<div class="phx-topic abstract-wrapper">A handful of companies unveiled new products in the last week intended to enable decision-making based off the visibility data they provide. </div>

A handful of companies unveiled new products in the last week intended to enable decision-making based off the visibility data they provide.

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<div class="phx-topic">Transportation visibility vendors are repositioning their value propositions to shippers as providers of something more than just the data governing the whereabouts of freight, with three different vendors launching adjacent products in the last week alone. As the pandemic-led boom in investment into a cohort of providers has waned, and as customers sought applications rather than just data from visibility vendors, those providers have branched out into execution- or risk management-based offerings to remain relevant. This extension into execution is potentially reshaping the visibility market, which has largely relied on vendors partnering with execution-focused software vendors in the transportation, warehouse and inventory management spaces. On Wednesday, FourKites announced a new suite of control tower products designed to let shippers leverage its visibility data into decisions on areas like supplier collaboration, purchase orders, yard management and cross-docking. The products are aimed at not just influencing decision making, but giving shippers a direct path to make those decisions. “We have the ability to shape the definition of a control tower because that term means different things to different people,” FourKites CEO Matthew Elenjickal said. “We are one of the few providers with a real-time [visibility data] network. The control tower providers don’t have it. But we have to expand beyond transportation.” FourKites will enable shippers to track not only freight transportation, but orders, inventory and assets through eight specific control towers, he said. <h3>New funding for competition </h3>But FourKites is far from alone in trying to more directly link the value of visibility to adjacent decisions. Overhaul, which focuses on using visibility data to help shippers prevent or recover from cargo theft, last week landed a $55 million funding round from investors. “We want to provide a tech engagement that doesn’t slow the process down but allows a shipper or a broker to verify who is there picking up or delivering a load,” Overhaul CEO Barry Conlon said. “Shippers are using our solution as a safety net to continue to use brokers, who don’t always have control or influence over the carrier being used to move their load.” Conlon said the fresh round of investment will be used to accelerate the company’s use of AI in its products, and to fund acquisitions should the right opportunities arise. Another visibility vendor, Vizion, in 2024 launched a product called TradeView in conjunction with Dun &amp; Bradstreet that helps shippers monitor shipments from upstream suppliers using Vizion tracking data and D&amp;B’s business information databases. “There is still a focus on innovation and developing new solutions, but perhaps not at the pace or bloated spending waste there once was,” Vizion CEO Kyle Henderson said. “This cycle is not like past cycles, because priorities changed due to COVID and then the world changed to being very multi-polar. ”You’ll have more companies working on a wider range of solutions because the world of supply chain and logistics is getting more complex,” he added. “And tech is needed to both manage the complexity and eek out the efficiency gains.” project44, the largest vendor in the space, has since late 2023 been pushing its Movement product, a platform intended to unify its datasets across transportation modes and global regions to help shippers make better inventory management decisions. InforNexus, one of the pioneers of cargo visibility, last Friday released its own product aimed at extending the value of tracking data. Its NexTrace product is intended to give shippers visibility on raw materials through to finished goods to help them comply with traceability regulations, especially in the EU. “This will help our customers to not only meet upcoming regulations like the EU Digital Product Passport but also gain a competitive edge by providing comprehensive data on their products' journey, composition and sustainability,” Brian Carelli, Infor’s vice president of sustainability and partnerships, said in a statement. <h3>Failure to launch </h3>The impetus behind all of these moves is, as Elenjickal put it, a sort of aggregate failure from vendors to deliver on the promise of how visibility data could help other supply chain software perform better. “The market sentiment right now is there’s a lack of value realization around visibility,” he said. “There were a lot of promises made, including by us. But the value from those promises, very few companies have realized it. The ones that have are progressive and have resources and use data in other areas of supply chain, and they’re not afraid to throw people at it.” Conlon agreed. “There has, unfortunately, been a degrading in the belief of what visibility can bring,” he said. “There have been a lot of false promises that have been made. But we’ve been clear from the beginning. Visibility is not a solution; it’s a data stream. We’ve focused on risk management.” While Conlon said Overhaul welcomes partnerships with adjacent systems, Elenjickal said FourKites is now charting a course based on the idea that visibility partnerships with transportation management systems (TMSs), warehouse management systems (WMSs), and enterprise resource planning (ERP) vendors haven’t yielded desired results for shippers. “We always thought that we can be [neutral] and enable our partners to consume the data for our customers,” Elenjickal said. “But that hasn’t happened. They have other priorities. We cannot be dependent on partners. If we can’t do it, someone else will do it.” The intent of the eight control tower products, he said, is to make FourKites more directly accountable to its shipper customers. “We cannot appease all our partners all the time,” Elenjickal said. “We tried to do it for the past 10 years. We’re not trying to build a TMS, [an order management system], or a WMS. But we are going to make those systems more efficient, and every customer wants this to happen.” <h3>Partner friendly </h3>On Wednesday, another visibility provider, Shippeo, announced a $40 million investment aimed at helping it expand its customer base in North America and Asia-Pacific. Shippeo is taking a more traditional path to growth for its multimodal visibility platform, not eschewing partners or building product extensions, but highlighting its work with TMS or ERP system vendors. Shippeo said it saw a 40% year-over-year increase in North American customers in 2024, “driven by strategic partnerships with e2open, Google and SAP,” the company said in a statement. “As the US visibility market matures, companies are increasingly looking to switch vendors, with data quality concerns being the primary driver.” Contact Eric Johnson at eric.johnson@spglobal.com. </div>

Transportation visibility vendors are repositioning their value propositions to shippers as providers of something more than just the data governing the whereabouts of freight, with three different vendors launching adjacent products in the last week alone. As the pandemic-led boom in investment into a cohort of providers has waned, and as customers sought applications rather than just data from visibility vendors, those providers have branched out into execution- or risk management-based offerings to remain relevant. This extension into execution is potentially reshaping the visibility market, which has largely relied on vendors partnering with execution-focused software vendors in the transportation, warehouse and inventory management spaces. On Wednesday, FourKites announced a new suite of control tower products designed to let shippers leverage its visibility data into decisions on areas like supplier collaboration, purchase orders, yard management and cross-docking. The products are aimed at not just influencing decision making, but giving shippers a direct path to make those decisions. “We have the ability to shape the definition of a control tower because that term means different things to different people,” FourKites CEO Matthew Elenjickal said. “We are one of the few providers with a real-time [visibility data] network. The control tower providers don’t have it. But we have to expand beyond transportation.” FourKites will enable shippers to track not only freight transportation, but orders, inventory and assets through eight specific control towers, he said. New funding for competition But FourKites is far from alone in trying to more directly link the value of visibility to adjacent decisions. Overhaul, which focuses on using visibility data to help shippers prevent or recover from cargo theft, last week landed a $55 million funding round from investors. “We want to provide a tech engagement that doesn’t slow the process down but allows a shipper or a broker to verify who is there picking up or delivering a load,” Overhaul CEO Barry Conlon said. “Shippers are using our solution as a safety net to continue to use brokers, who don’t always have control or influence over the carrier being used to move their load.” Conlon said the fresh round of investment will be used to accelerate the company’s use of AI in its products, and to fund acquisitions should the right opportunities arise. Another visibility vendor, Vizion, in 2024 launched a product called TradeView in conjunction with Dun & Bradstreet that helps shippers monitor shipments from upstream suppliers using Vizion tracking data and D&B’s business information databases. “There is still a focus on innovation and developing new solutions, but perhaps not at the pace or bloated spending waste there once was,” Vizion CEO Kyle Henderson said. “This cycle is not like past cycles, because priorities changed due to COVID and then the world changed to being very multi-polar. ”You’ll have more companies working on a wider range of solutions because the world of supply chain and logistics is getting more complex,” he added. “And tech is needed to both manage the complexity and eek out the efficiency gains.” project44, the largest vendor in the space, has since late 2023 been pushing its Movement product, a platform intended to unify its datasets across transportation modes and global regions to help shippers make better inventory management decisions. InforNexus, one of the pioneers of cargo visibility, last Friday released its own product aimed at extending the value of tracking data. Its NexTrace product is intended to give shippers visibility on raw materials through to finished goods to help them comply with traceability regulations, especially in the EU. “This will help our customers to not only meet upcoming regulations like the EU Digital Product Passport but also gain a competitive edge by providing comprehensive data on their products' journey, composition and sustainability,” Brian Carelli, Infor’s vice president of sustainability and partnerships, said in a statement. Failure to launch The impetus behind all of these moves is, as Elenjickal put it, a sort of aggregate failure from vendors to deliver on the promise of how visibility data could help other supply chain software perform better. “The market sentiment right now is there’s a lack of value realization around visibility,” he said. “There were a lot of promises made, including by us. But the value from those promises, very few companies have realized it. The ones that have are progressive and have resources and use data in other areas of supply chain, and they’re not afraid to throw people at it.” Conlon agreed. “There has, unfortunately, been a degrading in the belief of what visibility can bring,” he said. “There have been a lot of false promises that have been made. But we’ve been clear from the beginning. Visibility is not a solution; it’s a data stream. We’ve focused on risk management.” While Conlon said Overhaul welcomes partnerships with adjacent systems, Elenjickal said FourKites is now charting a course based on the idea that visibility partnerships with transportation management systems (TMSs), warehouse management systems (WMSs), and enterprise resource planning (ERP) vendors haven’t yielded desired results for shippers. “We always thought that we can be [neutral] and enable our partners to consume the data for our customers,” Elenjickal said. “But that hasn’t happened. They have other priorities. We cannot be dependent on partners. If we can’t do it, someone else will do it.” The intent of the eight control tower products, he said, is to make FourKites more directly accountable to its shipper customers. “We cannot appease all our partners all the time,” Elenjickal said. “We tried to do it for the past 10 years. We’re not trying to build a TMS, [an order management system], or a WMS. But we are going to make those systems more efficient, and every customer wants this to happen.” Partner friendly On Wednesday, another visibility provider, Shippeo, announced a $40 million investment aimed at helping it expand its customer base in North America and Asia-Pacific. Shippeo is taking a more traditional path to growth for its multimodal visibility platform, not eschewing partners or building product extensions, but highlighting its work with TMS or ERP system vendors. Shippeo said it saw a 40% year-over-year increase in North American customers in 2024, “driven by strategic partnerships with e2open, Google and SAP,” the company said in a statement. “As the US visibility market matures, companies are increasingly looking to switch vendors, with data quality concerns being the primary driver.” Contact Eric Johnson at eric.johnson@spglobal.com.

Container lines

Forwarding

Truckload

Logistics Technology News

Visibility vendors move to extend reach and relevancy in rebalancing market

<div class="phx-topic abstract-wrapper">The US producer price index shows LTL pricing has been flat since September, but carriers continue to push for annualized increases in service contracts. </div>

The US producer price index shows LTL pricing has been flat since September, but carriers continue to push for annualized increases in service contracts.

<div class="phx-topic">The long-term rise in US less-than-truckload (LTL) pricing following the collapse of Yellow in 2023 is colliding with soft demand. That’s likely to give US shippers some leverage to resist LTL carrier requests for steep rate hikes in annual contract negotiations. The US producer price index (PPI) for long-distance LTL trucking was flat for the fourth straight month in December, according to data released Tuesday by the US Bureau of Labor Statistics (BLS). That’s the longest plateau for the LTL PPI since the recovery from the pandemic began in 2020 and an indicator that price hikes have stalled. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="92030a49-a365-46c9-89b8-472c39b44640"></dynamic-object></div>The LTL PPI has dropped 1.6% from its most recent high point last July, an indication LTL rates — still 5.5% higher <a href="https://www.joc.com/article/us-ltl-sector-growth-efficiencies-still-fueled-by-loss-of-yellow-5715785">than when Yellow shut down</a> in July 2023 — are not ready to rise much higher without more demand. On a year-over-year basis, the LTL PPI was up 3% from December 2023 and only 5.9% below its peak in June 2022, a sign of the resilience of LTL pricing. The BLS’ truckload PPI is 23.4% below its peak in May 2022. In comparison, the PPI for long-distance truckload services rose 1.3% in December from November, reaching its highest level since November 2023, but it is still fairly flat. The December reading from the BLS was 0.8% higher than a year ago. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="502bfcce-8a5c-4a30-b4a2-18030e5ba3df"></dynamic-object></div>Low demand is helping shippers <a href="https://www.joc.com/article/us-truckload-spot-rates-rising-but-shippers-keeping-lid-on-contract-rates-5919921">keep a lid on truckload contract rates</a>. It’s not clear where new LTL or truckload freight might come from. The freight downturn that began in 2022 is still alive in 2025, despite hopes it would end last year. Freight volumes are steady but stagnant early in the first quarter, according to AFS Logistics. “We haven’t seen a lull since the holidays, so freight volumes have been steady,” said Aaron LaGanke, vice president of freight services at the third-party logistics provider. “But we haven’t seen a big dip or an increase in demand either. It’s pretty flat.” <h3>Fresh demand absent </h3>“We’re in a depressed freight market,” said an LTL carrier executive who asked not to be identified. “Shipment activity is relatively flat year over year. We’re all waiting for the event or trend that will unleash increased demand for freight, but it’s not there.” LTL carriers are better positioned, even in a flat market, to negotiate higher pricing. For one, the market is highly consolidated. But perhaps more importantly, LTL providers in 2025 have a much better understanding of their costs, their service value and margins. “They do a good job of knowing their numbers,” LaGanke said, noting that will support some rate hikes, depending on the carrier. Shippers have told the Journal of Commerce they are seeing contract LTL rates rise, but in low single-digit percentages. The LTL PPI was still 3% higher on an annualized basis in December, and 5.5% higher than it was in July 2023, the month Yellow shut down and reshaped the LTL landscape. The amount of LTL savings shippers can expect depends on their freight, their lanes and their carriers, LaGanke said. But shippers and carriers are both getting better at fitting the right freight with the right network. Shippers have seen savings in LTL fuel surcharges. The average US retail diesel price was down 26 cents from a year ago as of Monday. The average fuel surcharge from major LTL carriers fell 3.4% in the fourth quarter from the third quarter, AFS Logistics said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The long-term rise in US less-than-truckload (LTL) pricing following the collapse of Yellow in 2023 is colliding with soft demand. That’s likely to give US shippers some leverage to resist LTL carrier requests for steep rate hikes in annual contract negotiations. The US producer price index (PPI) for long-distance LTL trucking was flat for the fourth straight month in December, according to data released Tuesday by the US Bureau of Labor Statistics (BLS). That’s the longest plateau for the LTL PPI since the recovery from the pandemic began in 2020 and an indicator that price hikes have stalled. The LTL PPI has dropped 1.6% from its most recent high point last July, an indication LTL rates — still 5.5% higher than when Yellow shut down in July 2023 — are not ready to rise much higher without more demand. On a year-over-year basis, the LTL PPI was up 3% from December 2023 and only 5.9% below its peak in June 2022, a sign of the resilience of LTL pricing. The BLS’ truckload PPI is 23.4% below its peak in May 2022. In comparison, the PPI for long-distance truckload services rose 1.3% in December from November, reaching its highest level since November 2023, but it is still fairly flat. The December reading from the BLS was 0.8% higher than a year ago. Low demand is helping shippers keep a lid on truckload contract rates . It’s not clear where new LTL or truckload freight might come from. The freight downturn that began in 2022 is still alive in 2025, despite hopes it would end last year. Freight volumes are steady but stagnant early in the first quarter, according to AFS Logistics. “We haven’t seen a lull since the holidays, so freight volumes have been steady,” said Aaron LaGanke, vice president of freight services at the third-party logistics provider. “But we haven’t seen a big dip or an increase in demand either. It’s pretty flat.” Fresh demand absent “We’re in a depressed freight market,” said an LTL carrier executive who asked not to be identified. “Shipment activity is relatively flat year over year. We’re all waiting for the event or trend that will unleash increased demand for freight, but it’s not there.” LTL carriers are better positioned, even in a flat market, to negotiate higher pricing. For one, the market is highly consolidated. But perhaps more importantly, LTL providers in 2025 have a much better understanding of their costs, their service value and margins. “They do a good job of knowing their numbers,” LaGanke said, noting that will support some rate hikes, depending on the carrier. Shippers have told the Journal of Commerce they are seeing contract LTL rates rise, but in low single-digit percentages. The LTL PPI was still 3% higher on an annualized basis in December, and 5.5% higher than it was in July 2023, the month Yellow shut down and reshaped the LTL landscape. The amount of LTL savings shippers can expect depends on their freight, their lanes and their carriers, LaGanke said. But shippers and carriers are both getting better at fitting the right freight with the right network. Shippers have seen savings in LTL fuel surcharges. The average US retail diesel price was down 26 cents from a year ago as of Monday. The average fuel surcharge from major LTL carriers fell 3.4% in the fourth quarter from the third quarter, AFS Logistics said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

US LTL truck pricing flat, but still elevated despite low demand

<div class="phx-topic abstract-wrapper">Domestic intermodal providers are frustrated that they’ve been unable to win significant rate increases in contracts in early 2025, but capacity in trucking and rail is still abundant and easy to procure.</div>

Domestic intermodal providers are frustrated that they’ve been unable to win significant rate increases in contracts in early 2025, but capacity in trucking and rail is still abundant and easy to procure.

<div class="phx-topic">Domestic intermodal providers are expressing frustration with what they say is a challenging freight market as early bids on annual contracts with shippers have yielded only small rate increases in California and flat or declining rates in other regions. That reality is underscoring a tough pricing environment for carriers as 2025 begins. One asset-based intermodal executive who did not want to be identified said he was “disappointed” with the results of annual contracts already awarded for 2025, saying they fell below his expectations. The source said he hopes to eke out a 1% or 2% increase on annual contracts that are inked in the first quarter and lobby for mid-single-digit percentage increases on a second wave of intermodal bids this spring. Meanwhile, J.B. Hunt Transport Services, the largest US intermodal carrier, has urged shippers to engage in “transparent conversations” about freight rates. In an advisory sent to shippers last week that was obtained by the Journal of Commerce, the company cited <a href="https://www.joc.com/article/domestic-intermodal-rate-pressure-building-on-stronger-truck-pricing-5741060">robust California outbound volumes</a> during the 2024 peak season as a reason to agree to higher rates now. “Inflation and rising costs have made our current margins unsustainable over the long term,” the advisory said. Railroads moved more than 82,000 containers from the Southwest to the Midwest last October, a record for any month, according to the Intermodal Association of North America (IANA). The Journal of Commerce estimates railroads hauled about 50,000 containers from Los Angeles to Chicago, the busiest US lane, that month, also a record. One intermodal shipper who did not want to be identified said despite the robust peak season in Southern California for trucking and rail, there is still abundant capacity available to handle current freight demand, adding that rate increases won’t occur until shippers struggle to procure containers or trailers. “As long as the supply of containers, drivers and over-the-road equipment is sufficient for freight demand, rates are going to stay flat or go down as carriers compete to keep their equipment moving,” the shipper said. “Rates only go up significantly when the supply is insufficient or inadequate to handle freight demand, causing shippers to worry whether their product will move downstream in enough time to generate revenue.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e322a7e3-8b94-4c1d-a1f3-896d029aad84"></dynamic-object></div><h3>Flexibility to negotiate </h3>Union Pacific Railroad (UP) is seeking rate increases in California while conceding to flat or lower rates in several inland markets, according to a pricing matrix compiled by the company and obtained by the Journal of Commerce. Aggregate pricing for low-volume shippers, which serves as a ceiling for negotiations with customers moving higher volumes, shows proposed increases of 5.9% in Southern California and 3.1% in Northern California, effective Feb. 1. However, UP has shown flexibility to negotiate more aggressive rates to keep incumbent customers or take business away from competitors. “If UP really wants the lane and it fits well within their network, they’re willing to help us retain existing business and compete against J.B. Hunt,” said a non-asset intermodal marketing company (IMC) executive. “Other BNSF partners are also offering attractive rates to take business from UP.” The need to work aggressively to keep or win business has some intermodal carriers and brokers pessimistic about the first half of the year. “The magic date for me is June,” a second non-asset IMC executive told the Journal of Commerce. “Either truckload capacity will have shrunk considerably and the market dynamics have shifted, or it’ll be another tough year for carriers,” BNSF and UP seem reluctant to raise rates in inland markets such as Chicago, Memphis, Minneapolis and St. Louis, with proposed rates flat or lower than a year ago, according to pricing documents from UP and BNSF partners seen by the Journal of Commerce. Adding pressure to the domestic intermodal market is Amazon, which is leveraging its fleet of more than 20,000 branded containers. The e-commerce giant is courting shippers with very aggressive rates to fill its boxes on backhauls from the inland to the West Coast in a bid to balance its freight flows originating on the West Coast, according to two intermodal shippers who spoke with the Journal of Commerce. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Domestic intermodal providers are expressing frustration with what they say is a challenging freight market as early bids on annual contracts with shippers have yielded only small rate increases in California and flat or declining rates in other regions. That reality is underscoring a tough pricing environment for carriers as 2025 begins. One asset-based intermodal executive who did not want to be identified said he was “disappointed” with the results of annual contracts already awarded for 2025, saying they fell below his expectations. The source said he hopes to eke out a 1% or 2% increase on annual contracts that are inked in the first quarter and lobby for mid-single-digit percentage increases on a second wave of intermodal bids this spring. Meanwhile, J.B. Hunt Transport Services, the largest US intermodal carrier, has urged shippers to engage in “transparent conversations” about freight rates. In an advisory sent to shippers last week that was obtained by the Journal of Commerce, the company cited robust California outbound volumes during the 2024 peak season as a reason to agree to higher rates now. “Inflation and rising costs have made our current margins unsustainable over the long term,” the advisory said. Railroads moved more than 82,000 containers from the Southwest to the Midwest last October, a record for any month, according to the Intermodal Association of North America (IANA). The Journal of Commerce estimates railroads hauled about 50,000 containers from Los Angeles to Chicago, the busiest US lane, that month, also a record. One intermodal shipper who did not want to be identified said despite the robust peak season in Southern California for trucking and rail, there is still abundant capacity available to handle current freight demand, adding that rate increases won’t occur until shippers struggle to procure containers or trailers. “As long as the supply of containers, drivers and over-the-road equipment is sufficient for freight demand, rates are going to stay flat or go down as carriers compete to keep their equipment moving,” the shipper said. “Rates only go up significantly when the supply is insufficient or inadequate to handle freight demand, causing shippers to worry whether their product will move downstream in enough time to generate revenue.” Flexibility to negotiate Union Pacific Railroad (UP) is seeking rate increases in California while conceding to flat or lower rates in several inland markets, according to a pricing matrix compiled by the company and obtained by the Journal of Commerce. Aggregate pricing for low-volume shippers, which serves as a ceiling for negotiations with customers moving higher volumes, shows proposed increases of 5.9% in Southern California and 3.1% in Northern California, effective Feb. 1. However, UP has shown flexibility to negotiate more aggressive rates to keep incumbent customers or take business away from competitors. “If UP really wants the lane and it fits well within their network, they’re willing to help us retain existing business and compete against J.B. Hunt,” said a non-asset intermodal marketing company (IMC) executive. “Other BNSF partners are also offering attractive rates to take business from UP.” The need to work aggressively to keep or win business has some intermodal carriers and brokers pessimistic about the first half of the year. “The magic date for me is June,” a second non-asset IMC executive told the Journal of Commerce. “Either truckload capacity will have shrunk considerably and the market dynamics have shifted, or it’ll be another tough year for carriers,” BNSF and UP seem reluctant to raise rates in inland markets such as Chicago, Memphis, Minneapolis and St. Louis, with proposed rates flat or lower than a year ago, according to pricing documents from UP and BNSF partners seen by the Journal of Commerce. Adding pressure to the domestic intermodal market is Amazon, which is leveraging its fleet of more than 20,000 branded containers. The e-commerce giant is courting shippers with very aggressive rates to fill its boxes on backhauls from the inland to the West Coast in a bid to balance its freight flows originating on the West Coast, according to two intermodal shippers who spoke with the Journal of Commerce. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Intermodal providers navigate tough pricing environment at start of year

<div class="phx-topic abstract-wrapper">The pricing move means a general rate increase planned by carriers for Jan. 15 will not be implemented, forwarders say, because demand is not sufficient to support another boost.</div>

The pricing move means a general rate increase planned by carriers for Jan. 15 will not be implemented, forwarders say, because demand is not sufficient to support another boost.

<div class="phx-topic">Most ocean carriers on the eastbound trans-Pacific are extending their current spot rates through the end of January, a sign that liners are losing pricing power even before the trade enters its weakest month of the year. Three of those carriers — including Hapag-Lloyd — are even taking the uncommon step of offering customers guaranteed rates into mid-February, sources say. Those pricing moves mean a general rate increase (GRI) planned by carriers for Jan. 15 will not be implemented, forwarders told the Journal of Commerce, because demand, while strong enough now to support the current rate level, is not sufficient to support another boost. “We’re not only getting two-week [guaranteed] rates, we’re [also] getting 30-day rates to Feb. 15,” said Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International. The fact that Hapag-Lloyd and two smaller lines that sources identified as Wan Hai and SM Lines have extended their rates for a full month to mid-February is especially significant because carriers normally guarantee rates for only two weeks. The advanced undercutting suggests carriers expect capacity to outpace demand even more in the coming month, further eroding pricing power. <h3>Lunar New Year factory closures </h3>The weakening market is driven by the reality that many factories in Asia will soon close for a week or two for the annual Lunar New Year holiday that begins Jan. 29. By guaranteeing spot rates through the end of the month, carriers are attempting to build “roll pools” of containers at Asian load ports to carry them into February, said James Caradonna, executive vice president at the forwarder M&amp;R Spedag Group. “Space is still OK, but some carriers are not as full as others,” Caradonna said, adding some carriers are willing to provide customers the space they want even if they exceed the minimum quantity commitment (MQC) in their contracts. Carriers confirm that with the Lunar New Year holidays approaching, further rate hikes are unlikely. “Rates are coming down pretty fast to the West Coast,” a carrier executive told the Journal of Commerce. A second carrier source acknowledged: “It seems like rates have crested and are drifting lower.” Spot rates from North Asia to the West Coast were $4,700 per FEU as of Jan. 13, down 10% on the week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. East Coast rates of $6,000 were down 7% from last week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Customers also have access to discounts provided by so-called “bullet” rates, which are special commodity- or trade lane-specific rates that are lower than the posted spot rates and freight-all-kinds (FAK) rates paid by forwarders. “The promotional rates are starting to proliferate,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. Bookings for shipments into February have peaked and will only decline further, he said, adding special rates to the West Coast are in the low $4,000s. An industry consultant who did not want to be identified said the fact that some carriers are extending current spot rates into mid-February indicates the drop in demand is accelerating. And that means some customers may choose to delay bookings of non-essential merchandise to see if spot rates decline further during the factory closures in Asia, the source said. Now that the International Longshoremen’s Association (ILA) has reached a tentative contract agreement with East and Gulf coast employees, <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">averting a second strike</a>, shippers are focusing primarily on what the tariff policy of President-elect Donald Trump will be after he takes office Jan. 20. If the higher tariffs Trump has threatened do not take effect on day one of the new administration but are staggered into the spring and summer, the eastbound trans-Pacific will experience a “massive frontloading” of imports, McElroy said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Most ocean carriers on the eastbound trans-Pacific are extending their current spot rates through the end of January, a sign that liners are losing pricing power even before the trade enters its weakest month of the year. Three of those carriers — including Hapag-Lloyd — are even taking the uncommon step of offering customers guaranteed rates into mid-February, sources say. Those pricing moves mean a general rate increase (GRI) planned by carriers for Jan. 15 will not be implemented, forwarders told the Journal of Commerce, because demand, while strong enough now to support the current rate level, is not sufficient to support another boost. “We’re not only getting two-week [guaranteed] rates, we’re [also] getting 30-day rates to Feb. 15,” said Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International. The fact that Hapag-Lloyd and two smaller lines that sources identified as Wan Hai and SM Lines have extended their rates for a full month to mid-February is especially significant because carriers normally guarantee rates for only two weeks. The advanced undercutting suggests carriers expect capacity to outpace demand even more in the coming month, further eroding pricing power. Lunar New Year factory closures The weakening market is driven by the reality that many factories in Asia will soon close for a week or two for the annual Lunar New Year holiday that begins Jan. 29. By guaranteeing spot rates through the end of the month, carriers are attempting to build “roll pools” of containers at Asian load ports to carry them into February, said James Caradonna, executive vice president at the forwarder M&R Spedag Group. “Space is still OK, but some carriers are not as full as others,” Caradonna said, adding some carriers are willing to provide customers the space they want even if they exceed the minimum quantity commitment (MQC) in their contracts. Carriers confirm that with the Lunar New Year holidays approaching, further rate hikes are unlikely. “Rates are coming down pretty fast to the West Coast,” a carrier executive told the Journal of Commerce. A second carrier source acknowledged: “It seems like rates have crested and are drifting lower.” Spot rates from North Asia to the West Coast were $4,700 per FEU as of Jan. 13, down 10% on the week, according to Platts, a sister company of the Journal of Commerce within S&P Global. East Coast rates of $6,000 were down 7% from last week. Customers also have access to discounts provided by so-called “bullet” rates, which are special commodity- or trade lane-specific rates that are lower than the posted spot rates and freight-all-kinds (FAK) rates paid by forwarders. “The promotional rates are starting to proliferate,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. Bookings for shipments into February have peaked and will only decline further, he said, adding special rates to the West Coast are in the low $4,000s. An industry consultant who did not want to be identified said the fact that some carriers are extending current spot rates into mid-February indicates the drop in demand is accelerating. And that means some customers may choose to delay bookings of non-essential merchandise to see if spot rates decline further during the factory closures in Asia, the source said. Now that the International Longshoremen’s Association (ILA) has reached a tentative contract agreement with East and Gulf coast employees, averting a second strike , shippers are focusing primarily on what the tariff policy of President-elect Donald Trump will be after he takes office Jan. 20. If the higher tariffs Trump has threatened do not take effect on day one of the new administration but are staggered into the spring and summer, the eastbound trans-Pacific will experience a “massive frontloading” of imports, McElroy said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Container Shipping News

Trans-Pacific

Maritime

Carriers extend spot rates in bid to avoid further rate erosion in eastbound trans-Pac

<div class="phx-topic abstract-wrapper">The shipowner’s decision to expand its MPV fleet is underpinned by expected growth in project cargo volumes and a lack of suitable ships. </div>

The shipowner’s decision to expand its MPV fleet is underpinned by expected growth in project cargo volumes and a lack of suitable ships.

<div class="phx-topic">A four-ship leasing deal by Norden reflects strong project cargo demand growth and sound market fundamentals, the Denmark-headquartered shipowner said Tuesday.Two 17,500-deadweight metric ton (dwt) multipurpose vessels (MPVs) are due to be delivered by the end of 2026 in a deal that includes options to purchase the vessels at the end of the lease agreements, the company said in a statement.Norden has an option to declare an additional two vessel leases with delivery in 2027. The first two ships will take Norden’s fleet of specialized project cargo vessels to 45, CEO Jan Rindbo said. “[The ships are] designed to handle windmill components, large-scale batteries, industrial plant equipment and breakbulk cargoes like steel and forestry products — enabling us to meet the evolving needs of our customers,” Rindbo said in the statement.The company declined to give further details about the leasing company or if the ships are newbuild or secondhand vessels. The vessels have an innovative design with the bridge located at the front of the ship, optimizing cargo space capacity for project cargo such as windmill blades. The ships are also biofuel compatible, Norden said.Norden entered the project cargo and MPV market in June 2023 when it acquired Thorco Projects.“Since entering the project cargo segment in 2023, our focus has been on growth within this part of the business,” Thomas Mikkelsen, Norden’s head of projects and parceling, said in the statement.“The multipurpose [vessel] segment benefits from favorable supply fundamentals with a rapidly ageing fleet and low order book, coupled with a strong projected demand outlook,” added Mikkelsen, who was previously the CEO of Thorco Projects.<h3>Drewry warns of limited MPV capacity </h3>Mikkelsen’s comments echo the upbeat outlook of the project cargo sector from maritime analyst Drewry Research, which has forecast an increase in charter rates for MPVs this year due to limited vessel supply and high demand.Drewry said the MPV fleet did not grow as much as expected last year because fewer vessels were delivered and scrapped. There were also fewer orders for new vessels placed in the second half of last year. Consequently, “deliveries are likely to be muted over the next two years,” Anurag Kumar, Drewry’s senior research analyst, said in the outlook.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1e7f3686-4313-47cb-9fe9-d40ac8e832e6"></dynamic-object></div>The MPV fleet totaled 31.6 million dwt on Jan. 1, according to British shipbroking house Clarksons, a figure virtually unchanged since 2022. Clarksons also forecasts that vessels totaling 1.8 million dwt will be delivered this year.“A tight supply of project cargo vessels [MPVs] will persist due to a low order book, resulting in higher charter rates,” Kumar said. “If delays in deliveries increase in 2025, we may see rates surging in 2026 for project cargo.”He added that, “demand for project cargo vessels will be robust in 2025, particularly on intra-Asia, supported by energy projects that remain on schedule.”Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

A four-ship leasing deal by Norden reflects strong project cargo demand growth and sound market fundamentals, the Denmark-headquartered shipowner said Tuesday. Two 17,500-deadweight metric ton (dwt) multipurpose vessels (MPVs) are due to be delivered by the end of 2026 in a deal that includes options to purchase the vessels at the end of the lease agreements, the company said in a statement. Norden has an option to declare an additional two vessel leases with delivery in 2027. The first two ships will take Norden’s fleet of specialized project cargo vessels to 45, CEO Jan Rindbo said. “[The ships are] designed to handle windmill components, large-scale batteries, industrial plant equipment and breakbulk cargoes like steel and forestry products — enabling us to meet the evolving needs of our customers,” Rindbo said in the statement. The company declined to give further details about the leasing company or if the ships are newbuild or secondhand vessels. The vessels have an innovative design with the bridge located at the front of the ship, optimizing cargo space capacity for project cargo such as windmill blades. The ships are also biofuel compatible, Norden said. Norden entered the project cargo and MPV market in June 2023 when it acquired Thorco Projects. “Since entering the project cargo segment in 2023, our focus has been on growth within this part of the business,” Thomas Mikkelsen, Norden’s head of projects and parceling, said in the statement. “The multipurpose [vessel] segment benefits from favorable supply fundamentals with a rapidly ageing fleet and low order book, coupled with a strong projected demand outlook,” added Mikkelsen, who was previously the CEO of Thorco Projects. Drewry warns of limited MPV capacity Mikkelsen’s comments echo the upbeat outlook of the project cargo sector from maritime analyst Drewry Research, which has forecast an increase in charter rates for MPVs this year due to limited vessel supply and high demand. Drewry said the MPV fleet did not grow as much as expected last year because fewer vessels were delivered and scrapped. There were also fewer orders for new vessels placed in the second half of last year. Consequently, “deliveries are likely to be muted over the next two years,” Anurag Kumar, Drewry’s senior research analyst, said in the outlook. The MPV fleet totaled 31.6 million dwt on Jan. 1, according to British shipbroking house Clarksons, a figure virtually unchanged since 2022. Clarksons also forecasts that vessels totaling 1.8 million dwt will be delivered this year. “A tight supply of project cargo vessels [MPVs] will persist due to a low order book, resulting in higher charter rates,” Kumar said. “If delays in deliveries increase in 2025, we may see rates surging in 2026 for project cargo.” He added that, “demand for project cargo vessels will be robust in 2025, particularly on intra-Asia, supported by energy projects that remain on schedule.” Contact Keith Wallis at keithwallis@hotmail.com .

Breakbulk carriers

Project cargo

Breakbulk News

Norden MPV leasing deal capitalizes on global fleet undercapacity

<div class="phx-topic abstract-wrapper">The carrier said its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators.</div>

The carrier said its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators.

<div class="phx-topic">Intra-Europe specialist carrier Unifeeder tripled its market share in the Mediterranean in 2024 as deep-sea liners diverting around Africa to avoid the Red Sea outsourced coverage of the region to smaller operators. The DP World subsidiary said in a statement Tuesday its market share of the intra-Mediterranean trade had risen from 1.5% in 2023 to 4.3% last year, with data from Alphaliner showing that Unifeeder recorded the highest capacity growth of all carriers in the region. Unifeeder CEO Martin Gaard Christiansen said the carrier’s growth in the Mediterranean and Black Sea was a result of the rapidly evolving shipping landscape in the region. ”The shipping industry is going through profound shifts, with geopolitical and economic factors driving the need for more agile and responsive supply chain solutions,” Gaard said in the statement. Vessel diversions around southern Africa add up to two weeks to transit times and absorb an additional 10% of capacity. Rather than connect with ports inside the Mediterranean, deep-sea carriers, in a bid to maintain weekly schedules, <a href="https://www.joc.com/article/ocean-carriers-slash-port-calls-as-red-sea-disruptions-grow-5219908">often offload South Europe cargo at hubs</a> in North Europe or at ports just inside the Atlantic entrance to the Mediterranean. The cargo is then transshipped eastward to destinations inside the Mediterranean or Black Sea. Unifeeder said the intra-Mediterranean trade sector as a whole saw overall capacity expand by 9.3%, or almost 50,000 TEUs, by December last year compared with December 2023. The carrier noted that its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators. <h3>Increasing Mediterranean transshipment </h3>Those changes in the Asia-Mediterranean network led to a host of new services being rolled out across the Med and Black Sea last year by both mainline carriers and smaller intra-Europe operators. Unifeeder alone launched seven new intra-Mediterranean services in the past 12 months, adding 10,600 TEUs of capacity and increasing its average vessel size to 1,186 TEUs, with plans to expand services into the Black Sea later this month. The carrier’s Mediterranean fleet now totals 20 vessels with a total capacity of 24,000 TEUs. <a href="https://www.joc.com/article/turkish-liners-shift-to-india-for-suez-routings-with-relays-to-us-europe-5919049">Turkish shipping company Arkas</a> last week announced the Feb. 10 launch of its direct India Med Service that will operate four vessels, each having a capacity of 2,500-2,800 TEUs. The additional volume coming into the Mediterranean from India will see Arkas restructuring its network with a new Blue Med Service merging two existing services jointly operated with CMA CGM. Unimed will launch a new service to connect Turkey to Bulgaria this month, while from Jan. 24 CMA CGM will add their new Odessa Express connecting Odessa with Piraeus and Ambarli in Turkey using two ships of 1,100 TEUs and 1,500 TEUs. Maersk this week launched its new Mediterranean Sea C (SLN) service that has replaced the Mediterranean Sea A (SLZ) and Mediterranean Sea B (SLH) services it operates jointly with Arkas. Ocean Network Express (ONE) on Jan. 18 will launch two feeder services covering the Adriatic and south Mediterranean. The Adriatic Service 1 (AD1) will use three ships of 1,000 TEUs and replace ONE’s existing Adriatic Israel Butterfly (AIB) service. There is set to be a significant increase in intra-Mediterranean ocean traffic from Feb. 1 when the <a href="https://www.joc.com/article/hapag-lloyd-says-gemini-alliance-cargo-bookings-to-open-dec-3-5846853">Gemini Cooperation between Maersk and Hapag-Lloyd</a> is launched. According to published Gemini schedules, vessels on the Asia-Mediterranean trade will provide weekly connectivity with Asia at gateway ports in Spain, Italy, the Adriatic and Turkey, with shuttles transporting cargo to destination terminals. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Intra-Europe specialist carrier Unifeeder tripled its market share in the Mediterranean in 2024 as deep-sea liners diverting around Africa to avoid the Red Sea outsourced coverage of the region to smaller operators. The DP World subsidiary said in a statement Tuesday its market share of the intra-Mediterranean trade had risen from 1.5% in 2023 to 4.3% last year, with data from Alphaliner showing that Unifeeder recorded the highest capacity growth of all carriers in the region. Unifeeder CEO Martin Gaard Christiansen said the carrier’s growth in the Mediterranean and Black Sea was a result of the rapidly evolving shipping landscape in the region. ”The shipping industry is going through profound shifts, with geopolitical and economic factors driving the need for more agile and responsive supply chain solutions,” Gaard said in the statement. Vessel diversions around southern Africa add up to two weeks to transit times and absorb an additional 10% of capacity. Rather than connect with ports inside the Mediterranean, deep-sea carriers, in a bid to maintain weekly schedules, often offload South Europe cargo at hubs in North Europe or at ports just inside the Atlantic entrance to the Mediterranean. The cargo is then transshipped eastward to destinations inside the Mediterranean or Black Sea. Unifeeder said the intra-Mediterranean trade sector as a whole saw overall capacity expand by 9.3%, or almost 50,000 TEUs, by December last year compared with December 2023. The carrier noted that its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators. Increasing Mediterranean transshipment Those changes in the Asia-Mediterranean network led to a host of new services being rolled out across the Med and Black Sea last year by both mainline carriers and smaller intra-Europe operators. Unifeeder alone launched seven new intra-Mediterranean services in the past 12 months, adding 10,600 TEUs of capacity and increasing its average vessel size to 1,186 TEUs, with plans to expand services into the Black Sea later this month. The carrier’s Mediterranean fleet now totals 20 vessels with a total capacity of 24,000 TEUs. Turkish shipping company Arkas last week announced the Feb. 10 launch of its direct India Med Service that will operate four vessels, each having a capacity of 2,500-2,800 TEUs. The additional volume coming into the Mediterranean from India will see Arkas restructuring its network with a new Blue Med Service merging two existing services jointly operated with CMA CGM. Unimed will launch a new service to connect Turkey to Bulgaria this month, while from Jan. 24 CMA CGM will add their new Odessa Express connecting Odessa with Piraeus and Ambarli in Turkey using two ships of 1,100 TEUs and 1,500 TEUs. Maersk this week launched its new Mediterranean Sea C (SLN) service that has replaced the Mediterranean Sea A (SLZ) and Mediterranean Sea B (SLH) services it operates jointly with Arkas. Ocean Network Express (ONE) on Jan. 18 will launch two feeder services covering the Adriatic and south Mediterranean. The Adriatic Service 1 (AD1) will use three ships of 1,000 TEUs and replace ONE’s existing Adriatic Israel Butterfly (AIB) service. There is set to be a significant increase in intra-Mediterranean ocean traffic from Feb. 1 when the Gemini Cooperation between Maersk and Hapag-Lloyd is launched. According to published Gemini schedules, vessels on the Asia-Mediterranean trade will provide weekly connectivity with Asia at gateway ports in Spain, Italy, the Adriatic and Turkey, with shuttles transporting cargo to destination terminals. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Unifeeder boosts market share as Red Sea diversions grow Med business

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

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

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

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

Transport, Trade and Regulation News

Protecting navigation and the Commerce Clause in 2025

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

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

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

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

MSC takes measured steps toward long-term goals

Los Angeles

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Seattle

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The *Journal of Commerce* calculates outbound port rates using data from Cargo Chief, DAT Freight & Analytics, digital freight broker Loadsmart, and an anonymous survey of truckload brokers. Outbound port rates cover Los Angeles-Long Beach, Oakland, and Seattle on the West Coast, and Houston, New York-New Jersey, Virginia, and Savannah on the Gulf and East coasts.

Outbound spot dry van trucking rates from LA, Seattle (Various sources)

Outbound spot dry van trucking rates from US West Coast ports Gateway

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

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

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

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

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

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

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

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

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

Port News

Rail News

North American ports

Marine terminals

Vancouver braces for congestion, high rail dwells through January

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

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

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

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

Trans-Atlantic

Limited disruption likely as new carrier alliances roll out: Alphaliner

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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<div class="phx-topic abstract-wrapper">While the draft language of the tentative agreement was not disclosed, the two sides said the deal includes language that covers the contentious issue of port automation and new technologies. </div>

While the draft language of the tentative agreement was not disclosed, the two sides said the deal includes language that covers the contentious issue of port automation and new technologies.

<div class="phx-topic">The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they have reached a tentative agreement on a new master contract that covers ports from Maine to Texas. While the deal needs approval from ILA locals and USMX members, it avoids another port strike and ensures shippers of labor peace along the US East and Gulf coasts for the next six years. The ILA and the USMX said in separate statements the agreement includes language that covers the contentious issue of port automation and new technologies. While the draft language of the tentative agreement was not available, one source said that marine terminals will have some leeway in implementing new technologies in return for more longshore jobs. Talks on a new master contract broke down in November due to the union’s concerns about the impact on jobs from <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">the use of semi-automated rail-mounted gantry cranes</a> (RMGs) at marine terminals. “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports — making them safer and more efficient and creating the capacity they need to keep our supply chains strong,” the statement said. Details of the agreement were not publicly disclosed, pending final approval by both sides. The deal was reached a week before a Jan. 15 strike deadline that was set <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">in October at the end of the three-day ILA strike</a> that was settled with an agreement on wages. The 45,000 dockworkers at East and Gulf coast ports will work under the current contract until the tentative agreement is ratified by the wage-scale committees of local unions. But sources indicate that the locals are likely to support the contract negotiated by ILA President Harold Daggett and Executive Vice President Dennis Daggett. The breakthrough came after four days of talks in Teaneck, New Jersey, on a new master contract. Those talks included side discussions on the impact of new technology on longshore jobs, ahead of <a href="https://www.joc.com/article/ila-usmx-contract-talks-set-for-jan-7-restart-ahead-of-strike-deadline-sources-5913854">broader talks that restarted on Jan. 7</a> that covered benefits and specific longshore crafts such as checkers and clerks. In December, the union enlisted President-elect Donald Trump to advocate on behalf of their stance against automation. On Wednesday, the ILA issued its own statement thanking Trump for his “bold stance [that] helped prevent a second coastwide strike.” “President Trump clearly demonstrated his unwavering support for our ILA union and longshore workers with his statement ‘heard round the world’ backing our position to protect American longshore jobs against the ravages of automated terminals,” Harold Daggett said in the statement. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com.</a></div>

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they have reached a tentative agreement on a new master contract that covers ports from Maine to Texas. While the deal needs approval from ILA locals and USMX members, it avoids another port strike and ensures shippers of labor peace along the US East and Gulf coasts for the next six years. The ILA and the USMX said in separate statements the agreement includes language that covers the contentious issue of port automation and new technologies. While the draft language of the tentative agreement was not available, one source said that marine terminals will have some leeway in implementing new technologies in return for more longshore jobs. Talks on a new master contract broke down in November due to the union’s concerns about the impact on jobs from the use of semi-automated rail-mounted gantry cranes (RMGs) at marine terminals. “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports — making them safer and more efficient and creating the capacity they need to keep our supply chains strong,” the statement said. Details of the agreement were not publicly disclosed, pending final approval by both sides. The deal was reached a week before a Jan. 15 strike deadline that was set in October at the end of the three-day ILA strike that was settled with an agreement on wages. The 45,000 dockworkers at East and Gulf coast ports will work under the current contract until the tentative agreement is ratified by the wage-scale committees of local unions. But sources indicate that the locals are likely to support the contract negotiated by ILA President Harold Daggett and Executive Vice President Dennis Daggett. The breakthrough came after four days of talks in Teaneck, New Jersey, on a new master contract. Those talks included side discussions on the impact of new technology on longshore jobs, ahead of broader talks that restarted on Jan. 7 that covered benefits and specific longshore crafts such as checkers and clerks. In December, the union enlisted President-elect Donald Trump to advocate on behalf of their stance against automation. On Wednesday, the ILA issued its own statement thanking Trump for his “bold stance [that] helped prevent a second coastwide strike.” “President Trump clearly demonstrated his unwavering support for our ILA union and longshore workers with his statement ‘heard round the world’ backing our position to protect American longshore jobs against the ravages of automated terminals,” Harold Daggett said in the statement. Contact Michael Angell at michael.angell@spglobal.com.

Longshore labor

ILA, USMX reach tentative deal that avoids another port strike

<div class="phx-topic abstract-wrapper">It’s important for railroads to prevent export containers from clogging their terminals because domestic and international intermodal cargo share terminal space.</div>

It’s important for railroads to prevent export containers from clogging their terminals because domestic and international intermodal cargo share terminal space.

<div class="phx-topic">Norfolk Southern Railway (NS) has begun to wind down accepting export containers for movement from inland terminals to key ports along the US East Coast ahead of a possible longshore strike next week. NS, in a “port curtailment” schedule issued to customers, said all exports from Cleveland to the Port of New York and New Jersey and the Port of Virginia will not be accepted after Wednesday. Freight going from Chicago to the Virginia International Gateway terminal must be tendered by Friday and to Norfolk Intermodal Terminals by Saturday. The railroad said freight from Detroit to the Port of Virginia will stop being accepted on Friday, with no freight to the Port of New York and New Jersey accepted as of Saturday. No exports going to terminals at the Port of Virginia will be accepted from any location after Friday, NS said. Exports from Chicago and Pittsburgh to the Port of New York and New Jersey will be accepted through Saturday, while no cargo will be accepted beginning Sunday from any location that is destined for the port’s Elizabeth Marine Terminal or Global Container Terminals. Norfolk Southern has not released a schedule yet for export cutoffs to ports in Charleston or Savannah. The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) were meeting in New Jersey this week in a bid to hammer out the final details of a new master contract and head off a strike that would begin Jan. 15, suspending container operations at ports along the East and Gulf coasts. It is important for railroads to prevent exports or empties from clogging their terminals because domestic and international intermodal cargo share terminal space, except in Chicago. If too much international cargo gets stuck inside terminals, it can disrupt customers who ship 53-foot domestic containers via rail, as happened during the COVID-19 pandemic. On an average weekday, about 600 to 1,000 loaded exports are hauled on trains from inland hubs to the Port of New York and New Jersey and about 1,000 to 1,500 to the Port of Virginia, according to a Journal of Commerce analysis of data from the Association of American Railroads (AAR) and the Intermodal Association of North America (IANA). CSX Transportation, the other eastern Class I railroad hauling containers between the Midwest and East Coast, has not issued any deadlines to in-gate containers, but it will adjust if a strike occurs. “In the event of an East Coast port disruption, CSX is prepared to pause both interchange traffic as well as in-gate activity and temporarily adjust terminal reservations in accordance with port shutdown plans,” CSX said in a statement to the Journal of Commerce. “CSX is making every effort to accommodate as much freight as possible in a fluid situation.” During the three-day ILA strike in October, CSX took a similar approach of accepting and storing outbound loads until there was no available space left inside the terminals. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Norfolk Southern Railway (NS) has begun to wind down accepting export containers for movement from inland terminals to key ports along the US East Coast ahead of a possible longshore strike next week. NS, in a “port curtailment” schedule issued to customers, said all exports from Cleveland to the Port of New York and New Jersey and the Port of Virginia will not be accepted after Wednesday. Freight going from Chicago to the Virginia International Gateway terminal must be tendered by Friday and to Norfolk Intermodal Terminals by Saturday. The railroad said freight from Detroit to the Port of Virginia will stop being accepted on Friday, with no freight to the Port of New York and New Jersey accepted as of Saturday. No exports going to terminals at the Port of Virginia will be accepted from any location after Friday, NS said. Exports from Chicago and Pittsburgh to the Port of New York and New Jersey will be accepted through Saturday, while no cargo will be accepted beginning Sunday from any location that is destined for the port’s Elizabeth Marine Terminal or Global Container Terminals. Norfolk Southern has not released a schedule yet for export cutoffs to ports in Charleston or Savannah. The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) were meeting in New Jersey this week in a bid to hammer out the final details of a new master contract and head off a strike that would begin Jan. 15, suspending container operations at ports along the East and Gulf coasts. It is important for railroads to prevent exports or empties from clogging their terminals because domestic and international intermodal cargo share terminal space, except in Chicago. If too much international cargo gets stuck inside terminals, it can disrupt customers who ship 53-foot domestic containers via rail, as happened during the COVID-19 pandemic. On an average weekday, about 600 to 1,000 loaded exports are hauled on trains from inland hubs to the Port of New York and New Jersey and about 1,000 to 1,500 to the Port of Virginia, according to a Journal of Commerce analysis of data from the Association of American Railroads (AAR) and the Intermodal Association of North America (IANA). CSX Transportation, the other eastern Class I railroad hauling containers between the Midwest and East Coast, has not issued any deadlines to in-gate containers, but it will adjust if a strike occurs. “In the event of an East Coast port disruption, CSX is prepared to pause both interchange traffic as well as in-gate activity and temporarily adjust terminal reservations in accordance with port shutdown plans,” CSX said in a statement to the Journal of Commerce. “CSX is making every effort to accommodate as much freight as possible in a fluid situation.” During the three-day ILA strike in October, CSX took a similar approach of accepting and storing outbound loads until there was no available space left inside the terminals. Contact Ari Ashe at ari.ashe@spglobal.com .

Norfolk Southern begins limiting export container moves ahead of possible strike

<div class="phx-topic abstract-wrapper">The twin complaints to the FMC charge that several ocean carriers pushed the shippers into paying surcharges and premium rates totaling $5.5 million, while creating another $76 million in added spot market costs. </div>

The twin complaints to the FMC charge that several ocean carriers pushed the shippers into paying surcharges and premium rates totaling $5.5 million, while creating another $76 million in added spot market costs.

<div class="phx-topic">Two US shippers, including the parent company of retailer Crate &amp; Barrel, want the Federal Maritime Commission (FMC) to investigate ocean carriers for not providing enough vessel space during the pandemic surge, alleging they also extracted surcharges and higher rates for previously agreed-upon container volumes in violation of US shipping law and forced the shippers into the then-costly spot market. The complaints are a further shot across the bow on the enforceability of service contracts and whether service refusals for some customers were a legitimate response to overwhelming demand during the COVID-19 era. In a pair of complaints published by FMC last week, Euromarket Designs, the parent of Crate &amp; Barrel, and housewares and furniture distributor Nielsen &amp; Bainbridge both allege that a host of ocean carriers failed to honor service contracts with the two shippers between 2020 and 2022, resulting in delays and a shortfall in expected cargo volumes. Instead, the shippers claim that carriers sought surcharges for getting their allocated cargo on a ship. All in, Euromarket said its freight bills with Mediterranean Shipping Co., HMM and Ocean Network Express (ONE) increased $5.5 million due to surcharges and higher rates. Nielsen &amp; Bainbridge said it paid $4 million more to ONE, OOCL and Evergreen Line for carrying cargo under its existing contracts.Even with the premiums, the two shippers said they were not able to get all the space they required during the 2020–22 service years. As a result, they were forced into the spot market where they say they paid a combined $76.5 million for capacity they expected to get under their service contracts. Nielsen &amp; Bainbridge filed for bankruptcy last year, turning itself over to private equity lenders KKR &amp; Co. and Silver Point Capital. The company said in its filing the higher freight costs “significantly contributed” to its bankruptcy. Along with an FMC investigation, the complainants asked for reparations from the carriers for the alleged violations. Representatives of the carriers did not immediately respond to the allegations. <h3>Similar complaints lobbed at carriers </h3>The twin complaints mirror similar ones filed in the wake of the pandemic-era container surge alleging refusal of service by carriers, with those cases having mixed success. MCS Industries, another home goods importer, alleged in 2021 that MSC and Cosco Shipping <a href="https://www.joc.com/article/us-importer-complains-of-container-line-collusion-to-fmc-5249085">failed to honor service contracts</a> and agreed-upon rate structures, the first such complaint on the issue of service contract fulfillment. MCS eventually entered into a settlement with Cosco.Food importer MSRF alleged in 2022 that HMM and Yang Ming did not honor service contracts that forced the shipper into the more expensive spot market. An FMC administrative law judge found <a href="https://www.joc.com/article/fmc-judge-rules-in-favor-of-hmm-in-rolled-cargo-complaint-5220361">HMM did try to accommodate MSRF’s cargo</a> by renegotiating contracts, while Yang Ming eventually settled with the shipper. Prior to the two recent filings, the largest complaints about refusal of service have come from Bed Bath &amp; Beyond. The bankrupt retailer alleged in <a href="https://www.joc.com/article/bed-bath-beyond-files-fmc-complaint-against-yang-ming-in-capacity-dispute-5220648">two complaints from 2023</a> that OOCL and Yang Ming caused a combined $40 million in damages for their alleged refusal to provide sufficient vessel space under existing contracts. The two cases are still pending. The alleged violations occurred before the June 2022 implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22), which prohibits ocean carriers from <a href="https://www.joc.com/article/fmc-refusal-of-service-rule-risks-overreacting-to-pandemic-market-5216058">“unreasonable refusals” of cargo space to shippers</a>. In July 2024, the FMC published its final rules on how it would treat instances where carriers refused cargo space to customers. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Two US shippers, including the parent company of retailer Crate & Barrel, want the Federal Maritime Commission (FMC) to investigate ocean carriers for not providing enough vessel space during the pandemic surge, alleging they also extracted surcharges and higher rates for previously agreed-upon container volumes in violation of US shipping law and forced the shippers into the then-costly spot market. The complaints are a further shot across the bow on the enforceability of service contracts and whether service refusals for some customers were a legitimate response to overwhelming demand during the COVID-19 era. In a pair of complaints published by FMC last week, Euromarket Designs, the parent of Crate & Barrel, and housewares and furniture distributor Nielsen & Bainbridge both allege that a host of ocean carriers failed to honor service contracts with the two shippers between 2020 and 2022, resulting in delays and a shortfall in expected cargo volumes. Instead, the shippers claim that carriers sought surcharges for getting their allocated cargo on a ship. All in, Euromarket said its freight bills with Mediterranean Shipping Co., HMM and Ocean Network Express (ONE) increased $5.5 million due to surcharges and higher rates. Nielsen & Bainbridge said it paid $4 million more to ONE, OOCL and Evergreen Line for carrying cargo under its existing contracts. Even with the premiums, the two shippers said they were not able to get all the space they required during the 2020–22 service years. As a result, they were forced into the spot market where they say they paid a combined $76.5 million for capacity they expected to get under their service contracts. Nielsen & Bainbridge filed for bankruptcy last year, turning itself over to private equity lenders KKR & Co. and Silver Point Capital. The company said in its filing the higher freight costs “significantly contributed” to its bankruptcy. Along with an FMC investigation, the complainants asked for reparations from the carriers for the alleged violations. Representatives of the carriers did not immediately respond to the allegations. Similar complaints lobbed at carriers The twin complaints mirror similar ones filed in the wake of the pandemic-era container surge alleging refusal of service by carriers, with those cases having mixed success. MCS Industries, another home goods importer, alleged in 2021 that MSC and Cosco Shipping failed to honor service contracts and agreed-upon rate structures, the first such complaint on the issue of service contract fulfillment. MCS eventually entered into a settlement with Cosco. Food importer MSRF alleged in 2022 that HMM and Yang Ming did not honor service contracts that forced the shipper into the more expensive spot market. An FMC administrative law judge found HMM did try to accommodate MSRF’s cargo by renegotiating contracts, while Yang Ming eventually settled with the shipper. Prior to the two recent filings, the largest complaints about refusal of service have come from Bed Bath & Beyond. The bankrupt retailer alleged in two complaints from 2023 that OOCL and Yang Ming caused a combined $40 million in damages for their alleged refusal to provide sufficient vessel space under existing contracts. The two cases are still pending. The alleged violations occurred before the June 2022 implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22), which prohibits ocean carriers from “unreasonable refusals” of cargo space to shippers . In July 2024, the FMC published its final rules on how it would treat instances where carriers refused cargo space to customers. Contact Michael Angell at michael.angell@spglobal.com .

Two US shippers latest to allege carriers bumped contract cargo to spot market

<div class="phx-topic abstract-wrapper">The decline reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased.</div>

The decline reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased.

<div class="phx-topic">Taiwan's Big Three container lines saw an accelerating decline in revenues over the last six months, although they remain significantly higher than monthly revenues in 2023, filings this week with the Taiwan stock exchange show. Figures from Evergreen Marine, Taiwan’s largest container line, show monthly revenues dropped 30% between the peak in July and December. Yang Ming Marine Transport saw a similar pattern, with monthly revenues falling 32% between July and December, while intra-Asia-focused Wan Hai Lines saw a 28% drop in the same period. The slump reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased. The Shanghai Containerized Freight Index (SCFI), which measures spot container rates on a basket of trades including the trans-Pacific from Shanghai, plunged 43% in the third quarter alone, the biggest third-quarter drop since 2022. That followed an early peak season as shippers forward booked shipments to offset port congestion and voyage delays and the threat of disruption due to industrial action by dockworkers on the US East and Gulf coasts in October. “With the end of the US East [and Gulf] coast port strike, concerns about supply chain disruptions ... eased, leading to increased competitive pressure in the market,” Yang Ming said in market comments about the fourth quarter. Evergreen and Wan Hai Lines did see a slight uptick in December revenues from November on the back of higher freight rates ahead of the Lunar New Year holidays. Overall, Evergreen saw monthly revenues slide from $1.6 billion in July to $1.1 billion in December, stock exchange filings show. Total revenues for the year were $14 billion, up 68% compared with $8.4 billion in 2023. Yang Ming reported monthly revenues of $770 million in July, falling to $521 million in December. But revenues for all of 2024 totaled $6.7 billion, up 58% from $4.2 billion in the year prior. Similarly, Wan Hai Lines recorded revenues of $608 million in July compared with $435 million in December. Full-year revenue of $4.9 billion was up 62% from $3 million in 2023. Other carriers are expected to report a similar slide in revenues after rates peaked in the middle of last year. <a href="https://www.joc.com/article/cosco-forecasts-95-jump-in-2024-net-profit-on-robust-volumes-freight-rates-5920588">OOCL on Friday</a> said revenues fell to $2.5 billion in the fourth quarter, despite an increase in liftings, from $3 billion in the third quarter. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Taiwan's Big Three container lines saw an accelerating decline in revenues over the last six months, although they remain significantly higher than monthly revenues in 2023, filings this week with the Taiwan stock exchange show. Figures from Evergreen Marine, Taiwan’s largest container line, show monthly revenues dropped 30% between the peak in July and December. Yang Ming Marine Transport saw a similar pattern, with monthly revenues falling 32% between July and December, while intra-Asia-focused Wan Hai Lines saw a 28% drop in the same period. The slump reflects the wider slide in container freight rates from August, which accelerated in October and November as cargo demand eased. The Shanghai Containerized Freight Index (SCFI), which measures spot container rates on a basket of trades including the trans-Pacific from Shanghai, plunged 43% in the third quarter alone, the biggest third-quarter drop since 2022. That followed an early peak season as shippers forward booked shipments to offset port congestion and voyage delays and the threat of disruption due to industrial action by dockworkers on the US East and Gulf coasts in October. “With the end of the US East [and Gulf] coast port strike, concerns about supply chain disruptions ... eased, leading to increased competitive pressure in the market,” Yang Ming said in market comments about the fourth quarter. Evergreen and Wan Hai Lines did see a slight uptick in December revenues from November on the back of higher freight rates ahead of the Lunar New Year holidays. Overall, Evergreen saw monthly revenues slide from $1.6 billion in July to $1.1 billion in December, stock exchange filings show. Total revenues for the year were $14 billion, up 68% compared with $8.4 billion in 2023. Yang Ming reported monthly revenues of $770 million in July, falling to $521 million in December. But revenues for all of 2024 totaled $6.7 billion, up 58% from $4.2 billion in the year prior. Similarly, Wan Hai Lines recorded revenues of $608 million in July compared with $435 million in December. Full-year revenue of $4.9 billion was up 62% from $3 million in 2023. Other carriers are expected to report a similar slide in revenues after rates peaked in the middle of last year. OOCL on Friday said revenues fell to $2.5 billion in the fourth quarter, despite an increase in liftings, from $3 billion in the third quarter. Contact Keith Wallis at keithwallis@hotmail.com .

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