<div class="phx-topic abstract-wrapper">Hapag-Lloyd and Maersk will alternatively use feeder connections to relay Indian loads to the US East and West coasts over Gemini hub ports in Asia.</div>

Hapag-Lloyd and Maersk will alternatively use feeder connections to relay Indian loads to the US East and West coasts over Gemini hub ports in Asia.

Feature image

<div class="phx-topic">Gemini alliance partners Maersk and Hapag-Lloyd have set the stage to serve shippers on the India-US trade, a market that was not part of the contours of the original collaborative agreement specifically tied to direct calls. The carriers will alternatively use feeder connections to relay Indian loads to the US East and West coasts over Gemini hub ports in Asia. Those extended coverage plans, known as of now, include Hapag-Lloyd acquiring slots on an existing Maersk intra-Asia loop and adding another regional string for US transshipment options. The former service, to be marketed by Hapag-Lloyd as the India-Asia Express (IAX), features a rotation of Mundra, Singapore, Qingdao, Tianjin, Xingang and Busan, but the cooperation beginning in mid-February will be restricted to export loading rights out of Mundra. “This service [IAX] will connect to our Gemini shuttle network via our hubs to attractive other locations in North America and Asia,” Hapag-Lloyd said in a customer advisory. “In fact, the cargo bound to North America will connect at Qingdao and Busan.” Similarly, Hapag-Lloyd will open Indian bookings to the US West Coast region via its India-China (CIX) Service, which has thus far concentrated on shipments from Taiwan to West India on the back of more competitive transits. Intra-Asia operators traditionally thrive on the backhaul trade to India. “From late April or early May, the CIX calling Nhava Sheva and Hazira will load for the (North American) West Coast, including Los Angeles, Oakland, Tacoma and Vancouver, via transshipment at Singapore and/or Shanghai,” a liner industry official with knowledge of the matter told the Journal of Commerce. “The Gemini alliance is driving multiple cargo relay opportunities with enhanced schedule reliability.” The current CIX itinerary includes stops at Colombo, Nhava Sheva, Port Klang, Singapore, Kaohsiung, Hong Kong and Shekou, available data shows. Both Hapag-Lloyd and Maersk already have standalone direct West India-US East Coast connections, known as the TPI and MECL services, respectively. The latter has also been upgraded with a new call at Mundra beginning in late February in a schedule reshuffle that Maersk claims will improve transit times for Indian shippers to the East Coast by five days on average. Meanwhile, Maersk has begun accepting <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Findian-forwarders-seek-clarity-on-spot-booking-program-for-gemini-europe-sailings-5921452&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C08d105451d324ae394c608dd3acebe55%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C638731381809994995%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=X%2BKut0Ix6ahwu3s4nGLkLUNiI0yZWyFyurPE7%2Ba5Wb4%3D&amp;reserved=0">spot bookings on its portal for Gemini Europe sailings</a>, while Hapag-Lloyd is expected to open its spot window for Indian customers on the network from January 24, local forwarder sources said. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

Gemini alliance partners Maersk and Hapag-Lloyd have set the stage to serve shippers on the India-US trade, a market that was not part of the contours of the original collaborative agreement specifically tied to direct calls. The carriers will alternatively use feeder connections to relay Indian loads to the US East and West coasts over Gemini hub ports in Asia. Those extended coverage plans, known as of now, include Hapag-Lloyd acquiring slots on an existing Maersk intra-Asia loop and adding another regional string for US transshipment options. The former service, to be marketed by Hapag-Lloyd as the India-Asia Express (IAX), features a rotation of Mundra, Singapore, Qingdao, Tianjin, Xingang and Busan, but the cooperation beginning in mid-February will be restricted to export loading rights out of Mundra. “This service [IAX] will connect to our Gemini shuttle network via our hubs to attractive other locations in North America and Asia,” Hapag-Lloyd said in a customer advisory. “In fact, the cargo bound to North America will connect at Qingdao and Busan.” Similarly, Hapag-Lloyd will open Indian bookings to the US West Coast region via its India-China (CIX) Service, which has thus far concentrated on shipments from Taiwan to West India on the back of more competitive transits. Intra-Asia operators traditionally thrive on the backhaul trade to India. “From late April or early May, the CIX calling Nhava Sheva and Hazira will load for the (North American) West Coast, including Los Angeles, Oakland, Tacoma and Vancouver, via transshipment at Singapore and/or Shanghai,” a liner industry official with knowledge of the matter told the Journal of Commerce. “The Gemini alliance is driving multiple cargo relay opportunities with enhanced schedule reliability.” The current CIX itinerary includes stops at Colombo, Nhava Sheva, Port Klang, Singapore, Kaohsiung, Hong Kong and Shekou, available data shows. Both Hapag-Lloyd and Maersk already have standalone direct West India-US East Coast connections, known as the TPI and MECL services, respectively. The latter has also been upgraded with a new call at Mundra beginning in late February in a schedule reshuffle that Maersk claims will improve transit times for Indian shippers to the East Coast by five days on average. Meanwhile, Maersk has begun accepting spot bookings on its portal for Gemini Europe sailings , while Hapag-Lloyd is expected to open its spot window for Indian customers on the network from January 24, local forwarder sources said. Contact Bency Mathew at bencyvmathew@gmail.com.

Container Shipping News

Container lines

Maritime

Transshipment networks to give Gemini-linked boost to India-US trade

<div class="phx-topic abstract-wrapper">By promising 90%-plus schedule reliability using a hub-and-spoke model, the Maersk/Hapag-Lloyd alliance is tacking sharply away from the industry pack in attempting to solve the problem of unreliable schedules that continues to plague the industry well after the end of COVID-19.</div>

By promising 90%-plus schedule reliability using a hub-and-spoke model, the Maersk/Hapag-Lloyd alliance is tacking sharply away from the industry pack in attempting to solve the problem of unreliable schedules that continues to plague the industry well after the end of COVID-19.

<div class="phx-topic">With the Gemini Cooperation set to officially launch on Feb. 1, repositioning of ships is under way, thus kicking off one of the boldest and riskiest gambits the container shipping industry has seen in a long time. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5927220_0.1.jpg"></img></div>By promising 90%-plus schedule reliability using a hub-and-spoke network, the Maersk/Hapag-Lloyd alliance is tacking sharply away from the industry pack in attempting to solve the problem of unreliable schedules that continues to plague the industry well after the end of COVID-19. The questions hovering over that strategy and its chances of success fall into two main categories. The first is whether the concept can deliver operationally; in other words, when fully implemented by mid-year, will it achieve the promised 90%-plus schedule reliability? Remember this comes at a time when the industry average was 55% as of November, with Maersk and Hapag-Lloyd themselves not much different, according to data from Sea-Intelligence Maritime Analysis. The second, assuming it succeeds operationally, is whether it will find a market large enough to keep its ships filled without having to chase market share in a potentially weak 2025 market, and possibly even extract a premium at some point if the reliability is so consistent it can influence inventory decisions. Operationally, a key factor in favor of the concept is the two carriers’ ability to rely on each other to be committed to schedule integrity. That not being the case in their previous alliances was a contributing factor in both those partnerships breaking up. The mutual commitment appears to be real. Maersk has a long history of prioritizing schedule integrity, a principle espoused by its patriarch Maersk McKinny Moller, known to employees as Mr. Moller. “Historically going back to Mr. Moller and his father, Maersk wanted to be known for reliability,” said a former Maersk executive. “[As in] ‘I know it’s time for dinner because the Maersk ship always passes by at dinner time.’” Furthermore, the success of the Maersk integrator strategy, where it aspires to manage customers’ end-to-end supply chains, rests on a foundation of schedule integrity, a reputation it needs to reclaim. “Maersk appears to be trying to restore its focus back to the core shipping business,” said a second former Maersk executive. For Hapag-Lloyd, a self-described “pure play” container line, becoming the “undisputed number one” carrier for quality is core to its Strategy 2030. Achieving that can’t not include schedule reliability. <h3>Managing internal and external factors </h3>Whether Gemini achieves its reliability goals is both within and outside its control. Within its control are owned or controlled hub ports such as Port Tanjung Pelepas in Malaysia, in which APM Terminals has a 30% stake. Confidence in PTP to fluidly manage handoffs between feeders and mainliners stems from its strict policy of limiting volumes on its terminal to levels it knows it can handle, a longstanding policy that avoided congestion that affected other Asian transshipment ports last year and during the pandemic. External factors are more challenging. Congestion has been growing at key ports in China, by far the largest container shipping market, with one reason being it has largely stopped building port capacity ahead of demand as it did for many years, Asia veterans tell the Journal of Commerce. Now demand is catching up to capacity, a long-term problem not just for Gemini. Shanghai and Ningbo had the most congestion globally as of Jan. 12, according to Linerlytica. “Who would have thought that Shanghai and Ningbo would become the most congested ports in terms of capacity waiting to berth?” the company said <a href="https://www.linkedin.com/posts/linerlytica_linerlytica-shanghai-ningbo-activity-7285229457953435649-uosj?utm_source=share&amp;utm_medium=member_desktop">in a LinkedIn post</a>.Whether a large enough market awaits an east-west network with high schedule reliability, and whether customers will be willing to pay a premium, is a big unanswered question. Conceptually, if shippers come to trust Gemini’s reliability, they could reduce inventory and be willing to share the value created with the carriers by paying a premium. “For a supply chain to take out meaningful inventory costs, the reliability of the ocean leg has to be over 95% reliable,” the first former Maersk executive said. “Below 95%, the retailers will not trust the supply chain enough to take inventory cost out.” But even if that is achieved, the issue of bifurcated supply chains arises. A reason for the 2015 suspension of Daily Maersk, an earlier attempt at schedule reliability at scale, was customers not being able to divide their supply chains between high-reliability and low-reliability services, and thus being unwilling to pay a premium. Given that Gemini is a smaller alliance — only 60% of the size of the Ocean Alliance, according to Alphaliner — and shippers will typically not give all their cargo to a single carrier, the same issue will arise at least for a certain segment of beneficial cargo owners (BCOs). Given that the other alliances and a standalone Mediterranean Shipping Co. are sticking to traditional port-to-port services more familiar to shippers but prone to cascading delays, Gemini is on its own in trying to solve schedule reliability. As one current Maersk executive put it: “Instead of asking ‘what happens if we fail,’ competitors should rather be asking, ‘what if we succeed?’” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

With the Gemini Cooperation set to officially launch on Feb. 1, repositioning of ships is under way, thus kicking off one of the boldest and riskiest gambits the container shipping industry has seen in a long time. By promising 90%-plus schedule reliability using a hub-and-spoke network, the Maersk/Hapag-Lloyd alliance is tacking sharply away from the industry pack in attempting to solve the problem of unreliable schedules that continues to plague the industry well after the end of COVID-19. The questions hovering over that strategy and its chances of success fall into two main categories. The first is whether the concept can deliver operationally; in other words, when fully implemented by mid-year, will it achieve the promised 90%-plus schedule reliability? Remember this comes at a time when the industry average was 55% as of November, with Maersk and Hapag-Lloyd themselves not much different, according to data from Sea-Intelligence Maritime Analysis. The second, assuming it succeeds operationally, is whether it will find a market large enough to keep its ships filled without having to chase market share in a potentially weak 2025 market, and possibly even extract a premium at some point if the reliability is so consistent it can influence inventory decisions. Operationally, a key factor in favor of the concept is the two carriers’ ability to rely on each other to be committed to schedule integrity. That not being the case in their previous alliances was a contributing factor in both those partnerships breaking up. The mutual commitment appears to be real. Maersk has a long history of prioritizing schedule integrity, a principle espoused by its patriarch Maersk McKinny Moller, known to employees as Mr. Moller. “Historically going back to Mr. Moller and his father, Maersk wanted to be known for reliability,” said a former Maersk executive. “[As in] ‘I know it’s time for dinner because the Maersk ship always passes by at dinner time.’” Furthermore, the success of the Maersk integrator strategy, where it aspires to manage customers’ end-to-end supply chains, rests on a foundation of schedule integrity, a reputation it needs to reclaim. “Maersk appears to be trying to restore its focus back to the core shipping business,” said a second former Maersk executive. For Hapag-Lloyd, a self-described “pure play” container line, becoming the “undisputed number one” carrier for quality is core to its Strategy 2030. Achieving that can’t not include schedule reliability. Managing internal and external factors Whether Gemini achieves its reliability goals is both within and outside its control. Within its control are owned or controlled hub ports such as Port Tanjung Pelepas in Malaysia, in which APM Terminals has a 30% stake. Confidence in PTP to fluidly manage handoffs between feeders and mainliners stems from its strict policy of limiting volumes on its terminal to levels it knows it can handle, a longstanding policy that avoided congestion that affected other Asian transshipment ports last year and during the pandemic. External factors are more challenging. Congestion has been growing at key ports in China, by far the largest container shipping market, with one reason being it has largely stopped building port capacity ahead of demand as it did for many years, Asia veterans tell the Journal of Commerce. Now demand is catching up to capacity, a long-term problem not just for Gemini. Shanghai and Ningbo had the most congestion globally as of Jan. 12, according to Linerlytica. “Who would have thought that Shanghai and Ningbo would become the most congested ports in terms of capacity waiting to berth?” the company said in a LinkedIn post . Whether a large enough market awaits an east-west network with high schedule reliability, and whether customers will be willing to pay a premium, is a big unanswered question. Conceptually, if shippers come to trust Gemini’s reliability, they could reduce inventory and be willing to share the value created with the carriers by paying a premium. “For a supply chain to take out meaningful inventory costs, the reliability of the ocean leg has to be over 95% reliable,” the first former Maersk executive said. “Below 95%, the retailers will not trust the supply chain enough to take inventory cost out.” But even if that is achieved, the issue of bifurcated supply chains arises. A reason for the 2015 suspension of Daily Maersk, an earlier attempt at schedule reliability at scale, was customers not being able to divide their supply chains between high-reliability and low-reliability services, and thus being unwilling to pay a premium. Given that Gemini is a smaller alliance — only 60% of the size of the Ocean Alliance, according to Alphaliner — and shippers will typically not give all their cargo to a single carrier, the same issue will arise at least for a certain segment of beneficial cargo owners (BCOs). Given that the other alliances and a standalone Mediterranean Shipping Co. are sticking to traditional port-to-port services more familiar to shippers but prone to cascading delays, Gemini is on its own in trying to solve schedule reliability. As one current Maersk executive put it: “Instead of asking ‘what happens if we fail,’ competitors should rather be asking, ‘what if we succeed?’” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Gemini Cooperation on cusp of launching bold experiment in service networks

<div class="phx-topic abstract-wrapper">Increased demand and diminishing new capacity will lead to an inflection point for logistics rents in a stronger second half of 2025, executives at the real estate developer say.</div>

Increased demand and diminishing new capacity will lead to an inflection point for logistics rents in a stronger second half of 2025, executives at the real estate developer say.

<div class="phx-topic">An increase in rents for industrial distribution space in the US is coming, even if it’s not just around the corner, executives at logistics real estate developer Prologis said Tuesday. A post-election increase in demand for leased space, including third-party logistics sites, has the developer optimistic. “My view is that the market is going to surprise people in the back half of the year,” Prologis CEO Hamid Moghadam told analysts during a fourth-quarter earnings call. “I’ve been wrong before but that’s my view,” he added, noting that others are “a bit more conservative.” Moghadam’s confidence is based on Prologis’ performance in the last quarter, when it leased 60 million square feet of space, a quarterly record for the developer. “We believe market vacancy is topping out and rents will inflect later this year,” CFO Timothy Arndt said during the call. “Leasing in our portfolio accelerated following the US election, and the pipeline has started the year at healthy levels.” Industrial rents on average declined 2% in the fourth quarter from the prior quarter, Christopher Caton, the company’s managing director of global strategy and analytics, said. “Most markets are stable, but we expect modest further decline from here in a handful of soft markets,” he said. Industrial space <a href="https://www.joc.com/article/us-warehouse-vacancies-expected-to-fall-from-2024-peak-5912895">wasn’t difficult for shippers to find in 2024</a> after destocking led to a rebalancing of inventories and the construction boom that started during the COVID-19 pandemic opened more available logistics facilities, flipping a tight market. Prologis’ average occupancy rate was 95.8% for the 2024 fourth quarter and 96.3% for the full year. The occupancy rate is expected to be about 96% at the end of 2025. Prologis is the first of the major industrial real estate developers to release its fourth-quarter results and views on the market. Jones Lang LaSalle and CBRE Group will release fourth-quarter earnings reports in February. Arndt said conditions appear set for a recovery in net absorption of logistics space, fueled by increased need for inventory. That will lead to “a bottoming of global rents” at some point in 2025. From that point later this year, he believes rents will turn upward. Existing customers “are looking to grow,” Caton said. They’re also looking to renew their leases, which means they’re searching for space in Prologis’ existing portfolio, he said. <h3>Bump in confidence </h3>Demand boomed after the Nov. 5 US election, as customers that had delayed decisions about new development came off the fence, said Prologis President Daniel Letter. “We’ve had really 10 weeks of very solid decision-making unlocking previously stalled deals,” he said. Prologis is starting the year with $5 billion and 30 million square feet in projects under development, said Letter, noting “resilient” demand among e-commerce, general goods, electronics and food and beverage customers as well as logistics providers. “3PLs [third-party logistics providers] last quarter broke the record they had in the third quarter of 25 million square feet leased, so 3PLs in the back half [of 2024] leased 50 million square feet,” Letter said. Leasing demand is up 17% year over year to date in January. “Logistics is still a very attractive investable category for investors out there,” Letter said. “We feel strongly that we’ll see a pretty strong year on the transaction market.” In addition to industrial distribution space, Prologis sees strong demand for data centers and energy-related facilities. A former logistics center in Elk Grove, Illinois, was converted into a data center and sold during the fourth quarter. As artificial intelligence fuels demand for data centers, the capital those centers generate can be used to expand Prologis’ core logistics business, Moghadam said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

An increase in rents for industrial distribution space in the US is coming, even if it’s not just around the corner, executives at logistics real estate developer Prologis said Tuesday. A post-election increase in demand for leased space, including third-party logistics sites, has the developer optimistic. “My view is that the market is going to surprise people in the back half of the year,” Prologis CEO Hamid Moghadam told analysts during a fourth-quarter earnings call. “I’ve been wrong before but that’s my view,” he added, noting that others are “a bit more conservative.” Moghadam’s confidence is based on Prologis’ performance in the last quarter, when it leased 60 million square feet of space, a quarterly record for the developer. “We believe market vacancy is topping out and rents will inflect later this year,” CFO Timothy Arndt said during the call. “Leasing in our portfolio accelerated following the US election, and the pipeline has started the year at healthy levels.” Industrial rents on average declined 2% in the fourth quarter from the prior quarter, Christopher Caton, the company’s managing director of global strategy and analytics, said. “Most markets are stable, but we expect modest further decline from here in a handful of soft markets,” he said. Industrial space wasn’t difficult for shippers to find in 2024 after destocking led to a rebalancing of inventories and the construction boom that started during the COVID-19 pandemic opened more available logistics facilities, flipping a tight market. Prologis’ average occupancy rate was 95.8% for the 2024 fourth quarter and 96.3% for the full year. The occupancy rate is expected to be about 96% at the end of 2025. Prologis is the first of the major industrial real estate developers to release its fourth-quarter results and views on the market. Jones Lang LaSalle and CBRE Group will release fourth-quarter earnings reports in February. Arndt said conditions appear set for a recovery in net absorption of logistics space, fueled by increased need for inventory. That will lead to “a bottoming of global rents” at some point in 2025. From that point later this year, he believes rents will turn upward. Existing customers “are looking to grow,” Caton said. They’re also looking to renew their leases, which means they’re searching for space in Prologis’ existing portfolio, he said. Bump in confidence Demand boomed after the Nov. 5 US election, as customers that had delayed decisions about new development came off the fence, said Prologis President Daniel Letter. “We’ve had really 10 weeks of very solid decision-making unlocking previously stalled deals,” he said. Prologis is starting the year with $5 billion and 30 million square feet in projects under development, said Letter, noting “resilient” demand among e-commerce, general goods, electronics and food and beverage customers as well as logistics providers. “3PLs [third-party logistics providers] last quarter broke the record they had in the third quarter of 25 million square feet leased, so 3PLs in the back half [of 2024] leased 50 million square feet,” Letter said. Leasing demand is up 17% year over year to date in January. “Logistics is still a very attractive investable category for investors out there,” Letter said. “We feel strongly that we’ll see a pretty strong year on the transaction market.” In addition to industrial distribution space, Prologis sees strong demand for data centers and energy-related facilities. A former logistics center in Elk Grove, Illinois, was converted into a data center and sold during the fourth quarter. As artificial intelligence fuels demand for data centers, the capital those centers generate can be used to expand Prologis’ core logistics business, Moghadam said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Surface

Industrial Real Estate News

Supply chain

Prologis sees post-election rush for logistics real estate in US

<div class="phx-topic abstract-wrapper">Just ahead of November’s election, then-Commissioner Sola laid out “America First” initiatives during an October speech, highlighting the further development of LNG export facilities and the fuel’s impact on ship bunkering.</div>

Just ahead of November’s election, then-Commissioner Sola laid out “America First” initiatives during an October speech, highlighting the further development of LNG export facilities and the fuel’s impact on ship bunkering.

<div class="phx-topic">Louis Sola has been elevated from commissioner to chairman of the Federal Maritime Commission after being appointed Monday by President Donald Trump to lead the US maritime regulator.Sola was nominated to the FMC in November 2018 during Trump’s first term. While he has focused more on cruise ships than container ships, he has also shown an interest in maritime fuels, US freedom-of-navigation and export markets. Sola will replace Daniel Maffei as chairman. Maffei, a Democrat, has been at the FMC since 2016 and was appointed chairman in 2021 by President Joe Biden.Just ahead of Trump’s election in November, Sola laid out “America First” initiatives during an October speech, highlighting the further development of liquefied natural gas (LNG) export facilities and the impact on maritime bunkering. He also addressed the role of shipping in supporting US exporters and trade relations between the US and Latin America. In subsequent public comments, Sola has said that Trump’s election means the “war on fossil fuels exports is over.” He also called for US development agencies to fund overseas LNG infrastructure projects and “reciprocal and balanced trade” among the Western Hemisphere trading bloc. Sola also weighed in on the December announcement that the FMC was investigating whether <a href="https://www.joc.com/article/fmc-probing-reports-spain-blocked-us-flag-maersk-ships-5876411">Spain blocked a port call by a Maersk ship</a> in the US Maritime Security Program. He threw his support behind the investigation, saying “Spain must uphold the traditions and commitments of port states to allow vessels to call and trade to flow.” That same month, Sola, ironically, wrote a letter to Trump urging him to appoint Commissioner Rebecca Dye to chair the FMC. Sola said the appointment of Dye, <a href="https://www.joc.com/article/us-senate-confirms-existing-terms-for-fmcs-maffei-dye-5240804">the FMC’s longest-serving commissioner</a>, would be “a powerful message of stability and resolve to shippers, port operators, and international trade partners.”Earlier in his term on the FMC, Sola was tasked with investigating how COVID-19 affected the cruise industry and ensuring that passengers could more easily get refunds for cancelled or delayed cruises.Sola was formerly on the Florida Board of Pilots Commissioners and the chief executive officer of a ship and yacht brokerage. He also had stints in the military and as a financial consultant. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Louis Sola has been elevated from commissioner to chairman of the Federal Maritime Commission after being appointed Monday by President Donald Trump to lead the US maritime regulator. Sola was nominated to the FMC in November 2018 during Trump’s first term. While he has focused more on cruise ships than container ships, he has also shown an interest in maritime fuels, US freedom-of-navigation and export markets. Sola will replace Daniel Maffei as chairman. Maffei, a Democrat, has been at the FMC since 2016 and was appointed chairman in 2021 by President Joe Biden. Just ahead of Trump’s election in November, Sola laid out “America First” initiatives during an October speech, highlighting the further development of liquefied natural gas (LNG) export facilities and the impact on maritime bunkering. He also addressed the role of shipping in supporting US exporters and trade relations between the US and Latin America. In subsequent public comments, Sola has said that Trump’s election means the “war on fossil fuels exports is over.” He also called for US development agencies to fund overseas LNG infrastructure projects and “reciprocal and balanced trade” among the Western Hemisphere trading bloc. Sola also weighed in on the December announcement that the FMC was investigating whether Spain blocked a port call by a Maersk ship in the US Maritime Security Program. He threw his support behind the investigation, saying “Spain must uphold the traditions and commitments of port states to allow vessels to call and trade to flow.” That same month, Sola, ironically, wrote a letter to Trump urging him to appoint Commissioner Rebecca Dye to chair the FMC. Sola said the appointment of Dye, the FMC’s longest-serving commissioner , would be “a powerful message of stability and resolve to shippers, port operators, and international trade partners.” Earlier in his term on the FMC, Sola was tasked with investigating how COVID-19 affected the cruise industry and ensuring that passengers could more easily get refunds for cancelled or delayed cruises. Sola was formerly on the Florida Board of Pilots Commissioners and the chief executive officer of a ship and yacht brokerage. He also had stints in the military and as a financial consultant. Contact Michael Angell at michael.angell@spglobal.com .

Port News

Transport, Trade and Regulation News

Trump appoints Louis Sola to chairman’s slot at FMC

<div class="phx-topic abstract-wrapper">A startup founded and backed by ex-Flexport sales executives is aiming to help shippers manage the flood of outbound sales efforts they receive from logistics providers. </div>

A startup founded and backed by ex-Flexport sales executives is aiming to help shippers manage the flood of outbound sales efforts they receive from logistics providers.

<div class="phx-topic">An early-stage provider of sales tools used by third-party logistics providers (3PLs) has landed a funding round to help forwarders make the process of finding suitable shipper customers more efficient. The company, Revenue Vessel, provides an importer database that allows 3PLs to gain insights into importers to refine searches for customers. The company also allows 3PLs to migrate relevant importers directly into sales execution tools. Terms of the pre-seed round, announced Tuesday, were not disclosed. Revenue Vessel was founded in 2024 by Brian Li, former head of demand generation at Flexport; Noah Stewart, former sales leader at Flexport; and Danny Keller, former head of engineering at Rutter, a provider of application programming interface (API) tools. Its customers include Crane Worldwide Logistics, Willson International Farrow and Gnosis Freight. “It is hard to know who is a relevant customer for a specialized 3PL service,” Li told the Journal of Commerce. “Most companies get around this by hiring experienced sellers who have a Rolodex of shippers and scraps of intel they have gained over time at conferences or researching Google Maps.” The idea behind Revenue Vessel was to provide Flexport’s blueprint for refining its sales pipeline to other 3PLs, customs brokers and software vendors who target shippers as customers. Among its early investors were Will Urban, a veteran sales executive at Expeditors who spent three years as chief revenue officer at Flexport through 2023; and Ben Braverman, who held chief revenue and chief customer officer roles for eight years at Flexport through 2022. Li said logistics provider sales teams are particularly challenged in finding suitable customers for their capacity and services as trade patterns are reshaped by changing sourcing locations due to tariffs and events such as the vessel diversions away from the Red Sea. “Lower inbox burden on importers is a benefit to them,” he said. “But the main advantage is that it is easier for importers to discover new services that will help them navigate all the global trade chaos. We work with startups that are simplifying duty drawback to reduce tariff burdens, helping shippers hedge their volatile freight rates, and leveraging the SHEIN warehousing strategy for further savings.” Revenue Vessel competes primarily with general purpose contact information databases such as Zoominfo and Apollo, as well as established importer database businesses including Datamyne and Import Genius, as well as Panjiva and PIERS, both of which are sister companies of the Journal of Commerce within S&amp;P Global. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

An early-stage provider of sales tools used by third-party logistics providers (3PLs) has landed a funding round to help forwarders make the process of finding suitable shipper customers more efficient. The company, Revenue Vessel, provides an importer database that allows 3PLs to gain insights into importers to refine searches for customers. The company also allows 3PLs to migrate relevant importers directly into sales execution tools. Terms of the pre-seed round, announced Tuesday, were not disclosed. Revenue Vessel was founded in 2024 by Brian Li, former head of demand generation at Flexport; Noah Stewart, former sales leader at Flexport; and Danny Keller, former head of engineering at Rutter, a provider of application programming interface (API) tools. Its customers include Crane Worldwide Logistics, Willson International Farrow and Gnosis Freight. “It is hard to know who is a relevant customer for a specialized 3PL service,” Li told the Journal of Commerce. “Most companies get around this by hiring experienced sellers who have a Rolodex of shippers and scraps of intel they have gained over time at conferences or researching Google Maps.” The idea behind Revenue Vessel was to provide Flexport’s blueprint for refining its sales pipeline to other 3PLs, customs brokers and software vendors who target shippers as customers. Among its early investors were Will Urban, a veteran sales executive at Expeditors who spent three years as chief revenue officer at Flexport through 2023; and Ben Braverman, who held chief revenue and chief customer officer roles for eight years at Flexport through 2022. Li said logistics provider sales teams are particularly challenged in finding suitable customers for their capacity and services as trade patterns are reshaped by changing sourcing locations due to tariffs and events such as the vessel diversions away from the Red Sea. “Lower inbox burden on importers is a benefit to them,” he said. “But the main advantage is that it is easier for importers to discover new services that will help them navigate all the global trade chaos. We work with startups that are simplifying duty drawback to reduce tariff burdens, helping shippers hedge their volatile freight rates, and leveraging the SHEIN warehousing strategy for further savings.” Revenue Vessel competes primarily with general purpose contact information databases such as Zoominfo and Apollo, as well as established importer database businesses including Datamyne and Import Genius, as well as Panjiva and PIERS, both of which are sister companies of the Journal of Commerce within S&P Global. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Flexport alums arm 3PLs with tools to refine shipper outreach

<div class="phx-topic abstract-wrapper">A pledge by Houthi militants to focus ship attacks on Israel-linked vessels is not enough to encourage ocean carriers to end their diversions around Africa and return to transits via the Suez Canal. </div>

A pledge by Houthi militants to focus ship attacks on Israel-linked vessels is not enough to encourage ocean carriers to end their diversions around Africa and return to transits via the Suez Canal.

<div class="phx-topic">Ocean carriers say they will only return to Red Sea transits “when it is safe to do so,” despite an announcement Sunday by Yemen’s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels. The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center (HOCC) <a href="https://www.joc.com/article/return-to-suez-not-a-certainty-even-after-israel-hamas-ceasefire-analysts-5923830">following the start of a 42-day ceasefire</a> in Gaza between Israel and Hamas, but the ocean carriers’ position on a return to the Red Sea remains unchanged. “We will closely analyze the latest developments and their impact on the security situation in the Red Sea. Otherwise, the following applies unchanged: we will return to the Red Sea when it is sufficiently safe to do so,” Hapag-Lloyd spokesman Tim Seifert told the Journal of Commerce Monday. Maersk released a similar statement Monday with the carrier calling developments in the region “positive.” “We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so,” Maersk noted. “It is still too early to speculate about timing, but these developments are a needed step in the right direction.” Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthi rebels in early 2024 said they would only attack Israel-linked vessels, but this was not borne out. Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&amp;P Global Market Intelligence, parent company of the Journal of Commerce, said last week there might be a relative decrease in the frequency of attacks against shipping after the ceasefire, but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes. <h3>Flooding capacity </h3>As much as carriers extol the virtues of a return to Red Sea transits, the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out, followed by collapsing rates as excess capacity floods the market. In a report titled Exceptional profits period drawing to a close, investment bank Jefferies noted that with rates expected to weaken through 2025, 90% of container ships typically using the shorter Suez route diverted around Africa, removing over 12% of fleet capacity. “Last year was one of the best years ever for the container industry as the sudden removal of this capacity, along with strong trade growth, pushed capacity utilization to an average of 87.5%,” noted the Jefferies report, well above the 75% utilization in 2024 had there been no diversions. “We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve. The demand picture over the medium term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years.” <h3>Downward pressure on spot rates</h3>Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter that a return to transits through the Red Sea would be good news for shippers and consumers, but bad news for carriers. “The high freight rates are clearly supported by the severe capacity absorption from the round-Africa services as a consequence of the Red Sea crisis,” he wrote. “A reversal back to Suez would bring the global supply-demand balance back to the level we saw towards the end of 2023. This in turn means that — after a somewhat turbulent period with port congestion issues in Europe — spot rates will drop sharply.” Average Asia-North Europe spot rates in the last week of November 2023 were $1,379 per FEU, according to rate benchmarking platform Xeneta. By mid-July 2024 the rate peaked at $8,558/FEU, and although falling through the second half, the spot rate has remained more than double the price recorded in November 2023. A return to the shorter voyages through the Red Sea will dramatically change the supply-demand picture and put significant downward pressure on rates, Peter Sand, chief analyst at Xeneta, wrote in a report Monday. “Combined with record deliveries of new ships, the market will be flooded with capacity, with carriers needing to remove around 1.8 million TEUs to retain the status quo,” he said. “Scrapping of ships will increase and carriers have become much better at capacity management in recent years, but it is unlikely this will be enough to prevent freight rates from collapsing,” he added. <a href="https://www.joc.com/article/container-shipping-still-has-an-overcapacity-problem-but-its-far-from-insurmountable-5234357">Carriers have been playing down the impact</a> of overcapacity following the resumption of transits through Suez, pointing to an increase in scrapping (which has been close to zero for the last few years) and the ability to slow steam ships that have been at full speed since Africa diversions began. Still, Murphy said from a supply-demand perspective, “it is hard to see any other outcome than a rapid decline back towards the depths seen in 2023. At least for a temporary period,” he noted, adding that the market drop after the Suez route’s reopening would not be a “soft landing.” Contact Greg Knowler at <a href="greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers say they will only return to Red Sea transits “when it is safe to do so,” despite an announcement Sunday by Yemen’s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels. The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center (HOCC) following the start of a 42-day ceasefire in Gaza between Israel and Hamas, but the ocean carriers’ position on a return to the Red Sea remains unchanged. “We will closely analyze the latest developments and their impact on the security situation in the Red Sea. Otherwise, the following applies unchanged: we will return to the Red Sea when it is sufficiently safe to do so,” Hapag-Lloyd spokesman Tim Seifert told the Journal of Commerce Monday. Maersk released a similar statement Monday with the carrier calling developments in the region “positive.” “We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so,” Maersk noted. “It is still too early to speculate about timing, but these developments are a needed step in the right direction.” Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthi rebels in early 2024 said they would only attack Israel-linked vessels, but this was not borne out. Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&P Global Market Intelligence, parent company of the Journal of Commerce, said last week there might be a relative decrease in the frequency of attacks against shipping after the ceasefire, but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes. Flooding capacity As much as carriers extol the virtues of a return to Red Sea transits, the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out, followed by collapsing rates as excess capacity floods the market. In a report titled Exceptional profits period drawing to a close, investment bank Jefferies noted that with rates expected to weaken through 2025, 90% of container ships typically using the shorter Suez route diverted around Africa, removing over 12% of fleet capacity. “Last year was one of the best years ever for the container industry as the sudden removal of this capacity, along with strong trade growth, pushed capacity utilization to an average of 87.5%,” noted the Jefferies report, well above the 75% utilization in 2024 had there been no diversions. “We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve. The demand picture over the medium term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years.” Downward pressure on spot rates Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter that a return to transits through the Red Sea would be good news for shippers and consumers, but bad news for carriers. “The high freight rates are clearly supported by the severe capacity absorption from the round-Africa services as a consequence of the Red Sea crisis,” he wrote. “A reversal back to Suez would bring the global supply-demand balance back to the level we saw towards the end of 2023. This in turn means that — after a somewhat turbulent period with port congestion issues in Europe — spot rates will drop sharply.” Average Asia-North Europe spot rates in the last week of November 2023 were $1,379 per FEU, according to rate benchmarking platform Xeneta. By mid-July 2024 the rate peaked at $8,558/FEU, and although falling through the second half, the spot rate has remained more than double the price recorded in November 2023. A return to the shorter voyages through the Red Sea will dramatically change the supply-demand picture and put significant downward pressure on rates, Peter Sand, chief analyst at Xeneta, wrote in a report Monday. “Combined with record deliveries of new ships, the market will be flooded with capacity, with carriers needing to remove around 1.8 million TEUs to retain the status quo,” he said. “Scrapping of ships will increase and carriers have become much better at capacity management in recent years, but it is unlikely this will be enough to prevent freight rates from collapsing,” he added. Carriers have been playing down the impact of overcapacity following the resumption of transits through Suez, pointing to an increase in scrapping (which has been close to zero for the last few years) and the ability to slow steam ships that have been at full speed since Africa diversions began. Still, Murphy said from a supply-demand perspective, “it is hard to see any other outcome than a rapid decline back towards the depths seen in 2023. At least for a temporary period,” he noted, adding that the market drop after the Suez route’s reopening would not be a “soft landing.” Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Trans-Pacific

Carriers eye Red Sea transits after Houthi rebels pledge restraint

<div class="phx-topic abstract-wrapper">After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons v. Ogden, no one has been reckless enough to try to upend it. </div>

After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons v. Ogden, no one has been reckless enough to try to upend it.

<div class="phx-topic">Last year marked 200 years of the Commerce Clause jurisprudence that underpins the modern, national American economy. In 2025, we may need to protect it. In 1824, the US Supreme Court decided Gibbons v. Ogden, the first major case to interpret the constitutional power of Congress to “regulate commerce among the several states,” or commonly known as the Commerce Clause. To reach this decision, the Court struck down a significant restriction on which ships were allowed access to navigation and an individual state’s seaports. And, as a result, Gibbons created the legal underpinnings of a unified national economy.  The specific legal question at issue in Gibbons was whether one state could deny access to ships from other states based on their means of propulsion: the use of a steam engine instead of sail. But the bigger implication of the question was whether the country would return to the fractured multi-state economy that existed under the Articles of Confederation. In 2024, however, Gibbons’ bicentennial was not celebrated by the environmental advocacy group Pacific Environment, who started advocating for the state of California to institute a “port access fee” based on “the carbon intensity of ship engines.”  This is literally advocating for a Gibbons-like state imposition of a restriction on navigational access to a port based on a ship’s use of a certain type of propulsion system.  In a May 2024 report, Pacific Environment also proclaimed that California should “lead the world to reduce emissions from ocean cargo ships, lower climate impacts, and improve air quality around ports.” The justification? The California “State Legislature is relatively nimble compared to the US Congress and less affected by national politics.” In the early 1800s, before canals and railroads opened up the interior of the continent, the introduction of steam propulsion on ships revolutionized commerce by virtually eliminating physical constraints on river trade. The State of New York wanted to limit the means of propulsion of ships calling on its ports, at the expense of free trade, competition, consumers and the burgeoning US economy. As a result, the Supreme Court in Gibbons needed to decide if New York could constitutionally restrict navigation by barring certain types of vessels from its ports based on their use of a steam engine. And to answer this, the young nation’s highest Court first had to grapple with another, larger question: If the Constitution guarantees free rights of navigation to ships under the Commerce Clause, then is New York’s ban preempted? Gibbons minced no words: “All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation.” The Constitution granted the federal government authority over “commercial intercourse between nations, and parts of nations,” and “the power over commerce with foreign nations, and among the several states is vested in Congress as absolutely as it would be in a single government,” the court said.   <h3>California proposals </h3>In 2025, after two centuries of giving Chief Justice John Marshall the final word on the matter, should we reopen this fundamental question of whether states should be able to decide which ships are allowed to call on their ports based on a vessel’s system of propulsion?   In Southern California in 2023, the staff of the South Coast Air Quality Management District (AQMD) started a process to consider indirect regulation of ship propulsion systems. The staff was musing about the adoption of a regulation that would penalize ports or marine terminals that did not “route cleaner ships” or require “new, cleaner vessel designs” for vessels calling at the nation’s busiest container port complex in Los Angeles and Long Beach. AQMD’s board has yet to decide if the staff’s proposed concepts will proceed. California State’s air regulators are also starting a discussion in 2025 around reducing emissions from oceangoing vessels in transit. But whether they stick to incentives and voluntary measures in support of federal and International Maritime Organization (IMO) standards or they take the bait of the ship engine regulations proposed by Pacific Environment remains to be seen.  If either the state or a local air district acts directly to restrict the means of vessel propulsion as a condition of access to state seaports, it would be a novelty — the first direct tests of Gibbons’ rules and its conclusion that the right of navigation is commerce, and therefore the province of Congress and the federal government. And these would be novel cases for good reason. After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons, no one has been reckless enough to try to upend it. Contact Mike Jacob at <a href="mailto:mjacob@pmsaship.com">mjacob@pmsaship.com.</a></div>

Last year marked 200 years of the Commerce Clause jurisprudence that underpins the modern, national American economy. In 2025, we may need to protect it. In 1824, the US Supreme Court decided Gibbons v. Ogden, the first major case to interpret the constitutional power of Congress to “regulate commerce among the several states,” or commonly known as the Commerce Clause. To reach this decision, the Court struck down a significant restriction on which ships were allowed access to navigation and an individual state’s seaports. And, as a result, Gibbons created the legal underpinnings of a unified national economy.  The specific legal question at issue in Gibbons was whether one state could deny access to ships from other states based on their means of propulsion: the use of a steam engine instead of sail. But the bigger implication of the question was whether the country would return to the fractured multi-state economy that existed under the Articles of Confederation. In 2024, however, Gibbons’ bicentennial was not celebrated by the environmental advocacy group Pacific Environment, who started advocating for the state of California to institute a “port access fee” based on “the carbon intensity of ship engines.”  This is literally advocating for a Gibbons-like state imposition of a restriction on navigational access to a port based on a ship’s use of a certain type of propulsion system.  In a May 2024 report, Pacific Environment also proclaimed that California should “lead the world to reduce emissions from ocean cargo ships, lower climate impacts, and improve air quality around ports.” The justification? The California “State Legislature is relatively nimble compared to the US Congress and less affected by national politics.” In the early 1800s, before canals and railroads opened up the interior of the continent, the introduction of steam propulsion on ships revolutionized commerce by virtually eliminating physical constraints on river trade. The State of New York wanted to limit the means of propulsion of ships calling on its ports, at the expense of free trade, competition, consumers and the burgeoning US economy. As a result, the Supreme Court in Gibbons needed to decide if New York could constitutionally restrict navigation by barring certain types of vessels from its ports based on their use of a steam engine. And to answer this, the young nation’s highest Court first had to grapple with another, larger question: If the Constitution guarantees free rights of navigation to ships under the Commerce Clause, then is New York’s ban preempted? Gibbons minced no words: “All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation.” The Constitution granted the federal government authority over “commercial intercourse between nations, and parts of nations,” and “the power over commerce with foreign nations, and among the several states is vested in Congress as absolutely as it would be in a single government,” the court said.   California proposals In 2025, after two centuries of giving Chief Justice John Marshall the final word on the matter, should we reopen this fundamental question of whether states should be able to decide which ships are allowed to call on their ports based on a vessel’s system of propulsion?   In Southern California in 2023, the staff of the South Coast Air Quality Management District (AQMD) started a process to consider indirect regulation of ship propulsion systems. The staff was musing about the adoption of a regulation that would penalize ports or marine terminals that did not “route cleaner ships” or require “new, cleaner vessel designs” for vessels calling at the nation’s busiest container port complex in Los Angeles and Long Beach. AQMD’s board has yet to decide if the staff’s proposed concepts will proceed. California State’s air regulators are also starting a discussion in 2025 around reducing emissions from oceangoing vessels in transit. But whether they stick to incentives and voluntary measures in support of federal and International Maritime Organization (IMO) standards or they take the bait of the ship engine regulations proposed by Pacific Environment remains to be seen.  If either the state or a local air district acts directly to restrict the means of vessel propulsion as a condition of access to state seaports, it would be a novelty — the first direct tests of Gibbons’ rules and its conclusion that the right of navigation is commerce, and therefore the province of Congress and the federal government. And these would be novel cases for good reason. After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons, no one has been reckless enough to try to upend it. Contact Mike Jacob at mjacob@pmsaship.com.

Protecting navigation and the Commerce Clause in 2025

<div class="phx-topic abstract-wrapper">MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with the Premier Alliance and ZIM.</div>

MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with the Premier Alliance and ZIM.

<div class="phx-topic">When it became clear that the restructuring of the industry in the east-west trades in early 2025 meant moving from three major networks — 2M, Ocean Alliance and THE Alliance — to four major networks — Ocean, Gemini, Premier and a standalone Mediterranean Shipping Co. — radical overcapacity was in the cards. Even though the carriers knew they were moving into dangerous territory, they didn’t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships. The most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks. Maersk and Hapag-Lloyd made it clear at the outset that the Gemini Cooperation alliance could not entertain more members or slot agreements if it was to deliver the kind of quality level it aspires to. This left it to MSC, Ocean and Premier to take some initiatives; as we have seen, MSC has led the charge. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="bc8c7bab-e415-4fea-861b-3926a4691794"></dynamic-object></div>With the dissolution of the 2M alliance, many industry observers assumed that MSC would operate entirely independently in the east-west trade. This was based on its clear desire to control its own destiny and be nimble in building products to answer client needs. Pundits underestimated MSC’s history of balancing its longer-term objectives with the realities and opportunities of the immediate market. We don’t know the number of slots bought and sold in MSC’s deal with Premier, but with the number of loops MSC will be operating to North Europe and the Med and the capacity it has deployed, it’s a reasonable assumption it is selling more slots than it’s buying, which probably suits the carrier well at this point of evolution. Conversely, the ZIM Integrated Shipping Services deal has helped reduce the capacity injection that MSC needed to make post-2M. (Maersk has been a much bigger contributor of tonnage to the US East Coast than MSC within 2M.) Furthermore, in as much as it has reduced the overall injection of capacity, which reduces overall oversupply in the east-west trade, that will also help rates stay up longer, which MSC also benefits from. It’s hard to see — once all the 25 new deployments are bedded in — that it will stem the capacity influx tide sufficiently to defy rate level gravity. Short, of course, of labor troubles becoming long term or other black swan events over and above the Suez problem. <h3>‘Competitive edge’ for MSC </h3>Meanwhile, the other benefit of the slot agreements MSC has made — particularly for the USEC and Gulf — is that it has enhanced the quality of its network and thus given it more of a competitive edge. The charts don’t give the full picture on service, and every shipper will look at their particular mix of port pairs and what service combo of frequency, transit time and reliability they want. Gemini will point out that this dry set of numbers does nothing to factor in the reliability they will be targeting. It would be correct, but the charts do highlight the fact that shippers will often have to make their pick between frequency and more direct port pairs on one side and dependable departures/arrivals on the other. What the charts also confirm is that in the trades where it has made slot deals, MSC has a competitive overall product that has been enhanced by the slot arrangements. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="886ef5d7-6ed6-45c1-b099-a851968de973"></dynamic-object></div>MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with Premier and ZIM. If MSC carries on accumulating tonnage at the rate it is now, it’s an open question whether the deals with Premier and ZIM will look as attractive for them in the future as they do now. Of course, Premier — or its individual carriers — and ZIM may also have other options when the time comes. Contact Jeremy Masters at <a href="https://www.joc.com/article/jeremy@shippingmastershk.com">jeremy@shippingmastershk.com.</a></div>

When it became clear that the restructuring of the industry in the east-west trades in early 2025 meant moving from three major networks — 2M, Ocean Alliance and THE Alliance — to four major networks — Ocean, Gemini, Premier and a standalone Mediterranean Shipping Co. — radical overcapacity was in the cards. Even though the carriers knew they were moving into dangerous territory, they didn’t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships. The most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks. Maersk and Hapag-Lloyd made it clear at the outset that the Gemini Cooperation alliance could not entertain more members or slot agreements if it was to deliver the kind of quality level it aspires to. This left it to MSC, Ocean and Premier to take some initiatives; as we have seen, MSC has led the charge. With the dissolution of the 2M alliance, many industry observers assumed that MSC would operate entirely independently in the east-west trade. This was based on its clear desire to control its own destiny and be nimble in building products to answer client needs. Pundits underestimated MSC’s history of balancing its longer-term objectives with the realities and opportunities of the immediate market. We don’t know the number of slots bought and sold in MSC’s deal with Premier, but with the number of loops MSC will be operating to North Europe and the Med and the capacity it has deployed, it’s a reasonable assumption it is selling more slots than it’s buying, which probably suits the carrier well at this point of evolution. Conversely, the ZIM Integrated Shipping Services deal has helped reduce the capacity injection that MSC needed to make post-2M. (Maersk has been a much bigger contributor of tonnage to the US East Coast than MSC within 2M.) Furthermore, in as much as it has reduced the overall injection of capacity, which reduces overall oversupply in the east-west trade, that will also help rates stay up longer, which MSC also benefits from. It’s hard to see — once all the 25 new deployments are bedded in — that it will stem the capacity influx tide sufficiently to defy rate level gravity. Short, of course, of labor troubles becoming long term or other black swan events over and above the Suez problem. ‘Competitive edge’ for MSC Meanwhile, the other benefit of the slot agreements MSC has made — particularly for the USEC and Gulf — is that it has enhanced the quality of its network and thus given it more of a competitive edge. The charts don’t give the full picture on service, and every shipper will look at their particular mix of port pairs and what service combo of frequency, transit time and reliability they want. Gemini will point out that this dry set of numbers does nothing to factor in the reliability they will be targeting. It would be correct, but the charts do highlight the fact that shippers will often have to make their pick between frequency and more direct port pairs on one side and dependable departures/arrivals on the other. What the charts also confirm is that in the trades where it has made slot deals, MSC has a competitive overall product that has been enhanced by the slot arrangements. MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with Premier and ZIM. If MSC carries on accumulating tonnage at the rate it is now, it’s an open question whether the deals with Premier and ZIM will look as attractive for them in the future as they do now. Of course, Premier — or its individual carriers — and ZIM may also have other options when the time comes. Contact Jeremy Masters at jeremy@shippingmastershk.com.

MSC takes measured steps toward long-term goals

S&P Global Platts editors engaging with market participants to assess the current value of freight-of-all-kinds (FAK) rates on major container trades produce container spot rates. The rates include bunker adjustment factors, general rate increases and emergency rare restoration. They also include low-sulfur fuel, equipment imbalance and repositioning surcharges. The rates exclude terminal handling, port security, overweight container, delivery, and detention and demurrage charges. [Platts](https://www.spglobal.com/commodityinsights)

North Asia to US West Coast and East Coast container spot rates (Platts)

Platts North Asia to US East and West Coasts Weekly Gateway

<div class="phx-topic abstract-wrapper">The uncertainty surrounding the Red Sea was highlighted by member OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice.</div>

The uncertainty surrounding the Red Sea was highlighted by member OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice.

<div class="phx-topic">The Ocean Alliance of COSCO Shipping, OOCL, Evergreen Line and CMA CGM has unveiled its new shipping network, expanding direct coverage of both the Asia-Europe and trans-Pacific trades from April. “They [Ocean Alliance] are clearly increasing capacity,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Monday. Ocean Alliance’s so-called “Day 9” product was announced by member carrier OOCL Monday and will comprise 41 service loops and 390 vessels. Three new services will be introduced: the trans-Pacific PSX from Xiamen and Yantian to Long Beach and back via Kaohsiung; the PNW5 from Ningbo and Shanghai to Tacoma and Seattle and back via Lianyungang; and the LL3, an Asia-Europe route calling Shanghai, Xiamen, Hong Kong, Yantian, Cai Mep, Singapore, Rotterdam, Hamburg, Zeebrugge, Felixstowe and back via Port Kelang. The uncertainty surrounding the Red Sea was highlighted by OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice. “In light of the current situation in the Red Sea region, OOCL’s vessels will continue to be diverted to the Cape of Good Hope route to ensure the safety of our crews, your cargo and our vessels,” OOCL noted in a customer advisory. Outside the alliance services, OOCL will also roll out six new trans-Atlantic services from February. All four global networks have now been announced with the carriers in the vessel-sharing agreements repositioning ships in preparation for the launch of the new services. The new Gemini Cooperation between Maersk and Hapag-Lloyd will deploy a hub-and-spoke model connecting regional ports to the hubs by shuttles, while Ocean Alliance, the Premier Alliance (Ocean Network Express, HMM and Yang Ming) and a standalone Mediterranean Shipping Co. will offer direct services. “...The big change will not only be the transition period to the new alliances, but the fact that the networks will be very different,” Verberckmoes said. “Until last year, THE Alliance, Ocean Alliance and 2M were comparable, but now for the first time we will have networks which are not comparable.” While MSC and the alliances prepare for their networks, several carriers <a href="https://www.joc.com/article/ocean-carriers-outline-new-trans-atlantic-services-from-feb-1-5907735">are striking partnerships beyond their own networks</a> to plug coverage gaps. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The Ocean Alliance of COSCO Shipping, OOCL, Evergreen Line and CMA CGM has unveiled its new shipping network, expanding direct coverage of both the Asia-Europe and trans-Pacific trades from April. “They [Ocean Alliance] are clearly increasing capacity,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Monday. Ocean Alliance’s so-called “Day 9” product was announced by member carrier OOCL Monday and will comprise 41 service loops and 390 vessels. Three new services will be introduced: the trans-Pacific PSX from Xiamen and Yantian to Long Beach and back via Kaohsiung; the PNW5 from Ningbo and Shanghai to Tacoma and Seattle and back via Lianyungang; and the LL3, an Asia-Europe route calling Shanghai, Xiamen, Hong Kong, Yantian, Cai Mep, Singapore, Rotterdam, Hamburg, Zeebrugge, Felixstowe and back via Port Kelang. The uncertainty surrounding the Red Sea was highlighted by OOCL, and although the carrier provided both an around-Africa option and a version via the Suez, it said the Africa diversions will continue until further notice. “In light of the current situation in the Red Sea region, OOCL’s vessels will continue to be diverted to the Cape of Good Hope route to ensure the safety of our crews, your cargo and our vessels,” OOCL noted in a customer advisory. Outside the alliance services, OOCL will also roll out six new trans-Atlantic services from February. All four global networks have now been announced with the carriers in the vessel-sharing agreements repositioning ships in preparation for the launch of the new services. The new Gemini Cooperation between Maersk and Hapag-Lloyd will deploy a hub-and-spoke model connecting regional ports to the hubs by shuttles, while Ocean Alliance, the Premier Alliance (Ocean Network Express, HMM and Yang Ming) and a standalone Mediterranean Shipping Co. will offer direct services. “...The big change will not only be the transition period to the new alliances, but the fact that the networks will be very different,” Verberckmoes said. “Until last year, THE Alliance, Ocean Alliance and 2M were comparable, but now for the first time we will have networks which are not comparable.” While MSC and the alliances prepare for their networks, several carriers are striking partnerships beyond their own networks to plug coverage gaps. Contact Greg Knowler at greg.knowler@spglobal.com .

Ocean Alliance network to grow trans-Pacific, Asia-Europe coverage

<div class="phx-topic abstract-wrapper">A confluence of factors, including vessel bunching at Asian load ports and a pre-Lunar New Year cargo surge, have combined to cause congestion at the port and reduce its railcar availability.</div>

A confluence of factors, including vessel bunching at Asian load ports and a pre-Lunar New Year cargo surge, have combined to cause congestion at the port and reduce its railcar availability.

<div class="phx-topic">Port of Vancouver stakeholders expect they will have to navigate at least three more weeks of congestion as Canada’s largest port works to clear a backlog of rail containers that built up in December. A confluence of factors — including vessel bunching at Asian load ports, a pre-Lunar New Year cargo surge, <a href="https://www.joc.com/article/bc-container-ports-set-for-shutdown-after-foremen-begin-strike-5785499">a strike by dockworker foremen</a> in November and shorter trains due to winter operating conditions — combined to cause congestion at the port and reduce Vancouver’s railcar availability last month. As a result, the average rail container dwell time at the port’s four container terminals spiked to 6.9 days in December — the highest since last March – and up from 5.2 days in November and 4.5 days in October, according to data on the port’s website. “We are seeing an increase in the number of vessels waiting to enter the Port of Vancouver due to arrival delays associated with winter weather in Asia and the seasonal pre-Lunar New Year impact causing a surge in volume,” a spokesperson for the Vancouver Fraser Port Authority told the Journal of Commerce Wednesday. “As such, we anticipate that high on-dock times will continue for the rest of January.” Terminal operators and the railroads say they are chipping away at the rail container backlog and note conditions will improve further at the end of the month when import volumes are expected to drop significantly due to many factories in Asia closing for a week or two for the Lunar New Year celebrations that start Jan. 29. <h3>Train restrictions during Canadian cold snap </h3>Canadian National Railway (CN) in December was already recovering from a backlog of rail containers from the dockworkers’ strike and vessel bunching when a cold snap in Western Canada resulted in operating restrictions, including running shorter trains, that impacted CN’s network velocity, a CN spokesperson told the Journal of Commerce. “CN is working closely with the port operators to clear out these volumes as the vessel discharge normalizes over the next three weeks,” a spokesperson for the railroad said. “We are already seeing some improvements and are confident that the dwell metric will fall back to normal levels as we catch up on the backlog over the next few weeks.” Canadian Pacific Kansas City (CPKC) said Thursday its railcars are cycling efficiently through its network and that the supply of cars is good. Demand is forecast to remain strong through January, a CPKC spokesperson said. DP World Canada, which operates the Centerm terminal in Vancouver, said it is working with the railroads to handle the increased import volumes leading up to the Lunar New Year on Jan. 29. “We should be back to normal in a few weeks,” said CEO Doug Smith. Meanwhile, the elevated rail container dwell times at the marine terminals have not had an impact on drayage operations in Vancouver, said David Earle, CEO of the British Columbia Trucking Association. The only change Earle said he’s noted in recent days is that a small number of inbound containers that had been booked to leave the terminals by rail are being redirected to long-haul truckers for movement inland. <h3>Prince Rupert back to normal </h3>The Port of Prince Rupert, which faced challenges similar to Vancouver last month, saw its rail container dwell times spike to an average of nearly 10 days in mid-December, said Brian Friesen, vice president of trade development at the port. The average dwell dropped to 6.1 days for the week of Dec. 20 and has continued to slide in January. “The dwells are now below two days,” Friesen said. “It’s all fluid now.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Port of Vancouver stakeholders expect they will have to navigate at least three more weeks of congestion as Canada’s largest port works to clear a backlog of rail containers that built up in December. A confluence of factors — including vessel bunching at Asian load ports, a pre-Lunar New Year cargo surge, a strike by dockworker foremen in November and shorter trains due to winter operating conditions — combined to cause congestion at the port and reduce Vancouver’s railcar availability last month. As a result, the average rail container dwell time at the port’s four container terminals spiked to 6.9 days in December — the highest since last March – and up from 5.2 days in November and 4.5 days in October, according to data on the port’s website. “We are seeing an increase in the number of vessels waiting to enter the Port of Vancouver due to arrival delays associated with winter weather in Asia and the seasonal pre-Lunar New Year impact causing a surge in volume,” a spokesperson for the Vancouver Fraser Port Authority told the Journal of Commerce Wednesday. “As such, we anticipate that high on-dock times will continue for the rest of January.” Terminal operators and the railroads say they are chipping away at the rail container backlog and note conditions will improve further at the end of the month when import volumes are expected to drop significantly due to many factories in Asia closing for a week or two for the Lunar New Year celebrations that start Jan. 29. Train restrictions during Canadian cold snap Canadian National Railway (CN) in December was already recovering from a backlog of rail containers from the dockworkers’ strike and vessel bunching when a cold snap in Western Canada resulted in operating restrictions, including running shorter trains, that impacted CN’s network velocity, a CN spokesperson told the Journal of Commerce. “CN is working closely with the port operators to clear out these volumes as the vessel discharge normalizes over the next three weeks,” a spokesperson for the railroad said. “We are already seeing some improvements and are confident that the dwell metric will fall back to normal levels as we catch up on the backlog over the next few weeks.” Canadian Pacific Kansas City (CPKC) said Thursday its railcars are cycling efficiently through its network and that the supply of cars is good. Demand is forecast to remain strong through January, a CPKC spokesperson said. DP World Canada, which operates the Centerm terminal in Vancouver, said it is working with the railroads to handle the increased import volumes leading up to the Lunar New Year on Jan. 29. “We should be back to normal in a few weeks,” said CEO Doug Smith. Meanwhile, the elevated rail container dwell times at the marine terminals have not had an impact on drayage operations in Vancouver, said David Earle, CEO of the British Columbia Trucking Association. The only change Earle said he’s noted in recent days is that a small number of inbound containers that had been booked to leave the terminals by rail are being redirected to long-haul truckers for movement inland. Prince Rupert back to normal The Port of Prince Rupert, which faced challenges similar to Vancouver last month, saw its rail container dwell times spike to an average of nearly 10 days in mid-December, said Brian Friesen, vice president of trade development at the port. The average dwell dropped to 6.1 days for the week of Dec. 20 and has continued to slide in January. “The dwells are now below two days,” Friesen said. “It’s all fluid now.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Rail News

North American ports

Marine terminals

North-American rail

Vancouver braces for congestion, high rail dwells through January

<div class="phx-topic abstract-wrapper">With the threat of a US port strike averted, the transition to new global service networks will not be accompanied by widespread disruption, the analyst believes.</div>

With the threat of a US port strike averted, the transition to new global service networks will not be accompanied by widespread disruption, the analyst believes.

<div class="phx-topic">Ocean carriers will roll out their new global networks next month, and while disruption to supply chains is inevitable during the transition period, the extent of that disruption will be limited by a series of factors, not least of which is the longshore contract agreement on the US East and Gulf coasts, according to Alphaliner The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">had reached a tentative agreemen</a>t on a new master contract, avoiding a strike that would have begun Jan. 15. “The carriers must feel relieved that there will not be any striking that would potentially complicate the changes they are preparing,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Thursday. With the threat of a port strike removed, carriers can now focus on preparations for the new networks that will be implemented from Feb. 1 by the Gemini Cooperation (Maersk and Hapag-Lloyd), Premier Alliance (Ocean Network Express, HMM and Yang Ming) and the standalone Mediterranean Shipping Co. Verberckmoes said in the past, reshuffling carrier alliances “normally creates chaos,” but a series of factors would help to smooth the transition this time. He noted that Lunar New Year falls on Jan. 29, and on top of a slowdown in demand, factories in China will close for at least a week, so the new alliance services would only start in the second week of February. That will leave carriers plenty of time to move ships to the right Chinese port. Another factor is that even within the alliances, many services will be operated by a single carrier, and those fleets will continue to operate the new loops without the need for extensive repositioning of vessels. “The new schedules are already published and most of the ships have already been nominated and are in place, so every importer or exporter can already see which ships are available,” Verberckmoes said. “There will be skipped sailings, but it will certainly not be chaos.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="874fb71b-dde8-4286-b65b-1bef7790a9f3"></dynamic-object></div>In preparation for the post-Lunar New Year slowdown, ocean carriers are increasing blank sailings on the Asia-Europe trade lanes in February. Data from visibility provider eeSea shows available capacity from Asia to North Europe is set to drop to 860,974 TEUs from 1.1 million TEUs in January. <h3>Repositioning of ships </h3>Interestingly, disruption to supply chains from the canceled sailings will be mitigated by the repositioning of ships that were doubling as extra loaders moving from Asia to Europe to work the new trans-Atlantic services, Verberckmoes said. “I already see a lot of extra loaders mainly active on the trans-Pacific trade that are now coming to Europe on extra voyages from the Far East to ensure they are in position to join the new trans-Atlantic services starting in February,” he noted. Even though the vessels are 6,000-7,000 TEUs in capacity, they are taking on cargo during their repositioning voyages, which Verberckmoes said was offsetting the capacity impact of blank sailings. Sea-Intelligence Maritime Analysis noted that supply chain disruptions from the Lunar New Year blank sailings might be amplified on the trans-Pacific by the phase-out of existing alliance services and the phase-in of new services. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3af4814e-7307-4298-887b-ce4d0ef124e6"></dynamic-object></div>In its weekly Sunday Spotlight newsletter, Sea-Intelligence said carriers on the Asia-US West Coast trade have so far scheduled blanked capacity of 9% for the Lunar New Year week and the following three-week period compared with the 22.8% blanked in 2024 and the average 2016–19 reduction of 18.3%. This is despite current capacity deployment at just under 1.34 million TEUs for the four-week period covering the Lunar New Year, which corresponds to 33.3% growth in capacity year over year. “Under normal circumstances, this would mean significant blank sailings announcements in the upcoming weeks, since it is highly unlikely that carriers would be satisfied with this level of excess capacity,” Alan Murphy, CEO of Sea-Intelligence, wrote in the newsletter. However, Murphy noted that the phase-in of new networks by MSC, Gemini Cooperation and Premier Alliance introduced a new uncertainty, where carriers might prioritize getting their vessels phased into the new networks at the expense of not blanking as much capacity as usual. Marc Meier, global head of ocean freight for Toll Global Forwarding, believes there are likely to be service disruptions on the major east-west trades in the first half of the year due to the startup of the new alliances. ”Carriers will plan their capacity to meet demand with many blank sailings in the first two weeks of February for all trades,” Meier told the Journal of Commerce this week, noting there would be a gradual pickup in volume expected from Feb. 21. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers will roll out their new global networks next month, and while disruption to supply chains is inevitable during the transition period, the extent of that disruption will be limited by a series of factors, not least of which is the longshore contract agreement on the US East and Gulf coasts, according to Alphaliner The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they had reached a tentative agreemen t on a new master contract, avoiding a strike that would have begun Jan. 15. “The carriers must feel relieved that there will not be any striking that would potentially complicate the changes they are preparing,” Stefan Verberckmoes, senior analyst at Alphaliner, told the Journal of Commerce Thursday. With the threat of a port strike removed, carriers can now focus on preparations for the new networks that will be implemented from Feb. 1 by the Gemini Cooperation (Maersk and Hapag-Lloyd), Premier Alliance (Ocean Network Express, HMM and Yang Ming) and the standalone Mediterranean Shipping Co. Verberckmoes said in the past, reshuffling carrier alliances “normally creates chaos,” but a series of factors would help to smooth the transition this time. He noted that Lunar New Year falls on Jan. 29, and on top of a slowdown in demand, factories in China will close for at least a week, so the new alliance services would only start in the second week of February. That will leave carriers plenty of time to move ships to the right Chinese port. Another factor is that even within the alliances, many services will be operated by a single carrier, and those fleets will continue to operate the new loops without the need for extensive repositioning of vessels. “The new schedules are already published and most of the ships have already been nominated and are in place, so every importer or exporter can already see which ships are available,” Verberckmoes said. “There will be skipped sailings, but it will certainly not be chaos.” In preparation for the post-Lunar New Year slowdown, ocean carriers are increasing blank sailings on the Asia-Europe trade lanes in February. Data from visibility provider eeSea shows available capacity from Asia to North Europe is set to drop to 860,974 TEUs from 1.1 million TEUs in January. Repositioning of ships Interestingly, disruption to supply chains from the canceled sailings will be mitigated by the repositioning of ships that were doubling as extra loaders moving from Asia to Europe to work the new trans-Atlantic services, Verberckmoes said. “I already see a lot of extra loaders mainly active on the trans-Pacific trade that are now coming to Europe on extra voyages from the Far East to ensure they are in position to join the new trans-Atlantic services starting in February,” he noted. Even though the vessels are 6,000-7,000 TEUs in capacity, they are taking on cargo during their repositioning voyages, which Verberckmoes said was offsetting the capacity impact of blank sailings. Sea-Intelligence Maritime Analysis noted that supply chain disruptions from the Lunar New Year blank sailings might be amplified on the trans-Pacific by the phase-out of existing alliance services and the phase-in of new services. In its weekly Sunday Spotlight newsletter, Sea-Intelligence said carriers on the Asia-US West Coast trade have so far scheduled blanked capacity of 9% for the Lunar New Year week and the following three-week period compared with the 22.8% blanked in 2024 and the average 2016–19 reduction of 18.3%. This is despite current capacity deployment at just under 1.34 million TEUs for the four-week period covering the Lunar New Year, which corresponds to 33.3% growth in capacity year over year. “Under normal circumstances, this would mean significant blank sailings announcements in the upcoming weeks, since it is highly unlikely that carriers would be satisfied with this level of excess capacity,” Alan Murphy, CEO of Sea-Intelligence, wrote in the newsletter. However, Murphy noted that the phase-in of new networks by MSC, Gemini Cooperation and Premier Alliance introduced a new uncertainty, where carriers might prioritize getting their vessels phased into the new networks at the expense of not blanking as much capacity as usual. Marc Meier, global head of ocean freight for Toll Global Forwarding, believes there are likely to be service disruptions on the major east-west trades in the first half of the year due to the startup of the new alliances. ”Carriers will plan their capacity to meet demand with many blank sailings in the first two weeks of February for all trades,” Meier told the Journal of Commerce this week, noting there would be a gradual pickup in volume expected from Feb. 21. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Forwarding

Limited disruption likely as new carrier alliances roll out: Alphaliner

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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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<div class="phx-topic abstract-wrapper">The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.</div>

The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.

<div class="phx-topic">The California Air Resources Board (CARB) has rescinded a proposed rule that would have required train locomotives operating in the state to produce zero emissions by 2030, a regulation that would have put a $1.5 billion project by BNSF Railway to expand its terminal in Barstow in serious jeopardy. BNSF can now move forward with the project that should be completed in 2027 or 2028. “Railroads are pleased that the California Air Resources Board has withdrawn its authorization request for the ill-conceived in-use locomotive rule,” the Association of American Railroads (AAR) said in a statement Wednesday. “As we move past this untenable proposal, railroads look forward to focusing on advancing their already strong sustainability profile and further reducing emissions in the years to come.” A US District Court judge last November paused the proposed Jan. 1 implementation of the locomotive emissions rule to determine whether it violated federal pre-emption laws on interstate commerce. The decision by CARB to drop the rule comes after the US Bureau of Land Management on Monday approved the sale of the federal land to BNSF on which the railroad will develop the Barstow Intermodal Gateway, or BIG. BIG will be a transloading hub where ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach. Aside from requiring zero-emission locomotives, the proposed CARB rule would have immediately banned any locomotive 23 years or older from operating in California. BNSF argued that the current technology isn’t viable to meet the zero-emission standards, adding the rule also would have limited the useful life of 25,000 relatively new diesel-electric hybrid locomotives. <h3>Hub would benefit stakeholders </h3>If BNSF’s Barstow hub is successful, it can have a positive impact on several supply chain stakeholders. For the railroad, it would boost transloading of imports into domestic containers using intermodal providers that don’t run into the same equipment challenges as the maritime industry. J.B. Hunt Transport Services, for example, owns its chassis, so BNSF can quickly mount a load off a train and place the unit in a parking spot. A successful Barstow terminal would also benefit shippers in several ways. Domestic intermodal providers are hyper-focused on box turns — meaning the number of revenue-paying loads an average container handles per month — in order to maximize revenue. BNSF partners such as J.B. Hunt are much more likely to send a driver immediately and deliver the load to the customer, rarely letting the box idle in the terminal for more than 24 to 48 hours. Also, customers who don’t transload will benefit because fewer loads would move in ocean containers. Transferring imports into domestic containers would free up the ocean boxes to be railed back to marine terminals in Los Angeles and Long Beach much faster, which benefits exporters requiring empty containers and helps ocean carriers moving boxes back to Asia. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The California Air Resources Board (CARB) has rescinded a proposed rule that would have required train locomotives operating in the state to produce zero emissions by 2030, a regulation that would have put a $1.5 billion project by BNSF Railway to expand its terminal in Barstow in serious jeopardy. BNSF can now move forward with the project that should be completed in 2027 or 2028. “Railroads are pleased that the California Air Resources Board has withdrawn its authorization request for the ill-conceived in-use locomotive rule,” the Association of American Railroads (AAR) said in a statement Wednesday. “As we move past this untenable proposal, railroads look forward to focusing on advancing their already strong sustainability profile and further reducing emissions in the years to come.” A US District Court judge last November paused the proposed Jan. 1 implementation of the locomotive emissions rule to determine whether it violated federal pre-emption laws on interstate commerce. The decision by CARB to drop the rule comes after the US Bureau of Land Management on Monday approved the sale of the federal land to BNSF on which the railroad will develop the Barstow Intermodal Gateway, or BIG. BIG will be a transloading hub where ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach. Aside from requiring zero-emission locomotives, the proposed CARB rule would have immediately banned any locomotive 23 years or older from operating in California. BNSF argued that the current technology isn’t viable to meet the zero-emission standards, adding the rule also would have limited the useful life of 25,000 relatively new diesel-electric hybrid locomotives. Hub would benefit stakeholders If BNSF’s Barstow hub is successful, it can have a positive impact on several supply chain stakeholders. For the railroad, it would boost transloading of imports into domestic containers using intermodal providers that don’t run into the same equipment challenges as the maritime industry. J.B. Hunt Transport Services, for example, owns its chassis, so BNSF can quickly mount a load off a train and place the unit in a parking spot. A successful Barstow terminal would also benefit shippers in several ways. Domestic intermodal providers are hyper-focused on box turns — meaning the number of revenue-paying loads an average container handles per month — in order to maximize revenue. BNSF partners such as J.B. Hunt are much more likely to send a driver immediately and deliver the load to the customer, rarely letting the box idle in the terminal for more than 24 to 48 hours. Also, customers who don’t transload will benefit because fewer loads would move in ocean containers. Transferring imports into domestic containers would free up the ocean boxes to be railed back to marine terminals in Los Angeles and Long Beach much faster, which benefits exporters requiring empty containers and helps ocean carriers moving boxes back to Asia. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

BNSF Barstow project to proceed after CARB emissions rule withdrawn

<div class="phx-topic abstract-wrapper">The announcement comes less than a month after FedEx said it would spin off FedEx Freight, which would be the largest standalone LTL provider in North America by revenue. </div>

The announcement comes less than a month after FedEx said it would spin off FedEx Freight, which would be the largest standalone LTL provider in North America by revenue.

<div class="phx-topic">Lance Moll, who has led FedEx Freight — the largest US trucking company — as president and CEO for nearly four years will retire at the end of January, FedEx announced late Friday. Moll will take an advisory role with the company until July 31 to ensure a smooth transition, FedEx said in a statement that did not mention a successor. Moll’s departure comes as FedEx prepares to spin off its US less-than-truckload (LTL) division, a process the company said in December would take 18 months. That separation remains on track, FedEx said in the statement, and will be overseen by John Smith, COO of US and Canadian surface operations at FedEx. Smith is the former president and CEO of FedEx Ground and FedEx Freight. Moll joined American Freightways as a dock worker in 1992. By the time American Freightways became FedEx Freight in 2001, he was an LTL terminal manager. He became senior vice president of operations in 2018 and president and CEO in 2021. FedEx Freight had $9.4 billion in revenue in its fiscal year that ended May 31; for calendar year 2023, the revenue figure was $10.2 billion. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Lance Moll, who has led FedEx Freight — the largest US trucking company — as president and CEO for nearly four years will retire at the end of January, FedEx announced late Friday. Moll will take an advisory role with the company until July 31 to ensure a smooth transition, FedEx said in a statement that did not mention a successor. Moll’s departure comes as FedEx prepares to spin off its US less-than-truckload (LTL) division, a process the company said in December would take 18 months. That separation remains on track, FedEx said in the statement, and will be overseen by John Smith, COO of US and Canadian surface operations at FedEx. Smith is the former president and CEO of FedEx Ground and FedEx Freight. Moll joined American Freightways as a dock worker in 1992. By the time American Freightways became FedEx Freight in 2001, he was an LTL terminal manager. He became senior vice president of operations in 2018 and president and CEO in 2021. FedEx Freight had $9.4 billion in revenue in its fiscal year that ended May 31; for calendar year 2023, the revenue figure was $10.2 billion. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

FedEx Freight says CEO Moll to retire Jan. 31

<div class="phx-topic abstract-wrapper">With the president-elect looking to unwind some Biden administration policies, US port operators want to ensure that maritime transportation funding will not be unduly affected.</div>

With the president-elect looking to unwind some Biden administration policies, US port operators want to ensure that maritime transportation funding will not be unduly affected.

<div class="phx-topic">US ports on Wednesday laid out legislative priorities for the incoming Trump administration and new Congress that include continued federal spending for maritime transportation and navigation. While many of the priorities of the American Association of Port Authorities (AAPA) align with the president-elect’s campaign pledges, issues such as tariffs and clean energy funding at ports may face more challenges. AAPA said it met with Trump’s transition team and <a href="https://www.joc.com/article/former-congressman-tv-host-gets-trumps-nod-to-lead-dot-5820698">US Department of Transportation nominee Sean Duffy</a> to discuss its policy agenda for 2025. Among the group’s asks are permitting reform, easing restrictions on liquefied natural gas (LNG) development and reducing restrictions on vessel speed. AAPA said one of its top priorities is infrastructure spending. It asked Congress “not [to] rescind infrastructure spending” from the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL), two hallmark pieces of legislation from the outgoing Biden administration. BIL earmarked $17 billion specifically for ports through 2026, with the largest portion of that going to the US Army Corps of Engineers for maintenance of coastal and inland waterways. Some $2.25 billion of that law was funneled into the Port Infrastructure Development Program (PIDP), which has already issued $2 billion in grants since the BIL’s passage. The AAPA also asked that <a href="https://www.joc.com/article/port-nola-receives-more-federal-funds-for-proposed-container-terminal-5219974">other funding programs for ports</a>, <a href="https://www.joc.com/article/federal-grant-to-boost-baltimores-on-dock-rail-capacity-5242949">intermodal rail</a>, and <a href="https://www.joc.com/article/dot-offers-44-million-for-ny-nj-port-road-project-5249533">roads</a> be maintained. While Trump has not specifically addressed the BIL he has targeted the $3.5 trillion Inflation Reduction Act (IRA), saying in September he would “rescind all unspent funds” from the law. <a href="https://www.joc.com/article/project-cargo-optimism-buffeted-by-policy-unpredictability-5917316">Offshore wind</a>, and <a href="https://www.joc.com/article/offshore-project-delivers-virginia-cargo-windfall-5780771">breakbulk ports</a> by extension, expect to take the biggest hit from any change in the IRA. But container ports also <a href="https://www.joc.com/article/us-ports-plan-upgrades-to-electric-yard-equipment-after-securing-epa-grants-5782145">availed themselves of IRA funding</a>, chiefly for replacing diesel yard equipment with electric-powered machinery and installing charging stations for electric trucks. The IRA is also expected to help fund the Biden administration’s <a href="https://www.joc.com/article/white-house-counters-risk-of-chinese-port-cranes-with-20-billion-for-us-sourcing-5200230">$20 billion push</a> to establish a US-based manufacturer of ship-to-shore cranes. The program is bolstering electric vehicle battery and auto manufacturing, which is <a href="https://www.joc.com/article/southeast-gulf-ports-expect-container-uplift-from-electric-vehicle-plants-5224276">expected to boost cargo volumes through Southeast and Gulf ports</a>. Trump’s ability to roll back the IRA, though, remains unclear. Funds that have already been pledged to ports and others are considered safe. Additionally, rescinding unspent IRA funds would require an act of Congress. Although no Republicans voted for the IRA, 18 Republican representatives <a href="https://thehill.com/policy/energy-environment/4815990-mike-johnson-ira-clean-energy-tax-credits/">sent a letter last year to Speaker Mike Johnson</a> asking that IRA tax credits for clean energy projects remain intact. The AAPA also joined many other business groups in opposing Trump’s plans for fresh import tariffs, arguing that higher import duties may reduce cargo volumes and affect port revenues. “[But] any existing and expanded tariff revenue should be used to fund port infrastructure, which would strengthen our supply chains and have a deflationary effect on the economy,” the AAPA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ports on Wednesday laid out legislative priorities for the incoming Trump administration and new Congress that include continued federal spending for maritime transportation and navigation. While many of the priorities of the American Association of Port Authorities (AAPA) align with the president-elect’s campaign pledges, issues such as tariffs and clean energy funding at ports may face more challenges. AAPA said it met with Trump’s transition team and US Department of Transportation nominee Sean Duffy to discuss its policy agenda for 2025. Among the group’s asks are permitting reform, easing restrictions on liquefied natural gas (LNG) development and reducing restrictions on vessel speed. AAPA said one of its top priorities is infrastructure spending. It asked Congress “not [to] rescind infrastructure spending” from the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL), two hallmark pieces of legislation from the outgoing Biden administration. BIL earmarked $17 billion specifically for ports through 2026, with the largest portion of that going to the US Army Corps of Engineers for maintenance of coastal and inland waterways. Some $2.25 billion of that law was funneled into the Port Infrastructure Development Program (PIDP), which has already issued $2 billion in grants since the BIL’s passage. The AAPA also asked that other funding programs for ports , intermodal rail , and roads be maintained. While Trump has not specifically addressed the BIL he has targeted the $3.5 trillion Inflation Reduction Act (IRA), saying in September he would “rescind all unspent funds” from the law. Offshore wind , and breakbulk ports by extension, expect to take the biggest hit from any change in the IRA. But container ports also availed themselves of IRA funding , chiefly for replacing diesel yard equipment with electric-powered machinery and installing charging stations for electric trucks. The IRA is also expected to help fund the Biden administration’s $20 billion push to establish a US-based manufacturer of ship-to-shore cranes. The program is bolstering electric vehicle battery and auto manufacturing, which is expected to boost cargo volumes through Southeast and Gulf ports . Trump’s ability to roll back the IRA, though, remains unclear. Funds that have already been pledged to ports and others are considered safe. Additionally, rescinding unspent IRA funds would require an act of Congress. Although no Republicans voted for the IRA, 18 Republican representatives sent a letter last year to Speaker Mike Johnson asking that IRA tax credits for clean energy projects remain intact. The AAPA also joined many other business groups in opposing Trump’s plans for fresh import tariffs, arguing that higher import duties may reduce cargo volumes and affect port revenues. “[But] any existing and expanded tariff revenue should be used to fund port infrastructure, which would strengthen our supply chains and have a deflationary effect on the economy,” the AAPA said. Contact Michael Angell at michael.angell@spglobal.com .

Breakbulk News

Port infrastructure

US ports urge Trump, Congress to keep funds in place but tariffs at bay

<div class="phx-topic abstract-wrapper">The peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez.</div>

The peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez.

<div class="phx-topic">Houthi attacks on commercial ships in the Red Sea are likely to continue despite the ceasefire agreement between Israel and Hamas signed Jan. 15, according to a geopolitical expert. Yet one shipping analyst believes if all the deal’s conditions are met, a best-case scenario could see Suez Canal transits resume as soon as next month. While that best-case scenario was offered by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, the peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez Canal. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthis said their attacks were a sign of solidarity with Hamas. Jensen noted the best-case scenario for shipping would require that the six-week ceasefire that begins Jan. 19 sticks, and that the two other phases of the deal — a full withdrawal from Gaza by Israeli forces and a rebuilding plan in place for the territory — are also met. “There is no specificity at this point as to whether or when the Houthis will lift their proclaimed embargo against certain groups of merchant vessels passing through the southern Red Sea,” Jensen <a href="https://www.linkedin.com/search/results/all/?fetchDeterministicClustersOnly=true&amp;heroEntityKey=urn%3Ali%3Afsd_profile%3AACoAAABT06QBma5hiHVSOND3WOHMUNYfxwswFL8&amp;keywords=lars%20jensen&amp;origin=RICH_QUERY_TYPEAHEAD_HISTORY&amp;position=0&amp;searchId=1367a011-a129-45c7-bb5b-3a8cff1f4783&amp;sid=%3AIW&amp;spellCorrectionEnabled=true">wrote in a LinkedIn post Thursday</a>. “It is likely that shipping lines currently diverting around Africa want to see not only the ceasefire hold up ... but also see some meaningful traction on the negotiations for phase two and three of the ceasefire — as well as see some meaningful statements from the Houthis in terms of no longer targeting merchant vessels,” Jensen said. An analysis by S&amp;P Global Market Intelligence published Thursday noted that the main economic impact of the Red Sea route reopening would be to return capacity to the container shipping system, equivalent to about 6% to 8% of existing vessels. At the same time, new vessels adding nearly 24% of new capacity to the global fleet would be launched over the next three years. Still, Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&amp;P Global Market Intelligence, parent company of the Journal of Commerce, said the ceasefire would not bring safety to the Red Sea. “The Houthi are likely to continue to target international vessels in transit regardless of a ceasefire being agreed between Israel and Hamas or end to the wider conflict because it still is an effective means for them to demonstrate internal legitimacy and engage external actors, and secure revenue through protection payments,” Kennedy wrote in a report Thursday. “Even with the ceasefire outlined, there is still going to be an Israeli military presence in Gaza, and what is in effect a blockade of the strip.” <h3>Red Sea risks remain </h3>Mediterranean Shipping Co. and the revised carrier alliances have all indicated in their new 2025 schedules that Cape of Good Hope diversions will continue, although Suez transit services were included in the schedules as the preferred option to deploy once it was safe to return to the Red Sea. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said carriers need to re-assess their risks for Red Sea transits, and while a ceasefire was likely to lower the overall risk, more certainty was needed before shipping’s full return can happen. “Carriers need some assurance from the Houthi rebels before they begin their return, at first with sub-10,000 TEU ships and the last ones to return will be the 24,000-TEU container ships,” Sand told the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="476e3a1b-4a99-4f05-9eb9-1b3e0c96bf09"></dynamic-object></div>Container carriers entered 2025 with a record order book of 8.3 million TEUs that followed the delivery of vessels totaling 2.9 million TEUs in 2024, according to shipping association BIMCO. An average of 1.9 million TEUs in capacity will be delivered every year from 2025 to 2028, peaking at 2.2 million TEUs in 2027, BIMCO noted. Sand said that when it was safe for carriers to return to the shorter Suez route, 2 million TEUs of container shipping capacity would no longer be needed, leading to large-scale lay-ups, demolition and re-deployment of vessels. “But none of it, alone or in total, will prevent freight rates from falling to levels seen in early Q4 2023,” he said. “The question is how fast that will be. We expect some operational troubles to keep freight rates volatile for one to two months.” Sand said while carriers have been good at capacity management in the past few years, the Suez return scenario was “next level.” “You can’t just be smart and feed 2 million TEUs into other trades and expect no impact,” he said. “Upon return [to the Suez], fundamental overcapacity will reign once again.” Much of the capacity ordered over the past three years is for vessels greater than 14,500 TEUs that are being steadily deployed on the Asia-Europe trade where all available vessels are being utilized. Virtually no scrapping in the past few years has resulted in the number of ships 20 years old or older reaching 11% of the in-service fleet at 3.4 million TEUs. “It would require 680,000 TEUs per year to recycle all ships 20 years old or older during the next five years — the current annual record is 657,000 TEUs — but actual recycling is likely to end lower,” Niels Rasmussen, chief shipping analyst at BIMCO, wrote in a report this week, adding that as long as ships could not fully return to the Red Sea, recycling would continue to be low. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Houthi attacks on commercial ships in the Red Sea are likely to continue despite the ceasefire agreement between Israel and Hamas signed Jan. 15, according to a geopolitical expert. Yet one shipping analyst believes if all the deal’s conditions are met, a best-case scenario could see Suez Canal transits resume as soon as next month. While that best-case scenario was offered by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, the peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez Canal. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthis said their attacks were a sign of solidarity with Hamas. Jensen noted the best-case scenario for shipping would require that the six-week ceasefire that begins Jan. 19 sticks, and that the two other phases of the deal — a full withdrawal from Gaza by Israeli forces and a rebuilding plan in place for the territory — are also met. “There is no specificity at this point as to whether or when the Houthis will lift their proclaimed embargo against certain groups of merchant vessels passing through the southern Red Sea,” Jensen wrote in a LinkedIn post Thursday . “It is likely that shipping lines currently diverting around Africa want to see not only the ceasefire hold up ... but also see some meaningful traction on the negotiations for phase two and three of the ceasefire — as well as see some meaningful statements from the Houthis in terms of no longer targeting merchant vessels,” Jensen said. An analysis by S&P Global Market Intelligence published Thursday noted that the main economic impact of the Red Sea route reopening would be to return capacity to the container shipping system, equivalent to about 6% to 8% of existing vessels. At the same time, new vessels adding nearly 24% of new capacity to the global fleet would be launched over the next three years. Still, Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&P Global Market Intelligence, parent company of the Journal of Commerce, said the ceasefire would not bring safety to the Red Sea. “The Houthi are likely to continue to target international vessels in transit regardless of a ceasefire being agreed between Israel and Hamas or end to the wider conflict because it still is an effective means for them to demonstrate internal legitimacy and engage external actors, and secure revenue through protection payments,” Kennedy wrote in a report Thursday. “Even with the ceasefire outlined, there is still going to be an Israeli military presence in Gaza, and what is in effect a blockade of the strip.” Red Sea risks remain Mediterranean Shipping Co. and the revised carrier alliances have all indicated in their new 2025 schedules that Cape of Good Hope diversions will continue, although Suez transit services were included in the schedules as the preferred option to deploy once it was safe to return to the Red Sea. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said carriers need to re-assess their risks for Red Sea transits, and while a ceasefire was likely to lower the overall risk, more certainty was needed before shipping’s full return can happen. “Carriers need some assurance from the Houthi rebels before they begin their return, at first with sub-10,000 TEU ships and the last ones to return will be the 24,000-TEU container ships,” Sand told the Journal of Commerce. Container carriers entered 2025 with a record order book of 8.3 million TEUs that followed the delivery of vessels totaling 2.9 million TEUs in 2024, according to shipping association BIMCO. An average of 1.9 million TEUs in capacity will be delivered every year from 2025 to 2028, peaking at 2.2 million TEUs in 2027, BIMCO noted. Sand said that when it was safe for carriers to return to the shorter Suez route, 2 million TEUs of container shipping capacity would no longer be needed, leading to large-scale lay-ups, demolition and re-deployment of vessels. “But none of it, alone or in total, will prevent freight rates from falling to levels seen in early Q4 2023,” he said. “The question is how fast that will be. We expect some operational troubles to keep freight rates volatile for one to two months.” Sand said while carriers have been good at capacity management in the past few years, the Suez return scenario was “next level.” “You can’t just be smart and feed 2 million TEUs into other trades and expect no impact,” he said. “Upon return [to the Suez], fundamental overcapacity will reign once again.” Much of the capacity ordered over the past three years is for vessels greater than 14,500 TEUs that are being steadily deployed on the Asia-Europe trade where all available vessels are being utilized. Virtually no scrapping in the past few years has resulted in the number of ships 20 years old or older reaching 11% of the in-service fleet at 3.4 million TEUs. “It would require 680,000 TEUs per year to recycle all ships 20 years old or older during the next five years — the current annual record is 657,000 TEUs — but actual recycling is likely to end lower,” Niels Rasmussen, chief shipping analyst at BIMCO, wrote in a report this week, adding that as long as ships could not fully return to the Red Sea, recycling would continue to be low. Contact Greg Knowler at greg.knowler@spglobal.com .

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