<div class="phx-topic abstract-wrapper">This year is shaping up to be a tough one for the air cargo business with an unsettled trade environment set to extend the demand slowdown into the third quarter.</div>

This year is shaping up to be a tough one for the air cargo business with an unsettled trade environment set to extend the demand slowdown into the third quarter.

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<div>The only positive in an increasingly gloomy air cargo outlook this year is that the price of jet fuel, which can comprise one-third of airline operating costs, has fallen almost 6 percent in the past month and is down more than 10 percent year over year.The bad news is that the price of oil and its distillates is falling because of concerns over slowing global growth, which means cargo volumes are declining along with fuel prices. This caused global airline share prices to fall sharply in May, which the International Air Transport Association (IATA) said was an indication that forward-looking...

The only positive in an increasingly gloomy air cargo outlook this year is that the price of jet fuel, which can comprise one-third of airline operating costs, has fallen almost 6 percent in the past month and is down more than 10 percent year over year. The bad news is that the price of oil and its distillates is falling because of concerns over slowing global growth, which means cargo volumes are declining along with fuel prices. This caused global airline share prices to fall sharply in May, which the International Air Transport Association (IATA) said was an indication that forward-looking equity investors were expecting tougher financial conditions ahead. IATA said Brent crude oil and jet fuel prices lost their strong upward momentum at the end of May, driven by worries over slowing global oil demand reinforced by any escalation in the China-US trade war. According to S&P Global Platts, the jet fuel price on June 24 was $78.97 per barrel, up from $76 per barrel in May, but down from $88 a year ago. Fuel prices are important to shippers as they determine the size of the surcharges levied by the carriers. Air cargo airlines manage the fluctuating price of their fuel by adding a sliding fee to the base rate that adapts to changes in the price, either up or down. A push by shipper organizations to get carriers to charge all-in rates that include the fuel segment has not taken off, mainly because a fixed rate means airlines also need to carry all the risk. While the fuel price is trending downwards, so, too, are air cargo rates on the major east-west trades. Freight Investor Services (FIS) said on the trans-Pacific, slack demand and the ongoing US-China trade war is behind an 11.5 percent drop in spot market freight rates from China/Hong Kong to the US in the past six weeks. Year over year, the rate is down 3 percent. While FIS noted in its weekly update that both basket lanes from China to Europe and the US rebounded slightly, climbing by $0.02 and $0.08, respectively, the analyst said it was a result of short-term e-commerce demand from several major high-tech manufacturers. Unpredictable demand The downturn on the China-Europe trade was softened slightly by a delayed Brexit. FIS said spot rates have fallen 3 percent in the last six weeks but are up 12 percent year over year, with demand remaining unpredictable. “Airlines are attempting to align capacity with demand … the market is now firmly in control of spot-market rates as the benefits of a bumper 2017 and 2018 help buffer airlines for the slack season,” FIS noted. The global slowdown is being particularly hard on Asian airlines that depend so heavily on demand from the US and Europe. According to the Association of Asia Pacific Airlines (AAPA), the region’s airlines in May registered a 6.5 percent decline in air cargo demand measured in freight ton kilometers. At the same time, the average international freight load factor fell 4.3 percentage points to 59 percent for the month. AAPA director general Andrew Herdman said air cargo demand had weakened as manufacturing in Asia slowed amid deteriorating business confidence, undermined by the ongoing trade dispute. "Airlines are grappling with the effects of weaker air cargo demand, volatile oil prices, and renewed downward pressure on passenger yields,” he said. The weak Asian cargo market could be seen in Cathay Pacific’s May figures. The Hong Kong-based carrier saw the volume of cargo and mail fall by just under 4 percent compared with the same month last year. Cathay Pacific and sister carrier Cathay Dragon carried 168,270 tons of cargo and mail last month, a drop of 3.9 percent compared with the same month last year. The cargo and mail load factor fell 4.7 percentage points to 63.9 percent. Capacity, measured in available freight ton kilometers (AFTKs), was up 4.6% while cargo and mail revenue freight ton kilometers (RFTKs) dropped 2.6%. In the first five months of 2019, tonnage fell 5% against a 1% increase in capacity and a 5.3% decrease in RFTKs. Ronald Lam, Cathay Pacific director of commercial and cargo, said the cargo business continued to be adversely affected by geopolitical tensions and its dampening of market sentiment. “Despite positive capacity growth in May, cargo revenue saw negative growth over last year. Both volume and yield incurred decline year over year,” he said. Citi’s economists are expecting global economic growth to be in the range of 2.9 percent year over year for both 2019 and 2020. However, the investment bank’s global trade war simulations suggest global growth could slow to a rate of 2 percent year over year in just 12 months if trade tensions escalate on a broad scale. Under such a scenario, the bank warned it would “dramatically” lower global growth forecasts. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Air Cargo

Air cargo volume, rates in tailspin

<div class="phx-topic abstract-wrapper">The largest forwarding software provider globally adds heft to DCSA’s push to drive electronic standards in the ocean freight industry.</div>

The largest forwarding software provider globally adds heft to DCSA’s push to drive electronic standards in the ocean freight industry.

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<div class="phx-topic">WiseTech Global is joining the Digital Container Shipping Association’s (DCSA) partnership program to help drive adoption of digital standards in the ocean freight industry, the two announced Tuesday. Wisetech, provider of the industry’s most widely used forwarding software, becomes the most prominent name in a growing list of technology vendors, consultants, third-party logistics providers, and implementation specialists that are partners with DCSA under its DCSA+ program. “WiseTech has been among the earliest and most active implementers of DCSA standards since 2019, growing into one of the largest users of DCSA-specification carrier [application program interfaces] in the industry,” DCSA said in a statement. DSCA represents most of the world’s top container shipping companies as they collectively push for digital standards to become more engrained in the industry. Its ocean carrier members are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services, and PIL. More than 90% of the world’s top 3PLs use WiseTech for freight management, accounting, visibility, or customs compliance. The company <a href="https://www.joc.com/article/wisetech-notches-biggest-acquisition-with-21-billion-deal-for-e2open-6011581">acquired E2open</a>, a platform that provides planning and transportation management software to global shippers, in May 2025, meaning it has connectivity to shipper, ocean carrier and forwarder systems and the data that passes between those entities. “Standardized integrations help our customers and their carrier partners to achieve their goals faster and more effectively by removing friction at critical data handover points,” Ashley Skaanild, WiseTech’s principal advisor for carrier integration and transformation, said in the joint statement. The DCSA+ program has seen a number of members join over the past six months, including IKEA, the program’s first shipper, and Unifeeder, bringing the total number of members to 20. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

WiseTech Global is joining the Digital Container Shipping Association’s (DCSA) partnership program to help drive adoption of digital standards in the ocean freight industry, the two announced Tuesday. Wisetech, provider of the industry’s most widely used forwarding software, becomes the most prominent name in a growing list of technology vendors, consultants, third-party logistics providers, and implementation specialists that are partners with DCSA under its DCSA+ program. “WiseTech has been among the earliest and most active implementers of DCSA standards since 2019, growing into one of the largest users of DCSA-specification carrier [application program interfaces] in the industry,” DCSA said in a statement. DSCA represents most of the world’s top container shipping companies as they collectively push for digital standards to become more engrained in the industry. Its ocean carrier members are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services, and PIL. More than 90% of the world’s top 3PLs use WiseTech for freight management, accounting, visibility, or customs compliance. The company acquired E2open , a platform that provides planning and transportation management software to global shippers, in May 2025, meaning it has connectivity to shipper, ocean carrier and forwarder systems and the data that passes between those entities. “Standardized integrations help our customers and their carrier partners to achieve their goals faster and more effectively by removing friction at critical data handover points,” Ashley Skaanild, WiseTech’s principal advisor for carrier integration and transformation, said in the joint statement. The DCSA+ program has seen a number of members join over the past six months, including IKEA, the program’s first shipper, and Unifeeder, bringing the total number of members to 20. Contact Eric Johnson at eric.johnson@spglobal.com .

Container lines

Forwarding

Container Shipping News

Maritime

WiseTech joins partner program of container shipping digital standards group

<div class="phx-topic abstract-wrapper">Richard Kloster joins the STB at an important time for the agency as it reviews the proposed $85 billion merger of Union Pacific and Norfolk Southern, which would be the largest US rail transaction in nearly three decades. </div>

Richard Kloster joins the STB at an important time for the agency as it reviews the proposed $85 billion merger of Union Pacific and Norfolk Southern, which would be the largest US rail transaction in nearly three decades.

<div class="phx-topic">The US Senate has confirmed the appointment of Richard Kloster to the Surface Transportation Board, adding a third Republican to the regulatory body as it moves toward a pivotal early decision in Union Pacific Railroad’s proposed $85 billion acquisition of Norfolk Southern Railway. Kloster was approved Monday as part of a broader package of federal nominees that passed by a 46-43 party line vote. He fills the seat vacated by former STB Chairman Martin Oberman, who retired in May 2024. Kloster’s term runs through Dec. 31, 2028. Kloster has extensive experience as a consultant and board member on several transportation groups, including the National Industrial Transportation League and Railway Supply Institute. His confirmation gives Republicans a 3-1 edge on STB. Kloster joins Chairman Patrick Fuchs and Michelle Schultz, both Republicans, and Democrat Karen Hedlund. One seat remains vacant, but the board does not need all five seats filled to conduct business. Kloster joins STB at an important time for the agency as it reviews what would be the largest US rail transaction in nearly three decades. The regulatory body can rule as soon as May 29 on whether UP has submitted a “complete” application for its proposed merger with NS. The board previously <a href="https://www.joc.com/article/stb-rejects-up-ns-merger-application-as-incomplete-6154074">ruled in January</a> that an initial application was “incomplete” and outlined several deficiencies that had to be rectified. UP filed a revised application on April 30. UP and NS argue that their revised application satisfies the STB’s requirements and that the review process should be allowed to continue. But rival railroads BNSF Railway, Canadian Pacific Kansas City, and CSX Transportation have urged the STB to reject the filing again, arguing the second version of the application remains structurally deficient. If the STB deems the second application complete, then the merger proposal can move into a formal review process that would include environmental analysis, public hearings, and broader shipper input. Kloster’s path to the STB was delayed after his nomination failed to reach the Senate floor during the body’s prior session. He was re-nominated in January and advanced to the Senate floor in March on a party line vote. Kloster offered few insights on the UP-NS transaction during his Senate confirmation hearing last fall, saying only he would review the application thoroughly and not take his seat on the STB with a predetermined decision on the proposed merger. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The US Senate has confirmed the appointment of Richard Kloster to the Surface Transportation Board, adding a third Republican to the regulatory body as it moves toward a pivotal early decision in Union Pacific Railroad’s proposed $85 billion acquisition of Norfolk Southern Railway. Kloster was approved Monday as part of a broader package of federal nominees that passed by a 46-43 party line vote. He fills the seat vacated by former STB Chairman Martin Oberman, who retired in May 2024. Kloster’s term runs through Dec. 31, 2028. Kloster has extensive experience as a consultant and board member on several transportation groups, including the National Industrial Transportation League and Railway Supply Institute. His confirmation gives Republicans a 3-1 edge on STB. Kloster joins Chairman Patrick Fuchs and Michelle Schultz, both Republicans, and Democrat Karen Hedlund. One seat remains vacant, but the board does not need all five seats filled to conduct business. Kloster joins STB at an important time for the agency as it reviews what would be the largest US rail transaction in nearly three decades. The regulatory body can rule as soon as May 29 on whether UP has submitted a “complete” application for its proposed merger with NS. The board previously ruled in January that an initial application was “incomplete” and outlined several deficiencies that had to be rectified. UP filed a revised application on April 30. UP and NS argue that their revised application satisfies the STB’s requirements and that the review process should be allowed to continue. But rival railroads BNSF Railway, Canadian Pacific Kansas City, and CSX Transportation have urged the STB to reject the filing again, arguing the second version of the application remains structurally deficient. If the STB deems the second application complete, then the merger proposal can move into a formal review process that would include environmental analysis, public hearings, and broader shipper input. Kloster’s path to the STB was delayed after his nomination failed to reach the Senate floor during the body’s prior session. He was re-nominated in January and advanced to the Senate floor in March on a party line vote. Kloster offered few insights on the UP-NS transaction during his Senate confirmation hearing last fall, saying only he would review the application thoroughly and not take his seat on the STB with a predetermined decision on the proposed merger. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Surface

Senate approves Kloster for seat on Surface Transportation Board

<div class="phx-topic abstract-wrapper">Yet liner executives insist that much of the surplus tonnage can be absorbed by a combination of vessel management, trade imbalances, increased scrapping, and the ongoing effects of geopolitical disruptions.</div>

Yet liner executives insist that much of the surplus tonnage can be absorbed by a combination of vessel management, trade imbalances, increased scrapping, and the ongoing effects of geopolitical disruptions.

<div class="phx-topic">The profitability-sapping effects of vessel overcapacity from an order book closing in on 40% of the in-service fleet were on display in the first quarter when volume gains by some ocean carriers were not enough to prevent a steep drop in earnings. Declining average rates dragged down the <a href="https://www.joc.com/article/maersk-passing-500-million-monthly-fuel-bill-to-customers-in-full-ceo-6216319">first-quarter results of Maersk and HMM</a>, despite solid volume increases; HMM reported a 14% increase in first-quarter volume, while Maersk reported “above market growth” of 9%. And despite stable volumes from other carriers such as <a href="https://www.joc.com/article/hapag-lloyd-posts-q1-net-loss-in-unsatisfactory-start-to-2026-6219964">Hapag-Lloyd</a>, <a href="https://www.joc.com/article/one-expects-11-decline-in-fy26-net-profit-due-to-war-in-middle-east-6212215">Ocean Network Express</a>, <a href="https://www.joc.com/article/lower-freight-rates-hit-q1-revenues-for-taiwans-big-three-carriers-6204140">Evergreen, Yang Ming and OOCL</a>, their revenues were significantly eroded by weaker rates; Hapag even posted a loss in Q1. Yet carrier executives insist that the excess supply can be mitigated and the surplus tonnage absorbed — this year at least — by a combination of vessel management, trade imbalances, the ongoing effects of geopolitical disruption, and an increase in scrapping. Some heavy lifting will be required. Maersk CEO Vincent Clerc put the current excess supply in the market at 1 million to 1.5 million TEUs, with the longer routes around southern Africa absorbing another 2 million TEUs. “So, it's about 3.5 million TEUs overall that is the total capacity overhang to normalized trade routes today,” Clerc said during Maersk’s recent Q1 earnings call with analysts. But he believes excess capacity can be managed by carriers showing discipline in how they deploy capacity, a rise in scrapping and by a new wave of slow steaming that will be triggered by high energy costs. “The deliveries are okay this year, but they are picking up significantly next year, and that’s going to put further pressure on the overhang,” he added. Despite the significant capacity overhang, Clerc believes high energy costs, driven by the effective closure of the Strait of Hormuz amid the ongoing war in the Middle East, will soon trigger a wave of slow steaming that could absorb up to an additional 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” <h3>Swelling order book </h3>The global order book continues to swell, with total capacity on order currently at 12.3 million TEUs, 37% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Sea-web data shows just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year, contributing to capacity growth of 4% amid market predictions for demand growth of 2% to 3% this year. Around 2.3 million TEUs of capacity are due for delivery in 2027 and 3.4 million TEUs in 2028. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4c149ebf-df6c-4535-a9b2-7d12091e03d8"></dynamic-object></div>Rolf Habben Jansen, CEO of Maersk’s Gemini Cooperation partner Hapag-Lloyd, also pointed to vessel management levers such as slow steaming and blank sailings, as well as increased scrapping, to limit the effects of excess tonnage. But he noted that another capacity-absorbing factor was emerging in the form of an imbalance between the dominant trade lanes of head-haul corridors and non-dominant lanes. Habben Jansen said growth on the dominant legs of a trade lane is what drives capacity needs, not the overall market growth, noting that strong growth on dominant trade lanes -- 10% in 2024 and 8% in 2025 -- was helping to offset the impact of new supply on rate levels. “In 2026, the growth on the dominant legs will be higher than the additional supply that comes into the market, acting as a mitigating factor against overcapacity,” he said during Hapag’s earnings call last week. <h3>Supply management to be tested </h3>How demand and rates shape up through the second quarter and peak season will put the capacity-mitigating confidence of carrier executives to the test, particularly on the trans-Pacific. US imports from Asia have fallen 4.6% this year through April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Despite the weak demand, carriers on the trans-Pacific are having some success with rate increases amid an environment of sharply higher fuel costs. Platts, a sister company of the Journal of Commerce, believes rates are being supported by blank sailings, smaller vessel deployments and tighter space allocations. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9c18268a-1028-4fd5-916a-6a7afa16d7ec"></dynamic-object></div>Spot rates for Asia to the US West Coast were at $3,200 per FEU as of May 18 — up 84% in two months, according to Platts. East Coast rates were at $4,200/FEU. A series of general rate increases (GRIs) was issued in mid-May, with carriers announcing another set from June 1 as high as $3,000 per FEU, combined with a wave of fuel‑linked surcharge adjustments ranging from $200/FEU to $500/FEU. Asia-Europe volume from Container Trades Statistics is only available for the first quarter, but shows a 13% increase year over year, continuing the strong demand recorded last year when the trade lane grew volume by 8%. Rates have been rising; on Asia-North Europe they are up 17% week on week at $2,800/FEU, with Asia-Mediterranean rates climbing 8% to $4,000/FEU, Platts data shows. The gains appear to be driven by demand and not carrier capacity management, with a significant increase in deployed capacity on Asia-North Europe and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. It is a more dramatic picture on the trans-Pacific. Asia-US will see 1.96 million TEUs deployed in May, up 4% from April, with blank sailings falling 36%. Planned capacity in June will increase to 2.1 million TEUs while blank sailings will drop by almost 40%. The demand picture for the rest of the year remains unclear. Mediterranean Shipping Co. CEO Soren Toft told the Journal of Commerce in London last week that consumer behavior in both the US and Europe was difficult to predict in the current global economic climate. <h3>Rising energy prices to dampen demand </h3>The International Monetary Fund (IMF) has revised its economic growth forecast downward from 3.3% to 2.8% with the expectation that rising energy prices will dampen demand. At the same time, the war in the Middle East is fueling inflation fears, product shortages and aggressive stockpiling by manufacturers worldwide, according to the GEP Global Supply Chain Volatility Index compiled by S&amp;P Global and released May 12. Businesses globally have ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price increases and disruption, the GEP survey found. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs. “Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president of consulting at GEP, said in his analysis of the survey results. “What stands out in April’s data is how broadly the disruption is spreading,” he added. "Shortages worsened across every major region, signaling this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption.” A softening of Asian exports because of the stockpiling will likely result in oversupplied carriers rapidly scaling up blank sailings to support rate levels. Maersk and Hapag-Lloyd in March amended their Gemini Cooperation agreement across all global service loops to modify the timing of discussions regarding potential seasonal blank sailings. Under previous terms, the carriers were authorized to blank sailings only during Chinese New Year or Chinese Golden Week, provided such agreement was reached no later than 12 weeks prior to the scheduled date of the sailing. The new agreement allows the carriers to announce blanks six to eight weeks before sailings. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The profitability-sapping effects of vessel overcapacity from an order book closing in on 40% of the in-service fleet were on display in the first quarter when volume gains by some ocean carriers were not enough to prevent a steep drop in earnings. Declining average rates dragged down the first-quarter results of Maersk and HMM , despite solid volume increases; HMM reported a 14% increase in first-quarter volume, while Maersk reported “above market growth” of 9%. And despite stable volumes from other carriers such as Hapag-Lloyd , Ocean Network Express , Evergreen, Yang Ming and OOCL , their revenues were significantly eroded by weaker rates; Hapag even posted a loss in Q1. Yet carrier executives insist that the excess supply can be mitigated and the surplus tonnage absorbed — this year at least — by a combination of vessel management, trade imbalances, the ongoing effects of geopolitical disruption, and an increase in scrapping. Some heavy lifting will be required. Maersk CEO Vincent Clerc put the current excess supply in the market at 1 million to 1.5 million TEUs, with the longer routes around southern Africa absorbing another 2 million TEUs. “So, it's about 3.5 million TEUs overall that is the total capacity overhang to normalized trade routes today,” Clerc said during Maersk’s recent Q1 earnings call with analysts. But he believes excess capacity can be managed by carriers showing discipline in how they deploy capacity, a rise in scrapping and by a new wave of slow steaming that will be triggered by high energy costs. “The deliveries are okay this year, but they are picking up significantly next year, and that’s going to put further pressure on the overhang,” he added. Despite the significant capacity overhang, Clerc believes high energy costs, driven by the effective closure of the Strait of Hormuz amid the ongoing war in the Middle East, will soon trigger a wave of slow steaming that could absorb up to an additional 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” Swelling order book The global order book continues to swell, with total capacity on order currently at 12.3 million TEUs, 37% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Sea-web data shows just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year, contributing to capacity growth of 4% amid market predictions for demand growth of 2% to 3% this year. Around 2.3 million TEUs of capacity are due for delivery in 2027 and 3.4 million TEUs in 2028. Rolf Habben Jansen, CEO of Maersk’s Gemini Cooperation partner Hapag-Lloyd, also pointed to vessel management levers such as slow steaming and blank sailings, as well as increased scrapping, to limit the effects of excess tonnage. But he noted that another capacity-absorbing factor was emerging in the form of an imbalance between the dominant trade lanes of head-haul corridors and non-dominant lanes. Habben Jansen said growth on the dominant legs of a trade lane is what drives capacity needs, not the overall market growth, noting that strong growth on dominant trade lanes -- 10% in 2024 and 8% in 2025 -- was helping to offset the impact of new supply on rate levels. “In 2026, the growth on the dominant legs will be higher than the additional supply that comes into the market, acting as a mitigating factor against overcapacity,” he said during Hapag’s earnings call last week. Supply management to be tested How demand and rates shape up through the second quarter and peak season will put the capacity-mitigating confidence of carrier executives to the test, particularly on the trans-Pacific. US imports from Asia have fallen 4.6% this year through April, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Despite the weak demand, carriers on the trans-Pacific are having some success with rate increases amid an environment of sharply higher fuel costs. Platts, a sister company of the Journal of Commerce, believes rates are being supported by blank sailings, smaller vessel deployments and tighter space allocations. Spot rates for Asia to the US West Coast were at $3,200 per FEU as of May 18 — up 84% in two months, according to Platts. East Coast rates were at $4,200/FEU. A series of general rate increases (GRIs) was issued in mid-May, with carriers announcing another set from June 1 as high as $3,000 per FEU, combined with a wave of fuel‑linked surcharge adjustments ranging from $200/FEU to $500/FEU. Asia-Europe volume from Container Trades Statistics is only available for the first quarter, but shows a 13% increase year over year, continuing the strong demand recorded last year when the trade lane grew volume by 8%. Rates have been rising; on Asia-North Europe they are up 17% week on week at $2,800/FEU, with Asia-Mediterranean rates climbing 8% to $4,000/FEU, Platts data shows. The gains appear to be driven by demand and not carrier capacity management, with a significant increase in deployed capacity on Asia-North Europe and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. It is a more dramatic picture on the trans-Pacific. Asia-US will see 1.96 million TEUs deployed in May, up 4% from April, with blank sailings falling 36%. Planned capacity in June will increase to 2.1 million TEUs while blank sailings will drop by almost 40%. The demand picture for the rest of the year remains unclear. Mediterranean Shipping Co. CEO Soren Toft told the Journal of Commerce in London last week that consumer behavior in both the US and Europe was difficult to predict in the current global economic climate. Rising energy prices to dampen demand The International Monetary Fund (IMF) has revised its economic growth forecast downward from 3.3% to 2.8% with the expectation that rising energy prices will dampen demand. At the same time, the war in the Middle East is fueling inflation fears, product shortages and aggressive stockpiling by manufacturers worldwide, according to the GEP Global Supply Chain Volatility Index compiled by S&P Global and released May 12. Businesses globally have ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price increases and disruption, the GEP survey found. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs. “Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president of consulting at GEP, said in his analysis of the survey results. “What stands out in April’s data is how broadly the disruption is spreading,” he added. "Shortages worsened across every major region, signaling this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption.” A softening of Asian exports because of the stockpiling will likely result in oversupplied carriers rapidly scaling up blank sailings to support rate levels. Maersk and Hapag-Lloyd in March amended their Gemini Cooperation agreement across all global service loops to modify the timing of discussions regarding potential seasonal blank sailings. Under previous terms, the carriers were authorized to blank sailings only during Chinese New Year or Chinese Golden Week, provided such agreement was reached no later than 12 weeks prior to the scheduled date of the sailing. The new agreement allows the carriers to announce blanks six to eight weeks before sailings. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Trans-Pacific

Ocean carriers face growing order book nearing 40% of in-service fleet

<div class="phx-topic abstract-wrapper">The BCO technology provider, in a bid to avoid costly dispute resolution, has identified 20 use cases under which shippers, consignees and carriers can agree to be held responsible for container storage.</div>

The BCO technology provider, in a bid to avoid costly dispute resolution, has identified 20 use cases under which shippers, consignees and carriers can agree to be held responsible for container storage.

<div class="phx-topic">International logistics software vendor BuyCo is proposing that shippers and carriers agree to a standard set of contract terms that would apportion responsibility for the cost of container detention and demurrage. BuyCo’s proposal delineates, for 20 different circumstances that can lead to detention and demurrage, which party is accountable, and thus contractually would absolve the other parties from blame. The goal would be to include the mutually accepted rules in ocean freight contracts so there would be clarity around which party would be responsible for the storage fees and to avoid disputes, which BuyCo notes leads to costly overhead for importers, exporters, and shipping lines. “The idea is that it’s so simple, a kid could understand it,” said BuyCo CEO Carl Lauron said in an interview with the Journal of Commerce. “We’re playing together, let’s agree on the rules.” Marseille-based BuyCo provides international transportation management software for beneficial cargo owners (BCOs). Its customers include Goodyear, Hershey, Renault, and TotalEnergies. BuyCo executives formally presented their D&amp;D proposal at the Digital Container Shipping Association’s DCSA+ Day, an event held in Singapore in late April that brought together DCSA’s container line members, its technology and consulting partners, and a group of forwarders and shippers to discuss ways to make the container shipping industry more efficient. DCSA is an organization representing most of the world’s top liner carriers that is driving the adoption of digital standards in the ocean freight industry. <h3>Rules developed with customer feedback </h3>Lauron said BuyCo customers helped it create a list of more than 50 different root causes of detention and demurrage disputes, with the software vendor whittling that down to the 20 most common use cases to make the proposal more digestible. Of those 20, seven would be a shipper’s liability, seven would be a carrier’s fault, and the remaining six would be the consignee’s fault. Examples of a shipper’s responsibility: a lack of export documentation compliance, damaged equipment in a merchant haulage scenario (where the shipper arranges drayage), and a failure to meet vessel cutoff at the origin port. Carriers would agree to be held responsible when storage fees are accrued due to transshipment delays, late or inaccurate communication around vessel cutoffs, or when a container is rolled. Meanwhile, consignees would agree to pay storage fees in situations such as when they asked for a container rerouting, or when warehouse capacity at destination precluded their ability to pick up a container. “This is a common sense approach written on paper, which at the end of the day would be the rules of the game that every player needs,” said Olivier Martinot, global transports and customs leader for Adeo, a major home improvement retailer in Europe and a BuyCo customer. Martinot, though, acknowledged it will be challenging to drive adoption of the rules simply because each major region has its own culture and regulatory environment. “From my French-based shipper window, we would need a significant panel of large, impactful shippers allied if we want to make it happen with carriers on French-based contacts,” he said. “I’m not sure at all we could reach a global agreement, and to me, this is where the major difficulty is.” But Lauron said there was a positive reception to the idea from both shippers and container lines at the April DCSA meeting. BuyCo is in the process of championing the idea to individual carriers to galvanize support for the proposal. <h3>Long-standing problem </h3>The idea of making responsibility for detention and demurrage more concrete has long been an elusive goal. The National Industrial Transportation League (NITL) in 2023 developed a so-called “shipper bill of rights” that specified 14 things to which a shipper was entitled in its relationship with container lines. Included in that list was pricing transparency and efficiency in claims resolution. Detention and demurrage costs spiraled during the pandemic and have remained higher than before COVID-19, prompting shippers to use an array of technology providers and freight audit companies to automate disputes across thousands of invoices and claw back refunds. BuyCo’s approach has been to look at incentives more holistically, Lauron said, in ways that would motivate both container lines and shippers to be accountable, and to avoid the presumption that carriers are always in the wrong when a storage dispute occurs. “This started with our customers asking us to check on invoicing,” he said. “And the real pain was not freight, but the D&amp;D. Instead of looking at the invoicing, let’s look at the actual D&amp;D that’s being created because if you reduce D&amp;D accrued, you automatically reduce the claims.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

International logistics software vendor BuyCo is proposing that shippers and carriers agree to a standard set of contract terms that would apportion responsibility for the cost of container detention and demurrage. BuyCo’s proposal delineates, for 20 different circumstances that can lead to detention and demurrage, which party is accountable, and thus contractually would absolve the other parties from blame. The goal would be to include the mutually accepted rules in ocean freight contracts so there would be clarity around which party would be responsible for the storage fees and to avoid disputes, which BuyCo notes leads to costly overhead for importers, exporters, and shipping lines. “The idea is that it’s so simple, a kid could understand it,” said BuyCo CEO Carl Lauron said in an interview with the Journal of Commerce. “We’re playing together, let’s agree on the rules.” Marseille-based BuyCo provides international transportation management software for beneficial cargo owners (BCOs). Its customers include Goodyear, Hershey, Renault, and TotalEnergies. BuyCo executives formally presented their D&D proposal at the Digital Container Shipping Association’s DCSA+ Day, an event held in Singapore in late April that brought together DCSA’s container line members, its technology and consulting partners, and a group of forwarders and shippers to discuss ways to make the container shipping industry more efficient. DCSA is an organization representing most of the world’s top liner carriers that is driving the adoption of digital standards in the ocean freight industry. Rules developed with customer feedback Lauron said BuyCo customers helped it create a list of more than 50 different root causes of detention and demurrage disputes, with the software vendor whittling that down to the 20 most common use cases to make the proposal more digestible. Of those 20, seven would be a shipper’s liability, seven would be a carrier’s fault, and the remaining six would be the consignee’s fault. Examples of a shipper’s responsibility: a lack of export documentation compliance, damaged equipment in a merchant haulage scenario (where the shipper arranges drayage), and a failure to meet vessel cutoff at the origin port. Carriers would agree to be held responsible when storage fees are accrued due to transshipment delays, late or inaccurate communication around vessel cutoffs, or when a container is rolled. Meanwhile, consignees would agree to pay storage fees in situations such as when they asked for a container rerouting, or when warehouse capacity at destination precluded their ability to pick up a container. “This is a common sense approach written on paper, which at the end of the day would be the rules of the game that every player needs,” said Olivier Martinot, global transports and customs leader for Adeo, a major home improvement retailer in Europe and a BuyCo customer. Martinot, though, acknowledged it will be challenging to drive adoption of the rules simply because each major region has its own culture and regulatory environment. “From my French-based shipper window, we would need a significant panel of large, impactful shippers allied if we want to make it happen with carriers on French-based contacts,” he said. “I’m not sure at all we could reach a global agreement, and to me, this is where the major difficulty is.” But Lauron said there was a positive reception to the idea from both shippers and container lines at the April DCSA meeting. BuyCo is in the process of championing the idea to individual carriers to galvanize support for the proposal. Long-standing problem The idea of making responsibility for detention and demurrage more concrete has long been an elusive goal. The National Industrial Transportation League (NITL) in 2023 developed a so-called “shipper bill of rights” that specified 14 things to which a shipper was entitled in its relationship with container lines. Included in that list was pricing transparency and efficiency in claims resolution. Detention and demurrage costs spiraled during the pandemic and have remained higher than before COVID-19, prompting shippers to use an array of technology providers and freight audit companies to automate disputes across thousands of invoices and claw back refunds. BuyCo’s approach has been to look at incentives more holistically, Lauron said, in ways that would motivate both container lines and shippers to be accountable, and to avoid the presumption that carriers are always in the wrong when a storage dispute occurs. “This started with our customers asking us to check on invoicing,” he said. “And the real pain was not freight, but the D&D. Instead of looking at the invoicing, let’s look at the actual D&D that’s being created because if you reduce D&D accrued, you automatically reduce the claims.” Contact Eric Johnson at eric.johnson@spglobal.com .

Software vendor offers proposal to establish detention, demurrage accountability

<div class="phx-topic abstract-wrapper">Main construction started Friday and includes the development of four berths capable of handling ships of more than 21,000 TEUs, plus 15 berths for regional feeder vessels. </div>

Main construction started Friday and includes the development of four berths capable of handling ships of more than 21,000 TEUs, plus 15 berths for regional feeder vessels.

<div class="phx-topic">Work has begun on the $2 billion fifth development phase of Nansha port, the main international container gateway for Guangzhou in southern China, as part of a move to increase Nansha’s capacity to 35 million TEUs by around 2030. Main construction started Friday and includes the development of four berths capable of handling ships of more than 21,000 TEUs, plus 15 berths for regional feeder vessels, China’s Transport Ministry said Monday. The extension, with a combined berth length of 2.4 miles, will boost capacity at Nansha by 6.7 million TEUs. Guangzhou Port Group is also developing the $1 billion Nansha International General Terminal that will add an additional 500,000 TEUs of capacity and berths for breakbulk, project cargo and vehicle shipments. Port group Chairman Huang Bo said the fifth development phase plus general terminal and other expansion work will add 11 million TEUs of operating capacity to Nansha port, located about 40 miles south of Guangzhou city. The work comes as Guangzhou is seeing an increase in container volumes as growth there largely keeps pace with rival Shenzhen about 60 miles south, while both ports are continuing to lure volumes away from Hong Kong. Guangzhou saw throughput climb 8% to over 27 million TEUs last year, of which more than 22 million TEUs were handled at Nansha, according to the Guangzhou Port Group. The growth has continued this year, with a 4% increase in Guangzhou’s total throughput in the first four months of this year, to 9 million TEUs. Container volumes at Shenzhen rose 5% last year to 35 million TEUs, with growth in the first four months climbing 8% to 8.5 million TEUs, according to China’s Transport Ministry.Volumes at Hong Kong have continued to decline, falling 5% to 13.7 million TEUs last year and sliding a further 7% to 4.2 million TEUs this year through April, according to data from Hong Kong’s Marine Department. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Work has begun on the $2 billion fifth development phase of Nansha port, the main international container gateway for Guangzhou in southern China, as part of a move to increase Nansha’s capacity to 35 million TEUs by around 2030. Main construction started Friday and includes the development of four berths capable of handling ships of more than 21,000 TEUs, plus 15 berths for regional feeder vessels, China’s Transport Ministry said Monday. The extension, with a combined berth length of 2.4 miles, will boost capacity at Nansha by 6.7 million TEUs. Guangzhou Port Group is also developing the $1 billion Nansha International General Terminal that will add an additional 500,000 TEUs of capacity and berths for breakbulk, project cargo and vehicle shipments. Port group Chairman Huang Bo said the fifth development phase plus general terminal and other expansion work will add 11 million TEUs of operating capacity to Nansha port, located about 40 miles south of Guangzhou city. The work comes as Guangzhou is seeing an increase in container volumes as growth there largely keeps pace with rival Shenzhen about 60 miles south, while both ports are continuing to lure volumes away from Hong Kong. Guangzhou saw throughput climb 8% to over 27 million TEUs last year, of which more than 22 million TEUs were handled at Nansha, according to the Guangzhou Port Group. The growth has continued this year, with a 4% increase in Guangzhou’s total throughput in the first four months of this year, to 9 million TEUs. Container volumes at Shenzhen rose 5% last year to 35 million TEUs, with growth in the first four months climbing 8% to 8.5 million TEUs, according to China’s Transport Ministry. Volumes at Hong Kong have continued to decline, falling 5% to 13.7 million TEUs last year and sliding a further 7% to 4.2 million TEUs this year through April, according to data from Hong Kong’s Marine Department. Contact Keith Wallis at keithwallis@hotmail.com .

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Guangzhou begins work on $2 billion fifth development phase at Nansha port

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