Trans-Pacific

Matson’s second quarter financial earnings rose well above both last year and the consensus estimate as shippers looked to its expedited ocean services for relief from high air cargo rates.

The move to increase ship traffic comes as canal officials have started talks with some of the inhabitants who will be affected by the $1.6 billion project to expand the canal’s water catchment, including construction of the Río Indio reservoir.

As the clock ticks down toward the expiration of ILA’s current contract, the window for frontloading to the East and Gulf coasts is closing and there is limited potential for diversions through Canada and Mexico, writes Journal of Commerce Executive Editor Mark Szakonyi.

The Singapore-based carrier also said it is expecting to book an operating profit for its current financial year that is more than double its previous forecast despite a “highly uncertain” outlook for the rest of 2024.

The threat of labor unrest and the increased transit times and costlier voyages on all-water services to the East and Gulf coasts are diverting some discretionary cargo to the West Coast.

Key to those questions is whether the first-half volume growth was primarily a result of robust underlying demand or rather logistics decisions by skittish shippers to advance the peak season in the face of second-half risk.

Carriers over the past two months have launched or reinstated seven services from Asia to Los Angeles-Long Beach, and three to Vancouver and the Northwest Seaport Alliance of Seattle and Tacoma.

The capacity deployments during the first half of 2024 show that smaller carriers have been deploying many of the new large ships serving the North America trade, while major alliance carriers have deployed most of their big vessels on Asia-Europe.

The Cosco subsidiary benefited from a sharp increase in rates as early peak season demand on the main trades out of Asia filled all available vessel capacity.

The liner follows MSC, Cosco and CMA CGM in rolling out new services that cater to the growing container trade between China and Mexico.

Forwarders expect the rate decline to accelerate in the coming weeks after carriers launched or reinstated 10 services into the eastbound trans-Pacific.

Ocean carriers have seen freight rates on key trans-Pacific and Asia-Europe trades double and triple since the start of the year amid a capacity crunch and supply chain disruptions.

The revised forecast from the National Retail Federation comes as US consumer spending remains strong despite higher prices for merchandise and various supply chain challenges that have increased shipping costs.

The opening of the first of three new container berths last week at the Tuas mega container terminal is part of a larger effort to shift operations away from the city center.

Some shippers still raw from two years of pandemic disruptions are willing to pay thousands of dollars more to ensure they secure slots and equipment on container ships, writes Journal of Commerce Executive Editor Mark Szakonyi.

The carrier next week will roll out a premium express service from central China to complement the South China express service it relaunched late last year as spot rates continue to move higher.

The daily number of vessel transits through the critical waterway is set to return to normal levels after easing of a drought that cut transits in half last year.

An early start to the peak seasons on the trans-Pacific and Asia-Europe trades has left shippers fighting for space with no sign of a respite from soaring rates and deteriorating service levels.

The capacity cuts come as ocean bookings in the eastbound trans-Pacific are climbing sharply because US-based importers who had planned to ship their merchandise during the traditional August-through-October peak season are scrambling to book space early.

Cargo flow is improving through Singapore and major Chinese ports, but India’s largest container gateway, Mundra, is straining under rising transshipment volumes, ocean carriers and forwarders say.

Houthi rebels have little incentive to stop attacks even if there is a Gaza-Israel ceasefire, there’s no US appetite to root them out, and a political solution is highly unlikely, according to geopolitical analysts.

Mediterranean Shipping Co. is increasing capacity between Asia and the West Coast of Mexico amid surging foreign direct investment by China into Mexico.

How do you build a robust, resilient system in the face of operational and geopolitical disruptions that throw conventional container shipping networks into disarray?

The longer transits around southern Africa, port congestion at key hubs in Asia and unseasonally strong demand have absorbed all the capacity carriers threw into the major east-west trade lanes early this year.

With vessel space from Asia to the US at a premium amid an early peak season, ocean carriers have been largely successful in implementing the surcharges in June, and some will keep pushing their luck in July.

Established long-haul carriers are also launching a raft of new services between Asia and the Americas to take advantage of the buoyant market.

The Global Port Tracker has again increased its forecast for US imports through September, with the National Retail Federation pointing to retailers stocking up to meet the rising demand of consumers.

Amid soaring spot rates, importers are booking as much cargo as possible under the allotments in their freshly signed annual service contracts, many of which just went into effect on May 1.

The strength of bookings over the past month has surprised container lines executives, even when factoring some front-loading and replenishing inventories that are back to pre-pandemic levels, writes Journal of Commerce Executive Editor Mark Szakonyi.

With vessel capacity tight and freight rates on the rise, there are several market dynamics that emerged during the pandemic that are already beginning to play out once again, writes Lars Jensen.

The West Coast’s sharp jump in on-time performance — the highest gain of the 34 trade lanes covered by the analyst’s monthly report — is a sign ports along the coast have not been directly impacted by the ongoing ship diversions around southern Africa.

While the lower dwells are promising, some trucking and logistics executives say terminal operators in Los Angeles and Long Beach have not yet fully adjusted to the rise in import volumes, especially considering projections for an early start to peak shipping season.

The current market situation — amid the Red Sea crisis, growing port congestion and a sudden rise in demand — is similar to the early parts of the pandemic, where insufficient capacity led to the largest rate increases the industry has ever seen, writes Lars Jensen.

The carrier credits new chartered capacity and container equipment investments for allowing it to handle the higher-than-expected volume growth this year as Red Sea diversions challenge industry bandwidth.

In the recently completed annual negotiating round, trans-Pacific carriers slashed, or in some cases eliminated, the access of forwarders to fixed-rate bookings for accounts whose identity they disclose.

Longer transit times to Europe and North America as vessels continue to divert via the Cape of Good Hope to avoid the Red Sea region has delayed the return of empty containers to Asia, particularly China.

Evergreen Marine’s first-quarter net profit of $537 million was among the highest quarterly profit posted by container lines in the post-COVID 19 era, according to Alphaliner.

Trans-Pacific carriers are restricting forwarders’ access to fixed “named-account” rates and pushing bookings to the much higher spot market pricing.

While Yang Ming was upbeat about improving container volumes and easing global inflation, the Taiwan-based ocean carrier warned of geopolitical volatility.

Container spot rates on the key markets Wan Hai serves, including Asia-North America, intra-Asia and Asia-Latin America, have been steadily rising this year, helping to push the carrier back into the black in the first quarter.