<div class="phx-topic abstract-wrapper">The increase in the price of bunker fuel, driven by crude oil’s 2017 to 2018 surge, is real. But beyond that ocean carriers face a tough sell with shippers regarding the inclusion of other surcharges, given spare capacity and a continued competitive market for shipper business.</div>

The increase in the price of bunker fuel, driven by crude oil’s 2017 to 2018 surge, is real. But beyond that ocean carriers face a tough sell with shippers regarding the inclusion of other surcharges, given spare capacity and a continued competitive market for shipper business.

<div><div><img></div>The increase in the price of bunker fuel, driven by crude oil’s 2017 to 2018 surge, is real. But beyond that ocean carriers face a tough sell with shippers regarding the inclusion of other surcharges, given spare capacity and a continued competitive market for shipper business. Photo credit: Shutterstock.com.Container lines face a steep challenge in recouping emergency bunker fuel and peak-season surcharges (PSSs) because contractual agreements limit shippers’ exposure, and competition among carriers gives shippers leverage in rejecting any “emergency” fees. Alternatively, shippers can threaten to take their cargo to another carrier and take action if they don’t get their...

The increase in the price of bunker fuel, driven by crude oil’s 2017 to 2018 surge, is real. But beyond that ocean carriers face a tough sell with shippers regarding the inclusion of other surcharges, given spare capacity and a continued competitive market for shipper business. Photo credit: Shutterstock.com. Container lines face a steep challenge in recouping emergency bunker fuel and peak-season surcharges (PSSs) because contractual agreements limit shippers’ exposure, and competition among carriers gives shippers leverage in rejecting any “emergency” fees. Alternatively, shippers can threaten to take their cargo to another carrier and take action if they don’t get their way. Click to enlarge Contract clauses forbidding general rate increases, PSSs, and other ancillary charges shield shippers from the new fees sought by carriers, but it’s unclear whether the “emergency” element of the newest wave of surcharges will puncture this contract armor. Non-vessel operating common carriers’ (NVOCC) contracts where forwarders don’t detail named accounts are subject to such fees, a move some see as an effort by carriers to essentially use NVOCCs as their sales team. For carriers that deal primarily with BCOs directly, and NVOCCs with named accounts, only 30 percent of the customers pay the surcharges, container line executives told JOC.com. For some carriers, it could be 40 percent. However, for shipping lines that rely mostly on NVOCCs for their cargo base, as many as 60 percent of the contracts can be open to surcharges. Shippers question basis for surcharge(s) — ‘We are not in an oil crisis’ While the wrangling between shippers and carriers over surcharges isn’t new, the number of surcharges levied by carriers, from those tied to the US trucking sector's electronic logging device mandate to freight-all-kind (FAK) charges, has risen in the last nine months. With many carriers fresh off a lackluster contracting season for the Asia-Europe and trans-Pacific trades, and some reporting first-quarter losses, shipper skepticism of the true driver of such surcharges is rampant. “If you have an agreement, you should stick to it. We are not in a war, we are not in an oil crisis. There is no emergency, so there is no need for an emergency bunker surcharge,” Fabien Becquelin, maritime policy manager for the European Shippers’ Council (ESC), told JOC.com. “Both parties should take into account the possibility that the bunker price could go up again. The carriers should hedge their fuel costs.” Ocean carriers counter that not only have fuel prices spiked to levels they couldn’t have predicted, but that ship chartering and US trucking costs have, too. The average cost of IFO 380 bunker fuel per metric ton across the ports of Shanghai, Rotterdam, and New York-New Jersey is up 67.2 percent from the January 2016 low of $146, and has risen 19.4 percent to $445 per ton from the the start of April to June 8, according to IHS Markit data. That spike still pales in comparison with the one in 2008, when the price of crude oil reached $140 a barrel and bunker fuel reached $667 per metric ton ($735 per ton). Crude oil per barrel has traded in a $65 to $75 range since the start of the year, and IHS Markit forecasts prices will rise 18.4 percent from April’s average price of $71.80 per barrel to a peak of $85 in July and August before falling to $81 by October. West Texas Intermediate Crude traded Monday up 33 cents to $66.07 a barrel. Fuel costs account for about 15 percent of carriers’ operating costs, according to Alphaliner. The emergency bunker charges announced by five carriers — including CMA CGM , Hyundai Merchant Marine, Maersk Line , Mediterranean Shipping Co. , and Zim Integrated Shipping Services — range generally from $55 to $60 per TEU. Hapag-Lloyd is seeking an operations cost surcharge. Carrier charges vary, some singling out trade lines Complicating matters, not all carriers have filed for emergency bunker fuel surcharges, and some of those levied surcharges apply to the Asia-US trade while others to the Asia-Europe trade. China prohibits carriers from charging an emergency fuel surcharge, so carriers labeled their attempted surcharges on China exports to the United States as emergency, PSSs, according to two NVOCCs. To add to the confusion, the surcharges are paid by some BCOs and NVOCCs depending upon their contracts with ocean carriers, but other contracts contain no-surcharge provisions. As one BCO told JOC.com, his company has its own bunker fuel adjustment (BAF) that is adjusted monthly, and the BCO will not accept any surcharge unless it is mandated by a government. Another BCO said he has “no sympathy” for an emergency bunker fuel surcharge. His company has a BAF formula based on the last two months of the daily bunker pricings, so it should cover any swings in the price of bunker. Also, the service contracting regime in the freight forwarder-dominated Asia-Europe trade, where contracts run generally one to three months, is different from the retailer-dominated eastbound Pacific, where the preference is for annual service contracts. The three container lines that reported a profit in the first quarter were led by Hapag-Lloyd, with an operating profit of $66 million for a margin of 2.1 percent, Alphaliner noted. CMA CGM, with a margin of 1.6 percent, and Wan Hai, at 1 percent, were also profitable in the first three months of the year. The remaining eight global liner companies reported losses. Most carriers were disappointed by their performance, given the industry’s collective operating profit of $7 billion in 2017, the highest since 2014, according to Drewry. Peak-season surcharges: annual carrier test of the market In contrast to their reaction to the emergency bunker fuel surcharges, BCOs and NVOCCs found nothing unusual when carriers on June 1 filed for a PSS effective July 1. The US Federal Maritime Commission requires that carriers provide a 30-day notice of their intention to increase freight rates, and with the peak season approaching, it is common to test market reaction to a PSS at this time of year, said Bruce Chilton, vice president of trade management at Ascent Global Logistics. Past experience with early summer PSS filings demonstrated that market conditions are not yet ready to support a surcharge. With vessel utilization rates normally around 90 percent this time of year, BCOs and NVOCCs have no problem booking space, so they will simply shift to another carrier if their first choice pushes the surcharge. A carrier spokesperson agreed that carriers’ initial attempts at PSS are “testing the waters” in preparation for late summer and autumn. Carriers on July 1 will likely file for an Aug. 1 PSS, and if vessel utilization rates climb into the mid to high 90s in August through October, carriers will probably be able to secure at least a portion of the increase they seek. Regardless of the type of surcharge that carriers file, the patchwork of service contract arrangements in the trade is a limiting factor on their implementation. The basic service contract between carriers and BCOs runs roughly from May 1 through April 30 the following year. The largest BCOs normally have a no-surcharge clause that is closely adhered to by the carriers. Large BCOs with thousands of shipments spread out over the year insist upon certainty in pricing. Since the largest BCOs provide carriers with their base cargo for the year, carriers do not want to upset their relationship with their largest-volume customers. Click to enlarge An exception to the no-surcharge arrangement is when carriers and BCOs must respond to an emergency — such as in 2008 when the price of oil surged to over $140 a barrel. During those unusual events, the BAF in the contract, which is changed quarterly or monthly, can not keep up with the weekly increases in bunker fuel costs. Although many BCOs and NVOCCs will not resist an emergency fuel surcharge in those cases, they insist that today’s relatively modest increase in the price of oil — which already began to slip over the past couple of weeks — does not constitute an emergency. Furthermore, many carriers today hedge their bunker fuel costs through multimonth contracts with fuel providers. “Shippers will also want to know what steps have been taken to mitigate the impacts of rising fuel prices, including the impact of fuel hedging, which are designed to manage the risks associated with the single-largest cost component of operating container ships,” said Chris Welsh, outgoing secretary general of the Global Shippers’ Forum. NVOCC contracts that cover specific BCO accounts, known as named accounts, also normally contain no-surcharge clauses, and they are treated the same way that carriers handle their large BCO contracts. NVOCCs generally sign a mix of named-account and variable-account contracts (also called FAK contracts). The variable account shippers understand that when cargo volumes are low during the slack shipping months, they may actually pay lower rates than the larger BCOs pay in their annual service contracts, but during peak-volume periods they will probably pay decidedly higher rates, plus surcharges. Carriers generally do not allow NVOCCs to shift their customers back and forth between named and variable contract arrangements in order to achieve the best rate available at the time. The breakdown between fixed-rate and variable-rate accounts can vary considerably by carrier. Some carriers rely more heavily on NVOCCs and smaller shippers willing to play the spot market, so as many as 60 percent or more of their business can be variable-rate accounts subject to surcharges. Other carriers have historically dealt mostly with larger BCOs and named-account NVOCC contracts that are not subject to surcharges, and those may represent 60 percent or more of their business. The spot market is a moving target that also has an impact on pricing, especially during service contract negotiations in the spring. Even in what is usually the slack period, carriers will attempt to keep the spot rates above the psychological benchmarks of about $1,000 per FEU to the West Coast and $2,000 per FEU to the East Coast because they do not want their BCO customers to think they can sign for these low rates in their service contracts. Welsh: emergency surcharges ‘have no place in modern liner shipping’ Welsh said emergency surcharges “have no place in a modern liner shipping market” where costs and prices should be mutually agreed upon between customers and suppliers in their service contracts. Emergency surcharges are a “none too subtle attempt to impose non-negotiable charges on customers,” he said. Ocean carriers have expressed disappointment to JOC.com over the finalization of annual service contracts they signed with their steady customers in the eastbound Pacific. Carriers had hoped to achieve rates of at least $1,500 to $1,600 per FEU to the West Coast and $2,500 to $2,600 per FEU to the East Coast, but the benchmark rates came in about $1,200 to the West Coast and $2,200 to the East Coast. Some of the largest accounts reportedly broke the $1,000 per FEU barrier to the West Coast and $2,000 per FEU barrier to the East Coast. Asia-Europe shippers have told JOC.com that despite carriers going in high, after negotiations their contract rates were agreed at the same levels as those secured in 2017, while forwarders on the trade reported contract rates at levels below those of 2017. “It seems the carriers are trying to get the money that they couldn’t get in the contracts,” said David Bennett, president of the Americas at Globe Express Services. Did the carriers this spring pass up an opportunity to lock in higher service contract rates? The eastbound Pacific spot rates in the first week of June were $1,445 per FEU to the West Coast and $2,463 per FEU to the West Coast. Some observers might say BCOs playing the spot market are paying higher rates than BCOs paid in their service contracts, and that’s the way it should be. However, others might say the market would have accepted higher service contract rates. Becquelin of the ESC sees the disruptions caused by the surcharges as an opportunity for carriers and shippers to start from scratch and agree upon a new service contracting regime in which the base freight rate is negotiated alone by pricing specialists, and then later each side brings in other teams such as legal and accounting to negotiate a framework agreement that deals with all of the issues that are not base freight rates. This would enable the teams to take a deep dive into key performance indicators, no-shows, minimum quantity commitments, and surcharges, he said. “That will take a real mind shift. The shipper should be treated as a partner of the carrier, which is too often not the case,” he said. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.

Container lines

Container lines face steep climb in recouping bunker fuel surcharges

<div class="phx-topic abstract-wrapper">The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol over the weekend as part of an alternative fuel partnership with the world’s largest container port.</div>

The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol over the weekend as part of an alternative fuel partnership with the world’s largest container port.

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<div class="phx-topic">CMA CGM completed its first-ever biomethanol bunkering operation over the weekend at Shanghai’s Yangshan terminal, setting a record for the largest biomethanol bunkering move at a Chinese port. The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol from supplier Shanghai Electric Group, CMA CGM said in a statement Monday. “The completion of China’s largest single biomethanol bunkering operation with CMA CGM marks a significant leap in Shanghai Port’s biomethanol bunkering capacity,” Luo Wenbin, managing director of SIPG Energy, part of the Shanghai International Port Group (SIPG), said in the statement. The Marseilles-based carrier is preparing to operate around 200 dual-fuel container vessels by 2031, all capable of running on low-carbon energy such as bio- and e-liquified natural gas as well as bio- and e-methanol. Farid Trad, vice president of group energy transition at CMA CGM, said the bunkering of Osmium marked “a defining moment in (the carrier’s) decarbonization journey.” “Together with SIPG Energy, we are demonstrating that cleaner, low-carbon shipping is no longer an aspiration, but a reality,” Trad said in the statement. Shanghai Port is developing its position as a global sustainable energy bunkering hub, and CMA CGM’s long-standing collaboration with partners SIPG Energy and Shanghai Electric Group include a long-term LNG bunkering partnership with SIPG and the framework agreement on long-term biomethanol supply. Biomethanol is a low-carbon fuel produced from renewable or waste-based biomass that can offer lifecycle greenhouse gas emission reductions of more than 65% compared with conventional marine fuels. Despite uncertainties caused by the International Maritime Organization’s decision last October <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">to delay the adoption of its net-zero framework</a> for a year, the container shipping industry has continued to invest heavily in dual-fuel vessels and bunkering infrastructure. Data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, shows that 6.44 million TEUs of capacity for LNG dual-fuel ships are currently on order, compared with 1.6 million TEUs of methanol-capable vessels. Industry coalition SEA-LNG estimated in a recent report that investment in LNG dual-fuel vessels and associated fuel supply chains over the past 10 years has amounted to more than $150 billion. A large portion of that is going into the supply side, with fuel availability at scale crucial for the global shipping industry. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM completed its first-ever biomethanol bunkering operation over the weekend at Shanghai’s Yangshan terminal, setting a record for the largest biomethanol bunkering move at a Chinese port. The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol from supplier Shanghai Electric Group, CMA CGM said in a statement Monday. “The completion of China’s largest single biomethanol bunkering operation with CMA CGM marks a significant leap in Shanghai Port’s biomethanol bunkering capacity,” Luo Wenbin, managing director of SIPG Energy, part of the Shanghai International Port Group (SIPG), said in the statement. The Marseilles-based carrier is preparing to operate around 200 dual-fuel container vessels by 2031, all capable of running on low-carbon energy such as bio- and e-liquified natural gas as well as bio- and e-methanol. Farid Trad, vice president of group energy transition at CMA CGM, said the bunkering of Osmium marked “a defining moment in (the carrier’s) decarbonization journey.” “Together with SIPG Energy, we are demonstrating that cleaner, low-carbon shipping is no longer an aspiration, but a reality,” Trad said in the statement. Shanghai Port is developing its position as a global sustainable energy bunkering hub, and CMA CGM’s long-standing collaboration with partners SIPG Energy and Shanghai Electric Group include a long-term LNG bunkering partnership with SIPG and the framework agreement on long-term biomethanol supply. Biomethanol is a low-carbon fuel produced from renewable or waste-based biomass that can offer lifecycle greenhouse gas emission reductions of more than 65% compared with conventional marine fuels. Despite uncertainties caused by the International Maritime Organization’s decision last October to delay the adoption of its net-zero framework for a year, the container shipping industry has continued to invest heavily in dual-fuel vessels and bunkering infrastructure. Data from Sea-web, a sister company of the Journal of Commerce within S&P Global, shows that 6.44 million TEUs of capacity for LNG dual-fuel ships are currently on order, compared with 1.6 million TEUs of methanol-capable vessels. Industry coalition SEA-LNG estimated in a recent report that investment in LNG dual-fuel vessels and associated fuel supply chains over the past 10 years has amounted to more than $150 billion. A large portion of that is going into the supply side, with fuel availability at scale crucial for the global shipping industry. Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

International ports

Container Shipping News

Maritime

CMA CGM sets Chinese volume record with Shanghai biomethanol bunkering

<div class="phx-topic abstract-wrapper">The carrier said it would rely on the diversification of its activities, network flexibility and financial strength to weather the uncertain outlook this year.</div>

The carrier said it would rely on the diversification of its activities, network flexibility and financial strength to weather the uncertain outlook this year.

<div class="phx-topic">Container shipping is expected to see moderate growth this year, although developments in the Middle East will be a key factor impacting the market and freight rates, CMA CGM said Friday. The carrier, in a statement announcing its fourth-quarter and full-year 2025 results, said it would rely on the diversification of its activities, network flexibility and financial strength to weather the uncertain outlook. “In 2026, in a context of heightened tensions, particularly in the Middle East, our priority is clear: protecting our teams and adapting our operations to ensure our customers continue to receive a reliable and high-quality service,” Rodolphe Saadé, CMA CGM chairman and CEO, said in the statement. “At the same time, we are pursuing our development, continuing to invest in our industrial assets and to strengthen our global network.” While CMA CGM saw container volumes climb in the fourth quarter and for the year, revenues and profitability at the group and shipping division level were hit by the drop in freight rates. The company said group net profit dropped 58% to $2.3 billion last year from $5.7 billion in the prior year. Revenue slipped 2% to $54 billion. Revenue at its shipping division fell 6% to $34.3 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) plunged 30% to $7.9 billion last year. The drop in profitability was even more marked in the fourth quarter after EBITDA slumped 48% to $1.5 billion. That came even though CMA CGM said it “outperformed” the wider market with a 5.3% increase in container volumes in the fourth quarter, to 6.3 million TEUs. Volumes rose 3% to 24.2 million TEUs for the full year, though average revenue per TEU fell 9% to $1,414. CMA CGM’s results showed the 2025 financial damage accelerated in the fourth quarter, similar to the <a href="https://www.joc.com/article/gemini-benefits-face-looming-challenge-from-oversupplied-market-maersk-ceo-6164887">full-year earnings of Maersk</a> and the <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">fiscal third-quarter results of Ocean Network Express</a>. Still, Maritime consultant Drewry has upgraded its financial year 2025 profit forecast from $20 billion to $32 billion following “better-than-expected” third-quarter results from carriers and raised the outlook for 2026 from a $10 billion loss to a $1 billion profit. <h3>Air freight, terminals business show strength </h3>CMA CGM’s logistics division, which includes CEVA Logistics, saw revenues largely unchanged on a quarterly basis and over the full year at about $5 billion and $18 billion, respectively. Full year EBITDA was also stable at $1.7 billion, although it fell 11% to $440 million in the fourth quarter, which the carrier said was due to a volatile market and “challenges affecting the automotive sector.” Air cargo and the carrier’s terminals businesses were the star performers last year, helping CMA CGM’s other activities to post a 48% increase in revenue to $4.3 billion last year. On a quarterly basis, revenue rose 39% to $1.3 billion. EBITDA soared 115% to $958 million in the full year and jumped 74% in the fourth quarter to $278 million. The terminals operation expanded with the acquisition of a 51% stake in Santos Brasil last April. CMA CGM said the air freight business was buoyed with the acquisition last year of freighter airline Air Belgium and the addition of a fifth Boeing 777 freighter deployed on trans-Pacific services. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Container shipping is expected to see moderate growth this year, although developments in the Middle East will be a key factor impacting the market and freight rates, CMA CGM said Friday. The carrier, in a statement announcing its fourth-quarter and full-year 2025 results, said it would rely on the diversification of its activities, network flexibility and financial strength to weather the uncertain outlook. “In 2026, in a context of heightened tensions, particularly in the Middle East, our priority is clear: protecting our teams and adapting our operations to ensure our customers continue to receive a reliable and high-quality service,” Rodolphe Saadé, CMA CGM chairman and CEO, said in the statement. “At the same time, we are pursuing our development, continuing to invest in our industrial assets and to strengthen our global network.” While CMA CGM saw container volumes climb in the fourth quarter and for the year, revenues and profitability at the group and shipping division level were hit by the drop in freight rates. The company said group net profit dropped 58% to $2.3 billion last year from $5.7 billion in the prior year. Revenue slipped 2% to $54 billion. Revenue at its shipping division fell 6% to $34.3 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) plunged 30% to $7.9 billion last year. The drop in profitability was even more marked in the fourth quarter after EBITDA slumped 48% to $1.5 billion. That came even though CMA CGM said it “outperformed” the wider market with a 5.3% increase in container volumes in the fourth quarter, to 6.3 million TEUs. Volumes rose 3% to 24.2 million TEUs for the full year, though average revenue per TEU fell 9% to $1,414. CMA CGM’s results showed the 2025 financial damage accelerated in the fourth quarter, similar to the full-year earnings of Maersk and the fiscal third-quarter results of Ocean Network Express . Still, Maritime consultant Drewry has upgraded its financial year 2025 profit forecast from $20 billion to $32 billion following “better-than-expected” third-quarter results from carriers and raised the outlook for 2026 from a $10 billion loss to a $1 billion profit. Air freight, terminals business show strength CMA CGM’s logistics division, which includes CEVA Logistics, saw revenues largely unchanged on a quarterly basis and over the full year at about $5 billion and $18 billion, respectively. Full year EBITDA was also stable at $1.7 billion, although it fell 11% to $440 million in the fourth quarter, which the carrier said was due to a volatile market and “challenges affecting the automotive sector.” Air cargo and the carrier’s terminals businesses were the star performers last year, helping CMA CGM’s other activities to post a 48% increase in revenue to $4.3 billion last year. On a quarterly basis, revenue rose 39% to $1.3 billion. EBITDA soared 115% to $958 million in the full year and jumped 74% in the fourth quarter to $278 million. The terminals operation expanded with the acquisition of a 51% stake in Santos Brasil last April. CMA CGM said the air freight business was buoyed with the acquisition last year of freighter airline Air Belgium and the addition of a fifth Boeing 777 freighter deployed on trans-Pacific services. Contact Keith Wallis at keithwallis@hotmail.com .

CMA CGM preps for challenging year after 2025 revenue, profit decline

<div class="phx-topic abstract-wrapper">The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports.</div>

The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports.

<div class="phx-topic">Gemini Cooperation is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles, due to the ongoing war in the region. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services, partners Maersk and Hapag-Lloyd said Friday. Maersk said the suspensions are being made “following our latest risk assessment and operational review and considering the escalating conflict affecting safe navigation in the Gulf region.” “This decision has been taken as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network,” the carrier added in its advisory. The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports including Jebel Ali, Dammam, Umm Qasr, Sohar, Khalifa, Sharjah, and Al Jubail. Container ports in the Gulf usually book 3.4 million TEUs per year with an estimated cargo value of $140 billion, according to Vizion’s Tradeview platform. The Gemini partners said two mainline services — ME11/IMX linking the Middle East, India and the Mediterranean and FM1/AGX linking Asia and the Middle East — would be halted starting next week. But a new AE19/SE4 service would be launched from March 13 that would replace most of the Asia port calls lost with the suspension of the FM1/AGX. Maersk said the westbound FM1 service being operated by the 10,100-TEU Vung Tau Express would terminate at Tanjung Pelepas in Malaysia on March 9 while the ME11 served by the 15,100-TEU Astrid Maersk would be curtailed at Salalah in Oman on March 13. The carrier said it was still determining the final eastbound FM1 and ME11 voyages and would inform shippers and cargo owners once discharge and contingency plans are confirmed. The ME11/IMX loop normally calls at Jebel Ali and Salalah, along with other ports such as Nheva Shava, Port Said and Valencia, while the FM1/AGX service calls at Jebel Ali in addition to its Asia calls at ports including Pusan, Shanghai, Ningbo, and Tanjung Pelepas. But US and Israeli strikes on Iran and Tehran’s retaliation across the region mean the risk of drone and missile attacks in the Strait of Hormuz has closed the area to shipping, including access to Jebel Ali. As a result, the carriers said they have also dropped Jebel Ali from Gemini’s ME1/IOS service. The revised rotation is now Mundra, Nhava Sheva, Salalah, Port Tangier (TC1), Rotterdam, Wilhelmshaven, Hamburg and London Gateway. <h3>New Gemini service to ease capacity cut </h3>To fill the reduction in cargo capacity caused by the FM1/AGX service suspension, the new Gemini AE19/SE4 loop will call at Jeddah in Saudi Arabia plus its West Med and East Med hubs at Tangier and Damietta (Egypt), respectively. The full rotation, via the Cape of Good Hope, is Xingang, Qingdao, Busan, Ningbo, Shanghai, Tanjung Pelepas, West Med hub, East Med hub, Jeddah, West Med hub, Singapore, and Xingang. The carriers said the first westbound sailing will be by the 13,092-TEU Maersk Elba at Xingang on March 13. The new service “will enable more flexibility and routing options for customers’ supply chain,” Maersk said in an advisory. Three Middle East/Gulf shuttles — OGS, UG2, and UGS — will also stop while Jebel Ali will be omitted from the rotation of the PKS service, which has a revised rotation of Karachi, Bin Qasim, Salalah, and Karachi. Hapag-Lloyd said alternatives are being evaluated following the demise of the shuttles, with details to be confirmed shortly. Meanwhile, Yang Ming said Friday it is declaring “an end of voyage” for cargo currently stranded at transshipment ports. Yang Ming’s other Premier Alliance partners, Ocean Network Express and HMM, have yet to confirm if the measure applies to them. ONE did announce Friday it was imposing an emergency surcharge of $1,200 per 20-foot container and $2,400 per 40-foot box on all imports and exports to and from Persian Gulf countries including Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, Oman, Qatar, and the United Arab Emirates, that have not been discharged or loaded by March 4. The carrier said the surcharge also applies to all cargo currently in transit, which will be diverted to the next safe port of discharge. At these contingency ports, cargo will be discharged and placed at the disposal of the customer for local pickup and subsequent handling. CMA CGM, meanwhile, has abandoned all alternative Middle East port options it was evaluating to keep shipping schedules running as best as possible. Sohar in Oman and Khor Fakkan in the UAE were part of those interim plans, but the carrier finally found even them unworkable in the current volatile scenario. CMA CGM is the latest carrier to declare a total “end of voyage” for Middle East coverage. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. Special correspondent Bency Mathew contributed to this report. </div>

Gemini Cooperation is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles, due to the ongoing war in the region. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services, partners Maersk and Hapag-Lloyd said Friday. Maersk said the suspensions are being made “following our latest risk assessment and operational review and considering the escalating conflict affecting safe navigation in the Gulf region.” “This decision has been taken as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network,” the carrier added in its advisory. The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports including Jebel Ali, Dammam, Umm Qasr, Sohar, Khalifa, Sharjah, and Al Jubail. Container ports in the Gulf usually book 3.4 million TEUs per year with an estimated cargo value of $140 billion, according to Vizion’s Tradeview platform. The Gemini partners said two mainline services — ME11/IMX linking the Middle East, India and the Mediterranean and FM1/AGX linking Asia and the Middle East — would be halted starting next week. But a new AE19/SE4 service would be launched from March 13 that would replace most of the Asia port calls lost with the suspension of the FM1/AGX. Maersk said the westbound FM1 service being operated by the 10,100-TEU Vung Tau Express would terminate at Tanjung Pelepas in Malaysia on March 9 while the ME11 served by the 15,100-TEU Astrid Maersk would be curtailed at Salalah in Oman on March 13. The carrier said it was still determining the final eastbound FM1 and ME11 voyages and would inform shippers and cargo owners once discharge and contingency plans are confirmed. The ME11/IMX loop normally calls at Jebel Ali and Salalah, along with other ports such as Nheva Shava, Port Said and Valencia, while the FM1/AGX service calls at Jebel Ali in addition to its Asia calls at ports including Pusan, Shanghai, Ningbo, and Tanjung Pelepas. But US and Israeli strikes on Iran and Tehran’s retaliation across the region mean the risk of drone and missile attacks in the Strait of Hormuz has closed the area to shipping, including access to Jebel Ali. As a result, the carriers said they have also dropped Jebel Ali from Gemini’s ME1/IOS service. The revised rotation is now Mundra, Nhava Sheva, Salalah, Port Tangier (TC1), Rotterdam, Wilhelmshaven, Hamburg and London Gateway. New Gemini service to ease capacity cut To fill the reduction in cargo capacity caused by the FM1/AGX service suspension, the new Gemini AE19/SE4 loop will call at Jeddah in Saudi Arabia plus its West Med and East Med hubs at Tangier and Damietta (Egypt), respectively. The full rotation, via the Cape of Good Hope, is Xingang, Qingdao, Busan, Ningbo, Shanghai, Tanjung Pelepas, West Med hub, East Med hub, Jeddah, West Med hub, Singapore, and Xingang. The carriers said the first westbound sailing will be by the 13,092-TEU Maersk Elba at Xingang on March 13. The new service “will enable more flexibility and routing options for customers’ supply chain,” Maersk said in an advisory. Three Middle East/Gulf shuttles — OGS, UG2, and UGS — will also stop while Jebel Ali will be omitted from the rotation of the PKS service, which has a revised rotation of Karachi, Bin Qasim, Salalah, and Karachi. Hapag-Lloyd said alternatives are being evaluated following the demise of the shuttles, with details to be confirmed shortly. Meanwhile, Yang Ming said Friday it is declaring “an end of voyage” for cargo currently stranded at transshipment ports. Yang Ming’s other Premier Alliance partners, Ocean Network Express and HMM, have yet to confirm if the measure applies to them. ONE did announce Friday it was imposing an emergency surcharge of $1,200 per 20-foot container and $2,400 per 40-foot box on all imports and exports to and from Persian Gulf countries including Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, Oman, Qatar, and the United Arab Emirates, that have not been discharged or loaded by March 4. The carrier said the surcharge also applies to all cargo currently in transit, which will be diverted to the next safe port of discharge. At these contingency ports, cargo will be discharged and placed at the disposal of the customer for local pickup and subsequent handling. CMA CGM, meanwhile, has abandoned all alternative Middle East port options it was evaluating to keep shipping schedules running as best as possible. Sohar in Oman and Khor Fakkan in the UAE were part of those interim plans, but the carrier finally found even them unworkable in the current volatile scenario. CMA CGM is the latest carrier to declare a total “end of voyage” for Middle East coverage. Contact Keith Wallis at keithwallis@hotmail.com . Special correspondent Bency Mathew contributed to this report.

Asia-Europe

Gemini suspends, revamps Middle East services amid growing conflict

<div class="phx-topic abstract-wrapper">The new express service comes amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations.</div>

The new express service comes amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations.

<div class="phx-topic">CMA CGM is launching a standalone direct service between India and the US West Coast (USWC) in another apparent revamp of its Asian networks after just <a href="https://www.joc.com/article/cma-cgm-to-launch-standalone-japan-europe-express-service-in-april-6177297">announcing a new Japan-Europe express service</a> to start in early April. As market updates suggest, the Marseille-based carrier has extended the port rotation of its Pearl River Express service between South China and the USWC to the Indian subcontinent, using about 13 vessels with capacities of 10,000 to 13,000 TEUs. The extended weekly loop includes four ports of call across the subcontinent: Nhava Sheva and Mundra in West India, Karachi in Pakistan, and Colombo in Sri Lanka. The relaunched Pearl’s full eastbound rotation will be Nhava Sheva, Mundra, Karachi, Colombo, Singapore, Haiphong, Xiamen, Nansha, Yantian and Los Angeles. On the westbound leg, vessels will call Los Angeles, Gwangyang, Qingdao, Shanghai, Ningbo, Shekou, Singapore, Nhava Sheva, Mundra and Karachi, according to a CMA CGM India advisory. The rotation structure seems to be in sync with ongoing Indian port restrictions for Pakistan transit cargo. CMA-CGM said the service upgrade seeks to enhance connectivity and coverage for Indian trades to the USWC. “The Pearl service will now offer an exclusive and direct connection from West India, Pakistan and Sri Lanka ports to Los Angeles,” the carrier said. The service is due to begin with the 10,000-TEU APL Qingdao departing Nhava Sheva March 30, offering a declared transit time of 47 days to Los Angeles. The restructured Pearl will compete with Ocean Network Express’ Pacific South 3 service, currently the only direct connection on the trade lane, which offers a faster 36-day transit from Nhava Sheva to Los Angeles. CMA CGM has typically relied on transshipment over Asian ports for coverage of trades between India and the USWC, mainly feeding via its Asia-Subcontinent Express (AS1) service with calls at Nhava Sheva and Mundra, according to industry sources. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1cf22f06-bc03-4442-9050-628846faea40"></dynamic-object></div>New direct links between India and the US come amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations. Industry data also points to an upward move in Nhava Sheva-Los Angeles spot rates, pegged at $2,500 per FEU for late March sailings, compared with the current $1,500 per FEU, sources said. Indian exports to the West Coast have shown some strength of late, hitting 19,117 TEUs in January, the highest since September, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM is launching a standalone direct service between India and the US West Coast (USWC) in another apparent revamp of its Asian networks after just announcing a new Japan-Europe express service to start in early April. As market updates suggest, the Marseille-based carrier has extended the port rotation of its Pearl River Express service between South China and the USWC to the Indian subcontinent, using about 13 vessels with capacities of 10,000 to 13,000 TEUs. The extended weekly loop includes four ports of call across the subcontinent: Nhava Sheva and Mundra in West India, Karachi in Pakistan, and Colombo in Sri Lanka. The relaunched Pearl’s full eastbound rotation will be Nhava Sheva, Mundra, Karachi, Colombo, Singapore, Haiphong, Xiamen, Nansha, Yantian and Los Angeles. On the westbound leg, vessels will call Los Angeles, Gwangyang, Qingdao, Shanghai, Ningbo, Shekou, Singapore, Nhava Sheva, Mundra and Karachi, according to a CMA CGM India advisory. The rotation structure seems to be in sync with ongoing Indian port restrictions for Pakistan transit cargo. CMA-CGM said the service upgrade seeks to enhance connectivity and coverage for Indian trades to the USWC. “The Pearl service will now offer an exclusive and direct connection from West India, Pakistan and Sri Lanka ports to Los Angeles,” the carrier said. The service is due to begin with the 10,000-TEU APL Qingdao departing Nhava Sheva March 30, offering a declared transit time of 47 days to Los Angeles. The restructured Pearl will compete with Ocean Network Express’ Pacific South 3 service, currently the only direct connection on the trade lane, which offers a faster 36-day transit from Nhava Sheva to Los Angeles. CMA CGM has typically relied on transshipment over Asian ports for coverage of trades between India and the USWC, mainly feeding via its Asia-Subcontinent Express (AS1) service with calls at Nhava Sheva and Mundra, according to industry sources. New direct links between India and the US come amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations. Industry data also points to an upward move in Nhava Sheva-Los Angeles spot rates, pegged at $2,500 per FEU for late March sailings, compared with the current $1,500 per FEU, sources said. Indian exports to the West Coast have shown some strength of late, hitting 19,117 TEUs in January, the highest since September, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM adds direct India-USWC string as part of Asia network overhaul

<div class="phx-topic abstract-wrapper">The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility and disruption in the market.</div>

The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility and disruption in the market.

<div class="phx-topic">Intercontinental Exchange (ICE) on Friday said it intends to launch four container freight futures contracts next month covering shipping routes linking Asia, Europe and the US. Subject to regulatory approval, the contracts will begin trading on ICE, owner of the New York Stock Exchange, on April 7, ICE said in a statement. The contracts, which ICE said “are designed to help the market manage container freight [price] risk,” will be indexed to the New York Shipping Exchange’s (NYSHEX’s) Freight Indices price assessments, <a href="https://www.joc.com/article/nyshex-enters-container-index-fray-targeting-floating-rate-contract-adoption-5996516">which were unveiled last May.</a>The four futures contracts, which will be US-denominated and cash-settled, will cover Asia to the US West Coast, Asia to the US East Coast, Asia to North Europe, and North Europe to the US East Coast. The ICE futures do not represent physical slots on container ships; they are a financial instrument that allows investors to hedge against future spot rate movements. The push to launch futures contracts for container shipping <a href="https://www.joc.com/article/near-constant-disruption-giving-new-momentum-to-freight-futures-5979859">has gained momentum in recent years</a> given the seemingly never-ending volatility in the market — from the supply chain disruption caused by the COVID-19 pandemic, the lengthy and costly vessel diversions around southern Africa to avoid the Red Sea and Suez Canal, and now with up to 10% of global capacity tied up due to the war in the Middle East. One big question about container shipping futures has been the potential liquidity of the market, meaning whether the contacts could gain enough traction and eventually become heavily traded. Previous attempts at launching similar container rate futures markets have struggled to generate demand. ICE sought to ease those doubts by pointing out the four contracts “will be supported by [its] network of extremely liquid energy markets.” Open interest, or the number of actively traded contracts, for ICE’s total oil market was at a record 18.7 million contracts as of Feb. 23, it said. “The container shipping industry is massive and critical for global trade, yet it is incredibly volatile,” Gordon Downes, CEO and co-founder of NYSHEX, said in the statement. “With the launch of ICE’s new freight futures, the market participants can far more easily hedge against unexpected swings in the market price.” Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>.</div>

Intercontinental Exchange (ICE) on Friday said it intends to launch four container freight futures contracts next month covering shipping routes linking Asia, Europe and the US. Subject to regulatory approval, the contracts will begin trading on ICE, owner of the New York Stock Exchange, on April 7, ICE said in a statement. The contracts, which ICE said “are designed to help the market manage container freight [price] risk,” will be indexed to the New York Shipping Exchange’s (NYSHEX’s) Freight Indices price assessments, which were unveiled last May. The four futures contracts, which will be US-denominated and cash-settled, will cover Asia to the US West Coast, Asia to the US East Coast, Asia to North Europe, and North Europe to the US East Coast. The ICE futures do not represent physical slots on container ships; they are a financial instrument that allows investors to hedge against future spot rate movements. The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility in the market — from the supply chain disruption caused by the COVID-19 pandemic, the lengthy and costly vessel diversions around southern Africa to avoid the Red Sea and Suez Canal, and now with up to 10% of global capacity tied up due to the war in the Middle East. One big question about container shipping futures has been the potential liquidity of the market, meaning whether the contacts could gain enough traction and eventually become heavily traded. Previous attempts at launching similar container rate futures markets have struggled to generate demand. ICE sought to ease those doubts by pointing out the four contracts “will be supported by [its] network of extremely liquid energy markets.” Open interest, or the number of actively traded contracts, for ICE’s total oil market was at a record 18.7 million contracts as of Feb. 23, it said. “The container shipping industry is massive and critical for global trade, yet it is incredibly volatile,” Gordon Downes, CEO and co-founder of NYSHEX, said in the statement. “With the launch of ICE’s new freight futures, the market participants can far more easily hedge against unexpected swings in the market price.” Contact Kevin Saville at kevin.saville2@spglobal.com .

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