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Platts Containers Update

<div class="phx-topic abstract-wrapper">The Georgia Ports Authority has approved $205 million in capital expenditures to address the congestion slowing down the supply chain through the port of Savannah.</div>

The Georgia Ports Authority has approved $205 million in capital expenditures to address the congestion slowing down the supply chain through the port of Savannah.

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<div>The Georgia Ports Authority (GPA) will increase capacity in Savannah by 650,000 TEU, a 20 percent increase, before the end of 2021 to handle volume surges with fewer slowdowns, a lesson learned from recent congestion that resulted in as many as 23 vessels anchored outside the harbor in late February.GPA’s board of directors Monday approved $205 million in capital expenses to address the frenzied pace of business. Expenditures include $65 million to construct 2,100 container slots in the Garden City Terminal, and the purchase of 20 new rubber-tired gantry cranes that will allow stacks to be packed six containers high...

The Georgia Ports Authority (GPA) will increase capacity in Savannah by 650,000 TEU, a 20 percent increase, before the end of 2021 to handle volume surges with fewer slowdowns, a lesson learned from recent congestion that resulted in as many as 23 vessels anchored outside the harbor in late February. GPA’s board of directors Monday approved $205 million in capital expenses to address the frenzied pace of business. Expenditures include $65 million to construct 2,100 container slots in the Garden City Terminal, and the purchase of 20 new rubber-tired gantry cranes that will allow stacks to be packed six containers high instead of five. The $65 million was not on the original budget for this fiscal year. While the delays are nowhere near as lengthy as those in Southern California, the GPA has said keeping up with the heavy volume and weather-related delays in the past eight weeks has been “challenging” and “problematic.” GPA CEO Griff Lynch said there were as many as 23 vessels anchored outside Savannah in late February and early March because fog shut down traffic through the harbor for 109 hours, or roughly 16 percent of the available operating hours in February, compared with less than 60 hours in February 2020. “That's not uncommon for January, February, and early March, but normally the fog season is at our slowest point of the year. This fog season came and it's the heaviest time of the year, for all the reasons you’ve written about,” Lynch told JOC.com. “That really hurt us big time and then even in March, we had several days of fog in the first two weeks.” Lynch believes the port will handle 5.2 million TEU by the end of the current fiscal year ending June 30, compared with 4.4 million between July 2019 and June 2020. He said the capital expenditures will ease congestion coming from volume levels the port authority didn’t forecast until 2025. “It doesn't solve the weather, you will still have some delays on vessels,” he said. “But when you're shut down for a couple days because of the fog, you start getting a buildup of inventory and unwanted congestion. So the question is, how quickly can you recover from the delay. How do we overcome that adversity, quickly, and we do it by creating more capacity.” Fewer vessels anchored than two weeks ago Photo credit: Sophia Pehawkins/Flickr. The number of vessels anchored outside Savannah has fallen to about a dozen since mid-March amid better weather and what Lynch attributed to high productivity from longshoremen. “We're going to do 270,000 lifts in March because we're doing 65,000 lifts a week right now, which is a 6 million TEU pace [annually]. If you compare that to last year we wrapped up last year with 4.4 million, things are very busy,” he said. “People are working a lot of overtime, but there comes a point in time where they're just tired. We need to get more people to help relieve them, get them trained, and adapted to this level of volume.” The labor issue is not related to call outs, but rather a hiring freeze both the GPA and International Longshoremen’s Association put in place when they believed there would be a gradual recovery from the pandemic, rather than a sharp swing, Lynch said. If longshoremen keep up their current productivity, and the weather is not an issue, Lynch believes the vessel queue can be cleared up by mid-to-late April. Inventory and dwells down, too With the anchored vessels cut roughly in half this month, the dwell and number of containers in the terminal have decreased. In early February, there were about 78,000 containers sitting in the Garden City Terminal with an average import dwell of five to six days. The number grew to 84,000 containers and roughly six days in late February, but the number has fallen to 70,000 containers and a dwell of about four to five days as of late last week. Lynch said the port was in “much better shape” than 30 days ago, although the inventory and import dwell numbers are still higher than the 50,000 to 60,000 containers and four days of dwell in a normal March. Export dwells remain elevated at 10.4 days, however, due to the low vessel schedule reliability , which is less than the 12 days in late February, but more than the six-day average for a normal March, Lynch said. “Ocean carriers have been evacuating empties, which has been very helpful,” he said. “A lot of the pain points were created because of empties not being evacuated, and the [loaded] exports were not being cleared out. Of the 84,000 containers [in late February], we had 28,000 exports on the terminal at the peak. Today we’re at 19,000.” Other capital projects underway The GPA board also gave final approval to the reconstruction of Berth 1 at the Garden City Terminal, a month after the Ocean Terminal reconfigured a berth to handle container traffic until the Garden City project is complete in 2023. The Ocean Terminal is a roll-on/roll-off, project cargo terminal, but a portion of the yard has been repurposed to handle smaller vessels. The Berth 1 reconstruction received $140 million on Monday and work begins in April. The port authority applied for a permit earlier this month for another expansion project that will create an additional 800,000 TEU of capacity by 2023. The GPA hopes to begin work on that project, which is tied to the Berth 1 project, by the end of this year. The GPA has also begun design work to build storage space for exporters on a nearly 100-acre property just west of the Garden City Terminal. The original plan was to open the space in 2024 or 2025, but GPA is speeding up the pace of work because of the problems exporters are facing at the moment with inconsistent earliest receive dates (ERDs) . “What we've learned is we've got to pick up the pace on some of the projects that we were planning on, and we're going to expedite those projects to create more capacity as quickly as possible,” Lynch said. Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe .

Savannah port adding capacity to address congestion

<div class="phx-topic abstract-wrapper">The carrier has inked an MOU with Cochin Shipyard Ltd., India’s largest facility, pledging to work together on shipbuilding and ship repair services.</div>

The carrier has inked an MOU with Cochin Shipyard Ltd., India’s largest facility, pledging to work together on shipbuilding and ship repair services.

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<div class="phx-topic">India seems to have become an appealing location for global container carriers seeking new shipbuilding capacity and yard development opportunities as their traditional marketplaces in China and South Korea remain full and prefer building ultra-large container ships. Signaling that newfound interest, Maersk -- typically a bellwether for changing industry dynamics -- has inked a memorandum of understanding with Cochin Shipyard Ltd. (CSL), India’s largest facility, pledging to work together on shipbuilding and ship repair services. For the Danish carrier, the strategic partnership extends its interests in India beyond port-to-port shipping and terminal/inland operations. “The collaboration comes at a crucial time when the global shipping industry is expected to face capacity constraints in ship repair yards around the world,” Maersk said in a statement. “Maersk will leverage its expertise as an off-taker in its global fleet to strengthen CSL's capabilities, primarily focusing on container ship maintenance, repair and drydocking operations.” The carrier said it will initially concentrate on vessels up to 7,000 TEUs for afloat repairs and up to 4,000 TEUs for drydocking at Cochin, scaling up capabilities in stages. ”The first Maersk vessel repair at CSL, planned already for 2025, will mark the beginning of what we envisage as a long-term collaborative relationship,” the carrier said. Maersk, which is preparing to name one of its newest methanol dual-fuel containerships in India’s Nhava Sheva Port next week, also noted that the extended business program ties in with New Delhi’s recently announced policy incentives for shipbuilding verticals. Maersk is not alone in pursuing that new “port of call.” Mediterranean Shipping Co. (MSC) and CMA CGM are firming up plans to follow suit as Asian supply chains increasingly diversify from a “China-plus-one” to a “China-plus-two-or-more” sourcing model. MSC is considering setting up a shipbuilding and repair center in India, while CMA CGM is expected to emulate Maersk’s approach, industry sources say. “Chinese yards now have a filled order book and are turning away smaller-size orders,” a Mumbai-based industry observer who didn’t want to be identified told the Journal of Commerce. “This is driving a business shift to India as the government has rolled out a red carpet for investment.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

India seems to have become an appealing location for global container carriers seeking new shipbuilding capacity and yard development opportunities as their traditional marketplaces in China and South Korea remain full and prefer building ultra-large container ships. Signaling that newfound interest, Maersk -- typically a bellwether for changing industry dynamics -- has inked a memorandum of understanding with Cochin Shipyard Ltd. (CSL), India’s largest facility, pledging to work together on shipbuilding and ship repair services. For the Danish carrier, the strategic partnership extends its interests in India beyond port-to-port shipping and terminal/inland operations. “The collaboration comes at a crucial time when the global shipping industry is expected to face capacity constraints in ship repair yards around the world,” Maersk said in a statement. “Maersk will leverage its expertise as an off-taker in its global fleet to strengthen CSL's capabilities, primarily focusing on container ship maintenance, repair and drydocking operations.” The carrier said it will initially concentrate on vessels up to 7,000 TEUs for afloat repairs and up to 4,000 TEUs for drydocking at Cochin, scaling up capabilities in stages. ”The first Maersk vessel repair at CSL, planned already for 2025, will mark the beginning of what we envisage as a long-term collaborative relationship,” the carrier said. Maersk, which is preparing to name one of its newest methanol dual-fuel containerships in India’s Nhava Sheva Port next week, also noted that the extended business program ties in with New Delhi’s recently announced policy incentives for shipbuilding verticals. Maersk is not alone in pursuing that new “port of call.” Mediterranean Shipping Co. (MSC) and CMA CGM are firming up plans to follow suit as Asian supply chains increasingly diversify from a “China-plus-one” to a “China-plus-two-or-more” sourcing model. MSC is considering setting up a shipbuilding and repair center in India, while CMA CGM is expected to emulate Maersk’s approach, industry sources say. “Chinese yards now have a filled order book and are turning away smaller-size orders,” a Mumbai-based industry observer who didn’t want to be identified told the Journal of Commerce. “This is driving a business shift to India as the government has rolled out a red carpet for investment.” Contact Bency Mathew at bencyvmathew@gmail.com.

Maersk joins Indian shipbuilding race amid government incentives, China pivot

<div class="phx-topic abstract-wrapper">Vessel capacity for shippers was a given in the early days of TPM, but since then carrier customers have faced an accelerating assault on capacity coming from both outside the industry and within, writes Peter Tirschwell. </div>

Vessel capacity for shippers was a given in the early days of TPM, but since then carrier customers have faced an accelerating assault on capacity coming from both outside the industry and within, writes Peter Tirschwell.

<div class="phx-topic">The past 25 years of container shipping since the launch of TPM is a story of service quality and cost becoming progressively more negative for customers. The reason is this: a slowly building but accelerating assault on capacity, originating both from outside the industry and from within. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5946735_0.1.jpg"></img></div>In those early days capacity was assumed – external shocks were minor and infrequent, and carriers took it as a given that they would provide capacity into a highly fragmented and competitive market, as that is what shippers demanded. Even then the advantages in capacity limitation were well understood by carriers, even if they could do little to take advantage of it. In the first TPM keynote speech in 2001, then-APL CEO Flemming Jacobs lamented the inability of carriers, in those pre-alliance days, to adjust capacity on a short-term basis. “Flexibility to withdraw ships and services in response particularly to temporary changes [in demand] is limited,” Jacobs told attendees. That reflected carriers’ deeply entrenched assumption of capacity provision. Until the financial crisis of 2008-09, carriers were operating ships at 22 or 23 knots, essentially racing by today’s standards. It was inconceivable they would ever slow their fleets down, effectively pulling capacity. The financial crisis and resulting carrier losses triggered a change of heart, with speeds being ratcheted down in coordinated actions to 18 to 19 knots, and only lower since then. Similarly, until just a few years before COVID-19, many carriers were loath to blank sailings, believing – correctly -- that it would adversely affect their customers’ supply chains. Now blank sailings and their negative impact on capacity and service are a fact of life. Carriers’ commitment to capacity took more subtle forms as well. In the decades after 2000, carriers’ marching orders to those negotiating with US West Coast dockworkers was to keep the ports open and fluid, said former Pacific Maritime Association head Joseph Miniace. Yet after COVID and the mass withdrawal of capacity due to port congestion that led directly to record rates and profits, the views of carriers changed. Some were unbothered by severe Asia port congestion last year, seeing benefits in the negative capacity impact. This year, they seemed resigned to a strike on the US East Coast, believing they did everything they could to avoid it. Shippers early on saw the emerging threat to capacity. After US container imports grew 9% on average between 2002 and 2007, prompting early bouts of West Coast congestion, shippers realized capacity was limited. In 2005, beneficial cargo owners (BCOs) including Target, Nike, Macy’s and Johnson &amp; Johnson sought to raise the alarm in Washington, an effort led by then-APL CEO Ron Widdows. “Twenty years ago, we began to see symptoms that indicated that without considerable changes in transport infrastructure, we were headed to a bad place,” Widdows told the Journal of Commerce recently. <h3>External shocks, internal threats </h3>The assault on capacity has been most forceful from outside the industry. External shocks resulting in massive capacity withdrawals have come from multiple directions: public health crises (COVID-19), geopolitics (Red Sea) and climate change (Panama Canal). The impact of nationalism (trade wars) could well be coming. But the assault is coming from within the industry as well, taking the form of a gradual acceptance by carriers, made easier by consolidation, that their ability to earn profits depends on capacity withdrawals that run contrary to the interests of their customers. This includes actions they themselves take, like blank sailings, but also takes the form of growing port congestion due to ships chronically arriving off-schedule and capacity expansion struggling to keep up with demand growth. The view that a certain category of shipper has had enough of blank sailings and poor reliability overall is behind the Maersk/Hapag-Lloyd Gemini Cooperation tie-up and its promise of 90%-plus reliability versus the current global average of 54% as of December, according to Sea-Intelligence Maritime Analysis. But the potential that carriers have landed on the right side of capacity long-term – despite investing billions in new tonnage in recent years -- has even more serious consequences for customers going forward. The reason is energy transition. International maritime regulators committed in 2023 to eliminating greenhouse gas emissions from shipping by or around 2050 and will likely implement that by agreeing to binding regulations, including a mandate on carriers to transition to alternative fuels. “There is a very strong likelihood based on broad agreement that there will be a GHG intensity standard agreed at the [International Maritime Organization], to be implemented in 2028 and becoming progressively more stringent through 2050,” Bryan Wood-Thomas, the World Shipping Council’s vice president for environmental policy, told the Journal of Commerce. Viewed through a lens of capacity being assumed and abundant – in other words, the long-ago status quo -- that would be a problem for carriers which have historically struggled to pass along even fuel surcharges to shippers at times of abundant capacity. But in a market of constant capacity constraint whether due to external or artificial means, the idea of passing along higher alternative fuel costs to customers becomes an increasingly more realistic scenario for carriers. That alone takes the challenges facing shippers to an entirely new level. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com.</a></div>

The past 25 years of container shipping since the launch of TPM is a story of service quality and cost becoming progressively more negative for customers. The reason is this: a slowly building but accelerating assault on capacity, originating both from outside the industry and from within. In those early days capacity was assumed – external shocks were minor and infrequent, and carriers took it as a given that they would provide capacity into a highly fragmented and competitive market, as that is what shippers demanded. Even then the advantages in capacity limitation were well understood by carriers, even if they could do little to take advantage of it. In the first TPM keynote speech in 2001, then-APL CEO Flemming Jacobs lamented the inability of carriers, in those pre-alliance days, to adjust capacity on a short-term basis. “Flexibility to withdraw ships and services in response particularly to temporary changes [in demand] is limited,” Jacobs told attendees. That reflected carriers’ deeply entrenched assumption of capacity provision. Until the financial crisis of 2008-09, carriers were operating ships at 22 or 23 knots, essentially racing by today’s standards. It was inconceivable they would ever slow their fleets down, effectively pulling capacity. The financial crisis and resulting carrier losses triggered a change of heart, with speeds being ratcheted down in coordinated actions to 18 to 19 knots, and only lower since then. Similarly, until just a few years before COVID-19, many carriers were loath to blank sailings, believing – correctly -- that it would adversely affect their customers’ supply chains. Now blank sailings and their negative impact on capacity and service are a fact of life. Carriers’ commitment to capacity took more subtle forms as well. In the decades after 2000, carriers’ marching orders to those negotiating with US West Coast dockworkers was to keep the ports open and fluid, said former Pacific Maritime Association head Joseph Miniace. Yet after COVID and the mass withdrawal of capacity due to port congestion that led directly to record rates and profits, the views of carriers changed. Some were unbothered by severe Asia port congestion last year, seeing benefits in the negative capacity impact. This year, they seemed resigned to a strike on the US East Coast, believing they did everything they could to avoid it. Shippers early on saw the emerging threat to capacity. After US container imports grew 9% on average between 2002 and 2007, prompting early bouts of West Coast congestion, shippers realized capacity was limited. In 2005, beneficial cargo owners (BCOs) including Target, Nike, Macy’s and Johnson & Johnson sought to raise the alarm in Washington, an effort led by then-APL CEO Ron Widdows. “Twenty years ago, we began to see symptoms that indicated that without considerable changes in transport infrastructure, we were headed to a bad place,” Widdows told the Journal of Commerce recently. External shocks, internal threats The assault on capacity has been most forceful from outside the industry. External shocks resulting in massive capacity withdrawals have come from multiple directions: public health crises (COVID-19), geopolitics (Red Sea) and climate change (Panama Canal). The impact of nationalism (trade wars) could well be coming. But the assault is coming from within the industry as well, taking the form of a gradual acceptance by carriers, made easier by consolidation, that their ability to earn profits depends on capacity withdrawals that run contrary to the interests of their customers. This includes actions they themselves take, like blank sailings, but also takes the form of growing port congestion due to ships chronically arriving off-schedule and capacity expansion struggling to keep up with demand growth. The view that a certain category of shipper has had enough of blank sailings and poor reliability overall is behind the Maersk/Hapag-Lloyd Gemini Cooperation tie-up and its promise of 90%-plus reliability versus the current global average of 54% as of December, according to Sea-Intelligence Maritime Analysis. But the potential that carriers have landed on the right side of capacity long-term – despite investing billions in new tonnage in recent years -- has even more serious consequences for customers going forward. The reason is energy transition. International maritime regulators committed in 2023 to eliminating greenhouse gas emissions from shipping by or around 2050 and will likely implement that by agreeing to binding regulations, including a mandate on carriers to transition to alternative fuels. “There is a very strong likelihood based on broad agreement that there will be a GHG intensity standard agreed at the [International Maritime Organization], to be implemented in 2028 and becoming progressively more stringent through 2050,” Bryan Wood-Thomas, the World Shipping Council’s vice president for environmental policy, told the Journal of Commerce. Viewed through a lens of capacity being assumed and abundant – in other words, the long-ago status quo -- that would be a problem for carriers which have historically struggled to pass along even fuel surcharges to shippers at times of abundant capacity. But in a market of constant capacity constraint whether due to external or artificial means, the idea of passing along higher alternative fuel costs to customers becomes an increasingly more realistic scenario for carriers. That alone takes the challenges facing shippers to an entirely new level. Contact Peter Tirschwell at peter.tirschwell@spglobal.com.

Ocean carriers’ ever-tightening grip on capacity control shows no signs of loosening

<div class="phx-topic abstract-wrapper">The Federal Motor Carrier Safety Administration will accept additional comments on a proposed rule that would require brokers to make transactional data available to carriers.</div>

The Federal Motor Carrier Safety Administration will accept additional comments on a proposed rule that would require brokers to make transactional data available to carriers.

<div class="phx-topic">US regulators are requesting additional comments <a href="https://www.joc.com/article/regulator-proposes-tougher-transparency-requirements-for-us-freight-brokers-5821502">on a proposed rule</a> that would let trucking companies access and review rates shippers pay to brokers. The Federal Motor Carrier Safety Administration (FMCSA) on Tuesday reopened its “broker transparency” rulemaking for additional comment through March 20. The FMCSA has received more than 4,800 comments since publishing its proposal Nov. 20. The reopening of the comment period was requested by the Small Business in Transportation Coalition (SBTC), one of the groups that petitioned the FMCSA for a rulemaking on broker transparency in 2020, during the first Trump administration. Comments on docket FMCSA-2023-0257 may be <a href="https://www.regulations.gov/docket/FMCSA-2023-0257/document?withinCommentPeriod=true">filed online</a> or by mail at addresses provided in the <a href="https://www.govinfo.gov/content/pkg/FR-2025-02-18/pdf/2025-02707.pdf">Feb. 18 Federal Register</a>. The rulemaking is part of a long-running dispute between freight brokers and owner-operators and small carriers over access to transactional data that would reveal shipper-paid rates and broker margins. The rulemaking was launched in 2020. In <a href="https://www.federalregister.gov/documents/2024/11/20/2024-27115/transparency-in-property-broker-transactions">its proposal</a>, the FMCSA suggested requiring brokers to keep electronic records of their freight transactions and make those records available to carriers and shippers electronically within 48 hours of a request. The FMCSA is also proposing standards for those transactional records, requiring them to contain all charges and payments connected to the shipment, including a description, amount and date, as well as any claims filed by shippers for damages or delays. The FMCSA denied an SBTC request that the agency ban provisions included in broker contracts that would waive a carrier’s right to review transaction data. The FMCSA said it will accept any comments received between Jan. 21, when the original comment period closed, and Feb. 18, when the period reopened. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US regulators are requesting additional comments on a proposed rule that would let trucking companies access and review rates shippers pay to brokers. The Federal Motor Carrier Safety Administration (FMCSA) on Tuesday reopened its “broker transparency” rulemaking for additional comment through March 20. The FMCSA has received more than 4,800 comments since publishing its proposal Nov. 20. The reopening of the comment period was requested by the Small Business in Transportation Coalition (SBTC), one of the groups that petitioned the FMCSA for a rulemaking on broker transparency in 2020, during the first Trump administration. Comments on docket FMCSA-2023-0257 may be filed online or by mail at addresses provided in the Feb. 18 Federal Register . The rulemaking is part of a long-running dispute between freight brokers and owner-operators and small carriers over access to transactional data that would reveal shipper-paid rates and broker margins. The rulemaking was launched in 2020. In its proposal , the FMCSA suggested requiring brokers to keep electronic records of their freight transactions and make those records available to carriers and shippers electronically within 48 hours of a request. The FMCSA is also proposing standards for those transactional records, requiring them to contain all charges and payments connected to the shipment, including a description, amount and date, as well as any claims filed by shippers for damages or delays. The FMCSA denied an SBTC request that the agency ban provisions included in broker contracts that would waive a carrier’s right to review transaction data. The FMCSA said it will accept any comments received between Jan. 21, when the original comment period closed, and Feb. 18, when the period reopened. Contact William B. Cassidy at bill.cassidy@spglobal.com .

US regulator reopens truck broker-transparency proposal for new comments

<div class="phx-topic abstract-wrapper">SeaLead is offering a new service from Turkey after Hapag-Lloyd ended one of its standalone loops following the launch of the Gemini alliance with Maersk.</div>

SeaLead is offering a new service from Turkey after Hapag-Lloyd ended one of its standalone loops following the launch of the Gemini alliance with Maersk.

<div class="phx-topic">Ocean carriers are adding services and emphasizing speed between the Mediterranean and the US East Coast amid a reshuffling of southern European port coverage on trans-Atlantic services. Independent carrier SeaLead announced Monday it will launch a new biweekly service called MEDUS connecting Turkey, Morocco and the US East Coast, with the first voyage departing from the Turkish port of Mersin at the end of March. Along with Mersin, MEDUS’ port rotation includes Istanbul, Gebze, Aliaga, Casablanca, New York-New Jersey and Norfolk. SeaLead did not provide any other details about the service but said it would offer “fast transit times to the US East Coast” and feeder connections from other East Mediterranean and North African ports. The new service offering comes after Hapag-Lloyd ended its standalone Turkey East Coast service this year. The carrier still offers its Turkey East Coast Express (TEX) service covering Turkey with a 23-day service from Mersin to NY-NJ. Hapag-Lloyd is also a slot charterer on Zim Integrated Shipping’s ZCA service covering the East Mediterranean region, which has a 28-day transit from Mersin. SeaLead’s new service announcement comes a week after Mediterranean Shipping Co. said it planned to revamp its Mediterranean-US East Coast (MEDUSEC) service by removing port calls at Barcelona and Portugal’s Sines. MSC said the Barcelona and Sines port rotations will remain part of its East Mediterranean-USA service. The MEDUSEC service will now only call Italy’s West Coast ports of Gioia Tauro, Naples, Livorno and Genoa, with MSC adding that the service change will offer an “industry-leading” transit time of nine days between Genoa and NY-NJ. MSC’s service pledge comes as the Maersk/Hapag-Lloyd Gemini Cooperation alliance will offer Genoa coverage on one of its direct trans-Atlantic services, the AL6, offering a 12-day transit between the Italian port and NY-NJ. As for Livorno coverage, it will be part of Gemini’s transshipment service through its main Mediterranean hub at Morocco’s Port Tangier. Livorno is also a call for Hapag-Lloyd’s TEX service.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>.</div>

Ocean carriers are adding services and emphasizing speed between the Mediterranean and the US East Coast amid a reshuffling of southern European port coverage on trans-Atlantic services. Independent carrier SeaLead announced Monday it will launch a new biweekly service called MEDUS connecting Turkey, Morocco and the US East Coast, with the first voyage departing from the Turkish port of Mersin at the end of March. Along with Mersin, MEDUS’ port rotation includes Istanbul, Gebze, Aliaga, Casablanca, New York-New Jersey and Norfolk. SeaLead did not provide any other details about the service but said it would offer “fast transit times to the US East Coast” and feeder connections from other East Mediterranean and North African ports. The new service offering comes after Hapag-Lloyd ended its standalone Turkey East Coast service this year. The carrier still offers its Turkey East Coast Express (TEX) service covering Turkey with a 23-day service from Mersin to NY-NJ. Hapag-Lloyd is also a slot charterer on Zim Integrated Shipping’s ZCA service covering the East Mediterranean region, which has a 28-day transit from Mersin. SeaLead’s new service announcement comes a week after Mediterranean Shipping Co. said it planned to revamp its Mediterranean-US East Coast (MEDUSEC) service by removing port calls at Barcelona and Portugal’s Sines. MSC said the Barcelona and Sines port rotations will remain part of its East Mediterranean-USA service. The MEDUSEC service will now only call Italy’s West Coast ports of Gioia Tauro, Naples, Livorno and Genoa, with MSC adding that the service change will offer an “industry-leading” transit time of nine days between Genoa and NY-NJ. MSC’s service pledge comes as the Maersk/Hapag-Lloyd Gemini Cooperation alliance will offer Genoa coverage on one of its direct trans-Atlantic services, the AL6, offering a 12-day transit between the Italian port and NY-NJ. As for Livorno coverage, it will be part of Gemini’s transshipment service through its main Mediterranean hub at Morocco’s Port Tangier. Livorno is also a call for Hapag-Lloyd’s TEX service. Contact Michael Angell at michael.angell@spglobal.com .

Mediterranean-US East Coast container services get revamp for 2025

<div class="phx-topic abstract-wrapper">Spot rates on the eastbound corridor are fast converging on long-term prices, and carriers want to lock in cargo owners ahead of a return to Red Sea transits and the resulting capacity overhang.</div>

Spot rates on the eastbound corridor are fast converging on long-term prices, and carriers want to lock in cargo owners ahead of a return to Red Sea transits and the resulting capacity overhang.

<div class="phx-topic">Uncertainty over the timing of shipping’s resumption of Red Sea transits is being reflected in Asia-North Europe long-term rate deals, with carriers offering substantial “discounts” to shippers agreeing to contracts longer than six months, according to rate benchmarking platform Xeneta. The move by carriers comes as the spot market on the eastbound trade lane continues its slide, with Xeneta’s average short-term rates assessed on Tuesday of $2,949 per FEU now just $199 above the long-term rates signed in the last three months. The data shows Asia-North Europe spot rates have almost halved since the start of the year. Emily Stausbøll, senior shipping analyst at Xeneta, noted in a market update this week that the uncertainty prevalent in the Asia-North Europe trade lane was seeing carriers agreeing to discounts of 22% as they tried to lock shippers in for longer periods. “On the one hand you have the seller trying to incentivize longer-term agreements to manage risk and protect market share ... on the other hand, you have the buyer doing everything possible to keep their options open for as long as possible while not spending more than necessary,” Stausbøll said. Marc Meier, global head of ocean freight at the forwarder Toll Group, said freight-all-kinds (FAK) rates on Asia-North Europe were coming under growing pressure and were at the same level as long-term rates for the January to December period. “We expect the market to be decreasing between now and [the] end of March or early April at the earliest before we see conditions to push for a rate increase,” Meier told the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a1e904d2-7e92-4785-b6a0-a738fca52dd1"></dynamic-object></div>Some carriers have announced March 1 FAK rates on Asia-North Europe of $4,100/FEU. A 22% discount on the current Xeneta spot rate would drop the rate on the index to $2,300/FEU, but with the short-term market softening every week, some cargo owners are holding off on signing contracts. “Some shippers may be happy to lock in for more than six months if it protects their supply chains and negates the need for further negotiation in the event of another major global disruption,” Stausbøll said. “Other shippers may choose to gamble on being able to achieve a lower rate in a few months and are happy to go through another tender round.” <h3>Base case for a second half return to Red Sea </h3>The risk tolerance level of shippers on Asia-North Europe is ultimately based around a guess when diversions around southern Africa will end. The base case of many analysts is for a return to Red Sea transits at some point in the second half, but the fast-changing political dynamics in the Israel-Hamas conflict provide little certainty. Carriers have said they will only return to the Red Sea and Suez Canal “<a href="https://www.joc.com/article/carriers-eye-red-sea-transits-after-houthi-rebels-pledge-restraint-5925939">when it was safe to do so</a>,” and are continuing to divert vessels around Africa despite Hamas-supporting Houthi militants pledging to only attack Israel-affiliated ships following <a href="https://www.joc.com/article/return-to-suez-not-a-certainty-even-after-israel-hamas-ceasefire-analysts-5923830">the start of a ceasefire</a> in Gaza in January. The only consensus appears to be that when Red Sea voyages do finally resume, significant amounts of capacity no longer being diverted will overwhelm the market. Sea-Intelligence Maritime Analysis expects the impact to be “dramatic” — although temporary — as the trade lane adjusts to the resumption of shorter transits. The analyst estimated that demand growth on Asia-Europe received a boost of 2.9 percentage points in 2024 once the longer voyages and increased inventory levels were factored into the equation. Demand would contract by the same amount when the Red Sea reopens, according to Sea-Intelligence CEO Alan Murphy. “The excess inventory held in the longer supply chain will be released, and for a temporary period, importers will curb ordering to mitigate this sudden excess inventory,” Murphy wrote in his Sunday Spotlight newsletter. “If it unravels over just a few months, the Asia-Europe trade will see dramatic decreases in demand.” Murphy noted that the fall in demand would occur at the same time as shorter sailing times released significant amounts of capacity into the market, with the supply overhang placing downward pressure on rates. But <a href="https://www.joc.com/article/container-shipping-still-has-an-overcapacity-problem-but-its-far-from-insurmountable-5234357">carriers have been playing down the impact of overcapacity</a> once the resumption of transits through Suez occurs, pointing to an increase in scrapping — which has been close to zero for the last few years — and the ability to slow steam ships that have been at full speed since the Africa diversions began. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Uncertainty over the timing of shipping’s resumption of Red Sea transits is being reflected in Asia-North Europe long-term rate deals, with carriers offering substantial “discounts” to shippers agreeing to contracts longer than six months, according to rate benchmarking platform Xeneta. The move by carriers comes as the spot market on the eastbound trade lane continues its slide, with Xeneta’s average short-term rates assessed on Tuesday of $2,949 per FEU now just $199 above the long-term rates signed in the last three months. The data shows Asia-North Europe spot rates have almost halved since the start of the year. Emily Stausbøll, senior shipping analyst at Xeneta, noted in a market update this week that the uncertainty prevalent in the Asia-North Europe trade lane was seeing carriers agreeing to discounts of 22% as they tried to lock shippers in for longer periods. “On the one hand you have the seller trying to incentivize longer-term agreements to manage risk and protect market share ... on the other hand, you have the buyer doing everything possible to keep their options open for as long as possible while not spending more than necessary,” Stausbøll said. Marc Meier, global head of ocean freight at the forwarder Toll Group, said freight-all-kinds (FAK) rates on Asia-North Europe were coming under growing pressure and were at the same level as long-term rates for the January to December period. “We expect the market to be decreasing between now and [the] end of March or early April at the earliest before we see conditions to push for a rate increase,” Meier told the Journal of Commerce. Some carriers have announced March 1 FAK rates on Asia-North Europe of $4,100/FEU. A 22% discount on the current Xeneta spot rate would drop the rate on the index to $2,300/FEU, but with the short-term market softening every week, some cargo owners are holding off on signing contracts. “Some shippers may be happy to lock in for more than six months if it protects their supply chains and negates the need for further negotiation in the event of another major global disruption,” Stausbøll said. “Other shippers may choose to gamble on being able to achieve a lower rate in a few months and are happy to go through another tender round.” Base case for a second half return to Red Sea The risk tolerance level of shippers on Asia-North Europe is ultimately based around a guess when diversions around southern Africa will end. The base case of many analysts is for a return to Red Sea transits at some point in the second half, but the fast-changing political dynamics in the Israel-Hamas conflict provide little certainty. Carriers have said they will only return to the Red Sea and Suez Canal “ when it was safe to do so ,” and are continuing to divert vessels around Africa despite Hamas-supporting Houthi militants pledging to only attack Israel-affiliated ships following the start of a ceasefire in Gaza in January. The only consensus appears to be that when Red Sea voyages do finally resume, significant amounts of capacity no longer being diverted will overwhelm the market. Sea-Intelligence Maritime Analysis expects the impact to be “dramatic” — although temporary — as the trade lane adjusts to the resumption of shorter transits. The analyst estimated that demand growth on Asia-Europe received a boost of 2.9 percentage points in 2024 once the longer voyages and increased inventory levels were factored into the equation. Demand would contract by the same amount when the Red Sea reopens, according to Sea-Intelligence CEO Alan Murphy. “The excess inventory held in the longer supply chain will be released, and for a temporary period, importers will curb ordering to mitigate this sudden excess inventory,” Murphy wrote in his Sunday Spotlight newsletter. “If it unravels over just a few months, the Asia-Europe trade will see dramatic decreases in demand.” Murphy noted that the fall in demand would occur at the same time as shorter sailing times released significant amounts of capacity into the market, with the supply overhang placing downward pressure on rates. But carriers have been playing down the impact of overcapacity once the resumption of transits through Suez occurs, pointing to an increase in scrapping — which has been close to zero for the last few years — and the ability to slow steam ships that have been at full speed since the Africa diversions began. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe carriers dangle contract discounts before shippers: Xeneta

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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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