<div class="phx-topic abstract-wrapper">Canada this week looked to give its largest ports a competitive edge on rivals in the United States </div>

Canada this week looked to give its largest ports a competitive edge on rivals in the United States

<div>Canada this week looked to give its largest ports a competitive edge on rivals in the United States by easing restrictions on borrowing and dropping a ban on hubs receiving public funding.Amendments to the 10-year-old Canada Marine Act will provide access to financing port officials say they require to attract a greater share of growing global trade. Except for special arrangements made after the 2001 terrorist attacks in the U.S. for security upgrades, the ports have relied totally on their cash flow, although their lands and facilities are federally-owned.The largest ports handling international commerce -- Vancouver Fraser, Montreal and Halifax,...

Canada this week looked to give its largest ports a competitive edge on rivals in the United States by easing restrictions on borrowing and dropping a ban on hubs receiving public funding. Amendments to the 10-year-old Canada Marine Act will provide access to financing port officials say they require to attract a greater share of growing global trade. Except for special arrangements made after the 2001 terrorist attacks in the U.S. for security upgrades, the ports have relied totally on their cash flow, although their lands and facilities are federally-owned. The largest ports handling international commerce -- Vancouver Fraser, Montreal and Halifax, now can tap into a C$2.1-billion (about US$2 billion) fund recently established for infrastructure projects across the country. Federal constraints were also removed permitting them to borrow in financial markets for expansion and improvement. The Association of Canadian Port Authorities "couldn't be happier," said group chair Sean Hanrahan, chief executive of the St. John's (Newfoundland) Port Authority, adding, "these revisions to the Act will help port authorities, and Canada itself, to capture its fair share of the anticipated worldwide expansion of trade."

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Canada OKs Port Funding

<div class="phx-topic abstract-wrapper">China’s new port fees on non-China-made vessels that are US-flagged or owned or controlled by US companies are forcing the Gemini Cooperation partners to transship via South Korea to avoid the multimillion dollar hit. </div>

China’s new port fees on non-China-made vessels that are US-flagged or owned or controlled by US companies are forcing the Gemini Cooperation partners to transship via South Korea to avoid the multimillion dollar hit.

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<div class="phx-topic">The Gemini Cooperation diverted two US-flag vessels in a trans-Pacific service away from China due to that country’s retaliatory port fees, with one of the alliance partners warning of a multi-million dollar hit that carriers face on US-flag ships because of the fees. Maersk and Hapag-Lloyd advised customers on Tuesday that two US-flagged ships in their jointly operated TP7/WC5 service will no longer call Ningbo. This week’s voyage of Hapag-Lloyd’s Potomac Express will discharge westbound cargo for China in Busan, South Korea, and then be transshipped on another ship. The Denmark-flagged Maersk Luz will carry outbound freight from Ningbo to South Korea’s Kwangyang port, which will then be loaded on the Potomac Express. Next week’s voyage of the Maersk Kinloss will also discharge westbound China cargo in South Korea for transshipment on an unidentified ship, with eastbound cargo from Ningbo being shipped on a Gemini shuttle ship. The service switch-up comes as <a href="https://www.joc.com/article/china-returns-fire-with-retaliatory-port-fees-targeting-us-affiliated-ships-6095198">China’s recently unveiled port fees on US-flag ships</a> went into effect on Oct. 14, the same day as similar US port fees took effect on Chinese-built ships and carriers. While China has exempted US-flagged ships built in China from the fees, both of Gemini’s affected ships were built in South Korea. China plans to charge US-flag, non-Chinese vessels $56 per net ton, roughly similar to what the US is levying. Based on their net tonnage, each of the Gemini ships would incur a $2.5 million charge. <h3>Hapag-Lloyd looks to adjust </h3>Stuart Sandlin, Hapag-Lloyd’s North American president, said Wednesday at the Virginia Maritime Association trade conference in Norfolk that the carrier’s five US-flagged, South Korean-built ships would face a total of $125 million in Chinese port fees annually. The US-flag international fleet can also carry commercial cargo to and from China, in addition to any government or military cargo for other Asian countries. Sandlin said Hapag-Lloyd is now looking at how to split up that business to avoid the fees. ”We have a US-flag group, and we have a non-US-flag group, and that makes it a lot more difficult because of the current geopolitical situation,” he said. “We’re working to see how we actually manage through that.” There are currently 57 ships in the US-flag international fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Those US-flag ships made 163 calls globally year-to-date. The US-flag Matson Waikiki, which called Shanghai on Tuesday, faces a $1.7 million fee. Among US-flag carriers, CMA CGM’s APL division runs the only fleet solely built in China. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Gemini Cooperation diverted two US-flag vessels in a trans-Pacific service away from China due to that country’s retaliatory port fees, with one of the alliance partners warning of a multi-million dollar hit that carriers face on US-flag ships because of the fees. Maersk and Hapag-Lloyd advised customers on Tuesday that two US-flagged ships in their jointly operated TP7/WC5 service will no longer call Ningbo. This week’s voyage of Hapag-Lloyd’s Potomac Express will discharge westbound cargo for China in Busan, South Korea, and then be transshipped on another ship. The Denmark-flagged Maersk Luz will carry outbound freight from Ningbo to South Korea’s Kwangyang port, which will then be loaded on the Potomac Express. Next week’s voyage of the Maersk Kinloss will also discharge westbound China cargo in South Korea for transshipment on an unidentified ship, with eastbound cargo from Ningbo being shipped on a Gemini shuttle ship. The service switch-up comes as China’s recently unveiled port fees on US-flag ships went into effect on Oct. 14, the same day as similar US port fees took effect on Chinese-built ships and carriers. While China has exempted US-flagged ships built in China from the fees, both of Gemini’s affected ships were built in South Korea. China plans to charge US-flag, non-Chinese vessels $56 per net ton, roughly similar to what the US is levying. Based on their net tonnage, each of the Gemini ships would incur a $2.5 million charge. Hapag-Lloyd looks to adjust Stuart Sandlin, Hapag-Lloyd’s North American president, said Wednesday at the Virginia Maritime Association trade conference in Norfolk that the carrier’s five US-flagged, South Korean-built ships would face a total of $125 million in Chinese port fees annually. The US-flag international fleet can also carry commercial cargo to and from China, in addition to any government or military cargo for other Asian countries. Sandlin said Hapag-Lloyd is now looking at how to split up that business to avoid the fees. ”We have a US-flag group, and we have a non-US-flag group, and that makes it a lot more difficult because of the current geopolitical situation,” he said. “We’re working to see how we actually manage through that.” There are currently 57 ships in the US-flag international fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Those US-flag ships made 163 calls globally year-to-date. The US-flag Matson Waikiki, which called Shanghai on Tuesday, faces a $1.7 million fee. Among US-flag carriers, CMA CGM’s APL division runs the only fleet solely built in China. Contact Michael Angell at michael.angell@spglobal.com .

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Trans-Pacific

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Maritime

China’s port fees forcing Gemini to shift out US-flag ships

<div class="phx-topic abstract-wrapper">A 25% state subsidy for the newbuild program approved by Indian policymakers after months of negotiations is believed to have pushed the deal through, thus neutralizing the cost gaps with rival yards in China and South Korea. </div>

A 25% state subsidy for the newbuild program approved by Indian policymakers after months of negotiations is believed to have pushed the deal through, thus neutralizing the cost gaps with rival yards in China and South Korea.

<div class="phx-topic">CMA CGM has inked an approximately $350 million newbuild deal with Indian shipbuilding major Cochin Shipyard Ltd. (CSL) for six 1,700-TEU liquefied natural gas (LNG)-powered dual-fuel vessels. The deal confirms <a href="https://www.joc.com/article/cma-cgm-eyes-shipbuilding-plans-for-india-in-trade-diversification-strategy-sources-6088185">earlier reporting</a> from the Journal of Commerce. The French shipping group, in a letter of intent signed with CSL on Tuesday, agreed to order the six vessels, the first attempt by a major mainliner in the Indian market. “India is a strategic country for CMA CGM, where we invest, train and innovate,” group Chairman and CEO Rodolphe Saadé said in a statement. “Beyond shipbuilding, we are strengthening our partnerships in logistics, maritime training and sustainable transport to support India’s growth and contribute to the decarbonization of global trade.” The deal is estimated to cost the carrier approximately $60 million per ship, according to CSL sources. Vessel deliveries are scheduled to take place between 2029 and 2031, with all ships to be India-flagged. A 25% state subsidy for the newbuild program approved by Indian policymakers after months of negotiations is believed to have finally pushed the deal through, thus neutralizing the cost gaps with rival yards in China and South Korea. Local container industry leaders greeted the shipbuilding news warmly. “India is embarking on shipbuilding/repairs/recycling verticals in a significant manner as the economy expands,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “India’s serious entry into this sphere offers another [sourcing] option for the international carriers.” <h3>CMA CGM bolstering presence in India </h3>The contract seemingly is a win-win proposition for both parties, as CSL aims to push yard operations via a strategic alliance with HD Korea Shipbuilding &amp; Offshore Engineering and CMA CGM looks to raise the bar on its Indian presence beyond port-to-port shipping. The liner now has dedicated box terminals at Nhava Sheva and Mundra, the country’s top cargo handlers, gaining the flexibility to turn around vessels more seamlessly amid the lingering Red Sea-linked pressure on schedule reliability. A recent resetting of berthing windows around CMA CGM’s own Nhava Sheva terminal for the premier India-US East Coast “Indamex” and India-Europe “Epic” services underpins those considerations. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM has inked an approximately $350 million newbuild deal with Indian shipbuilding major Cochin Shipyard Ltd. (CSL) for six 1,700-TEU liquefied natural gas (LNG)-powered dual-fuel vessels. The deal confirms earlier reporting from the Journal of Commerce. The French shipping group, in a letter of intent signed with CSL on Tuesday, agreed to order the six vessels, the first attempt by a major mainliner in the Indian market. “India is a strategic country for CMA CGM, where we invest, train and innovate,” group Chairman and CEO Rodolphe Saadé said in a statement. “Beyond shipbuilding, we are strengthening our partnerships in logistics, maritime training and sustainable transport to support India’s growth and contribute to the decarbonization of global trade.” The deal is estimated to cost the carrier approximately $60 million per ship, according to CSL sources. Vessel deliveries are scheduled to take place between 2029 and 2031, with all ships to be India-flagged. A 25% state subsidy for the newbuild program approved by Indian policymakers after months of negotiations is believed to have finally pushed the deal through, thus neutralizing the cost gaps with rival yards in China and South Korea. Local container industry leaders greeted the shipbuilding news warmly. “India is embarking on shipbuilding/repairs/recycling verticals in a significant manner as the economy expands,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “India’s serious entry into this sphere offers another [sourcing] option for the international carriers.” CMA CGM bolstering presence in India The contract seemingly is a win-win proposition for both parties, as CSL aims to push yard operations via a strategic alliance with HD Korea Shipbuilding & Offshore Engineering and CMA CGM looks to raise the bar on its Indian presence beyond port-to-port shipping. The liner now has dedicated box terminals at Nhava Sheva and Mundra, the country’s top cargo handlers, gaining the flexibility to turn around vessels more seamlessly amid the lingering Red Sea-linked pressure on schedule reliability. A recent resetting of berthing windows around CMA CGM’s own Nhava Sheva terminal for the premier India-US East Coast “Indamex” and India-Europe “Epic” services underpins those considerations. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM signs $350 million Indian shipbuilding order for six box ships

<div class="phx-topic abstract-wrapper">The ILWU is warning the state’s governor of political consequences, while maritime employers say the decision preserves the integrity of collective bargaining.</div>

The ILWU is warning the state’s governor of political consequences, while maritime employers say the decision preserves the integrity of collective bargaining.

<div class="phx-topic">California Gov. Gavin Newsom’s refusal to sign a bill that would have effectively banned automation at the state’s ports “will undoubtedly lead to a loss of jobs,” the International Longshore and Warehouse Union (ILWU) said Tuesday. But maritime employers hailed Newsom’s decision, saying it “reinforces the integrity of collective bargaining” at West Coast ports. The bill, known as SB 34, <a href="https://www.joc.com/article/fate-of-future-automation-at-california-ports-in-governors-hands-6094241">would have banned automated or remotely operated cargo-handling equipment from plugging into the state’s power grid</a>. Newsom late Monday refused to sign the bill, in effect killing it. That means the collective bargaining process between the ILWU and the Pacific Maritime Association (PMA) — and not legislative proposals outside of the coastwide contract — will continue to determine the role of marine terminal automation at California’s ports. Robert Olvera Jr., ILWU international president, said the West Coast dockworkers’ union supports California’s attempts to reduce port-related emissions, but not at the sacrifice of longshore jobs. Olvera pulled no punches in saying Newsom’s decision will have political repercussions. “Make no mistake. Your veto of SB 34 has severely damaged our confidence to work together to achieve these goals, and it will take more than rhetoric to rebuild a partnership in the future,” Olvera said in a letter to the governor. PMA President Stephen Hennessey said in a letter to Newsom that by threatening the efficiencies inherent in automated container terminals, SB 34 would have made California’s ports less competitive. PMA represents shipping lines and terminal operators in negotiating the coastwide labor contract with the ILWU. “[Newsom’s] decision sends an important message to consumers, workers, farmers, small business owners and many others that strong, competitive ports are essential to California’s economy and its role in global trade,” Hennessey said in the letter. <h3>Coastwide contract defines process for terminal automation </h3>The 2008 ILWU-PMA contract defined the process by which individual PMA terminal operators that choose to do so can automate their facilities. In return, PMA agreed to an increase in wages and retirement benefits for all ILWU members coastwide. Long Beach Container Terminal and TraPac in Los Angeles have fully automated terminals, while APM Terminal in Los Angeles has automated 100 acres of its 400-acre terminal. Since the 2008 contract, the ILWU on several occasions has promoted restrictions on automation before <a href="https://www.joc.com/article/commission-vote-allows-apms-electrification-of-automation-5244491">port commissions, city councils and the state legislature</a> through environmental legislation and work-related issues in an attempt to circumvent the language in the contract. The Pacific Merchant Shipping Association (PMSA), which represents shipping lines and terminal operators on the West Coast on legislative and clean air initiatives, said that by using environmental issues as a vehicle for restricting automation, the ILWU’s actions actually threaten the effectiveness of the ports’ clean air efforts. PMSA President Mike Jacob noted that the ports of Los Angeles and Long Beach recently reached an agreement with the South Coast Air Quality Management District (AQMD) to work cooperatively to advance clean air initiatives that the AQMD had proposed in its <a href="https://www.joc.com/article/la-lb-likely-to-work-with-regulator-on-emissions-cutting-plan-for-ports-6084550">port Indirect Source Rule.</a> While the ILWU says it supports environmental efforts at the port, Jacob said stifling automation was the union’s real intention in promoting and supporting SB 34. “This is ILWU’s priority bill,” he said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

California Gov. Gavin Newsom’s refusal to sign a bill that would have effectively banned automation at the state’s ports “will undoubtedly lead to a loss of jobs,” the International Longshore and Warehouse Union (ILWU) said Tuesday. But maritime employers hailed Newsom’s decision, saying it “reinforces the integrity of collective bargaining” at West Coast ports. The bill, known as SB 34, would have banned automated or remotely operated cargo-handling equipment from plugging into the state’s power grid . Newsom late Monday refused to sign the bill, in effect killing it. That means the collective bargaining process between the ILWU and the Pacific Maritime Association (PMA) — and not legislative proposals outside of the coastwide contract — will continue to determine the role of marine terminal automation at California’s ports. Robert Olvera Jr., ILWU international president, said the West Coast dockworkers’ union supports California’s attempts to reduce port-related emissions, but not at the sacrifice of longshore jobs. Olvera pulled no punches in saying Newsom’s decision will have political repercussions. “Make no mistake. Your veto of SB 34 has severely damaged our confidence to work together to achieve these goals, and it will take more than rhetoric to rebuild a partnership in the future,” Olvera said in a letter to the governor. PMA President Stephen Hennessey said in a letter to Newsom that by threatening the efficiencies inherent in automated container terminals, SB 34 would have made California’s ports less competitive. PMA represents shipping lines and terminal operators in negotiating the coastwide labor contract with the ILWU. “[Newsom’s] decision sends an important message to consumers, workers, farmers, small business owners and many others that strong, competitive ports are essential to California’s economy and its role in global trade,” Hennessey said in the letter. Coastwide contract defines process for terminal automation The 2008 ILWU-PMA contract defined the process by which individual PMA terminal operators that choose to do so can automate their facilities. In return, PMA agreed to an increase in wages and retirement benefits for all ILWU members coastwide. Long Beach Container Terminal and TraPac in Los Angeles have fully automated terminals, while APM Terminal in Los Angeles has automated 100 acres of its 400-acre terminal. Since the 2008 contract, the ILWU on several occasions has promoted restrictions on automation before port commissions, city councils and the state legislature through environmental legislation and work-related issues in an attempt to circumvent the language in the contract. The Pacific Merchant Shipping Association (PMSA), which represents shipping lines and terminal operators on the West Coast on legislative and clean air initiatives, said that by using environmental issues as a vehicle for restricting automation, the ILWU’s actions actually threaten the effectiveness of the ports’ clean air efforts. PMSA President Mike Jacob noted that the ports of Los Angeles and Long Beach recently reached an agreement with the South Coast Air Quality Management District (AQMD) to work cooperatively to advance clean air initiatives that the AQMD had proposed in its port Indirect Source Rule. While the ILWU says it supports environmental efforts at the port, Jacob said stifling automation was the union’s real intention in promoting and supporting SB 34. “This is ILWU’s priority bill,” he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

North American ports

Marine terminals

Stakeholders differ on Newsom’s move to kill automation ban at California ports

<div class="phx-topic abstract-wrapper">But the move comes as China’s Transport Ministry launched an investigation into how the country’s maritime industry and supply chains will be impacted by the US Trade Representative’s Section 301 port charges and tariffs.</div>

But the move comes as China’s Transport Ministry launched an investigation into how the country’s maritime industry and supply chains will be impacted by the US Trade Representative’s Section 301 port charges and tariffs.

<div class="phx-topic">China will exempt US-flag ships built in China from its new port fees that went into effect Tuesday, even as the first two Chinese-operated vessels were slapped with new fees in the US. The concession by Beijing will come as a relief to Matson and APL, both of which are US-flagged and operate China-built vessels. Maersk Line Ltd., the other major US-flag carrier, doesn’t regularly serve Chinese ports. The US port fees heavily target Cosco, its subsidiary OOCL and Hede Shipping, while also giving non-Chinese operators a way to mostly avoid the charges by substituting China-built ships on US services with vessels built in South Korea, Japan and Taiwan. The change in China’s port fees comes as the country’s Transport Ministry on Tuesday launched an investigation into how its maritime industry and supply chains will be impacted by the US Trade Representative’s (USTR’s) Section 301 port charges and tariffs. Significantly, the probe will also investigate any organizations and individuals that assisted or supported USTR’s “discriminatory restrictive measures against our country in the shipping industry, shipbuilding industry and related industrial and supply chains,” the ministry said. Beijing announced its investigation of the USTR activities on the same day the US and China imposed reciprocal port call charges on each other’s vessels and owners. The US is charging Chinese-owned or -operated vessels $50 per net ton on each initial port call subject to a cap of five port calls a year. Foreign owners and operators of China-built vessels are being charged the higher of either $18 per net ton or $120 per discharged container. The rates will increase next April. China, in turn, is levying a fee of $56 per net ton on non-China-made vessels that are US-flagged or owned or controlled by US companies or companies where more than 25% shares are held by US interests. <h3>Two China-operated ships hit with US port fees </h3>Meanwhile, the first two Chinese-operated ships to be subjected to US fees called at US ports Tuesday. The OOCL Sunflower, a 16,828-TEU vessel, called Long Beach, while the 13,800-TEU Cosco Jasmine arrived in Savannah, according to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. The other 14 container ships to call US ports on the day the new fees went into effect were excluded because they were under 4,000 TEUs or were US-flagged. Steel unions that in March 2024 triggered the USTR investigation into China’s maritime industry celebrated the new US ports fees and urged the White House to provide more support to the industry. “Revitalizing shipbuilding and the supply chain will yield hundreds of thousands of jobs and strengthen our national defense and our industrial base,” the United Steelworkers and International Association of Machinists said in a statement. But a group of apparel shippers was less enthused, saying that while it supported US shipbuilding, the new fees could prompt ocean carriers to levy surcharges to recoup their costs. “Instead of imposing punitive port fees that create inefficiencies and divert business away from US ports, the focus should be on creating strong domestic incentives and providing sustained support to revitalize American shipbuilding,” Audrey Clark, trade and transportation specialist for the American Apparel &amp; Footwear Association, said in a statement. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

China will exempt US-flag ships built in China from its new port fees that went into effect Tuesday, even as the first two Chinese-operated vessels were slapped with new fees in the US. The concession by Beijing will come as a relief to Matson and APL, both of which are US-flagged and operate China-built vessels. Maersk Line Ltd., the other major US-flag carrier, doesn’t regularly serve Chinese ports. The US port fees heavily target Cosco, its subsidiary OOCL and Hede Shipping, while also giving non-Chinese operators a way to mostly avoid the charges by substituting China-built ships on US services with vessels built in South Korea, Japan and Taiwan. The change in China’s port fees comes as the country’s Transport Ministry on Tuesday launched an investigation into how its maritime industry and supply chains will be impacted by the US Trade Representative’s (USTR’s) Section 301 port charges and tariffs. Significantly, the probe will also investigate any organizations and individuals that assisted or supported USTR’s “discriminatory restrictive measures against our country in the shipping industry, shipbuilding industry and related industrial and supply chains,” the ministry said. Beijing announced its investigation of the USTR activities on the same day the US and China imposed reciprocal port call charges on each other’s vessels and owners. The US is charging Chinese-owned or -operated vessels $50 per net ton on each initial port call subject to a cap of five port calls a year. Foreign owners and operators of China-built vessels are being charged the higher of either $18 per net ton or $120 per discharged container. The rates will increase next April. China, in turn, is levying a fee of $56 per net ton on non-China-made vessels that are US-flagged or owned or controlled by US companies or companies where more than 25% shares are held by US interests. Two China-operated ships hit with US port fees Meanwhile, the first two Chinese-operated ships to be subjected to US fees called at US ports Tuesday. The OOCL Sunflower, a 16,828-TEU vessel, called Long Beach, while the 13,800-TEU Cosco Jasmine arrived in Savannah, according to Sea-web, a sister product of the Journal of Commerce within S&P Global. The other 14 container ships to call US ports on the day the new fees went into effect were excluded because they were under 4,000 TEUs or were US-flagged. Steel unions that in March 2024 triggered the USTR investigation into China’s maritime industry celebrated the new US ports fees and urged the White House to provide more support to the industry. “Revitalizing shipbuilding and the supply chain will yield hundreds of thousands of jobs and strengthen our national defense and our industrial base,” the United Steelworkers and International Association of Machinists said in a statement. But a group of apparel shippers was less enthused, saying that while it supported US shipbuilding, the new fees could prompt ocean carriers to levy surcharges to recoup their costs. “Instead of imposing punitive port fees that create inefficiencies and divert business away from US ports, the focus should be on creating strong domestic incentives and providing sustained support to revitalize American shipbuilding,” Audrey Clark, trade and transportation specialist for the American Apparel & Footwear Association, said in a statement. Contact Keith Wallis at keithwallis@hotmail.com .

Beijing exempts US-flag vessels built in China from retaliatory port fees

<div class="phx-topic abstract-wrapper">But it will take several months of sustained peace before liners are confident enough of safe passage to redirect mainline services through the Suez Canal, according to an HSBC report.</div>

But it will take several months of sustained peace before liners are confident enough of safe passage to redirect mainline services through the Suez Canal, according to an HSBC report.

<div class="phx-topic">Two ocean carriers have expanded services in the Red Sea just days after a ceasefire was declared in Gaza between Israel and Hamas, but most liners will not be in a hurry to return to the at-times perilous route, according to one global bank. The expanded services of both CMA CGM and SeaLead pass through the narrow Bab al-Mandab Strait at the southern end of the Red Sea that is controlled by Houthi militants who have been attacking commercial shipping in support of Palestinians in Gaza since late 2023. A new routing structure by SeaLead’s revamped Five Seas Express (5CX) service will be launched on Oct. 27 offering weekly sailings via the Suez Canal connecting China, Egypt, Turkey, Saudi Arabia and Malaysia. The port rotation covers Qingdao, Shanghai, Ningbo, Nansha, Alexandria, Aliaga, Istanbul, Mersin, Jeddah and Port Klang before returning to Qingdao. “With weekly sailings and a time-saving route, the revamped service offers faster, more reliable, and efficient shipping solutions,” Kadir Oruc, regional managing director for Europe and the Mediterranean at SeaLead, said in a statement. CMA CGM told customers in an advisory Tuesday it was upgrading its REX2 service this month to offer expanded direct coverage between China and the Red Sea that would provide weekly sailings and faster transit times. New direct calls will be added at Qingdao and Aqaba in Jordan, with the double calls at Saudi Arabia’s Red Sea hub of Jeddah. The port rotation will be Qingdao, Shanghai, Ningbo, Shekou, Nansha, Singapore, Djibouti, Jeddah, Sokhna, Aqaba, Jeddah and Qingdao. The revamped service does not pass through the Suez. <h3>Carriers to practice caution </h3>The first phase of the Gaza truce took effect Oct. 9, and while a return to the Red Sea was expected at some point, carriers will remain cautious over whether the ceasefire will hold before they redirect mainline services through the Suez, HSBC said in a research report Monday. “In our view, liners will require a period of up to several months to feel confident that safe passage is fully restored before returning to the route,” HSBC said. “We think the ceasefire remains a key risk. A potential breakdown in the truce could lead to a resurgence of Red Sea attacks and further delay the return to the Red Sea.” The threat of attacks by the Houthis has forced carriers to divert around southern Africa since late 2023, adding significant time to journeys and pulling an estimated 7% of global capacity from the market. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Two ocean carriers have expanded services in the Red Sea just days after a ceasefire was declared in Gaza between Israel and Hamas, but most liners will not be in a hurry to return to the at-times perilous route, according to one global bank. The expanded services of both CMA CGM and SeaLead pass through the narrow Bab al-Mandab Strait at the southern end of the Red Sea that is controlled by Houthi militants who have been attacking commercial shipping in support of Palestinians in Gaza since late 2023. A new routing structure by SeaLead’s revamped Five Seas Express (5CX) service will be launched on Oct. 27 offering weekly sailings via the Suez Canal connecting China, Egypt, Turkey, Saudi Arabia and Malaysia. The port rotation covers Qingdao, Shanghai, Ningbo, Nansha, Alexandria, Aliaga, Istanbul, Mersin, Jeddah and Port Klang before returning to Qingdao. “With weekly sailings and a time-saving route, the revamped service offers faster, more reliable, and efficient shipping solutions,” Kadir Oruc, regional managing director for Europe and the Mediterranean at SeaLead, said in a statement. CMA CGM told customers in an advisory Tuesday it was upgrading its REX2 service this month to offer expanded direct coverage between China and the Red Sea that would provide weekly sailings and faster transit times. New direct calls will be added at Qingdao and Aqaba in Jordan, with the double calls at Saudi Arabia’s Red Sea hub of Jeddah. The port rotation will be Qingdao, Shanghai, Ningbo, Shekou, Nansha, Singapore, Djibouti, Jeddah, Sokhna, Aqaba, Jeddah and Qingdao. The revamped service does not pass through the Suez. Carriers to practice caution The first phase of the Gaza truce took effect Oct. 9, and while a return to the Red Sea was expected at some point, carriers will remain cautious over whether the ceasefire will hold before they redirect mainline services through the Suez, HSBC said in a research report Monday. “In our view, liners will require a period of up to several months to feel confident that safe passage is fully restored before returning to the route,” HSBC said. “We think the ceasefire remains a key risk. A potential breakdown in the truce could lead to a resurgence of Red Sea attacks and further delay the return to the Red Sea.” The threat of attacks by the Houthis has forced carriers to divert around southern Africa since late 2023, adding significant time to journeys and pulling an estimated 7% of global capacity from the market. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

CMA CGM, SeaLead revamp Red Sea sailings after Gaza truce

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

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Shippers save money, time with automated transportation bidding tools

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

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