asia-Europe trade in 2019, followed by a 3.2 percent bump in 2020 and a further expansion of 3.6 percent in 2021. Volumes of exports from Asia to Europe were essentially flat over the first two months of 2019, according to data from Container Trades Statistics (CTS), rising almost 11 percent year over year in January before falling almost 15 percent in February. European exports to Asia are forecast to grow by 4 percent year over year in 2019, followed by 3.3 percent and 3.4 percent expansion in 2020 and 2021, respectively. In its report, SISI said an increase in bilateral trade between China and the European Union helped container throughput at major ports in Europe to rise 5 percent year over year to 135 million TEU. At the other end of the Asia-Europe trade, China’s container throughput growth dipped in 2018, with volume rising 5.2 percent compared with an 8.3 percent increase the previous year. SISI said the still-solid growth was largely driven by domestic demand as a result of China’s strict environmental policy that forced coal and other goods previously transported as dry bulk by truck to be shipped to ports in containers. That contributed to robust growth of container shipping in the domestic China trade, where volume grew 9.2 percent year over year. Of the 10 busiest container ports in 2018, only two recorded volume declines in 2018 — Hong Kong and Dubai. Container throughput at Hong Kong port slumped 5.6 percent to 19.6 million TEU in 2018 and continued its slide into 2019, recording a 10 percent decline in first-quarter volume compared with the first three months of last year. Dubai posted a 2.9 percent drop to 14.9 million TEU last year that DP World group chairman and CEO Sultan Ahmed Bin Sulayem said was a result of a focus on profitable cargo, rather than low-margin goods. First-quarter volume fell 0.6 percent year over year, but the CEO is expecting an improvement in the second half. Leading the throughput chart again in 2018 was Shanghai, which handled 42 million TEU, an increase of 4.4 percent. Singapore was the world’s second-busiest port at 36.6 million TEU, an 8.7 percent year over year increase that was a reflection of the strong growth in Association of Southeast Asian Nations (ASEAN) economies. Container volume in intra-Asia, the world’s busiest trade, grew 3 percent in 2018 to 30 million TEU, and IHS Markit has forecast growth of 5 percent a year beyond 2021. Front-loaded On the trans-Pacific trade between Asia and North America, IHS Markit said the 5 percent growth in volume in 2018, partly a result of shippers front-loading imports from China ahead of US tariffs, would fall to 3.3 percent growth in 2019 before rising back to 5 percent in 2020. In the first quarter, despite the seasonal Chinese New Year slump in February, US imports from Asia are up by 5.7 percent year over year, according to CTS. Click to enlarge SISI said the strong growth in the US economy in 2018 drove the growth in container volume, but Canada and Mexico saw trade friction and disputes over tariff rate quotas with the US continue to simmer. This dragged on overall North American economic growth, with total container throughput rising 6.1 percent to 67.6 million TEU in 2018. Statistics from PIERS, a sister product of JOC.com within IHS Markit, show that US exports to China were down 24.5 percent in 2018 as Beijing imposed retaliatory tariffs on US goods. For North America, IHS Markit is forecasting a 4.4 percent growth in exports this year, but US exporters are expecting a dismal year . According to the IHS Markit trade report, container trade from Europe to North America grew 4.8 percent to 4.96 million TEU last year, with the report forecasting 5 percent growth for 2019 and 3.3 percent growth in 2020. North American exports to Europe surged 14.5 percent year over year to 3.48 million TEU in 2018, more than 400,000 containers above the amount shipped in 2017. IHS Markit has pegged volume growth for eastbound trans-Atlantic containers in 2019 and 2020 at 2.7 percent and 4 percent, respectively. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Maritime

Global container growth forecast to rebound

<div class="phx-topic abstract-wrapper">Multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe.</div>

Multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe.

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<div class="phx-topic">Indian freight forwarders are still waiting to learn when Gemini alliance partners Maersk and Hapag-Lloyd will open spot bookings to Europe even as the so-called hub-and-spoke network moves closer to its official Feb. 1 launch. Hapag-Lloyd earlier told customers that Dec. 3 would be the booking start date for all Gemini services. But multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe. “While the inaugural sailing schedules have been declared, the network hasn’t begun accepting spot bookings as of now,” said a sales executive at a Mumbai-based forwarding house. “Some rollover adjustments from the current independent networks and other commercial considerations could be holding things back.” Gemini <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fgemini-to-bulk-up-capacity-on-india-europe-trade-amid-rate-push-pressure-5911491&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C137c532edf0d471c908508dd33c2e925%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C638723634416921183%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=KvNS921FK3lhQ3kswi9JR2bd%2BDoRoQb5v9h9sHBju9c%3D&amp;reserved=0">has three direct services out of India for North Europe</a> -- two with stops at Mundra and Nhava Sheva for northwestern India trade, and one for southern India trade over Ennore (Chennai). The first westbound Gemini sailing on the West India-Europe trade will be the Houston Express, operated by Hapag-Lloyd, with an estimated time of arrival in Mundra of Feb. 9, while the southern India leg is due to begin with the Maersk Stadelhorn calling at Ennore on Feb. 11, sources said. A second forwarder said as Maersk has the largest market share of the seasonal grape market out of India to Europe, which typically moves under carrier service contracts, the availability of space on early Gemini vessels could in some part hinge on this reefer trade that market sources generally expect to exceed last year's volumes. Hapag-Lloyd and Mediterranean Shipping Co. (MSC) are also major carriers for Indian-grown grape exports, which normally peak from February through March. As contract negotiations move into the closing stages, forwarder sources expect average carrier rates to hover at about $3,500 per FEU for grape bookings from West India to Europe. That range compares with early-January spot pricing of between $1,800 to $1,900 per FEU for standard dry loads from Nhava Sheva to London Gateway or Felixstowe. “A stronger grape season could cut into the spot booking space, thus driving rates up after steady declines,” the second forwarder source said. Shrugging off forwarder claims, Bhavik Mota, Maersk’s director of regional ocean management for India/Middle East/Africa, told the Journal of Commerce the Gemini network transition remains “on schedule.” “Bookings are open on the Gemini network,” said Mota. “There are no rollovers that could impact bookings.” He also reiterated that the network has been structured globally with Maersk providing 60% of the capacity and Hapag-Lloyd 40%. Hapag-Lloyd (India) was unavailable for comment. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Indian freight forwarders are still waiting to learn when Gemini alliance partners Maersk and Hapag-Lloyd will open spot bookings to Europe even as the so-called hub-and-spoke network moves closer to its official Feb. 1 launch. Hapag-Lloyd earlier told customers that Dec. 3 would be the booking start date for all Gemini services. But multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe. “While the inaugural sailing schedules have been declared, the network hasn’t begun accepting spot bookings as of now,” said a sales executive at a Mumbai-based forwarding house. “Some rollover adjustments from the current independent networks and other commercial considerations could be holding things back.” Gemini has three direct services out of India for North Europe -- two with stops at Mundra and Nhava Sheva for northwestern India trade, and one for southern India trade over Ennore (Chennai). The first westbound Gemini sailing on the West India-Europe trade will be the Houston Express, operated by Hapag-Lloyd, with an estimated time of arrival in Mundra of Feb. 9, while the southern India leg is due to begin with the Maersk Stadelhorn calling at Ennore on Feb. 11, sources said. A second forwarder said as Maersk has the largest market share of the seasonal grape market out of India to Europe, which typically moves under carrier service contracts, the availability of space on early Gemini vessels could in some part hinge on this reefer trade that market sources generally expect to exceed last year's volumes. Hapag-Lloyd and Mediterranean Shipping Co. (MSC) are also major carriers for Indian-grown grape exports, which normally peak from February through March. As contract negotiations move into the closing stages, forwarder sources expect average carrier rates to hover at about $3,500 per FEU for grape bookings from West India to Europe. That range compares with early-January spot pricing of between $1,800 to $1,900 per FEU for standard dry loads from Nhava Sheva to London Gateway or Felixstowe. “A stronger grape season could cut into the spot booking space, thus driving rates up after steady declines,” the second forwarder source said. Shrugging off forwarder claims, Bhavik Mota, Maersk’s director of regional ocean management for India/Middle East/Africa, told the Journal of Commerce the Gemini network transition remains “on schedule.” “Bookings are open on the Gemini network,” said Mota. “There are no rollovers that could impact bookings.” He also reiterated that the network has been structured globally with Maersk providing 60% of the capacity and Hapag-Lloyd 40%. Hapag-Lloyd (India) was unavailable for comment. Contact Bency Mathew at bencyvmathew@gmail.com .

Container Shipping News

Container lines

Indian forwarders seek clarity on spot booking program for Gemini Europe sailings

<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">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 carrier’s top-line financials are a clear signal that container shipping is firmly back in profitable territory following a poor end to 2023 that left several carriers nursing losses.</div>

The carrier’s top-line financials are a clear signal that container shipping is firmly back in profitable territory following a poor end to 2023 that left several carriers nursing losses.

<div class="phx-topic">Cosco Shipping Holdings, the parent of Cosco Shipping and OOCL, on Friday said it expects $7.5 billion in net profit for 2024, a 95% year-over-year jump that the carrier attributed to an increase in volumes and higher freight rates. While Cosco did not provide the volume or revenue figures in its estimated annual results, the China state-owned carrier noted in an announcement to the Hong Kong Exchange that the Red Sea diversions had caused a shortage in capacity and kept rates at “a relatively high level.” “In 2024, the company recorded an increase in volume and freight rate of its container shipping business on a year-over-year basis, achieving better operating results,” Cosco said in the statement. Also released Friday was an operational update from Cosco subsidiary OOCL. Although no profit and loss details were published — full financial results will be announced in March — the OOCL result gave a little more color on fourth-quarter and full-year performance. OOCL reported 2024 annual revenue just shy of $10 billion, with the 30% year-over-year increase driven by a booming fourth quarter when volume rose 3.5% to 7.6 million TEUs and average revenue per TEU rose 46.2% compared with the last three months of 2023. The operating result and Cosco’s 2024 earnings forecast show container shipping is firmly back in profitable territory following a poor end to 2023 when several carriers, including <a href="https://www.joc.com/article/red-sea-crisis-wont-prevent-likely-significant-operating-loss-2024-maersk_20240208.html">Maersk</a> and <a href="https://www.joc.com/article/hapag-lloyd-reports-q4-loss-falling-rates-red-sea-disruption_20240130.html">Hapag-Lloyd</a>, reported <a href="https://www.joc.com/article/evergreen-wai-hai-join-peers-in-reporting-sharply-lower-2023-financials-5214522">fourth-quarter operating losses</a>. <h3>High average revenue per TEU </h3>The trans-Pacific trade led both volume and revenue growth at OOCL last year, with 2024 volume up 10% to 2 million TEUs and revenue on the lane soaring 53.5% to $3.8 billion. Asia-Europe volume of 1.4 million TEUs was down 10.9% while revenue rose 44% to $2.3 billion. Trans-Atlantic volumes fell 0.6% to 479,517 with revenue declining 26% to $616 million. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4bf824e9-ea85-4405-857e-04a7fa8dec88"></dynamic-object></div>OOCL’s largest segment by volume is effectively two trade lanes, intra-Asia and Australasia, which reported a 7.4% increase in demand to 3.6 million TEUs and revenue rising 17.1% to just under $3 billion. It was the fourth quarter where the big financial numbers were recorded as the carrier capitalized on trans-Pacific and trans-Atlantic frontloading ahead of <a href="https://www.joc.com/article/us-retailers-prepare-for-new-ila-strike-threat-tariffs-on-china-imports-5822904">a threatened increase in US tariffs on China</a> by the new Trump administration and <a href="https://www.joc.com/article/front-loading-of-ocean-cargo-diminishing-ch-robinson-ceo-says-5907756">an earlier Lunar New Year</a>. <h3>Trans-Pacific leads Q4 volume growth </h3>While OOCL’s total fourth-quarter volume rose 6.1% to just under 2 million TEUs, a sharp rise in average rate levels propelled revenue in the last three months of 2024 to $2.5 billion, up 55% year over year. The trans-Pacific led OOCL’s fourth-quarter volume growth, increasing 14.5% to 551,734 TEUs with revenue up 61.7% at $967 million. While Asia-Europe recorded a 6.5% decline in volume to 363,125 TEUs, revenue on the trade rose 75.4% to $553 million as diversions around southern Africa <a href="https://www.joc.com/article/ongoing-red-sea-effect-reaches-deep-into-asia-europe-trade-lane-5878610">absorbed all available capacity and drove up rate levels</a>. Trans-Atlantic fourth-quarter volume rose 11.3% to 119,733 TEUs, while revenue was up 22.9% to $163 million. Intra-Asia-Australasia volume in the fourth quarter increased 6.3% to 951,318 TEUs and revenue was up 44.3% year over year at $828 million. OOCL’s operational result also highlighted the gap between demand and available capacity, a result of strong demand all year on the trans-Pacific and the Africa diversions absorbing all excess supply. In the fourth quarter, the volume growth of 6.1% across all the carrier’s trade lanes was accompanied by available capacity growth of 4.2%. The full-year volume growth of 3.5% came as available capacity increased by just 0.3%. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Cosco Shipping Holdings, the parent of Cosco Shipping and OOCL, on Friday said it expects $7.5 billion in net profit for 2024, a 95% year-over-year jump that the carrier attributed to an increase in volumes and higher freight rates. While Cosco did not provide the volume or revenue figures in its estimated annual results, the China state-owned carrier noted in an announcement to the Hong Kong Exchange that the Red Sea diversions had caused a shortage in capacity and kept rates at “a relatively high level.” “In 2024, the company recorded an increase in volume and freight rate of its container shipping business on a year-over-year basis, achieving better operating results,” Cosco said in the statement. Also released Friday was an operational update from Cosco subsidiary OOCL. Although no profit and loss details were published — full financial results will be announced in March — the OOCL result gave a little more color on fourth-quarter and full-year performance. OOCL reported 2024 annual revenue just shy of $10 billion, with the 30% year-over-year increase driven by a booming fourth quarter when volume rose 3.5% to 7.6 million TEUs and average revenue per TEU rose 46.2% compared with the last three months of 2023. The operating result and Cosco’s 2024 earnings forecast show container shipping is firmly back in profitable territory following a poor end to 2023 when several carriers, including Maersk and Hapag-Lloyd , reported fourth-quarter operating losses . High average revenue per TEU The trans-Pacific trade led both volume and revenue growth at OOCL last year, with 2024 volume up 10% to 2 million TEUs and revenue on the lane soaring 53.5% to $3.8 billion. Asia-Europe volume of 1.4 million TEUs was down 10.9% while revenue rose 44% to $2.3 billion. Trans-Atlantic volumes fell 0.6% to 479,517 with revenue declining 26% to $616 million. OOCL’s largest segment by volume is effectively two trade lanes, intra-Asia and Australasia, which reported a 7.4% increase in demand to 3.6 million TEUs and revenue rising 17.1% to just under $3 billion. It was the fourth quarter where the big financial numbers were recorded as the carrier capitalized on trans-Pacific and trans-Atlantic frontloading ahead of a threatened increase in US tariffs on China by the new Trump administration and an earlier Lunar New Year . Trans-Pacific leads Q4 volume growth While OOCL’s total fourth-quarter volume rose 6.1% to just under 2 million TEUs, a sharp rise in average rate levels propelled revenue in the last three months of 2024 to $2.5 billion, up 55% year over year. The trans-Pacific led OOCL’s fourth-quarter volume growth, increasing 14.5% to 551,734 TEUs with revenue up 61.7% at $967 million. While Asia-Europe recorded a 6.5% decline in volume to 363,125 TEUs, revenue on the trade rose 75.4% to $553 million as diversions around southern Africa absorbed all available capacity and drove up rate levels . Trans-Atlantic fourth-quarter volume rose 11.3% to 119,733 TEUs, while revenue was up 22.9% to $163 million. Intra-Asia-Australasia volume in the fourth quarter increased 6.3% to 951,318 TEUs and revenue was up 44.3% year over year at $828 million. OOCL’s operational result also highlighted the gap between demand and available capacity, a result of strong demand all year on the trans-Pacific and the Africa diversions absorbing all excess supply. In the fourth quarter, the volume growth of 6.1% across all the carrier’s trade lanes was accompanied by available capacity growth of 4.2%. The full-year volume growth of 3.5% came as available capacity increased by just 0.3%. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Asia-Europe

Trans-Pacific

Cosco forecasts 95% jump in 2024 net profit on robust volumes, freight rates

<div class="phx-topic abstract-wrapper">The US last-mile market has become fragmented, benefiting shippers from both a cost and capacity perspective. </div>

The US last-mile market has become fragmented, benefiting shippers from both a cost and capacity perspective.

<div class="phx-topic">The big picture: Large parcel carriers FedEx and UPS are discounting rates to attract volumes, while retailers are courting business-to-consumer (B2C) shipments by offering free delivery through subscription services. Shippers have spread volumes out among a number of carriers, which has also taken volumes from the large carriers. The more profitable business-to-business (B2B) parcel market is not expected to increase until manufacturing demand picks up. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5914613_0.1.png"></img></div>A look back: FedEx and UPS struggled in the B2C last-mile market last year, and B2B parcel volumes remained muted due to weak global manufacturing activity. Shippers diversifying the number of carriers they use and increased competition from regional carriers, retailers such as Amazon, Target and Walmart, the US Postal Service and parcel management technology tools have forced FedEx and UPS to lower rates to regain lost volumes. According to AFS Logistics, the cost to ship a ground parcel declined 2.5% year over year in the third quarter of 2024 due to higher discounts and lower average package weights. Those lighter parcels are often e-commerce related, which is the future of ground parcels, according to FedEx CFO Bill Dietrich. “E-commerce is going to make up a large percentage, probably up to 90% of the volume growth of our ground network,” Dietrich said at the November Baird Global Industrial Conference. “We just have to find the right cost structure to accommodate it.” Despite automation investments that have lowered some operating costs, FedEx and UPS are struggling to compete within the B2C last-mile market. Protecting revenue per parcel is a priority for both carriers, but it conflicts with discounting rates to attract volumes. A look ahead: Higher rates for 2025 went into effect as early as Dec. 23, 2024, with UPS’ average rate increases of 5.9% followed by other last-mile carriers’ rate increases effective in January. However, FedEx and UPS will likely continue to discount ground parcel rates because of the expected continuation of stronger B2C volumes. Amazon, Walmart and Target will benefit the most in terms, volume-wise, because of the expected increase in e-commerce demand and subscription services that each provide, which also include free delivery services. B2C parcel volumes will continue to shift away from FedEx and UPS. B2B volumes may see some gains, but not much, at least for the first half of the year. According to Deloitte, manufacturers are expected to continue to face a challenging and uncertain business climate due to a combination of higher costs, potential policy changes following the US and global elections, and geopolitical uncertainty in 2025. Until manufacturing demand improves, FedEx and UPS will face a competitive B2C last-mile market in which lower rates are the norm. This assumes, however, that consumer spending will remain resilient. Year-to-date through October, US retail sales rose 2.4% from the same period in 2023, according to data from the US Census Bureau. But slowing economic growth and the uncertainty of a new presidential administration could result in a pullback in consumer spending this year. The next inflection: Prior to the COVID-19 pandemic, shippers tended to split parcel volumes between FedEx, UPS and the US Postal System. Since then, however, the last-mile market has become much more fragmented, benefiting shippers from a cost and capacity perspective. But it has left FedEx and UPS trying to figure out how to profitably compete in the B2C parcel market while they wait for the B2B market to revive. Contact Cathy Morrow Roberson at <a href="mailto:cathy.morrowroberso@spglobal.com">cathy.morrowroberso@spglobal.com.</a></div>

The big picture: Large parcel carriers FedEx and UPS are discounting rates to attract volumes, while retailers are courting business-to-consumer (B2C) shipments by offering free delivery through subscription services. Shippers have spread volumes out among a number of carriers, which has also taken volumes from the large carriers. The more profitable business-to-business (B2B) parcel market is not expected to increase until manufacturing demand picks up. A look back: FedEx and UPS struggled in the B2C last-mile market last year, and B2B parcel volumes remained muted due to weak global manufacturing activity. Shippers diversifying the number of carriers they use and increased competition from regional carriers, retailers such as Amazon, Target and Walmart, the US Postal Service and parcel management technology tools have forced FedEx and UPS to lower rates to regain lost volumes. According to AFS Logistics, the cost to ship a ground parcel declined 2.5% year over year in the third quarter of 2024 due to higher discounts and lower average package weights. Those lighter parcels are often e-commerce related, which is the future of ground parcels, according to FedEx CFO Bill Dietrich. “E-commerce is going to make up a large percentage, probably up to 90% of the volume growth of our ground network,” Dietrich said at the November Baird Global Industrial Conference. “We just have to find the right cost structure to accommodate it.” Despite automation investments that have lowered some operating costs, FedEx and UPS are struggling to compete within the B2C last-mile market. Protecting revenue per parcel is a priority for both carriers, but it conflicts with discounting rates to attract volumes. A look ahead: Higher rates for 2025 went into effect as early as Dec. 23, 2024, with UPS’ average rate increases of 5.9% followed by other last-mile carriers’ rate increases effective in January. However, FedEx and UPS will likely continue to discount ground parcel rates because of the expected continuation of stronger B2C volumes. Amazon, Walmart and Target will benefit the most in terms, volume-wise, because of the expected increase in e-commerce demand and subscription services that each provide, which also include free delivery services. B2C parcel volumes will continue to shift away from FedEx and UPS. B2B volumes may see some gains, but not much, at least for the first half of the year. According to Deloitte, manufacturers are expected to continue to face a challenging and uncertain business climate due to a combination of higher costs, potential policy changes following the US and global elections, and geopolitical uncertainty in 2025. Until manufacturing demand improves, FedEx and UPS will face a competitive B2C last-mile market in which lower rates are the norm. This assumes, however, that consumer spending will remain resilient. Year-to-date through October, US retail sales rose 2.4% from the same period in 2023, according to data from the US Census Bureau. But slowing economic growth and the uncertainty of a new presidential administration could result in a pullback in consumer spending this year. The next inflection: Prior to the COVID-19 pandemic, shippers tended to split parcel volumes between FedEx, UPS and the US Postal System. Since then, however, the last-mile market has become much more fragmented, benefiting shippers from a cost and capacity perspective. But it has left FedEx and UPS trying to figure out how to profitably compete in the B2C parcel market while they wait for the B2B market to revive. Contact Cathy Morrow Roberson at cathy.morrowroberso@spglobal.com.

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FedEx, UPS to continue discounting parcel rates amid increased competition

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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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