<div class="phx-topic abstract-wrapper">The Knight-Ridder Commodity Research Bureau's future price index closed Monday at 235.63 up 0.30 whi</div>

The Knight-Ridder Commodity Research Bureau's future price index closed Monday at 235.63 up 0.30 whi

<div>The Knight-Ridder Commodity Research Bureau's future price index closed Monday at 235.63 up 0.30 which compares with 228.57 a year ago.Imports 394.40 off 0.42; Industrials 271.96 off 0.80; Grains 192.22 up 2.30; Misc. 318.52 up 2.56; Oilseeds 281.68 off 0.46; Precious Metals 266.38 off 0.34; Livestock and Meats 189.59 up 1.66; Energy 172.85 up 0.80._Base 1967 equals 100Energy 164.50 up 1.11; Currencies 147.89 off 0.87; Interest Rates 108.20 off 0.16._Base 1977 equals 100</div>...

The Knight-Ridder Commodity Research Bureau's future price index closed Monday at 235.63 up 0.30 which compares with 228.57 a year ago. Imports 394.40 off 0.42; Industrials 271.96 off 0.80; Grains 192.22 up 2.30; Misc. 318.52 up 2.56; Oilseeds 281.68 off 0.46; Precious Metals 266.38 off 0.34; Livestock and Meats 189.59 up 1.66; Energy 172.85 up 0.80._Base 1967 equals 100 Energy 164.50 up 1.11; Currencies 147.89 off 0.87; Interest Rates 108.20 off 0.16. _Base 1977 equals 100

KR-CRB FUTURES INDEXES

<div class="phx-topic abstract-wrapper">The French liner joined the ranks of its profitable peers, announcing Friday that its net profit rose 2% to $5.7 billion last year on an 18% rise in revenue to $55.5 billion.</div>

The French liner joined the ranks of its profitable peers, announcing Friday that its net profit rose 2% to $5.7 billion last year on an 18% rise in revenue to $55.5 billion.

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<div class="phx-topic">New ship deliveries, the possible resumption of Suez Canal transits and the impact of US tariffs on trade are the three key issues that will define the container shipping sector this year, CMA CGM said Friday. “Deliveries of new vessels, combined with any developments in the Red Sea situation, will be decisive factors in shaping the market,” the French carrier said while reporting its fourth-quarter and full-year 2024 results. CMA CGM expects global container volumes to grow 3% this year, the same as global GDP. “The prospect of higher tariffs announced in the United States could have an impact on trade and lead to a reorganization of global supply chains in the medium term,” the carrier said. CMA CGM said its net profit rose 2% to $5.7 billion last year on an 18% rise in revenue to $55.5 billion. Its shipping division saw a 16% increase in revenue to $36.5 billion, while container volumes rose almost 8% to 23.6 million TEUs. Earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024 climbed 52% year over year to $11 billion. The contribution of shipping to total revenue was unchanged at about 66% despite the growth in the carrier’s logistics business following the full integration of Bolloré Logistics. Revenue at the logistics business climbed 21% to $18.4 billion. CMA CGM’s other businesses, including terminals and air cargo, saw revenue surge 43% to almost $2.9 billion. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

New ship deliveries, the possible resumption of Suez Canal transits and the impact of US tariffs on trade are the three key issues that will define the container shipping sector this year, CMA CGM said Friday. “Deliveries of new vessels, combined with any developments in the Red Sea situation, will be decisive factors in shaping the market,” the French carrier said while reporting its fourth-quarter and full-year 2024 results. CMA CGM expects global container volumes to grow 3% this year, the same as global GDP. “The prospect of higher tariffs announced in the United States could have an impact on trade and lead to a reorganization of global supply chains in the medium term,” the carrier said. CMA CGM said its net profit rose 2% to $5.7 billion last year on an 18% rise in revenue to $55.5 billion. Its shipping division saw a 16% increase in revenue to $36.5 billion, while container volumes rose almost 8% to 23.6 million TEUs. Earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024 climbed 52% year over year to $11 billion. The contribution of shipping to total revenue was unchanged at about 66% despite the growth in the carrier’s logistics business following the full integration of Bolloré Logistics. Revenue at the logistics business climbed 21% to $18.4 billion. CMA CGM’s other businesses, including terminals and air cargo, saw revenue surge 43% to almost $2.9 billion. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

Maritime

Red Sea, tariffs among ‘decisive factors’ for liner market in 2025: CMA CGM

<div class="phx-topic abstract-wrapper">The measures are the latest in a series of support packages announced by South Korean trade organizations and government bodies to help the country’s small and medium-sized exporters weather capacity restrictions and volatile freight rates.</div>

The measures are the latest in a series of support packages announced by South Korean trade organizations and government bodies to help the country’s small and medium-sized exporters weather capacity restrictions and volatile freight rates.

<div class="phx-topic">South Korea’s largest trade group has teamed up with nine of the country’s carriers, including HMM, to offer space and preferential freight rate concessions to small South Korean exporters on 22 routes covering the trans-Pacific, European and intra-Asia trades. The program, announced Friday, is meant to help the exporters navigate market uncertainties affecting container shipping. “Although freight rates, which soared due to the Red Sea crisis last year, have been trending downward recently, uncertainty about the future rate outlook is growing due to the difficulty of navigating the Suez Canal and continued Cape of Good Hope diversions," the Korea International Trade Association (KITA) said in a statement. A proposal by the Trump <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">administration to charge a port tax on ships built in China or operated by Chinese carriers</a> “may also act as a factor for future freight increases,” KITA said. The association said its 2025 maritime transportation support project for small and medium-sized export enterprises will be done in collaboration with nine carriers, comprising HMM and eight mainly intra-Asia-focused lines including Heung-A Line, Korea Marine Transport Company (KMTC) and Pan Ocean. HMM will provide 1,000 TEUs per week at discounted rates on 14 routes to the Americas and Europe. The eight intra-Asia carriers will allocate 420 TEUs per week on eight services to India and Southeast Asia. No details of the preferential freight rates have been disclosed, but KITA said the rates would be adjusted semi-annually on routes to the Americas and Europe and quarterly on intra-Asia services, including those to India. The measures are the latest in a series of support packages announced by South Korean trade organizations and government bodies to help the country’s small and medium-sized exporters weather capacity restrictions and volatile freight rates. <h3>Group encourages long-term contracts with HMM </h3>Highlighting the current freight rate volatility, South Korea’s customs service said all-in container freight rates from South Korea to the US East Coast rose 7% in January to about $5,000 per FEU compared with a month earlier. But rates from South Korea to Europe fell 11% to $3,600/FEU, it said. KITA said it is also urging smaller exporters to sign long-term contracts with HMM to secure more stable space and rate levels on trans-Pacific and European services. “We expect this support package will help alleviate the burden of logistics costs on small and medium-sized enterprises that are suffering from uncertainty in ocean freight," Jeong Hee-chul, head of KITA’s trade promotion division, said. “The Korea International Trade Association will continue to expand support projects for companies, such as reducing logistics costs through active cooperation with national shipping companies.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

South Korea’s largest trade group has teamed up with nine of the country’s carriers, including HMM, to offer space and preferential freight rate concessions to small South Korean exporters on 22 routes covering the trans-Pacific, European and intra-Asia trades. The program, announced Friday, is meant to help the exporters navigate market uncertainties affecting container shipping. “Although freight rates, which soared due to the Red Sea crisis last year, have been trending downward recently, uncertainty about the future rate outlook is growing due to the difficulty of navigating the Suez Canal and continued Cape of Good Hope diversions," the Korea International Trade Association (KITA) said in a statement. A proposal by the Trump administration to charge a port tax on ships built in China or operated by Chinese carriers “may also act as a factor for future freight increases,” KITA said. The association said its 2025 maritime transportation support project for small and medium-sized export enterprises will be done in collaboration with nine carriers, comprising HMM and eight mainly intra-Asia-focused lines including Heung-A Line, Korea Marine Transport Company (KMTC) and Pan Ocean. HMM will provide 1,000 TEUs per week at discounted rates on 14 routes to the Americas and Europe. The eight intra-Asia carriers will allocate 420 TEUs per week on eight services to India and Southeast Asia. No details of the preferential freight rates have been disclosed, but KITA said the rates would be adjusted semi-annually on routes to the Americas and Europe and quarterly on intra-Asia services, including those to India. The measures are the latest in a series of support packages announced by South Korean trade organizations and government bodies to help the country’s small and medium-sized exporters weather capacity restrictions and volatile freight rates. Group encourages long-term contracts with HMM Highlighting the current freight rate volatility, South Korea’s customs service said all-in container freight rates from South Korea to the US East Coast rose 7% in January to about $5,000 per FEU compared with a month earlier. But rates from South Korea to Europe fell 11% to $3,600/FEU, it said. KITA said it is also urging smaller exporters to sign long-term contracts with HMM to secure more stable space and rate levels on trans-Pacific and European services. “We expect this support package will help alleviate the burden of logistics costs on small and medium-sized enterprises that are suffering from uncertainty in ocean freight," Jeong Hee-chul, head of KITA’s trade promotion division, said. “The Korea International Trade Association will continue to expand support projects for companies, such as reducing logistics costs through active cooperation with national shipping companies.” Contact Keith Wallis at keithwallis@hotmail.com .

Asia-Europe

Trans-Pacific

HMM among carriers to offer rate, space deals to smaller South Korean exporters

<div class="phx-topic abstract-wrapper">Cheetah Chassis and Stoughton Trailers contend that the same trade practices that led to an influx of low-cost Chinese chassis are now occurring with imports from the other three nations, causing significant financial harm to US producers.</div>

Cheetah Chassis and Stoughton Trailers contend that the same trade practices that led to an influx of low-cost Chinese chassis are now occurring with imports from the other three nations, causing significant financial harm to US producers.

<div class="phx-topic">Two US-based chassis manufacturers have petitioned the Department of Commerce and the International Trade Commission to impose steep antidumping and countervailing duties on chassis imports from Mexico, Thailand and Vietnam — extending penalties beyond those levied on China in 2021. The manufacturers — Cheetah Chassis and Stoughton Trailers — contend that the same trade practices that led to an influx of low-cost Chinese chassis are now occurring with imports from the other three nations, causing significant financial harm to US producers. The petition seeks antidumping duties of 32.37% on Mexico, 234.06% on Thailand and 304.68% on Vietnam, although it does not specify how those figures were calculated. “While the sources of dumped and subsidized imports have shifted, they still have the same effect: taking domestic market share and eroding a proud American manufacturing industry,” said Robert DeFrancesco, an attorney representing the manufacturers. The companies argue that the trade practices used by the foreign chassis makers prevented Cheetah and Stoughton from securing business in 2021 and 2022, when a shortage of chassis disrupted the US supply chain and caused demand to soar. “This pervasive underselling caused domestic producers to lose sales and revenue,” the complaint, filed Wednesday, alleges. “Customers cut off contracts early in favor of [foreign] imports, and US producers were forced to either lower prices further or lose additional sales. Moreover, as demand softens, [foreign] producers will have even more incentive to offer chassis at even lower prices to win the remaining available sales.” If levied, the duties would hurt manufacturers that include ATRO Trailers and GG Trailers in Mexico, THACO Industries in Vietnam and CIE Manufacturing in Thailand. <h3>Protracted battle with CIE </h3>The allegations are the latest chapter in a five-year battle between US chassis manufacturers and CIE, formerly known as CIMC Intermodal, a subsidiary of China International Marine Containers (CIMC). CIE was the target of the original <a href="https://www.joc.com/article/crippling-duty-on-chinese-chassis-upheld-in-final-ruling-5249958">antidumping and countervailing duties</a> on Chinese chassis in May 2021 after a year-long investigation. Shortly thereafter, CIE opened a new factory in Thailand to avoid the new tariffs. In 2022, CIE filed a complaint <a href="https://www.joc.com/article/us-commerce-department-rejects-pitts-appeal-in-marine-chassis-case-5200425">against Pitts Enterprises</a>, alleging that chassis built by Vietnam-based THACO Industries were in fact Chinese-made. Investigators ruled in 2023 that Pitts had violated US trade laws. That same year, US manufacturers alleged that chassis produced by CIE in Thailand contained <a href="https://www.joc.com/article/us-cbp-clears-chassis-maker-cie-in-case-alleging-tariff-evasion-5214408">Chinese parts</a>. Investigators determined in 2024 that those allegations were unfounded. “Yet again we will rigorously refute these baseless claims and will work with the appropriate agencies on reform so a select few cannot continue to weaponize these regulatory levers for commercial gain with no recourse,” Trevor Ash, CEO of CIE Manufacturing, said in a statement to the Journal of Commerce. In a letter to customers on Thursday, CIE warned that the proposed duties could increase the average price of a chassis by 75% and create a production shortage that would strain beneficial cargo owners, chassis lessors and drayage providers. <h3>An uphill battle this time around </h3>While CIE prevailed in previous trade disputes in 2023 and 2024, it may face a more challenging landscape this time. President Donald Trump has repeatedly criticized foreign trade practices that he argues harm US manufacturing and said he will implement new tariffs on China, Canada, Mexico and the European Union. The Office of the US Trade Representative has discussed <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">charging fees of up to $1 million</a> for Chinese-operated vessels calling at US ports. In the final weeks of the Biden administration, the Defense Department added COSCO Shipping and CIMC to its sanctions list for alleged ties to the Chinese military. The Commerce Department is expected to decide within 20 days whether to initiate an investigation on the allegations brought by Cheetah and Stoughton, while the International Trade Commission (ITC) must issue a preliminary determination on material injury within 45 days. The ITC’s ruling will be critical. The commission has the authority to impose preliminary antidumping and countervailing duties while an investigation is ongoing. In the past, it exercised that power in the Pitts and CIE cases, forcing both companies to halt chassis imports until the investigations were completed. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Two US-based chassis manufacturers have petitioned the Department of Commerce and the International Trade Commission to impose steep antidumping and countervailing duties on chassis imports from Mexico, Thailand and Vietnam — extending penalties beyond those levied on China in 2021. The manufacturers — Cheetah Chassis and Stoughton Trailers — contend that the same trade practices that led to an influx of low-cost Chinese chassis are now occurring with imports from the other three nations, causing significant financial harm to US producers. The petition seeks antidumping duties of 32.37% on Mexico, 234.06% on Thailand and 304.68% on Vietnam, although it does not specify how those figures were calculated. “While the sources of dumped and subsidized imports have shifted, they still have the same effect: taking domestic market share and eroding a proud American manufacturing industry,” said Robert DeFrancesco, an attorney representing the manufacturers. The companies argue that the trade practices used by the foreign chassis makers prevented Cheetah and Stoughton from securing business in 2021 and 2022, when a shortage of chassis disrupted the US supply chain and caused demand to soar. “This pervasive underselling caused domestic producers to lose sales and revenue,” the complaint, filed Wednesday, alleges. “Customers cut off contracts early in favor of [foreign] imports, and US producers were forced to either lower prices further or lose additional sales. Moreover, as demand softens, [foreign] producers will have even more incentive to offer chassis at even lower prices to win the remaining available sales.” If levied, the duties would hurt manufacturers that include ATRO Trailers and GG Trailers in Mexico, THACO Industries in Vietnam and CIE Manufacturing in Thailand. Protracted battle with CIE The allegations are the latest chapter in a five-year battle between US chassis manufacturers and CIE, formerly known as CIMC Intermodal, a subsidiary of China International Marine Containers (CIMC). CIE was the target of the original antidumping and countervailing duties on Chinese chassis in May 2021 after a year-long investigation. Shortly thereafter, CIE opened a new factory in Thailand to avoid the new tariffs. In 2022, CIE filed a complaint against Pitts Enterprises , alleging that chassis built by Vietnam-based THACO Industries were in fact Chinese-made. Investigators ruled in 2023 that Pitts had violated US trade laws. That same year, US manufacturers alleged that chassis produced by CIE in Thailand contained Chinese parts . Investigators determined in 2024 that those allegations were unfounded. “Yet again we will rigorously refute these baseless claims and will work with the appropriate agencies on reform so a select few cannot continue to weaponize these regulatory levers for commercial gain with no recourse,” Trevor Ash, CEO of CIE Manufacturing, said in a statement to the Journal of Commerce. In a letter to customers on Thursday, CIE warned that the proposed duties could increase the average price of a chassis by 75% and create a production shortage that would strain beneficial cargo owners, chassis lessors and drayage providers. An uphill battle this time around While CIE prevailed in previous trade disputes in 2023 and 2024, it may face a more challenging landscape this time. President Donald Trump has repeatedly criticized foreign trade practices that he argues harm US manufacturing and said he will implement new tariffs on China, Canada, Mexico and the European Union. The Office of the US Trade Representative has discussed charging fees of up to $1 million for Chinese-operated vessels calling at US ports. In the final weeks of the Biden administration, the Defense Department added COSCO Shipping and CIMC to its sanctions list for alleged ties to the Chinese military. The Commerce Department is expected to decide within 20 days whether to initiate an investigation on the allegations brought by Cheetah and Stoughton, while the International Trade Commission (ITC) must issue a preliminary determination on material injury within 45 days. The ITC’s ruling will be critical. The commission has the authority to impose preliminary antidumping and countervailing duties while an investigation is ongoing. In the past, it exercised that power in the Pitts and CIE cases, forcing both companies to halt chassis imports until the investigations were completed. Contact Ari Ashe at ari.ashe@spglobal.com .

Drayage

US chassis manufacturers targeting makers in Mexico, Thailand and Vietnam

<div class="phx-topic abstract-wrapper">Container lines in the US’ busiest trade lane, determined to avoid a repeat of last year when they believe they significantly underpriced their services, are seeking rate gains of 20% to 30% for the upcoming service year. </div>

Container lines in the US’ busiest trade lane, determined to avoid a repeat of last year when they believe they significantly underpriced their services, are seeking rate gains of 20% to 30% for the upcoming service year.

<div class="phx-topic">Trans-Pacific container lines, during their first round of talks with shippers for 2025–26 annual service contracts, have been seeking rates 20% to 30% higher than the current year’s levels, market sources say. In actual dollar terms, that means carriers are asking for $2,000 per FEU to the West Coast and $3,000 per FEU to the East Coast for next year’s contracts, most of which start on May 1. “The feeling is that $2,000/$3,000 is achievable,” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global Transport Logistics, told the Journal of Commerce. Carriers are trying to avoid a repeat of last spring, when they believe they underpriced their services, settling at West Coast rates of $1,500 to $1,600 per FEU and East Coast rates at $2,500 to $2,600 per FEU for 2024–25 contracts. Most large and midsize importers have wrapped up the first round of their 2025–26 service contract negotiations and intend to finalize the agreements in the coming month, according to forwarders in the eastbound trans-Pacific, the largest US trade lane. “Most of our clients want to wrap up by the end of March,” Kauffman said. Last year, many service contract negotiations continued well into April. Non-vessel-operating common carriers (NVOs), ocean carriers and transportation consultants agree that US imports from Asia in the coming months, while likely to be down from the double-digit growth last year, will support a range of rates within a few hundred dollars per FEU on either side of the $2,000/$3,000 per FEU the carriers are aiming for, depending on the size of the importers. “It should be really close to those numbers,” said Kevin Parkerson, a transportation consultant and former logistics manager at national retailers. “The small to mid-size [beneficial cargo owners (BCOs)] may be a little bit north of $2,000/$3,000.” <h3>Largest retailers not as influential as in past years </h3>It appears that carriers this year are not waiting for the few largest big-box retailers to set the floor for service contract rates before they finalize negotiations with second- and third-tier importers, said Sanjay Tejwani, CEO of the consulting firm 365 Logistics. If midsize BCOs are signing contracts at $2,000/$3,000 per FEU, the several largest retailers may lose bargaining power if they insist on paying $1,200-$1,400 for the West Coast and $2,200-$2,400 to the East Coast, Tejwani said. “That may put a reverse pressure on the larger big-box retailers,” he said. A carrier executive said that while pricing always plays a key role in a customer’s service contract negotiating strategy, a more important factor this year, given the changes in carrier alliances that took effect in February, is securing the vessel space based on minimum quantity commitments that importers feel they will need for the life of the contracts. “A lot of shippers want to lock in space,” the source said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>A midsize BCO that imports home furnishings said his team has had a “fair amount of healthy debate” on pricing with its core carrier. Rather than waiting until later in March to finalize the contract, he is ready in the coming week to present a final offer that will cover as much as 60% of the total volume the company plans to import in the coming year. The remaining 40% will then be spread out over several carriers and NVOs. “We used to worry about putting too many eggs into one basket, but this carrier has done a great job for us,” the importer said. <h3>Some retailers going slow in contract talks </h3>On the other hand, some importers are in no rush to finalize their contract negotiations because the general feeling among shippers and analysts is that while supply and demand will return to normal seasonal levels in March as factories in Asia return to full production after the Lunar New Year lull, import growth this year will be down considerably from last year. US imports from Asia were up 12.7% in January year over year after growing 17.6% in 2024 from 2023, according to PIERS, a Journal of Commerce sister company within S&amp;P Global. Ben Coleman, president of the NVO Teampower Logistics, said that while space is always a concern for importers, vessel capacity is scheduled to increase about 10% while import volume growth will likely be in the mid-single digits. “A number of BCOs don’t want to rush into this,” Coleman said. Spot pricing in the eastbound trans-Pacific also plays a role in pricing annual service contracts, and the spot market has been dropping rapidly during the Lunar New Year lull. The West Coast spot rate as of Feb. 27 was $2,450 per FEU, down 11% on the week and 37% year over year. The East Coast spot rate of $3,575 per FEU is down 9% week over week and 38% year over year, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Carriers have filed general rate increases (GRIs) effective March 1 and March 15 with the intention of propping up spot rates during contract negotiations. But there is widespread skepticism whether the GRIs will stick, especially because some carriers are undercutting current spot rates with special “bullet” rates below $2,000 to the West Coast. “We’re already starting to see a few carriers being very aggressive in their pricing,” an NVO said. <h3>GRIs losing significance? </h3>Kauffman said that GRIs have lost much of the significance they had in past years because carriers have been successful in propping rates up through peak season surcharges (PSSs). PSSs are added to customers’ contract rates by mutual consent of the carrier and the importer. In the past, PSSs were levied during the peak volume months of August through October, but they are now a year-round tactic deployed by carriers to prop up rates. “PSSs have replaced the GRI,” Kauffman said. “We don’t like it, but we’re explaining this to our customers.” Despite the significant uncertainties facing the trans-Pacific trade this year, notably the Trump administration’s tariffs and their impact on consumer demand, and the eventual return of commerce through the Suez Canal that would likely result in a surge of overcapacity, retailers will have to agree on contract pricing soon because seasonal and special-event shipments continue to be shipped, noted an industry consultant who was formerly a logistics manager at big-box retailers. “You can pause some of your merchandise, but not all of it,” the source said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Trans-Pacific container lines, during their first round of talks with shippers for 2025–26 annual service contracts, have been seeking rates 20% to 30% higher than the current year’s levels, market sources say. In actual dollar terms, that means carriers are asking for $2,000 per FEU to the West Coast and $3,000 per FEU to the East Coast for next year’s contracts, most of which start on May 1. “The feeling is that $2,000/$3,000 is achievable,” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global Transport Logistics, told the Journal of Commerce. Carriers are trying to avoid a repeat of last spring, when they believe they underpriced their services, settling at West Coast rates of $1,500 to $1,600 per FEU and East Coast rates at $2,500 to $2,600 per FEU for 2024–25 contracts. Most large and midsize importers have wrapped up the first round of their 2025–26 service contract negotiations and intend to finalize the agreements in the coming month, according to forwarders in the eastbound trans-Pacific, the largest US trade lane. “Most of our clients want to wrap up by the end of March,” Kauffman said. Last year, many service contract negotiations continued well into April. Non-vessel-operating common carriers (NVOs), ocean carriers and transportation consultants agree that US imports from Asia in the coming months, while likely to be down from the double-digit growth last year, will support a range of rates within a few hundred dollars per FEU on either side of the $2,000/$3,000 per FEU the carriers are aiming for, depending on the size of the importers. “It should be really close to those numbers,” said Kevin Parkerson, a transportation consultant and former logistics manager at national retailers. “The small to mid-size [beneficial cargo owners (BCOs)] may be a little bit north of $2,000/$3,000.” Largest retailers not as influential as in past years It appears that carriers this year are not waiting for the few largest big-box retailers to set the floor for service contract rates before they finalize negotiations with second- and third-tier importers, said Sanjay Tejwani, CEO of the consulting firm 365 Logistics. If midsize BCOs are signing contracts at $2,000/$3,000 per FEU, the several largest retailers may lose bargaining power if they insist on paying $1,200-$1,400 for the West Coast and $2,200-$2,400 to the East Coast, Tejwani said. “That may put a reverse pressure on the larger big-box retailers,” he said. A carrier executive said that while pricing always plays a key role in a customer’s service contract negotiating strategy, a more important factor this year, given the changes in carrier alliances that took effect in February, is securing the vessel space based on minimum quantity commitments that importers feel they will need for the life of the contracts. “A lot of shippers want to lock in space,” the source said. A midsize BCO that imports home furnishings said his team has had a “fair amount of healthy debate” on pricing with its core carrier. Rather than waiting until later in March to finalize the contract, he is ready in the coming week to present a final offer that will cover as much as 60% of the total volume the company plans to import in the coming year. The remaining 40% will then be spread out over several carriers and NVOs. “We used to worry about putting too many eggs into one basket, but this carrier has done a great job for us,” the importer said. Some retailers going slow in contract talks On the other hand, some importers are in no rush to finalize their contract negotiations because the general feeling among shippers and analysts is that while supply and demand will return to normal seasonal levels in March as factories in Asia return to full production after the Lunar New Year lull, import growth this year will be down considerably from last year. US imports from Asia were up 12.7% in January year over year after growing 17.6% in 2024 from 2023, according to PIERS, a Journal of Commerce sister company within S&P Global. Ben Coleman, president of the NVO Teampower Logistics, said that while space is always a concern for importers, vessel capacity is scheduled to increase about 10% while import volume growth will likely be in the mid-single digits. “A number of BCOs don’t want to rush into this,” Coleman said. Spot pricing in the eastbound trans-Pacific also plays a role in pricing annual service contracts, and the spot market has been dropping rapidly during the Lunar New Year lull. The West Coast spot rate as of Feb. 27 was $2,450 per FEU, down 11% on the week and 37% year over year. The East Coast spot rate of $3,575 per FEU is down 9% week over week and 38% year over year, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Carriers have filed general rate increases (GRIs) effective March 1 and March 15 with the intention of propping up spot rates during contract negotiations. But there is widespread skepticism whether the GRIs will stick, especially because some carriers are undercutting current spot rates with special “bullet” rates below $2,000 to the West Coast. “We’re already starting to see a few carriers being very aggressive in their pricing,” an NVO said. GRIs losing significance? Kauffman said that GRIs have lost much of the significance they had in past years because carriers have been successful in propping rates up through peak season surcharges (PSSs). PSSs are added to customers’ contract rates by mutual consent of the carrier and the importer. In the past, PSSs were levied during the peak volume months of August through October, but they are now a year-round tactic deployed by carriers to prop up rates. “PSSs have replaced the GRI,” Kauffman said. “We don’t like it, but we’re explaining this to our customers.” Despite the significant uncertainties facing the trans-Pacific trade this year, notably the Trump administration’s tariffs and their impact on consumer demand, and the eventual return of commerce through the Suez Canal that would likely result in a surge of overcapacity, retailers will have to agree on contract pricing soon because seasonal and special-event shipments continue to be shipped, noted an industry consultant who was formerly a logistics manager at big-box retailers. “You can pause some of your merchandise, but not all of it,” the source said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Trans-Pacific carriers reaching higher in early 2025–26 contract talks

<div class="phx-topic abstract-wrapper">The sector is off to a strong start to the year, but tariff-driven trade tensions and other concerns could have a negative impact on the global air freight market, according to industry groups. </div>

The sector is off to a strong start to the year, but tariff-driven trade tensions and other concerns could have a negative impact on the global air freight market, according to industry groups.

<div class="phx-topic">Global air freight is headed for another year of tight capacity and elevated rate levels, but a series of economic, geopolitical and regulatory risks are stacking up to cloud the outlook, the head of The International Air Cargo Association (TIACA) says. Glyn Hughes, TIACA’s director-general, warned that the widespread risks posed a threat to the industry forecast of 5% growth in air cargo demand this year that was based on expected global GDP growth of 3.2%. “We see trade tensions as an elevated risk as tariffs are being weaponized in the political forum,” Hughes told a media briefing Wednesday. “We believe international trade and the integration of economies is a way for global prosperity, and anything impacting that could have a negative impact on our industry.” Hughes highlighted a number of risks, including moves in the US and Europe to remove the so-called de minimis exemption for low-value imports from China, declining consumer confidence in the US, tariffs and retaliatory measures, low backhaul load factors, Red Sea diversions and an uncertain outcome of peace talks in Ukraine. All those factors were leaving air cargo in “a fragile situation,” he said. Willie Walsh, director-general of the International Air Transport Association (IATA), was more positive in his monthly air cargo update on Thursday, pointing to external factors such as trade growth, declining fuel costs and expanding e-commerce that were bullish for air cargo. But he, too, warned that global trade was facing disruption that could change market conditions. “In particular, the wild card is the potential for tariff-driven trade policies from the US Trump administration,” Walsh said. President Donald Trump on Thursday posted a social media message saying he <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">intends to add another 10% levy on Chinese imports</a>, citing what he says is that country’s role in the illegal drug trade. Those tariffs, which go into effect March 4, would be on top of an initial 10% tariff on Chinese goods that Trump announced at the start of February. Air cargo is coming off a record 2024 that saw 12% growth in global volume, but both demand and rates were starting to fall, according to IATA. “January marked 18 consecutive months of growth for air cargo, but the month’s 3.2% year-on-year growth is a moderation from double-digit peaks in 2024,” Walsh said in his update. “Similarly, yields, while still above January 2024 levels, saw a 9.9% decline from December as cargo load factors also declined by an average of 1.5 percentage points.” <h3>Bracing for de minimis clampdown </h3>Strong e-commerce demand last year filled all available capacity out of China and kept the industry in peak season mode, and Hughes said the expectation was for online demand to remain robust. However, US moves to <a href="https://www.joc.com/article/europe-joins-us-in-call-for-end-to-e-commerce-de-minimis-exemption-5943108">clamp down on low-value Chinese imports</a> would impact that demand. “We continue to focus on e-commerce expansion but because of certain policy changes there is an elevated risk associated with this,” he said. In the US, China accounted for two-thirds of the 1.36 billion de minimis imports last year. De minimis regulations in the US allow one shipment of less than $800 in value to move between a single shipper and single consignee per day duty free. Last year, 4.6 billion consignments with a value below the European Union’s de minimis threshold of €150 ($155) entered the EU market duty free, mostly from China. Removing low-value products from de minimis exemptions will mean all those millions of daily parcels will need to go through customs checks, a process that would immediately overwhelm the system in both the EU and the US. It is for that reason that soon after the Trump administration removed Chinese low-value products from de minimis rules earlier this month, the exemption was restored. “US Customs and Border Patrol weren’t able and capable of handling the inspections, and they weren’t capable and able to handle the levy and the collection of the applicable duties and tariffs,” Hughes said. “We anticipate it being at least two or three months before they can look at implementing the appropriate systems.” Another issue outside the control of airlines was the closing of Russian airspace to western carriers, which continues to add significant costs and flying time for airlines on routes between Asia and Europe. And Hughes said a Ukraine peace deal currently being negotiated between the US and Russia would not automatically translate into an opening of Russian skies. “Russian restrictions were imposed as a retaliatory measure to sanctions from certain states so there will be several other measures that will need to take place before we see completely reopened air space,” Hughes said. Yet another challenge was the growing cargo imbalance between Asia and major destination markets. Despite freighters flying full on routes from Asia to the US, Europe and the Middle East in January ahead of Lunar New Year, cargo volume on the backhaul routes was low, with airlines having to price the weak return legs into the freight costs. “The inequality we see in air cargo transport is evident and is becoming even more fragmented and diverse as we go forward,” Hughes said. He noted that the backhaul Europe-to-Asia dynamic load factor in January was 36%, Middle East-to-Asia was 29% and North America-to-North Asia was 43%. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Global air freight is headed for another year of tight capacity and elevated rate levels, but a series of economic, geopolitical and regulatory risks are stacking up to cloud the outlook, the head of The International Air Cargo Association (TIACA) says. Glyn Hughes, TIACA’s director-general, warned that the widespread risks posed a threat to the industry forecast of 5% growth in air cargo demand this year that was based on expected global GDP growth of 3.2%. “We see trade tensions as an elevated risk as tariffs are being weaponized in the political forum,” Hughes told a media briefing Wednesday. “We believe international trade and the integration of economies is a way for global prosperity, and anything impacting that could have a negative impact on our industry.” Hughes highlighted a number of risks, including moves in the US and Europe to remove the so-called de minimis exemption for low-value imports from China, declining consumer confidence in the US, tariffs and retaliatory measures, low backhaul load factors, Red Sea diversions and an uncertain outcome of peace talks in Ukraine. All those factors were leaving air cargo in “a fragile situation,” he said. Willie Walsh, director-general of the International Air Transport Association (IATA), was more positive in his monthly air cargo update on Thursday, pointing to external factors such as trade growth, declining fuel costs and expanding e-commerce that were bullish for air cargo. But he, too, warned that global trade was facing disruption that could change market conditions. “In particular, the wild card is the potential for tariff-driven trade policies from the US Trump administration,” Walsh said. President Donald Trump on Thursday posted a social media message saying he intends to add another 10% levy on Chinese imports , citing what he says is that country’s role in the illegal drug trade. Those tariffs, which go into effect March 4, would be on top of an initial 10% tariff on Chinese goods that Trump announced at the start of February. Air cargo is coming off a record 2024 that saw 12% growth in global volume, but both demand and rates were starting to fall, according to IATA. “January marked 18 consecutive months of growth for air cargo, but the month’s 3.2% year-on-year growth is a moderation from double-digit peaks in 2024,” Walsh said in his update. “Similarly, yields, while still above January 2024 levels, saw a 9.9% decline from December as cargo load factors also declined by an average of 1.5 percentage points.” Bracing for de minimis clampdown Strong e-commerce demand last year filled all available capacity out of China and kept the industry in peak season mode, and Hughes said the expectation was for online demand to remain robust. However, US moves to clamp down on low-value Chinese imports would impact that demand. “We continue to focus on e-commerce expansion but because of certain policy changes there is an elevated risk associated with this,” he said. In the US, China accounted for two-thirds of the 1.36 billion de minimis imports last year. De minimis regulations in the US allow one shipment of less than $800 in value to move between a single shipper and single consignee per day duty free. Last year, 4.6 billion consignments with a value below the European Union’s de minimis threshold of €150 ($155) entered the EU market duty free, mostly from China. Removing low-value products from de minimis exemptions will mean all those millions of daily parcels will need to go through customs checks, a process that would immediately overwhelm the system in both the EU and the US. It is for that reason that soon after the Trump administration removed Chinese low-value products from de minimis rules earlier this month, the exemption was restored. “US Customs and Border Patrol weren’t able and capable of handling the inspections, and they weren’t capable and able to handle the levy and the collection of the applicable duties and tariffs,” Hughes said. “We anticipate it being at least two or three months before they can look at implementing the appropriate systems.” Another issue outside the control of airlines was the closing of Russian airspace to western carriers, which continues to add significant costs and flying time for airlines on routes between Asia and Europe. And Hughes said a Ukraine peace deal currently being negotiated between the US and Russia would not automatically translate into an opening of Russian skies. “Russian restrictions were imposed as a retaliatory measure to sanctions from certain states so there will be several other measures that will need to take place before we see completely reopened air space,” Hughes said. Yet another challenge was the growing cargo imbalance between Asia and major destination markets. Despite freighters flying full on routes from Asia to the US, Europe and the Middle East in January ahead of Lunar New Year, cargo volume on the backhaul routes was low, with airlines having to price the weak return legs into the freight costs. “The inequality we see in air cargo transport is evident and is becoming even more fragmented and diverse as we go forward,” Hughes said. He noted that the backhaul Europe-to-Asia dynamic load factor in January was 36%, Middle East-to-Asia was 29% and North America-to-North Asia was 43%. Contact Greg Knowler at greg.knowler@spglobal.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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