<div class="phx-topic abstract-wrapper">Blank sailings are making it difficult for ag shippers and truckers to make appointments for delivering export containers to marine terminals, and they are experiencing additional supply chain costs as well.</div>

Blank sailings are making it difficult for ag shippers and truckers to make appointments for delivering export containers to marine terminals, and they are experiencing additional supply chain costs as well.

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<div>Agricultural shippers say dozens of canceled sailings at US ports since February have exacerbated existing problems they face at marine terminals. Those longstanding issues include difficulties in making appointments for export containers, unexpected changes in the earliest return date (ERD) for container deliveries, and detention and demurrage charges.Shippers and truckers who addressed the virtual conference of the Agriculture Transportation Coalition (AgTC) Thursday offered potential remedies for these problems that focus on modernizing existing regulatory statutes, including the Uniform Intermodal Interchange Agreement (UIIA) and the Shipping Act of 1984. Ag shippers will also cooperate with the Federal Maritime Commission (FMC) in...

Agricultural shippers say dozens of canceled sailings at US ports since February have exacerbated existing problems they face at marine terminals. Those longstanding issues include difficulties in making appointments for export containers, unexpected changes in the earliest return date (ERD) for container deliveries, and detention and demurrage charges. Shippers and truckers who addressed the virtual conference of the Agriculture Transportation Coalition (AgTC) Thursday offered potential remedies for these problems that focus on modernizing existing regulatory statutes, including the Uniform Intermodal Interchange Agreement (UIIA) and the Shipping Act of 1984. Ag shippers will also cooperate with the Federal Maritime Commission (FMC) in its recently released interpretive rule on detention and demurrage. Those cargo owners and the truckers that transport their containers to marine terminals and rail ramps are mounting an aggressive campaign in Washington to promote change at a time when the COVID-19 crisis is also adding costs and creating delays in their supply chains. Ag shippers and truckers are expressing their views through their participation on supply chain working groups of federal agencies such as the FMC. “The goal is freight fluidity,” said Joey Friedmann, legal and regulatory affairs counsel to AgTC. Friedmann is in charge of drafting provisions to address supply chain disruptions that ag shippers can incorporate into their service contracts with ocean carriers. Until COVID-19 crushed consumer demand in the US, the problems that ag shippers and other beneficial cargo owners (BCOs) grappled with at marine terminals were most often caused by congestion due to cargo surges . Cargo volumes the past two months, however, have been unusually weak as US imports from Asia dropped 1.3 percent year over year in April after declining 17.4 percent in March, according to PIERS, a JOC.com sister company within IHS Markit. The executive directors of the ports of New York-New Jersey, Charleston, and Los Angeles told the AgTC conference terminal congestion and the bunching of trucks at terminal gates have been non-issues as consumer demand plummets in the US. Some ports and terminals today have so much extra space that they are offering to store containers at their facilities until they move to warehouses. “All of our terminals are operating smoothly,” said Gene Seroka, executive director of the Port of Los Angeles. Pickup, delivery schedules a ‘moving target’ With volume spikes no longer a concern, the majority of challenges faced by ag exporters at marine terminals today are precipitated by blank sailings. When cargo volumes drop precipitously, terminal operators and operating ports look to reduce variable costs by closing gates and work shifts, which disrupts truck pickup and delivery schedules. Stephen Edwards, president and CEO of port terminal operator TraPac, said the blank sailings in February and March removed outbound sailings from Oakland just as refrigerated export cargoes were picking up. Donna Lemm, executive vice president national sales at the drayage operator IMC Companies, said the lack of vessel schedule integrity and interrupted gate hours directly impacts motor carriers throughout the country. “It’s every coast, every gateway,” she told the virtual attendees of the AgTC event. In this environment, container pickup and delivery schedules are a “moving target,” said Dan Miller, global container leader at Cargill. Click to enlarge An added problem that ag shippers face is that cargo booked on one line may be carried on a vessel operated by another line in the ocean carrier vessel-sharing alliance, but the shipper may not have been informed if the second carrier canceled the sailing. Juergen Pump, president North America at Maersk Line subsidiary Hamburg Sud, said that from April into July, carriers have implemented or have scheduled 80 blank sailings from Asia to the West Coast and 43 to the East Coast. Vessel capacity in the US-Asia trades since February has been reduced by 17.3 percent, according to Sea-Intelligence Maritime Consulting. “Having visibility into blank sailings at the alliance level would be great,” Miller said. Complicating matters further for agricultural exporters, carriers are increasingly changing their early return dates (ERDs), the earliest day that they will accept an export container at their marine terminal without charging the shipper a penalty, often with little advance notice , said Peter Friedmann, executive director of AgTC. Elena Asher, assistant director of export logistics at the Dairy Farmers of America, said the sudden changes in ERDs are adding to costs for ag exporters. In these cases, shippers often end up holding onto chassis and export containers longer than anticipated, resulting in detention, demurrage, and chassis usage fees. When ag shippers must delay the delivery of their container to the marine terminal because the ERD is changed, they have no choice but to incur these added costs because they have already committed to pick up their load at the packing plant. “We have to continue on with the load,” she said. This constantly changing landscape in the era of blank sailings is also interfering with the ability of truckers to make appointments for delivery of empty and loaded containers and pickup of inbound containers at marine terminals, said Robert Loya, vice president of the motor carrier CMI West. Modernization of UIIA, Shipping Act eyed Loya, who is a member of the FMC’s supply chain innovation team, said trucker and BCO efforts on Capitol Hill include pushing for updates to the UIIA, the standard intermodal industry contract for the exchange of equipment among supply chain participants, and the Shipping Act of 1984, which was amended in 1998. These statutes are designed to promote fairness and mitigate discrimination in intermodal and ocean transportation and have gone a long way toward achieving those objectives. However, “The industry has continued to evolve” since those statutes were passed, Loya said. For example, the UIIA and Shipping Act do not address the impact of container carrier vessel-sharing alliances and blank sailings on marine terminal operations. Nor do they say anything about the difficulties truckers encounter in making appointments at marine terminals, or the ability of BCOs and truckers to seek force majeure protection in response to COVID-19 disruptions, he said. The need to update federal statutes in the current environment of blank sailings and supply chain interruptions is apparent for ag shippers and the truckers who serve them, said Peter Schneider, vice president of TGS Transportation. “Blank sailings have affected us greatly. It is arduous getting export containers accepted at marine terminals,” he said. For ocean carriers, blank sailings are an unfortunate necessity at a time of rapidly declining cargo volumes, said Jeremy Nixon, CEO of Ocean Network Express. “We’re trying to end these ad hoc cancellations. Maybe July will be better,” Nixon told the AgTC conference. Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo .

Container lines

Blank sailings exacerbate US ag shipper pain points

<div class="phx-topic abstract-wrapper">Cosco said changes in the shipping alliances this year will trigger competition in digitization and decarbonization.</div>

Cosco said changes in the shipping alliances this year will trigger competition in digitization and decarbonization.

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<div class="phx-topic">Cosco Shipping Holdings said Friday that the industry will experience “profound changes in global cargo flow patterns” due to tariff- and trade-related policies after reporting strong profits in 2024. Container shipping demand growth is set to moderate this year, the carrier said, thanks to the combined effects of an easing of “global inflationary pressures and accommodative monetary policies in Europe and the United States.” The carrier, the fourth-largest by tonnage, according to Alphaliner, said changes among the major container shipping alliances are expected to trigger increased competition this year, “particularly in two strategic arenas: digitalized supply chains and green and low-carbon development initiatives.” That came as Cosco reported a 106% increase in net profit, to $6.8 billion, last year, on revenues that rose 33% to $32 billion thanks to significantly higher freight rates and a 10% year-over-year increase in total container volumes. Average revenue per TEU on international routes climbed 30% to $1,055 per TEU. Industrywide operating profits reached nearly $60 billion in 2024, according to estimates from Sea-Intelligence Maritime Analysis, but analysts are <a href="https://www.joc.com/article/oversupplied-ocean-carriers-sailing-into-new-downcycle-analysts-5963852">warning of a downcycle beginning this year</a>. The state-owned carrier said it will accelerate the scaled development of its dual-brand fleet, consisting of Cosco Shipping Lines and Hong Kong-based subsidiary Orient Overseas Container Line (OOCL), after it ordered a dozen 14,000-TEU methanol dual-fuel container ships last year. Cosco Shipping Lines accounted for approximately two-thirds ($4.3 billion) of the $6.8 billion in reported profits last year, with the balance coming from OOCL and terminal arm Cosco Shipping Port, which saw its net profit slip 5% to $309 million. Revenue gains were led by the trans-Pacific trade, which spiked 63% to $9 billion on a 13% jump in volumes. Asia-Europe revenue rose 41% to $6.4 billion despite a 13% drop in liftings, a reflection of operational capacity cuts stemming from vessels diverting around the Cape of Good Hope to avoid Houthi militant attacks in the Red Sea area. Revenue from intra-Asia, including Australia, climbed 23% to $7.4 billion on volumes that increased 11%. Earnings from other trades, including the trans-Atlantic and Latin America, grew 27% year over year to $4.5 billion as liftings rose 10%.Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Cosco Shipping Holdings said Friday that the industry will experience “profound changes in global cargo flow patterns” due to tariff- and trade-related policies after reporting strong profits in 2024. Container shipping demand growth is set to moderate this year, the carrier said, thanks to the combined effects of an easing of “global inflationary pressures and accommodative monetary policies in Europe and the United States.” The carrier, the fourth-largest by tonnage, according to Alphaliner, said changes among the major container shipping alliances are expected to trigger increased competition this year, “particularly in two strategic arenas: digitalized supply chains and green and low-carbon development initiatives.” That came as Cosco reported a 106% increase in net profit, to $6.8 billion, last year, on revenues that rose 33% to $32 billion thanks to significantly higher freight rates and a 10% year-over-year increase in total container volumes. Average revenue per TEU on international routes climbed 30% to $1,055 per TEU. Industrywide operating profits reached nearly $60 billion in 2024, according to estimates from Sea-Intelligence Maritime Analysis, but analysts are warning of a downcycle beginning this year . The state-owned carrier said it will accelerate the scaled development of its dual-brand fleet, consisting of Cosco Shipping Lines and Hong Kong-based subsidiary Orient Overseas Container Line (OOCL), after it ordered a dozen 14,000-TEU methanol dual-fuel container ships last year. Cosco Shipping Lines accounted for approximately two-thirds ($4.3 billion) of the $6.8 billion in reported profits last year, with the balance coming from OOCL and terminal arm Cosco Shipping Port, which saw its net profit slip 5% to $309 million. Revenue gains were led by the trans-Pacific trade, which spiked 63% to $9 billion on a 13% jump in volumes. Asia-Europe revenue rose 41% to $6.4 billion despite a 13% drop in liftings, a reflection of operational capacity cuts stemming from vessels diverting around the Cape of Good Hope to avoid Houthi militant attacks in the Red Sea area. Revenue from intra-Asia, including Australia, climbed 23% to $7.4 billion on volumes that increased 11%. Earnings from other trades, including the trans-Atlantic and Latin America, grew 27% year over year to $4.5 billion as liftings rose 10%. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

Asia-Europe

Trans-Pacific

Container Shipping News

Escalating tariffs will cause ‘profound’ trade pattern changes: Cosco

<div class="phx-topic abstract-wrapper">US maritime interests said the proposed fees on Chinese ships would hit a variety of low-value, niche trades that can’t absorb the costs.</div>

US maritime interests said the proposed fees on Chinese ships would hit a variety of low-value, niche trades that can’t absorb the costs.

<div class="phx-topic">While major container lines and their major customers are not speaking out much about the Trump administration’s proposed fees of about $1 million per US port call on Chinese vessels, shippers involved in smaller maritime and container trades are lashing out directly against the proposal through a comment period ending Monday. In comments filed with US Trade Representative (USTR) prior to a Monday hearing on the proposed fees, maritime interests said it will hit swathes of the economy outside the container trade and will even hurt the US-based maritime industry, which relies on Chinese ships. The USTR hearing comes after a year-long investigation found that <a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">China heavily subsidized its shipbuilding industry to take a dominant market share</a>. Last month, the USTR outlined a broad array of possible remedies, including collecting fees on Chinese carriers calling US ports, collecting other fees on non-Chinese carriers with Chinese ships in their fleet or newbuild orders in China, and requiring that US-flag vessels carry more exports. After the public hearing, the USTR will make a final determination on which of the penalties to enforce. The USTR has received more than 200 submissions ahead of Monday’s hearing on the impact of those penalties. The majority of commenters argue against any type of penalties, citing the potential for much higher shipping costs on trades that can least afford them and the reduction of services as Chinese ships avoid US ports. Many of the submissions highlighted that US-based ocean carriers also have Chinese-built ships in their fleets, with some of these fleets serving small regional markets such as the Caribbean, or dry and liquid bulk trades that will also be swept up in the port fees. There are 448 ships currently in service that are built in China and owned and operated by US ocean carriers, according to Sea-Web, a sister company of the Journal of Commerce within S&amp;P Global. Dry bulk ships make up about one-third of that total. There are also about 90 Chinese-built container and general cargo ships in US-based fleets, Sea-web data show. Although the Jones Act bars these ships from transporting goods between US ports, carriers such as Tropical Shipping and Seaboard Marine can serve international ports in the Caribbean and Central America from US ports. <h3>Caribbean sees end to shipping services </h3>A number of Florida ports and Caribbean-based shippers said USTR’s proposed penalties would cripple trade throughout the region. While the port fees could easily be absorbed across multiple cargoes on large ships, smaller vessels and shippers would take a big hit if a fee is charged regardless of the size of the ship and the value of the cargo. Carriers that serve Caribbean markets with Chinese ships “would effectively be out of business and so would all the islands and countries they trade with,” West Indian Marine Group said in its comment. “Islands and countries in the Caribbean would not be able to survive and exist because all trade is supplied from the USA.” Other niche carriers said they would not be able to serve the US market if fees on Chinese ships are levied. Atlantic Container Line, which has five ships in the trans-Atlantic trade, said only Chinese shipyards were willing to build its ships, which can switch between handling containers, breakbulk and roll-on, roll-off cargoes. “ACL would be forced to terminate its US service, close its American offices, lay off its American staff and redeploy its ships to non-US trades,” the company said in its submission. Container lines that remain in the US trade will likely have to pass on those charges to customers, the International Chamber of Shipping (ICS) said in its submission. It said the port fees could add $600 to $800 to the cost of each shipping container moved through US ports as the USTR proposal would impact nearly all container vessel calls to the US. “While some reorganization and substitution may be possible to avoid exposure to fees, it would be impossible for container liners to avoid the disproportionately high fees proposed, and costs would be passed on to US charterers and consumers,” the ICS said. The proposed fees would also cause large ocean carriers to change their service networks, the American Association of Port Authorities (AAPA) said in its submission to the USTR. It said container lines could increase calls to Canadian and Mexican ports to avoid the fees while reducing US port calls. <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">That would strain big US ports and leave others with vastly reduced business, all while increasing costs to shippers</a>, the AAPA said. “This would cause significant congestion at large ports and the collapse of business lines at small and medium-sized ports. The results would be higher inflation, more unemployment, and higher trade deficits,” the AAPA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

While major container lines and their major customers are not speaking out much about the Trump administration’s proposed fees of about $1 million per US port call on Chinese vessels, shippers involved in smaller maritime and container trades are lashing out directly against the proposal through a comment period ending Monday. In comments filed with US Trade Representative (USTR) prior to a Monday hearing on the proposed fees, maritime interests said it will hit swathes of the economy outside the container trade and will even hurt the US-based maritime industry, which relies on Chinese ships. The USTR hearing comes after a year-long investigation found that China heavily subsidized its shipbuilding industry to take a dominant market share . Last month, the USTR outlined a broad array of possible remedies, including collecting fees on Chinese carriers calling US ports, collecting other fees on non-Chinese carriers with Chinese ships in their fleet or newbuild orders in China, and requiring that US-flag vessels carry more exports. After the public hearing, the USTR will make a final determination on which of the penalties to enforce. The USTR has received more than 200 submissions ahead of Monday’s hearing on the impact of those penalties. The majority of commenters argue against any type of penalties, citing the potential for much higher shipping costs on trades that can least afford them and the reduction of services as Chinese ships avoid US ports. Many of the submissions highlighted that US-based ocean carriers also have Chinese-built ships in their fleets, with some of these fleets serving small regional markets such as the Caribbean, or dry and liquid bulk trades that will also be swept up in the port fees. There are 448 ships currently in service that are built in China and owned and operated by US ocean carriers, according to Sea-Web, a sister company of the Journal of Commerce within S&P Global. Dry bulk ships make up about one-third of that total. There are also about 90 Chinese-built container and general cargo ships in US-based fleets, Sea-web data show. Although the Jones Act bars these ships from transporting goods between US ports, carriers such as Tropical Shipping and Seaboard Marine can serve international ports in the Caribbean and Central America from US ports. Caribbean sees end to shipping services A number of Florida ports and Caribbean-based shippers said USTR’s proposed penalties would cripple trade throughout the region. While the port fees could easily be absorbed across multiple cargoes on large ships, smaller vessels and shippers would take a big hit if a fee is charged regardless of the size of the ship and the value of the cargo. Carriers that serve Caribbean markets with Chinese ships “would effectively be out of business and so would all the islands and countries they trade with,” West Indian Marine Group said in its comment. “Islands and countries in the Caribbean would not be able to survive and exist because all trade is supplied from the USA.” Other niche carriers said they would not be able to serve the US market if fees on Chinese ships are levied. Atlantic Container Line, which has five ships in the trans-Atlantic trade, said only Chinese shipyards were willing to build its ships, which can switch between handling containers, breakbulk and roll-on, roll-off cargoes. “ACL would be forced to terminate its US service, close its American offices, lay off its American staff and redeploy its ships to non-US trades,” the company said in its submission. Container lines that remain in the US trade will likely have to pass on those charges to customers, the International Chamber of Shipping (ICS) said in its submission. It said the port fees could add $600 to $800 to the cost of each shipping container moved through US ports as the USTR proposal would impact nearly all container vessel calls to the US. “While some reorganization and substitution may be possible to avoid exposure to fees, it would be impossible for container liners to avoid the disproportionately high fees proposed, and costs would be passed on to US charterers and consumers,” the ICS said. The proposed fees would also cause large ocean carriers to change their service networks, the American Association of Port Authorities (AAPA) said in its submission to the USTR. It said container lines could increase calls to Canadian and Mexican ports to avoid the fees while reducing US port calls. That would strain big US ports and leave others with vastly reduced business, all while increasing costs to shippers , the AAPA said. “This would cause significant congestion at large ports and the collapse of business lines at small and medium-sized ports. The results would be higher inflation, more unemployment, and higher trade deficits,” the AAPA said. Contact Michael Angell at michael.angell@spglobal.com .

North American ports

Transport, Trade and Regulation News

USTR’s China tonnage tax would squeeze smaller trades: stakeholders

<div class="phx-topic abstract-wrapper">MPV industry experts call for exemptions to US port taxes for China-built ships, stressing the lack of alternatives for specialist cargo carriage and the unfair burden on responsibility on the sector.</div>

MPV industry experts call for exemptions to US port taxes for China-built ships, stressing the lack of alternatives for specialist cargo carriage and the unfair burden on responsibility on the sector.

<div class="phx-topic">Breakbulk operators and interests are pulling no punches in their responses to the United States Trade Representative (USTR) proposal to hit Chinese-made and -operated vessels with fees of $1 million to $1.5 million per US port call.“Very bad for US trade,” “disadvantaging American businesses,” “disproportionately [affecting] US non-asset-based vessel operators, particularly those engaged in … breakbulk shipping,” various stakeholders said, weighing in on the proposal. In advance of Monday’s deadline for submission of comments to the proposal, multipurpose vessel (MPV) charterers and operators have criticized the proposal for creating higher vessel fees that will substantially increase the cost of transporting breakbulk and project cargoes, including steel coils and industrial components. Captain Scott Bravener, CEO of McKeil Marine Limited, a Canadian enterprise that delivers marine transportation and project cargo services across the Great Lakes, St. Lawrence Seaway, East Coast, and the Canadian Arctic, said the proposed port fees “fail to account for the frequency-driven nature of short-sea shipping, where repeated port calls amplify financial burdens.”He added that MPVs lack the pricing flexibility of deep-sea container ships and cannot simply absorb substantial cost increases. The proposed fees seem “designed for large ocean-going vessels carrying cargo worth hundreds of millions or even billions of dollars,” Bravener said.In its response, MPV operator BBC Chartering asked for a complete exclusion for the breakbulk sector from the fees “because there are no US-built multipurpose heavy-lift vessels and because multipurpose heavy-lift vessels carry critical industrial cargoes, strategic components and resources to and from the US,” BBC Chartering USA president Tim Kopfensteiner and BBC Chartering Carriers CEO Ulrich Ulrichs said. BBC said the operator’s 581 port calls to the US in 2024 would translate to $581 million in fees under the proposal, “close to 200% of BBC’s annual revenue controlled in the US,” said the response. Suggesting amendments to the proposal, BBC recommended that the service fee be applied to Chinese-built tonnage prospectively; that it only applies to Chinese-built vessels without regard to the percentage of Chinese-built tonnage in the operator’s fleet; and that it corresponds to the size of the vessel.<h3>Rate not equitable for US versus non-US interests</h3>Another submission claimed the proposal unfairly penalizes non-Chinese shipping companies that have purchased secondhand Chinese-built vessels. A more effective and equitable approach would be to impose the fees solely on Chinese shipping companies with Chinese-built ships, suggested Kasper Bihlet, director of chartering Norvic Shipping with broad experience in the project and breakbulk sectors. “This would ensure that the burden falls on the true beneficiaries of China’s state-subsidized shipping industry, rather than on global shipowners who have lawfully acquired Chinese-built tonnage,” Bihlet said.Juan Ignacio Lopez, CEO of King Ocean Gulf Alliance LLC (KOGA), a transporter of mining and oilfield supplies, steel, agricultural products, dry bulk chemicals, power generation equipment, and heavy machinery, said the proposed rule would impose a higher tax burden on US operators than their foreign competitors. Lopez calculated that non-US operators using Chinese-built vessels would face a $1-million-per-port entry tax, while US operators using the same vessels would be subject to a higher tax of $1.5 million per port entry.“This disproportionate taxation on US companies puts us at a severe competitive disadvantage against foreign operators, who will have a lower cost structure when engaging in the same trade routes,” he said.To mitigate the unintended consequences of the proposed tax, KOGA echoed BBC comments that the tax be a tiered structure based on net tonnage, rather than a flat rate, and that it is implemented in a phased-in approach, allowing time for industry adjustments.Respondents also raised concerns that the fees would force MPV operators to ultimately pull US port calls. “This would leave a dramatic hole in the amount of ocean tonnage available for trading in the US. Limiting the options of vessels available on the market to carry US goods would most likely increase costs further for US shippers,” said a submission from John S. Connor, Inc., with interests in project cargo forwarding.Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Breakbulk operators and interests are pulling no punches in their responses to the United States Trade Representative (USTR) proposal to hit Chinese-made and -operated vessels with fees of $1 million to $1.5 million per US port call. “Very bad for US trade,” “disadvantaging American businesses,” “disproportionately [affecting] US non-asset-based vessel operators, particularly those engaged in … breakbulk shipping,” various stakeholders said, weighing in on the proposal. In advance of Monday’s deadline for submission of comments to the proposal, multipurpose vessel (MPV) charterers and operators have criticized the proposal for creating higher vessel fees that will substantially increase the cost of transporting breakbulk and project cargoes, including steel coils and industrial components. Captain Scott Bravener, CEO of McKeil Marine Limited, a Canadian enterprise that delivers marine transportation and project cargo services across the Great Lakes, St. Lawrence Seaway, East Coast, and the Canadian Arctic, said the proposed port fees “fail to account for the frequency-driven nature of short-sea shipping, where repeated port calls amplify financial burdens.” He added that MPVs lack the pricing flexibility of deep-sea container ships and cannot simply absorb substantial cost increases. The proposed fees seem “designed for large ocean-going vessels carrying cargo worth hundreds of millions or even billions of dollars,” Bravener said. In its response, MPV operator BBC Chartering asked for a complete exclusion for the breakbulk sector from the fees “because there are no US-built multipurpose heavy-lift vessels and because multipurpose heavy-lift vessels carry critical industrial cargoes, strategic components and resources to and from the US,” BBC Chartering USA president Tim Kopfensteiner and BBC Chartering Carriers CEO Ulrich Ulrichs said. BBC said the operator’s 581 port calls to the US in 2024 would translate to $581 million in fees under the proposal, “close to 200% of BBC’s annual revenue controlled in the US,” said the response. Suggesting amendments to the proposal, BBC recommended that the service fee be applied to Chinese-built tonnage prospectively; that it only applies to Chinese-built vessels without regard to the percentage of Chinese-built tonnage in the operator’s fleet; and that it corresponds to the size of the vessel. Rate not equitable for US versus non-US interests Another submission claimed the proposal unfairly penalizes non-Chinese shipping companies that have purchased secondhand Chinese-built vessels. A more effective and equitable approach would be to impose the fees solely on Chinese shipping companies with Chinese-built ships, suggested Kasper Bihlet, director of chartering Norvic Shipping with broad experience in the project and breakbulk sectors. “This would ensure that the burden falls on the true beneficiaries of China’s state-subsidized shipping industry, rather than on global shipowners who have lawfully acquired Chinese-built tonnage,” Bihlet said. Juan Ignacio Lopez, CEO of King Ocean Gulf Alliance LLC (KOGA), a transporter of mining and oilfield supplies, steel, agricultural products, dry bulk chemicals, power generation equipment, and heavy machinery, said the proposed rule would impose a higher tax burden on US operators than their foreign competitors. Lopez calculated that non-US operators using Chinese-built vessels would face a $1-million-per-port entry tax, while US operators using the same vessels would be subject to a higher tax of $1.5 million per port entry. “This disproportionate taxation on US companies puts us at a severe competitive disadvantage against foreign operators, who will have a lower cost structure when engaging in the same trade routes,” he said. To mitigate the unintended consequences of the proposed tax, KOGA echoed BBC comments that the tax be a tiered structure based on net tonnage, rather than a flat rate, and that it is implemented in a phased-in approach, allowing time for industry adjustments. Respondents also raised concerns that the fees would force MPV operators to ultimately pull US port calls. “This would leave a dramatic hole in the amount of ocean tonnage available for trading in the US. Limiting the options of vessels available on the market to carry US goods would most likely increase costs further for US shippers,” said a submission from John S. Connor, Inc., with interests in project cargo forwarding. Contact Carly Fields at carly.fields@spglobal.com .

Breakbulk carriers

Project cargo

Breakbulk News

Breakbulk stakeholders blast USTR’s China tonnage tax proposal

<div class="phx-topic abstract-wrapper">Container lines serving the India-US trade appear to be taking a hard line in the first round of annual contract negotiations amid overcapacity putting downward pressure on spot rates. </div>

Container lines serving the India-US trade appear to be taking a hard line in the first round of annual contract negotiations amid overcapacity putting downward pressure on spot rates.

<div class="phx-topic">India-US trade ocean carriers have kicked off their first round of contract negotiations for the next season (2025–26) and appear to be signaling a “tight hold” on rates even as excess capacity continues to undermine their spot price-hiking efforts. “Major carriers are looking firm on how they want to sell the space,” a Mumbai-based freight forwarder who didn’t want to be identified told the Journal of Commerce. “But it remains to be seen if they will be able to hold that resolve for long.” Leading carriers are generally targeting long-term (yearly) contracts at rates of $1,900 to $2,100 per FEU for loads to the US East Coast, market sources say. Container rates, as measured by Platts, a sister company of Journal of Commerce with S&amp;P Global, have ticked up in recent weeks, to $2,250 per FEU. Forwarders who spoke with the Journal of Commerce and asked not to be identified believe it all depends on how rate-hungry carriers will strategize their capacity plans as the introduction of an enhanced Maersk MECL loop, since late February, added to that pressure. The last MECL sailing is said to have lifted close to 4,000 TEUs out of West India, compared with the previous average of 2,500 TEUs a week, which arguably meant some market share losses for CMA CGM’s Indamex and Hapag-Lloyd’s TPI services, sources stated. “No contract deals are done yet,” a line manager at a European carrier said. “Customers are negotiating for the best rates they can buy.” While annual service contracts typically come into play from May 1, last year, negotiations continued well into June and July as shippers and forwarders found the spot market more attractive. Even now, as a second carrier source told the Journal Commerce, several large beneficial cargo owners (BCOs) don't want to rush into finalizing their contract commitments due to ongoing volatile market conditions — an early indicator of coming long negotiations. That said, Maersk, known for its compliance enforcement, usually closes all contract deals by April 30. “It’s a <a href=" ">falling market</a>, so we are a bit cautious about locking ourselves into any fixed rates with exposure to several terms/conditions,” a logistics head at a diversified Indian conglomerate noted. “Moreover, we are now seeing sales calls from several first-time carriers, promising better rates than our regular liner partners and forwarding agents.” Local forwarding houses and global non-vessel-operating common carriers (NVOs) control a significant portion of the Indian container market. “We are awaiting firm [contract] proposals after some informal discussions,” said an NVO country head with high stakes in the India-US trade. In the last contracting cycle, the lead carriers — Hapag-Lloyd, CMA CGM and Maersk — were initially negotiating to close deals at rates in the range of $2,100 and $2,300 per FEU but eventually had to settle at about $1,900 per FEU due to the entry of Ocean Network Express’ standalone WIN loop from May 2024. ONE and other smaller operators, especially Cosco Shipping, ended up signing at rates of $1,600 to $1,700 per FEU last year, sources noted. “As things stand, the market is heading toward the same direction, plus or minus 10% contingent on shippers’ minimum quantity commitments (MQCs),” an industry expert said. Contact Bency Matthew at <a href="bencymathew@gmail.com">bencymathew@gmail.com</a>.</div>

India-US trade ocean carriers have kicked off their first round of contract negotiations for the next season (2025–26) and appear to be signaling a “tight hold” on rates even as excess capacity continues to undermine their spot price-hiking efforts. “Major carriers are looking firm on how they want to sell the space,” a Mumbai-based freight forwarder who didn’t want to be identified told the Journal of Commerce. “But it remains to be seen if they will be able to hold that resolve for long.” Leading carriers are generally targeting long-term (yearly) contracts at rates of $1,900 to $2,100 per FEU for loads to the US East Coast, market sources say. Container rates, as measured by Platts, a sister company of Journal of Commerce with S&P Global, have ticked up in recent weeks, to $2,250 per FEU. Forwarders who spoke with the Journal of Commerce and asked not to be identified believe it all depends on how rate-hungry carriers will strategize their capacity plans as the introduction of an enhanced Maersk MECL loop, since late February, added to that pressure. The last MECL sailing is said to have lifted close to 4,000 TEUs out of West India, compared with the previous average of 2,500 TEUs a week, which arguably meant some market share losses for CMA CGM’s Indamex and Hapag-Lloyd’s TPI services, sources stated. “No contract deals are done yet,” a line manager at a European carrier said. “Customers are negotiating for the best rates they can buy.” While annual service contracts typically come into play from May 1, last year, negotiations continued well into June and July as shippers and forwarders found the spot market more attractive. Even now, as a second carrier source told the Journal Commerce, several large beneficial cargo owners (BCOs) don't want to rush into finalizing their contract commitments due to ongoing volatile market conditions — an early indicator of coming long negotiations. That said, Maersk, known for its compliance enforcement, usually closes all contract deals by April 30. “It’s a falling market , so we are a bit cautious about locking ourselves into any fixed rates with exposure to several terms/conditions,” a logistics head at a diversified Indian conglomerate noted. “Moreover, we are now seeing sales calls from several first-time carriers, promising better rates than our regular liner partners and forwarding agents.” Local forwarding houses and global non-vessel-operating common carriers (NVOs) control a significant portion of the Indian container market. “We are awaiting firm [contract] proposals after some informal discussions,” said an NVO country head with high stakes in the India-US trade. In the last contracting cycle, the lead carriers — Hapag-Lloyd, CMA CGM and Maersk — were initially negotiating to close deals at rates in the range of $2,100 and $2,300 per FEU but eventually had to settle at about $1,900 per FEU due to the entry of Ocean Network Express’ standalone WIN loop from May 2024. ONE and other smaller operators, especially Cosco Shipping, ended up signing at rates of $1,600 to $1,700 per FEU last year, sources noted. “As things stand, the market is heading toward the same direction, plus or minus 10% contingent on shippers’ minimum quantity commitments (MQCs),” an industry expert said. Contact Bency Matthew at bencymathew@gmail.com .

India-US contract cycle shadowed by overcapacity

<div class="phx-topic abstract-wrapper">Air cargo operators out of Europe’s busiest airport will face at least a week of turmoil as airlines, forwarders and terminals start clearing the rapidly building backlog of freight when flight operations restart at midnight Friday.</div>

Air cargo operators out of Europe’s busiest airport will face at least a week of turmoil as airlines, forwarders and terminals start clearing the rapidly building backlog of freight when flight operations restart at midnight Friday.

<div class="phx-topic">Air freight forwarders are scrambling to recover cargo stranded at airports across Europe and the UK with inbound planes forced to divert following the complete shutdown of London’s Heathrow Airport. Europe’s busiest airport will remain shut all Friday after a fire at an electrical substation cut power to most of west London, including the airport, and led to the cancellation or diversion of more than 1,300 flights. “Due to a power outage in the London Heathrow area, our operations are temporarily disrupted ... at this time, we are unable to accept any freight at London Heathrow,” IAG Cargo, the holding company for British Airways and Iberia, said in a customer advisory Friday. The scale of the disruption to cargo is immense. In February, Heathrow handled 120,000 tons of air cargo, according to the airport authority, with record volume in 2024 that increased 10.4% year over year to 1.5 million tons. Flights on the ground at Heathrow are unable to take off and inbound aircraft are being rerouted to cities such as Barcelona, Lyon and Glasgow, stranding passengers and severely disrupting air freight flows. “Today’s closure of Heathrow is going to have a profound impact on supply chains for days, and potentially weeks,” was the grim assessment of Angus Hind, director of UK-based forwarder Europa Air and Sea. “Airline handling facilities are operating as normal, so airline transfers from European hubs and UK airports will continue to arrive on the ground and be processed as normal,” he said in a statement. But the terminals will need to work through the backlog of freight when flights resume, he added. <h3>Airline sheds filling up fast </h3>The British International Freight Association (BIFA) said in a statement Friday that the impact of Heathrow’s closure will be significant on both import and export shipments that depend on a consistent flow of goods. “For exports the immediate concern will be that airline sheds will fill up rapidly and be unable to accept fresh freight [perishable] deliveries, which will then affect other parties. For imports, freight will not arrive at or be diverted from its original destination,” BIFA noted. Much of the cargo in and out of Heathrow is carried in the below-deck bellies of passenger aircraft, and BIFA warned that when flights were restored, the onward movement of passengers would likely take precedence over air freight that could potentially restrict the cargo capacity available. Heathrow is a key airport serving the trans-Atlantic trade lane that has been seeing <a href="https://www.joc.com/article/trans-atlantic-air-cargo-demand-surges-ahead-of-us-tariffs-5965691">rising demand as the US implements tariffs</a> on the European Union. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Air freight forwarders are scrambling to recover cargo stranded at airports across Europe and the UK with inbound planes forced to divert following the complete shutdown of London’s Heathrow Airport. Europe’s busiest airport will remain shut all Friday after a fire at an electrical substation cut power to most of west London, including the airport, and led to the cancellation or diversion of more than 1,300 flights. “Due to a power outage in the London Heathrow area, our operations are temporarily disrupted ... at this time, we are unable to accept any freight at London Heathrow,” IAG Cargo, the holding company for British Airways and Iberia, said in a customer advisory Friday. The scale of the disruption to cargo is immense. In February, Heathrow handled 120,000 tons of air cargo, according to the airport authority, with record volume in 2024 that increased 10.4% year over year to 1.5 million tons. Flights on the ground at Heathrow are unable to take off and inbound aircraft are being rerouted to cities such as Barcelona, Lyon and Glasgow, stranding passengers and severely disrupting air freight flows. “Today’s closure of Heathrow is going to have a profound impact on supply chains for days, and potentially weeks,” was the grim assessment of Angus Hind, director of UK-based forwarder Europa Air and Sea. “Airline handling facilities are operating as normal, so airline transfers from European hubs and UK airports will continue to arrive on the ground and be processed as normal,” he said in a statement. But the terminals will need to work through the backlog of freight when flights resume, he added. Airline sheds filling up fast The British International Freight Association (BIFA) said in a statement Friday that the impact of Heathrow’s closure will be significant on both import and export shipments that depend on a consistent flow of goods. “For exports the immediate concern will be that airline sheds will fill up rapidly and be unable to accept fresh freight [perishable] deliveries, which will then affect other parties. For imports, freight will not arrive at or be diverted from its original destination,” BIFA noted. Much of the cargo in and out of Heathrow is carried in the below-deck bellies of passenger aircraft, and BIFA warned that when flights were restored, the onward movement of passengers would likely take precedence over air freight that could potentially restrict the cargo capacity available. Heathrow is a key airport serving the trans-Atlantic trade lane that has been seeing rising demand as the US implements tariffs on the European Union. Contact Greg Knowler at greg.knowler@spglobal.com .

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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