<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.

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<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.

Maritime

Container Shipping News

Container lines

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

<div class="phx-topic abstract-wrapper">The latest salvo in the US-induced global tariff war comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April.</div>

The latest salvo in the US-induced global tariff war comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April.

<div class="phx-topic">A coalition of US wine importers, retailers and restaurants has told members to suspend all shipments from the European Union until greater clarity emerges on the level of tariffs to be imposed on European wine and spirits by the Trump administration. That comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April, a reciprocal measure that was in response to tariffs placed on all steel and aluminium imports to the US. After the EU announced its tariff on US whiskey, Donald Trump threatened to raise tariffs to 200% on wine and spirits imports from the “hostile and abusive” EU. The threat was enough for the US Wine Trade Alliance (USWTA), a collection of hundreds of importers, to issue a notice on Wednesday urging importers to halt all shipments of wine, beer and spirits from the EU. USWTA fears the tariffs on the beverages could be imposed from April 2. Alison Leavitt, managing director of the US-based Wine and Spirits Shippers’ Association, said many other companies have also stopped their orders from the EU or have requested a stop on shipments. “The uncertainty is the biggest problem, and it is hugely disruptive,” Leavitt told the Journal of Commerce. “The tariffs will have a devastating impact on the [US] wine business.” Europe sends wine valued at more than €4.5 billion ($4.89 billion) a year to the US, according to European wine industry representative Comité Européen des Entreprises Vins. <h3>No guarantee of on-time arrival </h3>Leavitt said for US importers, anything that is not already on the water will not arrive before the beginning of April, and even then, there is no guarantee that the shipments will be on time. “Many containers booked to arrive pre-April 1 are not going to arrive in time based on the massive delays caused by the ocean carrier disruption with almost all vessels delayed by seven to 14 days over the last weeks,” she said, adding that some companies were arranging air freight for high-value goods. Ocean carriers are in the midst of a reshuffling of alliances, with new services being phased in and often running in parallel with old services. Carriers have warned previously that disruption was likely during the transition period that will only be completed by the summer. But if there are lengthy delays on the trans-Atlantic, they will not be coming from Gemini Cooperation members Hapag-Lloyd and Maersk, according to Rolf Habben Jansen, CEO of Hapag-Lloyd. “As far as the Gemini voyages are concerned, when we look at the schedule reliability data, we are looking at very high on-time arrival percentages in North America,” he said Thursday during the carrier’s 2024 annual results press conference. He added that across the Gemini network, schedule reliability is currently near 90%. Habben Jansen said there was also no sign of a slowdown in volume on the Europe to US routes, with this week having the strongest bookings since Gemini was launched on Feb. 1. “It is normal people would think a little bit harder about whether to ramp up volume when we see high tariffs coming, but so far we do not see declines in bookings [on the trans-Atlantic],” he said. <h3>Rate increases, surcharges coming in April </h3>Meanwhile, ocean carriers are lining up trans-Atlantic rate increases and “peak season surcharges” in April that, if accepted by the market, will significantly ramp up price levels that have been declining steadily since late December. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="fa309dd3-ee6c-427e-9173-66d782c66dbf"></dynamic-object></div>Mediterranean Shipping Co. set its freight-all-kinds (FAK) rate from Antwerp to New York at a hefty $7,000 per FEU, while CMA CGM’s Rotterdam to New York rate was set at $3,026/FEU. For context, the North Europe to US East Coast spot rate this week was at $2,000/FEU, down 13% since the beginning of the year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. On the Mediterranean-US trade lane, Gemini partners Maersk and Hapag-Lloyd announced separate peak season surcharges. From April 5, Hapag-Lloyd will add $750 to all types of containers and Maersk will charge $400 per box. Rate benchmarking platform Xeneta this week assessed average spot rates from the Mediterranean to the US East Coast at $3,355/FEU, down 8.4% since Jan. 1. The latest available trans-Atlantic volume data is for February, so any frontloading to get ahead of the tariffs to be imposed on the European Union on April 2 by the Trump administration is not yet reflected in the data. February volume fell 8.7% year over year to 154,090 TEUs, according to PIERS, also part of S&amp;P Global. On Mediterranean to US routes, volume edged up 1.7% year over year to 128,230 TEUs. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A coalition of US wine importers, retailers and restaurants has told members to suspend all shipments from the European Union until greater clarity emerges on the level of tariffs to be imposed on European wine and spirits by the Trump administration. That comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April, a reciprocal measure that was in response to tariffs placed on all steel and aluminium imports to the US. After the EU announced its tariff on US whiskey, Donald Trump threatened to raise tariffs to 200% on wine and spirits imports from the “hostile and abusive” EU. The threat was enough for the US Wine Trade Alliance (USWTA), a collection of hundreds of importers, to issue a notice on Wednesday urging importers to halt all shipments of wine, beer and spirits from the EU. USWTA fears the tariffs on the beverages could be imposed from April 2. Alison Leavitt, managing director of the US-based Wine and Spirits Shippers’ Association, said many other companies have also stopped their orders from the EU or have requested a stop on shipments. “The uncertainty is the biggest problem, and it is hugely disruptive,” Leavitt told the Journal of Commerce. “The tariffs will have a devastating impact on the [US] wine business.” Europe sends wine valued at more than €4.5 billion ($4.89 billion) a year to the US, according to European wine industry representative Comité Européen des Entreprises Vins. No guarantee of on-time arrival Leavitt said for US importers, anything that is not already on the water will not arrive before the beginning of April, and even then, there is no guarantee that the shipments will be on time. “Many containers booked to arrive pre-April 1 are not going to arrive in time based on the massive delays caused by the ocean carrier disruption with almost all vessels delayed by seven to 14 days over the last weeks,” she said, adding that some companies were arranging air freight for high-value goods. Ocean carriers are in the midst of a reshuffling of alliances, with new services being phased in and often running in parallel with old services. Carriers have warned previously that disruption was likely during the transition period that will only be completed by the summer. But if there are lengthy delays on the trans-Atlantic, they will not be coming from Gemini Cooperation members Hapag-Lloyd and Maersk, according to Rolf Habben Jansen, CEO of Hapag-Lloyd. “As far as the Gemini voyages are concerned, when we look at the schedule reliability data, we are looking at very high on-time arrival percentages in North America,” he said Thursday during the carrier’s 2024 annual results press conference. He added that across the Gemini network, schedule reliability is currently near 90%. Habben Jansen said there was also no sign of a slowdown in volume on the Europe to US routes, with this week having the strongest bookings since Gemini was launched on Feb. 1. “It is normal people would think a little bit harder about whether to ramp up volume when we see high tariffs coming, but so far we do not see declines in bookings [on the trans-Atlantic],” he said. Rate increases, surcharges coming in April Meanwhile, ocean carriers are lining up trans-Atlantic rate increases and “peak season surcharges” in April that, if accepted by the market, will significantly ramp up price levels that have been declining steadily since late December. Mediterranean Shipping Co. set its freight-all-kinds (FAK) rate from Antwerp to New York at a hefty $7,000 per FEU, while CMA CGM’s Rotterdam to New York rate was set at $3,026/FEU. For context, the North Europe to US East Coast spot rate this week was at $2,000/FEU, down 13% since the beginning of the year, according to Platts, a sister company of the Journal of Commerce within S&P Global. On the Mediterranean-US trade lane, Gemini partners Maersk and Hapag-Lloyd announced separate peak season surcharges. From April 5, Hapag-Lloyd will add $750 to all types of containers and Maersk will charge $400 per box. Rate benchmarking platform Xeneta this week assessed average spot rates from the Mediterranean to the US East Coast at $3,355/FEU, down 8.4% since Jan. 1. The latest available trans-Atlantic volume data is for February, so any frontloading to get ahead of the tariffs to be imposed on the European Union on April 2 by the Trump administration is not yet reflected in the data. February volume fell 8.7% year over year to 154,090 TEUs, according to PIERS, also part of S&P Global. On Mediterranean to US routes, volume edged up 1.7% year over year to 128,230 TEUs. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Jittery US wine coalition urges hold on EU imports over Trump tariff threat

<div class="phx-topic abstract-wrapper">Montreal’s port chief says a successful outcome after nearly two years of talks between port employers and the longshore union will be critical to restoring shipper trust. </div>

Montreal’s port chief says a successful outcome after nearly two years of talks between port employers and the longshore union will be critical to restoring shipper trust.

<div class="phx-topic">The Port of Montreal’s chief says a new contract with the port’s longshore union will help restore shipper trust in sending cargoes through Canada’s main eastern gateway. That labor peace will be critical as Montreal expects to play a larger role in the country’s international trade due to the ongoing tensions between the Trump administration and Ottawa. One year into her new role, Montreal Port Authority (MPA) Chief Executive Julie Gascon told the Journal of Commerce last week that after the port’s last labor disruption in 2024 — its third in as many years — shippers began diverting more cargo away from Montreal. Gascon said the port needs to restore trust in its reliability, particularly as it presses ahead with plans for developing a new container terminal. “In terms of operational performance, that labor instability makes it difficult,” she said. “We’ve lost some volume because the confidence for some of [the beneficial cargo owners] and shipping lines has been eroded.” Montreal’s dockworkers have been working without a contract since the last one expired at the end of 2023. In a bid to exert pressure on maritime employers, dockworkers staged a series of <a href="https://www.joc.com/article/port-of-montreal-to-face-three-day-strike-against-two-terminals-next-week-5737483">port-wide work stoppages</a>, <a href="https://www.joc.com/article/montreal-dockworkers-target-mscs-terminals-for-strike-this-week-5781453">walkouts</a> and <a href="https://www.joc.com/article/montreal-dockworkers-to-refuse-overtime-in-latest-salvo-against-port-employers-5745362">refusals of work overtime</a> throughout October. To end the labor actions, the Canada Industrial Relations Board last November said it would force arbitration on both sides in the long-running standoff. However, Montreal’s Maritime Employers Association (MEA), which directly hires longshore labor at the port, and Local 375 of the Canadian Union of Public Employees (CUPE) requested a mediation period for a negotiated contract covering the 1,300 dockworkers. Late Wednesday, the MEA confirmed that negotiations with Local 375 will now go to arbitration following a breakdown in mediated talks. Gascon, who spoke before the impasse was declared, said a deal reached under mediation, instead of under arbitration where one side’s terms may be forced on the other without negotiation, is preferable for ensuring long-term labor peace. However, it’s also important to have arbitration as a backstop for restoring consistent vessel service at the port. “For ports, shipping lines are looking for the same thing: low congestion, operational efficiencies and stability, and that it’s an acceptable cost,” Gascon said. “We’ve eroded a little bit of their confidence on the labor side. “Arbitration doesn’t normally yield a longer-term agreement because it doesn’t address root-cause issues,” she added. “A negotiated agreement allows them to work on those issues collaboratively.” <h3>Capacity boost from Contrecoeur project </h3>Gascon said restoring trust in Montreal among shippers and ocean carriers will be critical as Canada looks to navigate fresh tensions with the Trump administration. While Montreal doesn’t handle any cargoes from the US, Gascon said the port is looking to enhance its capacity to handle more trade lanes. To that end, Quebec’s government recently <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">provided more funding to Montreal’s Contrecoeur marine terminal project</a>. Gascon, a former Canadian Coast Guard mariner, said Montreal is also working with federal agencies and river pilots to start trialing the navigation of larger ships on the St. Lawrence River, which would allow the port to handle direct services from Asia. “Without investing another dollar in dredging, we can bring in vessels of different sizes,” Gascon said. “It’s really important for Montreal to pivot to the more modern vessels. “If we do not build this infrastructure, when the demand comes, we will not be ready,” she added. “Contrecoeur has now become critical to the diversification effort of the country.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of Montreal’s chief says a new contract with the port’s longshore union will help restore shipper trust in sending cargoes through Canada’s main eastern gateway. That labor peace will be critical as Montreal expects to play a larger role in the country’s international trade due to the ongoing tensions between the Trump administration and Ottawa. One year into her new role, Montreal Port Authority (MPA) Chief Executive Julie Gascon told the Journal of Commerce last week that after the port’s last labor disruption in 2024 — its third in as many years — shippers began diverting more cargo away from Montreal. Gascon said the port needs to restore trust in its reliability, particularly as it presses ahead with plans for developing a new container terminal. “In terms of operational performance, that labor instability makes it difficult,” she said. “We’ve lost some volume because the confidence for some of [the beneficial cargo owners] and shipping lines has been eroded.” Montreal’s dockworkers have been working without a contract since the last one expired at the end of 2023. In a bid to exert pressure on maritime employers, dockworkers staged a series of port-wide work stoppages , walkouts and refusals of work overtime throughout October. To end the labor actions, the Canada Industrial Relations Board last November said it would force arbitration on both sides in the long-running standoff. However, Montreal’s Maritime Employers Association (MEA), which directly hires longshore labor at the port, and Local 375 of the Canadian Union of Public Employees (CUPE) requested a mediation period for a negotiated contract covering the 1,300 dockworkers. Late Wednesday, the MEA confirmed that negotiations with Local 375 will now go to arbitration following a breakdown in mediated talks. Gascon, who spoke before the impasse was declared, said a deal reached under mediation, instead of under arbitration where one side’s terms may be forced on the other without negotiation, is preferable for ensuring long-term labor peace. However, it’s also important to have arbitration as a backstop for restoring consistent vessel service at the port. “For ports, shipping lines are looking for the same thing: low congestion, operational efficiencies and stability, and that it’s an acceptable cost,” Gascon said. “We’ve eroded a little bit of their confidence on the labor side. “Arbitration doesn’t normally yield a longer-term agreement because it doesn’t address root-cause issues,” she added. “A negotiated agreement allows them to work on those issues collaboratively.” Capacity boost from Contrecoeur project Gascon said restoring trust in Montreal among shippers and ocean carriers will be critical as Canada looks to navigate fresh tensions with the Trump administration. While Montreal doesn’t handle any cargoes from the US, Gascon said the port is looking to enhance its capacity to handle more trade lanes. To that end, Quebec’s government recently provided more funding to Montreal’s Contrecoeur marine terminal project . Gascon, a former Canadian Coast Guard mariner, said Montreal is also working with federal agencies and river pilots to start trialing the navigation of larger ships on the St. Lawrence River, which would allow the port to handle direct services from Asia. “Without investing another dollar in dredging, we can bring in vessels of different sizes,” Gascon said. “It’s really important for Montreal to pivot to the more modern vessels. “If we do not build this infrastructure, when the demand comes, we will not be ready,” she added. “Contrecoeur has now become critical to the diversification effort of the country.” Contact Michael Angell at michael.angell@spglobal.com .

Montreal seeking longshore deal ahead of capacity expansions

<div class="phx-topic abstract-wrapper">No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.</div>

No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.

<div class="phx-topic">On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, <a href="https://www.joc.com/article/fedex-freight-spinoff-is-latest-move-to-reshape-us-ltl-market-5909683">the leadership announced that a spinoff</a> was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. <h3>Greater role for technology </h3>While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at <a href="mailto:info@shipmatrix.com">info@shipmatrix.com</a>. </div>

On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, the leadership announced that a spinoff was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. Greater role for technology While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at info@shipmatrix.com .

Surface

How the LTL market could evolve as the FedEx Freight spinoff plays out

<div class="phx-topic abstract-wrapper">What we have today in containerization is the opposite of Malcom McLean’s vision, writes Ted Prince — a vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world.</div>

What we have today in containerization is the opposite of Malcom McLean’s vision, writes Ted Prince — a vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world.

<div class="phx-topic">The Journal of Commerce’s roots extend back to 1827, when Samuel Morse and partners started a newspaper in New York. In 1844, Morse effectively started the telecommunications revolution. His first telegraph message asked, “What hath God wrought?” To many, the answer to that question might have been the development of containerization by Malcom McLean of Maxton, North Carolina. McLean’s transportation roots were in less-than-truckload (LTL). He was an early pioneer; McLean Trucking was founded in 1934 — the same year as the Motor Carrier Act of 1934 — and at one time was the fourth-largest motor carrier in the United States. This Motor Carrier Act followed traditional regulatory thinking. To ensure sufficient capacity, carriers were granted monopolies in the form of operating authorities. With tobacco a highly rated commodity, this was an incredibly lucrative business. These profits supported the acquisition of other motor carriers and the seed capital to start containerization. What the hagiography of McLean frequently omits is that he was not perfect. He twice “bet the company” on oil prices — and got it wrong both times. The development of high-speed container ships known as SL-7s were deployed in 1972 and 1973 during the first fuel shock. The ships’ high operating costs destroyed any profitability, and they were sold to the United States Navy in 1981 and 1982. In 1969, McLean sold Sea-Land to R.J. Reynolds Tobacco Company. In 1978, McLean purchased United States Lines and built a fleet of 4,400-TEU container ships. These were the largest ships at the time and were designed to operate in around-the-world services. Following the second oil shock of 1979, these vessels were designed to be fuel-efficient — albeit slow. When oil prices cratered five years later, so did US Lines. <h3>A ‘grander strategy’</h3>While the SL-7s and EconoShips are well-known aspects of McLean’s legacy, I think it is worthwhile exploring his grander strategy. SeaLand was vertically integrated — deploying his ships, calling his terminals, utilizing cranes of his specifications, carrying his containers, and moving on his chassis. While this model was emulated by many of those that followed, it is worthwhile to think about what has changed since then — and what it means today. Independent vessel strings are mostly a thing of the past. Vessel-sharing agreements (VSAs) have given way to global alliances — not to mention outright acquisitions. SeaLand–Maersk was an early VSA that ultimately led to Maersk acquiring SeaLand. This is a reflection of the need for economies of scope and scale — alongside density and service frequency — that are table stakes in today’s liner shipping world. By the early 1960s, McLean’s concept for standardized shipping containers gave rise to the container leasing industry. Sea Containers was an early entrant that was followed by others. This was a reflection that the capital-intensive nature of liner shipping made it almost impossible for a carrier to invest in everything. It was also a realization that economies of scale were sometimes beyond the reach of a single entity. While the chassis was necessary to provide pickup and delivery, carrier provision of chassis was limited to the United States. McLean was a trucker at heart and couldn’t imagine not having his own wheels. This decision haunted the industry for decades. Finally, in 2012, Maersk sold its chassis-leasing subsidiary, Direct ChassisLink, Inc. (DCLI), to a private equity firm. In an industry where most want to be second, almost every other line followed. Marine terminals were the last to be unbundled — perhaps because lines viewed them as their “crown jewels,” or perhaps because of their high price tags. These investments became popular with infrastructure funds and their pension fund investors. What we have today is the opposite of McLean’s vision. A vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world. Whereas the former would inevitably cross-subsidize separate components through intricate transfer pricing, the latter has created a world of cutthroat capitalism. The impacts are not always clear. Container and chassis providers claim that they offer savings; however, their line customers may not agree — perhaps because they lack the sophistication to ascertain the true cost of ownership and operation. The impact on marine terminals is much more pervasive. Whereas an ocean carrier might have previously absorbed some additional costs (e.g., extra gates, third shifts, etc.) in a holistic service perspective, today’s terminals have owners that demand profitability across the spectrum. Our industry, despite its global scale, is still relatively young. We are living Joseph Schumpeter’s theory of creative destruction that he believed is essential for capitalism and economic growth. New innovations replace old ones. McLean’s innovations were essential, but not timeless. Our industry is essential, and the only certainty is change. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The Journal of Commerce’s roots extend back to 1827, when Samuel Morse and partners started a newspaper in New York. In 1844, Morse effectively started the telecommunications revolution. His first telegraph message asked, “What hath God wrought?” To many, the answer to that question might have been the development of containerization by Malcom McLean of Maxton, North Carolina. McLean’s transportation roots were in less-than-truckload (LTL). He was an early pioneer; McLean Trucking was founded in 1934 — the same year as the Motor Carrier Act of 1934 — and at one time was the fourth-largest motor carrier in the United States. This Motor Carrier Act followed traditional regulatory thinking. To ensure sufficient capacity, carriers were granted monopolies in the form of operating authorities. With tobacco a highly rated commodity, this was an incredibly lucrative business. These profits supported the acquisition of other motor carriers and the seed capital to start containerization. What the hagiography of McLean frequently omits is that he was not perfect. He twice “bet the company” on oil prices — and got it wrong both times. The development of high-speed container ships known as SL-7s were deployed in 1972 and 1973 during the first fuel shock. The ships’ high operating costs destroyed any profitability, and they were sold to the United States Navy in 1981 and 1982. In 1969, McLean sold Sea-Land to R.J. Reynolds Tobacco Company. In 1978, McLean purchased United States Lines and built a fleet of 4,400-TEU container ships. These were the largest ships at the time and were designed to operate in around-the-world services. Following the second oil shock of 1979, these vessels were designed to be fuel-efficient — albeit slow. When oil prices cratered five years later, so did US Lines. A ‘grander strategy’ While the SL-7s and EconoShips are well-known aspects of McLean’s legacy, I think it is worthwhile exploring his grander strategy. SeaLand was vertically integrated — deploying his ships, calling his terminals, utilizing cranes of his specifications, carrying his containers, and moving on his chassis. While this model was emulated by many of those that followed, it is worthwhile to think about what has changed since then — and what it means today. Independent vessel strings are mostly a thing of the past. Vessel-sharing agreements (VSAs) have given way to global alliances — not to mention outright acquisitions. SeaLand–Maersk was an early VSA that ultimately led to Maersk acquiring SeaLand. This is a reflection of the need for economies of scope and scale — alongside density and service frequency — that are table stakes in today’s liner shipping world. By the early 1960s, McLean’s concept for standardized shipping containers gave rise to the container leasing industry. Sea Containers was an early entrant that was followed by others. This was a reflection that the capital-intensive nature of liner shipping made it almost impossible for a carrier to invest in everything. It was also a realization that economies of scale were sometimes beyond the reach of a single entity. While the chassis was necessary to provide pickup and delivery, carrier provision of chassis was limited to the United States. McLean was a trucker at heart and couldn’t imagine not having his own wheels. This decision haunted the industry for decades. Finally, in 2012, Maersk sold its chassis-leasing subsidiary, Direct ChassisLink, Inc. (DCLI), to a private equity firm. In an industry where most want to be second, almost every other line followed. Marine terminals were the last to be unbundled — perhaps because lines viewed them as their “crown jewels,” or perhaps because of their high price tags. These investments became popular with infrastructure funds and their pension fund investors. What we have today is the opposite of McLean’s vision. A vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world. Whereas the former would inevitably cross-subsidize separate components through intricate transfer pricing, the latter has created a world of cutthroat capitalism. The impacts are not always clear. Container and chassis providers claim that they offer savings; however, their line customers may not agree — perhaps because they lack the sophistication to ascertain the true cost of ownership and operation. The impact on marine terminals is much more pervasive. Whereas an ocean carrier might have previously absorbed some additional costs (e.g., extra gates, third shifts, etc.) in a holistic service perspective, today’s terminals have owners that demand profitability across the spectrum. Our industry, despite its global scale, is still relatively young. We are living Joseph Schumpeter’s theory of creative destruction that he believed is essential for capitalism and economic growth. New innovations replace old ones. McLean’s innovations were essential, but not timeless. Our industry is essential, and the only certainty is change. Contact Ted Prince at ted@tricitiesintermodal.com .

Supply chain

In appreciation of McLean’s essential, although not timeless, innovations

Notes: Data as of January 2025
Shaded areas indicate forecasts

MPV delivered

MPV demolished

HL capable delivered

HL capable demolished 

Net fleet loss/gain

The S&P Global multipurpose and heavy-lift fleet capacity database aggregates data for vessels that are in service, on order or have been demolished. The *Journal of Commerce* uses this database of current and historical data to forecast future newbuildings and demolitions.

Multipurpose and heavy-lift vessel deliveries and demolitions, with forecast (JOC)

MPV and HL Capable Fleet development Gateway

<div class="phx-topic abstract-wrapper">Despite banking a collective operating profit of about $60 billion in 2024, a worsening supply-demand imbalance could make the next three years difficult for the container shipping industry.</div>

Despite banking a collective operating profit of about $60 billion in 2024, a worsening supply-demand imbalance could make the next three years difficult for the container shipping industry.

<div class="phx-topic">Container shipping is plunging into another downcycle with an oversupply of capacity and weakening demand hanging over the industry, leaving little to slow the slide in rates on major trades that analysts say has declined beyond seasonal norms. Despite reporting a highly profitable 2024 — operating profit will be near $60 billion across the industry, according to estimates from Sea-Intelligence Maritime Analysis — analysts are predicting a sharp downturn beginning this year. “We think we are entering a multi-year period of losses as the industry grapples with overcapacity,” J.P. Morgan wrote in a market update Monday, noting that the losses will likely emerge even if capacity does not fully return to the Red Sea this year. “Our demand-supply analysis now points to a 30% reduction in freight rates year over year in 2025 [down from the previous estimate of negative 15%],” the bank’s transport analysts wrote. “This leads to ocean EBIT [earnings before interest and taxes] losses emerging during 2025 and in our view persisting into the next three years, as vessel deliveries re-accelerate in 2027.” On the trans-Pacific, North Asia-US West Coast rates are down 65% since early January, falling an additional $400 last week to $1,800 per FEU. North Asia-US East Coast rates of $2,800/FEU lost $500 in the past week and are down 58% so far this year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Similarly, Asia-North Europe spot rates are down 50% since the beginning of January at $2,549/FEU and are now $148/FEU below the long-term contract rate, according to rate benchmarking platform Xeneta. <h3>Short-lived rate increases </h3>Carriers levied freight-all-kinds (FAK) increases on Asia-North Europe on March 1, but it had little effect on the oversupplied market, according to Peter Sand, Xeneta’s chief analyst. “The short-lived uptick in spot rates at the start of March suggests a weakness in the market and demonstrates the difficulties carriers will face in capacity management during 2025,” Sand said in a market update, adding that a similar weakening of rates can be seen on the Asia-to-US West and East coast trades despite a series of general rate increases (GRIs). <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e60581e5-a2c4-45df-a59f-3fe2b770f471"></dynamic-object></div>Maersk CEO Vincent Clerc <a href="https://www.joc.com/article/excess-capacity-hangs-over-recovering-container-market-maersk-ceo-5214234">said during the carrier’s earnings call</a> earlier this month that no matter how long the Red Sea disruption lasted, the fundamentals of increasing overcapacity in container shipping would “eventually” prevail and could start hitting the market as early as the third quarter. “Even if the situation on the Red Sea was to endure for two years, three years or four years, the current orderbook would eventually be bigger than what we expect market growth to be,” Clerc said. <h3>Flurry of air strikes on Houthi positions </h3>The container shipping order book is currently just over 7 million TEUs, representing 25% of the existing fleet, according to S&amp;P Global’s Sea-web, sister company of the Journal of Commerce, with the supply-demand imbalance expected to be particularly acute over the next two years. Niels Rasmussen, chief shipping analyst at shipping association BIMCO, had forecast cargo volume growth at 3% to 4% in both 2024 and 2025, which will be easily outstripped by fleet growth that was due to top 9.5% in 2024 and is forecast for 4.9% in 2025. An estimated 10% of global capacity has been absorbed by the longer transits around southern Africa to avoid the Red Sea. The Houthi’s move last week to renew attacks on Israeli-linked ships and a flurry of air strikes from US warplanes on the militants’ positions in Yemen over the weekend highlighted the ongoing volatility in the region. “The next incremental addition in capacity will result near term from the reopening of the Red Sea, which we think will likely happen in 2026 as it will take time for the full capacity to return,” J.P. Morgan noted in its update. The bank has forecast 2% growth in global volume this year, with volume rising 5% in the first quarter before falling to 1% growth for the remaining quarters of 2025. “We continue to see the freight backdrop as challenging and it remains subject to heightened demand risks as we enter a global trade war, given recent announcements of reciprocal tariffs with business confidence subject to downside risks,” J.P. Morgan said. John McCown, founder of private equity firm Blue Alpha Capital, agreed in his McCown Report released earlier this month. “The year 2025 could be a return to the roller coaster volume swings that most of us had hoped were in the past,” he wrote. “Whether it’s the Panama Canal situation, the complex reciprocal tariffs or the initiative <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">to tax ships with a Chinese connection</a> each time they call on a US port, these initiatives inject chaos, uncertainty and unnecessary costs into the container supply chain.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Container shipping is plunging into another downcycle with an oversupply of capacity and weakening demand hanging over the industry, leaving little to slow the slide in rates on major trades that analysts say has declined beyond seasonal norms. Despite reporting a highly profitable 2024 — operating profit will be near $60 billion across the industry, according to estimates from Sea-Intelligence Maritime Analysis — analysts are predicting a sharp downturn beginning this year. “We think we are entering a multi-year period of losses as the industry grapples with overcapacity,” J.P. Morgan wrote in a market update Monday, noting that the losses will likely emerge even if capacity does not fully return to the Red Sea this year. “Our demand-supply analysis now points to a 30% reduction in freight rates year over year in 2025 [down from the previous estimate of negative 15%],” the bank’s transport analysts wrote. “This leads to ocean EBIT [earnings before interest and taxes] losses emerging during 2025 and in our view persisting into the next three years, as vessel deliveries re-accelerate in 2027.” On the trans-Pacific, North Asia-US West Coast rates are down 65% since early January, falling an additional $400 last week to $1,800 per FEU. North Asia-US East Coast rates of $2,800/FEU lost $500 in the past week and are down 58% so far this year, according to Platts, a sister company of the Journal of Commerce within S&P Global. Similarly, Asia-North Europe spot rates are down 50% since the beginning of January at $2,549/FEU and are now $148/FEU below the long-term contract rate, according to rate benchmarking platform Xeneta. Short-lived rate increases Carriers levied freight-all-kinds (FAK) increases on Asia-North Europe on March 1, but it had little effect on the oversupplied market, according to Peter Sand, Xeneta’s chief analyst. “The short-lived uptick in spot rates at the start of March suggests a weakness in the market and demonstrates the difficulties carriers will face in capacity management during 2025,” Sand said in a market update, adding that a similar weakening of rates can be seen on the Asia-to-US West and East coast trades despite a series of general rate increases (GRIs). Maersk CEO Vincent Clerc said during the carrier’s earnings call earlier this month that no matter how long the Red Sea disruption lasted, the fundamentals of increasing overcapacity in container shipping would “eventually” prevail and could start hitting the market as early as the third quarter. “Even if the situation on the Red Sea was to endure for two years, three years or four years, the current orderbook would eventually be bigger than what we expect market growth to be,” Clerc said. Flurry of air strikes on Houthi positions The container shipping order book is currently just over 7 million TEUs, representing 25% of the existing fleet, according to S&P Global’s Sea-web, sister company of the Journal of Commerce, with the supply-demand imbalance expected to be particularly acute over the next two years. Niels Rasmussen, chief shipping analyst at shipping association BIMCO, had forecast cargo volume growth at 3% to 4% in both 2024 and 2025, which will be easily outstripped by fleet growth that was due to top 9.5% in 2024 and is forecast for 4.9% in 2025. An estimated 10% of global capacity has been absorbed by the longer transits around southern Africa to avoid the Red Sea. The Houthi’s move last week to renew attacks on Israeli-linked ships and a flurry of air strikes from US warplanes on the militants’ positions in Yemen over the weekend highlighted the ongoing volatility in the region. “The next incremental addition in capacity will result near term from the reopening of the Red Sea, which we think will likely happen in 2026 as it will take time for the full capacity to return,” J.P. Morgan noted in its update. The bank has forecast 2% growth in global volume this year, with volume rising 5% in the first quarter before falling to 1% growth for the remaining quarters of 2025. “We continue to see the freight backdrop as challenging and it remains subject to heightened demand risks as we enter a global trade war, given recent announcements of reciprocal tariffs with business confidence subject to downside risks,” J.P. Morgan said. John McCown, founder of private equity firm Blue Alpha Capital, agreed in his McCown Report released earlier this month. “The year 2025 could be a return to the roller coaster volume swings that most of us had hoped were in the past,” he wrote. “Whether it’s the Panama Canal situation, the complex reciprocal tariffs or the initiative to tax ships with a Chinese connection each time they call on a US port, these initiatives inject chaos, uncertainty and unnecessary costs into the container supply chain.” Contact Greg Knowler at greg.knowler@spglobal.com .

Forwarding

Asia-Europe

Oversupplied ocean carriers sailing into new downcycle: analysts

<div class="phx-topic abstract-wrapper">A commentary published in a Hong Kong state-backed newspaper said the acquisition of Hutchison’s Panama assets by BlackRock and TiL would “Americanize” the canal and cause Washington to restrict Chinese access to the waterway. </div>

A commentary published in a Hong Kong state-backed newspaper said the acquisition of Hutchison’s Panama assets by BlackRock and TiL would “Americanize” the canal and cause Washington to restrict Chinese access to the waterway.

<div class="phx-topic">Beijing is voicing its opposition to the sale by Hong Kong conglomerate CK Hutchison of its Panama ports terminals to a consortium of BlackRock Group and Mediterranean Shipping Co.’s Terminal Investment Limited (TiL), warning the Panama Canal would be “Americanized” by the US government restricting Chinese access to the waterway. Chinese government concerns were outlined in a commentary published Thursday by Hong Kong newspaper Ta Kung Pao, a China state-backed newspaper. Official endorsement of the commentary was demonstrated when it was reposted on the joint website of the Chinese Communist Party’s Hong Kong and Macao Work Office and the Chinese government’s Hong Kong and Macao Affairs Office. The report spooked investors, causing Hutchison’s share price to drop more than 6% Friday to close at HK$46.25 (US$6). China’s opposition could put pressure on regulators to reject the sale. Hutchison on March 4 <a href="https://www.joc.com/article/hutchison-inks-228-billion-deal-to-sell-majority-of-port-holdings-to-blackrock-til-5955819">announced it had agreed to sell</a> its 90% stake in the Panama Ports Company as part of a larger $22.8 billion deal to offload its global ports business to BlackRock and TiL. The deal covers its 80% interest in Hutchison Port Holdings, which has terminal operations at 43 ports, but excludes Hutchison’s China ports. The Panama Ports Company controls terminals at Cristobal and Balboa at both ends of the canal. The newspaper commentary said the sale of the Panama terminals would lead the canal to become “Americanized” and “politicized,” with the US using the canal for “political purposes and pursuit of its own political agenda.” “China’s shipping trade will inevitably be constrained by the United States,” it said. “Once the US implements measures such as selective flow restrictions and imposition of political surcharges, the logistics costs and supply chain stability of Chinese enterprises will face great risks.” <h3>‘Not ordinary business practice’</h3>When the deal was announced, Frank Sixt, CK Hutchison’s co-managing director, stressed that the transaction was “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.” He added the sale “was the result of a rapid, discrete, but competitive process in which numerous bids and expressions of interest were received.” But the newspaper commentary rejected that explanation, highlighting Donald Trump’s ongoing threats to take back control of the canal and his close relationship with BlackRock co-founder, chairman and CEO Larry Fink. The Hutchison ports sale was “not ordinary business practice,” the commentary said. “Some [on the internet] pointed out that the United States may use this transaction as a template, through political pressure, to set off port mergers and acquisitions around the world, control more key ports in the world, and use ‘long-arm jurisdiction’ to implement suppression methods so that Chinese ships have nowhere to be berth,” the commentary added. “It can be seen that this deal is a hegemonic act by the US to use national power to embezzle the legitimate rights and interests of other countries through coercion, pressure, inducement and other despicable means, and it is power politics packaged as commercial behavior,” it added. CK Hutchison was also attacked, with the commentary saying that observers “generally strongly questioned and criticized this transaction” with the company “ignoring national interests and betraying all Chinese.” Warning of possible consequences if the sale goes ahead, the commentary said: “The relevant enterprises should think twice and think carefully about what position they want to stand on and which side they want to stand on.” Hutchison structured the deal as two transactions so the Panama Ports Company can likely be sold ahead of the other terminals in its portfolio. Regulatory and related issues in jurisdictions where the terminals are located could delay the sale of those assets by about a year, Eleanor Hadland, senior associate and ports and terminals analyst at maritime consultancy Drewry, <a href="https://www.joc.com/article/big-hutchison-deal-could-reshuffle-global-ports-network-drewry-5958162">told the Journal of Commerce</a>. Officially, the Chinese government has not commented on the deal, with a Foreign Ministry spokesperson saying it does not comment on commercial matters. Hutchison, which is in a 145-day exclusive negotiating period with BlackRock and TiL, did not immediately comment. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Beijing is voicing its opposition to the sale by Hong Kong conglomerate CK Hutchison of its Panama ports terminals to a consortium of BlackRock Group and Mediterranean Shipping Co.’s Terminal Investment Limited (TiL), warning the Panama Canal would be “Americanized” by the US government restricting Chinese access to the waterway. Chinese government concerns were outlined in a commentary published Thursday by Hong Kong newspaper Ta Kung Pao, a China state-backed newspaper. Official endorsement of the commentary was demonstrated when it was reposted on the joint website of the Chinese Communist Party’s Hong Kong and Macao Work Office and the Chinese government’s Hong Kong and Macao Affairs Office. The report spooked investors, causing Hutchison’s share price to drop more than 6% Friday to close at HK$46.25 (US$6). China’s opposition could put pressure on regulators to reject the sale. Hutchison on March 4 announced it had agreed to sell its 90% stake in the Panama Ports Company as part of a larger $22.8 billion deal to offload its global ports business to BlackRock and TiL. The deal covers its 80% interest in Hutchison Port Holdings, which has terminal operations at 43 ports, but excludes Hutchison’s China ports. The Panama Ports Company controls terminals at Cristobal and Balboa at both ends of the canal. The newspaper commentary said the sale of the Panama terminals would lead the canal to become “Americanized” and “politicized,” with the US using the canal for “political purposes and pursuit of its own political agenda.” “China’s shipping trade will inevitably be constrained by the United States,” it said. “Once the US implements measures such as selective flow restrictions and imposition of political surcharges, the logistics costs and supply chain stability of Chinese enterprises will face great risks.” ‘Not ordinary business practice’ When the deal was announced, Frank Sixt, CK Hutchison’s co-managing director, stressed that the transaction was “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.” He added the sale “was the result of a rapid, discrete, but competitive process in which numerous bids and expressions of interest were received.” But the newspaper commentary rejected that explanation, highlighting Donald Trump’s ongoing threats to take back control of the canal and his close relationship with BlackRock co-founder, chairman and CEO Larry Fink. The Hutchison ports sale was “not ordinary business practice,” the commentary said. “Some [on the internet] pointed out that the United States may use this transaction as a template, through political pressure, to set off port mergers and acquisitions around the world, control more key ports in the world, and use ‘long-arm jurisdiction’ to implement suppression methods so that Chinese ships have nowhere to be berth,” the commentary added. “It can be seen that this deal is a hegemonic act by the US to use national power to embezzle the legitimate rights and interests of other countries through coercion, pressure, inducement and other despicable means, and it is power politics packaged as commercial behavior,” it added. CK Hutchison was also attacked, with the commentary saying that observers “generally strongly questioned and criticized this transaction” with the company “ignoring national interests and betraying all Chinese.” Warning of possible consequences if the sale goes ahead, the commentary said: “The relevant enterprises should think twice and think carefully about what position they want to stand on and which side they want to stand on.” Hutchison structured the deal as two transactions so the Panama Ports Company can likely be sold ahead of the other terminals in its portfolio. Regulatory and related issues in jurisdictions where the terminals are located could delay the sale of those assets by about a year, Eleanor Hadland, senior associate and ports and terminals analyst at maritime consultancy Drewry, told the Journal of Commerce. Officially, the Chinese government has not commented on the deal, with a Foreign Ministry spokesperson saying it does not comment on commercial matters. Hutchison, which is in a 145-day exclusive negotiating period with BlackRock and TiL, did not immediately comment. Contact Keith Wallis at keithwallis@hotmail.com .

Beijing issues warning over Hutchison’s proposed sale of Panama Ports Company

<div class="phx-topic abstract-wrapper">Fresh questions about the direction of the US economy after the tariff chaos unleashed by the Trump administration in recent weeks has container lines resetting their rate expectations for the 2025–26 service year.</div>

Fresh questions about the direction of the US economy after the tariff chaos unleashed by the Trump administration in recent weeks has container lines resetting their rate expectations for the 2025–26 service year.

<div class="phx-topic">Ocean carriers on the eastbound trans-Pacific are acknowledging they will be unable to achieve their hoped-for rates in 2025–26 annual service contracts with importers amid fresh concerns about the health of the US economy and a spot market that continues to slide. Mere weeks ago, those same carriers were adamant about nailing down rates for next year at a minimum level of $2,000 per FEU to the West Coast and $3,000 per FEU to the East Coast, <a href="https://www.joc.com/article/trans-pacific-carriers-reaching-higher-in-early-202526-contract-talks-5952701">saying they were determined not to underprice their services again</a> as they believe they did in the existing 2024–25 contracts. But a plummeting stock market and larger questions about the direction of the US economy after the tariff chaos unleashed by the Trump administration in recent weeks has container lines resetting their rate expectations. Four carriers told the Journal of Commerce they are now setting their sights slightly lower than $2,000/FEU for the West Coast and $3,000/FEU to the East Coast. One carrier executive said the new going rate in service contract negotiations with shippers is $1,800 to $1,900 per FEU to the West Coast and about $1,000 higher to the East Coast. But even that may not be a level to satiate some beneficial cargo owners (BCOs) who may prefer to wait to see if the market moves lower. “BCOs are still asking for lower,” the carrier executive said. The rapid decline in spot rates during the Lunar New Year factory closures in Asia is prompting some retailers to look at one or two more rounds of negotiations before they agree to a final contract rate for the 2025–26 service year, a second carrier source said. Most service contracts begin on May 1. <h3>Spot rate plunge influencing contract talks </h3>Spot rates from North Asia to the West Coast were at $1,850 per FEU as of Thursday, down 19% in just one week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Rates to the East Coast of $2,900 per FEU were down 14% over the week. Plummeting spot rates — which are about 46% lower than this time last year — are having a knock-on effect on service contract levels now under negotiation. “Contract rates have mostly fallen below $2,000/$3,000,” said Rachel Shames, vice president for pricing and procurement at the forwarder CV International. “Carriers are becoming more aggressive with rates.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Kevin Parkerson, an industry consultant and former logistics manager at national retailers, said he’s seeing West Coast/East Coast levels now talked at $1,800/$2,900. “I would not be surprised to see $1,700 [for the West Coast],” he said. Four importers who spoke to the Journal of Commerce said carriers, in a second round of negotiations over 2025–26 contracts, are now quoting rates below $2,000 to the West Coast and $3,000 to the East Coast. “Round two is now south of $2,000 [to the West Coast],” said one importer in the apparel sector. <h3>Confusion, frustration over tariffs </h3>While they negotiate new service contracts with carriers, importers are also trying to plan their sourcing and supply chain requirements while wading through the day-to-day confusion over the Trump administration’s ever-changing policy on tariffs. Frustrated retailers and importers say it has become increasingly difficult to plan ahead. “We are making estimates on [the tariffs’] impact on a per-unit basis and determining how that might impact imports on [vessel] strings where we do not have many options,” said an importer in the automotive sector. “This whole tariff thing is causing chaos and an inability to plan. We hate it.” An importer in the furniture sector said he is almost becoming numb to the bluster and constantly changing announcements from the White House on which nations will be hit with tariffs and how much those tariffs will be. “Whatever answer I get could change in the next 24 hours,” the source said. If and when some clarity is achieved as to how the tariffs will affect sourcing, “[we] will certainly go to our carriers” to lock in vessel space, he added. Meanwhile, importers say they will <a href="https://www.joc.com/article/new-year-heralds-triple-threat-to-us-container-shipping-5908327">continue to engage in frontloading of seasonal merchandise</a> while they wait for clarity on tariffs. One importer said he is already bringing in back-to-school and other fall merchandise, and another said his team is preparing to begin importing year-end holiday merchandise soon depending on the ability of factories in Asia to deliver the products. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Ocean carriers on the eastbound trans-Pacific are acknowledging they will be unable to achieve their hoped-for rates in 2025–26 annual service contracts with importers amid fresh concerns about the health of the US economy and a spot market that continues to slide. Mere weeks ago, those same carriers were adamant about nailing down rates for next year at a minimum level of $2,000 per FEU to the West Coast and $3,000 per FEU to the East Coast, saying they were determined not to underprice their services again as they believe they did in the existing 2024–25 contracts. But a plummeting stock market and larger questions about the direction of the US economy after the tariff chaos unleashed by the Trump administration in recent weeks has container lines resetting their rate expectations. Four carriers told the Journal of Commerce they are now setting their sights slightly lower than $2,000/FEU for the West Coast and $3,000/FEU to the East Coast. One carrier executive said the new going rate in service contract negotiations with shippers is $1,800 to $1,900 per FEU to the West Coast and about $1,000 higher to the East Coast. But even that may not be a level to satiate some beneficial cargo owners (BCOs) who may prefer to wait to see if the market moves lower. “BCOs are still asking for lower,” the carrier executive said. The rapid decline in spot rates during the Lunar New Year factory closures in Asia is prompting some retailers to look at one or two more rounds of negotiations before they agree to a final contract rate for the 2025–26 service year, a second carrier source said. Most service contracts begin on May 1. Spot rate plunge influencing contract talks Spot rates from North Asia to the West Coast were at $1,850 per FEU as of Thursday, down 19% in just one week, according to Platts, a sister company of the Journal of Commerce within S&P Global. Rates to the East Coast of $2,900 per FEU were down 14% over the week. Plummeting spot rates — which are about 46% lower than this time last year — are having a knock-on effect on service contract levels now under negotiation. “Contract rates have mostly fallen below $2,000/$3,000,” said Rachel Shames, vice president for pricing and procurement at the forwarder CV International. “Carriers are becoming more aggressive with rates.” Kevin Parkerson, an industry consultant and former logistics manager at national retailers, said he’s seeing West Coast/East Coast levels now talked at $1,800/$2,900. “I would not be surprised to see $1,700 [for the West Coast],” he said. Four importers who spoke to the Journal of Commerce said carriers, in a second round of negotiations over 2025–26 contracts, are now quoting rates below $2,000 to the West Coast and $3,000 to the East Coast. “Round two is now south of $2,000 [to the West Coast],” said one importer in the apparel sector. Confusion, frustration over tariffs While they negotiate new service contracts with carriers, importers are also trying to plan their sourcing and supply chain requirements while wading through the day-to-day confusion over the Trump administration’s ever-changing policy on tariffs. Frustrated retailers and importers say it has become increasingly difficult to plan ahead. “We are making estimates on [the tariffs’] impact on a per-unit basis and determining how that might impact imports on [vessel] strings where we do not have many options,” said an importer in the automotive sector. “This whole tariff thing is causing chaos and an inability to plan. We hate it.” An importer in the furniture sector said he is almost becoming numb to the bluster and constantly changing announcements from the White House on which nations will be hit with tariffs and how much those tariffs will be. “Whatever answer I get could change in the next 24 hours,” the source said. If and when some clarity is achieved as to how the tariffs will affect sourcing, “[we] will certainly go to our carriers” to lock in vessel space, he added. Meanwhile, importers say they will continue to engage in frontloading of seasonal merchandise while they wait for clarity on tariffs. One importer said he is already bringing in back-to-school and other fall merchandise, and another said his team is preparing to begin importing year-end holiday merchandise soon depending on the ability of factories in Asia to deliver the products. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Transport, Trade and Regulation News

Tariffs, falling spot market weaken contract resolve of trans-Pac carriers

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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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<div class="phx-topic abstract-wrapper">The dizzying pace of the Trump administration’s moves against longtime US trading partners is putting shippers at risk of facing hefty new costs as a result of tariff “stacking.” </div>

The dizzying pace of the Trump administration’s moves against longtime US trading partners is putting shippers at risk of facing hefty new costs as a result of tariff “stacking.”

<div class="phx-topic">The Trump administration’s flurry of threats against trading partners puts shippers at risk of tariff “stacking” as import duties compound on top of other charges, customs experts say. That flurry is adding to the increasing compliance burden on shippers who face what one expert called a “massive historic shift” in the cost of US import duties. On Tuesday, President Donald Trump’s executive order ending tariff exemptions on steel and aluminum imports from Canada, Mexico, the European Union and South Korea went into effect. The move essentially reinstates a 25% tariff from Trump’s first administration, but from which those countries had successfully negotiated exemptions. Cameron Roberts, partner at trade and customs law specialist Roberts &amp; Kehagiaras, said at the Journal of Commerce’s TPM25 conference in Long Beach, California, last week that complying with the steel and aluminum tariffs “is going to be a major headache for everybody when you are importing goods into the United States” as it will require calculating the non-US metal content of goods for their customs entry. “That will be an important one to watch,” Roberts said. “There has been a recent discussion and information from the US Customs messaging system about derivatives and figuring out how much of the steel in a product is made from non-US steel and paying the countervailing duty on those amounts.” Tariffs on copper imports could also rise under a pending US trade investigation. Those tariffs would come on top of the current 25% tariff rates on all goods from Canada and Mexico, along with the 20% tariffs on imports from China. The cornerstone of Trump’s “America First” trade policy, Roberts said, is removing the trade deficit between the US and its three largest trading partners. “The answer from the administration is we are going to make it extremely expensive to import into the United States of America,” Roberts said. “So, these [tariffs] are stacking. “Over the last two decades, tariff rates have averaged 2% to 3%,” he added. “We are seeing now, what, a [multiple of 10] change? This is a massive historic shift.” Also speaking at TPM25, Pete Mento, director of customs at forwarder DSV, said Trump’s threat of an across-the-board 10% tariff on all imports is also hanging over the heads of importers. “That would run roughshod on inflation,” Mento said. <h3>Tariff wildcards coming </h3>Trump implemented the country-specific tariffs under the International Emergency Economic Powers Act (IEEPA), which gives US presidents executive authority over parts of the economy due to a national emergency. Typically used to impose financial penalties on criminal and terrorist groups, IEEPA has only been used once before for tariffs, by President Richard Nixon in 1971. Roberts said the IEEPA tariffs, which are being justified to stem flows of illegal drugs and migrants into the US, offer the most latitude for new carveouts and exemptions because they are over negotiable issues. However, steel and aluminum tariffs, which were imposed under national security provisions of US trade law, are more likely to last due to Trump’s policy of building up US manufacturing and national defense capacity. Another tariff wildcard will come in April when the Trump administration is scheduled to release a wide-ranging report on what it sees as unfair practices of US trading partners. The report is expected to address how the US could enact “reciprocal” tariffs against countries based on the tariffs they charge US exports. That would upend the practice of most import duties being assessed based on the type of goods, not the country of origin. DSV’s Mento said the additional line items for country-specific goods will balloon the number of possible import classifications in the US tariff schedule. The retaliatory measures that China, Canada and the European Union enacted in response to Trump’s trade measures further risk spiraling reciprocal tariffs upward. “Trump said he’s going to put a 25% tariff on Japanese and European cars, but that’s far beyond reciprocal,” Mento said. “So now I’m worried that reciprocal tariffs will be far higher than imagined and more punitive.” The tariff escalations put further risk on importers who use a customs bond to release cargo prior to paying actual import duties, Roberts said. The increasing size of tariffs means importers will have to post additional bonds, raising their financial costs and increasing their credit risk. “This increase in duty will diminish your profit margin if you are an importer,” Roberts said. “If your financials don’t look as good, you will have a harder time qualifying for credit.” On top of the tariffs, Roberts said shippers need to know the makeup of the fleet carrying their imports due to <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">Trump’s plan for a port tax on Chinese ocean carriers and ships</a>. The proposed order calls for fees of about $1 million per port call based on a mix of factors including the ship’s country of ownership, the number of newbuilds the carrier has at Chinese shipyards and the cargo capacity of the ships. “If you have a vessel, you could be responsible to pay the fee for bringing in the ship, plus being a Chinese firm, for having a majority of Chinese-built ships, plus a majority of Chinese-built ships in the order process,” Roberts said. “You could be looking at a $4 million to $5 million hit just for coming into the US.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Trump administration’s flurry of threats against trading partners puts shippers at risk of tariff “stacking” as import duties compound on top of other charges, customs experts say. That flurry is adding to the increasing compliance burden on shippers who face what one expert called a “massive historic shift” in the cost of US import duties. On Tuesday, President Donald Trump’s executive order ending tariff exemptions on steel and aluminum imports from Canada, Mexico, the European Union and South Korea went into effect. The move essentially reinstates a 25% tariff from Trump’s first administration, but from which those countries had successfully negotiated exemptions. Cameron Roberts, partner at trade and customs law specialist Roberts & Kehagiaras, said at the Journal of Commerce’s TPM25 conference in Long Beach, California, last week that complying with the steel and aluminum tariffs “is going to be a major headache for everybody when you are importing goods into the United States” as it will require calculating the non-US metal content of goods for their customs entry. “That will be an important one to watch,” Roberts said. “There has been a recent discussion and information from the US Customs messaging system about derivatives and figuring out how much of the steel in a product is made from non-US steel and paying the countervailing duty on those amounts.” Tariffs on copper imports could also rise under a pending US trade investigation. Those tariffs would come on top of the current 25% tariff rates on all goods from Canada and Mexico, along with the 20% tariffs on imports from China. The cornerstone of Trump’s “America First” trade policy, Roberts said, is removing the trade deficit between the US and its three largest trading partners. “The answer from the administration is we are going to make it extremely expensive to import into the United States of America,” Roberts said. “So, these [tariffs] are stacking. “Over the last two decades, tariff rates have averaged 2% to 3%,” he added. “We are seeing now, what, a [multiple of 10] change? This is a massive historic shift.” Also speaking at TPM25, Pete Mento, director of customs at forwarder DSV, said Trump’s threat of an across-the-board 10% tariff on all imports is also hanging over the heads of importers. “That would run roughshod on inflation,” Mento said. Tariff wildcards coming Trump implemented the country-specific tariffs under the International Emergency Economic Powers Act (IEEPA), which gives US presidents executive authority over parts of the economy due to a national emergency. Typically used to impose financial penalties on criminal and terrorist groups, IEEPA has only been used once before for tariffs, by President Richard Nixon in 1971. Roberts said the IEEPA tariffs, which are being justified to stem flows of illegal drugs and migrants into the US, offer the most latitude for new carveouts and exemptions because they are over negotiable issues. However, steel and aluminum tariffs, which were imposed under national security provisions of US trade law, are more likely to last due to Trump’s policy of building up US manufacturing and national defense capacity. Another tariff wildcard will come in April when the Trump administration is scheduled to release a wide-ranging report on what it sees as unfair practices of US trading partners. The report is expected to address how the US could enact “reciprocal” tariffs against countries based on the tariffs they charge US exports. That would upend the practice of most import duties being assessed based on the type of goods, not the country of origin. DSV’s Mento said the additional line items for country-specific goods will balloon the number of possible import classifications in the US tariff schedule. The retaliatory measures that China, Canada and the European Union enacted in response to Trump’s trade measures further risk spiraling reciprocal tariffs upward. “Trump said he’s going to put a 25% tariff on Japanese and European cars, but that’s far beyond reciprocal,” Mento said. “So now I’m worried that reciprocal tariffs will be far higher than imagined and more punitive.” The tariff escalations put further risk on importers who use a customs bond to release cargo prior to paying actual import duties, Roberts said. The increasing size of tariffs means importers will have to post additional bonds, raising their financial costs and increasing their credit risk. “This increase in duty will diminish your profit margin if you are an importer,” Roberts said. “If your financials don’t look as good, you will have a harder time qualifying for credit.” On top of the tariffs, Roberts said shippers need to know the makeup of the fleet carrying their imports due to Trump’s plan for a port tax on Chinese ocean carriers and ships . The proposed order calls for fees of about $1 million per port call based on a mix of factors including the ship’s country of ownership, the number of newbuilds the carrier has at Chinese shipyards and the cargo capacity of the ships. “If you have a vessel, you could be responsible to pay the fee for bringing in the ship, plus being a Chinese firm, for having a majority of Chinese-built ships, plus a majority of Chinese-built ships in the order process,” Roberts said. “You could be looking at a $4 million to $5 million hit just for coming into the US.” Contact Michael Angell at michael.angell@spglobal.com .

Escalating tariff costs are ‘massive’ financial shift for US importers: experts

<div class="phx-topic abstract-wrapper">The Federal Maritime Commission is looking at areas where ships are having transit troubles with an eye on how US maritime influence can fix those problems.</div>

The Federal Maritime Commission is looking at areas where ships are having transit troubles with an eye on how US maritime influence can fix those problems.

<div class="phx-topic">The US Federal Maritime Commission (FMC) is asking shipping interests to weigh in on the biggest global maritime chokepoints they face as part of US waterborne commerce. The probe, part of the FMC’s regular work under US shipping law, comes amid the Trump administration’s moves to assert US power across the global maritime sector and to develop a US-based shipping industry. The FMC said Thursday it is investigating “transit constraints at international maritime chokepoints” as part of its regular annual report to Congress about practices in the ocean shipping industry. The agency is asking, in particular, whether the practices or policies of foreign governments and ocean carriers exacerbate those chokepoints. “It appears that constraints on transits ... may have created shipping conditions that call for careful consideration by the Federal Maritime Commission in connection with the determination of its policies and the carrying out of its duties,” the agency said in the docket announcing the probe. The FMC identified seven chokepoints for the probe — the English Channel, the Malacca Strait, the Northern Sea Passage, the Singapore Strait, the Panama Canal, the Strait of Gibraltar and the Suez Canal. The Panama Canal has been a particular area of concern for President Donald Trump, who has criticized the 1977 treaty that ceded US control of the canal to Panama. The Trump administration got one win in that regard when <a href="https://www.joc.com/article/big-hutchison-deal-could-reshuffle-global-ports-network-drewry-5958162">BlackRock-backed investors Global Infrastructure Partners struck a $23 billion deal</a> to buy the ports network belonging to Hong Kong’s CK Hutchison. The deal included two <a href="https://www.joc.com/article/panama-canal-transit-data-belies-trumps-claims-of-chinas-control-project44-5948559">Panama marine terminals that Trump called out for their Chinese ownership</a>. The FMC said in its docket about the investigation that the Panama Canal “holds substantial geopolitical importance [and is] crucial to the interests of the United States.” “Political instability or disruptions in its operation could have far-reaching consequences,” it added. The FMC suggested that if Panama or any other maritime entity appears to be causing problems at the canal, the US is prepared to hit back at Panama’s ship registry — one of the largest in the world with 8,000 vessels — including refusing US entry to Panama-flag vessels. <h3>Attempt to bolster US maritime presence</h3>The FMC is also seeking input on avoiding other types of navigational constraints, including the <a href="https://www.joc.com/article/with-ever-given-freed-suez-backlog-to-clear-through-week-carriers-5250358">2021 grounding of the Ever Given in the Suez Canal</a> and the <a href="https://www.joc.com/article/baltimore-preps-for-limited-port-reopening-by-end-of-april-5225392">2024 closure of the Port of Baltimore</a> after the container ship Dali struck a bridge, causing it to collapse. Alongside the FMC, the Trump administration as a whole has taken interest in the maritime sector, particularly regarding how to boost the US’ presence. The US Trade Representative is currently weighing whether <a href="https://www.joc.com/article/tpm25-us-exporters-starting-to-feel-pinch-of-trump-trade-war-with-china-5956798">Chinese-built and -operated ships should face $1 million fees for US port calls</a> to offset China’s dominance in shipbuilding. A hearing on the matter is scheduled for March 24. Trump also said in his joint address to Congress at the start of March that his administration plans to create an office of commercial and military shipbuilding with a view of “bringing this industry home to America.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) is asking shipping interests to weigh in on the biggest global maritime chokepoints they face as part of US waterborne commerce. The probe, part of the FMC’s regular work under US shipping law, comes amid the Trump administration’s moves to assert US power across the global maritime sector and to develop a US-based shipping industry. The FMC said Thursday it is investigating “transit constraints at international maritime chokepoints” as part of its regular annual report to Congress about practices in the ocean shipping industry. The agency is asking, in particular, whether the practices or policies of foreign governments and ocean carriers exacerbate those chokepoints. “It appears that constraints on transits ... may have created shipping conditions that call for careful consideration by the Federal Maritime Commission in connection with the determination of its policies and the carrying out of its duties,” the agency said in the docket announcing the probe. The FMC identified seven chokepoints for the probe — the English Channel, the Malacca Strait, the Northern Sea Passage, the Singapore Strait, the Panama Canal, the Strait of Gibraltar and the Suez Canal. The Panama Canal has been a particular area of concern for President Donald Trump, who has criticized the 1977 treaty that ceded US control of the canal to Panama. The Trump administration got one win in that regard when BlackRock-backed investors Global Infrastructure Partners struck a $23 billion deal to buy the ports network belonging to Hong Kong’s CK Hutchison. The deal included two Panama marine terminals that Trump called out for their Chinese ownership . The FMC said in its docket about the investigation that the Panama Canal “holds substantial geopolitical importance [and is] crucial to the interests of the United States.” “Political instability or disruptions in its operation could have far-reaching consequences,” it added. The FMC suggested that if Panama or any other maritime entity appears to be causing problems at the canal, the US is prepared to hit back at Panama’s ship registry — one of the largest in the world with 8,000 vessels — including refusing US entry to Panama-flag vessels. Attempt to bolster US maritime presence The FMC is also seeking input on avoiding other types of navigational constraints, including the 2021 grounding of the Ever Given in the Suez Canal and the 2024 closure of the Port of Baltimore after the container ship Dali struck a bridge, causing it to collapse. Alongside the FMC, the Trump administration as a whole has taken interest in the maritime sector, particularly regarding how to boost the US’ presence. The US Trade Representative is currently weighing whether Chinese-built and -operated ships should face $1 million fees for US port calls to offset China’s dominance in shipbuilding. A hearing on the matter is scheduled for March 24. Trump also said in his joint address to Congress at the start of March that his administration plans to create an office of commercial and military shipbuilding with a view of “bringing this industry home to America.” Contact Michael Angell at michael.angell@spglobal.com .

FMC probes ocean chokepoints as Trump looks to rule the waves

<div class="phx-topic abstract-wrapper">Ports across the continent are struggling to clear bottlenecks as containers stack up in terminals and delay inland and feeder connections.</div>

Ports across the continent are struggling to clear bottlenecks as containers stack up in terminals and delay inland and feeder connections.

<div class="phx-topic">Severe congestion continues to plague ports across Europe with new alliance vessel plans combining with strikes, bad weather and fully occupied container yards to delay ships and disrupt terminal operations. The bottlenecks are being felt in both North Europe and the Mediterranean, with carriers, terminals and forwarders reporting lengthy delays in some ports. Maersk said in its latest Europe advisory that all terminals in Antwerp were congested “due to the phase-in and phase-out of vessel plans,” a factor that was being exacerbated by late vessel arrivals from delays in previous ports. Maersk and Hapag-Lloyd are phasing in Gemini Cooperation services, with the new network expected to be fully deployed by the end of the second quarter. Likewise, Mediterranean Shipping Co. is moving services from its 2M Alliance with Maersk to a standalone network, and the Premier Alliance is adjusting to services without Hapag-Lloyd. Carrier executives have warned customers that operational disruptions to port schedules will be experienced, with some old and new services running in parallel. The new networks will require two full cycles from Asia to Europe and back to Asia before they will be fully rolled out. Maersk also reported delays in Bremerhaven, where several services were arriving late due to bad weather en route to the German port. In Rotterdam, the carrier said the Hutchinson Ports Delta II terminal was back to full operational productivity <a href="https://www.joc.com/article/strikes-storms-and-record-volumes-adding-to-north-europe-port-delays-5942119">after a month of slowdowns</a> following a tentative agreement between the company and dockworkers, but a backlog of inland cargo was still being cleared. South Korean carrier HMM warned customers it was taking an average of three days to secure a berth at Hamburg that was experiencing a strike by boat pilots, while berth waiting times at Le Havre were up to 5.7 days because of recurring strikes in the French hub. French unions are holding four-hour stoppages in Le Havre on eight separate days in March, in addition to a three-day strike planned this week from March 18–20. Significant disruption is already being experienced from the rolling industrial action, and the full-day strikes are set to bring container operations in France to a standstill this week. Spillover effects of the Le Havre strike are also affecting Rotterdam, according to HMM, which said the average berth waiting time at Europe’s largest container port was 5.6 days. <h3>Yards and berths fully occupied </h3>Kuehne + Nagel’s SeaExplorer visibility platform reported heavily disrupted operations at Rotterdam, Hamburg, Antwerp and Le Havre, with full container yards and most berths fully occupied. Although SeaExplorer put the average waiting time at Hamburg at 1.25 days, it said the port was experiencing “heavily disrupted operations.” The bottlenecks saw Hamburg terminal operator HHLA imposing container delivery restrictions from Monday at Container Terminal Burchardkai (CTB) and Container Terminal Tollerort (CTT). Export container deliveries will be managed on a ship-by-ship basis, “potentially causing delays and complicating daily operations,” HHLA noted. At Rotterdam’s ECT Euromax terminal, Hutchison Ports has announced that container stacks are so high it will not be able to accept empty containers delivered by road ​​from ​March 23 “​​to prevent an unworkable situation.” The port bottlenecks are also impacting inland connections from Rotterdam and nearby Antwerp. Intermodal operator Contargo on Monday reported average waiting times for the handling of its barges have reached 75 hours in Antwerp and 72 hours in Rotterdam. Adding to the port congestion issues are seasonal low water levels in the Rhine River that restrict the loading of containers for inland destinations and are generating surcharges of about €50 ($54) per box. The low-water surcharges will rise as water levels drop further through the summer, with shifting cargo putting pressure on road and rail services. In the Mediterranean, HMM noted that the Greek hub of Piraeus has a berth waiting time of 4.4 days and six days for feeder vessels, while average berth wait times at Genoa and La Spezia were four days. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Severe congestion continues to plague ports across Europe with new alliance vessel plans combining with strikes, bad weather and fully occupied container yards to delay ships and disrupt terminal operations. The bottlenecks are being felt in both North Europe and the Mediterranean, with carriers, terminals and forwarders reporting lengthy delays in some ports. Maersk said in its latest Europe advisory that all terminals in Antwerp were congested “due to the phase-in and phase-out of vessel plans,” a factor that was being exacerbated by late vessel arrivals from delays in previous ports. Maersk and Hapag-Lloyd are phasing in Gemini Cooperation services, with the new network expected to be fully deployed by the end of the second quarter. Likewise, Mediterranean Shipping Co. is moving services from its 2M Alliance with Maersk to a standalone network, and the Premier Alliance is adjusting to services without Hapag-Lloyd. Carrier executives have warned customers that operational disruptions to port schedules will be experienced, with some old and new services running in parallel. The new networks will require two full cycles from Asia to Europe and back to Asia before they will be fully rolled out. Maersk also reported delays in Bremerhaven, where several services were arriving late due to bad weather en route to the German port. In Rotterdam, the carrier said the Hutchinson Ports Delta II terminal was back to full operational productivity after a month of slowdowns following a tentative agreement between the company and dockworkers, but a backlog of inland cargo was still being cleared. South Korean carrier HMM warned customers it was taking an average of three days to secure a berth at Hamburg that was experiencing a strike by boat pilots, while berth waiting times at Le Havre were up to 5.7 days because of recurring strikes in the French hub. French unions are holding four-hour stoppages in Le Havre on eight separate days in March, in addition to a three-day strike planned this week from March 18–20. Significant disruption is already being experienced from the rolling industrial action, and the full-day strikes are set to bring container operations in France to a standstill this week. Spillover effects of the Le Havre strike are also affecting Rotterdam, according to HMM, which said the average berth waiting time at Europe’s largest container port was 5.6 days. Yards and berths fully occupied Kuehne + Nagel’s SeaExplorer visibility platform reported heavily disrupted operations at Rotterdam, Hamburg, Antwerp and Le Havre, with full container yards and most berths fully occupied. Although SeaExplorer put the average waiting time at Hamburg at 1.25 days, it said the port was experiencing “heavily disrupted operations.” The bottlenecks saw Hamburg terminal operator HHLA imposing container delivery restrictions from Monday at Container Terminal Burchardkai (CTB) and Container Terminal Tollerort (CTT). Export container deliveries will be managed on a ship-by-ship basis, “potentially causing delays and complicating daily operations,” HHLA noted. At Rotterdam’s ECT Euromax terminal, Hutchison Ports has announced that container stacks are so high it will not be able to accept empty containers delivered by road ​​from ​March 23 “​​to prevent an unworkable situation.” The port bottlenecks are also impacting inland connections from Rotterdam and nearby Antwerp. Intermodal operator Contargo on Monday reported average waiting times for the handling of its barges have reached 75 hours in Antwerp and 72 hours in Rotterdam. Adding to the port congestion issues are seasonal low water levels in the Rhine River that restrict the loading of containers for inland destinations and are generating surcharges of about €50 ($54) per box. The low-water surcharges will rise as water levels drop further through the summer, with shifting cargo putting pressure on road and rail services. In the Mediterranean, HMM noted that the Greek hub of Piraeus has a berth waiting time of 4.4 days and six days for feeder vessels, while average berth wait times at Genoa and La Spezia were four days. Contact Greg Knowler at greg.knowler@spglobal.com .