<div class="phx-topic abstract-wrapper">MIAMI -- Ocean containers moving through a validated secure supply chain from a secure loading dock </div>

MIAMI -- Ocean containers moving through a validated secure supply chain from a secure loading dock

<div>MIAMI -- Ocean containers moving through a validated secure supply chain from a secure loading dock through a port that is part of the Container Security Initiative to a validated Customs-Trade Partnership Against Terrorism shipper will use a "green lane" to clear U.S. Customs without inspection in the near future, U.S. Customs and Border Protection Commission Robert Bonner said today. Bonner said that shippers, carriers, forwarders and warehouses that implement strict "best practices" and undergo Customs verification of their supply chain security "will be part of a 'third tier'...whose benefits will be, in my mind, the green lane," Bonner said...

MIAMI -- Ocean containers moving through a validated secure supply chain from a secure loading dock through a port that is part of the Container Security Initiative to a validated Customs-Trade Partnership Against Terrorism shipper will use a "green lane" to clear U.S. Customs without inspection in the near future, U.S. Customs and Border Protection Commission Robert Bonner said today. Bonner said that shippers, carriers, forwarders and warehouses that implement strict "best practices" and undergo Customs verification of their supply chain security "will be part of a 'third tier'...whose benefits will be, in my mind, the green lane," Bonner said in a interview with Florida Shipper before a speech at a Customs supply chain security conference. Shippers will earn the green lane, Bonner said, "because the best practices will include employing a smart box container. Best practices will mean owning the secure supply chain and selecting C-TPAT-verified carriers and may well include as a best practice routing shipments through a CSI port." Bonner said the last requirement is not a certainty, but added, "[i]n all probability a best practice will include routing shipment through CSI ports. Since we are in 36 foreign ports, the largest ports in the world, this can now be done. This could not have been done two years ago. But it can now be done." Bonner said the three-tier system begins with an application for participation in C-TPAT that includes a written supply chain security plan. If the plan is approved by Customs, the business becomes certified. Following certification, a company can expect Customs agents to validate the security plan including a check of compliance of the foreign components in the supply chain. Foreign suppliers must have limited access, on-duty security personnel, employment screening and proper paperwork. This second tier of validation will assure speedy passage through Customs, Bonner said, but will not earn inspection-free clearance. Third-tier, green-lane shippers must also use smart containers equipped with anti-tamper technology when they become available. They must use carriers that are also Customs-validated and they must export from CSI ports. Asked if there are any plans to help shippers offset the cost of increased security, travel and paper work, Bonner said, "No. The programs have their benefits that are translatable to dollars and cents. And if they can't see that, it is their problem not mine." However, Bonner did say that in addition to green-lane clearance for the most secure shippers, all validated C-TPAT partners can expect uninterrupted commerce even if there is a terrorist attack on ports or other parts of the trade infrastructure. "If you are not a member of C-TPAT, in times of crisis: good luck," Bonner said. Bonner said that non-C-TPAT shippers are six times more likely to undergo a Customs security inspection at a U.S. port than members. And he added that because of advance notice rules and complex computer programs used for screening shippers, "I am certain that we examine 100 percent of the suspect containers entering the United States." He said that of the 90,083 C-TPAT applicants, 5,020 are importers, 2,208 are carriers, 1412 are brokers and about 440 are foreign manufacturers. Of that number, 10 percent have been validated with another 20 percent in the validation process; more than 100 companies have been rejected after failing their validation inspection, he said. Bonner said that within two months Customs will post validated and certified C-TPAT partners on a secure, members-only Web site for those companies aiming for third-tier clearance or that wish to avoid companies not in the C-TPAT program.

Transport, Trade and Regulation News

Inspection-free Box Clearance

<div class="phx-topic abstract-wrapper">Increased demand and diminishing new capacity will lead to an inflection point for logistics rents in a stronger second half of 2025, executives at the real estate developer say.</div>

Increased demand and diminishing new capacity will lead to an inflection point for logistics rents in a stronger second half of 2025, executives at the real estate developer say.

Feature image

<div class="phx-topic">An increase in rents for industrial distribution space in the US is coming, even if it’s not just around the corner, executives at logistics real estate developer Prologis said Tuesday. A post-election increase in demand for leased space, including third-party logistics sites, has the developer optimistic. “My view is that the market is going to surprise people in the back half of the year,” Prologis CEO Hamid Moghadam told analysts during a fourth-quarter earnings call. “I’ve been wrong before but that’s my view,” he added, noting that others are “a bit more conservative.” Moghadam’s confidence is based on Prologis’ performance in the last quarter, when it leased 60 million square feet of space, a quarterly record for the developer. “We believe market vacancy is topping out and rents will inflect later this year,” CFO Timothy Arndt said during the call. “Leasing in our portfolio accelerated following the US election, and the pipeline has started the year at healthy levels.” Industrial rents on average declined 2% in the fourth quarter from the prior quarter, Christopher Caton, the company’s managing director of global strategy and analytics, said. “Most markets are stable, but we expect modest further decline from here in a handful of soft markets,” he said. Industrial space <a href="https://www.joc.com/article/us-warehouse-vacancies-expected-to-fall-from-2024-peak-5912895">wasn’t difficult for shippers to find in 2024</a> after destocking led to a rebalancing of inventories and the construction boom that started during the COVID-19 pandemic opened more available logistics facilities, flipping a tight market. Prologis’ average occupancy rate was 95.8% for the 2024 fourth quarter and 96.3% for the full year. The occupancy rate is expected to be about 96% at the end of 2025. Prologis is the first of the major industrial real estate developers to release its fourth-quarter results and views on the market. Jones Lang LaSalle and CBRE Group will release fourth-quarter earnings reports in February. Arndt said conditions appear set for a recovery in net absorption of logistics space, fueled by increased need for inventory. That will lead to “a bottoming of global rents” at some point in 2025. From that point later this year, he believes rents will turn upward. Existing customers “are looking to grow,” Caton said. They’re also looking to renew their leases, which means they’re searching for space in Prologis’ existing portfolio, he said. <h3>Bump in confidence </h3>Demand boomed after the Nov. 5 US election, as customers that had delayed decisions about new development came off the fence, said Prologis President Daniel Letter. “We’ve had really 10 weeks of very solid decision-making unlocking previously stalled deals,” he said. Prologis is starting the year with $5 billion and 30 million square feet in projects under development, said Letter, noting “resilient” demand among e-commerce, general goods, electronics and food and beverage customers as well as logistics providers. “3PLs [third-party logistics providers] last quarter broke the record they had in the third quarter of 25 million square feet leased, so 3PLs in the back half [of 2024] leased 50 million square feet,” Letter said. Leasing demand is up 17% year over year to date in January. “Logistics is still a very attractive investable category for investors out there,” Letter said. “We feel strongly that we’ll see a pretty strong year on the transaction market.” In addition to industrial distribution space, Prologis sees strong demand for data centers and energy-related facilities. A former logistics center in Elk Grove, Illinois, was converted into a data center and sold during the fourth quarter. As artificial intelligence fuels demand for data centers, the capital those centers generate can be used to expand Prologis’ core logistics business, Moghadam said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

An increase in rents for industrial distribution space in the US is coming, even if it’s not just around the corner, executives at logistics real estate developer Prologis said Tuesday. A post-election increase in demand for leased space, including third-party logistics sites, has the developer optimistic. “My view is that the market is going to surprise people in the back half of the year,” Prologis CEO Hamid Moghadam told analysts during a fourth-quarter earnings call. “I’ve been wrong before but that’s my view,” he added, noting that others are “a bit more conservative.” Moghadam’s confidence is based on Prologis’ performance in the last quarter, when it leased 60 million square feet of space, a quarterly record for the developer. “We believe market vacancy is topping out and rents will inflect later this year,” CFO Timothy Arndt said during the call. “Leasing in our portfolio accelerated following the US election, and the pipeline has started the year at healthy levels.” Industrial rents on average declined 2% in the fourth quarter from the prior quarter, Christopher Caton, the company’s managing director of global strategy and analytics, said. “Most markets are stable, but we expect modest further decline from here in a handful of soft markets,” he said. Industrial space wasn’t difficult for shippers to find in 2024 after destocking led to a rebalancing of inventories and the construction boom that started during the COVID-19 pandemic opened more available logistics facilities, flipping a tight market. Prologis’ average occupancy rate was 95.8% for the 2024 fourth quarter and 96.3% for the full year. The occupancy rate is expected to be about 96% at the end of 2025. Prologis is the first of the major industrial real estate developers to release its fourth-quarter results and views on the market. Jones Lang LaSalle and CBRE Group will release fourth-quarter earnings reports in February. Arndt said conditions appear set for a recovery in net absorption of logistics space, fueled by increased need for inventory. That will lead to “a bottoming of global rents” at some point in 2025. From that point later this year, he believes rents will turn upward. Existing customers “are looking to grow,” Caton said. They’re also looking to renew their leases, which means they’re searching for space in Prologis’ existing portfolio, he said. Bump in confidence Demand boomed after the Nov. 5 US election, as customers that had delayed decisions about new development came off the fence, said Prologis President Daniel Letter. “We’ve had really 10 weeks of very solid decision-making unlocking previously stalled deals,” he said. Prologis is starting the year with $5 billion and 30 million square feet in projects under development, said Letter, noting “resilient” demand among e-commerce, general goods, electronics and food and beverage customers as well as logistics providers. “3PLs [third-party logistics providers] last quarter broke the record they had in the third quarter of 25 million square feet leased, so 3PLs in the back half [of 2024] leased 50 million square feet,” Letter said. Leasing demand is up 17% year over year to date in January. “Logistics is still a very attractive investable category for investors out there,” Letter said. “We feel strongly that we’ll see a pretty strong year on the transaction market.” In addition to industrial distribution space, Prologis sees strong demand for data centers and energy-related facilities. A former logistics center in Elk Grove, Illinois, was converted into a data center and sold during the fourth quarter. As artificial intelligence fuels demand for data centers, the capital those centers generate can be used to expand Prologis’ core logistics business, Moghadam said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Surface

Industrial Real Estate News

Supply chain

Prologis sees post-election rush for logistics real estate in US

<div class="phx-topic abstract-wrapper">Just ahead of November’s election, then-Commissioner Sola laid out “America First” initiatives during an October speech, highlighting the further development of LNG export facilities and the fuel’s impact on ship bunkering.</div>

Just ahead of November’s election, then-Commissioner Sola laid out “America First” initiatives during an October speech, highlighting the further development of LNG export facilities and the fuel’s impact on ship bunkering.

<div class="phx-topic">Louis Sola has been elevated from commissioner to chairman of the Federal Maritime Commission after being appointed Monday by President Donald Trump to lead the US maritime regulator.Sola was nominated to the FMC in November 2018 during Trump’s first term. While he has focused more on cruise ships than container ships, he has also shown an interest in maritime fuels, US freedom-of-navigation and export markets. Sola will replace Daniel Maffei as chairman. Maffei, a Democrat, has been at the FMC since 2016 and was appointed chairman in 2021 by President Joe Biden.Just ahead of Trump’s election in November, Sola laid out “America First” initiatives during an October speech, highlighting the further development of liquefied natural gas (LNG) export facilities and the impact on maritime bunkering. He also addressed the role of shipping in supporting US exporters and trade relations between the US and Latin America. In subsequent public comments, Sola has said that Trump’s election means the “war on fossil fuels exports is over.” He also called for US development agencies to fund overseas LNG infrastructure projects and “reciprocal and balanced trade” among the Western Hemisphere trading bloc. Sola also weighed in on the December announcement that the FMC was investigating whether <a href="https://www.joc.com/article/fmc-probing-reports-spain-blocked-us-flag-maersk-ships-5876411">Spain blocked a port call by a Maersk ship</a> in the US Maritime Security Program. He threw his support behind the investigation, saying “Spain must uphold the traditions and commitments of port states to allow vessels to call and trade to flow.” That same month, Sola, ironically, wrote a letter to Trump urging him to appoint Commissioner Rebecca Dye to chair the FMC. Sola said the appointment of Dye, <a href="https://www.joc.com/article/us-senate-confirms-existing-terms-for-fmcs-maffei-dye-5240804">the FMC’s longest-serving commissioner</a>, would be “a powerful message of stability and resolve to shippers, port operators, and international trade partners.”Earlier in his term on the FMC, Sola was tasked with investigating how COVID-19 affected the cruise industry and ensuring that passengers could more easily get refunds for cancelled or delayed cruises.Sola was formerly on the Florida Board of Pilots Commissioners and the chief executive officer of a ship and yacht brokerage. He also had stints in the military and as a financial consultant. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Louis Sola has been elevated from commissioner to chairman of the Federal Maritime Commission after being appointed Monday by President Donald Trump to lead the US maritime regulator. Sola was nominated to the FMC in November 2018 during Trump’s first term. While he has focused more on cruise ships than container ships, he has also shown an interest in maritime fuels, US freedom-of-navigation and export markets. Sola will replace Daniel Maffei as chairman. Maffei, a Democrat, has been at the FMC since 2016 and was appointed chairman in 2021 by President Joe Biden. Just ahead of Trump’s election in November, Sola laid out “America First” initiatives during an October speech, highlighting the further development of liquefied natural gas (LNG) export facilities and the impact on maritime bunkering. He also addressed the role of shipping in supporting US exporters and trade relations between the US and Latin America. In subsequent public comments, Sola has said that Trump’s election means the “war on fossil fuels exports is over.” He also called for US development agencies to fund overseas LNG infrastructure projects and “reciprocal and balanced trade” among the Western Hemisphere trading bloc. Sola also weighed in on the December announcement that the FMC was investigating whether Spain blocked a port call by a Maersk ship in the US Maritime Security Program. He threw his support behind the investigation, saying “Spain must uphold the traditions and commitments of port states to allow vessels to call and trade to flow.” That same month, Sola, ironically, wrote a letter to Trump urging him to appoint Commissioner Rebecca Dye to chair the FMC. Sola said the appointment of Dye, the FMC’s longest-serving commissioner , would be “a powerful message of stability and resolve to shippers, port operators, and international trade partners.” Earlier in his term on the FMC, Sola was tasked with investigating how COVID-19 affected the cruise industry and ensuring that passengers could more easily get refunds for cancelled or delayed cruises. Sola was formerly on the Florida Board of Pilots Commissioners and the chief executive officer of a ship and yacht brokerage. He also had stints in the military and as a financial consultant. Contact Michael Angell at michael.angell@spglobal.com .

Container Shipping News

Port News

Trump appoints Louis Sola to chairman’s slot at FMC

<div class="phx-topic abstract-wrapper">A startup founded and backed by ex-Flexport sales executives is aiming to help shippers manage the flood of outbound sales efforts they receive from logistics providers. </div>

A startup founded and backed by ex-Flexport sales executives is aiming to help shippers manage the flood of outbound sales efforts they receive from logistics providers.

<div class="phx-topic">An early-stage provider of sales tools used by third-party logistics providers (3PLs) has landed a funding round to help forwarders make the process of finding suitable shipper customers more efficient. The company, Revenue Vessel, provides an importer database that allows 3PLs to gain insights into importers to refine searches for customers. The company also allows 3PLs to migrate relevant importers directly into sales execution tools. Terms of the pre-seed round, announced Tuesday, were not disclosed. Revenue Vessel was founded in 2024 by Brian Li, former head of demand generation at Flexport; Noah Stewart, former sales leader at Flexport; and Danny Keller, former head of engineering at Rutter, a provider of application programming interface (API) tools. Its customers include Crane Worldwide Logistics, Willson International Farrow and Gnosis Freight. “It is hard to know who is a relevant customer for a specialized 3PL service,” Li told the Journal of Commerce. “Most companies get around this by hiring experienced sellers who have a Rolodex of shippers and scraps of intel they have gained over time at conferences or researching Google Maps.” The idea behind Revenue Vessel was to provide Flexport’s blueprint for refining its sales pipeline to other 3PLs, customs brokers and software vendors who target shippers as customers. Among its early investors were Will Urban, a veteran sales executive at Expeditors who spent three years as chief revenue officer at Flexport through 2023; and Ben Braverman, who held chief revenue and chief customer officer roles for eight years at Flexport through 2022. Li said logistics provider sales teams are particularly challenged in finding suitable customers for their capacity and services as trade patterns are reshaped by changing sourcing locations due to tariffs and events such as the vessel diversions away from the Red Sea. “Lower inbox burden on importers is a benefit to them,” he said. “But the main advantage is that it is easier for importers to discover new services that will help them navigate all the global trade chaos. We work with startups that are simplifying duty drawback to reduce tariff burdens, helping shippers hedge their volatile freight rates, and leveraging the SHEIN warehousing strategy for further savings.” Revenue Vessel competes primarily with general purpose contact information databases such as Zoominfo and Apollo, as well as established importer database businesses including Datamyne and Import Genius, as well as Panjiva and PIERS, both of which are sister companies of the Journal of Commerce within S&amp;P Global. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

An early-stage provider of sales tools used by third-party logistics providers (3PLs) has landed a funding round to help forwarders make the process of finding suitable shipper customers more efficient. The company, Revenue Vessel, provides an importer database that allows 3PLs to gain insights into importers to refine searches for customers. The company also allows 3PLs to migrate relevant importers directly into sales execution tools. Terms of the pre-seed round, announced Tuesday, were not disclosed. Revenue Vessel was founded in 2024 by Brian Li, former head of demand generation at Flexport; Noah Stewart, former sales leader at Flexport; and Danny Keller, former head of engineering at Rutter, a provider of application programming interface (API) tools. Its customers include Crane Worldwide Logistics, Willson International Farrow and Gnosis Freight. “It is hard to know who is a relevant customer for a specialized 3PL service,” Li told the Journal of Commerce. “Most companies get around this by hiring experienced sellers who have a Rolodex of shippers and scraps of intel they have gained over time at conferences or researching Google Maps.” The idea behind Revenue Vessel was to provide Flexport’s blueprint for refining its sales pipeline to other 3PLs, customs brokers and software vendors who target shippers as customers. Among its early investors were Will Urban, a veteran sales executive at Expeditors who spent three years as chief revenue officer at Flexport through 2023; and Ben Braverman, who held chief revenue and chief customer officer roles for eight years at Flexport through 2022. Li said logistics provider sales teams are particularly challenged in finding suitable customers for their capacity and services as trade patterns are reshaped by changing sourcing locations due to tariffs and events such as the vessel diversions away from the Red Sea. “Lower inbox burden on importers is a benefit to them,” he said. “But the main advantage is that it is easier for importers to discover new services that will help them navigate all the global trade chaos. We work with startups that are simplifying duty drawback to reduce tariff burdens, helping shippers hedge their volatile freight rates, and leveraging the SHEIN warehousing strategy for further savings.” Revenue Vessel competes primarily with general purpose contact information databases such as Zoominfo and Apollo, as well as established importer database businesses including Datamyne and Import Genius, as well as Panjiva and PIERS, both of which are sister companies of the Journal of Commerce within S&P Global. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Flexport alums arm 3PLs with tools to refine shipper outreach

<div class="phx-topic abstract-wrapper">A pledge by Houthi militants to focus ship attacks on Israel-linked vessels is not enough to encourage ocean carriers to end their diversions around Africa and return to transits via the Suez Canal. </div>

A pledge by Houthi militants to focus ship attacks on Israel-linked vessels is not enough to encourage ocean carriers to end their diversions around Africa and return to transits via the Suez Canal.

<div class="phx-topic">Ocean carriers say they will only return to Red Sea transits “when it is safe to do so,” despite an announcement Sunday by Yemen’s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels. The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center (HOCC) <a href="https://www.joc.com/article/return-to-suez-not-a-certainty-even-after-israel-hamas-ceasefire-analysts-5923830">following the start of a 42-day ceasefire</a> in Gaza between Israel and Hamas, but the ocean carriers’ position on a return to the Red Sea remains unchanged. “We will closely analyze the latest developments and their impact on the security situation in the Red Sea. Otherwise, the following applies unchanged: we will return to the Red Sea when it is sufficiently safe to do so,” Hapag-Lloyd spokesman Tim Seifert told the Journal of Commerce Monday. Maersk released a similar statement Monday with the carrier calling developments in the region “positive.” “We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so,” Maersk noted. “It is still too early to speculate about timing, but these developments are a needed step in the right direction.” Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthi rebels in early 2024 said they would only attack Israel-linked vessels, but this was not borne out. Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&amp;P Global Market Intelligence, parent company of the Journal of Commerce, said last week there might be a relative decrease in the frequency of attacks against shipping after the ceasefire, but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes. <h3>Flooding capacity </h3>As much as carriers extol the virtues of a return to Red Sea transits, the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out, followed by collapsing rates as excess capacity floods the market. In a report titled Exceptional profits period drawing to a close, investment bank Jefferies noted that with rates expected to weaken through 2025, 90% of container ships typically using the shorter Suez route diverted around Africa, removing over 12% of fleet capacity. “Last year was one of the best years ever for the container industry as the sudden removal of this capacity, along with strong trade growth, pushed capacity utilization to an average of 87.5%,” noted the Jefferies report, well above the 75% utilization in 2024 had there been no diversions. “We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve. The demand picture over the medium term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years.” <h3>Downward pressure on spot rates</h3>Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter that a return to transits through the Red Sea would be good news for shippers and consumers, but bad news for carriers. “The high freight rates are clearly supported by the severe capacity absorption from the round-Africa services as a consequence of the Red Sea crisis,” he wrote. “A reversal back to Suez would bring the global supply-demand balance back to the level we saw towards the end of 2023. This in turn means that — after a somewhat turbulent period with port congestion issues in Europe — spot rates will drop sharply.” Average Asia-North Europe spot rates in the last week of November 2023 were $1,379 per FEU, according to rate benchmarking platform Xeneta. By mid-July 2024 the rate peaked at $8,558/FEU, and although falling through the second half, the spot rate has remained more than double the price recorded in November 2023. A return to the shorter voyages through the Red Sea will dramatically change the supply-demand picture and put significant downward pressure on rates, Peter Sand, chief analyst at Xeneta, wrote in a report Monday. “Combined with record deliveries of new ships, the market will be flooded with capacity, with carriers needing to remove around 1.8 million TEUs to retain the status quo,” he said. “Scrapping of ships will increase and carriers have become much better at capacity management in recent years, but it is unlikely this will be enough to prevent freight rates from collapsing,” he added. <a href="https://www.joc.com/article/container-shipping-still-has-an-overcapacity-problem-but-its-far-from-insurmountable-5234357">Carriers have been playing down the impact</a> of overcapacity following the resumption of transits through Suez, pointing to an increase in scrapping (which has been close to zero for the last few years) and the ability to slow steam ships that have been at full speed since Africa diversions began. Still, Murphy said from a supply-demand perspective, “it is hard to see any other outcome than a rapid decline back towards the depths seen in 2023. At least for a temporary period,” he noted, adding that the market drop after the Suez route’s reopening would not be a “soft landing.” Contact Greg Knowler at <a href="greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers say they will only return to Red Sea transits “when it is safe to do so,” despite an announcement Sunday by Yemen’s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels. The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center (HOCC) following the start of a 42-day ceasefire in Gaza between Israel and Hamas, but the ocean carriers’ position on a return to the Red Sea remains unchanged. “We will closely analyze the latest developments and their impact on the security situation in the Red Sea. Otherwise, the following applies unchanged: we will return to the Red Sea when it is sufficiently safe to do so,” Hapag-Lloyd spokesman Tim Seifert told the Journal of Commerce Monday. Maersk released a similar statement Monday with the carrier calling developments in the region “positive.” “We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so,” Maersk noted. “It is still too early to speculate about timing, but these developments are a needed step in the right direction.” Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthi rebels in early 2024 said they would only attack Israel-linked vessels, but this was not borne out. Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&P Global Market Intelligence, parent company of the Journal of Commerce, said last week there might be a relative decrease in the frequency of attacks against shipping after the ceasefire, but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes. Flooding capacity As much as carriers extol the virtues of a return to Red Sea transits, the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out, followed by collapsing rates as excess capacity floods the market. In a report titled Exceptional profits period drawing to a close, investment bank Jefferies noted that with rates expected to weaken through 2025, 90% of container ships typically using the shorter Suez route diverted around Africa, removing over 12% of fleet capacity. “Last year was one of the best years ever for the container industry as the sudden removal of this capacity, along with strong trade growth, pushed capacity utilization to an average of 87.5%,” noted the Jefferies report, well above the 75% utilization in 2024 had there been no diversions. “We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve. The demand picture over the medium term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years.” Downward pressure on spot rates Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter that a return to transits through the Red Sea would be good news for shippers and consumers, but bad news for carriers. “The high freight rates are clearly supported by the severe capacity absorption from the round-Africa services as a consequence of the Red Sea crisis,” he wrote. “A reversal back to Suez would bring the global supply-demand balance back to the level we saw towards the end of 2023. This in turn means that — after a somewhat turbulent period with port congestion issues in Europe — spot rates will drop sharply.” Average Asia-North Europe spot rates in the last week of November 2023 were $1,379 per FEU, according to rate benchmarking platform Xeneta. By mid-July 2024 the rate peaked at $8,558/FEU, and although falling through the second half, the spot rate has remained more than double the price recorded in November 2023. A return to the shorter voyages through the Red Sea will dramatically change the supply-demand picture and put significant downward pressure on rates, Peter Sand, chief analyst at Xeneta, wrote in a report Monday. “Combined with record deliveries of new ships, the market will be flooded with capacity, with carriers needing to remove around 1.8 million TEUs to retain the status quo,” he said. “Scrapping of ships will increase and carriers have become much better at capacity management in recent years, but it is unlikely this will be enough to prevent freight rates from collapsing,” he added. Carriers have been playing down the impact of overcapacity following the resumption of transits through Suez, pointing to an increase in scrapping (which has been close to zero for the last few years) and the ability to slow steam ships that have been at full speed since Africa diversions began. Still, Murphy said from a supply-demand perspective, “it is hard to see any other outcome than a rapid decline back towards the depths seen in 2023. At least for a temporary period,” he noted, adding that the market drop after the Suez route’s reopening would not be a “soft landing.” Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Trans-Pacific

Container lines

Carriers eye Red Sea transits after Houthi rebels pledge restraint

<div class="phx-topic abstract-wrapper">A planned US executive order to halt offshore wind turbine activities along the East Coast has the sector in turmoil.</div>

A planned US executive order to halt offshore wind turbine activities along the East Coast has the sector in turmoil.

<div class="phx-topic">Momentum is downshifting in the US offshore wind industry in anticipation of an executive order to halt development in the sector immediately after today’s inauguration of Donald Trump as US president. On Jan. 15, power-purchase contract signings set to take place that day for a pair of offshore wind projects in Massachusetts and Rhode Island were <a href="https://fileservice.eea.comacloud.net/FileService.Api/file/FileRoom/19881934">pushed back</a> until March 31.The decision marks the second time since November that utilities and state officials have delayed the contracts for the two projects — Avangrid’s 791-megawatt (MW) New England Wind 1 and OceanWinds’ 1,287 MW SouthCoast Wind.In a step forward for one of the projects, SouthCoast Wind on Jan. 17 received the final approval needed to move ahead with construction of its wind farm, which will include up to 141 turbines and up to five offshore substation platforms. “Receiving today’s final Bureau of Ocean Energy Management (BOEM) approval keeps SouthCoast Wind on track to delivering reliable domestic energy to New England’s homes and businesses,” Michael Brown, CEO of SouthCoast Wind and Ocean Winds North America CEO, told the Journal of Commerce in a prepared statement.The moves come after Republican US Rep. Jefferson Van Drew of New Jersey said in a <a href="https://vandrew.house.gov/news/documentsingle.aspx?DocumentID=1801">Jan. 13 press release</a> that he has been working closely with Trump on drafting an executive order that would halt offshore wind turbine activities along the East Coast, while also laying the groundwork for “permanent measures” against the projects.“These offshore wind projects should have never been approved in the first place,” Van Drew said in the release. “The Biden administration’s reckless green agenda put politics over people, and that ends now.”US policy changes could strain the breakbulk and project cargo segment, which relies on wind energy as a significant cargo source.Trump has been a vocal adversary of offshore wind turbines and wrote in a Jan. 15 Truth Social post that “windmills are an economic and environmental disaster” and that he doesn’t “want even one built” during his administration. <h3>Ongoing projects could continue</h3>Charlie Papavizas, head of the maritime practice in the Washington, DC, office of Winston &amp; Strawn, told the Journal of Commerce that although an executive order would likely halt the offshore wind permitting process for at least six months, it should not affect fully permitted projects already under construction. Supporting this, during Jan. 16 confirmation hearings, Trump’s interior secretary nominee, Doug Burgum, said wind projects that are already in progress will continue “if they make sense.”Now in question, Papavizas said, are the dozen or so projects that are fully approved but not yet under construction. “What happens with those? Will they get their funding? Put turbines in the water? Hook up to the grid, but then there are no new ones for four years? We don’t know,” he said.Stephanie Francoeur, a spokeswoman for industry group Oceantic Network, told the Journal of Commerce that an executive order would undermine over $24 million in investments in the offshore wind supply chain, including shipyards and steel factories, and another $25 billion being spent on projects under construction.“An action that curtails domestic energy production, strands assets like vessels and manufacturing facilities, and curtails job creation would be in direct conflict with the incoming administration’s economic agenda,” Francoeur said.Offshore wind construction brought a windfall of cargo in 2024 to the Virginia Port Authority, which recorded a surge in breakbulk cargo volumes largely because of shipments for the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project that Virginia utility Dominion Energy is developing off the coast of Virginia Beach. The project is 43% complete but on pause until May to allow for whale migration past the project area. Joe Harris, spokesman for the Virginia Port Authority (VPA), told the Journal of Commerce that it will be impossible to determine the industry’s next steps before an official executive order materializes. But in the meantime, the port is still performing over $220 million in upgrades to its 287-acre Portsmouth Marine Terminal, one of two multipurpose terminals in Norfolk Harbor and the staging site for the CVOW project components.“We’re going to continue to go forward with our investments at Portsmouth Marine Terminal,” he said.Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

Momentum is downshifting in the US offshore wind industry in anticipation of an executive order to halt development in the sector immediately after today’s inauguration of Donald Trump as US president. On Jan. 15, power-purchase contract signings set to take place that day for a pair of offshore wind projects in Massachusetts and Rhode Island were pushed back until March 31. The decision marks the second time since November that utilities and state officials have delayed the contracts for the two projects — Avangrid’s 791-megawatt (MW) New England Wind 1 and OceanWinds’ 1,287 MW SouthCoast Wind. In a step forward for one of the projects, SouthCoast Wind on Jan. 17 received the final approval needed to move ahead with construction of its wind farm, which will include up to 141 turbines and up to five offshore substation platforms. “Receiving today’s final Bureau of Ocean Energy Management (BOEM) approval keeps SouthCoast Wind on track to delivering reliable domestic energy to New England’s homes and businesses,” Michael Brown, CEO of SouthCoast Wind and Ocean Winds North America CEO, told the Journal of Commerce in a prepared statement. The moves come after Republican US Rep. Jefferson Van Drew of New Jersey said in a Jan. 13 press release that he has been working closely with Trump on drafting an executive order that would halt offshore wind turbine activities along the East Coast, while also laying the groundwork for “permanent measures” against the projects. “These offshore wind projects should have never been approved in the first place,” Van Drew said in the release. “The Biden administration’s reckless green agenda put politics over people, and that ends now.” US policy changes could strain the breakbulk and project cargo segment, which relies on wind energy as a significant cargo source. Trump has been a vocal adversary of offshore wind turbines and wrote in a Jan. 15 Truth Social post that “windmills are an economic and environmental disaster” and that he doesn’t “want even one built” during his administration. Ongoing projects could continue Charlie Papavizas, head of the maritime practice in the Washington, DC, office of Winston & Strawn, told the Journal of Commerce that although an executive order would likely halt the offshore wind permitting process for at least six months, it should not affect fully permitted projects already under construction. Supporting this, during Jan. 16 confirmation hearings, Trump’s interior secretary nominee, Doug Burgum, said wind projects that are already in progress will continue “if they make sense.” Now in question, Papavizas said, are the dozen or so projects that are fully approved but not yet under construction. “What happens with those? Will they get their funding? Put turbines in the water? Hook up to the grid, but then there are no new ones for four years? We don’t know,” he said. Stephanie Francoeur, a spokeswoman for industry group Oceantic Network, told the Journal of Commerce that an executive order would undermine over $24 million in investments in the offshore wind supply chain, including shipyards and steel factories, and another $25 billion being spent on projects under construction. “An action that curtails domestic energy production, strands assets like vessels and manufacturing facilities, and curtails job creation would be in direct conflict with the incoming administration’s economic agenda,” Francoeur said. Offshore wind construction brought a windfall of cargo in 2024 to the Virginia Port Authority, which recorded a surge in breakbulk cargo volumes largely because of shipments for the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project that Virginia utility Dominion Energy is developing off the coast of Virginia Beach. The project is 43% complete but on pause until May to allow for whale migration past the project area. Joe Harris, spokesman for the Virginia Port Authority (VPA), told the Journal of Commerce that it will be impossible to determine the industry’s next steps before an official executive order materializes. But in the meantime, the port is still performing over $220 million in upgrades to its 287-acre Portsmouth Marine Terminal, one of two multipurpose terminals in Norfolk Harbor and the staging site for the CVOW project components. “We’re going to continue to go forward with our investments at Portsmouth Marine Terminal,” he said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.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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