Trans-Pacific

The pandemic-induced supply chain disruptions in China have left importers searching for more resilience and flexibility in their existing supply chains rather than racing for the exits.

The narrowing spread between East and West coast spot rates in the eastbound trans-Pacific comes as spot rates to the East Coast have fallen by 18 percent over the past six weeks while West Coast rates have ticked slightly higher.

Shippers are generally willing to share in the cost of reducing carbon emissions, but they worry a lack of transparency in pass-through charges could allow shipping lines to continue burning fossil fuels.

Despite the fourth-quarter crash in revenues, all three Taiwan-based carriers still booked record revenues for the full year, suggesting they will report bumper profits for 2022.

The West Coast’s share of US imports from Asia will continue to deteriorate in the first quarter and beyond until terminal operators and the International Longshore and Warehouse Union agree on a new contract, sources say.

Despite the collapse in spot rates, ocean carriers are fundamentally in a stronger position than in the past, and shippers would be wise not to confuse a temporary downcycle with the liners’ structurally stronger long-term position, writes analyst Lars Jensen.

Falling demand for ocean and air freight services is driving headcount cuts across the logistics sector, with forwarder Flexport the latest to announce layoffs.

The collapse in ocean freight rates is a clear signal that the market is reverting to its pre-pandemic state, but the burning question for 2023 is whether that reversion is temporary.

Maersk’s new executive lineup covers 15 areas of responsibility within the carrier and is a combination of long-term company leaders and those with experience from outside the group.

US retailers now forecast double-digit year-over-year declines in imports for each month through May as the eastbound trans-Pacific trade returns to pre-pandemic cargo volumes.

Some factors, such as the sharper attention both multinationals and smaller mom-and-pop sellers are paying to their supply chains, seem to be charting a new trajectory and are poised to help shape the freight sector this year.

Inflation and high interest rates mean consumers have less buying power and will spend less, driving shipping profits down in the year to come.

Congestion and vessel queues at Chinese ports could worsen in the run-up to the start of the Lunar New Year on Jan. 22 as COVID-19 infections continue to surge, affecting the number of dockers turning up for work.

Globally, schedule reliability in November increased in 31 of the 34 trade lanes measured by Sea-Intelligence Maritime Analysis, with 56.6 percent of vessels arriving on time overall.

After a messy 2022, the West Coast is starting 2023 nearly congestion-free as worries rise about how much market share has been lost to the East and Gulf coasts.

Contract rates will be lower this year, shippers, carriers, and analysts agree, but no one knows yet just how much lower reduced demand will take rates in the end.

The acquisition of a majority share of three terminals in Los Angeles and Oakland will allow Ocean Network Express to better coordinate vessel operations with those terminals and, in turn, improve cargo flow.

The cap-and-trade emissions cutting system being implemented in Europe will have a “positive influence” on decarbonization agreements at an international level, according to the European Shippers’ Council.

Long-term rates on major trade lanes out of Asia have fallen steadily through Q4 as shippers sign fewer contracts and instead ride the collapsing spot markets.

Shippers locked into long-term contracts at elevated rate levels on trades out of Asia are feeling “burnt” as the spot market collapses, according to the Global Shippers’ Forum.

How the new vessel carbon intensity rating measure will be applied from January continues to rile the global shipping community, with BIMCO facing the latest maritime industry broadside.

Danish power company Ørsted says policymakers must provide a regulatory environment that allows companies to commit to the huge investment required in developing shipping’s fuel of the future.

Carriers, forwarders, and shippers say there will be no pre-Lunar Year bump in rates because they expect US demand to remain weak while exports from China decline further.

China’s exports fell almost 9 percent in November, while carriers continue to pull significant levels of capacity on trans-Pacific and Asia-Europe services.

The decline in US imports from Asia is expected to accelerate in the coming months as earlier-than-usual Lunar New Year factory shutdowns in China cause production to plummet.

Shipping’s transition to zero-carbon energy sources will be costly, but shippers are showing a growing willingness to pay to decarbonize their ocean transport supply chains.

The expanding platform provided by shippers seeking green transport has allowed Maersk to ramp up its ocean sustainability efforts, with greening landside logistics the next target.

Sources with knowledge of the Port of Oakland’s operations called Monday’s action by the ILWU an obvious attempt to exert pressure on stalled contract negotiations with the Pacific Maritime Association.

Hapag-Lloyd’s CEO says the slide in ocean rates coupled with weakening demand would likely cause pop-up carriers — mainly intra-Asia lines that entered the trans-Pacific trade when rates hit historic highs — to pull out.

The carrier said it aims to tackle the challenging outlook by securing high-yield cargo to maximize profitability and improve operational efficiency to cut costs.

US containerized imports are expected to decline through the first quarter of 2023 at a faster clip than retailers forecasted just months ago, with consumers concerned over rising prices and interest rates.

The accelerated blankings in the eastbound trans-Pacific come after US imports in September and October “can at best be described as a complete collapse in demand growth,” according to Sea-Intelligence Maritime Analysis.

Matson’s CEO expects to see even more capacity reductions and schedule changes in the next two quarters to meet lower consumer demand in the expedited market, especially as air cargo and conventional ocean market rates continue to fall.

A work stoppage in Oakland only served to further stoke the fears of US cargo interests who have been routing discretionary cargo away from West Coast ports to avoid disruptions linked to ongoing longshore labor talks.

Maersk reported a record Q3 result as shippers locked into long-term contracts continued to drive profitability for the carrier despite sharply declining volumes.

Singapore-based carrier ONE expects to end its fiscal year with profits below the record earnings generated in FY2021 with no short-term improvement likely in container shipping markets.

Carriers in the eastbound trans-Pacific continue to improve their on-time vessel arrivals at US ports as softer import volumes contributed to reductions in vessel backlogs and marine terminal congestion.

US ports saw a jump in shipments from Bangladesh this year through August, mostly from apparel and clothing accessories, as importers support a “China-plus-one” sourcing strategy.

Reduced backlogs in Southern California due primarily to the diversion of cargo to the East and Gulf coasts have shifted the congestion problems to ports in those regions.

While retailers normally divert some discretionary cargo to ports on the East and Gulf coasts in years when the ILWU and PMA negotiate a new contract, the shift away from the West Coast has been particularly dramatic this year.