<div class="phx-topic abstract-wrapper">Shippers are scrambling for space on aircraft and paying more for their cargo as robust volume in Asia-Europe and Asia-North America trades quickly mop up available capacity.</div>

Shippers are scrambling for space on aircraft and paying more for their cargo as robust volume in Asia-Europe and Asia-North America trades quickly mop up available capacity.

<div class="phx-topic"><div class="wrapper-medium center-element"><img src="/images/phoenix/5259170_1.0.jpg"></img></div>Robust volumes in Asia-Europe and Asia-North America trades are driving up rates. Photo credit: Shutterstock.comSnowballing cross-border e-commerce and high levels of emergency shipments are driving up demand for air cargo, but some shippers’ intensifying need for speed to market is being threatened by limited capacity on planes in peak periods and at airport hubs. The industry’s busiest time of the year begins now, and shippers are scrambling for space on aircraft and paying more for their cargo as robust volume in Asia-Europe and Asia-North America trades quickly mop up available capacity. Data from e-booking and air freight automation platform Freightos WebCargo show a doubling of air freight prices from Shanghai to Frankfurt in the past two months. In September, the rate was $2.5 per kilogram, rising to $3.7 per kilogram in October and $5 per kilogram in November.“Driven by strong e-commerce sales and the build up for holiday season, air capacity is stretched incredibly thin,” said Manel Galindo, CEO of Freightos WebCargo. “The spot market is being heavily impacted by early capacity reservations by forwarders, as well as product launches such as Apple’s iPhoneX release.”Greg Guillaume, senior vice president strategic development at Atlas Air Worldwide Holdings, agreed that the underlying reason for rising demand was e-commerce, and he labeled it a mega-trend. “Over the longer term, e-commerce will account for an increasing share of retail sales — the mega-trend of our times,” he said. “Particularly in developed economies, we are seeing that e-commerce often uses express air freight as a mode of delivery to the customer. With the anticipated future expansion of e-commerce in emerging economies, its effect on air freight will drive growth for many years to come,” he said.Worldwide retail e-commerce sales are expected to reach $2.29 trillion in 2017 and will increase to $4.48 trillion by the end of 2021, equating to 16.1 percent of total retail sales. Consumers in China will generate almost half, or 49.5 percent, of all worldwide e-commerce sales in 2017, according to research consultant eMarketer.Atlas Air, along with the global carriers, is expecting a strong peak season and continued solid demand through 2018, but when airlines forecast a return to good times, shippers can expect rate increases. The strong demand is leading to packed freighters in the major trades out of Asia, and the high utilization and tight space will push up prices in the last two months of the year and into 2018.“The divergence in growth rates recently has been extreme — not since 2010 have we seen similar dynamics in supply and demand,” Guillaume said. “Current conditions are leading to a stronger pricing environment, and better capacity utilization, which is cause for optimism in the near term.”Bjorn Vang Jensen, vice president of global logistics for Electrolux, said his company was active in the air freight market this year, but he is not experiencing tight space constraints. “That may change now that the holiday season is upon us. Rates are definitely a little higher than last year,” he said.But increasing in tandem with the rising volume of air cargo is the growing need for speed to market. Much of e-commerce goes by air, but the highly competitive nature of modern retail and the complications involved in managing intercontinental supply chains means a huge amount of the freight being transported by air comprises emergency shipments — as much as 50 percent, according to Otto Schacht, senior vice president for global sea freight, at third-party logistics provider Kuehne + Nagel.This combination of more cargo needing to reach its destination quicker and limited head-haul capacity not only drives up air freight prices, but also leaves shippers, especially those in the trans-Pacific trade, with few options but to build delays into their supply chains with all the inventory costs that brings.Asia-Europe shippers have the China-Europe rail alternative, but with about 50 trains per week on the Silk Road providing a weekly capacity of approximately 5,000 TEU, the overland connection is at capacity during peak periods. This results in delays and congestion that erase the cost and transit time benefits that are the rail route’s key selling points over air and ocean.A quick review of the air cargo business this year shows the transport sector has been enjoying something of a renaissance in 2017 after six years of anemic demand. In August 2016, the air cargo industry reached a point that container shipping for a long time has only been able to dream of — growth in demand exceeded the rate of supply as the global economy improved. The solid demand for air cargo has prevailed through 2017.Data from the International Air Transport Association (IATA) show global air freight markets in September, measured in freight metric ton-kilometers, or FTKs, rose 9.2 percent compared with the same month in 2016. Although this was the slowest pace of growth seen in five months, it was still significantly higher than the five-year average growth rate of 4.4 percent. “While slower than in previous months, it remains stronger than anything we have seen in recent memory,” was Alexandre de Juniac's, IATA director general and CEO's, description of the September figures.Air cargo analyst WorldACD said that with a very high yield increase of 12 percent year over year in US dollar-terms, September was another outstanding month for air cargo carriers. “Revenue improved year over year by 21.8 percent, an excellent performance in any business,” the analyst said.After several months of double-digit growth in 2017, IATA said its forecast of 7.5 percent rise in air freight demand for the year still has “significant upside potential.” That optimism is being expressed across the industry, and confidence is flying high among airline executives. According to IATA’s October Airline Business Confidence Index that surveys CFOs and heads of cargo, there will be no reduction in air freight volumes over the next 12 months, and the robust demand will support improving profitability. Improvements in global trade sentiment also have delivered a robust 10.7 percent growth in January through September air cargo volumes for Asia-Pacific airlines, a welcome development for the carriers that account for nearly 40 percent of global air cargo traffic. September demand was up 11.4 percent.Continuing to stand out is the European region, where airlines posted a 10.3 percent increase in freight demand in September against a capacity increase of 5.6 percent. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized, IATA said. The association said German manufacturers’ export orders were growing at their fastest pace in more than seven years. Freight demand was strongest on the routes to and from Asia and across the Atlantic.The latest outlook from IHS Markit for air cargo trade tonnage also supports solid increases in Europe trade in 2017. Volume growth from East Asia into the European Union will outpace that into the United States for the first time since 2014. The EU’s economic recovery also shows up in trade with the United States, where exports will benefit from a relatively weak euro. Chemical and related product shipments to North America and food shipments to Asia have been particularly strong out of Europe.The improving economic conditions in the world’s major consuming markets are good news in terms of air cargo volume, and the recovery also is generating a rapid increase in low-cost and leisure travel. This is placing mounting pressure on capacity at airport hubs and is having worrying consequences for carriers and anyone shipping goods by air.According to IATA, more than 100 of the 177 capacity-constrained airports around the world are in Europe, and with passenger levels expected to double in the next 20 years, the ability of these airports to accommodate growing freight and leisure flights is being severely tested.Currently headlining the leisure travel versus air cargo issue is Amsterdam Schiphol Airport, one of the busiest hubs in Europe. Schiphol, like all other major airports, is reaping the benefits of rapidly growing e-commerce. China is already Schiphol’s largest cargo market, and e-commerce is helping to strengthen that position.“Historically, China is the recognized as the world’s leading manufacturer, but Chinese consumers are increasingly sourcing a wide range of online luxury items from the Netherlands and across Europe. On the back of this demand, a significant trend is for increased imports into China of goods bought on online marketplaces,” said Jonas van Stekelenburg, cargo director at Amsterdam Airport Schiphol.But threatening to undo all the hard work and investment in cargo infrastructure and services built up over many years is the triggering in September of something known as the 80:20 rule after flight movements at Schiphol grew faster than expected.IATA issues Worldwide Slot Guidelines to provide the global air transport community with a single set of standards for the management of airport slots. The 80:20 guidelines require any airline that has not used 80 percent of its allocated slots to forfeit them, but the approach does no favors for freighters. Many full freighter flights have difficult flight schedules with multiple stops in one flight, the European Shippers’ Council (ESC) noted, and a delay at a certain airport can affect their entire flight schedule and make them more vulnerable to losing their time slot. The ESC said the impact of the 80:20 rule was a 20 percent drop in full freighter flights from Schiphol during this winter season from Nov. 1. A major concern is that full freighters ousted from hubs in Europe will have to depend more on secondary airports such as Liege, Maastricht, and Frankfurt Hahn, where environmental restrictions are tougher, proper infrastructure is lacking, and cargo facilities are outdated. This was highlighted by the ESC, which said infrastructure and handling facilities at the major hubs had all been built up over time, and they were centers of expertise for air cargo. “Frankfurt, Paris, Brussels, and Amsterdam are all leading air cargo airports with a strong level of competition. They are customer-service oriented and are continuously striving for innovation and efficiency of air cargo handling,” the ESC noted.When the Dutch gateway reached full capacity in September and the 80:20 rule was applied, AirBridgeCargo lost half of its freighter slots and will shift scheduled B747 freighter flights to Liege. Emirates SkyCargo is moving flights from Schiphol to Brussels, Copenhagen, and Frankfurt, and Singapore Airlines is shifting to Brussels.The ESC had a warning for shippers using air cargo to get their goods to market. “Though we see an increase in shipping through air cargo, handling will deteriorate to a mediocre level through the secondary airports.” Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/greg_knowler">@greg_knowler</a>.</div>

Robust volumes in Asia-Europe and Asia-North America trades are driving up rates. Photo credit: Shutterstock.com Snowballing cross-border e-commerce and high levels of emergency shipments are driving up demand for air cargo, but some shippers’ intensifying need for speed to market is being threatened by limited capacity on planes in peak periods and at airport hubs. The industry’s busiest time of the year begins now, and shippers are scrambling for space on aircraft and paying more for their cargo as robust volume in Asia-Europe and Asia-North America trades quickly mop up available capacity. Data from e-booking and air freight automation platform Freightos WebCargo show a doubling of air freight prices from Shanghai to Frankfurt in the past two months. In September, the rate was $2.5 per kilogram, rising to $3.7 per kilogram in October and $5 per kilogram in November. “Driven by strong e-commerce sales and the build up for holiday season, air capacity is stretched incredibly thin,” said Manel Galindo, CEO of Freightos WebCargo. “The spot market is being heavily impacted by early capacity reservations by forwarders, as well as product launches such as Apple’s iPhoneX release.” Greg Guillaume, senior vice president strategic development at Atlas Air Worldwide Holdings, agreed that the underlying reason for rising demand was e-commerce, and he labeled it a mega-trend. “Over the longer term, e-commerce will account for an increasing share of retail sales — the mega-trend of our times,” he said. “Particularly in developed economies, we are seeing that e-commerce often uses express air freight as a mode of delivery to the customer. With the anticipated future expansion of e-commerce in emerging economies, its effect on air freight will drive growth for many years to come,” he said. Worldwide retail e-commerce sales are expected to reach $2.29 trillion in 2017 and will increase to $4.48 trillion by the end of 2021, equating to 16.1 percent of total retail sales. Consumers in China will generate almost half, or 49.5 percent, of all worldwide e-commerce sales in 2017, according to research consultant eMarketer. Atlas Air, along with the global carriers, is expecting a strong peak season and continued solid demand through 2018, but when airlines forecast a return to good times, shippers can expect rate increases. The strong demand is leading to packed freighters in the major trades out of Asia, and the high utilization and tight space will push up prices in the last two months of the year and into 2018. “The divergence in growth rates recently has been extreme — not since 2010 have we seen similar dynamics in supply and demand,” Guillaume said. “Current conditions are leading to a stronger pricing environment, and better capacity utilization, which is cause for optimism in the near term.” Bjorn Vang Jensen, vice president of global logistics for Electrolux, said his company was active in the air freight market this year, but he is not experiencing tight space constraints. “That may change now that the holiday season is upon us. Rates are definitely a little higher than last year,” he said. But increasing in tandem with the rising volume of air cargo is the growing need for speed to market. Much of e-commerce goes by air, but the highly competitive nature of modern retail and the complications involved in managing intercontinental supply chains means a huge amount of the freight being transported by air comprises emergency shipments — as much as 50 percent, according to Otto Schacht, senior vice president for global sea freight, at third-party logistics provider Kuehne + Nagel. This combination of more cargo needing to reach its destination quicker and limited head-haul capacity not only drives up air freight prices, but also leaves shippers, especially those in the trans-Pacific trade, with few options but to build delays into their supply chains with all the inventory costs that brings. Asia-Europe shippers have the China-Europe rail alternative, but with about 50 trains per week on the Silk Road providing a weekly capacity of approximately 5,000 TEU, the overland connection is at capacity during peak periods. This results in delays and congestion that erase the cost and transit time benefits that are the rail route’s key selling points over air and ocean. A quick review of the air cargo business this year shows the transport sector has been enjoying something of a renaissance in 2017 after six years of anemic demand. In August 2016, the air cargo industry reached a point that container shipping for a long time has only been able to dream of — growth in demand exceeded the rate of supply as the global economy improved. The solid demand for air cargo has prevailed through 2017. Data from the International Air Transport Association (IATA) show global air freight markets in September, measured in freight metric ton-kilometers, or FTKs, rose 9.2 percent compared with the same month in 2016. Although this was the slowest pace of growth seen in five months, it was still significantly higher than the five-year average growth rate of 4.4 percent. “While slower than in previous months, it remains stronger than anything we have seen in recent memory,” was Alexandre de Juniac's, IATA director general and CEO's, description of the September figures. Air cargo analyst WorldACD said that with a very high yield increase of 12 percent year over year in US dollar-terms, September was another outstanding month for air cargo carriers. “Revenue improved year over year by 21.8 percent, an excellent performance in any business,” the analyst said. After several months of double-digit growth in 2017, IATA said its forecast of 7.5 percent rise in air freight demand for the year still has “significant upside potential.” That optimism is being expressed across the industry, and confidence is flying high among airline executives. According to IATA’s October Airline Business Confidence Index that surveys CFOs and heads of cargo, there will be no reduction in air freight volumes over the next 12 months, and the robust demand will support improving profitability. Improvements in global trade sentiment also have delivered a robust 10.7 percent growth in January through September air cargo volumes for Asia-Pacific airlines, a welcome development for the carriers that account for nearly 40 percent of global air cargo traffic. September demand was up 11.4 percent. Continuing to stand out is the European region, where airlines posted a 10.3 percent increase in freight demand in September against a capacity increase of 5.6 percent. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized, IATA said. The association said German manufacturers’ export orders were growing at their fastest pace in more than seven years. Freight demand was strongest on the routes to and from Asia and across the Atlantic. The latest outlook from IHS Markit for air cargo trade tonnage also supports solid increases in Europe trade in 2017. Volume growth from East Asia into the European Union will outpace that into the United States for the first time since 2014. The EU’s economic recovery also shows up in trade with the United States, where exports will benefit from a relatively weak euro. Chemical and related product shipments to North America and food shipments to Asia have been particularly strong out of Europe. The improving economic conditions in the world’s major consuming markets are good news in terms of air cargo volume, and the recovery also is generating a rapid increase in low-cost and leisure travel. This is placing mounting pressure on capacity at airport hubs and is having worrying consequences for carriers and anyone shipping goods by air. According to IATA, more than 100 of the 177 capacity-constrained airports around the world are in Europe, and with passenger levels expected to double in the next 20 years, the ability of these airports to accommodate growing freight and leisure flights is being severely tested. Currently headlining the leisure travel versus air cargo issue is Amsterdam Schiphol Airport, one of the busiest hubs in Europe. Schiphol, like all other major airports, is reaping the benefits of rapidly growing e-commerce. China is already Schiphol’s largest cargo market, and e-commerce is helping to strengthen that position. “Historically, China is the recognized as the world’s leading manufacturer, but Chinese consumers are increasingly sourcing a wide range of online luxury items from the Netherlands and across Europe. On the back of this demand, a significant trend is for increased imports into China of goods bought on online marketplaces,” said Jonas van Stekelenburg, cargo director at Amsterdam Airport Schiphol. But threatening to undo all the hard work and investment in cargo infrastructure and services built up over many years is the triggering in September of something known as the 80:20 rule after flight movements at Schiphol grew faster than expected. IATA issues Worldwide Slot Guidelines to provide the global air transport community with a single set of standards for the management of airport slots. The 80:20 guidelines require any airline that has not used 80 percent of its allocated slots to forfeit them, but the approach does no favors for freighters. Many full freighter flights have difficult flight schedules with multiple stops in one flight, the European Shippers’ Council (ESC) noted, and a delay at a certain airport can affect their entire flight schedule and make them more vulnerable to losing their time slot. The ESC said the impact of the 80:20 rule was a 20 percent drop in full freighter flights from Schiphol during this winter season from Nov. 1. A major concern is that full freighters ousted from hubs in Europe will have to depend more on secondary airports such as Liege, Maastricht, and Frankfurt Hahn, where environmental restrictions are tougher, proper infrastructure is lacking, and cargo facilities are outdated. This was highlighted by the ESC, which said infrastructure and handling facilities at the major hubs had all been built up over time, and they were centers of expertise for air cargo. “Frankfurt, Paris, Brussels, and Amsterdam are all leading air cargo airports with a strong level of competition. They are customer-service oriented and are continuously striving for innovation and efficiency of air cargo handling,” the ESC noted. When the Dutch gateway reached full capacity in September and the 80:20 rule was applied, AirBridgeCargo lost half of its freighter slots and will shift scheduled B747 freighter flights to Liege. Emirates SkyCargo is moving flights from Schiphol to Brussels, Copenhagen, and Frankfurt, and Singapore Airlines is shifting to Brussels. The ESC had a warning for shippers using air cargo to get their goods to market. “Though we see an increase in shipping through air cargo, handling will deteriorate to a mediocre level through the secondary airports.” Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Air Cargo Forwarder News

Soaring air shipments spark capacity crunch and higher rates

<div class="phx-topic abstract-wrapper">Justice Department indictments against four of the world’s biggest box manufacturers follow reciprocal port fees and tariffs on China-made port equipment.</div>

Justice Department indictments against four of the world’s biggest box manufacturers follow reciprocal port fees and tariffs on China-made port equipment.

Feature image

<div class="phx-topic">The US Department of Justice’s (DOJ’s) indictment of four of the world’s largest ocean shipping container makers and seven of their senior executives marks the latest US-China supply chain-linked row that has previously included tit-for-tat port fees and tariffs on China-made port equipment. It also follows earlier <a href="https://www.joc.com/article/fmcs-bentzel-cautions-on-china-dominance-in-chassis-container-supply-5249125">US warnings about China’s dominance in container and chassis manufacturing</a> that led one of the indicted companies to drop its <a href="https://www.joc.com/article/cimc-maersk-drop-reefer-deal-after-doj-warning-5222824">planned $987 million acquisition of Maersk’s refrigerated container production business</a> in 2022 after the DOJ raised a red flag on the deal. DOJ, in an indictment unsealed Tuesday, accused the parties of engaging in a price-fixing and production-limiting conspiracy from November 2019 to at least January 2024. The companies indicted are China International Marine Containers (CIMC), the world’s largest container manufacturer; Cosco Shipping Development’s container-making subsidiary Shanghai Universal Logistics Equipment Company, which controls Dong Fang International Containers; CXIC Group Containers Company; and Hong Kong’s Singamas Container (Holdings). The executives targeted include CIMC President Mai Boliang and former vice president Huang Tianhua Huang, and Singamas CEO and Chairman Teo Siong Seng. “The multi-year conspiracy roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing the container manufacturers’ profits approximately one hundredfold during the COVID-19 pandemic and global supply chain crisis,” the DOJ said in a statement. Chinese container manufacturers produce arbout 95% of the world’s dry freight containers, according to maritime consultancy Drewry. The DOJ said one executive, Singamas marketing director Vick Nam Hing Ma, was arrested in France last month and his extradition to the US is pending. The six other co-defendants remain at large. The Justice Department did not say whether it had approached other jurisdictions, including Hong Kong and Singapore, where Singamas CEO Teo normally lives, seeking the arrest of the other executives. In separate statements to the Hong Kong stock exchange Wednesday, both CIMC and Singamas said they were aware the DOJ had issued criminal antitrust charges against them and company executives. But they both said that neither the companies nor their executives had been served with any legal documentation from the DOJ. Singamas added that it had “engaged external legal advisers,” while CIMC said it “will closely monitor and respond proactively.” Both companies said business operations and day-to-day activities remain normal. Dong Fang, Cosco Shipping Development and CXIC did not immediately comment. <h3>Companies allegedly agreed on production cap </h3>In details about the alleged conspiracy, the DOJ said executives from CIMC, Dong Fang, and CXIC, as well as an alleged unnamed co-conspirator, met at CIMC’s headquarters in Shenzhen in November 2019. The executives allegedly agreed to four measures limiting output of dry freight containers, including restricting the number of shifts and hours each factory worked, installing surveillance cameras on all production lines to ensure the agreed-upon limitations were not exceeded, and not building any new container-making factories. DOJ alleges the executives later refined the pact to restrict how many dry containers the companies would manufacture for particular customers, including container lessors, shipping lines and logistics companies in the US, Europe, China and elsewhere, while also capping total container production. “Global price-fixing cartels strike at the heart of our economic liberty,” Omeed Assefi, DOJ’s acting assistant attorney general, said in the statement. “The defendants held hostage the world’s supply of ocean shipping containers during the COVID pandemic when our supply chains needed it the most.” The indictments come just one week after US President Donald Trump traveled to China for meetings with Chinese President Xi Jinping. Washington and Beijing have also been at odds over the past year regarding what the US sees as <a href="https://www.joc.com/article/cosco-halts-balboa-calls-in-latest-twist-over-panama-port-row-6185309">China’s outsized influence in Panama Canal operations</a>, with that coming amid the wider trade spat that saw the US imposing tariffs on China-made products and Beijing responding in kind. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The US Department of Justice’s (DOJ’s) indictment of four of the world’s largest ocean shipping container makers and seven of their senior executives marks the latest US-China supply chain-linked row that has previously included tit-for-tat port fees and tariffs on China-made port equipment. It also follows earlier US warnings about China’s dominance in container and chassis manufacturing that led one of the indicted companies to drop its planned $987 million acquisition of Maersk’s refrigerated container production business in 2022 after the DOJ raised a red flag on the deal. DOJ, in an indictment unsealed Tuesday, accused the parties of engaging in a price-fixing and production-limiting conspiracy from November 2019 to at least January 2024. The companies indicted are China International Marine Containers (CIMC), the world’s largest container manufacturer; Cosco Shipping Development’s container-making subsidiary Shanghai Universal Logistics Equipment Company, which controls Dong Fang International Containers; CXIC Group Containers Company; and Hong Kong’s Singamas Container (Holdings). The executives targeted include CIMC President Mai Boliang and former vice president Huang Tianhua Huang, and Singamas CEO and Chairman Teo Siong Seng. “The multi-year conspiracy roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing the container manufacturers’ profits approximately one hundredfold during the COVID-19 pandemic and global supply chain crisis,” the DOJ said in a statement. Chinese container manufacturers produce arbout 95% of the world’s dry freight containers, according to maritime consultancy Drewry. The DOJ said one executive, Singamas marketing director Vick Nam Hing Ma, was arrested in France last month and his extradition to the US is pending. The six other co-defendants remain at large. The Justice Department did not say whether it had approached other jurisdictions, including Hong Kong and Singapore, where Singamas CEO Teo normally lives, seeking the arrest of the other executives. In separate statements to the Hong Kong stock exchange Wednesday, both CIMC and Singamas said they were aware the DOJ had issued criminal antitrust charges against them and company executives. But they both said that neither the companies nor their executives had been served with any legal documentation from the DOJ. Singamas added that it had “engaged external legal advisers,” while CIMC said it “will closely monitor and respond proactively.” Both companies said business operations and day-to-day activities remain normal. Dong Fang, Cosco Shipping Development and CXIC did not immediately comment. Companies allegedly agreed on production cap In details about the alleged conspiracy, the DOJ said executives from CIMC, Dong Fang, and CXIC, as well as an alleged unnamed co-conspirator, met at CIMC’s headquarters in Shenzhen in November 2019. The executives allegedly agreed to four measures limiting output of dry freight containers, including restricting the number of shifts and hours each factory worked, installing surveillance cameras on all production lines to ensure the agreed-upon limitations were not exceeded, and not building any new container-making factories. DOJ alleges the executives later refined the pact to restrict how many dry containers the companies would manufacture for particular customers, including container lessors, shipping lines and logistics companies in the US, Europe, China and elsewhere, while also capping total container production. “Global price-fixing cartels strike at the heart of our economic liberty,” Omeed Assefi, DOJ’s acting assistant attorney general, said in the statement. “The defendants held hostage the world’s supply of ocean shipping containers during the COVID pandemic when our supply chains needed it the most.” The indictments come just one week after US President Donald Trump traveled to China for meetings with Chinese President Xi Jinping. Washington and Beijing have also been at odds over the past year regarding what the US sees as China’s outsized influence in Panama Canal operations , with that coming amid the wider trade spat that saw the US imposing tariffs on China-made products and Beijing responding in kind. Contact Keith Wallis at keithwallis@hotmail.com .

Transport, Trade and Regulation News

Container lines

Supply chain

Container Shipping News

Maritime

US move against container makers is latest entry in logistics battle with China

<div class="phx-topic abstract-wrapper">CEO Eli Glickman did not offer earnings guidance due to the pending merger with Hapag-Lloyd, but said the war-driven surge in oil prices will likely drag Zim’s results down further in the second quarter. </div>

CEO Eli Glickman did not offer earnings guidance due to the pending merger with Hapag-Lloyd, but said the war-driven surge in oil prices will likely drag Zim’s results down further in the second quarter.

<div class="phx-topic">Zim Integrated Shipping Services on Wednesday reported a first-quarter loss and 30% decline in revenues, citing a “softer” freight environment that pulled rates and volumes lower. The ocean carrier said the two-month surge in global bunker fuel prices due to the war in the Middle East could make an even bigger impact on its second-quarter results. Israel-based Zim recorded a diluted per-share loss of 71 cents for the quarter. That compares with an analyst consensus forecast of a $1.37 per share loss, according to Capital IQ Estimates, a sister product of the Journal of Commerce within S&amp;P Global. Total first-quarter revenue of $1.3 billion was down 30% from a year earlier. Operational results worsened in the quarter. Zim said its average first-quarter freight rate of $1,310 per TEU was down 26%, while total volume of 866,000 TEUs was 8% lower. “Our first-quarter results were broadly in line with our expectations, reflecting a softer freight rate environment, coupled with weaker demand,” Zim Chief Executive Eli Glickman said in a statement. The carrier is not hosting a conference call due to its pending merger with Hapag-Lloyd. <h3>Q2 pessimism </h3>While Glickman did not offer earnings guidance due to the merger, he said the Middle East conflict, which has sparked a surge in global oil prices, will likely drag Zim’s results down further in the second quarter. But fuel surcharges and the carrier’s exposure to liquefied natural gas should lessen the longer-term impact of higher bunker fuel prices, he said. “The conflict in the Persian Gulf has sparked a sharp increase and significant volatility in bunkering costs,” Glickman said. “We expect a more meaningful effect in the second quarter, before our actions to offset these costs begin to take hold.” Offsetting the bunker impact, Glickman said demand has improved recently, particularly with the <a href="https://www.joc.com/article/spot-rate-surge-may-signal-early-peak-season-on-trans-pacific-6224734">recent strength in spot ocean rates</a>. He said seasonal contract talks over April and May show shippers are “maintaining similar contracted volumes to last year.” “We have recently observed a positive change in the trend on the trans-Pacific trade with freight rates strengthening alongside demand,” Glickman said. “If this momentum continues, we expect it to support our financial performance, particularly in the second half of the year.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Zim Integrated Shipping Services on Wednesday reported a first-quarter loss and 30% decline in revenues, citing a “softer” freight environment that pulled rates and volumes lower. The ocean carrier said the two-month surge in global bunker fuel prices due to the war in the Middle East could make an even bigger impact on its second-quarter results. Israel-based Zim recorded a diluted per-share loss of 71 cents for the quarter. That compares with an analyst consensus forecast of a $1.37 per share loss, according to Capital IQ Estimates, a sister product of the Journal of Commerce within S&P Global. Total first-quarter revenue of $1.3 billion was down 30% from a year earlier. Operational results worsened in the quarter. Zim said its average first-quarter freight rate of $1,310 per TEU was down 26%, while total volume of 866,000 TEUs was 8% lower. “Our first-quarter results were broadly in line with our expectations, reflecting a softer freight rate environment, coupled with weaker demand,” Zim Chief Executive Eli Glickman said in a statement. The carrier is not hosting a conference call due to its pending merger with Hapag-Lloyd. Q2 pessimism While Glickman did not offer earnings guidance due to the merger, he said the Middle East conflict, which has sparked a surge in global oil prices, will likely drag Zim’s results down further in the second quarter. But fuel surcharges and the carrier’s exposure to liquefied natural gas should lessen the longer-term impact of higher bunker fuel prices, he said. “The conflict in the Persian Gulf has sparked a sharp increase and significant volatility in bunkering costs,” Glickman said. “We expect a more meaningful effect in the second quarter, before our actions to offset these costs begin to take hold.” Offsetting the bunker impact, Glickman said demand has improved recently, particularly with the recent strength in spot ocean rates . He said seasonal contract talks over April and May show shippers are “maintaining similar contracted volumes to last year.” “We have recently observed a positive change in the trend on the trans-Pacific trade with freight rates strengthening alongside demand,” Glickman said. “If this momentum continues, we expect it to support our financial performance, particularly in the second half of the year.” Contact Michael Angell at michael.angell@spglobal.com .

Zim reports Q1 loss, with bunker impact expected to worsen in Q2

<div class="phx-topic abstract-wrapper">The decision comes as wholesale diesel prices in Britain have increased 40% in the last month and logistics businesses are finding it difficult to manage ever-increasing cost pressures. </div>

The decision comes as wholesale diesel prices in Britain have increased 40% in the last month and logistics businesses are finding it difficult to manage ever-increasing cost pressures.

<div class="phx-topic">The UK logistics industry has been thrown a lifeline by a British government decision Wednesday to postpone a fuel duty increase as the Middle East war sends pump prices soaring while truckers struggle to keep operating costs under control. Prime Minister Keir Starmer and Chancellor Rachel Reeves announced the postponement during a parliamentary session following intense lobbying against the proposed increase by road hauliers and industry associations. A 5p ($0.68) per liter hike was planned for September, but the current level will be maintained until the end of the year. Ben Fletcher, CEO of industry group Logistics UK, said logistics businesses are finding it increasingly hard to reconcile ever-increasing cost pressures. “The cost of filling up a large HGV [heavy goods vehicle] has risen by 31% in the past three months, to about £1,000 [$1,344] a tank, and this cannot be absorbed by an industry operating on incredibly narrow margins,” Fletcher said in a statement Wednesday. “The action announced today will be a lifeline to the businesses that keep all parts of the economy stocked with everything that the nation relies on every day,” he added. “At such a tough time for trade, these decisions will be a welcome boost to our sector.” Scott Parsons, transport and logistics senior manager at business advisory and accountancy firm Menzies, said fuel and energy costs have been pushed to levels unseen before the Middle East war began in February, driving inflation through supply chains. “Scrapping the planned rise in fuel duty provides much-needed relief for retailers, hauliers, and a hospitality industry currently on its knees,” Parsons said. “For businesses already at breaking point, it is a step in the right direction and could prove the difference between goods reaching shelves affordably and the shortages and hikes that hit hardest those with the least to spend,” he added. <h3>Trucking companies ‘on the brink’ </h3>Still, Richard Smith, managing director of the UK’s Road Haulage Association (RHA), warned that the relief measures would have limited impact because many trucking companies are already “on the brink.” “Our essential industry is a key economic enabler,” Smith said. “That is why we have been calling for the planned fuel duty rise to be scrapped, along with any link to future inflation rises. Such a rise would be a hammer blow for many firms.” The RHA said diesel makes up 30% of the operating cost of running an HGV, noting the wholesale cost of diesel has increased 40% in the last month. The suspension of the fuel duty increase was accompanied by a UK government decision to provide a 12-month holiday on the vehicle excise duty for heavy trucks, measures that Steve Parker, director-general of the British International Freight Association (BIFA), said showed the government was taking industry concerns seriously. “BIFA has consistently called for long-term certainty and a dedicated fuel duty stabilization mechanism rather than incremental, temporary postponements,” Parker said in a statement Wednesday. “The announcement of a 12-month holiday on vehicle excise duty for HGVs should also help the freight forwarding and logistics businesses that BIFA represents cope with the higher costs affecting the international supply chains that they manage,” he added. UK inflation fell from 3.3% to 2.8% in April, but analysts warn that the effects of rising energy costs have yet to be fully felt by consumers and that food price inflation could top 10% by the end of the year. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The UK logistics industry has been thrown a lifeline by a British government decision Wednesday to postpone a fuel duty increase as the Middle East war sends pump prices soaring while truckers struggle to keep operating costs under control. Prime Minister Keir Starmer and Chancellor Rachel Reeves announced the postponement during a parliamentary session following intense lobbying against the proposed increase by road hauliers and industry associations. A 5p ($0.68) per liter hike was planned for September, but the current level will be maintained until the end of the year. Ben Fletcher, CEO of industry group Logistics UK, said logistics businesses are finding it increasingly hard to reconcile ever-increasing cost pressures. “The cost of filling up a large HGV [heavy goods vehicle] has risen by 31% in the past three months, to about £1,000 [$1,344] a tank, and this cannot be absorbed by an industry operating on incredibly narrow margins,” Fletcher said in a statement Wednesday. “The action announced today will be a lifeline to the businesses that keep all parts of the economy stocked with everything that the nation relies on every day,” he added. “At such a tough time for trade, these decisions will be a welcome boost to our sector.” Scott Parsons, transport and logistics senior manager at business advisory and accountancy firm Menzies, said fuel and energy costs have been pushed to levels unseen before the Middle East war began in February, driving inflation through supply chains. “Scrapping the planned rise in fuel duty provides much-needed relief for retailers, hauliers, and a hospitality industry currently on its knees,” Parsons said. “For businesses already at breaking point, it is a step in the right direction and could prove the difference between goods reaching shelves affordably and the shortages and hikes that hit hardest those with the least to spend,” he added. Trucking companies ‘on the brink’ Still, Richard Smith, managing director of the UK’s Road Haulage Association (RHA), warned that the relief measures would have limited impact because many trucking companies are already “on the brink.” “Our essential industry is a key economic enabler,” Smith said. “That is why we have been calling for the planned fuel duty rise to be scrapped, along with any link to future inflation rises. Such a rise would be a hammer blow for many firms.” The RHA said diesel makes up 30% of the operating cost of running an HGV, noting the wholesale cost of diesel has increased 40% in the last month. The suspension of the fuel duty increase was accompanied by a UK government decision to provide a 12-month holiday on the vehicle excise duty for heavy trucks, measures that Steve Parker, director-general of the British International Freight Association (BIFA), said showed the government was taking industry concerns seriously. “BIFA has consistently called for long-term certainty and a dedicated fuel duty stabilization mechanism rather than incremental, temporary postponements,” Parker said in a statement Wednesday. “The announcement of a 12-month holiday on vehicle excise duty for HGVs should also help the freight forwarding and logistics businesses that BIFA represents cope with the higher costs affecting the international supply chains that they manage,” he added. UK inflation fell from 3.3% to 2.8% in April, but analysts warn that the effects of rising energy costs have yet to be fully felt by consumers and that food price inflation could top 10% by the end of the year. Contact Greg Knowler at greg.knowler@spglobal.com .

Trucking News

Surface

UK government scraps proposed fuel duty increase in relief move for truckers

<div class="phx-topic abstract-wrapper">The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and FAK rates.</div>

The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and FAK rates.

<div class="phx-topic">An unexpected jump in container spot rates from Asia to the US and the launch of a seasonal service next month suggest that some semblance of an early peak season is hitting the trans-Pacific trade. The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and freight-all-kind (FAK) rates. Still, some see momentum in the market, with Hapag-Lloyd CEO Rolf Habben Jansen telling investors last week that “demand at the moment is quite strong” on the trans-Pacific. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6224686_0.1.jpg"></img></div>“I’m fairly optimistic about the peak season,” he said on the carrier’s first-quarter earnings call May 13. The general rate increase sought by ocean carriers on May 15 clearly connected, with container rates hitting their highest point so far this year, according to various indexes. The cost to ship an FEU from North Asia to the US West Coast passed the $3,000 mark this week, as measured by the Shanghai Containerized Freight Index, although that was up just 1% from a year ago. US import volumes as forecast by the Global Port Tracker (GPT) are projected to be <a href="https://www.joc.com/article/weak-consumer-confidence-rising-inflation-dim-peak-season-hopes-6217405">up marginally this month</a> on a year-over-year basis, but the gains are illusory because imports crashed during the same period in 2025 following the widespread implementation of US tariffs. Maersk on June 8 plans to launch a seasonal trans-Pacific extra loader connecting Vietnam’s Cai Mep and Busan in South Korea to Long Beach, a modest sign of anticipated demand. Still, the outlook for July and August worsens, with GPT, produced by Hackett Associates on behalf of the National Retail Federation, predicting that import volumes will be down nearly 8% and 5% year over year, respectively. <h3>Carriers on guard after down Q1 </h3>Some of the increase in trans-Pacific spot rates is due to fuel-linked surcharges of hundreds of dollars per container and artificial capacity tightness created by the phasing in of new annual service contracts that generally began May 1. One forwarder estimates that 17% to 20% of capacity had been cut on services it utilizes from Asia to the US West Coast between mid-April and early May. “It seems to be a little bit of surge [of cargo] there that may have been trying to get in before new elevated contract levels [take effect],” the forwarder said. Container lines are blanking less and deploying incrementally more tonnage as peak season nears, according to eeSea data. But blank sailings can still have an impact as demand ratchets up. “Current demand is very strong and the industry is preparing for sustained volume pressure rather than a short-lived spike,” said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. “Multiple carrier actions indicate expectations for continued strong booking levels through early summer.” Kavas estimates that the coming weeks will be busy on the eastbound trans-Pacific as carriers take a more disciplined approach to capacity, having booked record profits during the pandemic thanks to tightening of available capacity. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="44b7e856-235d-4131-961a-7ab7cc4f2707"></dynamic-object></div>Facing elevated operating costs due to war-driven fuel prices and after an unspectacular service contracting cycle, ocean carriers have hair-trigger tolerance for non-compensatory services. <a href="https://www.joc.com/article/maersk-passing-500-million-monthly-fuel-bill-to-customers-in-full-ceo-6216319">Maersk</a> and <a href="https://www.joc.com/article/softer-freight-rates-push-evergreen-to-71-decline-in-q1-net-profit-6220526">Evergreen</a> earlier this month reported declining profits in the first quarter, while <a href="https://www.joc.com/article/hapag-lloyd-posts-q1-net-loss-in-unsatisfactory-start-to-2026-6219964">Hapag-Lloyd</a> recorded an “unsatisfactory” loss in the same period. Habben Jansen said service contract rates, excluding the higher fuel costs, “were a bit down compared to previous year.” Annual contracts for midsize importers for the 2026–27 service period ended approximately comparable to slightly less than last year, according to multiple sources. The threat of rising operating costs and weak demand is front and center for ocean carriers. So-called insufficient capacity management “will lead to an erosion of the recovery of costs on the short-term market, which could, depending on how much it will erode, quickly get you into a not-so-pleasant place in the second half of the year,” Maersk CEO Vincent Clerc told investors May 7. The sharply higher bunker fuel costs since the war began have changed carriers’ risk profile and profitability outlook, according to Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’ll be quicker to pull the capacity to fend off losses,” Cook said. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

An unexpected jump in container spot rates from Asia to the US and the launch of a seasonal service next month suggest that some semblance of an early peak season is hitting the trans-Pacific trade. The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and freight-all-kind (FAK) rates. Still, some see momentum in the market, with Hapag-Lloyd CEO Rolf Habben Jansen telling investors last week that “demand at the moment is quite strong” on the trans-Pacific. “I’m fairly optimistic about the peak season,” he said on the carrier’s first-quarter earnings call May 13. The general rate increase sought by ocean carriers on May 15 clearly connected, with container rates hitting their highest point so far this year, according to various indexes. The cost to ship an FEU from North Asia to the US West Coast passed the $3,000 mark this week, as measured by the Shanghai Containerized Freight Index, although that was up just 1% from a year ago. US import volumes as forecast by the Global Port Tracker (GPT) are projected to be up marginally this month on a year-over-year basis, but the gains are illusory because imports crashed during the same period in 2025 following the widespread implementation of US tariffs. Maersk on June 8 plans to launch a seasonal trans-Pacific extra loader connecting Vietnam’s Cai Mep and Busan in South Korea to Long Beach, a modest sign of anticipated demand. Still, the outlook for July and August worsens, with GPT, produced by Hackett Associates on behalf of the National Retail Federation, predicting that import volumes will be down nearly 8% and 5% year over year, respectively. Carriers on guard after down Q1 Some of the increase in trans-Pacific spot rates is due to fuel-linked surcharges of hundreds of dollars per container and artificial capacity tightness created by the phasing in of new annual service contracts that generally began May 1. One forwarder estimates that 17% to 20% of capacity had been cut on services it utilizes from Asia to the US West Coast between mid-April and early May. “It seems to be a little bit of surge [of cargo] there that may have been trying to get in before new elevated contract levels [take effect],” the forwarder said. Container lines are blanking less and deploying incrementally more tonnage as peak season nears, according to eeSea data. But blank sailings can still have an impact as demand ratchets up. “Current demand is very strong and the industry is preparing for sustained volume pressure rather than a short-lived spike,” said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. “Multiple carrier actions indicate expectations for continued strong booking levels through early summer.” Kavas estimates that the coming weeks will be busy on the eastbound trans-Pacific as carriers take a more disciplined approach to capacity, having booked record profits during the pandemic thanks to tightening of available capacity. Facing elevated operating costs due to war-driven fuel prices and after an unspectacular service contracting cycle, ocean carriers have hair-trigger tolerance for non-compensatory services. Maersk and Evergreen earlier this month reported declining profits in the first quarter, while Hapag-Lloyd recorded an “unsatisfactory” loss in the same period. Habben Jansen said service contract rates, excluding the higher fuel costs, “were a bit down compared to previous year.” Annual contracts for midsize importers for the 2026–27 service period ended approximately comparable to slightly less than last year, according to multiple sources. The threat of rising operating costs and weak demand is front and center for ocean carriers. So-called insufficient capacity management “will lead to an erosion of the recovery of costs on the short-term market, which could, depending on how much it will erode, quickly get you into a not-so-pleasant place in the second half of the year,” Maersk CEO Vincent Clerc told investors May 7. The sharply higher bunker fuel costs since the war began have changed carriers’ risk profile and profitability outlook, according to Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’ll be quicker to pull the capacity to fend off losses,” Cook said. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Trans-Pacific

Spot rate surge may signal early peak season on trans-Pacific

<div class="phx-topic abstract-wrapper">Collaboration with global forwarders is allowing the carrier and its customers to significantly reduce carbon footprints in the difficult-to-monitor area of Scope 3 emissions.</div>

Collaboration with global forwarders is allowing the carrier and its customers to significantly reduce carbon footprints in the difficult-to-monitor area of Scope 3 emissions.

<div class="phx-topic">Hapag-Lloyd has been rapidly scaling up the use of second-generation biofuel across its fleet, adding three global forwarders to its book-and-claim emissions-cutting product this year. Kuehne + Nagel, DSV, and Scan Global Logistics have signed up for the carrier’s Scope 3 emissions-reducing Ship Green biofuel service, joining DHL Global Forwarding, which inked a three-year framework agreement last year with Hapag-Lloyd. “Over 1,500 customers have reduced CO2e emissions with us since the introduction of biofuels in the Hapag-Lloyd fleet,” a spokesperson for the carrier told the Journal of Commerce. “The product now serves more than 750 customers globally, with verified emission reductions allocated via a book-and-claim chain of custody, generated through second-generation biofuel use across our fleet,” they added. At a time when the shipping industry is <a href="https://www.joc.com/article/shipping-decarbonization-will-work-best-with-global-rules-msc-ceo-6221271">struggling to push forward global regulations</a> to accelerate investment in alternative fuel technology and scale up infrastructure and production, solutions such as sustainably sourced biofuel that can be easily implemented are playing a crucial role. Hapag-Lloyd has reported rapidly rising demand. It transported 380,000 TEUs last year under its Ship Green biofuel service, up 90% year over year and 2.8% of the total 13.5 million TEUs the carrier handled in 2025. In 2024, 200,000 TEUs were transported under Ship Green, 1.6% of its annual volume. The collaboration with global forwarders is allowing Hapag-Lloyd, its customers and their customers to significantly reduce carbon footprints in the difficult-to-monitor Scope 3 emissions area. Scope 3 emissions are indirect emissions produced within a company’s supply chain. “Our customers are asking for real emission reductions, not promises for 2030 or 2050, but solutions they can use straight away,” Martin Andersen, global head of sustainability and ESG at Scan Global Logistics, said in a statement Wednesday. “By working with Hapag-Lloyd and investing in biofuel, we can reduce emissions from ocean freight right now, without changing how our customers operate.” <h3>Reducing carbon footprints </h3>Scan Global and Hapag-Lloyd will avoid more than 8,500 tons of CO2e emissions on global shipments on a well-to-wake basis, offering a practical and scalable way to reduce emissions without requiring changes to existing logistics operations. Earlier this month, Kuehne + Nagel signed an agreement with Hapag-Lloyd to use the Ship Green product to reduce the carbon footprint of its ocean freight shipments. From April to December, about 3,300 TEUs on the East Asia-to-North Europe trade lane will be covered under the agreement that is expected to avoid about 2,979 tons of CO2 emissions. “Decarbonizing shipping requires transparency, collaboration and commercially viable solutions,” Paolo Montrone, head of global sea logistics at Kuehne + Nagel, said. “By having strong partnerships, making emissions data transparent, and enabling Scope 3 reductions, we help customers navigate in a credible, market-based way, designed to accelerate the uptake of alternative fuels.” DSV in February <a href="https://www.joc.com/article/hapag-lloyd-inks-new-sustainable-biofuel-deal-with-dsv-6175204">signed a two-year Ship Green framework agreement</a> with Hapag-Lloyd that follows an earlier sustainable fuel collaboration in 2022. Under the new agreement, DSV has contracted a total of 18,000 tons of CO2e emission reductions on a well-to-wake basis. CMA CGM <a href="https://www.joc.com/article/dhl-cma-cgm-unveil-emissions-cutting-biofuel-collaboration-6139423">last year signed a deal with DHL</a> for the joint use of 8,990 metric tons of recycled waste cooking oil that was expected to cut 25,000 metric tons of CO2e emissions. The application of the book-and-claim chain of custody mechanism enables customers to claim Scope 3 emission reductions for their transport separately from the physical use of the fuel. It is driving early action in the shipping industry, particularly given that the supply of sustainable marine fuels is currently limited globally and of higher cost. But as demand for the biofuel products increases, so, too, has criticism from environmental campaigners that have expressed concern over the absence of regulatory safeguards and careful management of the full value chain impacts. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd has been rapidly scaling up the use of second-generation biofuel across its fleet, adding three global forwarders to its book-and-claim emissions-cutting product this year. Kuehne + Nagel, DSV, and Scan Global Logistics have signed up for the carrier’s Scope 3 emissions-reducing Ship Green biofuel service, joining DHL Global Forwarding, which inked a three-year framework agreement last year with Hapag-Lloyd. “Over 1,500 customers have reduced CO2e emissions with us since the introduction of biofuels in the Hapag-Lloyd fleet,” a spokesperson for the carrier told the Journal of Commerce. “The product now serves more than 750 customers globally, with verified emission reductions allocated via a book-and-claim chain of custody, generated through second-generation biofuel use across our fleet,” they added. At a time when the shipping industry is struggling to push forward global regulations to accelerate investment in alternative fuel technology and scale up infrastructure and production, solutions such as sustainably sourced biofuel that can be easily implemented are playing a crucial role. Hapag-Lloyd has reported rapidly rising demand. It transported 380,000 TEUs last year under its Ship Green biofuel service, up 90% year over year and 2.8% of the total 13.5 million TEUs the carrier handled in 2025. In 2024, 200,000 TEUs were transported under Ship Green, 1.6% of its annual volume. The collaboration with global forwarders is allowing Hapag-Lloyd, its customers and their customers to significantly reduce carbon footprints in the difficult-to-monitor Scope 3 emissions area. Scope 3 emissions are indirect emissions produced within a company’s supply chain. “Our customers are asking for real emission reductions, not promises for 2030 or 2050, but solutions they can use straight away,” Martin Andersen, global head of sustainability and ESG at Scan Global Logistics, said in a statement Wednesday. “By working with Hapag-Lloyd and investing in biofuel, we can reduce emissions from ocean freight right now, without changing how our customers operate.” Reducing carbon footprints Scan Global and Hapag-Lloyd will avoid more than 8,500 tons of CO2e emissions on global shipments on a well-to-wake basis, offering a practical and scalable way to reduce emissions without requiring changes to existing logistics operations. Earlier this month, Kuehne + Nagel signed an agreement with Hapag-Lloyd to use the Ship Green product to reduce the carbon footprint of its ocean freight shipments. From April to December, about 3,300 TEUs on the East Asia-to-North Europe trade lane will be covered under the agreement that is expected to avoid about 2,979 tons of CO2 emissions. “Decarbonizing shipping requires transparency, collaboration and commercially viable solutions,” Paolo Montrone, head of global sea logistics at Kuehne + Nagel, said. “By having strong partnerships, making emissions data transparent, and enabling Scope 3 reductions, we help customers navigate in a credible, market-based way, designed to accelerate the uptake of alternative fuels.” DSV in February signed a two-year Ship Green framework agreement with Hapag-Lloyd that follows an earlier sustainable fuel collaboration in 2022. Under the new agreement, DSV has contracted a total of 18,000 tons of CO2e emission reductions on a well-to-wake basis. CMA CGM last year signed a deal with DHL for the joint use of 8,990 metric tons of recycled waste cooking oil that was expected to cut 25,000 metric tons of CO2e emissions. The application of the book-and-claim chain of custody mechanism enables customers to claim Scope 3 emission reductions for their transport separately from the physical use of the fuel. It is driving early action in the shipping industry, particularly given that the supply of sustainable marine fuels is currently limited globally and of higher cost. But as demand for the biofuel products increases, so, too, has criticism from environmental campaigners that have expressed concern over the absence of regulatory safeguards and careful management of the full value chain impacts. Contact Greg Knowler at greg.knowler@spglobal.com .

Hapag-Lloyd scales up biofuel transport services with forwarder partners

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