Trans-Pacific

Norfolk Southern and the Port of Virginia are not only targeting importers using trans-Atlantic services from Europe and Asia, but also exporters moving goods through Memphis, such as the cotton industry.

Yang Ming echoed the warnings of its competitors, saying consumer spending power has fallen since the fourth quarter of last year because of inflation, while high inventory levels have also affected demand.

Carriers’ record container ship capacity on order is being led by MSC, which will grow its fleet – already the world’s largest – by almost 40 percent over the next two years.

The post-pandemic recovery of China’s economy following the lifting of restrictions late last year is sparking increasingly optimistic expectations for the air cargo market in 2023 despite a challenging start to the year.

Retailers say their main concern right now is to avoid over-ordering product from factories in Asia until they get a better handle on consumer demand later this summer.

Trucking and intermodal providers are offering discounts to secure freight in Southern California, where volumes are declining as imports from Asia fall.

Despite the lack of industry-wide emissions measurement, shippers are pressing ahead with their own sustainability programs and working with supply chain emissions data that is available, TPM23 attendees were told.

The share sale would give the new owners management control over HMM, which has led to speculation only South Korean firms would be allowed to participate.

Demand has slumped, overcapacity is on its way, and a rate war is igniting in the trans-Pacific, but analyst Lars Jensen says those factors are perfectly normal amid the cyclical downturn under way in container shipping.

Although surprised by the magnitude of the January drop in vessel on-time arrivals in the trans-Pacific, analysts expect carrier performance to improve this year.

From China to West Coast labor talks to the possibility of a rate war, a number of major factors weighed heavily on trans-Pacific service contract discussions taking place on the sidelines of TPM23.

Cosco Shipping’s large orderbook and decreasing market share make it more likely to go after customers of its Ocean Alliance partners, analyst Lars Jensen told TPM23.

With memories still fresh of being shut out of capacity over the past two years and forced into a historically high spot market, shipper executives are headed into service contract talks mindful of the need to minimize costs while at the same time ensure cargo moves.

While the supply chain has mostly healed from COVID-19, the pandemic revealed the risk of relying too much on China for product sourcing, CMA CGM’s new US president told TPM23.

US shippers are entering an era of greater risk in China trade, retired Gen. David Petraeus warned, but the two largest global economies will remain linked despite moves to source goods elsewhere.

Hapag-Lloyd is the latest carrier to sign a supply deal with a major energy company aimed at locking in the volumes of alternative fuel required to drive new dual-fuel ships.

Retailers are discovering the importance of closely managing purchase orders as increasingly complex trans-Pacific supply chains spawned by the pandemic highlight the need for a heightened hands-on approach.

The West Coast’s share of US imports from Asia continued to erode last month as retailers shipped their discretionary cargo through East and Gulf coast ports to avoid potential disruption linked to ongoing labor talks.

MSC vessels that transport containers for DB Schenker will use a blend of biofuel under an agreement designed to generate substantial cuts in CO2 emissions this year.

In negotiations leading up to the annual service contracts that will take effect May 1, container lines and importers are trying to find a new middle ground amid uncertainty as to how strong demand will be in the second half of the year.

HMM joined other carriers in recording a highly positive 2022 performance, but the South Korean carrier said demand would continue to come under pressure this year.

It might have been a fourth quarter to forget for OOCL as volume and rates tumbled, but a strong performance through the rest of 2022 has put the carrier on course for another profitable year.

If Maersk’s volumes and market share continue to slip, the reduction in size will eventually challenge profitability aspirations in a market where some competitors are increasing their scale benefit, writes analyst Lars Jensen.

Global economic growth is expected to outstrip container shipping demand through 2023, potentially upsetting the traditional approach to measuring trade.

Maersk does not believe any of the major carriers outside the 2M Alliance have the competitive network, scale, or cost base to forge individual paths outside their current partnerships.

The uncertain direction of the US economy is prompting consumers to hit the pause button on their buying habits, forcing a major retail group to further downgrade import projections through the first half of the year.

With the extended port reach into India, carriers are looking to fill leftover capacity from Southeast Asia as primary market volumes slow and US sourcing within Asia diversifies beyond China, sources say.

As the size of China’s workforce declines and production challenges increase, US retailers are shifting to global sourcing strategies, with each sector looking for the business model that meets its particular requirements.

Denmark’s DSV collected record profits for 2022, but the forwarder says a return to a more “normal” market has begun.

The return of US ports to normal cargo flow is demonstrated starkly in the year-over-year comparisons of vessel schedule reliability in the Asia-US trade.

Data shows US importers are walking the walk when it comes to sourcing diversification, slowly moving trade flows away from China and toward Vietnam, India, and South Korea, writes Journal of Commerce Executive Editor Mark Szakonyi.

The first 2022 financial results from ocean container carriers are filtering in, revealing the impact of collapsing rates and demand on profitability levels.

The premium rate that importers had been paying to ship Asian imports through the US East Coast has dropped considerably over the past few months, allowing the spread between East and West coast spot rates to narrow to pre-pandemic levels.

The move raises questions whether the carriers will seek new alliance partners, potentially setting off another round of musical chairs involving the other two networks, THE Alliance and the Ocean Alliance.

While there are encouraging signs regarding general merchandise retailers seeing their inventories-to-sales return toward pre-COVID levels, data suggests many sectors have a long way to go before their inventories-to-sales come back to pre-pandemic levels.

With an increased focus by importers on geopolitics and “friend-shoring,” carriers are shifting an increasing volume of deep-sea vessel capacity away to Vietnam — and away from China.

Dirtier products are the unintentional winners in global trade where cleaner finished goods pay higher tariffs, resulting in an effective “subsidy” of polluting commodities, according to the World Trade Organization.

Scrutiny over Flexport’s job cuts earlier this month points to a long-term issue for the venture-backed logistics company: a perceived lack of identity in a market that has long been skeptical of its differentiation.

Even as weak economic conditions prevail during the annual service contract negotiating cycle, it does not automatically mean shippers will be driving the hardest possible bargains with newly vulnerable carriers.

The softening outlook from niche carrier Matson foreshadows that the decline in US imports from Asia and the softening freight rates that began last fall are likely to continue through the first half of 2023.