<div class="phx-topic abstract-wrapper">The Zim Central China Xpress will restart next week, little more than a month after Zim announced its suspension as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network.</div>

The Zim Central China Xpress will restart next week, little more than a month after Zim announced its suspension as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network.

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<div class="phx-topic">Zim Integrated Shipping Services is relaunching a suspended service from China to Los Angeles due to the demand revival amid the 90-day pause in the tariff spat between Washington and Beijing, but has nonetheless downgraded its volume expectations for the trans-Pacific trade. The Zim Central China Xpress, connecting Los Angeles with Ningo and Shanghai, will restart next week, the carrier said Monday, little more than a month after Zim announced its suspension on April 22 as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network. Zim’s volumes from China halved after President Donald Trump on April 9 announced 145% tariffs on Beijing, though an influx of imports from Vietnam and Thailand helped mitigate the plunge. The sudden decline in US import booking has spurred Zim to downgrade its 2025 outlook for growth on the trans-Pacific to low single-digits compared to its original forecast of high-single digit growth. The market is at the highest level of uncertainty in recent memory, and the health of volumes for the rest of the year hinges on the extent of US tariffs on Chinese imports, Zim CEO Xavier Destriau told the Journal of Commerce. While there is a threat a rebound in imports from China could overwhelm US West Coast ports, Destriau said the US marine terminals Zim is calling are fluid. “But at some point, there is a risk of port congestion, if indeed, there is a surge in volume and a surge of capacity potentially also being redeployed due to newly recovered attractiveness of the trade,” he said. The frontloading of cargo by US importers in the first quarter in anticipation of higher US tariffs pushed up Zim’s Q1 volume 12% year over year. Net income tripled to $296 million, while revenue jumped 28%. Acknowledging that its fleet was more exposed than other carriers to a coming US tax on Chinese tonnage, Zim said it would swap out Chinese-built ships from the US trades before the new fees are implemented in October. CMA CGM <a href="https://www.joc.com/article/cma-cgm-fleet-will-not-need-to-pay-chinese-tonnage-tax-cfo-6006026">on Friday said it would take a similar tact</a>. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Zim Integrated Shipping Services is relaunching a suspended service from China to Los Angeles due to the demand revival amid the 90-day pause in the tariff spat between Washington and Beijing, but has nonetheless downgraded its volume expectations for the trans-Pacific trade. The Zim Central China Xpress, connecting Los Angeles with Ningo and Shanghai, will restart next week, the carrier said Monday, little more than a month after Zim announced its suspension on April 22 as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network. Zim’s volumes from China halved after President Donald Trump on April 9 announced 145% tariffs on Beijing, though an influx of imports from Vietnam and Thailand helped mitigate the plunge. The sudden decline in US import booking has spurred Zim to downgrade its 2025 outlook for growth on the trans-Pacific to low single-digits compared to its original forecast of high-single digit growth. The market is at the highest level of uncertainty in recent memory, and the health of volumes for the rest of the year hinges on the extent of US tariffs on Chinese imports, Zim CEO Xavier Destriau told the Journal of Commerce. While there is a threat a rebound in imports from China could overwhelm US West Coast ports, Destriau said the US marine terminals Zim is calling are fluid. “But at some point, there is a risk of port congestion, if indeed, there is a surge in volume and a surge of capacity potentially also being redeployed due to newly recovered attractiveness of the trade,” he said. The frontloading of cargo by US importers in the first quarter in anticipation of higher US tariffs pushed up Zim’s Q1 volume 12% year over year. Net income tripled to $296 million, while revenue jumped 28%. Acknowledging that its fleet was more exposed than other carriers to a coming US tax on Chinese tonnage, Zim said it would swap out Chinese-built ships from the US trades before the new fees are implemented in October. CMA CGM on Friday said it would take a similar tact . Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

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Zim restarts China-Los Angeles service to capture fresh import demand

<div class="phx-topic abstract-wrapper">Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.</div>

Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.

<div class="phx-topic">A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it’s needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines like HMM.” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, which was causing lengthy delays and port omissions on some long-haul and intra-Asia services. <h3>Congestion stretches throughout Asia </h3>Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">it had seen an increase of more than 50% in China-US cargo bookings</a> since the two countries signed a preliminary trade deal slashing tariffs for 90-days following meetings on May 11-12. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it’s needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines like HMM.” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, which was causing lengthy delays and port omissions on some long-haul and intra-Asia services. Congestion stretches throughout Asia Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday it had seen an increase of more than 50% in China-US cargo bookings since the two countries signed a preliminary trade deal slashing tariffs for 90-days following meetings on May 11-12. Contact Keith Wallis at keithwallis@hotmail.com .

US tariff-linked cargo rush causes port congestion, box shortages in China

<div class="phx-topic abstract-wrapper">Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.</div>

Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.

<div class="phx-topic">Tariff battles and port call penalty fees could be the least of the breakbulk and project cargo sector’s worries if two pieces of more impactful proposed legislation work their way through the legislative process.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6006944_0.1.jpg"></img></div>Amid the scramble to make sense of now partially-relaxed US import tariffs and the US Trade Representative’s (USTR’s) planned fees on Chinese ships calling US ports, industry stakeholders have overlooked a key detail of the recently reintroduced Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, according to an engineering, procurement and construction (EPC) source who asked not to be identified.The SHIPS Act, reintroduced to Congress April 30 by Sens. Mark Kelly (D-Ariz.), Todd Young (R-Ind.), John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), aims to expand the US-flag international fleet by 250 ships in 10 years, enhance US competitiveness and make investments in the maritime workforce. But according to the EPC source, the proposed legislation threatens to restore a provision in the USTR port fees that would punish operators with vessels on order at Chinese shipyards, a provision from which multipurpose vessels (MPVs) were thought to be exempt.The SHIPS Act would create a penalty tax for ships operated by Chinese carriers or built in China, as well as non-Chinese operators that order at foreign shipyards of concern. The tax is set at $5 per ton for ships owned or operated by a “foreign country of concern,” vessels registered there, or vessels registered there three years prior to “the date of the determination of the application.” An owner or operator not based in China would be subject to the tax if 50% or more of its vessel orders were placed with a shipyard of concern at the time the law goes into effect, or if 50% of its newbuild deliveries in the 24 months after enactment are from a designated yard.For a non-Chinese owner or operator with between 25% and 49% of its ships on order at or delivered by a shipyard of concern within 24 months of the effective date, the penalty would be $3.50 per ton. In addition, any owner or operator that had 50% or more of its ships constructed or undergoing repairs at a shipyard of concern “at any time” during the three years preceding the imposition of the law would be subject to a $1.25-per-ton fee.<h3>Industry could take a hit</h3>Given that these penalties would be on top of the previously announced USTR port fees, the bill would “have huge ramifications for the industry” if passed into law as currently written, the EPC source said, noting that it is generally much more difficult to reverse a law than, for example, an executive order on tariffs or a USTR measure.“After it has passed into law, the chance of it being repealed is pretty remote,” they said. “I can’t remember the last time an act was repealed in the US.”The 2025 reintroduction of the SHIPS Act has been referred to 12 committees, including the Committee on Armed Services, the Committees on Transportation and Infrastructure, and the Committee on Energy and Commerce. The previous version of the proposed act did not progress beyond the committee review stage.Also flying under the radar as it maneuvers through the legislative process is the American Cargo for American Ships Act. If enacted, that bill would require all work contracted by the Department of Transportation to be carried out by US-flag vessels, up from a current requirement of 50%, effectively shutting out non-US-flag MPVs from all government-funded energy and defense projects.Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Tariff battles and port call penalty fees could be the least of the breakbulk and project cargo sector’s worries if two pieces of more impactful proposed legislation work their way through the legislative process. Amid the scramble to make sense of now partially-relaxed US import tariffs and the US Trade Representative’s (USTR’s) planned fees on Chinese ships calling US ports, industry stakeholders have overlooked a key detail of the recently reintroduced Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, according to an engineering, procurement and construction (EPC) source who asked not to be identified. The SHIPS Act, reintroduced to Congress April 30 by Sens. Mark Kelly (D-Ariz.), Todd Young (R-Ind.), John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), aims to expand the US-flag international fleet by 250 ships in 10 years, enhance US competitiveness and make investments in the maritime workforce. But according to the EPC source, the proposed legislation threatens to restore a provision in the USTR port fees that would punish operators with vessels on order at Chinese shipyards, a provision from which multipurpose vessels (MPVs) were thought to be exempt. The SHIPS Act would create a penalty tax for ships operated by Chinese carriers or built in China, as well as non-Chinese operators that order at foreign shipyards of concern. The tax is set at $5 per ton for ships owned or operated by a “foreign country of concern,” vessels registered there, or vessels registered there three years prior to “the date of the determination of the application.” An owner or operator not based in China would be subject to the tax if 50% or more of its vessel orders were placed with a shipyard of concern at the time the law goes into effect, or if 50% of its newbuild deliveries in the 24 months after enactment are from a designated yard. For a non-Chinese owner or operator with between 25% and 49% of its ships on order at or delivered by a shipyard of concern within 24 months of the effective date, the penalty would be $3.50 per ton. In addition, any owner or operator that had 50% or more of its ships constructed or undergoing repairs at a shipyard of concern “at any time” during the three years preceding the imposition of the law would be subject to a $1.25-per-ton fee. Industry could take a hit Given that these penalties would be on top of the previously announced USTR port fees, the bill would “have huge ramifications for the industry” if passed into law as currently written, the EPC source said, noting that it is generally much more difficult to reverse a law than, for example, an executive order on tariffs or a USTR measure. “After it has passed into law, the chance of it being repealed is pretty remote,” they said. “I can’t remember the last time an act was repealed in the US.” The 2025 reintroduction of the SHIPS Act has been referred to 12 committees, including the Committee on Armed Services, the Committees on Transportation and Infrastructure, and the Committee on Energy and Commerce. The previous version of the proposed act did not progress beyond the committee review stage. Also flying under the radar as it maneuvers through the legislative process is the American Cargo for American Ships Act. If enacted, that bill would require all work contracted by the Department of Transportation to be carried out by US-flag vessels, up from a current requirement of 50%, effectively shutting out non-US-flag MPVs from all government-funded energy and defense projects. Contact Carly Fields at carly.fields@spglobal.com .

Breakbulk carriers

Project cargo

Breakbulk News

Potential regulatory bombshells flying under MPV sector’s radar

<div class="phx-topic abstract-wrapper">Greater interplay between US drayage and truckload markets may appear as imports fluctuate due to shifting tariff deadlines, but little impact is expected on pricing. </div>

Greater interplay between US drayage and truckload markets may appear as imports fluctuate due to shifting tariff deadlines, but little impact is expected on pricing.

<div class="phx-topic">A sooner-than-anticipated influx of US imports from China is already <a href="https://www.joc.com/article/trans-pacific-carriers-announce-massive-june-rate-hikes-6005450">pushing up ocean container spot rates</a>, but those price increases are not expected to reach landbound drayage and truckload markets. A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods. “Right now, we don’t see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,” even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday. Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks. “Drayage drivers could effectively go into power-only mode,” meaning they could use their tractors on the spot market to haul trailers, Dehan said. “There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.” <h3>Supply-demand imbalance </h3>Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won’t be enough to resuscitate demand. “There don’t appear to be too many demand catalysts that we can point to right now,” Dehan said. “Tariffs are not going to create demand.” At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence. Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight &amp; Analytics noted increased activity around major distribution hubs in April. “The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,” Dean Croke, principal analyst at DAT, told the Journal of Commerce. But that hasn’t moved spot pricing. Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week. “Overall, we continue to observe a consistent market,” Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday. “Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.” The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports. Demand “may be a little bit slack for four weeks, and then it will hit in June,” said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics. “We won’t see COVID-level disruption, but it will be a lift, and it’s on the way.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

A sooner-than-anticipated influx of US imports from China is already pushing up ocean container spot rates , but those price increases are not expected to reach landbound drayage and truckload markets. A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods. “Right now, we don’t see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,” even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday. Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks. “Drayage drivers could effectively go into power-only mode,” meaning they could use their tractors on the spot market to haul trailers, Dehan said. “There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.” Supply-demand imbalance Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won’t be enough to resuscitate demand. “There don’t appear to be too many demand catalysts that we can point to right now,” Dehan said. “Tariffs are not going to create demand.” At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence. Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight & Analytics noted increased activity around major distribution hubs in April. “The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,” Dean Croke, principal analyst at DAT, told the Journal of Commerce. But that hasn’t moved spot pricing. Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week. “Overall, we continue to observe a consistent market,” Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday. “Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.” The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports. Demand “may be a little bit slack for four weeks, and then it will hit in June,” said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics. “We won’t see COVID-level disruption, but it will be a lift, and it’s on the way.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

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Capacity-demand imbalance to shield truck rates from US import surge

<div class="phx-topic abstract-wrapper">MSC plans to provide all of the tonnage in a US Gulf service, with Zim slated to get a lower share of slot space as weaker demand forces service changes. </div>

MSC plans to provide all of the tonnage in a US Gulf service, with Zim slated to get a lower share of slot space as weaker demand forces service changes.

<div class="phx-topic">Zim Integrated Shipping looks to withdraw capacity from an Asia-US Gulf Coast service it operates with Mediterranean Shipping Co. (MSC) in response to a “drastic drop” in trans-Pacific cargo bookings. The withdrawal and other changes show how the Trump administration’s tariffs against China continue to redraw container services. In a Federal Maritime Commission filing last week, MSC and Zim said they were making interim changes to their <a href="https://www.joc.com/article/ocean-carrier-alliance-shakeup-offers-varied-service-choices-for-shippers-5735374">vessel sharing agreement</a> (VSA) struck last September for six trans-Pacific services to US East and Gulf coasts. The interim changes, which take effect next week, were made “in light of the drastic drop in demand resulting from current trade conditions.” The interim change will affect Zim’s South Lotus service that MSC jointly operates as its Lone Star Express service. Under the new arrangement, Zim will provide three ships to the 13-ship rotation. Zim originally provided up to six ships under the earlier VSA, which started out as a 12-ship string. MSC will provide all the Lone Star capacity by early fall, although Zim will have the option to contribute up to four ships. Zim’s container slot allocation on other services under the VSA will also be lower under the temporary arrangement. The ports served under the VSA were also changed to include Indonesia and Taiwan, along with the existing Asia port network of China, Vietnam, South Korea, Thailand and Singapore. Last week, MSC and Zim announced that their Emerald-Xpress Boston service would add a call in Taiwan. Evergreen Marine offers Taiwan service into the East Coast, as does the jointly operated Hapag-Lloyd and Wan Hai AA7 service, but carriers have rarely offered direct service from Indonesia. <a href="https://www.joc.com/article/maersk-to-debut-new-houston-norfolk-trans-pac-service-in-march-5223666">Maersk was the last to try</a> in 2022, but <a href="https://www.joc.com/article/maersk-culls-another-trans-pac-service-as-ship-supply-outstrips-demand-5245556">it suspended the service</a> a year later. The most recent changes come after MSC and Zim announced the suspension of <a href="https://www.joc.com/article/msc-suspends-two-us-services-rejigs-others-as-tariffs-hit-chinese-imports-6000649">one East Coast and one Gulf Coast service</a> due to <a href="https://www.joc.com/article/hapag-lloyd-saw-china-bookings-drop-hard-after-us-enacted-tariffs-5990185">the sharp drop in container bookings</a> from China following the April 9 release of President Trump’s latest tariffs. While the subsequent easing of those tariffs will spur <a href="https://www.joc.com/article/trans-pacific-carriers-announce-massive-june-rate-hikes-6005450">a rebound in shipments</a> from China, MSC and Zim’s recent schedules are adding calls to Southeast Asia to account for additional import sourcing shifts. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Zim Integrated Shipping looks to withdraw capacity from an Asia-US Gulf Coast service it operates with Mediterranean Shipping Co. (MSC) in response to a “drastic drop” in trans-Pacific cargo bookings. The withdrawal and other changes show how the Trump administration’s tariffs against China continue to redraw container services. In a Federal Maritime Commission filing last week, MSC and Zim said they were making interim changes to their vessel sharing agreement (VSA) struck last September for six trans-Pacific services to US East and Gulf coasts. The interim changes, which take effect next week, were made “in light of the drastic drop in demand resulting from current trade conditions.” The interim change will affect Zim’s South Lotus service that MSC jointly operates as its Lone Star Express service. Under the new arrangement, Zim will provide three ships to the 13-ship rotation. Zim originally provided up to six ships under the earlier VSA, which started out as a 12-ship string. MSC will provide all the Lone Star capacity by early fall, although Zim will have the option to contribute up to four ships. Zim’s container slot allocation on other services under the VSA will also be lower under the temporary arrangement. The ports served under the VSA were also changed to include Indonesia and Taiwan, along with the existing Asia port network of China, Vietnam, South Korea, Thailand and Singapore. Last week, MSC and Zim announced that their Emerald-Xpress Boston service would add a call in Taiwan. Evergreen Marine offers Taiwan service into the East Coast, as does the jointly operated Hapag-Lloyd and Wan Hai AA7 service, but carriers have rarely offered direct service from Indonesia. Maersk was the last to try in 2022, but it suspended the service a year later. The most recent changes come after MSC and Zim announced the suspension of one East Coast and one Gulf Coast service due to the sharp drop in container bookings from China following the April 9 release of President Trump’s latest tariffs. While the subsequent easing of those tariffs will spur a rebound in shipments from China, MSC and Zim’s recent schedules are adding calls to Southeast Asia to account for additional import sourcing shifts. Contact Michael Angell at michael.angell@spglobal.com .

MSC, Zim plan to rework Asia-US Gulf network as demand drops

<div class="phx-topic abstract-wrapper">The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.</div>

The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.

<div class="phx-topic">Excess capacity and weakening demand continue to exert downward pressure on Asia-North Europe container rates with the various indices showing the spot market has lost more than 60% of its value since the beginning of the year. Several carriers have announced rate increases for more than $3,000 per FEU from June 1 to try to slow the spot market slide but may struggle to find much support in an oversupplied market. CMA CGM will be setting its freight all kinds (FAK) rate from Asia to North Europe at $3,100 per FEU on June 1, while MSC and Hapag-Lloyd will set their rate on that route at $3,200/FEU. MSC and Hapag-Lloyd are also raising their Asia-Mediterranean FAK prices, with MSC rates of about $5,000/FEU and Hapag-Lloyd at $4,500/FEU. The asking prices are significantly higher than current rate levels. Average spot rates from Asia to North Europe on May 15 were $1,994/FEU, down from just over $5,000/FEU on Dec. 31, while Asia-Mediterranean rates of $3,156/FEU were down 42% so far this year, according to the rate benchmarking platform Xeneta. Platts, a sister company of the Journal of Commerce within S&amp;P Global recorded spot rates from Asia to North Europe at $1,600/FEU this week, an almost 70% decline since the beginning of January. Asia-Mediterranean rates this week were at $2,700/FEU, a drop of 50% since the start of the year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="aa85df16-b8fe-4e63-9181-65cba329e464"></dynamic-object></div>The supply chain director for a Germany-based Asia-Europe shipper said he was seeing offers in the market as low as $1,200/FEU, which was putting pressure on carriers to slow the decline. "I can understand the pressure carriers are under, and they are asking for more cargo but many BCOs (beneficial cargo owners) have declining cargo flows, so the market is really imbalanced,” the source said, adding that there was little chance the rate hikes would stick. “Our demand is the same as it was at this time last year, which is a slack period. The rate increases will not be 100% but may stabilize falling prices. Whether there will be another advanced peak season is impossible to gauge, but everything is possible in this market.” <h3>Mismatch between supply and demand </h3>Peter Sand, chief analyst at Xeneta, said the mismatch between offered capacity and demand was keeping spot rates under pressure. “While rates and demand are going up on trans-Pacific, spot rates are sliding into Europe,” he told the Journal of Commerce Friday. The container shipping orderbook of 8.6 million TEUs in capacity is about 27% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce. Just under 1 million TEUs in capacity will be delivered this year, most of it large ships that can only be deployed on Asia-Europe, while only 4,000 TEUs are set to be scrapped by the industry this year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b2f271aa-d66e-49e2-9bc8-99469f7fc20e"></dynamic-object></div>Only 6.5% of the available capacity is being blanked in May while carriers are deploying a record 1.12 million TEUs in the month, according to data from ocean visibility provider eeSea. Sand noted that the tariff cuts on the China-US trade following a 90-day deal between Washington and Beijing last weekend has “changed the picture” with some cargo diverted from the trans-Pacific to Asia-Europe. ”One month of ‘frustrated cargo’ that didn’t go from China to the US and is on its way to Europe, the Middle East and South America. The congested northern European ports will be facing a rush in June on the back of this,” Sand added. North Europe’s largest port gateways <a href="https://www.joc.com/article/no-end-to-the-congestion-choking-gateway-ports-in-north-europe-5995853">continue to struggle with persistent congestion</a> that has delayed vessels and hampered container operations at the hubs for months. The reasons include full container yards, port strikes and slowdowns, labor shortages because of several public holidays in May, crane engineering works in some terminals and changing carrier alliance networks. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Excess capacity and weakening demand continue to exert downward pressure on Asia-North Europe container rates with the various indices showing the spot market has lost more than 60% of its value since the beginning of the year. Several carriers have announced rate increases for more than $3,000 per FEU from June 1 to try to slow the spot market slide but may struggle to find much support in an oversupplied market. CMA CGM will be setting its freight all kinds (FAK) rate from Asia to North Europe at $3,100 per FEU on June 1, while MSC and Hapag-Lloyd will set their rate on that route at $3,200/FEU. MSC and Hapag-Lloyd are also raising their Asia-Mediterranean FAK prices, with MSC rates of about $5,000/FEU and Hapag-Lloyd at $4,500/FEU. The asking prices are significantly higher than current rate levels. Average spot rates from Asia to North Europe on May 15 were $1,994/FEU, down from just over $5,000/FEU on Dec. 31, while Asia-Mediterranean rates of $3,156/FEU were down 42% so far this year, according to the rate benchmarking platform Xeneta. Platts, a sister company of the Journal of Commerce within S&P Global recorded spot rates from Asia to North Europe at $1,600/FEU this week, an almost 70% decline since the beginning of January. Asia-Mediterranean rates this week were at $2,700/FEU, a drop of 50% since the start of the year. The supply chain director for a Germany-based Asia-Europe shipper said he was seeing offers in the market as low as $1,200/FEU, which was putting pressure on carriers to slow the decline. "I can understand the pressure carriers are under, and they are asking for more cargo but many BCOs (beneficial cargo owners) have declining cargo flows, so the market is really imbalanced,” the source said, adding that there was little chance the rate hikes would stick. “Our demand is the same as it was at this time last year, which is a slack period. The rate increases will not be 100% but may stabilize falling prices. Whether there will be another advanced peak season is impossible to gauge, but everything is possible in this market.” Mismatch between supply and demand Peter Sand, chief analyst at Xeneta, said the mismatch between offered capacity and demand was keeping spot rates under pressure. “While rates and demand are going up on trans-Pacific, spot rates are sliding into Europe,” he told the Journal of Commerce Friday. The container shipping orderbook of 8.6 million TEUs in capacity is about 27% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce. Just under 1 million TEUs in capacity will be delivered this year, most of it large ships that can only be deployed on Asia-Europe, while only 4,000 TEUs are set to be scrapped by the industry this year. Only 6.5% of the available capacity is being blanked in May while carriers are deploying a record 1.12 million TEUs in the month, according to data from ocean visibility provider eeSea. Sand noted that the tariff cuts on the China-US trade following a 90-day deal between Washington and Beijing last weekend has “changed the picture” with some cargo diverted from the trans-Pacific to Asia-Europe. ”One month of ‘frustrated cargo’ that didn’t go from China to the US and is on its way to Europe, the Middle East and South America. The congested northern European ports will be facing a rush in June on the back of this,” Sand added. North Europe’s largest port gateways continue to struggle with persistent congestion that has delayed vessels and hampered container operations at the hubs for months. The reasons include full container yards, port strikes and slowdowns, labor shortages because of several public holidays in May, crane engineering works in some terminals and changing carrier alliance networks. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Ocean carriers line up hefty rate hikes on oversupplied Asia-Europe trade

<div class="phx-topic abstract-wrapper">The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince. </div>

The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince.

<div class="phx-topic">Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. <h3>Yanqui go home! </h3>I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. <h3>Voluntary restraint </h3>In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. <h3>The Plaza Accord </h3>The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. <h3>China and the WTO </h3>Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>. </div>

Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. Yanqui go home! I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. Voluntary restraint In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. The Plaza Accord The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. China and the WTO Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at ted@tricitiesintermodal.com .

Transport, Trade and Regulation News

A history lesson while we watch current US trade policy unfold

<div class="phx-topic abstract-wrapper">The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.</div>

The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.

<div class="phx-topic">This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. <h3>‘Roulette game’ </h3>You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">to avoid Chinese-built, -owned, and -operated ships</a> will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">removal of de minimis</a> has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. ‘Roulette game’ You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response to avoid Chinese-built, -owned, and -operated ships will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the removal of de minimis has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Navigating the current supply chain is a matter of choosing your poison

Local container dwell time

Rail container dwell time

The Pacific Merchant Shipping Association (PMSA) calculates local-delivery container dwell times at the ports of Los Angeles and Long Beach using the number of inbound loaded containers out-gated at each marine terminal by truck during the month as well as the average dwell time in days for those out-gated containers. It calculates average rail container dwell based on the time a container sits on the marine terminal at the ports after it is discharged from the vessel and before it is loaded. [PMSA](https://pmsaship.com)

Los Angeles-Long Beach truck and rail dwell times (PMSA)

Los Angeles-Long Beach terminal and rail dwell times (PMSA) Gateway

<div class="phx-topic abstract-wrapper">The trans-Pacific air cargo sector is trying to assess the demand implications of the preliminary trade deal between Washington and Beijing, which included a reduction in the tariff on parcels from China. </div>

The trans-Pacific air cargo sector is trying to assess the demand implications of the preliminary trade deal between Washington and Beijing, which included a reduction in the tariff on parcels from China.

<div class="phx-topic">While the reduction in “de minimis” tariffs on Chinese exports to the US is unlikely to spark a surge in demand for air cargo on the trans-Pacific, any increase in demand could tighten capacity and push rates higher given the large numbers of freighter aircraft that have been shifted to other trade lanes. Following weekend trade talks in Geneva between the world’s two largest economies, part of the deal <a href="https://www.whitehouse.gov/presidential-actions/2025/05/modifying-reciprocal-tariff-rates-to-reflect-discussions-with-the-peoples-republic-of-china/">included a reduction of the 120% duty imposed from May 2</a> on any parcel from China, including Hong Kong, to 54%. An additional per-parcel fee of $100 will still go into effect May 14 but will not be increased to $200 in June as planned. The trans-Pacific market saw a mass exodus of freighter capacity as e-commerce bookings dried up ahead of the <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">Trump administration’s May 2 elimination of the duty-free exemption for low-value shipments</a>, with many aircraft being switched to Latin American routes. Data from air freight analyst Rotate shows daily average freighter capacity on the China-US corridor has declined 39% since May 2. The tariff impact on demand has been dramatic. Asia-North America air cargo volume is down 20% since the last week of April, at 73,037 tons, while volume on the Asia-Latin America corridor, a much smaller market, grew 23% to 855 tons over the same period, according to Rotate. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d9092521-9dbe-4569-bade-b3802c73bc98"></dynamic-object></div>Kathy Liu, vice president of global sales and marketing at Taiwan-based forwarder Dimerco Express Group, said the cut in tariffs would be positive for the air cargo business, but warned that finding space could be difficult in the days ahead. “After the last week of April, a lot of orders have been on hold in China for the US market due to the uncertainty,” Liu told the Journal of Commerce. “With this new announcement, a certain percentage of the orders will be released gradually. I believe we will see volume increase for air from China to the US from now on.” <h3>Demand decline pulls down rates </h3>The drop in demand over the past two weeks has dragged down air cargo rates on China-US routes, with the average rate falling 8.8% since late April, according to the Baltic Air Index. Data from rate benchmarking platform Xeneta showed prices have fallen 9% since the May 2 tariffs were imposed. “Approximately 50% of air cargo shipments on the China-US route is low-value e-commerce ... the oxygen was suddenly and dramatically removed from this demand on May 2, and it has shaken the market to its core,” said Niall van de Wouw, chief air freight officer at Xeneta. Rotate’s analysts are expecting “some demand” to return to the China-US air corridor, but it was not clear how strong the demand would be following frontloading ahead of May 2 and the prevailing uncertainty around tariff levels as the US continues negotiations with its trade partners. “Since May 2, some freighters have been parked and some were shifted to other trade lanes,” a Rotate spokesperson told the Journal of Commerce Tuesday. “If demand is there, we will probably see most freighter capacity return to the trans-Pacific.” Ocean carriers are expecting the preliminary China-US trade deal <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">to unleash pent-up demand</a> that has built over the past month, with imports from China quickly filling all available container shipping capacity. In times of severe space constraints in ocean, there is a spillover to air, but considering cost-conscious US importers paused shipments in the first place because of high tariffs, forwarding sources told the Journal of Commerce it was unlikely they would be willing to pay air freight prices. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

While the reduction in “de minimis” tariffs on Chinese exports to the US is unlikely to spark a surge in demand for air cargo on the trans-Pacific, any increase in demand could tighten capacity and push rates higher given the large numbers of freighter aircraft that have been shifted to other trade lanes. Following weekend trade talks in Geneva between the world’s two largest economies, part of the deal included a reduction of the 120% duty imposed from May 2 on any parcel from China, including Hong Kong, to 54%. An additional per-parcel fee of $100 will still go into effect May 14 but will not be increased to $200 in June as planned. The trans-Pacific market saw a mass exodus of freighter capacity as e-commerce bookings dried up ahead of the Trump administration’s May 2 elimination of the duty-free exemption for low-value shipments , with many aircraft being switched to Latin American routes. Data from air freight analyst Rotate shows daily average freighter capacity on the China-US corridor has declined 39% since May 2. The tariff impact on demand has been dramatic. Asia-North America air cargo volume is down 20% since the last week of April, at 73,037 tons, while volume on the Asia-Latin America corridor, a much smaller market, grew 23% to 855 tons over the same period, according to Rotate. Kathy Liu, vice president of global sales and marketing at Taiwan-based forwarder Dimerco Express Group, said the cut in tariffs would be positive for the air cargo business, but warned that finding space could be difficult in the days ahead. “After the last week of April, a lot of orders have been on hold in China for the US market due to the uncertainty,” Liu told the Journal of Commerce. “With this new announcement, a certain percentage of the orders will be released gradually. I believe we will see volume increase for air from China to the US from now on.” Demand decline pulls down rates The drop in demand over the past two weeks has dragged down air cargo rates on China-US routes, with the average rate falling 8.8% since late April, according to the Baltic Air Index. Data from rate benchmarking platform Xeneta showed prices have fallen 9% since the May 2 tariffs were imposed. “Approximately 50% of air cargo shipments on the China-US route is low-value e-commerce ... the oxygen was suddenly and dramatically removed from this demand on May 2, and it has shaken the market to its core,” said Niall van de Wouw, chief air freight officer at Xeneta. Rotate’s analysts are expecting “some demand” to return to the China-US air corridor, but it was not clear how strong the demand would be following frontloading ahead of May 2 and the prevailing uncertainty around tariff levels as the US continues negotiations with its trade partners. “Since May 2, some freighters have been parked and some were shifted to other trade lanes,” a Rotate spokesperson told the Journal of Commerce Tuesday. “If demand is there, we will probably see most freighter capacity return to the trans-Pacific.” Ocean carriers are expecting the preliminary China-US trade deal to unleash pent-up demand that has built over the past month, with imports from China quickly filling all available container shipping capacity. In times of severe space constraints in ocean, there is a spillover to air, but considering cost-conscious US importers paused shipments in the first place because of high tariffs, forwarding sources told the Journal of Commerce it was unlikely they would be willing to pay air freight prices. Contact Greg Knowler at greg.knowler@spglobal.com .

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Freighter exodus leaves trans-Pacific air cargo on edge after China-US trade deal

<div class="phx-topic abstract-wrapper">Much of the volume that has been locked up over the past month will come flooding back into the market after Washington and Beijing agreed to significantly slash their respective tariffs for 90 days. </div>

Much of the volume that has been locked up over the past month will come flooding back into the market after Washington and Beijing agreed to significantly slash their respective tariffs for 90 days.

<div class="phx-topic">The eastbound trans-Pacific will likely face insufficient ocean capacity to handle a surge of unlocked shipments from China to the US following the preliminary trade deal announced Monday, resulting in higher spot rates, surcharges and shortages of vessel space and equipment in the coming weeks, forwarders warned. “It’s clear it will be a mad rush to get capacity,” Jason Cook, managing director at Ardent Global Logistics, said. “Customers were already prebooking Friday and [early Monday]. Every day will count this week towards getting the booking plan and anticipated allocations with carriers.” Nerijus Poskus, Flexport’s head of ocean procurement, said: “I think we’re going to have a very significant peak season.” With just over a month having elapsed since the Trump administration slapped 145% tariffs on Beijing, a significant backlog of goods has built up in China, reflected in volumes dropping about 30% in recent weeks, according to Hapag-Lloyd and others. “For the first three weeks of May, 34% of capacity in the trans-Pacific has been taken out through blank sailings and service removals,” Poskus said. Now, much of that volume will come flooding back into the market with the US and China agreeing during weekend talks in Geneva to slash their respective tariffs for 90 days while negotiations continue. The 145% US tariffs will be cut to 30%, while China’s reciprocal 125% tariff on US goods will be lowered to 10%. Those levels are clearly low enough to unleash much of the pent-up demand building over the past month. Indeed, container bookings for imports from China appear to have been strengthening even before the tariff announcement. Bookings jumped 29% last week compared with the week prior, according to maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet. “Currently, ships are sailing 85% to 90% full, yet there is a huge backlog and that backlog at some point needs to be shipped,” Poskus said. “So if demand increases more than 10% — and it will — and if carriers put back 10% of capacity, we are at 100%. In other words, full. No space. And carriers have to add capacity such as extra loaders in order for importers to have space.” A space crunch will rapidly develop on the trans-Pacific, as the ships needed to replenish capacity aren’t immediately available, Poskus said. “The issue is a lot of these ships have been deployed on other trade lanes — intra-Asia, Asia to Latin America, etc. They are not just sitting and waiting, so shifting back capacity to the [trans-Pacific] will be not as easy as it seems and will take time,” he said. “There is maybe a ship or two that can be deployed back right away but as for the market as a whole, it will take more than four weeks for any meaningful capacity to be injected back into the TP [trans-Pacific].” Ocean rapidly withdrew capacity and redeployed it to multiple other trade lanes including Asia-Europe, DHL Global Forwarding told customers in its most recent Ocean Freight Market Update. The forwarder warned of “significant equipment and capacity constraints that could lead to increasing rates” in the aftermath of a deal between the US and China. Patrick Fay, CEO and co-founder of forwarder BOC International, said China bookings began surging on Sunday when the US signaled that a deal had been reached even before the specifics on tariff cuts were disclosed. “It is going to take a while to get these blank sailings canceled,” he said. “It will be very tight the next three weeks.” <h3>Port capacity could be overwhelmed </h3>Even before Monday’s announcement, others agreed that a volume surge would develop quickly after any trade deal reached between China and the US. “If a de-escalation was to happen, it is not unlikely that there would be a catch-up effect where, at some point, the situation resolves itself, and then you see a much stronger demand coming out of China,” Maersk CEO Vincent Clerc said on the company’s May 8 earning call. And any surge will potentially overwhelm US port capacity given that, as carrier executives told the recent Georgia Foreign Trade Conference, the system has no greater ability to absorb surge volumes than it did back in 2020. “Right now ... volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided,” said Charles van der Steene, president of Maersk North America. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Other issues will further complicate the post-deal market, empty containers among them, Poskus said. “Carriers have repositioned a lot of empty containers to SE Asia, dropping the empties in Vietnam versus China or not taking them back at all yet,” he said. “That means for at least some carriers in some locations, not the whole market, but ... certain places will start to face empty equipment shortages. “As carriers cancel or reduce capacity, that means empties are not able to be returned to Asia at the same pace as when they were brought into the US a few months earlier,” Poskus added. The result will likely be a classic squeeze lasting several weeks, reminiscent of the aftermath of the post-financial crisis restocking surge the market experienced in early 2010. Spot rates, which currently are hovering near $2,400 to the US West Coast, could surge to multiple times that, while peak season surcharges (PSSs) will be likely be quickly imposed on fixed rate contracts. “If space gets very tight, premium products will be the easiest way to secure additional capacity,” Poskus said. “If your volume is 20 containers a week and you need 25, for the five extra you may need to pay spot market prices plus, possibly, a premium.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

The eastbound trans-Pacific will likely face insufficient ocean capacity to handle a surge of unlocked shipments from China to the US following the preliminary trade deal announced Monday, resulting in higher spot rates, surcharges and shortages of vessel space and equipment in the coming weeks, forwarders warned. “It’s clear it will be a mad rush to get capacity,” Jason Cook, managing director at Ardent Global Logistics, said. “Customers were already prebooking Friday and [early Monday]. Every day will count this week towards getting the booking plan and anticipated allocations with carriers.” Nerijus Poskus, Flexport’s head of ocean procurement, said: “I think we’re going to have a very significant peak season.” With just over a month having elapsed since the Trump administration slapped 145% tariffs on Beijing, a significant backlog of goods has built up in China, reflected in volumes dropping about 30% in recent weeks, according to Hapag-Lloyd and others. “For the first three weeks of May, 34% of capacity in the trans-Pacific has been taken out through blank sailings and service removals,” Poskus said. Now, much of that volume will come flooding back into the market with the US and China agreeing during weekend talks in Geneva to slash their respective tariffs for 90 days while negotiations continue. The 145% US tariffs will be cut to 30%, while China’s reciprocal 125% tariff on US goods will be lowered to 10%. Those levels are clearly low enough to unleash much of the pent-up demand building over the past month. Indeed, container bookings for imports from China appear to have been strengthening even before the tariff announcement. Bookings jumped 29% last week compared with the week prior, according to maritime visibility provider Vizion and data and analytics company Dun & Bradstreet. “Currently, ships are sailing 85% to 90% full, yet there is a huge backlog and that backlog at some point needs to be shipped,” Poskus said. “So if demand increases more than 10% — and it will — and if carriers put back 10% of capacity, we are at 100%. In other words, full. No space. And carriers have to add capacity such as extra loaders in order for importers to have space.” A space crunch will rapidly develop on the trans-Pacific, as the ships needed to replenish capacity aren’t immediately available, Poskus said. “The issue is a lot of these ships have been deployed on other trade lanes — intra-Asia, Asia to Latin America, etc. They are not just sitting and waiting, so shifting back capacity to the [trans-Pacific] will be not as easy as it seems and will take time,” he said. “There is maybe a ship or two that can be deployed back right away but as for the market as a whole, it will take more than four weeks for any meaningful capacity to be injected back into the TP [trans-Pacific].” Ocean rapidly withdrew capacity and redeployed it to multiple other trade lanes including Asia-Europe, DHL Global Forwarding told customers in its most recent Ocean Freight Market Update. The forwarder warned of “significant equipment and capacity constraints that could lead to increasing rates” in the aftermath of a deal between the US and China. Patrick Fay, CEO and co-founder of forwarder BOC International, said China bookings began surging on Sunday when the US signaled that a deal had been reached even before the specifics on tariff cuts were disclosed. “It is going to take a while to get these blank sailings canceled,” he said. “It will be very tight the next three weeks.” Port capacity could be overwhelmed Even before Monday’s announcement, others agreed that a volume surge would develop quickly after any trade deal reached between China and the US. “If a de-escalation was to happen, it is not unlikely that there would be a catch-up effect where, at some point, the situation resolves itself, and then you see a much stronger demand coming out of China,” Maersk CEO Vincent Clerc said on the company’s May 8 earning call. And any surge will potentially overwhelm US port capacity given that, as carrier executives told the recent Georgia Foreign Trade Conference, the system has no greater ability to absorb surge volumes than it did back in 2020. “Right now ... volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided,” said Charles van der Steene, president of Maersk North America. Other issues will further complicate the post-deal market, empty containers among them, Poskus said. “Carriers have repositioned a lot of empty containers to SE Asia, dropping the empties in Vietnam versus China or not taking them back at all yet,” he said. “That means for at least some carriers in some locations, not the whole market, but ... certain places will start to face empty equipment shortages. “As carriers cancel or reduce capacity, that means empties are not able to be returned to Asia at the same pace as when they were brought into the US a few months earlier,” Poskus added. The result will likely be a classic squeeze lasting several weeks, reminiscent of the aftermath of the post-financial crisis restocking surge the market experienced in early 2010. Spot rates, which currently are hovering near $2,400 to the US West Coast, could surge to multiple times that, while peak season surcharges (PSSs) will be likely be quickly imposed on fixed rate contracts. “If space gets very tight, premium products will be the easiest way to secure additional capacity,” Poskus said. “If your volume is 20 containers a week and you need 25, for the five extra you may need to pay spot market prices plus, possibly, a premium.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Capacity crunch beckons on eastbound trans-Pacific after US-China deal

<div class="phx-topic abstract-wrapper">The National Retail Federation also warned the negative growth will accelerate, with imports through the summer expected to be at least 20% lower than the corresponding month last year. </div>

The National Retail Federation also warned the negative growth will accelerate, with imports through the summer expected to be at least 20% lower than the corresponding month last year. 

<div class="phx-topic">US imports this month will see their first year-over-year decline in more than a year and a half as the “true impact” of the Trump administration’s tariffs come to fruition, a major retail group said Friday. The National Retail Federation (NRF) also warned the negative growth will accelerate, with imports from June through September expected to be at least 20% lower than the corresponding month last year.  “We are starting to see the true impact of President Trump’s tariffs on the supply chain,” Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy, said in the group’s newly released Global Port Tracker (GPT) published with Hackett Associates. Gold said the US tariffs will result in “higher costs for businesses as well as reduced cargo volumes.”  “In the end, these tariffs will affect consumers in the form of higher prices and less availability on store shelves,” he said.  That less availability will begin in May, with projected imports of 1.81 million TEUs down almost 13% from May 2024 and the first year-over-year drop in imports in 19 months, according to the GPT. Imports for June through September are projected to see year-over-year declines of 20.2%, 23.4%, 21.5% and 21.2%, respectively. Expected June imports of 1.71 million TEUs would be the lowest for any month since March 2023, the GPT said. Tariff impacts Tariffs implemented by President Donald Trump in April “come at the most important time in the buying process” for retailers, said Gold, adding that many retailers are being forced to delay or cancel orders — with small retailers being especially impacted. With a pre-tariff rush of imports that appears to have largely ended in January, the ratio of US retail inventories to sales, a barometer of inventory balance, was unchanged in February, at 1.31, according to US Census Bureau data. Amid US importers increasingly canceling or suspending orders, ocean carriers are making capacity adjustments in the form of <a href="https://www.joc.com/article/msc-suspends-two-us-services-rejigs-others-as-tariffs-hit-chinese-imports-6000649">suspended services</a> and blanked sailings. “Container carriers are indeed dropping voyages and consolidating cargo and service to ensure that their vessels are as full as possible and to maintain economies of scale as demand declines,” said Ben Hackett, founder of Hackett Associates.  While carriers have begun to suspend services on the trans-Pacific, Hackett added that reports of a “broken” supply chain and ships “making U-turns in mid-voyage” because of the tariffs are “very far from the truth and the reality on the ground.” The GPT expects 12.13 million TEUs in US imports for the first half of 2025, up just 0.3% on the year and a significant downgrade from the 5.7% growth that was forecast before tariffs were implemented. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="">Laura.Robb@spglobal.com</a>.  </div>

US imports this month will see their first year-over-year decline in more than a year and a half as the “true impact” of the Trump administration’s tariffs come to fruition, a major retail group said Friday. The National Retail Federation (NRF) also warned the negative growth will accelerate, with imports from June through September expected to be at least 20% lower than the corresponding month last year.  “We are starting to see the true impact of President Trump’s tariffs on the supply chain,” Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy, said in the group’s newly released Global Port Tracker (GPT) published with Hackett Associates. Gold said the US tariffs will result in “higher costs for businesses as well as reduced cargo volumes.”  “In the end, these tariffs will affect consumers in the form of higher prices and less availability on store shelves,” he said.  That less availability will begin in May, with projected imports of 1.81 million TEUs down almost 13% from May 2024 and the first year-over-year drop in imports in 19 months, according to the GPT. Imports for June through September are projected to see year-over-year declines of 20.2%, 23.4%, 21.5% and 21.2%, respectively. Expected June imports of 1.71 million TEUs would be the lowest for any month since March 2023, the GPT said. Tariff impacts Tariffs implemented by President Donald Trump in April “come at the most important time in the buying process” for retailers, said Gold, adding that many retailers are being forced to delay or cancel orders — with small retailers being especially impacted. With a pre-tariff rush of imports that appears to have largely ended in January, the ratio of US retail inventories to sales, a barometer of inventory balance, was unchanged in February, at 1.31, according to US Census Bureau data. Amid US importers increasingly canceling or suspending orders, ocean carriers are making capacity adjustments in the form of suspended services and blanked sailings. “Container carriers are indeed dropping voyages and consolidating cargo and service to ensure that their vessels are as full as possible and to maintain economies of scale as demand declines,” said Ben Hackett, founder of Hackett Associates.  While carriers have begun to suspend services on the trans-Pacific, Hackett added that reports of a “broken” supply chain and ships “making U-turns in mid-voyage” because of the tariffs are “very far from the truth and the reality on the ground.” The GPT expects 12.13 million TEUs in US imports for the first half of 2025, up just 0.3% on the year and a significant downgrade from the 5.7% growth that was forecast before tariffs were implemented. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at Laura.Robb@spglobal.com . 

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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">Container lines are looking to capitalize on a ramp-up in Asia-US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.</div>

Container lines are looking to capitalize on a ramp-up in Asia-US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.

<div class="phx-topic">Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to approximately $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">a 50% increase in bookings</a> from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upward of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia-East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&amp;P Global. Last year, spot rates <a href="https://www.joc.com/article/carriers-to-deploy-extra-loaders-to-los-angeles-long-beach-amid-import-surge-5714861">peaked at $8,133 per FEU to the West Coast</a> and $10,133 per FEU to the East Coast in the week of July 5. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="db2a41f2-e1d4-498c-bda1-401715921660"></dynamic-object></div>Carriers Hapag-Lloyd, Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” <h3>Bookings from China surge </h3>The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Similar to Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to approximately $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen a 50% increase in bookings from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upward of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia-East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&P Global. Last year, spot rates peaked at $8,133 per FEU to the West Coast and $10,133 per FEU to the East Coast in the week of July 5. Carriers Hapag-Lloyd, Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” Bookings from China surge The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Similar to Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Trans-Pacific carriers announce massive June rate hikes

<div class="phx-topic abstract-wrapper">Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.</div>

Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.

<div class="phx-topic">Western US Class I railroads say they are preparing for a potential midsummer surge of imports from China following a 90-day suspension of steeper US tariffs on Chinese-made goods. To avoid a repeat of past breakdowns, such as during the COVID-19 pandemic, BNSF Railway and Union Pacific Railroad (UP) are ensuring they have sufficient staff, locomotives and equipment at critical terminals across the US. Both railroads outlined strategies to handle a likely uptick in cargo, including building longer trains, combining different train types, constructing trains differently and creating special trains temporarily. BNSF and UP say it is not clear yet how strong the rebound will be, with some ocean carriers and forwarders reporting a surge in booking of upward of 50%. “The month of June is where we think that air pocket will hit [most],” Jon Gabriel, BNSF’s group vice president of intermodal, told the Journal of Commerce. “Coming out of the Fourth of July is when what’s being put on vessels now would all start to hit. In the months of July and August, largely speaking.” UP CEO Jim Vena said the lull in volumes, sparked by US President Donald Trump raising tariffs on Chinese goods to 145% in early April before <a href="https://word-edit.officeapps.live.com/we/Eastbound%20trans-Pac%20spot%20rates%20in%20revival%20mode%20in%20wake%20of%20US-China%20trade%20deal%20%7C%20Journal%20of%20Commerce">reducing them to 30% Monday</a>, has begun to show in the numbers. “We can react [with] locomotives very fast; we have 500 of them parked, ready to go,” Vena said at the Bank of America Industrials Conference Wednesday. “We had a 30% increase in international intermodal last year, and we handled it. We’ve built a railroad that has some capacity to be able to flex.” <h3>A collaborative effort </h3>BNSF is positioning empty railcars and locomotives in California, Arizona, and Washington, while staying in close contact with ocean carriers, drayage companies, and third-party terminal operators such as ITS ConGlobal and Parsec. “Our terminal operators are in all the conversations; they are not cutting staff during this lull,” Gabriel said. “If we can give an extra vacation or two in June, let’s do that. But let’s also know it’s going to be a short-lived lull, and we must quickly snap back. It’s important to protect the business and keep it on the railroad versus trucking.” Those conversations also include chassis providers. Gabriel said he’s spoken with the CEOs of major providers such as DCLI, Flexi-Van Leasing, and TRAC Intermodal about what to expect in July and August. To provide a service with minimal dwell, both railroads are focusing on increasing train lengths and reconfiguring train designs to optimize throughput. During quiet periods, a standard international intermodal train may run 1.5 miles long. But in peak periods, railroads can stretch those trains to more than 2 miles. However, crane operators can only lift a finite number of containers per hour, which could lead to extended unloading times, impacting the ability of inland terminals to handle a continuous flow of incoming and outgoing trains. “We can pivot from a lull to a surge without disrupting the network,” UP COO Eric Gehringer said during an April 24 earnings call. “The tools we have today let us do that in hours or days, not weeks like in the past.” BNSF and UP could also send trains directly to smaller inland cities — e.g., Cincinnati, Houston or St. Louis — that normally would be part of a larger train going to Chicago, Dallas, Memphis or Kansas City. “We may run direct point-to-point trains, and I really like that because it reduces cargo transit times,” Gabriel explained. “It could also be that instead of one Chicago train a day, we run two trains. If you didn’t make the noon train, no worries, you’ll be on the 4 o’clock train. That helps all destinations, but certainly those smaller markets benefit more.” With just weeks to prepare, both railroads are betting that early coordination will be enough to keep freight moving and shippers from turning to long-haul trucking as a temporary solution. “It’s the calm before the whiplash,” said a former CN intermodal operations executive who asked not to be identified. “It’s one thing to say you have stored locomotives. It’s another thing to have trained crane operators, chassis, yard labor, and truck capacity all available at the same time. That’s where things broke down in 2021.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Western US Class I railroads say they are preparing for a potential midsummer surge of imports from China following a 90-day suspension of steeper US tariffs on Chinese-made goods. To avoid a repeat of past breakdowns, such as during the COVID-19 pandemic, BNSF Railway and Union Pacific Railroad (UP) are ensuring they have sufficient staff, locomotives and equipment at critical terminals across the US. Both railroads outlined strategies to handle a likely uptick in cargo, including building longer trains, combining different train types, constructing trains differently and creating special trains temporarily. BNSF and UP say it is not clear yet how strong the rebound will be, with some ocean carriers and forwarders reporting a surge in booking of upward of 50%. “The month of June is where we think that air pocket will hit [most],” Jon Gabriel, BNSF’s group vice president of intermodal, told the Journal of Commerce. “Coming out of the Fourth of July is when what’s being put on vessels now would all start to hit. In the months of July and August, largely speaking.” UP CEO Jim Vena said the lull in volumes, sparked by US President Donald Trump raising tariffs on Chinese goods to 145% in early April before reducing them to 30% Monday , has begun to show in the numbers. “We can react [with] locomotives very fast; we have 500 of them parked, ready to go,” Vena said at the Bank of America Industrials Conference Wednesday. “We had a 30% increase in international intermodal last year, and we handled it. We’ve built a railroad that has some capacity to be able to flex.” A collaborative effort BNSF is positioning empty railcars and locomotives in California, Arizona, and Washington, while staying in close contact with ocean carriers, drayage companies, and third-party terminal operators such as ITS ConGlobal and Parsec. “Our terminal operators are in all the conversations; they are not cutting staff during this lull,” Gabriel said. “If we can give an extra vacation or two in June, let’s do that. But let’s also know it’s going to be a short-lived lull, and we must quickly snap back. It’s important to protect the business and keep it on the railroad versus trucking.” Those conversations also include chassis providers. Gabriel said he’s spoken with the CEOs of major providers such as DCLI, Flexi-Van Leasing, and TRAC Intermodal about what to expect in July and August. To provide a service with minimal dwell, both railroads are focusing on increasing train lengths and reconfiguring train designs to optimize throughput. During quiet periods, a standard international intermodal train may run 1.5 miles long. But in peak periods, railroads can stretch those trains to more than 2 miles. However, crane operators can only lift a finite number of containers per hour, which could lead to extended unloading times, impacting the ability of inland terminals to handle a continuous flow of incoming and outgoing trains. “We can pivot from a lull to a surge without disrupting the network,” UP COO Eric Gehringer said during an April 24 earnings call. “The tools we have today let us do that in hours or days, not weeks like in the past.” BNSF and UP could also send trains directly to smaller inland cities — e.g., Cincinnati, Houston or St. Louis — that normally would be part of a larger train going to Chicago, Dallas, Memphis or Kansas City. “We may run direct point-to-point trains, and I really like that because it reduces cargo transit times,” Gabriel explained. “It could also be that instead of one Chicago train a day, we run two trains. If you didn’t make the noon train, no worries, you’ll be on the 4 o’clock train. That helps all destinations, but certainly those smaller markets benefit more.” With just weeks to prepare, both railroads are betting that early coordination will be enough to keep freight moving and shippers from turning to long-haul trucking as a temporary solution. “It’s the calm before the whiplash,” said a former CN intermodal operations executive who asked not to be identified. “It’s one thing to say you have stored locomotives. It’s another thing to have trained crane operators, chassis, yard labor, and truck capacity all available at the same time. That’s where things broke down in 2021.” Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

North-American rail

BNSF, UP prepping for July cargo rebound after tariff-induced lull

<div class="phx-topic abstract-wrapper">A request for industry comment on trucking regulations that could be modified or ended generated 896 responses in one month, with electronic logging devices and hours of service rules at the top of the list.</div>

A request for industry comment on trucking regulations that could be modified or ended generated 896 responses in one month, with electronic logging devices and hours of service rules at the top of the list.

<div class="phx-topic">If the Trump administration wants to deregulate trucking, it will find no lack of suggestions where to start. Comments on a Department of Transportation (DOT) request for information on rules that could or should be modified or replaced drew 896 comments in one month from industry organizations, state transportation officials, businesses and individuals. The comment period closed this week, and the list of regulations the respondents want amended or eliminated is long. Many of those responding were independent truckers. In particular, they targeted proposed mandates that would require speed limiting devices on truck engines and automatic emergency brakes (AEB) in heavy trucks, truck driver hours of service (HOS) rules, the electronic logging device (ELD) mandate and more. Those proposals and rules have been controversial since their inception. The current HOS rules and the ELD mandate were issued during the first Trump administration. It may be easier for regulators to drop or postpone pending regulations, such as a proposed requirement that trucks be equipped with speed limiters, than to rewrite existing rules such as the ELD mandate and HOS regulations. Many of the requests regarding those rules echo debates with prior administrations. Proposals that would mandate speed limiters were issued in 2016 under the Obama administration and then under the Biden White House in 2022. That last proposal remains active but has not advanced to a final rulemaking. The ELD mandate, implemented in late 2017, reshaped trucking, making it much more difficult to evade HOS limits. Many comments from truck drivers simply suggested some variant of ending the use of electronic logs and going back to paper logs. The request for information and the flood of responses are part of the Trump administration’s effort to identify and cut rules it considers unconstitutional, unlawful, unauthorized and unnecessarily burdensome. But respondents also called for new regulation that would help deter cargo crime and fraud. The National Association of Small Trucking Companies (NASTC) called for a permanent freight fraud enforcement task force with the DOT Office of the Inspector General. “This task force should be solely tasked with enforcing laws against fraud in transportation by investigating incidents and developing cases to bring to the Department of Justice,” the NASTC said in its comments. The organization also wants the Federal Motor Carrier Safety Administration to “diligently maintain” its National Consumer Complaint Database to fight fraud cases. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

If the Trump administration wants to deregulate trucking, it will find no lack of suggestions where to start. Comments on a Department of Transportation (DOT) request for information on rules that could or should be modified or replaced drew 896 comments in one month from industry organizations, state transportation officials, businesses and individuals. The comment period closed this week, and the list of regulations the respondents want amended or eliminated is long. Many of those responding were independent truckers. In particular, they targeted proposed mandates that would require speed limiting devices on truck engines and automatic emergency brakes (AEB) in heavy trucks, truck driver hours of service (HOS) rules, the electronic logging device (ELD) mandate and more. Those proposals and rules have been controversial since their inception. The current HOS rules and the ELD mandate were issued during the first Trump administration. It may be easier for regulators to drop or postpone pending regulations, such as a proposed requirement that trucks be equipped with speed limiters, than to rewrite existing rules such as the ELD mandate and HOS regulations. Many of the requests regarding those rules echo debates with prior administrations. Proposals that would mandate speed limiters were issued in 2016 under the Obama administration and then under the Biden White House in 2022. That last proposal remains active but has not advanced to a final rulemaking. The ELD mandate, implemented in late 2017, reshaped trucking, making it much more difficult to evade HOS limits. Many comments from truck drivers simply suggested some variant of ending the use of electronic logs and going back to paper logs. The request for information and the flood of responses are part of the Trump administration’s effort to identify and cut rules it considers unconstitutional, unlawful, unauthorized and unnecessarily burdensome. But respondents also called for new regulation that would help deter cargo crime and fraud. The National Association of Small Trucking Companies (NASTC) called for a permanent freight fraud enforcement task force with the DOT Office of the Inspector General. “This task force should be solely tasked with enforcing laws against fraud in transportation by investigating incidents and developing cases to bring to the Department of Justice,” the NASTC said in its comments. The organization also wants the Federal Motor Carrier Safety Administration to “diligently maintain” its National Consumer Complaint Database to fight fraud cases. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Truckers send Trump administration long list of rules to rewrite or kill

<div class="phx-topic abstract-wrapper">Rates are climbing quickly amid fresh Chinese volumes headed to the US, with an expected crunch in vessel capacity and the potential for port congestion driving the gains.  </div>

Rates are climbing quickly amid fresh Chinese volumes headed to the US, with an expected crunch in vessel capacity and the potential for port congestion driving the gains. 

<div class="phx-topic">Spot rates in the eastbound trans-Pacific are on a rapid rise as stakeholders on the trade lane expect a significant increase in cargo on the water in the wake of the <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">preliminary tariff deal agreed to last weekend between the US and China</a>.  While various pricing indexes have yet to reflect the post-deal jump in rates, forwarder sources say they are seeing May 15 general rate increases (GRIs) of about $1,000 for both the US West and East coasts, with an expected <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">crunch in vessel capacity</a> and the potential for port congestion driving the gains.  “We know that a lot of capacity has come out and there’s going to be a tremendous amount of volume that has to move,” said Rachel Shames, vice president of procurement and pricing at CV International. “No one knows how much, but we know it’s going to strain the system. The question is: How high will rates go?” In addition to the $1,000 GRIs carriers are due to implement this week, sources say an additional hike of $1,000 to $3,000 per FEU could be on tap for June 1. And several forwarders who spoke to the Journal of Commerce said shippers already need to book at $6,000 per FEU or above to guarantee space. In a research note Wednesday, analysts at Jefferies said Asia-West Coast spot rates are now being quoted at $3,000 per FEU, with East Coast rates at $4,000/FEU. Just how far rates could rise depends in large part on volumes, as not all observers are ready to categorize the coming flush of imports as a sustained surge. “It is too early to gauge whether this week’s volume surge is a simple return of normal volumes, a pull forward of demand, or an early start to peak season,” Jefferies said. “As of now though, spot rates are likely to continue gaining given limited vessel capacity near term.” Platts, a sister company of the Journal of Commerce within S&amp;P Global, shows North Asia to West Coast rates at $2,500 per FEU as of Wednesday, up $700 from a month ago. East Coast rates were at $3,500/FEU, up $500 month over month. But in the early days of a rapidly moving market, pricing indexes have yet to catch up to actual rate levels. A source at a non-vessel-operating common carrier (NVO) said he is rescinding quotes made to clients in April, unable to honor the initial offers in the new market environment. That same source saw bookings increase by about 200% this week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div><h3>Carrier moves </h3>An unbalanced supply and demand dynamic is fostering a hospitable environment for the rate hikes after carriers reduced capacity on the trans-Pacific in response to canceled bookings out of China in April in the aftermath of the US tariffs slapped on Beijing. On Wednesday, <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">Hapag-Lloyd reported an increase of more than 50%</a> in China-US bookings since the preliminary trade deal was signed over the weekend, also noting double-digit increases compared with pre-tariff cargo volumes — likely exacerbated by cargo held in China since early April. CEO Rolf Habben Jensen said the carrier expects “a surge in volume in the upcoming 60 or 90 days.” “But beyond that it is very difficult to predict and will depend on what kind of [trade] agreements will be closed between the US and other countries,” he said. Hapag-Lloyd and Gemini Cooperation partner Maersk each said they had swapped out large vessels for smaller ships on the eastbound trans-Pacific due to the decreased volumes but will reinstate the larger vessels now that demand has rebounded. “Over the next 90 days, there’s clearly going to be pent up supply that sits in China that needs to be reintroduced to the supply chain and [be brought to the US],” Charles van der Steene, president of Maersk North America, <a href="https://www.cnbc.com/video/2025/05/14/were-ready-to-reintroduce-capacity-on-the-trade-out-of-china-says-maersks-charles-van-der-steene.html">told CNBC</a>. “To bring capacity back in for vessels that have been redeployed elsewhere will be more difficult.” While the most prominent carriers operating on the trade lane are working to undo capacity reductions, several forwarder and shipper sources expect opportunistic behavior from some of the more agile carriers. “Big carriers, which reasonably anticipated continued import reductions and announced repositions [and] service suspensions ... will need to reverse course to take advantage of the coming import demand,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told the Journal of Commerce. “Some of the smaller, nimble carriers that jumped in during the COVID crisis will jump in now.” <h3>Added concerns </h3>As bookings climb and the market faces an increasingly significant capacity imbalance, stakeholders are concerned about the longer-term impacts of the changes, such as port congestion, equipment availability and manufacturing delays. Forwarder sources say West Coast ports will be particularly appealing for shippers due to the lower transit times from Asia and the uncertainty around what will happen after the 90-day cooling off period between Washington and Beijing ends. “It’s all about when you can clear customs, and obviously that is much faster on the West Coast because the ships arrive much earlier,” said Stephen Nothdurft, vice president of North American sales at forwarder MOL Consolidation Service. “You can get three ships cleared [if you ship to the] West Coast before one even gets to the East Coast. I don’t know that people are abandoning the East Coast loaders, per se, but having cargo on the shortest transit possible [is important to importers].” And while orders are increasing, manufacturing delays as some factories in China ramp back up to full speed could slow some US importers down, causing concerns within the 90-day deadline to take advantage of the reduced tariffs. Several importers reported factory closures in China as demand waned, and manufacturers will likely need some runway to reach traditional output levels. Forwarder and shipper sources are reporting some manufacturing delays of several weeks to a month. Meanwhile, fresh data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global, shows that US imports from Asia and China specifically rose in April, likely reflecting the last rush of boats on the water ahead of the April 9 implementation of new tariffs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>US imports from Asia last month rose to 1.59 million TEUs, up 3.9% from 1.53 million TEUs in March and up 14.5% from April 2024. US imports from China were at 849,390 TEUs, up 5.8% from 802,570 TEUs in March and 12.3% higher than a year ago. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  Senior Editor Bill Mongelluzzo contributed to this report.</div>

Spot rates in the eastbound trans-Pacific are on a rapid rise as stakeholders on the trade lane expect a significant increase in cargo on the water in the wake of the preliminary tariff deal agreed to last weekend between the US and China .  While various pricing indexes have yet to reflect the post-deal jump in rates, forwarder sources say they are seeing May 15 general rate increases (GRIs) of about $1,000 for both the US West and East coasts, with an expected crunch in vessel capacity and the potential for port congestion driving the gains.  “We know that a lot of capacity has come out and there’s going to be a tremendous amount of volume that has to move,” said Rachel Shames, vice president of procurement and pricing at CV International. “No one knows how much, but we know it’s going to strain the system. The question is: How high will rates go?” In addition to the $1,000 GRIs carriers are due to implement this week, sources say an additional hike of $1,000 to $3,000 per FEU could be on tap for June 1. And several forwarders who spoke to the Journal of Commerce said shippers already need to book at $6,000 per FEU or above to guarantee space. In a research note Wednesday, analysts at Jefferies said Asia-West Coast spot rates are now being quoted at $3,000 per FEU, with East Coast rates at $4,000/FEU. Just how far rates could rise depends in large part on volumes, as not all observers are ready to categorize the coming flush of imports as a sustained surge. “It is too early to gauge whether this week’s volume surge is a simple return of normal volumes, a pull forward of demand, or an early start to peak season,” Jefferies said. “As of now though, spot rates are likely to continue gaining given limited vessel capacity near term.” Platts, a sister company of the Journal of Commerce within S&P Global, shows North Asia to West Coast rates at $2,500 per FEU as of Wednesday, up $700 from a month ago. East Coast rates were at $3,500/FEU, up $500 month over month. But in the early days of a rapidly moving market, pricing indexes have yet to catch up to actual rate levels. A source at a non-vessel-operating common carrier (NVO) said he is rescinding quotes made to clients in April, unable to honor the initial offers in the new market environment. That same source saw bookings increase by about 200% this week. Carrier moves An unbalanced supply and demand dynamic is fostering a hospitable environment for the rate hikes after carriers reduced capacity on the trans-Pacific in response to canceled bookings out of China in April in the aftermath of the US tariffs slapped on Beijing. On Wednesday, Hapag-Lloyd reported an increase of more than 50% in China-US bookings since the preliminary trade deal was signed over the weekend, also noting double-digit increases compared with pre-tariff cargo volumes — likely exacerbated by cargo held in China since early April. CEO Rolf Habben Jensen said the carrier expects “a surge in volume in the upcoming 60 or 90 days.” “But beyond that it is very difficult to predict and will depend on what kind of [trade] agreements will be closed between the US and other countries,” he said. Hapag-Lloyd and Gemini Cooperation partner Maersk each said they had swapped out large vessels for smaller ships on the eastbound trans-Pacific due to the decreased volumes but will reinstate the larger vessels now that demand has rebounded. “Over the next 90 days, there’s clearly going to be pent up supply that sits in China that needs to be reintroduced to the supply chain and [be brought to the US],” Charles van der Steene, president of Maersk North America, told CNBC . “To bring capacity back in for vessels that have been redeployed elsewhere will be more difficult.” While the most prominent carriers operating on the trade lane are working to undo capacity reductions, several forwarder and shipper sources expect opportunistic behavior from some of the more agile carriers. “Big carriers, which reasonably anticipated continued import reductions and announced repositions [and] service suspensions ... will need to reverse course to take advantage of the coming import demand,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told the Journal of Commerce. “Some of the smaller, nimble carriers that jumped in during the COVID crisis will jump in now.” Added concerns As bookings climb and the market faces an increasingly significant capacity imbalance, stakeholders are concerned about the longer-term impacts of the changes, such as port congestion, equipment availability and manufacturing delays. Forwarder sources say West Coast ports will be particularly appealing for shippers due to the lower transit times from Asia and the uncertainty around what will happen after the 90-day cooling off period between Washington and Beijing ends. “It’s all about when you can clear customs, and obviously that is much faster on the West Coast because the ships arrive much earlier,” said Stephen Nothdurft, vice president of North American sales at forwarder MOL Consolidation Service. “You can get three ships cleared [if you ship to the] West Coast before one even gets to the East Coast. I don’t know that people are abandoning the East Coast loaders, per se, but having cargo on the shortest transit possible [is important to importers].” And while orders are increasing, manufacturing delays as some factories in China ramp back up to full speed could slow some US importers down, causing concerns within the 90-day deadline to take advantage of the reduced tariffs. Several importers reported factory closures in China as demand waned, and manufacturers will likely need some runway to reach traditional output levels. Forwarder and shipper sources are reporting some manufacturing delays of several weeks to a month. Meanwhile, fresh data from PIERS, a sister product of the Journal of Commerce within S&P Global, shows that US imports from Asia and China specifically rose in April, likely reflecting the last rush of boats on the water ahead of the April 9 implementation of new tariffs. US imports from Asia last month rose to 1.59 million TEUs, up 3.9% from 1.53 million TEUs in March and up 14.5% from April 2024. US imports from China were at 849,390 TEUs, up 5.8% from 802,570 TEUs in March and 12.3% higher than a year ago. Contact Laura Robb at laura.robb@spglobal.com .  Senior Editor Bill Mongelluzzo contributed to this report.

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