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<div class="phx-topic abstract-wrapper">There is a growing disconnect between third-party logistics providers and manufacturers and retailers who say they are dissatisfied with the level of service they are being provided.</div>

There is a growing disconnect between third-party logistics providers and manufacturers and retailers who say they are dissatisfied with the level of service they are being provided.

<div><div><img></div>There is a growing disconnect between third-party logistics providers and manufacturers and retailers who say they are dissatisfied with the level of service they are being provided.According to a recent survey of more than 400 logistics and supply chain executives, 55 percent of the manufacturers and retailers polled say they already have switched, or intend to switch, 3PLs.“3PLs appear to be on their back foot,” the eyefortransport report says.Between 2012 and 2014, the survey found a 4 percent jump in “less than satisfied” responses from manufacturers and retailers. Positive reviews declined 3.5 percent over the course of the past two...

There is a growing disconnect between third-party logistics providers and manufacturers and retailers who say they are dissatisfied with the level of service they are being provided. According to a recent survey of more than 400 logistics and supply chain executives, 55 percent of the manufacturers and retailers polled say they already have switched, or intend to switch, 3PLs. “3PLs appear to be on their back foot,” the eyefortransport report says. Between 2012 and 2014, the survey found a 4 percent jump in “less than satisfied” responses from manufacturers and retailers. Positive reviews declined 3.5 percent over the course of the past two years. And service, the study reports, was the primary driver. Business is booming for 3PLs, but as cost-cutting becomes the priority for manufacturers and retailers, more and more businesses have begun to “shop around” for more services at a lower price — driving down satisfaction, renewal rates and contract length. Industry insiders have suggested for years that the logistics sector stands on the brink of commoditization: providing only short-term contracts for execution-based services at the lowest price, rather than long-term relationships with value-added, strategic operations. In response, many 3PLs polled said they have diversified their array of value-added services and strategic operations. But the eyefortransport survey paints a very different picture of how 3PLs and their customers view those services and the status of their business relationships. While 36.8 percent of logistics providers said they maintained a 90 to 100 percent contract renewal rate, manufacturers and retailers reported significantly lower numbers. Indeed, only 16.1 percent of manufacturers and retailers reported renewal rates in the 90 to 100 percent range. “Customers are not seeing the benefits of differentiation and value-added services we’ve been hearing from 3PLs over the past few years,” eyefortransport said. Eyefortransport does note, however, “3PL services may be commoditized, but they’re not doomed.” The study suggests that while manufacturers and retailers are still not entirely satisfied with the value-added services 3PLs are providing, new technologies could give them the break they’re after. According to the report, 32 percent of manufacturers and retailers expect their 3PL to have at least some knowledge of augmented reality. Another 30 percent said they expect their logistics provider to have at least some knowledge of drone delivery. The bulk of 3PL respondents said they are not yet exploring drones, 3D printing, driverless vehicles, augmented reality or similar innovations. “What is interesting is that a not insignificant number of respondents have expertise in each of these four technology spaces,” eyefortransport said, “and respondents for all except augmented reality are already currently providing expertise, knowledge and services in these areas. This could be an insight in how the industry will persevere through the trials of commoditization, eyefortransport said. “Service-level required is greater and greater, margins are squeezed, contracts are short and customers are demanding more than ever,” the report concludes. “However, the 3PL industry is coming to a crossroads. “With real innovation on the horizon, potential abound, we look toward 2015 to see improved partnerships, increased revenues, and more value in logistics services.” Contact Reynolds Hutchins at rhutchins@joc.com and follow him on Twitter: @Hutchins_JOC .

Dissatisfaction with 3PL service on the rise, study finds

<div class="phx-topic abstract-wrapper">Carriers are already facing tight supplies in most key bunkering hubs including the Middle East and South Africa, which has led operators to cut the speed of ships and become more flexible in sourcing fuel. </div>

Carriers are already facing tight supplies in most key bunkering hubs including the Middle East and South Africa, which has led operators to cut the speed of ships and become more flexible in sourcing fuel.

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<div class="phx-topic">Multipurpose vessel (MPV) operators are set to face worsening bunker supply issues in April if the Middle East war continues to disrupt fuel availability, shipping executives and analysts say. Carriers are already facing tight supplies in most key bunkering hubs including the Middle East and South Africa, which has led operators to cut the speed of ships and become more flexible in sourcing fuel supplies. Adding to the strain is the fact fuel prices are almost double what they were at the start of the year. Highlighting the challenges facing MPV operators, Marcus Remmers, AAL Shipping’s regional operations manager for Europe, said while supply is still available, “conditions remain fragile.” “We are seeing tightening availability in multiple regions around the world,” Remmers told the Journal of Commerce. “If the situation persists, we expect more tangible impacts within the next two to three weeks. “The global bunker market has shifted from a simple oil price spike to a structural supply and logistics crisis driven by geopolitics,” he added. “The core issue is now product availability, not crude prices, keeping the overall market tight and highly volatile.” He pointed out that Asia and the Middle East are the two main areas most at risk of fuel supply shortages due to their reliance on imports of crude oil and refined products from the region. <h3>Export ban deepens bunker sourcing issues </h3>Potential shortages have been exacerbated by a ban on oil and fuel exports by some countries, including China, and longer vessel transits as ships avoid the conflict zone around the Persian Gulf and Red Sea region. “Europe is relatively more stable operationally but increasingly exposed to diesel and distillate tightness following reduced Russian product flows,” Remmers said. “South Africa shows patchy availability, with very tight low sulfur marine gas oil (LSMGO) in Durban and Cape Town, making last minute procurement risky.” Arthur English, CEO of Norway-headquartered MPV operator G2 Ocean, said “fuel products remain accessible (in South Africa), although pricing is notably higher than in other competitive regions.” Other shipping sources reported little or no fuel availability at South African ports. Globally, MPV operators said supplies of low sulfur marine gas oil and very low sulfur fuel oil (VLSFO) are especially tight. Marine gas oil has a sulfur content of less than 0.1% while fuel oil is below 0.5%. “LSMGO is currently the most exposed grade,” Remmers said. “In some markets, supply is already being restricted or bundled with VLSFO, and several regions are approaching suspension of standalone LSMGO deliveries.” English said increased demand for low sulfur marine fuels and tighter supply has made marine gas oil “particularly susceptible to market fluctuations.” “As a result, we have noticed that LSMGO is not only harder to secure but also has a higher premium in most locations,” he said. Those difficulties have led G2 Ocean to seek new sources of supply. “The locations where we take on bunkers have shifted, becoming far more flexible and dispersed geographically,” English said. “This allows us to adapt quickly to changing supply conditions and pricing, ensuring we maintain operational efficiency and reliability for our customers.” <h3>Smaller operators hit the hardest </h3>While large MPV operators including AAL Shipping, G2 Ocean, Chipolbrok and Norden have lengthy supply contracts or source directly from bunker suppliers rather than buy spot cargoes, Justin Archard, founder and owner of specialist MPV shipbroking house OneWorld Shipbrokers, said smaller operators that comprise much of the sector do not have big supply contracts. “It’s a mess out there, to be sure,” Archard told the Journal of Commerce. “Bunkers, whether price or availability, I think will be the choke point if this war continues much longer.” British shipbroking house Clarksons said the price of VLSFO was $848 per metric ton on Friday in Singapore, the world’s biggest bunkering hub. That’s down from $1,078/mt a week earlier but still nearly double the $431/mt it was on Jan 2. Prices at other major ship refueling hubs also reflected the massive volatility. In Fujairah, VLSFO was $858/mt on Friday, down from $1,084/mt on March 20 but double $428/mt on Jan. 2, according to Clarksons. Rotterdam prices eased to $728/mt on Friday from $812/mt on March 20, but are still up from $416/mt on Jan 2. MPV operators including AAL Shipping have imposed emergency fuel surcharges and other bunker pricing mechanisms to help recover some of the increased cost, although the full impact of the higher prices will only be known when the conflict is over. “From the beginning of the crisis in the Strait of Hormuz, we have adopted a strategy to first secure the bunkers and then worry about the price afterwards,” Michal Gomerski, shipping director at Sino-Polish MPV owner Chipolbrok Shanghai, told the Journal of Commerce. “We fill up our vessels to the top so there is no big impact on our cargo volumes and there are no weight restrictions.  “We have not turned cargo down, but we do see bulk cargo owners are adopting a wait-and-see strategy because they are unwilling to risk bunker fuel surcharges or higher freight rates due to the situation,” he added. Contact Keith Wallis on <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Multipurpose vessel (MPV) operators are set to face worsening bunker supply issues in April if the Middle East war continues to disrupt fuel availability, shipping executives and analysts say. Carriers are already facing tight supplies in most key bunkering hubs including the Middle East and South Africa, which has led operators to cut the speed of ships and become more flexible in sourcing fuel supplies. Adding to the strain is the fact fuel prices are almost double what they were at the start of the year. Highlighting the challenges facing MPV operators, Marcus Remmers, AAL Shipping’s regional operations manager for Europe, said while supply is still available, “conditions remain fragile.” “We are seeing tightening availability in multiple regions around the world,” Remmers told the Journal of Commerce. “If the situation persists, we expect more tangible impacts within the next two to three weeks. “The global bunker market has shifted from a simple oil price spike to a structural supply and logistics crisis driven by geopolitics,” he added. “The core issue is now product availability, not crude prices, keeping the overall market tight and highly volatile.” He pointed out that Asia and the Middle East are the two main areas most at risk of fuel supply shortages due to their reliance on imports of crude oil and refined products from the region. Export ban deepens bunker sourcing issues Potential shortages have been exacerbated by a ban on oil and fuel exports by some countries, including China, and longer vessel transits as ships avoid the conflict zone around the Persian Gulf and Red Sea region. “Europe is relatively more stable operationally but increasingly exposed to diesel and distillate tightness following reduced Russian product flows,” Remmers said. “South Africa shows patchy availability, with very tight low sulfur marine gas oil (LSMGO) in Durban and Cape Town, making last minute procurement risky.” Arthur English, CEO of Norway-headquartered MPV operator G2 Ocean, said “fuel products remain accessible (in South Africa), although pricing is notably higher than in other competitive regions.” Other shipping sources reported little or no fuel availability at South African ports. Globally, MPV operators said supplies of low sulfur marine gas oil and very low sulfur fuel oil (VLSFO) are especially tight. Marine gas oil has a sulfur content of less than 0.1% while fuel oil is below 0.5%. “LSMGO is currently the most exposed grade,” Remmers said. “In some markets, supply is already being restricted or bundled with VLSFO, and several regions are approaching suspension of standalone LSMGO deliveries.” English said increased demand for low sulfur marine fuels and tighter supply has made marine gas oil “particularly susceptible to market fluctuations.” “As a result, we have noticed that LSMGO is not only harder to secure but also has a higher premium in most locations,” he said. Those difficulties have led G2 Ocean to seek new sources of supply. “The locations where we take on bunkers have shifted, becoming far more flexible and dispersed geographically,” English said. “This allows us to adapt quickly to changing supply conditions and pricing, ensuring we maintain operational efficiency and reliability for our customers.” Smaller operators hit the hardest While large MPV operators including AAL Shipping, G2 Ocean, Chipolbrok and Norden have lengthy supply contracts or source directly from bunker suppliers rather than buy spot cargoes, Justin Archard, founder and owner of specialist MPV shipbroking house OneWorld Shipbrokers, said smaller operators that comprise much of the sector do not have big supply contracts. “It’s a mess out there, to be sure,” Archard told the Journal of Commerce. “Bunkers, whether price or availability, I think will be the choke point if this war continues much longer.” British shipbroking house Clarksons said the price of VLSFO was $848 per metric ton on Friday in Singapore, the world’s biggest bunkering hub. That’s down from $1,078/mt a week earlier but still nearly double the $431/mt it was on Jan 2. Prices at other major ship refueling hubs also reflected the massive volatility. In Fujairah, VLSFO was $858/mt on Friday, down from $1,084/mt on March 20 but double $428/mt on Jan. 2, according to Clarksons. Rotterdam prices eased to $728/mt on Friday from $812/mt on March 20, but are still up from $416/mt on Jan 2. MPV operators including AAL Shipping have imposed emergency fuel surcharges and other bunker pricing mechanisms to help recover some of the increased cost, although the full impact of the higher prices will only be known when the conflict is over. “From the beginning of the crisis in the Strait of Hormuz, we have adopted a strategy to first secure the bunkers and then worry about the price afterwards,” Michal Gomerski, shipping director at Sino-Polish MPV owner Chipolbrok Shanghai, told the Journal of Commerce. “We fill up our vessels to the top so there is no big impact on our cargo volumes and there are no weight restrictions.  “We have not turned cargo down, but we do see bulk cargo owners are adopting a wait-and-see strategy because they are unwilling to risk bunker fuel surcharges or higher freight rates due to the situation,” he added. Contact Keith Wallis on keithwallis@hotmail.com .

MPV operators face worsening bunker fuel supply crisis as stocks tighten

<div class="phx-topic abstract-wrapper">Strength in the breakbulk and project cargo markets has encouraged a round of new ship orders. </div>

Strength in the breakbulk and project cargo markets has encouraged a round of new ship orders.

<div class="phx-topic">Breakbulk vessel operators show little sign of slowing their ordering spree for new ships with a raft of deals made with Chinese shipyards amid continued buoyancy in the multipurpose vessel (MPV) market despite uncertainty caused by the Middle East war. The latest orders build upon the momentum seen at the start of the year when carriers announced a slew of new vessel contracts. AAL Shipping leads the newest batch with a contract at CSSC Huangpu Wenchong Shipyard in Guangzhou, southern China, for two additional 32,000 deadweight metric ton (dwt) Super B-class vessels. The carrier announced the order ahead of the naming of AAL Shipping’s latest Super B-class vessel, AAL Newcastle, due to take place Tuesday. The newest ships, to be named AAL Tianjin and AAL Miami, will take the carrier’s Super B-class fleet to 10 ships when delivered in early 2028. AAL said the AAL Newcastle will be joined by AAL Mumbai in June. Both have been upgraded with higher specification cranes that increase individual lifting capacity to 400 metric tons from 350 metric tons “to increase lifting performance and cargo flexibility.” Other design refinements include a new 26-meter lifting beam, up from the 20 meters deployed on earlier vessels, enabling the handling of elongated structures with greater ease and precision. <h3>Scandinavian orders add to supply picture </h3>Copenhagen-headquartered DS Norden, meanwhile, is also further expanding its MPV fleet with an order for two 23,000-dwt ice-class ships at Wuchang Shipbuilding Industry Group in Wuhan, central China, with delivery expected in 2028. The ships will be equipped with two 80-metric ton cranes and will be able to operate on biofuel. The ships have been ordered against a long-term 10-year contract of affreightment with Swedish mining giant LKAB. The ships also mark Norden’s entry into the specialized ice-class segment and will expand “the solutions we can offer customers with transport needs in northern and ice-prone waters,” Norden CEO Jan Rindbo said in a statement announcing the deal Friday. They take Norden’s vessel order backlog to 28 ships after it agreed in January to charter up to eight 17,400-dwt MPVs from Singapore-headquartered Wealth Holdings Shipping, which contracted the ships from China’s Jiangsu Haitong Shipyard against the Norden charter.   <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="be82ad49-72b7-49f2-967f-0107567aab6f"></dynamic-object></div>Norway’s Halten Bulk has ordered four 7,100-dwt MPVs from China’s Jiangsu Soho Marine Heavy Industry in Yizheng, Jiangsu province, in a move that will almost double the carrier’s fleet from five to nine ships when delivered in 2028 and 2029. The battery-hybrid powered ships will be capable of carrying 400 TEUs. Fellow Scandinavian owner Godby Shipping has also confirmed a deal for up to four 6,200-dwt roll-on/roll-off ships at the Yantai CIMC Raffles Offshore shipyard in Shandong province, northern China. The contract comprises a firm order for two Stream Roro 1700-class ships for delivery in September 2028 and January 2029, with options for two similar ships. The carrier said the methanol-ready, battery-hybrid ships will have 1,700 linear meters of deck space capable of carrying trucks, cars, forestry products and other breakbulk and project cargoes. MPV/heavy-lift fleet growth is expected to average about 1.3% per year through 2030, according to Journal of Commerce estimates. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Breakbulk vessel operators show little sign of slowing their ordering spree for new ships with a raft of deals made with Chinese shipyards amid continued buoyancy in the multipurpose vessel (MPV) market despite uncertainty caused by the Middle East war. The latest orders build upon the momentum seen at the start of the year when carriers announced a slew of new vessel contracts. AAL Shipping leads the newest batch with a contract at CSSC Huangpu Wenchong Shipyard in Guangzhou, southern China, for two additional 32,000 deadweight metric ton (dwt) Super B-class vessels. The carrier announced the order ahead of the naming of AAL Shipping’s latest Super B-class vessel, AAL Newcastle, due to take place Tuesday. The newest ships, to be named AAL Tianjin and AAL Miami, will take the carrier’s Super B-class fleet to 10 ships when delivered in early 2028. AAL said the AAL Newcastle will be joined by AAL Mumbai in June. Both have been upgraded with higher specification cranes that increase individual lifting capacity to 400 metric tons from 350 metric tons “to increase lifting performance and cargo flexibility.” Other design refinements include a new 26-meter lifting beam, up from the 20 meters deployed on earlier vessels, enabling the handling of elongated structures with greater ease and precision. Scandinavian orders add to supply picture Copenhagen-headquartered DS Norden, meanwhile, is also further expanding its MPV fleet with an order for two 23,000-dwt ice-class ships at Wuchang Shipbuilding Industry Group in Wuhan, central China, with delivery expected in 2028. The ships will be equipped with two 80-metric ton cranes and will be able to operate on biofuel. The ships have been ordered against a long-term 10-year contract of affreightment with Swedish mining giant LKAB. The ships also mark Norden’s entry into the specialized ice-class segment and will expand “the solutions we can offer customers with transport needs in northern and ice-prone waters,” Norden CEO Jan Rindbo said in a statement announcing the deal Friday. They take Norden’s vessel order backlog to 28 ships after it agreed in January to charter up to eight 17,400-dwt MPVs from Singapore-headquartered Wealth Holdings Shipping, which contracted the ships from China’s Jiangsu Haitong Shipyard against the Norden charter.   Norway’s Halten Bulk has ordered four 7,100-dwt MPVs from China’s Jiangsu Soho Marine Heavy Industry in Yizheng, Jiangsu province, in a move that will almost double the carrier’s fleet from five to nine ships when delivered in 2028 and 2029. The battery-hybrid powered ships will be capable of carrying 400 TEUs. Fellow Scandinavian owner Godby Shipping has also confirmed a deal for up to four 6,200-dwt roll-on/roll-off ships at the Yantai CIMC Raffles Offshore shipyard in Shandong province, northern China. The contract comprises a firm order for two Stream Roro 1700-class ships for delivery in September 2028 and January 2029, with options for two similar ships. The carrier said the methanol-ready, battery-hybrid ships will have 1,700 linear meters of deck space capable of carrying trucks, cars, forestry products and other breakbulk and project cargoes. MPV/heavy-lift fleet growth is expected to average about 1.3% per year through 2030, according to Journal of Commerce estimates. Contact Keith Wallis at keithwallis@hotmail.com .

Multipurpose vessel ordering spree continues with raft of new deals

<div class="phx-topic abstract-wrapper">The ocean carrier is acquiring a 30% stake in a Hutchison-owned terminal operator that runs four terminals at the port in Thailand. </div>

The ocean carrier is acquiring a 30% stake in a Hutchison-owned terminal operator that runs four terminals at the port in Thailand.

<div class="phx-topic">Ocean Network Express (ONE) is buying a stake in Thailand’s largest marine terminal operator from Chinese port operator Hutchison Ports, continuing a spate of recent terminal investments the ocean carrier has made in Asia. ONE said in a statement Sunday it signed a purchase agreement for a 30% stake in Hutchison Laemchabang Terminal Limited (HLT) for an undisclosed sum. The ocean carrier said HLT is an integral part of Thailand’s long-term plans to develop a high-tech, manufacturing economy. ONE also said HLT has a commitment to “advanced port technology” as the terminal operator has invested in remotely operated ship-to-shore and yard stacking cranes. HLT runs Laem Chabang Port’s Terminal D, as well as terminals C1, C2 and A3. The port is about 80 miles south of Bangkok. “This acquisition secures long-term access to competitive terminal capacity, further strengthening our presence in ONE’s key strategic market,” the carrier said in its statement. Over the last 12 months, ONE has been one of the most frequent callers among major ocean carriers to HLT’s Terminal D, which handles super post-Panamax container ships. ONE has made 113 calls to Terminal D, with an average vessel size of 10,800 TEUs, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Mediterranean Shipping Co. just follows with 110 calls over the same period, according to Sea-web. ONE’s acquisition of the HLT stake comes one week after it made a similar deal for <a href="https://www.joc.com/article/one-takes-stake-in-busans-dongwon-terminal-ahead-of-premier-network-shift-6192330">an undisclosed share in the Dongwon Global Terminal</a> in Busan, South Korea. Last year, ONE also purchased <a href="https://www.joc.com/article/hapag-lloyd-one-expand-terminal-networks-with-deals-in-brazil-china-6139983">a stake in China’s Dalian Container Terminal</a>, which came after it acquired <a href="https://www.joc.com/article/one-adds-to-terminal-holdings-with-stake-in-indonesian-operator-5873398">a minority stake in Indonesia’s New Priok Container Terminal One</a> in 2024. More broadly, container lines, supported by recent record profits, <a href="https://www.joc.com/article/apmt-takes-49-stake-in-haiphongs-hhit-terminal-in-northern-vietnam-6190288">are investing more in marine terminals</a> to gain better control of landside operations and mitigate port congestion. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Ocean Network Express (ONE) is buying a stake in Thailand’s largest marine terminal operator from Chinese port operator Hutchison Ports, continuing a spate of recent terminal investments the ocean carrier has made in Asia. ONE said in a statement Sunday it signed a purchase agreement for a 30% stake in Hutchison Laemchabang Terminal Limited (HLT) for an undisclosed sum. The ocean carrier said HLT is an integral part of Thailand’s long-term plans to develop a high-tech, manufacturing economy. ONE also said HLT has a commitment to “advanced port technology” as the terminal operator has invested in remotely operated ship-to-shore and yard stacking cranes. HLT runs Laem Chabang Port’s Terminal D, as well as terminals C1, C2 and A3. The port is about 80 miles south of Bangkok. “This acquisition secures long-term access to competitive terminal capacity, further strengthening our presence in ONE’s key strategic market,” the carrier said in its statement. Over the last 12 months, ONE has been one of the most frequent callers among major ocean carriers to HLT’s Terminal D, which handles super post-Panamax container ships. ONE has made 113 calls to Terminal D, with an average vessel size of 10,800 TEUs, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Mediterranean Shipping Co. just follows with 110 calls over the same period, according to Sea-web. ONE’s acquisition of the HLT stake comes one week after it made a similar deal for an undisclosed share in the Dongwon Global Terminal in Busan, South Korea. Last year, ONE also purchased a stake in China’s Dalian Container Terminal , which came after it acquired a minority stake in Indonesia’s New Priok Container Terminal One in 2024. More broadly, container lines, supported by recent record profits, are investing more in marine terminals to gain better control of landside operations and mitigate port congestion. Contact Michael Angell at michael.angell@spglobal.com .

ONE adds to Asian terminal holdings with Laem Chabang deal

<div class="phx-topic abstract-wrapper">Forcing liners to wait for the 30-day notice period to end before implementing war-related surcharges reflects a multi-year ascendency of shipper influence in Washington and the corresponding decline in carrier heft, writes Peter Tirschwell.</div>

Forcing liners to wait for the 30-day notice period to end before implementing war-related surcharges reflects a multi-year ascendency of shipper influence in Washington and the corresponding decline in carrier heft, writes Peter Tirschwell.

<div class="phx-topic">The <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">unanimous rejection by the US Federal Maritime Commission (FMC)</a> of ocean carriers’ desire to waive the 30-day notice period for imposing emergency surcharges due to the war in the Middle East is a reminder of how US shipping politics have turned hostile to carriers’ interests. Carriers were accused by FMC Chairperson Laura DiBella of lacking transparency in justifying the surcharges. “An assertion that there are increased costs, without any data on what those costs are, how long they may last, and what steps the carrier is taking to mitigate them, is insufficient in demonstrating good cause,” DiBella said. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6195098_0.1.jpg"></img></div>Her comments gave voice to decades of shipper frustration with opaque carrier surcharges and suspicion that the fees are revenue generators meant to offset weak freight rates, rather than a tool to pass along costs. Whereas the FMC in an earlier era would most likely have sided with carriers, accepting the premise of higher costs that need to be offset, this time — reflecting a multi-year ascendency of shipper influence in Washington and the corresponding decline in carrier influence — there was little to lose by rejecting the waiver requests made by CMA CGM, Hapag-Lloyd, Maersk and Zim Integrated Shipping Services. The action drew praise from agricultural exporters, whose Washington representative Peter Friedmann said he was “shocked by the manner in which these requests were drafted, the disrespect shown to carriers’ customers, and even to the [FMC].” Although the practical effect of the FMC’s move will end up being limited because the war-related surcharges will be allowed to take effect in early April, the reminder of how shipping politics have fundamentally shifted in Washington was stark. Lost in the dialogue around the requested surcharge waiver was the reality of increased fuel and other costs due to the war. The conflict has raised Hapag-Lloyd’s operating costs by $40 million to $50 million per week, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">CEO Rolf Habben-Jansen said last week</a>. “To counterbalance that, we have introduced a number of contingency and emergency fuel surcharges,” he said. “This is not to collect more than the extra costs, but an extra cost of $40 million or $50 million per week is not something that you can sustain for very long.” <h3>Little sympathy in US for carriers </h3>A lack of sympathy for carriers runs deep in the US. Few shed any tears, for example, for carriers incurring the world’s highest container handling costs, reflecting generous longshore labor contracts on both coasts, or the US being one of the only countries where carriers can’t recoup those costs through a terminal handing charge. Even the FMC <a href="https://www.fmc.gov/articles/commissioner-dye-releases-final-report-for-fact-finding-no-29/">concluding</a> in 2022 that the COVID-era rate increases resulted from port congestion and strong demand, not carrier collusion, failed to assuage many shippers who took financial hits due to shipping disruption and blamed carriers as a result. The political shift behind the FMC’s rejection of the carriers’ waiver requests was years in the making. With the demise of US-flag carriers APL, Sea-Land Service Inc., United States Lines, and others that for decades anchored a strong carrier presence in Washington, carriers have been left essentially without friends in Washington. The 2022 Ocean Shipping Reform Act (OSRA-22), the first shipping legislation signed into law in nearly a quarter century, was passed over the objections of the World Shipping Council (WSC), the carriers’ trade group, in contrast to earlier legislation in 1984 and 1998 that would not have passed without the carriers’ sign-off. Even port authorities, for whom carriers are customers, supported the 2022 law. Carriers’ criticism that the 2022 law failed to address the root landside causes of the COVID disruption were all but ignored amid the focus on detention and demurrage — a longtime shipper grievance — and wave of anti-carrier sentiment during COVID, <a href="https://www.worldshipping.org/news/world-shipping-council-statement-on-congressional-passage-of-the-ocean-shipping-reform-act">leaving the WSC to say</a> “we are appalled by the continued mischaracterization of the industry.” In rejecting carriers’ surcharge waiver last week, moreover, the FMC incurred virtually no risk in potentially alienating carriers. <h3>‘Global’ carriers need US market </h3>Despite whatever hardships carriers face when operating in the US — including being harshly disparaged by US presidents, union officials and legislators, as well as being forced into accepting a whopping 62% wage increase for East Coast dockworkers in the fall of 2024 — major carriers are highly unlikely to walk away from the US. In other words, the risk remains minimal that the US controlling a mere half of 1% of global shipping, <a href="https://www.heritage.org/military-strength/assessment-us-military-power/us-merchant-marine">according to the Heritage Foundation</a>, would come back to haunt the country in the form of vital trade connections being severed by the loss of carrier services. Industry veterans can recall of no instance when an established east-west carrier withdrew from the US trades for reasons other than mergers, acquisition or bankruptcy. That dependence might explain the FMC’s longtime hesitation to go after carriers in ways that would truly hurt, such as rejecting proposed alliances or mergers. In fact, you would have to go back to the 1990s to find a major FMC investigation of carriers that focused on the Trans-Atlantic Agreement, or TAA, trade attorney and Venable partner Ashley Craig told the Journal of Commerce.Arguing against the possibility of carriers withdrawing US services, the major carriers are increasingly global — the top 10 control a record 85% of the global fleet, according to Alphaliner — a figure that will grow if Hapag-Lloyd succeeds in closing on its acquisition of Zim. As the world’s largest economy and consumer market, the US is core to carrier networks. “It’s hard to do global tenders if you don’t have a presence here,” said George Goldman, who led CMA CGM and Zim in the US following a lengthy career at APL. “You basically can’t call yourself a global carrier if you don’t operate in the US.” Another reason carriers would likely never walk away from the US is their substantial and growing landside investments, especially in terminals, with carriers only seeking further opportunities to expand their US terminal footprints. As Goldman said, the US is viewed by carriers as “the land of opportunity.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

The unanimous rejection by the US Federal Maritime Commission (FMC) of ocean carriers’ desire to waive the 30-day notice period for imposing emergency surcharges due to the war in the Middle East is a reminder of how US shipping politics have turned hostile to carriers’ interests. Carriers were accused by FMC Chairperson Laura DiBella of lacking transparency in justifying the surcharges. “An assertion that there are increased costs, without any data on what those costs are, how long they may last, and what steps the carrier is taking to mitigate them, is insufficient in demonstrating good cause,” DiBella said. Her comments gave voice to decades of shipper frustration with opaque carrier surcharges and suspicion that the fees are revenue generators meant to offset weak freight rates, rather than a tool to pass along costs. Whereas the FMC in an earlier era would most likely have sided with carriers, accepting the premise of higher costs that need to be offset, this time — reflecting a multi-year ascendency of shipper influence in Washington and the corresponding decline in carrier influence — there was little to lose by rejecting the waiver requests made by CMA CGM, Hapag-Lloyd, Maersk and Zim Integrated Shipping Services. The action drew praise from agricultural exporters, whose Washington representative Peter Friedmann said he was “shocked by the manner in which these requests were drafted, the disrespect shown to carriers’ customers, and even to the [FMC].” Although the practical effect of the FMC’s move will end up being limited because the war-related surcharges will be allowed to take effect in early April, the reminder of how shipping politics have fundamentally shifted in Washington was stark. Lost in the dialogue around the requested surcharge waiver was the reality of increased fuel and other costs due to the war. The conflict has raised Hapag-Lloyd’s operating costs by $40 million to $50 million per week, CEO Rolf Habben-Jansen said last week . “To counterbalance that, we have introduced a number of contingency and emergency fuel surcharges,” he said. “This is not to collect more than the extra costs, but an extra cost of $40 million or $50 million per week is not something that you can sustain for very long.” Little sympathy in US for carriers A lack of sympathy for carriers runs deep in the US. Few shed any tears, for example, for carriers incurring the world’s highest container handling costs, reflecting generous longshore labor contracts on both coasts, or the US being one of the only countries where carriers can’t recoup those costs through a terminal handing charge. Even the FMC concluding in 2022 that the COVID-era rate increases resulted from port congestion and strong demand, not carrier collusion, failed to assuage many shippers who took financial hits due to shipping disruption and blamed carriers as a result. The political shift behind the FMC’s rejection of the carriers’ waiver requests was years in the making. With the demise of US-flag carriers APL, Sea-Land Service Inc., United States Lines, and others that for decades anchored a strong carrier presence in Washington, carriers have been left essentially without friends in Washington. The 2022 Ocean Shipping Reform Act (OSRA-22), the first shipping legislation signed into law in nearly a quarter century, was passed over the objections of the World Shipping Council (WSC), the carriers’ trade group, in contrast to earlier legislation in 1984 and 1998 that would not have passed without the carriers’ sign-off. Even port authorities, for whom carriers are customers, supported the 2022 law. Carriers’ criticism that the 2022 law failed to address the root landside causes of the COVID disruption were all but ignored amid the focus on detention and demurrage — a longtime shipper grievance — and wave of anti-carrier sentiment during COVID, leaving the WSC to say “we are appalled by the continued mischaracterization of the industry.” In rejecting carriers’ surcharge waiver last week, moreover, the FMC incurred virtually no risk in potentially alienating carriers. ‘Global’ carriers need US market Despite whatever hardships carriers face when operating in the US — including being harshly disparaged by US presidents, union officials and legislators, as well as being forced into accepting a whopping 62% wage increase for East Coast dockworkers in the fall of 2024 — major carriers are highly unlikely to walk away from the US. In other words, the risk remains minimal that the US controlling a mere half of 1% of global shipping, according to the Heritage Foundation , would come back to haunt the country in the form of vital trade connections being severed by the loss of carrier services. Industry veterans can recall of no instance when an established east-west carrier withdrew from the US trades for reasons other than mergers, acquisition or bankruptcy. That dependence might explain the FMC’s longtime hesitation to go after carriers in ways that would truly hurt, such as rejecting proposed alliances or mergers. In fact, you would have to go back to the 1990s to find a major FMC investigation of carriers that focused on the Trans-Atlantic Agreement, or TAA, trade attorney and Venable partner Ashley Craig told the Journal of Commerce. Arguing against the possibility of carriers withdrawing US services, the major carriers are increasingly global — the top 10 control a record 85% of the global fleet, according to Alphaliner — a figure that will grow if Hapag-Lloyd succeeds in closing on its acquisition of Zim. As the world’s largest economy and consumer market, the US is core to carrier networks. “It’s hard to do global tenders if you don’t have a presence here,” said George Goldman, who led CMA CGM and Zim in the US following a lengthy career at APL. “You basically can’t call yourself a global carrier if you don’t operate in the US.” Another reason carriers would likely never walk away from the US is their substantial and growing landside investments, especially in terminals, with carriers only seeking further opportunities to expand their US terminal footprints. As Goldman said, the US is viewed by carriers as “the land of opportunity.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

FMC rejection of carriers’ surcharge waiver shows shift in US shipping politics

<div class="phx-topic abstract-wrapper">The Omani port operated by APM Terminals is one of the alternative container drop-off points in the region being used by ocean carriers unable to pass through the Strait of Hormuz. </div>

The Omani port operated by APM Terminals is one of the alternative container drop-off points in the region being used by ocean carriers unable to pass through the Strait of Hormuz.

<div class="phx-topic">A drone strike on Saturday closed the APM Terminals (AMPT) regional hub of Salalah in Oman, disrupting operations at one of the key access points for containers being offloaded and trucked overland to Persian Gulf markets that are otherwise inaccessible by ocean due to the war. One port worker was injured in the attack, and a container terminal crane was damaged. No one has claimed responsibility for the strike, although some media is reporting that the drones were fired by Houthi militants in neighboring Yemen. APMT owner Maersk said in a customer advisory Monday that Salalah will gradually resume operations beginning Tuesday, although operational constraints “might remain for some time.” “Additional precautionary security measures have been implemented at the port, and we remain in contact with the relevant authorities and port stakeholders,” the carrier said. Following the attack, Hapag-Lloyd announced that its vessel Lisbon Express has been moved out of the port “as a precautionary measure.” With the Strait of Hormuz effectively closed to commercial shipping, ocean carriers are discharging containers in ports near the Persian Gulf, such as Salalah and Sohar in Oman and Khor Fakkan and Fujairah in the UAE. The cargo is then trucked vast distances inland to the United Arab Emirates, Qatar, Bahrain, Kuwait and Iraq. But customer advisories from forwarders and ocean carriers paint a picture of growing congestion across regional overland networks. Crane Worldwide Logistics said Khor Fakkan congestion was at 100% with wait times longer than 11 days and “vessel queues and dwell times unrelenting.” The region’s main port hub of Jebel Ali is experiencing systemic backlogs with DP World’s emergency land corridors to Dammam in Saudi Arabia and Sohar providing only marginal landside relief. Cross-border trucking capacity shortages persist in key corridors and are most acute in Oman, the UAE’s Fujairah, and Saudi Arabia, Crane noted. The landside disruption for cargo was exacerbated by the Eid holidays and flooding from a severe storm that lashed the UAE last week. Rolf Habben Jansen, CEO of Hapag-Lloyd, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">told reporters during a briefing last week</a> that the carrier was trying to come up with overland solutions for customer cargo that is stranded short of its Persian Gulf destinations. “But capacity there is limited, and that means it is possible for things that are urgent or critical, but it is not possible for the volume that normally would be carried via the water,” Habben Jansen said. “There is simply not enough inland infrastructure and there are not enough trucks to support that,” he added. <h3>Trucking costs rising </h3>It is not only inbound containers that are impacted by the ongoing conflict. The Journal of Commerce has been told that a shipper with containers that urgently need exporting from the Persian Gulf in the next two months is paying $15,000 per container to truck 140 boxes across Saudi Arabia to the port of Jeddah on the Red Sea. That figure was far above the current $2,000-$6,000 per container market price for a cross-desert truck journey from the UAE to Jeddah, according to the Middle East CEO for a global forwarder, who added the $15,000 per box was likely escalated by the urgent nature of the shipment. Still, the forwarder said trucking complications across the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — extended well beyond high rates. “For example, if you have a Saudi truck and want to drive to an Omani port, it’s not possible,” the source told the Journal of Commerce. “They are currently making some exceptions, but we have just learned that Oman will charge an entry fee per tire.” Another problem that has been escalated by the conflict, according to the executive, is the issuing of visas. “There is so much more cross-border trucking now and drivers need to queue for half a day and longer to get a visa,” he said. “That limits the number of journeys a trucker can make, it creates delays and traffic backlogs, and inflates the price.” <h3>Operational restrictions </h3>Crane Worldwide Logistics said a new operational restriction now in effect bars drivers of Syrian, Pakistani and Yemeni nationality from entering Qatar, directly impacting road-based freight operations in and out of the country. With ocean cargo handling suspended in the Qatari port of Doha, the Crane advisory said containers already discharged in the region were accruing storage charges daily and the driver nationality ban was limiting the ability of cargo owners to collect and move their boxes. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, acknowledged that trucking capacity was a challenge, but said the forwarder had a road network in place before the conflict that it was able to utilize. Priority was being given to transporting healthcare and perishable cargo into the Middle East. “To keep cargo moving, we are working on solutions to find alternative gateways and corridors with trucks into the Persian Gulf markets, such as cross-border trucking between Sohar or Khor Fakkan, and via Mersin [Turkey] or Aqaba [Jordan],” Aldwell told the Journal of Commerce. “We are also implementing air-road solutions via airports in Saudi Arabia [Jeddah] and Oman [Salalah] with cross-border trucking to the UAE, Qatar, Bahrain and Kuwait,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A drone strike on Saturday closed the APM Terminals (AMPT) regional hub of Salalah in Oman, disrupting operations at one of the key access points for containers being offloaded and trucked overland to Persian Gulf markets that are otherwise inaccessible by ocean due to the war. One port worker was injured in the attack, and a container terminal crane was damaged. No one has claimed responsibility for the strike, although some media is reporting that the drones were fired by Houthi militants in neighboring Yemen. APMT owner Maersk said in a customer advisory Monday that Salalah will gradually resume operations beginning Tuesday, although operational constraints “might remain for some time.” “Additional precautionary security measures have been implemented at the port, and we remain in contact with the relevant authorities and port stakeholders,” the carrier said. Following the attack, Hapag-Lloyd announced that its vessel Lisbon Express has been moved out of the port “as a precautionary measure.” With the Strait of Hormuz effectively closed to commercial shipping, ocean carriers are discharging containers in ports near the Persian Gulf, such as Salalah and Sohar in Oman and Khor Fakkan and Fujairah in the UAE. The cargo is then trucked vast distances inland to the United Arab Emirates, Qatar, Bahrain, Kuwait and Iraq. But customer advisories from forwarders and ocean carriers paint a picture of growing congestion across regional overland networks. Crane Worldwide Logistics said Khor Fakkan congestion was at 100% with wait times longer than 11 days and “vessel queues and dwell times unrelenting.” The region’s main port hub of Jebel Ali is experiencing systemic backlogs with DP World’s emergency land corridors to Dammam in Saudi Arabia and Sohar providing only marginal landside relief. Cross-border trucking capacity shortages persist in key corridors and are most acute in Oman, the UAE’s Fujairah, and Saudi Arabia, Crane noted. The landside disruption for cargo was exacerbated by the Eid holidays and flooding from a severe storm that lashed the UAE last week. Rolf Habben Jansen, CEO of Hapag-Lloyd, told reporters during a briefing last week that the carrier was trying to come up with overland solutions for customer cargo that is stranded short of its Persian Gulf destinations. “But capacity there is limited, and that means it is possible for things that are urgent or critical, but it is not possible for the volume that normally would be carried via the water,” Habben Jansen said. “There is simply not enough inland infrastructure and there are not enough trucks to support that,” he added. Trucking costs rising It is not only inbound containers that are impacted by the ongoing conflict. The Journal of Commerce has been told that a shipper with containers that urgently need exporting from the Persian Gulf in the next two months is paying $15,000 per container to truck 140 boxes across Saudi Arabia to the port of Jeddah on the Red Sea. That figure was far above the current $2,000-$6,000 per container market price for a cross-desert truck journey from the UAE to Jeddah, according to the Middle East CEO for a global forwarder, who added the $15,000 per box was likely escalated by the urgent nature of the shipment. Still, the forwarder said trucking complications across the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — extended well beyond high rates. “For example, if you have a Saudi truck and want to drive to an Omani port, it’s not possible,” the source told the Journal of Commerce. “They are currently making some exceptions, but we have just learned that Oman will charge an entry fee per tire.” Another problem that has been escalated by the conflict, according to the executive, is the issuing of visas. “There is so much more cross-border trucking now and drivers need to queue for half a day and longer to get a visa,” he said. “That limits the number of journeys a trucker can make, it creates delays and traffic backlogs, and inflates the price.” Operational restrictions Crane Worldwide Logistics said a new operational restriction now in effect bars drivers of Syrian, Pakistani and Yemeni nationality from entering Qatar, directly impacting road-based freight operations in and out of the country. With ocean cargo handling suspended in the Qatari port of Doha, the Crane advisory said containers already discharged in the region were accruing storage charges daily and the driver nationality ban was limiting the ability of cargo owners to collect and move their boxes. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, acknowledged that trucking capacity was a challenge, but said the forwarder had a road network in place before the conflict that it was able to utilize. Priority was being given to transporting healthcare and perishable cargo into the Middle East. “To keep cargo moving, we are working on solutions to find alternative gateways and corridors with trucks into the Persian Gulf markets, such as cross-border trucking between Sohar or Khor Fakkan, and via Mersin [Turkey] or Aqaba [Jordan],” Aldwell told the Journal of Commerce. “We are also implementing air-road solutions via airports in Saudi Arabia [Jeddah] and Oman [Salalah] with cross-border trucking to the UAE, Qatar, Bahrain and Kuwait,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Drone strike closes key Middle East transit hub of Salalah

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