Trans-Pacific

Retailers and NVOs aren’t sure if spot rates will continue to increase steadily through the peak season or whether new capacity expected to enter the trans-Pacific in the coming months will cause rates to fall again.

The rejection of last week’s tentative contract deal by a caucus of ILWU Canada narrows the prospects of a resolution without one imposed by Parliament through back-to-work legislation.

It’s easy to paint developments in the global shipping market as extreme, but when context is provided, the market is on many levels almost boringly normal at present, writes analyst Lars Jensen.

The expected declines followed a drop in demand for marine containers due to weakened economic and trade growth this year, both companies said in filings to the Hong Kong stock exchange.

The carrier’s CEO said the company would continue to “actively manage and rationalize” its fleet and services during the current downturn in the global shipping market.

The doom and gloom regarding cargo diverted away from the US West Coast during recent labor strife may have been excessive, as importers are not eager to permanently adopt higher-cost routings when a reliable lower-cost option with reasonable service exists, writes analyst Larry Gross.

The Global Port Tracker says prospects for a recession in the second half of the year are dimming and imports should increase as consumer demand ticks up and retailers reduce the inventory overhang that has kept warehouses full over the past year.

The Singapore-based carrier’s multi-billion-dollar investment plan into terminals, new ships and decarbonization is meant to secure the right assets in the right areas to keep it in the black.

Ocean carriers are pulling a variety of levers, such as cancelled services, new port calls and slow steaming, to keep ships on the water in the face of weak demand.

The long-anticipated wave of container ship newbuildings will hit the water by the end of August, despite a weak cargo market that threatens to keep the new ships underutilized.

The extent to which the rapidly cooling container shipping market is hurting China’s main carriers is likely to be repeated across the industry as reporting season approaches.

The carrier accelerated its reach into the direct shipper market during the pandemic when access to vessel space was severely limited, but as demand slows and capacity grows, the company may need to increase its forwarder business.

The pressure is on the Trudeau government to use its political capital to force a deal between employers and longshore workers at the ports of Vancouver and Prince Rupert after the latter began a strike Saturday.

Vessel on-time performance in the eastbound trans-Pacific is improving at West Coast ports, but slipping somewhat along the East Coast.

Prime Minister Justin Trudeau is generally viewed within the Canadian shipping industry as having acted too slowly — and weakly — when containerized supply chains were significantly disrupted over the last three years, notes Journal of Commerce Executive Editor Mark Szakonyi.

The locations were chosen based on their proximity to key rail, airport and port facilities, the partners said.

With most new trans-Pacific service contracts in effect only since late May, container lines are already nudging shippers to meet their minimum quantity commitments instead of taking advantage of spot rates that have been cratering for approximately three weeks, sources say.

Non-vessel-operating common carriers handle a growing percentage of US imports from Asia, but that hasn’t stopped traditional asset-owning companies from attempting to leverage core assets in a bid to differentiate themselves, writes Peter Tirschwell.

There’s growing concern among some US exporters that outbound container spot rates are too low, recalling memories of when unprofitable cargo was left on the docks and service levels fell in parallel with the bottom lines of ocean carriers, writes Journal of Commerce Executive Editor Mark Szakonyi.

In addition to a 32% increase in dockworker wages over the life of the six-year deal, the tentative US West Coast longshore labor agreement includes a one-time $70 million bonus for staying on the job during the COVID-19 pandemic.

Labor woes along the West Coast over the past year highlighted a stark difference: Shippers on the East and Gulf coasts are customers whose business is valued, while West Coast shippers are not customers in the traditional sense, but more like helpless bystanders, writes Peter Tirschwell.

The Pacific Maritime Association hopes Labor Secretary nominee Julie Su can get ILWU negotiators to move closer to a level of wage increases that puts an agreement within reach.

The shift to green fuels needs to be “supercharged” by establishing a clear zero-emissions target at the IMO’s July meeting, according to an Oslo-based shipowner group.

About 65% of the current carrier orderbook is for ships over 15,000 TEUs in capacity, the majority of which will be deployed on the already oversupplied Asia-Europe trade.

ILWU Canada rank-and-file will vote later this week on whether to issue a 72-hour strike notice, raising the unprecedented prospect of disruption on Canada’s West Coast amid job actions by labor along the US West Coast.

Air cargo carriers are set for a bleak few months, with high inventory levels and economic issues in destination markets further dampening the traditionally slow summer season.

Slow-steaming has come to the fore of late as ocean carriers seek help in absorbing overcapacity, but analyst Lars Jensen says the common refrain that slower speeds also help to improve schedule reliability doesn’t hold water.

Shippers and port executives say the post-COVID shift of cargo back to Hong Kong is being hampered by the global slump in demand as developed countries grapple with elevated inventories and inflationary pressures.

The port congestion in Asia and North America that compromised vessel on-time performance during the pandemic began to ease last fall with declining cargo volumes, and the reliability improvements have accelerated since.

Ocean carriers are pulling all available capacity management levers to address a supply-demand imbalance that is set to widen significantly through 2024.

Although the container shipping order book is the highest it has been in many years and demand remains subdued, the ground is shifting under the ocean market in new and unfamiliar ways, writes Peter Tirschwell.

Price is once again on the side of shippers, with excess ocean capacity allowing them to extract lower rates from service providers.

While indicators may point to a “normal” container shipping market in the wake of the pandemic, it is important to remember that disruptions large and small are all part of that normality, writes analyst Lars Jensen.

The Israel-based carrier is adding larger ships powered by liquefied natural gas to the Asia-US East Coast trade to capture sustained demand and lower unit costs.

A deteriorating container shipping market made the first quarter one to forget for the Israel-based carrier, but its full-year outlook remains positive.

A decrease in US housing construction from the fever pitch seen during the COVID-19 pandemic is reducing demand for imports of furniture, appliances and other household goods.

With a proposed baseball stadium at the terminal location off the table, the Port of Oakland is considering options to expand maritime support activities at the 50-acre site to complement overall growth at the port.

With import volumes sharply lower than last year, trans-Pacific carriers are more willing to consider requests for fixed-rate pricing and inland transportation bookings in 2023-24 service contracts, sources say.

Asian imports into the US last month reached their highest level since October 2022 as freight rates rose, but further import gains look unlikely as shippers take a wait-and-see approach to consumer demand.

The South Korea-based liner became the latest carrier to illustrate the post-pandemic crash in container shipping, posting a 91% drop in net profit for the first quarter.