<div class="phx-topic abstract-wrapper">Tay Yoshitani, CEO of the Port of Seattle, has promoted Kurt Beckett to the role of deputy CEO.</div>

Tay Yoshitani, CEO of the Port of Seattle, has promoted Kurt Beckett to the role of deputy CEO.

<div>Tay Yoshitani, CEO of the Port of Seattle, <a>has promoted</a> Kurt Beckett to the role of deputy CEO.Beckett will be primarily responsible for port infrastructure development and internal operations. He will direct the port’s public affairs, organizational performance, small business development, social responsibility, law enforcement and capital development teams.Beckett has served as Yoshitani’s chief of staff since 2010. He joined the port in 2007 as director of external affairs after senior staff roles with Sen. Maria Cantwell, D-Wash., and former Rep. Norm Dicks, D-Wash.The move will allow Yoshitani to focus exclusively on business development, attracting new shipping lines and air...

Tay Yoshitani, CEO of the Port of Seattle, has promoted Kurt Beckett to the role of deputy CEO. Beckett will be primarily responsible for port infrastructure development and internal operations. He will direct the port’s public affairs, organizational performance, small business development, social responsibility, law enforcement and capital development teams. Beckett has served as Yoshitani’s chief of staff since 2010. He joined the port in 2007 as director of external affairs after senior staff roles with Sen. Maria Cantwell, D-Wash., and former Rep. Norm Dicks, D-Wash. The move will allow Yoshitani to focus exclusively on business development, attracting new shipping lines and air services to Seattle and advancing policy issues regarding the port’s competitiveness, according to the port. Yoshitani will continue to directly oversee Sea-Tac International Airport and the organization’s real estate holdings. He will also continue to manage the port’s finances and budget and work closely with the port commission on internal audit matters. This fall, Yoshitani will assume the role of chairman of the board of the American Association of Port Authorities.

North American ports

Port of Seattle Appoints Beckett as Deputy CEO

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

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

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

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

Container Shipping News

Transport, Trade and Regulation News

Container lines

Maritime

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

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

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

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

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

Breakbulk carriers

Ro/ro cargo

Breakbulk News

Tariffs put relationship between vehicle manufacturers, carriers in spotlight

<div class="phx-topic abstract-wrapper">The carrier will enter long-term charters for 10 ships of 11,500-TEU capacity that will be deployed across various global trades and be capable of running on both regular bunkers and LNG. </div>

The carrier will enter long-term charters for 10 ships of 11,500-TEU capacity that will be deployed across various global trades and be capable of running on both regular bunkers and LNG.

<div class="phx-topic">Zim Integrated Shipping Services is filling in a gap in its fleet with a $2.3 billion deal to charter 10 newbuilds. The ocean carrier’s move comes amid still-healthy demand, for now, with rates on post-Panamax tonnage remaining strong into 2025. Zim said in a statement Monday it will enter long-term charters for 10 ships of 11,500-TEU capacity that will be deployed across various global trades. The ships will be dual fuel, running on both regular bunkers and liquefied natural gas (LNG). Seven of the vessels will be chartered from an affiliate of TMS Group, controlled by Greek shipping billionaire George Economou, with the remaining three chartered from an affiliate of Kenon Holdings, formerly Zim’s largest shareholder that had already chartered three 8,000-TEU ships to the carrier in 2022.The newly-chartered vessels, all being built at China’s Zhoushan Changhong shipyard, are to be delivered between 2027 and 2028. Zim said in the statement the new charters “ensure access to an important vessel segment and further strengthen our core LNG fleet.”Zim, which charters 131 of its 145-strong container fleet, is mostly concentrated on smaller post-Panamax vessels. The ocean carrier has 33 ships in the 7,000-10,000-TEU segment primarily serving its express services, according to data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. In its largest ship segment, Zim has 10 vessels of 15,000-TEU capacity on charter for 12 years. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="053bb831-b93b-4d03-b80c-b7ec6e6d9046"></dynamic-object></div>The company did not disclose the length of the new charters, but most of its other charter agreements are between five and eight years, Zim said in its last annual report. <h3>Charter rates at fresh highs</h3>After a lull following the pandemic-era demand shock, charter rates on post-Panamax ships are testing new highs. As of April, Alphaliner said that ships in the 8,500-TEU segment saw a daily charter rate of $74,000, the highest since early 2022. Charter rates for post-Panamax tonnage surged from a post-pandemic low of $40,000 per day during 2024 following the decision by ocean carriers to divert ships away from the Red Sea and Suez Canal amid ongoing attacks on commercial shipping by Houthi militants operating in Yemen. With those diversions expected to continue through much of 2025, Alphaliner sees no let-up in chartering costs.“The charter market remains unperturbed by the multiple policy and geopolitical uncertainties ... with no sign of any weakening whatsoever,” Alphaliner said in March. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Zim Integrated Shipping Services is filling in a gap in its fleet with a $2.3 billion deal to charter 10 newbuilds. The ocean carrier’s move comes amid still-healthy demand, for now, with rates on post-Panamax tonnage remaining strong into 2025. Zim said in a statement Monday it will enter long-term charters for 10 ships of 11,500-TEU capacity that will be deployed across various global trades. The ships will be dual fuel, running on both regular bunkers and liquefied natural gas (LNG). Seven of the vessels will be chartered from an affiliate of TMS Group, controlled by Greek shipping billionaire George Economou, with the remaining three chartered from an affiliate of Kenon Holdings, formerly Zim’s largest shareholder that had already chartered three 8,000-TEU ships to the carrier in 2022. The newly-chartered vessels, all being built at China’s Zhoushan Changhong shipyard, are to be delivered between 2027 and 2028. Zim said in the statement the new charters “ensure access to an important vessel segment and further strengthen our core LNG fleet.” Zim, which charters 131 of its 145-strong container fleet, is mostly concentrated on smaller post-Panamax vessels. The ocean carrier has 33 ships in the 7,000-10,000-TEU segment primarily serving its express services, according to data from Sea-web, a sister company of the Journal of Commerce within S&P Global. In its largest ship segment, Zim has 10 vessels of 15,000-TEU capacity on charter for 12 years. The company did not disclose the length of the new charters, but most of its other charter agreements are between five and eight years, Zim said in its last annual report. Charter rates at fresh highs After a lull following the pandemic-era demand shock, charter rates on post-Panamax ships are testing new highs. As of April, Alphaliner said that ships in the 8,500-TEU segment saw a daily charter rate of $74,000, the highest since early 2022. Charter rates for post-Panamax tonnage surged from a post-pandemic low of $40,000 per day during 2024 following the decision by ocean carriers to divert ships away from the Red Sea and Suez Canal amid ongoing attacks on commercial shipping by Houthi militants operating in Yemen. With those diversions expected to continue through much of 2025, Alphaliner sees no let-up in chartering costs. “The charter market remains unperturbed by the multiple policy and geopolitical uncertainties ... with no sign of any weakening whatsoever,” Alphaliner said in March. Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

Zim fills out its post-Panamax tonnage with $2.3 billion charter deal

<div class="phx-topic abstract-wrapper">The group’s secretary-general said there was “no Plan B” to fall back on, but is confident any disagreements between member states over the proposed midterm measures to reduce carbon emissions from shipping will be resolved during this week’s meeting of the Marine Environment Protection Committee.</div>

The group’s secretary-general said there was “no Plan B” to fall back on, but is confident any disagreements between member states over the proposed midterm measures to reduce carbon emissions from shipping will be resolved during this week’s meeting of the Marine Environment Protection Committee.

<div class="phx-topic">The head of the International Maritime Organization (IMO) insisted Monday that member states will end this week’s crucial greenhouse gas (GHG) meeting with a binding agreement on a fuel intensity standard and a pricing mechanism on carbon emissions. The 176 members of the IMO gathered in London at the 83rd session of its Marine Environment Protection Committee (MEPC 83) for discussions that include the midterm measures aimed at reducing carbon emissions from shipping. “This week the measures will be approved,” Secretary-General Arsenio Dominguez told reporters during a press conference at the IMO’s London headquarters, after a question about whether the discussions would end up being kicked down the road. “I don’t work on a Plan B. I only have a Plan A.” While the implementation of the measures will be made in October, agreement on the legal text and framework will be decided by the end of MEPC 83 on Friday, Dominguez insisted. The focus of MEPC 83 is on finalizing technical and economic measures that will ensure global shipping achieves the goals set out in the IMO’s 2023 GHG strategy, but the levy on emissions remains the main point of contention. A “compromise” levy proposal currently on the table is backed by over 50 countries, including Japan, South Korea, Greece and the UK, as well as the European Union, Small Island Developing States (SIDS) and the International Chamber of Shipping (ICS). Opposed to the idea of global fuel levy in general are Brazil, China, Saudi Arabia and South Africa that have concerns over the effect of a levy on their economies, shipping rates and food security. <h3>Tough talks ahead </h3>Despite Dominguez’s confidence that an agreement will be reached on the pricing mechanism, an indication of the tough talks that are in store this week came from representatives of the Pacific islands that regard shipping emissions as an existential threat. Albon Ishoda, ambassador for the Marshall Islands and special envoy for Pacific islands maritime decarbonization, said the compromise levy proposal would only be supported if it covers 100% of carbon emissions priced at $150 per ton. “That is what climate science, economic modeling and justice demand,” Ishoda told reporters at a separate press conference in the IMO headquarters. There is a large discrepancy over the carbon levy amount being proposed, with most countries indicating a price range of $18 to $150 per ton of CO2 emitted for the future levy. The container shipping sector is behind a fuel levy, with Maersk calling for a $600-per-ton-of-CO2 equivalent to cover the abatement cost of alternative fuels. A report by London-based UCL Energy Institute Shipping and Oceans Research Group last week found that stable and predictable revenue generation, crucial for enabling “a just and equitable energy transition,” would only be possible in scenarios that have a levy component as well as a global fuel standard. “Let me be clear about one thing,” Ishoda added. “This is not about raising money. A GHG price is a tool to drive rapid emissions reductions and to incentivize the uptake of zero-emissions fuels that can be scaled up to meet the energy demand of the shipping sector by 2050. “The revenue generated is a byproduct, one that must be used to both incentivize the industry and enable a just and equitable transition, especially for those most vulnerable nations least responsible for the climate crisis,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The head of the International Maritime Organization (IMO) insisted Monday that member states will end this week’s crucial greenhouse gas (GHG) meeting with a binding agreement on a fuel intensity standard and a pricing mechanism on carbon emissions. The 176 members of the IMO gathered in London at the 83rd session of its Marine Environment Protection Committee (MEPC 83) for discussions that include the midterm measures aimed at reducing carbon emissions from shipping. “This week the measures will be approved,” Secretary-General Arsenio Dominguez told reporters during a press conference at the IMO’s London headquarters, after a question about whether the discussions would end up being kicked down the road. “I don’t work on a Plan B. I only have a Plan A.” While the implementation of the measures will be made in October, agreement on the legal text and framework will be decided by the end of MEPC 83 on Friday, Dominguez insisted. The focus of MEPC 83 is on finalizing technical and economic measures that will ensure global shipping achieves the goals set out in the IMO’s 2023 GHG strategy, but the levy on emissions remains the main point of contention. A “compromise” levy proposal currently on the table is backed by over 50 countries, including Japan, South Korea, Greece and the UK, as well as the European Union, Small Island Developing States (SIDS) and the International Chamber of Shipping (ICS). Opposed to the idea of global fuel levy in general are Brazil, China, Saudi Arabia and South Africa that have concerns over the effect of a levy on their economies, shipping rates and food security. Tough talks ahead Despite Dominguez’s confidence that an agreement will be reached on the pricing mechanism, an indication of the tough talks that are in store this week came from representatives of the Pacific islands that regard shipping emissions as an existential threat. Albon Ishoda, ambassador for the Marshall Islands and special envoy for Pacific islands maritime decarbonization, said the compromise levy proposal would only be supported if it covers 100% of carbon emissions priced at $150 per ton. “That is what climate science, economic modeling and justice demand,” Ishoda told reporters at a separate press conference in the IMO headquarters. There is a large discrepancy over the carbon levy amount being proposed, with most countries indicating a price range of $18 to $150 per ton of CO2 emitted for the future levy. The container shipping sector is behind a fuel levy, with Maersk calling for a $600-per-ton-of-CO2 equivalent to cover the abatement cost of alternative fuels. A report by London-based UCL Energy Institute Shipping and Oceans Research Group last week found that stable and predictable revenue generation, crucial for enabling “a just and equitable energy transition,” would only be possible in scenarios that have a levy component as well as a global fuel standard. “Let me be clear about one thing,” Ishoda added. “This is not about raising money. A GHG price is a tool to drive rapid emissions reductions and to incentivize the uptake of zero-emissions fuels that can be scaled up to meet the energy demand of the shipping sector by 2050. “The revenue generated is a byproduct, one that must be used to both incentivize the industry and enable a just and equitable transition, especially for those most vulnerable nations least responsible for the climate crisis,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Fuel levy, intensity standard will be agreed to by Friday: IMO chief

<div class="phx-topic abstract-wrapper">An initial flurry of activity will be followed by a drop in demand after e-commerce from China and Hong Kong no longer enjoys duty-free treatment, the head of the air cargo group tells the Journal of Commerce.</div>

An initial flurry of activity will be followed by a drop in demand after e-commerce from China and Hong Kong no longer enjoys duty-free treatment, the head of the air cargo group tells the Journal of Commerce.

<div class="phx-topic">A period of “panic” is likely to unfold over the next three weeks on trans-Pacific air freight markets as cargo owners try to get shipments into the US before the duty-free exclusion for low-value imports ends on May 2, according to The International Air Cargo Association (Tiaca). But the initial flurry of activity will be followed by a drop in demand for both general cargo as tariffs slow trade volume and e-commerce from China and Hong Kong no longer enjoys duty-free treatment, Tiaca Director-General Glyn Hughes told the Journal of Commerce Monday. “We can expect a lot of panic and advance purchases by consumers, so movements could increase over the next three weeks,” Hughes said. “Thereafter, the extra costs involved for the relatively low average-value shipment, believed to be in range of $50 to $60, will likely result in less e-commerce shipments on Asia to US routes.” All postal items valued at or under $800 previously qualifying for the US’ so-called “de minimis” exemption will become subject to a duty rate of either 30% of their value or $25 per item from May 2, increasing to $50 per item after June 1. Almost one billion US de minimis shipments last year were from China. A spokesperson for Kuehne + Nagel said their trans-Pacific air freight volume was increasing in line with a usual “end-of-quarter rush” and it was not clear what influence the US low-value measures were having on demand. As companies evaluate the economic viability of their products under the new tariff regime, the overall general air cargo market from Asia to the US is also likely to suffer a downturn, Hughes noted. “We could see a drop in overall volumes of general cargo from all Asia origins as they have been hit particularly hard with tariff rates between 24% and 54%, depending on origin,” he said, adding that the downturn will have a knock-on impact on the deployment of freighters. “It would be reasonable to expect the current freighter capacity deployed on Asia-US to be redeployed on other trade lanes to avoid significant drops in load factors and rates,” Hughes said. “We are in a period of transition as new economic partnerships will get forged as producers and consumers seek to protect themselves from inevitable tariff induced price rises,” he added. <h3>Short-term approach to contracting </h3>While the trans-Pacific market waits to see the response from US importers to the widespread tariffs, the uncertainty is playing out in air cargo contracting behavior on the China-US trade lane. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the latest air cargo market data reflected the cautious “wait-and-see” approach being adopted by industry stakeholders. Shippers negotiating contracts in the first quarter preferred shorter-term agreements of three months or less, representing 79% of contracts negotiated, an increase of nearly 20 percentage points year over year. Forwarders continue to place approximately 45% of their volumes in the spot market. “With the growth of rates slowing overall, we’d normally expect to see shippers making longer capacity commitments to achieve more competitive rates, but right now, this is clearly a gamble few shippers are ready to take — and this is before we’re even seeing tariffs impacting volumes,” van de Wouw said in Xeneta’s latest market update. Average rates from Shanghai to North America were at $5.54 per kilogram this week, up 20% since the beginning of March and the third consecutive week the rate has been above $5/kg, according to the Baltic Air Index. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A period of “panic” is likely to unfold over the next three weeks on trans-Pacific air freight markets as cargo owners try to get shipments into the US before the duty-free exclusion for low-value imports ends on May 2, according to The International Air Cargo Association (Tiaca). But the initial flurry of activity will be followed by a drop in demand for both general cargo as tariffs slow trade volume and e-commerce from China and Hong Kong no longer enjoys duty-free treatment, Tiaca Director-General Glyn Hughes told the Journal of Commerce Monday. “We can expect a lot of panic and advance purchases by consumers, so movements could increase over the next three weeks,” Hughes said. “Thereafter, the extra costs involved for the relatively low average-value shipment, believed to be in range of $50 to $60, will likely result in less e-commerce shipments on Asia to US routes.” All postal items valued at or under $800 previously qualifying for the US’ so-called “de minimis” exemption will become subject to a duty rate of either 30% of their value or $25 per item from May 2, increasing to $50 per item after June 1. Almost one billion US de minimis shipments last year were from China. A spokesperson for Kuehne + Nagel said their trans-Pacific air freight volume was increasing in line with a usual “end-of-quarter rush” and it was not clear what influence the US low-value measures were having on demand. As companies evaluate the economic viability of their products under the new tariff regime, the overall general air cargo market from Asia to the US is also likely to suffer a downturn, Hughes noted. “We could see a drop in overall volumes of general cargo from all Asia origins as they have been hit particularly hard with tariff rates between 24% and 54%, depending on origin,” he said, adding that the downturn will have a knock-on impact on the deployment of freighters. “It would be reasonable to expect the current freighter capacity deployed on Asia-US to be redeployed on other trade lanes to avoid significant drops in load factors and rates,” Hughes said. “We are in a period of transition as new economic partnerships will get forged as producers and consumers seek to protect themselves from inevitable tariff induced price rises,” he added. Short-term approach to contracting While the trans-Pacific market waits to see the response from US importers to the widespread tariffs, the uncertainty is playing out in air cargo contracting behavior on the China-US trade lane. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the latest air cargo market data reflected the cautious “wait-and-see” approach being adopted by industry stakeholders. Shippers negotiating contracts in the first quarter preferred shorter-term agreements of three months or less, representing 79% of contracts negotiated, an increase of nearly 20 percentage points year over year. Forwarders continue to place approximately 45% of their volumes in the spot market. “With the growth of rates slowing overall, we’d normally expect to see shippers making longer capacity commitments to achieve more competitive rates, but right now, this is clearly a gamble few shippers are ready to take — and this is before we’re even seeing tariffs impacting volumes,” van de Wouw said in Xeneta’s latest market update. Average rates from Shanghai to North America were at $5.54 per kilogram this week, up 20% since the beginning of March and the third consecutive week the rate has been above $5/kg, according to the Baltic Air Index. 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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