<div class="phx-topic abstract-wrapper">The Container Port Performance Index for 2022 showed that among large ports, China’s Yangshan ranked No. 1, while Ningbo and Guangzhou were among the top 10. 
 
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The Container Port Performance Index for 2022 showed that among large ports, China’s Yangshan ranked No. 1, while Ningbo and Guangzhou were among the top 10.

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<div>North Carolina’s Port of Wilmington took the top spot among US ports for container ships spending the fewest hours at berth in 2022, according to the latest assessment of global port performance from the World Bank and S&amp;P Global Market Intelligence. Virginia, meanwhile, slipped to the No. 2 spot in North America as larger ships spent more time at berth last year than in 2021. The release of the Container Port Performance Index (CPPI) 2022 showed that among large ports, China’s Yangshan ranked No. 1, while Ningbo and Guangzhou were among the top 10. Likewise, three Middle Eastern ports were...

North Carolina’s Port of Wilmington took the top spot among US ports for container ships spending the fewest hours at berth in 2022, according to the latest assessment of global port performance from the World Bank and S&P Global Market Intelligence. Virginia, meanwhile, slipped to the No. 2 spot in North America as larger ships spent more time at berth last year than in 2021. The release of the Container Port Performance Index (CPPI) 2022 showed that among large ports, China’s Yangshan ranked No. 1, while Ningbo and Guangzhou were among the top 10. Likewise, three Middle Eastern ports were among the top 10, with Oman’s Port of Salalah ranked No. 2. The third edition of the CPPI, which combines two different rankings used in previous reports, aims to rank “the speed and efficiency with which customer assets are handled,” the report said. “The operational efficiency of how ports receive and handle container ships is critically important in a carrier’s decision to choose a port over other options,” it said. The CPPI 2022 used time stamp data for port calls and container moves from ocean carriers. Overall, the report covered 156,813 port calls involving 243.9 million container moves. The data is aggregated into rankings based on the size of ships that call a port and the number of container moves for each ship. Wilmington helped by reefer investment Wilmington achieved an overall ranking of 44 among 348 ports measured through data from S&P Global Market Intelligence. Virginia came in at 52. Both ports were grouped among medium-sized ports with volume between 500,000 and 4 million TEUs annually. Rounding out medium-size US ports were Boston at 69, Jacksonville at 82 and Port Everglades at 89. Large US ports were mostly at the back of the pack for overall rankings. The Port of New York and New Jersey ranked 306, while Los Angeles ranked 336, Long Beach was at 346 and Savannah at 348. Wilmington, which had port calls last year double from the previous year to 170, saw its rankings for handling ships between 5,000 and 13,500 TEUs improve from 2021. Brian Clark, executive director of the North Carolina State Ports Authority, told the Journal of Commerce that Wilmington is currently achieving 40 crane moves per hour, up from about 38 moves at the start of 2022, as carriers bring more freight to the port. He pointed to the additional Asian origins of Singapore, Xiamen and Yantian that the 2M Alliance added to the Emerald/TP16 service, which calls Wilmington, as a sign of carrier confidence in the port’s capability. Likewise, Wilmington remained a destination on THE Alliance’s EC2 service while the Port of New York and New Jersey was dropped. “Being known for vessel productivity is something we speak regularly about with our customers and being able to turn their vessels over as quickly as possible,” Clark said. He added that Wilmington’s ability to move freight more quickly off its docks also helped its performance. Last year, the port opened a new truck gate with the advanced features seen at other ports, such as optical character readers, radio frequency identification (RFID) and weigh-in-motion scales. The port’s investment in refrigerated container storage enabled it to more quickly service the north-south services that call Wilmington, Clark said. At the end of 2020, Wilmington brought on 540 reefer plugs and will install another 700 by September, he said, adding that the port is considering a third expansion. As a result of that additional reefer storage, Wilmington is seeing a greater amount of fresh produce imports on its north-south services and pharmaceutical imports on its trans-Atlantic services, Clark said. That enables ocean carriers to better match back containers to North Carolina’s pork and poultry exporters, he added. “We’re able to provide a closed loop to ocean carriers to keep those assets moving,” Clark said. More rail service allowed Wilmington to quickly move containers off its docks, he noted. The start of CSX Transportation’s Midwest Express service from Wilmington enabled shippers to reach Chicago and other inland markets. “We’re starting to see more interest in that service,” Clark said. Virginia adapted to 2022 congestion With 1,313 vessel calls in 2022, Virginia’s second-place rank among US ports came after it reached the top US spot in the CPPI 2021 report. According to the 2022 report, Virginia saw lower index rankings for servicing neo-Panamax and larger ships. Port of Virginia CEO Stephen Edwards told the Journal of Commerce that every major port faced berthing delays last year, and “we weren’t perfect.” But he noted that Virginia was able to quickly adapt to irregular schedules and handle unexpected volumes. “We did exceptionally well in 2021, we did very well in 2022,” Edwards said. “What that demonstrates is we’ve performed to a high level in the two most stressful years.” Edwards said that as the operator of Virginia’s two largest container terminals, the port can more easily coordinate rail and truck movements that freed up the dock space to service ships more rapidly. While crane moves at the port have remained steady at 31 per hour over the last two years, other performance metrics such as rail dwell and truck turn times improved during 2022, he added. After Class I railroads began to meter containers going to inland rail ramps last year due to congestion , Edwards said the port worked with the railroads to ship containers to less-crowded ramps. He added that the addition of 3,000 more chassis to its proprietary fleet also meant truckers could more easily pull a container from the port’s yard. With irregular ship arrivals through 2022, Virginia’s semi-automated yard cranes enabled the port to easily reconfigure container stacks, Edwards said. The semi-automation in the container yard also freed up longshore labor to work on the ships. Edwards also said that Virginia worked with ocean carriers last year on stowage plans for their cargo to offer more options for offloading freight. For example, if an ocean carrier faced a delay in berthing at one port, it could go to Virginia to discharge its freight, then return to the other port once congestion cleared. “All of those levers allowed us to be in the top 15th percentile of ports,” Edwards said. He said future projects at Virginia should reduce the time it takes to handle a ship. The port’s dredging project that will make it the deepest on the US East Coast will also enable two-way ship traffic for ultra-large container vessels, Edwards said, reducing the time that a berth is sitting idle. Virginia will be taking delivery of eight ultra-large container cranes for its two terminals by the end of 2024. Likewise, it will add a berth for ultra-large container ships to the North terminal of the Norfolk International Terminals by 2025. Once completed, the new berth will add about 1.4 million TEUs of capacity to Virginia, bringing its total capability to 5.8 million TEUs. Contact Michael Angell at michael.angell@spglobal.com and follow him on Twitter at @michael_angell . 

Container Shipping News

International ports

North American ports

Wilmington, Virginia top US port performers for 2022: index

<div class="phx-topic abstract-wrapper">The former Wisconsin congressman and Fox Business host was confirmed by a 77-22 vote on Tuesday. </div>

The former Wisconsin congressman and Fox Business host was confirmed by a 77-22 vote on Tuesday.

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<div class="phx-topic">Former Wisconsin congressman Sean Duffy received US Senate confirmation Tuesday to serve as Secretary of Transportation in the new Trump administration. Duffy, also a former Fox Business host, was confirmed by a 77-22 vote.Duffy represented Wisconsin in Congress from 2011 to 2019, during which time he introduced two bills directly related to transportation, neither of which advanced.Duffy showed interest in issues linked to the trucking industry during his time in Congress and co-sponsored several pieces of maritime-related legislation.Donald Trump <a href="https://www.joc.com/article/former-congressman-tv-host-gets-trumps-nod-to-lead-dot-5820698">nominated Duffy for the lead role at the Department of Transportation in mid-November</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com. ">laura.robb@spglobal.com</a>.</div>

Former Wisconsin congressman Sean Duffy received US Senate confirmation Tuesday to serve as Secretary of Transportation in the new Trump administration. Duffy, also a former Fox Business host, was confirmed by a 77-22 vote. Duffy represented Wisconsin in Congress from 2011 to 2019, during which time he introduced two bills directly related to transportation, neither of which advanced. Duffy showed interest in issues linked to the trucking industry during his time in Congress and co-sponsored several pieces of maritime-related legislation. Donald Trump nominated Duffy for the lead role at the Department of Transportation in mid-November . Contact Laura Robb at laura.robb@spglobal.com .

Maritime

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Air Cargo

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Trucking News

Rail News

Transport, Trade and Regulation News

North-American rail

Senate confirms Sean Duffy as Secretary of Transportation

<div class="phx-topic abstract-wrapper">Liners believe they left money on the table in 2024–25 service contracts, sources tell the Journal of Commerce, and are putting up opening quotes about 25% higher than a year ago in their initial talks with customers.</div>

Liners believe they left money on the table in 2024–25 service contracts, sources tell the Journal of Commerce, and are putting up opening quotes about 25% higher than a year ago in their initial talks with customers.

<div class="phx-topic">Ocean carriers plying the trans-Pacific are quoting initial rates for the 2025–26 contract year about 25% higher than the current year on the belief they underpriced their services from Asia to the US a year ago, sources with knowledge of the early-stage talks say. Those sources say carriers are trying to use this year’s talks with shippers to essentially recoup money they believe they left on the table in the current 2024–25 contracts. “They are certainly starting this year higher,” James Caradonna, executive vice president at the forwarder M&amp;R Spedag Group, said of the carriers. According to sources that include non-vessel-operating common carriers (NVOs) and industry consultants, trans-Pacific carriers in the opening round of discussions with their larger core customers for the 2025–26 service year have quoted contract rates of $2,500 per FEU to the West Coast and $3,500 per FEU to the East Coast. Those sources told the Journal of Commerce that for the current contract year that, for most deals, wraps up at the end of April, initial quotes from carriers were approximately $1,800 to $2,000 per FEU to the West Coast and in the high $2,000s per FEU to the East Coast. Those levels eventually settled at or below $1,600 and $2,500, respectively, the sources said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Kurt McElroy, executive vice president of the NVO Kerry Apex, said that in his conversations with several customers, any anxiety they are expressing is not about price, but rather about securing the vessel space they will need in the coming year, even if that involves paying higher contract rates to lock in the space commitments. With the spot rate from Asia to the West Coast at $3,800 per FEU as of Jan. 27, according to Platts, a Journal of Commerce sister company within S&amp;P Global, a $2,500 per FEU contract rate “is still pretty good,” McElroy said. <h3>Forecast of overcapacity in 2024 drove contract rates lower </h3>Carriers underpriced their services last spring because they bought into the prevailing view of the trade that there would be huge overcapacity in 2024, a carrier source told the Journal of Commerce. This year, however, carriers want to take control of the narrative and set the “perception” of what supply and demand will look like for the 2025–26 contract year, the source said. Most contracts for the upcoming service year take effect on May 1. “What is the market’s perception of 2025? Shipping lines want to take the initiative,” the carrier source said. Forwarders appear to be equally divided as to what rate levels the market will support, given the uncertainties over whether vessels will resume normal transits through the Suez Canal and Red Sea at some point this year. A shift back to the Suez would mean a flood of capacity — now being absorbed by the longer transits around southern Africa — returning to the market, thus softening rates. Another unknown hanging over the market is around potential new tariffs that may be implemented by the Trump administration. “Everything that is happening is exerting downward pressure [on rates],” said Robert Fredman, principal at the consulting firm SF Global Insights and a former logistics manager at a national retailer. “My gut tells me the rate will be below $2,000 [to the West Coast].” An importer in the automotive sector said he has heard the rates carriers are now quoting, and how carriers feel they must charge compensatory rates to make up for falling short a year ago. “Carriers have told us the story about setting contract rates that did not cover their costs last year and they are determined not to make the same mistake again this year,” the source said. Still, with spot rates dropping steadily during the Lunar New Year lull and the uncertainty around US tariffs, there is apparently no rush to sign up for the rates carriers are quoting at present. “We will probably wait until late April to sign just because of so much uncertainty with the tariffs,” the importer said. <h3>Trump tariffs could be a market disrupter </h3>Given the uncertainties linked to the Red Sea and the Trump tariffs, Jon Monroe, who serves as a consultant to NVOs, said it is difficult at this time to determine what the capacity situation in the trans-Pacific will be. However, carrier costs have risen in recent years, so if they remain determined to hold the line on contract rates, which is not out of the question, service contract rates will go up. “I think $2,000 to $2,500 [per FEU to the West Coast] is where the rates should end up,” Monroe said. A second industry consultant who once served as the logistics manager at two national retailers said he believes West Coast rates will end up “closer” to $2,000, with East Coast rates about $800 to $1,000 higher than that. If import volumes and spot rates do not recover quickly in March in the aftermath of the Lunar New Year factory shutdowns in Asia, some importers say they will likely delay signing service contracts until April. “Our strategy, at least today, is to drag our feet,” an importer in the home furnishings sector said. If it appears capacity is readily available, “that will drive the market lower,” the source said. One thing that could cause a spike in US import volumes is if the Trump administration announces large tariffs on key trading partners that take effect later in the spring, said another NVO. “Then you’ll see a bunch more front loading,” he said. “Otherwise, I think this year is going to be like a traditional year with a normal peak,” the NVO said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Ocean carriers plying the trans-Pacific are quoting initial rates for the 2025–26 contract year about 25% higher than the current year on the belief they underpriced their services from Asia to the US a year ago, sources with knowledge of the early-stage talks say. Those sources say carriers are trying to use this year’s talks with shippers to essentially recoup money they believe they left on the table in the current 2024–25 contracts. “They are certainly starting this year higher,” James Caradonna, executive vice president at the forwarder M&R Spedag Group, said of the carriers. According to sources that include non-vessel-operating common carriers (NVOs) and industry consultants, trans-Pacific carriers in the opening round of discussions with their larger core customers for the 2025–26 service year have quoted contract rates of $2,500 per FEU to the West Coast and $3,500 per FEU to the East Coast. Those sources told the Journal of Commerce that for the current contract year that, for most deals, wraps up at the end of April, initial quotes from carriers were approximately $1,800 to $2,000 per FEU to the West Coast and in the high $2,000s per FEU to the East Coast. Those levels eventually settled at or below $1,600 and $2,500, respectively, the sources said. Kurt McElroy, executive vice president of the NVO Kerry Apex, said that in his conversations with several customers, any anxiety they are expressing is not about price, but rather about securing the vessel space they will need in the coming year, even if that involves paying higher contract rates to lock in the space commitments. With the spot rate from Asia to the West Coast at $3,800 per FEU as of Jan. 27, according to Platts, a Journal of Commerce sister company within S&P Global, a $2,500 per FEU contract rate “is still pretty good,” McElroy said. Forecast of overcapacity in 2024 drove contract rates lower Carriers underpriced their services last spring because they bought into the prevailing view of the trade that there would be huge overcapacity in 2024, a carrier source told the Journal of Commerce. This year, however, carriers want to take control of the narrative and set the “perception” of what supply and demand will look like for the 2025–26 contract year, the source said. Most contracts for the upcoming service year take effect on May 1. “What is the market’s perception of 2025? Shipping lines want to take the initiative,” the carrier source said. Forwarders appear to be equally divided as to what rate levels the market will support, given the uncertainties over whether vessels will resume normal transits through the Suez Canal and Red Sea at some point this year. A shift back to the Suez would mean a flood of capacity — now being absorbed by the longer transits around southern Africa — returning to the market, thus softening rates. Another unknown hanging over the market is around potential new tariffs that may be implemented by the Trump administration. “Everything that is happening is exerting downward pressure [on rates],” said Robert Fredman, principal at the consulting firm SF Global Insights and a former logistics manager at a national retailer. “My gut tells me the rate will be below $2,000 [to the West Coast].” An importer in the automotive sector said he has heard the rates carriers are now quoting, and how carriers feel they must charge compensatory rates to make up for falling short a year ago. “Carriers have told us the story about setting contract rates that did not cover their costs last year and they are determined not to make the same mistake again this year,” the source said. Still, with spot rates dropping steadily during the Lunar New Year lull and the uncertainty around US tariffs, there is apparently no rush to sign up for the rates carriers are quoting at present. “We will probably wait until late April to sign just because of so much uncertainty with the tariffs,” the importer said. Trump tariffs could be a market disrupter Given the uncertainties linked to the Red Sea and the Trump tariffs, Jon Monroe, who serves as a consultant to NVOs, said it is difficult at this time to determine what the capacity situation in the trans-Pacific will be. However, carrier costs have risen in recent years, so if they remain determined to hold the line on contract rates, which is not out of the question, service contract rates will go up. “I think $2,000 to $2,500 [per FEU to the West Coast] is where the rates should end up,” Monroe said. A second industry consultant who once served as the logistics manager at two national retailers said he believes West Coast rates will end up “closer” to $2,000, with East Coast rates about $800 to $1,000 higher than that. If import volumes and spot rates do not recover quickly in March in the aftermath of the Lunar New Year factory shutdowns in Asia, some importers say they will likely delay signing service contracts until April. “Our strategy, at least today, is to drag our feet,” an importer in the home furnishings sector said. If it appears capacity is readily available, “that will drive the market lower,” the source said. One thing that could cause a spike in US import volumes is if the Trump administration announces large tariffs on key trading partners that take effect later in the spring, said another NVO. “Then you’ll see a bunch more front loading,” he said. “Otherwise, I think this year is going to be like a traditional year with a normal peak,” the NVO said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Container lines

Trans-Pacific

Trans-Pacific carriers determined to win higher contract rates this year: sources

<div class="phx-topic abstract-wrapper">The arrangement allows international carriers to transship domestic import and export cargoes at Shanghai’s Yangshan deepwater port from selected ports in northern China.</div>

The arrangement allows international carriers to transship domestic import and export cargoes at Shanghai’s Yangshan deepwater port from selected ports in northern China.

<div class="phx-topic">China’s Transport Ministry has extended Maersk’s domestic cabotage trial for an additional two years while also further liberalizing the cabotage rules, the carrier said Tuesday. “The pilot with China’s Transport Ministry has been extended until Dec. 31, 2027, and Maersk is continuing its cabotage business in China,” a Maersk spokesperson told the Journal of Commerce. The pilot arrangement allows international carriers to transship domestic import and export cargoes at Shanghai’s Yangshan deepwater port from selected ports in northern China. “The benefits for our customers include faster transit time and more efficient supply chain management,” the Maersk spokesperson said. Maersk said Lianyungang, in the northern Jiangsu province, has been added as a designated port as part of the pilot renewal. The port joins the three existing ports — Dalian, Tianjin and Qingdao — that were originally chosen when the pilot was launched in May 2022. The Transport Ministry also made further concessions under the renewal. These include defining ships that operate extended intra-Asia routes, including those between China and India, as long-haul vessels, thus making them eligible to participate in the pilot. The ministry is also allowing vessel-sharing partners to carry each other’s transshipped cargo provided the carriers have received permits from the ministry. This could potentially open the pilot to Gemini Cooperation services when the Maersk/Hapag-Lloyd partnership launches Feb. 1. Maersk is the only foreign carrier to acknowledge it is taking part in the China cabotage scheme. Hapag-Lloyd declined to comment on the pilot when contacted by the Journal of Commerce. Maersk estimated that import cargoes handled through Shanghai could arrive at the four designated Chinese ports about two days faster compared with being transshipped via South Korea’s Busan or Maersk’s other hubs. The carrier said it has handled more than 100,000 TEUs since the first inbound consignment of containers was transshipped via Shanghai bound for Tianjin in May 2022. The latest pilot renewal continues a process to liberalize China’s cabotage trade that started more than 12 years ago when foreign-registered ships were allowed to carry containers between Shanghai and other Chinese ports, although they still had to be Chinese-owned. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

China’s Transport Ministry has extended Maersk’s domestic cabotage trial for an additional two years while also further liberalizing the cabotage rules, the carrier said Tuesday. “The pilot with China’s Transport Ministry has been extended until Dec. 31, 2027, and Maersk is continuing its cabotage business in China,” a Maersk spokesperson told the Journal of Commerce. The pilot arrangement allows international carriers to transship domestic import and export cargoes at Shanghai’s Yangshan deepwater port from selected ports in northern China. “The benefits for our customers include faster transit time and more efficient supply chain management,” the Maersk spokesperson said. Maersk said Lianyungang, in the northern Jiangsu province, has been added as a designated port as part of the pilot renewal. The port joins the three existing ports — Dalian, Tianjin and Qingdao — that were originally chosen when the pilot was launched in May 2022. The Transport Ministry also made further concessions under the renewal. These include defining ships that operate extended intra-Asia routes, including those between China and India, as long-haul vessels, thus making them eligible to participate in the pilot. The ministry is also allowing vessel-sharing partners to carry each other’s transshipped cargo provided the carriers have received permits from the ministry. This could potentially open the pilot to Gemini Cooperation services when the Maersk/Hapag-Lloyd partnership launches Feb. 1. Maersk is the only foreign carrier to acknowledge it is taking part in the China cabotage scheme. Hapag-Lloyd declined to comment on the pilot when contacted by the Journal of Commerce. Maersk estimated that import cargoes handled through Shanghai could arrive at the four designated Chinese ports about two days faster compared with being transshipped via South Korea’s Busan or Maersk’s other hubs. The carrier said it has handled more than 100,000 TEUs since the first inbound consignment of containers was transshipped via Shanghai bound for Tianjin in May 2022. The latest pilot renewal continues a process to liberalize China’s cabotage trade that started more than 12 years ago when foreign-registered ships were allowed to carry containers between Shanghai and other Chinese ports, although they still had to be Chinese-owned. Contact Keith Wallis at keithwallis@hotmail.com .

China extends Maersk’s domestic cabotage pilot to December 2027

<div class="phx-topic abstract-wrapper">China celebrates the Year of the Snake Tuesday, and while there is always a move to get export orders on the water before the holidays, the push this year came earlier than expected.</div>

China celebrates the Year of the Snake Tuesday, and while there is always a move to get export orders on the water before the holidays, the push this year came earlier than expected.

<div class="phx-topic">Forwarders and carriers are competing aggressively for market share in the Asia-Europe trade lane as rates fall sharply through January and demand slows into the Lunar New Year holidays in China. The Year of the Snake begins Tuesday, and factories can be closed for more than two weeks as China celebrates its most important holiday. While there are always moves to ship out orders before the holidays, the rush this year came earlier than usual, according to Kathy Liu, vice president of global sales and marketing at Taiwan-based Dimerco Express Group. “Many factories in China had already moved their export orders out before the end of December and it has been very quiet on Asia-Europe since Jan. 10,” Liu told the Journal of Commerce Tuesday. The weakening demand has sparked fierce competition for business by forwarders and carriers preparing for the alliance reshuffling on Feb. 1, with short-term Asia-North Europe rates losing $2,000 in value since the end of December. “Global companies opened their [request for quotations from carriers] early in the first quarter and the competition from forwarders has been very strong this year,” Liu said. “With demand slowing, everybody is hungry for the goods and shipping lines need to fill their capacity, so there will for sure be a price war.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="730bbdfd-e50b-4bef-8a82-8007ba8d81e9"></dynamic-object></div>The average Asia-North Europe short-term rate has fallen 21% since the end of December to settle at $3,963 per FEU on Jan. 28, according to rate benchmarking platform Xeneta. While the decline has not been so acute on the Asia-Mediterranean trade, the rate of $5,209/FEU was down more than 10% compared with the end of December. <h3>Red Sea front and center in shipper contracts </h3>There is little clarity into how rates will perform after the Lunar New Year and widespread uncertainty into <a href="https://www.joc.com/article/carriers-eye-red-sea-transits-after-houthi-rebels-pledge-restraint-5925939">when carriers will resume shorter Suez Canal transits</a>, but the Red Sea was very much on the minds of Asia-Europe cargo owners who spoke to the Journal of Commerce this week. “Our annual contracts are not yet closed, but for sure there is a sentence in the agreements that in case of a significant market change, both parties must go into renegotiations,” according to the logistics director at a European retailer. An Asia-based supply chain manager said the contracts being entered into on Asia-Europe were high considering the expectations for weak demand this year. He estimated the annual rates were about 30% above those being signed last year. “But once Suez Canal transits are back, every shipper on that trade lane will renegotiate the rate down to the old levels before the Africa diversions,” he said. “There are still a lot of unknowns out there and Asia-Europe will be a buyers' market this year. The base case from global bank HSBC is for Red Sea transits to resume from mid-2025, which it said implied 10.5% effective capacity growth in 2025 compared with 2.7% volume growth, thus placing heavy downward pressure on prices. “With little incentive for liners to revert to the Red Sea, we think liners could still see decent first-half 2025 earnings, but profits should deteriorate in [the second half],” the bank noted in its Global Freight Monitor report released Tuesday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Forwarders and carriers are competing aggressively for market share in the Asia-Europe trade lane as rates fall sharply through January and demand slows into the Lunar New Year holidays in China. The Year of the Snake begins Tuesday, and factories can be closed for more than two weeks as China celebrates its most important holiday. While there are always moves to ship out orders before the holidays, the rush this year came earlier than usual, according to Kathy Liu, vice president of global sales and marketing at Taiwan-based Dimerco Express Group. “Many factories in China had already moved their export orders out before the end of December and it has been very quiet on Asia-Europe since Jan. 10,” Liu told the Journal of Commerce Tuesday. The weakening demand has sparked fierce competition for business by forwarders and carriers preparing for the alliance reshuffling on Feb. 1, with short-term Asia-North Europe rates losing $2,000 in value since the end of December. “Global companies opened their [request for quotations from carriers] early in the first quarter and the competition from forwarders has been very strong this year,” Liu said. “With demand slowing, everybody is hungry for the goods and shipping lines need to fill their capacity, so there will for sure be a price war.” The average Asia-North Europe short-term rate has fallen 21% since the end of December to settle at $3,963 per FEU on Jan. 28, according to rate benchmarking platform Xeneta. While the decline has not been so acute on the Asia-Mediterranean trade, the rate of $5,209/FEU was down more than 10% compared with the end of December. Red Sea front and center in shipper contracts There is little clarity into how rates will perform after the Lunar New Year and widespread uncertainty into when carriers will resume shorter Suez Canal transits , but the Red Sea was very much on the minds of Asia-Europe cargo owners who spoke to the Journal of Commerce this week. “Our annual contracts are not yet closed, but for sure there is a sentence in the agreements that in case of a significant market change, both parties must go into renegotiations,” according to the logistics director at a European retailer. An Asia-based supply chain manager said the contracts being entered into on Asia-Europe were high considering the expectations for weak demand this year. He estimated the annual rates were about 30% above those being signed last year. “But once Suez Canal transits are back, every shipper on that trade lane will renegotiate the rate down to the old levels before the Africa diversions,” he said. “There are still a lot of unknowns out there and Asia-Europe will be a buyers' market this year. The base case from global bank HSBC is for Red Sea transits to resume from mid-2025, which it said implied 10.5% effective capacity growth in 2025 compared with 2.7% volume growth, thus placing heavy downward pressure on prices. “With little incentive for liners to revert to the Red Sea, we think liners could still see decent first-half 2025 earnings, but profits should deteriorate in [the second half],” the bank noted in its Global Freight Monitor report released Tuesday. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Asia-Europe ocean rates fall as weak demand sparks battle for market share

<div class="phx-topic abstract-wrapper">Sources at established carriers on the trade lane, such as CMA CGM and Hapag-Lloyd, have noted extreme rate pressures due to a significant capacity injection driven in part by the new shipping alliances.</div>

Sources at established carriers on the trade lane, such as CMA CGM and Hapag-Lloyd, have noted extreme rate pressures due to a significant capacity injection driven in part by the new shipping alliances.

<div class="phx-topic">A huge injection of capacity on India-Europe trades powered by new container shipping alliances and service updates is pushing the westbound market toward a potential downward spiral in prices among cargo-hungry carriers, local industry sources say. In addition to <a href="https://www.joc.com/article/gemini-to-bulk-up-capacity-on-india-europe-trade-amid-rate-push-pressure-5911491">the Gemini network carriers making up 4% to 5% of capacity on the trade lane</a>, the Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming is set to enter the market with significant loading allocations out of India, pegged at 3,500 to 4,000 TEUs per week. Premier will initially employ nine ships of up to 8,000 TEUs of capacity — five from ONE and four from HMM with slot rights for Yang Ming — on a rotation of Karachi, Hazira, Mundra, Nhava Sheva, Colombo, London Gateway, Rotterdam, Hamburg, Antwerp and Karachi. The first Nhava Sheva call is scheduled for Feb. 12. Reflecting the aggressive posture, the lead Asian carriers have hosted cross-country industry networking sessions in India to garner cargo support from shippers and forwarders, including for out-of-gauge and breakbulk loads that could be containerized. Notably, the Premier Alliance string offers three ports of call out of West India, as opposed to two stops for other services, along with transshipment options for East India cargo via Colombo. Sources at established carriers on the trade lane, such as CMA CGM and Hapag-Lloyd, have noted extreme rate pressures due to the massive capacity influx. “Westbound Europe rates have already dropped substantially,” a senior trade manager at a carrier who didn’t want to be identified told the Journal of Commerce. “As we see it now, a 40% decline [in rates] is in the cards.” Sources put average freight-all-kinds (FAK) rate quotes for loads from West India to North Europe at $1,500 per TEU and $1,600 per FEU for February sailings, negating rate gains usually seen in the early part of the year due to the seasonal grape market. That compares with early-January spot pricing of between $1,800 and $1,900 per FEU for standard dry loads from Nhava Sheva to London Gateway or Felixstowe. Spot prices on the lane stood at $4,800 per TEU and $5,000 per FEU in early August, data shows. Forwarders echoed talk of the downward spiral in rates. “We can already see some dangerous cracks on the wall,” one forwarder said. Forwarders say it remains to be seen how the larger carriers will attempt to retain their market share positions as there are no signs of a demand pickup on the India trade in the near term. The European Union remains India’s largest export trade lane by volume, but westbound flows have slowed in recent years under geopolitical and inflationary setbacks. Anecdotal industry data puts Indian containerized exports to the EU at approximately 1 million TEUs annually. Sources, meanwhile, said West India-Mediterranean trades remain relatively balanced, with FEU booking rates to Genoa, for example, ticking higher in January. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

A huge injection of capacity on India-Europe trades powered by new container shipping alliances and service updates is pushing the westbound market toward a potential downward spiral in prices among cargo-hungry carriers, local industry sources say. In addition to the Gemini network carriers making up 4% to 5% of capacity on the trade lane , the Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming is set to enter the market with significant loading allocations out of India, pegged at 3,500 to 4,000 TEUs per week. Premier will initially employ nine ships of up to 8,000 TEUs of capacity — five from ONE and four from HMM with slot rights for Yang Ming — on a rotation of Karachi, Hazira, Mundra, Nhava Sheva, Colombo, London Gateway, Rotterdam, Hamburg, Antwerp and Karachi. The first Nhava Sheva call is scheduled for Feb. 12. Reflecting the aggressive posture, the lead Asian carriers have hosted cross-country industry networking sessions in India to garner cargo support from shippers and forwarders, including for out-of-gauge and breakbulk loads that could be containerized. Notably, the Premier Alliance string offers three ports of call out of West India, as opposed to two stops for other services, along with transshipment options for East India cargo via Colombo. Sources at established carriers on the trade lane, such as CMA CGM and Hapag-Lloyd, have noted extreme rate pressures due to the massive capacity influx. “Westbound Europe rates have already dropped substantially,” a senior trade manager at a carrier who didn’t want to be identified told the Journal of Commerce. “As we see it now, a 40% decline [in rates] is in the cards.” Sources put average freight-all-kinds (FAK) rate quotes for loads from West India to North Europe at $1,500 per TEU and $1,600 per FEU for February sailings, negating rate gains usually seen in the early part of the year due to the seasonal grape market. That compares with early-January spot pricing of between $1,800 and $1,900 per FEU for standard dry loads from Nhava Sheva to London Gateway or Felixstowe. Spot prices on the lane stood at $4,800 per TEU and $5,000 per FEU in early August, data shows. Forwarders echoed talk of the downward spiral in rates. “We can already see some dangerous cracks on the wall,” one forwarder said. Forwarders say it remains to be seen how the larger carriers will attempt to retain their market share positions as there are no signs of a demand pickup on the India trade in the near term. The European Union remains India’s largest export trade lane by volume, but westbound flows have slowed in recent years under geopolitical and inflationary setbacks. Anecdotal industry data puts Indian containerized exports to the EU at approximately 1 million TEUs annually. Sources, meanwhile, said West India-Mediterranean trades remain relatively balanced, with FEU booking rates to Genoa, for example, ticking higher in January. Contact Bency Mathew at bencyvmathew@gmail.com .

Hefty rate decline looms over India-Europe trade amid capacity buildup

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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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Filling the Supply Chain Education Gap with LTL Education Courses

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