<div class="phx-topic abstract-wrapper">Select blank sailings on the East Coast South America-Asia trade come as currency devaluations by both Brazil and Argentina are boosting exports to Asia, particularly of reefer cargoes, fueling an imbalance in container volumes. </div>

Select blank sailings on the East Coast South America-Asia trade come as currency devaluations by both Brazil and Argentina are boosting exports to Asia, particularly of reefer cargoes, fueling an imbalance in container volumes.

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<div>Carriers operating East Coast South America-Asia services will continue to make selective blank sailings in the coming weeks amid ongoing lackluster trade, although the number of blanked services could fall as trade picks up, maritime executives said.That comes even as currency devaluations by both Brazil and Argentina to Asia are boosting exports, particularly of reefer cargoes, fueling an imbalance in container volumes on east and westbound legs.Singapore-headquartered carrier Pacific International Lines withdrew about 50 percent of its weekly capacity from the end of April to this week, a senior shipping executive told JOC.com.The executive said Maersk has cut about 34...

Carriers operating East Coast South America-Asia services will continue to make selective blank sailings in the coming weeks amid ongoing lackluster trade, although the number of blanked services could fall as trade picks up, maritime executives said. That comes even as currency devaluations by both Brazil and Argentina to Asia are boosting exports, particularly of reefer cargoes, fueling an imbalance in container volumes on east and westbound legs. Singapore-headquartered carrier Pacific International Lines withdrew about 50 percent of its weekly capacity from the end of April to this week, a senior shipping executive told JOC.com. The executive said Maersk has cut about 34 percent, Hapag Lloyd approximately 45 percent, and Cosco Shipping-CMA CGM about 15 percent. “From what we’ve seen of our competitors, total capacity on the ECSA-Asia trade has been reduced by around 34 percent,” the executive said. Gustavo Fonseca Paschoa, Maersk’s head of sales for East Coast South America, told JOC.com the carrier is “blanking sailings to avoid rapid rate deterioration as seen in the past.” “The main demand challenges faced on the trades are related to imports into Brazil and Argentina whose economies are heavily affected by the COVID-19 crisis,” Paschoa said. But James Frew, director of research at Maritime Strategies International (MSI), said carriers are unlikely to be able to make deeper cuts in services. “Relatively stable Latin American exports to Asia in the second half of this year means that there is limited scope for service blankings, even as the backhaul trade — imports to Latin America — collapses,” he said. Ocean Network Express (ONE) confirmed it is operating a full schedule of weekly services from the East Coast South America to Asia in July, according to its latest sailing schedule published Friday. Outlining the issues faced by South American economies, the senior shipping executive said, “We are not seeing demand returning to normal levels. Brazil and Argentina are struggling quite a bit. Their GDP expectations are not good at all. My feeling is the downturn is going to persist until the end of this year.” Brazil GDP on track for 8 percent contraction Brazil has forecast its gross domestic product will contract 8 percent this year, the sharpest fall since at least 1990, the Economy Ministry said. Argentina has seen GDP contract nearly 2 percent so far this year. “Latin American economies were hit later by the virus than say, Europe and North America, and therefore locked down later — if at all, in the case of Brazil,” Frew said. Rates from Asia to East Coast South America have “fallen like a stone” to about $700 per container from about $1,200 earlier this year, with the possibility of further fall to $300 per box, the shipping executive said. That is despite some carriers, including CMA CGM, introducing a general rate increase from Asia to the East Coast South America of $600 to $1,000 per box in May. Hapag-Lloyd announced a further general rate increase of $300 per container from June 15. One carrier said it has seen volumes to the East Coast fall 30 percent compared with its original forecast for this year. But illustrating how the East Coast South America-Asia market is a tale of two trade lanes, while the trade as a whole is depressed, exports from the East Coast of South America, particularly Brazil, to Asia, are booming, creating a headache for carriers trying to balance capacity. Maersk/Mediterranean Shipping Co. are shipping boxes from East Coast South America via their European services to Asia to help tackle the imbalance. “Some carriers are seeking alternatives to compensate for the blank sailings for exports from the East Coast South America,” Paschoa said. He forecast volume growth of 3.8 percent between Brazil and Asia this year. MSI’s Frew said he expects to see East Coast South America exports to Asia rise by about 5 to 7 percent in the next few months relative to April data, “while full year growth will be more around 3 percent.” Hapag-Lloyd is feedering cargo to Cartagena in Colombia to connect with West Coast South America and Caribbean services to Asia. The carrier is also sending cargo from Brazil on its Conosur service through the Magellan Strait to connect with West Coast South America services to Asia. Despite the downturn in westbound volumes, PIL is optimistic about the outlook for the next few months. “Because the third quarter is the traditional peak period for ECSA, it is expected that cargo volumes will start to improve for the July-September period,” a spokesperson for the carrier said. “Local retail businesses are slowly resuming, and stock replenishment plans are in the pipeline.” Contact Keith Wallis at Keithwallis@hotmail.com .

Container lines

Trade imbalance on ECSA-Asia creates blank sailing headache for carriers

<div class="phx-topic abstract-wrapper">The IMO is a specialized agency of the United Nations, which potentially puts the organization in the crosshairs of the new administration that is reassessing all its UN positions and policies. </div>

The IMO is a specialized agency of the United Nations, which potentially puts the organization in the crosshairs of the new administration that is reassessing all its UN positions and policies.

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<div class="phx-topic">A crucial April meeting of the International Maritime Organization will be the first during President Trump's second term, with the US currently “in a holding pattern” regarding continued membership of the IMO, according to classification society DNV. The 176 member states of the IMO will gather at the 83rd Marine Environment Protection Committee (MEPC) meeting in London from April 7–11 to design a greenhouse gas fuel intensity regulation and settle on an economic measure for taxing carbon emissions, with both measures aiming for implementation in 2027. Eirik Nyhus, director for environment and maritime at DNV, said in an MEPC update this week that <a href="https://www.joc.com/article/progress-on-carbon-pricing-on-track-despite-us-stance-on-green-initiatives-imo-5929236">the US position regarding the IMO</a> going forward remained unclear. At the last meeting of the IMO’s Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 18) in late February, Nyhus said the US did not take the floor until the very end, stating that the new administration was reassessing all its United Nations positions and policies. The IMO is a specialized agency of the UN. The Trump administration is also in the process of withdrawing from the Paris Agreement climate change accord, part of a broader initiative of “reviewing for rescission all regulations that impose undue burdens on energy production and use.” A spokesperson for the IMO told the Journal of Commerce this week that “any member state can withdraw from the organization, as outlined in Article 73 of the IMO Convention, though they would still be bound by the treaties to which they are party.” Still, Nyhus played down the significance of a potential US withdrawal with the IMO having far more important issues to focus on. “While the US has turned into a bit of a wild card, I cannot see this being a showstopper (at MEPC) in any way,” he noted. “Many issues, big and small, remain under negotiation, with the two most challenging ones being the design of the greenhouse gas fuel intensity regulation and the choice of economic measure. The discussions remain intensely political,” he added. The goal is to have a net zero framework ready for approval at MEPC 83 in London, and there is pressure on member states to finalize the legal framework around a fuel standard and economic measure with implementation planned for October. If the measures do not roll out in October, it will place the IMO’s interim emissions reduction targets at risk. Ocean carriers are watching the MEPC deliberations closely — many have had to invest huge sums in dual-fuel ships able to run on cleaner energy despite the lack of regulations to narrow the gap between fossil fuels and the alternatives. “We <a href="https://www.joc.com/article/lack-of-clarity-over-clean-energy-supply-driving-dual-fuel-ship-orders-5747200">have to take decisions on decarbonizing our fleet</a> over the next 20, 25 or 30 years, and we believe that the direction that we have chosen remains valid,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters at the carrier’s annual results presentation Thursday. “That means trying to reduce our emissions significantly until 2030 and also to stick to our target to be net carbon neutral by 2045.” <h3>No deal is not an option </h3>Andy Wibroe, lead regulatory specialist at classification society Lloyd’s Register, said in an MEPC update this week that one of the main issues to be resolved in April is how shipowners and operators will pay for greenhouse gas emissions from their ships on a well-to-wake basis. Funds coming from whatever carbon-charging measure is agreed are essential to support the development and scale up of a new generation of carbon-free marine fuels, which remain significantly more expensive than traditional fossil fuels. Another crucial point is the support for developing countries and remote island states through the energy transition in shipping. Wibroe highlighted the divisions between two camps — those who believe in a technical measure built around a fuel standard that generates revenue from under-compliant ships paying for credits to make up the compliance deficit, while the others want a flat carbon emissions fee to guarantee revenue and reduce the cost gap between fuel types. Small island nations oppose both approaches because they believe the fuel standard measure will not generate enough funding to support “a just and equitable transition,” and considering they rely on sea trade for everything, the carbon tax will cost them out of existence. Navigating a way through the divisions among member states will not be easy, but Lloyd’s Register said the IMO cannot be seen to close this milestone MEPC meeting on a “no deal” basis. “It is not expected to be a hostile meeting, but there are many heated discussions already taking place in back rooms and corridors that will continue in the lead up to the meeting,” Wibroe said. “It is anticipated, however, that the IMO is still likely to close MEPC 83 with a consensus.” Nyhus had the same view that by the time MEPC delegates emerge on April 11 from their London Embankment bunker at the IMO headquarters in London they will have reached a deal of some kind. “It looks pretty certain that this is going to come down to the wire at MEPC 83 with a very real possibility that the meeting at some point simply will be presented with a take it or leave it proposal,” was Nyhus’ assessment. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A crucial April meeting of the International Maritime Organization will be the first during President Trump's second term, with the US currently “in a holding pattern” regarding continued membership of the IMO, according to classification society DNV. The 176 member states of the IMO will gather at the 83rd Marine Environment Protection Committee (MEPC) meeting in London from April 7–11 to design a greenhouse gas fuel intensity regulation and settle on an economic measure for taxing carbon emissions, with both measures aiming for implementation in 2027. Eirik Nyhus, director for environment and maritime at DNV, said in an MEPC update this week that the US position regarding the IMO going forward remained unclear. At the last meeting of the IMO’s Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 18) in late February, Nyhus said the US did not take the floor until the very end, stating that the new administration was reassessing all its United Nations positions and policies. The IMO is a specialized agency of the UN. The Trump administration is also in the process of withdrawing from the Paris Agreement climate change accord, part of a broader initiative of “reviewing for rescission all regulations that impose undue burdens on energy production and use.” A spokesperson for the IMO told the Journal of Commerce this week that “any member state can withdraw from the organization, as outlined in Article 73 of the IMO Convention, though they would still be bound by the treaties to which they are party.” Still, Nyhus played down the significance of a potential US withdrawal with the IMO having far more important issues to focus on. “While the US has turned into a bit of a wild card, I cannot see this being a showstopper (at MEPC) in any way,” he noted. “Many issues, big and small, remain under negotiation, with the two most challenging ones being the design of the greenhouse gas fuel intensity regulation and the choice of economic measure. The discussions remain intensely political,” he added. The goal is to have a net zero framework ready for approval at MEPC 83 in London, and there is pressure on member states to finalize the legal framework around a fuel standard and economic measure with implementation planned for October. If the measures do not roll out in October, it will place the IMO’s interim emissions reduction targets at risk. Ocean carriers are watching the MEPC deliberations closely — many have had to invest huge sums in dual-fuel ships able to run on cleaner energy despite the lack of regulations to narrow the gap between fossil fuels and the alternatives. “We have to take decisions on decarbonizing our fleet over the next 20, 25 or 30 years, and we believe that the direction that we have chosen remains valid,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters at the carrier’s annual results presentation Thursday. “That means trying to reduce our emissions significantly until 2030 and also to stick to our target to be net carbon neutral by 2045.” No deal is not an option Andy Wibroe, lead regulatory specialist at classification society Lloyd’s Register, said in an MEPC update this week that one of the main issues to be resolved in April is how shipowners and operators will pay for greenhouse gas emissions from their ships on a well-to-wake basis. Funds coming from whatever carbon-charging measure is agreed are essential to support the development and scale up of a new generation of carbon-free marine fuels, which remain significantly more expensive than traditional fossil fuels. Another crucial point is the support for developing countries and remote island states through the energy transition in shipping. Wibroe highlighted the divisions between two camps — those who believe in a technical measure built around a fuel standard that generates revenue from under-compliant ships paying for credits to make up the compliance deficit, while the others want a flat carbon emissions fee to guarantee revenue and reduce the cost gap between fuel types. Small island nations oppose both approaches because they believe the fuel standard measure will not generate enough funding to support “a just and equitable transition,” and considering they rely on sea trade for everything, the carbon tax will cost them out of existence. Navigating a way through the divisions among member states will not be easy, but Lloyd’s Register said the IMO cannot be seen to close this milestone MEPC meeting on a “no deal” basis. “It is not expected to be a hostile meeting, but there are many heated discussions already taking place in back rooms and corridors that will continue in the lead up to the meeting,” Wibroe said. “It is anticipated, however, that the IMO is still likely to close MEPC 83 with a consensus.” Nyhus had the same view that by the time MEPC delegates emerge on April 11 from their London Embankment bunker at the IMO headquarters in London they will have reached a deal of some kind. “It looks pretty certain that this is going to come down to the wire at MEPC 83 with a very real possibility that the meeting at some point simply will be presented with a take it or leave it proposal,” was Nyhus’ assessment. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Transport, Trade and Regulation News

Maritime

US in ‘holding pattern’ over IMO membership: DNV

<div class="phx-topic abstract-wrapper">A deal between the Northwest Seaport Alliance and the Native American Puyallup Tribe will result in a 22-acre, two-berth terminal completed by the end of the decade.</div>

A deal between the Northwest Seaport Alliance and the Native American Puyallup Tribe will result in a 22-acre, two-berth terminal completed by the end of the decade.

<div class="phx-topic">The Port of Tacoma is more than doubling the size of its roll-on/roll-off (ro/ro) terminal facilities after an agreement to build a new $200 million complex for ro/ro and breakbulk cargo.The Northwest Seaport Alliance (NWSA) and the Native American Puyallup Tribe signed a memorandum of understanding on March 17 to jointly develop a 22-acre two-berth terminal that will be built adjacent to the existing 19-acre East Blair 1 (EB1) terminal.The new terminal will expand berth capacity, “positioning the Seattle/Tacoma gateway to gain market share and increase economic activity across the region,” NWSA said in a statement announcing the deal.“Increased capacity of East Blair 1 and Puyallup Tribal Terminal will enable new cargo services to call the Tacoma Harbor, driving more job opportunities on the waterfront as well as across the supply chain,” NWSA said. NWSA is the marine cargo operating partnership of the ports of Seattle and Tacoma.Wallenius Wilhelmsen, Eukor Car Carriers, Glovis, MOL and Eastern Pacific Shipping are among the ro/ro operators calling at EB1, according to terminal vessel schedules and the NWSA.Both the new and existing terminals will be jointly marketed and operated by the NWSA and the Puyallup Tribe when the new Puyallup Tribal Terminal becomes operational in 2028-2030. Tahoma Global Logistics, the Puyallup Tribe’s global logistics company, will also benefit by gaining direct access to shipping lines to market its services, the NWSA said.<h3>NWSA lays the groundwork for development</h3>NWSA said the Port of Tacoma and the Puyallup Tribe are carrying out preparatory work along the Blair Waterway to allow development of the new facility. The port has also carried out waterway depth analysis and ship simulation to ensure dredging work will provide unimpeded vessel navigation to the terminals.The site of the new terminal is among 120 acres the tribe owns along the Blair Waterway that is intended for future development.The planned expansion follows significant growth of breakbulk volumes and automobile imports between 2020 and 2023 at the Tacoma and Seattle ro/ro terminals covered by the NWSA, which include the EB1 and Terminal 7 facilities in Tacoma and Seattle’s Terminal 46.Figures from the NWSA show breakbulk volumes climbed 55% to 453,249 metric tons in the four years to 2023, while auto volumes grew 117% to 338,917 units in the same period.Tacoma was among the secondary ports that gained cargo volumes when operations at larger US West Coast gateways were disrupted during the COVID-19 pandemic.But volumes slipped in 2024, a trend that has continued in the first two months of this year as high interest rates negatively impacted agricultural, mining and construction equipment sales and as auto sales slowed nationwide, the NWSA said.The Puyallup Tribal Terminal will have on-dock rail facilities and carbon reduction technology to minimize localized pollution to enable compatible operations with the EB1 terminal next door, the NWSA said.The deal is the first time a Native American tribe has partnered with a port, according to the Puyallup Tribal Council, the Puyallup Tribe’s governing body.Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

The Port of Tacoma is more than doubling the size of its roll-on/roll-off (ro/ro) terminal facilities after an agreement to build a new $200 million complex for ro/ro and breakbulk cargo. The Northwest Seaport Alliance (NWSA) and the Native American Puyallup Tribe signed a memorandum of understanding on March 17 to jointly develop a 22-acre two-berth terminal that will be built adjacent to the existing 19-acre East Blair 1 (EB1) terminal. The new terminal will expand berth capacity, “positioning the Seattle/Tacoma gateway to gain market share and increase economic activity across the region,” NWSA said in a statement announcing the deal. “Increased capacity of East Blair 1 and Puyallup Tribal Terminal will enable new cargo services to call the Tacoma Harbor, driving more job opportunities on the waterfront as well as across the supply chain,” NWSA said. NWSA is the marine cargo operating partnership of the ports of Seattle and Tacoma. Wallenius Wilhelmsen, Eukor Car Carriers, Glovis, MOL and Eastern Pacific Shipping are among the ro/ro operators calling at EB1, according to terminal vessel schedules and the NWSA. Both the new and existing terminals will be jointly marketed and operated by the NWSA and the Puyallup Tribe when the new Puyallup Tribal Terminal becomes operational in 2028-2030. Tahoma Global Logistics, the Puyallup Tribe’s global logistics company, will also benefit by gaining direct access to shipping lines to market its services, the NWSA said. NWSA lays the groundwork for development NWSA said the Port of Tacoma and the Puyallup Tribe are carrying out preparatory work along the Blair Waterway to allow development of the new facility. The port has also carried out waterway depth analysis and ship simulation to ensure dredging work will provide unimpeded vessel navigation to the terminals. The site of the new terminal is among 120 acres the tribe owns along the Blair Waterway that is intended for future development. The planned expansion follows significant growth of breakbulk volumes and automobile imports between 2020 and 2023 at the Tacoma and Seattle ro/ro terminals covered by the NWSA, which include the EB1 and Terminal 7 facilities in Tacoma and Seattle’s Terminal 46. Figures from the NWSA show breakbulk volumes climbed 55% to 453,249 metric tons in the four years to 2023, while auto volumes grew 117% to 338,917 units in the same period. Tacoma was among the secondary ports that gained cargo volumes when operations at larger US West Coast gateways were disrupted during the COVID-19 pandemic. But volumes slipped in 2024, a trend that has continued in the first two months of this year as high interest rates negatively impacted agricultural, mining and construction equipment sales and as auto sales slowed nationwide, the NWSA said. The Puyallup Tribal Terminal will have on-dock rail facilities and carbon reduction technology to minimize localized pollution to enable compatible operations with the EB1 terminal next door, the NWSA said. The deal is the first time a Native American tribe has partnered with a port, according to the Puyallup Tribal Council, the Puyallup Tribe’s governing body. Contact Keith Wallis at keithwallis@hotmail.com .

Ro/ro cargo

Port infrastructure

Breakbulk ports

North American ports

Breakbulk News

Tacoma to boost ro/ro capacity in $200 million expansion plan

<div class="phx-topic abstract-wrapper">A group of seven Asia-based regional carriers are collaborating to add a weekly long-haul service on the eastbound trans-Pacific despite bearish market signals. </div>

A group of seven Asia-based regional carriers are collaborating to add a weekly long-haul service on the eastbound trans-Pacific despite bearish market signals.

<div class="phx-topic">A consortium of seven regional Asia-based carriers will expand into the long-haul trans-Pacific trade in April with a joint North Asia-Mexico weekly express service, bringing at least 15,000 TEUs of new capacity to the growing trade. But forwarders say spot rates may already be under pressure due to overcapacity. Each of the seven carriers will provide one vessel with a nominal capacity of between 2,200 to 2,800 TEUs, Dubai’s Emirates Shipping said this week. Other carriers in the service group include Hong Kong-listed TS Lines, Singapore-headquartered SeaLead, Thailand’s Regional Container Lines, Sinotrans Container Line from China, and South Korean carriers Korea Marine Transport Company and Sinokor Merchant Marine. The full rotation for the service is Shanghai-Qingdao-Busan-Manzanillo (Mexico)-Shanghai, with a transit time of 21 days from Busan to Manzanillo, 23 days from Qingdao and 25 days from Shanghai, the carriers confirmed. Emirates Shipping said the total roundtrip voyage will be 49 days. The new service launches from Shanghai on April 30. Of the seven carriers, only SeaLead has existing Asia-America services. “Our new Asia Mexico Express service strengthens links between China, South Korea, and Mexico, enabling faster cargo transportation,” Bernd Meyer, SeaLead’s global director of sales and business development, said. <h3>Slipping spot rates </h3>The new service comes ahead of an expected decline in China-Mexico freight rates next month as traditional long-haul carriers, including Ocean Network Express (ONE), add further capacity on the trade. “In the current context, with weekly vessel capacity reaching historic highs and the uncertainty generated by the US-led trade war, vessel utilization is below 50% again, causing the short-term rate to accelerate its decline during March, targeting $1,500 per [FEU],” said Eternity International Freight Forwarder México President Nicolas Portenza in a March 12 report. “This situation could lead to the lowest ocean freight rate [on the China-Mexico trade] in the last five years.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e72bc578-67b3-4bfa-9c5c-93709208f068"></dynamic-object></div>The new service from the Asia-based carriers would seem to come at an odd time for the trade. “China-Mexico rates are almost back at where they were [a year and a half] ago,” Peter Sand, chief analyst at online benchmarking platform Xeneta, told the Journal of Commerce. “In terms of capacity, currently the China-Mexico market seems to be satisfied.” Nevertheless, carriers are trying to boost rate levels. Hapag-Lloyd issued a general rate increase (GRI) Monday on shipments from Asia to the West Coast of South America, the East Coast of South America, Mexico, Central America and the Caribbean. The GRI is set to go into effect on April 1 and would add $500 per TEU and $1,000 per FEU for both high cube and reefer containers. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com.</a></div>

A consortium of seven regional Asia-based carriers will expand into the long-haul trans-Pacific trade in April with a joint North Asia-Mexico weekly express service, bringing at least 15,000 TEUs of new capacity to the growing trade. But forwarders say spot rates may already be under pressure due to overcapacity. Each of the seven carriers will provide one vessel with a nominal capacity of between 2,200 to 2,800 TEUs, Dubai’s Emirates Shipping said this week. Other carriers in the service group include Hong Kong-listed TS Lines, Singapore-headquartered SeaLead, Thailand’s Regional Container Lines, Sinotrans Container Line from China, and South Korean carriers Korea Marine Transport Company and Sinokor Merchant Marine. The full rotation for the service is Shanghai-Qingdao-Busan-Manzanillo (Mexico)-Shanghai, with a transit time of 21 days from Busan to Manzanillo, 23 days from Qingdao and 25 days from Shanghai, the carriers confirmed. Emirates Shipping said the total roundtrip voyage will be 49 days. The new service launches from Shanghai on April 30. Of the seven carriers, only SeaLead has existing Asia-America services. “Our new Asia Mexico Express service strengthens links between China, South Korea, and Mexico, enabling faster cargo transportation,” Bernd Meyer, SeaLead’s global director of sales and business development, said. Slipping spot rates The new service comes ahead of an expected decline in China-Mexico freight rates next month as traditional long-haul carriers, including Ocean Network Express (ONE), add further capacity on the trade. “In the current context, with weekly vessel capacity reaching historic highs and the uncertainty generated by the US-led trade war, vessel utilization is below 50% again, causing the short-term rate to accelerate its decline during March, targeting $1,500 per [FEU],” said Eternity International Freight Forwarder México President Nicolas Portenza in a March 12 report. “This situation could lead to the lowest ocean freight rate [on the China-Mexico trade] in the last five years.” The new service from the Asia-based carriers would seem to come at an odd time for the trade. “China-Mexico rates are almost back at where they were [a year and a half] ago,” Peter Sand, chief analyst at online benchmarking platform Xeneta, told the Journal of Commerce. “In terms of capacity, currently the China-Mexico market seems to be satisfied.” Nevertheless, carriers are trying to boost rate levels. Hapag-Lloyd issued a general rate increase (GRI) Monday on shipments from Asia to the West Coast of South America, the East Coast of South America, Mexico, Central America and the Caribbean. The GRI is set to go into effect on April 1 and would add $500 per TEU and $1,000 per FEU for both high cube and reefer containers. Contact Keith Wallis at keithwallis@hotmail.com . Contact Laura Robb at laura.robb@spglobal.com.

Trans-Pacific

International ports

New capacity coming to Asia-Mexico trade despite recent rate pressure

<div class="phx-topic abstract-wrapper">The growing backlog of boxes awaiting a return to Asia has resulted in finger pointing among stakeholders over how best to address the problem.</div>

The growing backlog of boxes awaiting a return to Asia has resulted in finger pointing among stakeholders over how best to address the problem.

<div class="phx-topic">The surge in imports landing in Southern California during January amid a rush to beat new US tariffs and Lunar New Year factory closures has resulted in a significant buildup of empty containers awaiting a return trip to Asia in drayage yards and marine terminals. The growing backlog has also resulted in finger pointing among stakeholders over how to address the problem. The empties are creating a costly logistics problem for drayage operators in Southern California, according to Matt Schrap, CEO of the Harbor Trucking Association. Schrap said many of the empties are sitting on chassis at the yards of drayage operators, taking up space and inhibiting the return of the equipment before free storage time runs out at the marine terminals. One way to address the problem is for marine terminals to open more appointment slots for truckers so they can return the containers and chassis before detention and demurrage charges kick in, Schrap told the Journal of Commerce. “If you can’t get an appointment, you have to pay the late fees and demurrage fees,” he said. The threat of tariffs from the new Trump administration and an earlier-than-normal Lunar New Year that began Jan. 29 resulted in a cargo rush in Southern California at the start of the year. Imports from Asia were up 31.3% in Long Beach in January and 12.6% in Los Angeles year over year, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="23e67c9e-b9d6-4eb9-a4ca-6b3ac6e2cb07"></dynamic-object></div>At the same time, US exports through Southern California are down, so most of the containers must be returned to Asia empty. Gene Seroka, executive director of the Port of Los Angeles, told a press conference this week that exports in February from Los Angeles were down 18% year over year, while empty containers were up 16%. <h3>Trucker appointment slots a factor </h3>Because the empties cannot be returned to Asia quickly enough to prevent the containers from accumulating at the marine terminals, they have created a backlog at some terminals and at drayage operators’ facilities in Southern California. “Volumes are high. We get it,” Schrap said. But Schrap said the marine terminals continue to make it difficult for truckers to get sufficient appointment slots for empty container returns. Also, he noted, some terminals will only allow an empty to be returned if the trucker also picks up a loaded inbound container, a process known as a dual transaction. Terminal operators disagree with Schrap’s assessment. They note that Los Angeles-Long Beach is the only US port complex to consistently keep its gates open for 10 shifts each week. The terminals said they offer sufficient appointments to handle empty container returns, but a number of slots go unfilled each day because many truckers do not want to make appointments at inconvenient times, such as late at night or on weekends. SSA Marine, which operates three of the six container terminals in Long Beach, intentionally caps its truck traffic during the day gates in order to push more truck calls into the night shift. If SSA and other terminals didn’t do that, the freeways from the port would be overwhelmed during daytime hours, said Sal Ferrigno, SSA’s vice president in Southern California. Ferrigno said SSA attempts to maintain a mix of 55% of truck calls during the day shift and 45% at night. However, drayage companies are not using most of the nighttime slots that are available to them. “Those guys need to work at night,” Ferrigno said. Schrap said the empty container situation varies from ocean carrier to ocean carrier and terminal to terminal. Alan McCorkle, president of Yusen Terminals in Los Angeles, said containers have been flowing freely at his facility despite the January cargo surge and a February that was stronger than usual. Yusen, according to McCorkle, continues to experience unused trucker appointment slots during the terminal’s day and evening shifts. About 6% to 12% of its daytime appointment slots go unfilled or are no-shows, and about 16% to 20% of its nighttime appointments are not used, he said. Yet another factor at work this time of year is that terminals must catch up with the backlog of empty containers that occurs when ocean carriers blank sailings during the Lunar New Year lull, said Noel Hacegaba, COO at the Port of Long Beach. “Terminals, in an effort to manage blank sailings, are limiting the return of empties,” he said. “Because of the strong influx of imports in recent months, there are more empties across the system that need to be repositioned back to Asia.” <h3>Who should pay for container storage? </h3>Schrap said an even greater problem for truckers is “a complete unwillingness” by ocean carriers and intermodal equipment providers to pay drayage companies for storing their containers and chassis until the units can be returned to the terminals. “History has shown that it is cheaper for [equipment providers] to stage boxes at motor carrier yards [at no cost] as opposed to finding off/near-dock return locations or paying the MTO [marine terminal operator] to store them,” Schrap said. Seroka noted that according to the Pool of Pools, which is operated by the three largest chassis providers in Southern California, the average chassis street dwell time in the region is about six days. “We’d like to see it at four days,” Seroka said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The surge in imports landing in Southern California during January amid a rush to beat new US tariffs and Lunar New Year factory closures has resulted in a significant buildup of empty containers awaiting a return trip to Asia in drayage yards and marine terminals. The growing backlog has also resulted in finger pointing among stakeholders over how to address the problem. The empties are creating a costly logistics problem for drayage operators in Southern California, according to Matt Schrap, CEO of the Harbor Trucking Association. Schrap said many of the empties are sitting on chassis at the yards of drayage operators, taking up space and inhibiting the return of the equipment before free storage time runs out at the marine terminals. One way to address the problem is for marine terminals to open more appointment slots for truckers so they can return the containers and chassis before detention and demurrage charges kick in, Schrap told the Journal of Commerce. “If you can’t get an appointment, you have to pay the late fees and demurrage fees,” he said. The threat of tariffs from the new Trump administration and an earlier-than-normal Lunar New Year that began Jan. 29 resulted in a cargo rush in Southern California at the start of the year. Imports from Asia were up 31.3% in Long Beach in January and 12.6% in Los Angeles year over year, according to PIERS, a Journal of Commerce sister product within S&P Global. At the same time, US exports through Southern California are down, so most of the containers must be returned to Asia empty. Gene Seroka, executive director of the Port of Los Angeles, told a press conference this week that exports in February from Los Angeles were down 18% year over year, while empty containers were up 16%. Trucker appointment slots a factor Because the empties cannot be returned to Asia quickly enough to prevent the containers from accumulating at the marine terminals, they have created a backlog at some terminals and at drayage operators’ facilities in Southern California. “Volumes are high. We get it,” Schrap said. But Schrap said the marine terminals continue to make it difficult for truckers to get sufficient appointment slots for empty container returns. Also, he noted, some terminals will only allow an empty to be returned if the trucker also picks up a loaded inbound container, a process known as a dual transaction. Terminal operators disagree with Schrap’s assessment. They note that Los Angeles-Long Beach is the only US port complex to consistently keep its gates open for 10 shifts each week. The terminals said they offer sufficient appointments to handle empty container returns, but a number of slots go unfilled each day because many truckers do not want to make appointments at inconvenient times, such as late at night or on weekends. SSA Marine, which operates three of the six container terminals in Long Beach, intentionally caps its truck traffic during the day gates in order to push more truck calls into the night shift. If SSA and other terminals didn’t do that, the freeways from the port would be overwhelmed during daytime hours, said Sal Ferrigno, SSA’s vice president in Southern California. Ferrigno said SSA attempts to maintain a mix of 55% of truck calls during the day shift and 45% at night. However, drayage companies are not using most of the nighttime slots that are available to them. “Those guys need to work at night,” Ferrigno said. Schrap said the empty container situation varies from ocean carrier to ocean carrier and terminal to terminal. Alan McCorkle, president of Yusen Terminals in Los Angeles, said containers have been flowing freely at his facility despite the January cargo surge and a February that was stronger than usual. Yusen, according to McCorkle, continues to experience unused trucker appointment slots during the terminal’s day and evening shifts. About 6% to 12% of its daytime appointment slots go unfilled or are no-shows, and about 16% to 20% of its nighttime appointments are not used, he said. Yet another factor at work this time of year is that terminals must catch up with the backlog of empty containers that occurs when ocean carriers blank sailings during the Lunar New Year lull, said Noel Hacegaba, COO at the Port of Long Beach. “Terminals, in an effort to manage blank sailings, are limiting the return of empties,” he said. “Because of the strong influx of imports in recent months, there are more empties across the system that need to be repositioned back to Asia.” Who should pay for container storage? Schrap said an even greater problem for truckers is “a complete unwillingness” by ocean carriers and intermodal equipment providers to pay drayage companies for storing their containers and chassis until the units can be returned to the terminals. “History has shown that it is cheaper for [equipment providers] to stage boxes at motor carrier yards [at no cost] as opposed to finding off/near-dock return locations or paying the MTO [marine terminal operator] to store them,” Schrap said. Seroka noted that according to the Pool of Pools, which is operated by the three largest chassis providers in Southern California, the average chassis street dwell time in the region is about six days. “We’d like to see it at four days,” Seroka said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

Marine terminals

Empty containers piling up in Los Angeles-Long Beach after January import surge

<div class="phx-topic abstract-wrapper">Canada’s labor minister will take a direct hand after the mediated talks for a new longshore contract at the port failed to achieve a deal after 18 months of negotiations.</div>

Canada’s labor minister will take a direct hand after the mediated talks for a new longshore contract at the port failed to achieve a deal after 18 months of negotiations.

<div class="phx-topic">Canada’s government is now going to arbitrate longshore labor negotiations at the Port of Montreal after an impasse was declared between maritime employers and the local dockworkers union after 18 months of talks for a new master contract. Montreal’s Maritime Employers Association (MEA) said in a statement to the Journal of Commerce late Wednesday that the special mediator overseeing negotiations with Local 375 of the Canadian Union of Public Employees “no longer saw any potential agreement between the two parties and has ended the mediation process.” The MEA and Local 375 both requested 90 days of mediated talks to negotiate a settlement after the Canada Industrial Relations Board (CIRB) said in November that <a href="https://www.joc.com/article/bc-montreal-ports-set-to-reopen-under-orders-from-canadas-labor-chief-5792214">it would force arbitration on both sides to resolve talks</a> for a new master contract covering 1,300 dockworkers. The last master contract expired at the end of 2023. Following the initial mediation period, both sides requested a further 30-day extension from the CIRB, which expired last week. The CIRB intervened in the matter after <a href="https://www.joc.com/article/port-of-montreal-to-face-three-day-strike-against-two-terminals-next-week-5737483">multiple</a> <a href="https://www.joc.com/article/montreal-dockworkers-target-mscs-terminals-for-strike-this-week-5781453">labor</a> <a href="https://www.joc.com/article/montreal-dockworkers-to-refuse-overtime-in-latest-salvo-against-port-employers-5745362">actions</a> by Local 375 hit Montreal over the course of October, straining cargo flows and <a href="https://www.joc.com/article/montreal-seeking-longshore-deal-ahead-of-capacity-expansions-5966435">testing shippers’ trust in the gateway</a>. Both sides can now either agree on an arbitrator or Canada’s Labour Minister Steve MacKinnon can appoint one. Once appointed, the arbitrator generally has 60 days to issue their orders about terms for a new master contract. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>.</div>

Canada’s government is now going to arbitrate longshore labor negotiations at the Port of Montreal after an impasse was declared between maritime employers and the local dockworkers union after 18 months of talks for a new master contract. Montreal’s Maritime Employers Association (MEA) said in a statement to the Journal of Commerce late Wednesday that the special mediator overseeing negotiations with Local 375 of the Canadian Union of Public Employees “no longer saw any potential agreement between the two parties and has ended the mediation process.” The MEA and Local 375 both requested 90 days of mediated talks to negotiate a settlement after the Canada Industrial Relations Board (CIRB) said in November that it would force arbitration on both sides to resolve talks for a new master contract covering 1,300 dockworkers. The last master contract expired at the end of 2023. Following the initial mediation period, both sides requested a further 30-day extension from the CIRB, which expired last week. The CIRB intervened in the matter after multiple labor actions by Local 375 hit Montreal over the course of October, straining cargo flows and testing shippers’ trust in the gateway . Both sides can now either agree on an arbitrator or Canada’s Labour Minister Steve MacKinnon can appoint one. Once appointed, the arbitrator generally has 60 days to issue their orders about terms for a new master contract. Contact Michael Angell at michael.angell@spglobal.com .

Longshore labor

Montreal longshore labor talks head to arbitration after impasse

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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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