<div class="phx-topic abstract-wrapper">Yusen Terminals in Los Angeles is already holding twice its normal inventory of rail containers and is draying some of the boxes to a near-dock storage yard to prevent the backlog from interfering with cargo handling operations.</div>

Yusen Terminals in Los Angeles is already holding twice its normal inventory of rail containers and is draying some of the boxes to a near-dock storage yard to prevent the backlog from interfering with cargo handling operations.

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<div>Rail container backlogs are mounting at some marine terminals at the ports of Los Angeles and Long Beach amid a surge in imports from Asia that is driving a sharp increase in eastbound intermodal train movements and exacerbating a chronic deficit of railcars returning westbound. Yusen Terminals in Los Angeles is already holding twice its normal inventory of rail containers and is draying some of the boxes to a near-dock storage yard to prevent the backlog from interfering with cargo handling operations. “The eastbound dwell has built up to the point that we have to use near-dock storage space —...

Rail container backlogs are mounting at some marine terminals at the ports of Los Angeles and Long Beach amid a surge in imports from Asia that is driving a sharp increase in eastbound intermodal train movements and exacerbating a chronic deficit of railcars returning westbound. Yusen Terminals in Los Angeles is already holding twice its normal inventory of rail containers and is draying some of the boxes to a near-dock storage yard to prevent the backlog from interfering with cargo handling operations. “The eastbound dwell has built up to the point that we have to use near-dock storage space — at an extra expense to us,” said Alan McCorkle, Yusen’s president and CEO. Some terminal operators at the largest US port complex say while the railroads are providing sufficient rail cars to handle current eastbound intermodal traffic to the US interior, terminals are bumping up against their storage capacity and fear the facilities could become congested quickly if imports strengthen further in May and June. “We’re getting sufficient railcars, but we’re right on the bubble,” said a terminal operator in Los Angeles who did not want to be identified. The Journal of Commerce spoke to six terminal operators that operate eight of the 12 container terminals in the Los Angeles-Long Beach port complex. Long Beach Container Terminal (LBCT) experienced a “blip” last week but was able to accommodate the increase in inland point intermodal (IPI) cargo moving eastbound because its eastbound/westbound volumes have been in balance, said Anthony Otto, LBCT’s president. For IPI shipments to be handled efficiently by terminals, “the program has to be balanced,” Otto said. UP, BNSF stay prepared to handle rising volumes Union Pacific (UP) and BNSF railroads say they are not experiencing higher dwell times and that they will increase railcar supplies in Southern California in anticipation of the peak shipping season in the eastbound trans-Pacific that begins in August. “We have successfully supported record first quarter volumes at the ports of Los Angeles and Long Beach and look forward to continuing to do so,” a BNSF spokesperson said. A UP spokesperson said the railroad has been repositioning additional well cars to the West Coast to support demand. “Our network is operating well,” the spokesperson said. Rail container dwell times on the Los Angeles-Long Beach terminals have increased steadily this year, from 4.2 days in January to 6.26 days in February and 7.02 days in March, according to the Pacific Merchant Shipping Association (PMSA). PMSA will release its data on April’s rail container dwell times later this month. Numbers posted by the ports, meanwhile, show a wide variation in dwell times at individual terminals. Generally, they reveal that the number of containers with nine-day-plus dwells was relatively low during the first three weeks of April, then accelerated in the final week of the month. The higher dwells come as imports from Asia landing at Los Angeles-Long Beach increased 29.7% in the first quarter year over year to 1.96 million TEUs, according to PIERS, a Journal of Commerce sister company within S&P Global. Cargo surges lead to rail car shortages Larry Gross, president and founder of Gross Transportation Consulting, said in an April 3 column for the Journal of Commerce that rail car deficits in Los Angeles-Long Beach often occur during cargo surges. A similar development occurred last August and September when import volumes spiked. Citing data from the Intermodal Association of North America (IANA), Gross said about 190 more double-stack well cars with loaded eastbound containers moved out of the Pacific Southwest each day in January than came back to the region with loaded or empty containers. During the previous cargo spike last August–September, the daily deficit of intermodal well cars was even higher, at 430. Gross told the Journal of Commerce that during cargo surges, ocean carriers have the choice of meeting the demand in Asia by deploying extra-loader vessels or rolling the containers to subsequent voyages. However, Gross said when the inland point intermodal (IPI) shipments that were booked with carriers reach the West Coast, the liners simply dump the volume at the ports and tell the terminals and railroads, “deal with it.” “They [the liners] don’t give the railroads a lot of advance notice,” he said. Some terminals can handle the volatility in imports and IPI bookings, to a degree, depending on their size and configuration. But other terminals can become congested quickly as rail container dwells mount to five days or longer from the desired three or four days. When rail container dwell times spike to nine days or longer, terminals struggle because they must shift the containers around within their facilities to accommodate the thousands of import boxes being discharged from the vessels they handle each week. That’s why those terminal operators in Los Angeles-Long Beach that are reaching their storage capacity are apprehensive about the projection of US retailers calling for sizable year-over-year increases in import volumes in the coming months. The National Retail Federation, in its April 9 Global Port Tracker (GPT) , forecast that US imports will continue to increase year over year each month at least through August, the end of its latest forecast period. The GPT forecasted that imports will increase 5.5% in May, 8.9% in June, 6.6% in July and 6.9% in August from the year-earlier period. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

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Import surge boosting rail container dwells at some LA-LB marine terminals

<div class="phx-topic abstract-wrapper">The decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers. </div>

The decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers.

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<div class="phx-topic">India will delay by six months enforcement of a rebooted cabotage policy that sought to revoke the coastal shipping freedom <a href="https://www.joc.com/article/india-scraps-cabotage-rule-opens-domestic-freight-to-foreign-ocean-carriers-5229628">extended to foreign-flag vessel operators in 2018</a>. The incumbent regulatory support has long enabled carriers to freely move laden containers for transshipment and empty boxes for repositioning intra-country. The Ministry of Ports &amp; Shipping, in announcing the reprieve Tuesday, said the decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers. “…Representations have been received from stakeholders, including container liner operators' associations, highlighting operational concerns arising out of the prevailing geopolitical situation, particularly in the Persian Gulf region, affecting global shipping dynamics such as route planning, insurance costs and vessel deployment,” the ministry said. While the Middle East chaos is an “incidental operational challenge,” it is believed that carrier representatives had already been engaging with policymakers — individually and through industry bodies — to seek a review of the policy U-turn or at least gain more time to get ready for the new operational environment. Local industry analysts view the temporary reprieve more as regulatory posturing as liner heavyweights come forward to diversify their investment interests in India, including reflagging vessels to the local registry. Maersk, CMA CGM, Mediterranean Shipping Co. <a href="https://www.joc.com/article/hapag-lloyd-to-invest-1-billion-across-indian-maritime-verticals-6189463">and Hapag-Lloyd</a> have either already added a few ships to the Indian flag or confirmed flag changing plans. “India is emerging as a transshipment hub, and global operators and shipping lines have shown commitment towards flagging container ships in India,” the ministry said in its statement. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), welcomed the government’s decision. “The extension of cabotage relaxations was much needed under the current circumstances wherein transshipment at Indian ports has further increased,” Vaswani told the Journal of Commerce. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

India will delay by six months enforcement of a rebooted cabotage policy that sought to revoke the coastal shipping freedom extended to foreign-flag vessel operators in 2018 . The incumbent regulatory support has long enabled carriers to freely move laden containers for transshipment and empty boxes for repositioning intra-country. The Ministry of Ports & Shipping, in announcing the reprieve Tuesday, said the decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers. “…Representations have been received from stakeholders, including container liner operators' associations, highlighting operational concerns arising out of the prevailing geopolitical situation, particularly in the Persian Gulf region, affecting global shipping dynamics such as route planning, insurance costs and vessel deployment,” the ministry said. While the Middle East chaos is an “incidental operational challenge,” it is believed that carrier representatives had already been engaging with policymakers — individually and through industry bodies — to seek a review of the policy U-turn or at least gain more time to get ready for the new operational environment. Local industry analysts view the temporary reprieve more as regulatory posturing as liner heavyweights come forward to diversify their investment interests in India, including reflagging vessels to the local registry. Maersk, CMA CGM, Mediterranean Shipping Co. and Hapag-Lloyd have either already added a few ships to the Indian flag or confirmed flag changing plans. “India is emerging as a transshipment hub, and global operators and shipping lines have shown commitment towards flagging container ships in India,” the ministry said in its statement. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), welcomed the government’s decision. “The extension of cabotage relaxations was much needed under the current circumstances wherein transshipment at Indian ports has further increased,” Vaswani told the Journal of Commerce. Contact Bency Mathew at bencyvmathew@gmail.com .

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India delays cabotage rewind plan amid carrier pressure, Middle East reroutings

<div class="phx-topic abstract-wrapper">The agreement is the first of its kind between rail freight companies in Rotterdam and part of ongoing efforts to share information across the busy multimodal network at Europe’s largest port</div>

The agreement is the first of its kind between rail freight companies in Rotterdam and part of ongoing efforts to share information across the busy multimodal network at Europe’s largest port

<div class="phx-topic">Six rail companies operating on Rotterdam’s Port Railway Line have signed a pilot cooperation agreement aimed at addressing long delays and cancelations on the crucial corridor linking Europe’s busiest container hub with the hinterland. The rail operators — Rail Force One, HSL Netherlands, DB Cargo Nederland, RTB Cargo, LTE, and Rail Cargo Group — account for 70% of the market using the line that stretches 50 kilometers (31 miles) from Rotterdam city center to the Maasvlakte terminals. Known as “Track Together,” the shunting agreement is the first such partnership between rail freight operators in the port and is led by the Port of Rotterdam Authority. It launched on Wednesday as a seven-month pilot scheme, and if successful will be made permanent. “By sharing information more effectively, the platform helps to ensure more efficient operations and a more reliable rail network for all stakeholders,” Jordy Hermes, product design specialist at LTE, said in a statement. Rotterdam, Europe’s largest port, handled 14.2 million TEUs in 2025, up 3.1% year over year, with around a quarter of that volume using rail to connect with the hinterland network. But the port faced persistent congestion last year that spilled through to multimodal connections with the hinterland. <h3>Efficient collaboration </h3>Ongoing efforts are being made to improve collaboration and data-sharing across the carrier, terminal, barge, road, and rail operators with the Track Together partnership addressing collaboration around railway movements within the port corridor. “(It) will enable transport operators to collaborate more efficiently via the platform in the event of disruptions at the port of Rotterdam, thereby ensuring better utilization of capacity,” said Martin van der Linden, production manager at HSL. Under the shunting agreement, rail operators can take over each other’s journeys at fixed rates in the event of capacity issues in a move intended to prevent train cancellations and long delays. The collaboration also ensures that a contingency plan is immediately available in the event of deviations from standard timetables, enabling trains to be taken over quickly. Terminals in the port will benefit as their tracks are cleared, allowing scheduled trains to run as planned. The agreement outlines how trains are to be transferred, both administratively and physically, and the responsibilities of both the principal operator and the contractor. Journeys between Kijfhoek to the Maasvlakte, including all intermediate stations and terminals, can be booked via the specially developed PortFlow app. During the pilot period, the app developer, port authority and rail operators will meet monthly to review the collaboration. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Six rail companies operating on Rotterdam’s Port Railway Line have signed a pilot cooperation agreement aimed at addressing long delays and cancelations on the crucial corridor linking Europe’s busiest container hub with the hinterland. The rail operators — Rail Force One, HSL Netherlands, DB Cargo Nederland, RTB Cargo, LTE, and Rail Cargo Group — account for 70% of the market using the line that stretches 50 kilometers (31 miles) from Rotterdam city center to the Maasvlakte terminals. Known as “Track Together,” the shunting agreement is the first such partnership between rail freight operators in the port and is led by the Port of Rotterdam Authority. It launched on Wednesday as a seven-month pilot scheme, and if successful will be made permanent. “By sharing information more effectively, the platform helps to ensure more efficient operations and a more reliable rail network for all stakeholders,” Jordy Hermes, product design specialist at LTE, said in a statement. Rotterdam, Europe’s largest port, handled 14.2 million TEUs in 2025, up 3.1% year over year, with around a quarter of that volume using rail to connect with the hinterland network. But the port faced persistent congestion last year that spilled through to multimodal connections with the hinterland. Efficient collaboration Ongoing efforts are being made to improve collaboration and data-sharing across the carrier, terminal, barge, road, and rail operators with the Track Together partnership addressing collaboration around railway movements within the port corridor. “(It) will enable transport operators to collaborate more efficiently via the platform in the event of disruptions at the port of Rotterdam, thereby ensuring better utilization of capacity,” said Martin van der Linden, production manager at HSL. Under the shunting agreement, rail operators can take over each other’s journeys at fixed rates in the event of capacity issues in a move intended to prevent train cancellations and long delays. The collaboration also ensures that a contingency plan is immediately available in the event of deviations from standard timetables, enabling trains to be taken over quickly. Terminals in the port will benefit as their tracks are cleared, allowing scheduled trains to run as planned. The agreement outlines how trains are to be transferred, both administratively and physically, and the responsibilities of both the principal operator and the contractor. Journeys between Kijfhoek to the Maasvlakte, including all intermediate stations and terminals, can be booked via the specially developed PortFlow app. During the pilot period, the app developer, port authority and rail operators will meet monthly to review the collaboration. Contact Greg Knowler at greg.knowler@spglobal.com .

International rail

Rotterdam rail operators ink deal to tackle delays, reliability

<div class="phx-topic abstract-wrapper">The World Shipping Council argued unsuccessfully that a section of OSRA-22 aimed at US exports was an overreach by the country’s maritime regulator. </div>

The World Shipping Council argued unsuccessfully that a section of OSRA-22 aimed at US exports was an overreach by the country’s maritime regulator.

<div class="phx-topic">An appeals court has denied a challenge to US shipping law that blocks ocean carriers from unfairly denying vessel space to exporters, ruling that the Federal Maritime Commission (FMC) has broad latitude to review a carrier’s rates and export policy when it believes such violations occur. A three-judge panel for the District of Columbia appellate court on Tuesday turned down <a href="https://www.joc.com/article/dc-court-hears-challenge-to-fmc-rulemaking-on-refusal-to-deal-6078353">the World Shipping Council’s (WSC’s) petition</a> to review a section of the Ocean Shipping Reform Act of 2022 (OSRA-22) that bars ocean carriers from “unreasonably refus[ing] to deal or negotiate ... with respect to vessel space accommodations.” The provision stemmed from <a href="https://www.joc.com/article/us-regulators-warn-container-lines-on-obligation-to-serve-exporters-5251170">the US agriculture industry’s difficulties in getting export space</a> during the COVID-19-era container shipping surge. After OSRA-22 was passed, a July 2024 rulemaking by the FMC sought to clarify how the agency would determine an unreasonable refusal to deal. The WSC claimed the rulemaking exceeded the FMC’s authority because it allowed the agency to review export freight rates, even though it gave up its ratemaking authority in 1984. The rulemaking also requires ocean carriers to document their export policies, which the WSC claimed also oversteps the agency’s powers, and removed references to “business decisions” as a factor in deciding whether an ocean carrier unreasonably refused to deal. However, the court ruled that even if the FMC no longer regulates rates, it can still review ocean freight rates if they appear to be dissuading an export container booking. The ruling said that removing the FMC’s authority to review export rates “would permit any ocean carrier to refuse to deal or to negotiate with impunity, simply by quoting an unrealistically high rate.” “There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal,” the ruling said. The court also turned away the WSC’s argument that a documented export policy was government overreach because it is “prospective” information, not a factual recounting of what occurred in a particular instance. The judges said the FMC has authority under US shipping law to collect information about carrier pricing strategies and export policies. As for the exclusion of business decisions in the rulemaking, the judges said the rulemaking did not explicitly prevent the FMC from considering that factor in whether a shipper was unfairly denied vessel space. The FMC itself said that it could also consider business decisions. “Counsel for the Commission acknowledged that the Commission may not decline to consider a relevant business decision because failure to consider a relevant factor would itself be arbitrary,” the ruling said. “In short, the Commission did not meaningfully change course by dropping its main reference to business decisions.” <h3>Despite loss, WSC notes ‘clarity’ in ruling </h3>In a statement to the Journal of Commerce, WSC Chief Executive Joe Kramek said, “the ruling provides the liner shipping industry with clarity on the factors the [FMC] must consider in reviewing refusal-to-deal cases.” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in a statement the FMC’s refusal-to-deal rulemaking followed Congress’ intent on providing a level playing field for US exporters. “The provision in OSRA-22 and the subsequent FMC implementing regulation was designed to address refusals of ocean carriers to accept booking of many agriculture commodities during the COVID crisis,” Friedmann said. “Congress responded, on behalf of agriculture and other constituents, leading to this provision of OSRA-22. AgTC is pleased with the Court of Appeals decision denying efforts to derail this FMC regulation.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

An appeals court has denied a challenge to US shipping law that blocks ocean carriers from unfairly denying vessel space to exporters, ruling that the Federal Maritime Commission (FMC) has broad latitude to review a carrier’s rates and export policy when it believes such violations occur. A three-judge panel for the District of Columbia appellate court on Tuesday turned down the World Shipping Council’s (WSC’s) petition to review a section of the Ocean Shipping Reform Act of 2022 (OSRA-22) that bars ocean carriers from “unreasonably refus[ing] to deal or negotiate ... with respect to vessel space accommodations.” The provision stemmed from the US agriculture industry’s difficulties in getting export space during the COVID-19-era container shipping surge. After OSRA-22 was passed, a July 2024 rulemaking by the FMC sought to clarify how the agency would determine an unreasonable refusal to deal. The WSC claimed the rulemaking exceeded the FMC’s authority because it allowed the agency to review export freight rates, even though it gave up its ratemaking authority in 1984. The rulemaking also requires ocean carriers to document their export policies, which the WSC claimed also oversteps the agency’s powers, and removed references to “business decisions” as a factor in deciding whether an ocean carrier unreasonably refused to deal. However, the court ruled that even if the FMC no longer regulates rates, it can still review ocean freight rates if they appear to be dissuading an export container booking. The ruling said that removing the FMC’s authority to review export rates “would permit any ocean carrier to refuse to deal or to negotiate with impunity, simply by quoting an unrealistically high rate.” “There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal,” the ruling said. The court also turned away the WSC’s argument that a documented export policy was government overreach because it is “prospective” information, not a factual recounting of what occurred in a particular instance. The judges said the FMC has authority under US shipping law to collect information about carrier pricing strategies and export policies. As for the exclusion of business decisions in the rulemaking, the judges said the rulemaking did not explicitly prevent the FMC from considering that factor in whether a shipper was unfairly denied vessel space. The FMC itself said that it could also consider business decisions. “Counsel for the Commission acknowledged that the Commission may not decline to consider a relevant business decision because failure to consider a relevant factor would itself be arbitrary,” the ruling said. “In short, the Commission did not meaningfully change course by dropping its main reference to business decisions.” Despite loss, WSC notes ‘clarity’ in ruling In a statement to the Journal of Commerce, WSC Chief Executive Joe Kramek said, “the ruling provides the liner shipping industry with clarity on the factors the [FMC] must consider in reviewing refusal-to-deal cases.” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in a statement the FMC’s refusal-to-deal rulemaking followed Congress’ intent on providing a level playing field for US exporters. “The provision in OSRA-22 and the subsequent FMC implementing regulation was designed to address refusals of ocean carriers to accept booking of many agriculture commodities during the COVID crisis,” Friedmann said. “Congress responded, on behalf of agriculture and other constituents, leading to this provision of OSRA-22. AgTC is pleased with the Court of Appeals decision denying efforts to derail this FMC regulation.” Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

Appeals court upholds FMC rules on carrier refusal-to-deal, export policies

<div class="phx-topic abstract-wrapper">With operations at Salalah suspended on Saturday due to a drone strike, Hapag-Lloyd has positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim in Pakistan. </div>

With operations at Salalah suspended on Saturday due to a drone strike, Hapag-Lloyd has positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim in Pakistan.

<div class="phx-topic">Stop-and-start operations at Salalah Port in Oman are adding to the schedule challenges that had already forced major carriers on the Indian westbound trades to rework their network rotations in response to the Middle East crisis. Salalah remains a critical hub for Maersk and Hapag-Lloyd, both for the Gemini Cooperation India-Europe/Mediterranean loop and their standalone India-US East Coast services. With operations at Salalah suspended on Saturday due to a drone strike, although <a href="https://www.joc.com/article/drone-strike-closes-key-middle-east-transit-hub-of-salalah-6195094">gradually resuming from Tuesday</a>, Hapag-Lloyd has now positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim (Karachi) in Pakistan. The Niledutch Lion has an estimated time of arrival of April 9 in Karachi after a scheduled departure from India’s Mundra port on April 7, updated data shows. Hapag-Lloyd last year halted calls to Karachi following the country-to-country trade restrictions between India and Pakistan, and instead has been connecting Pakistan cargo via Salalah by using common feeder capacity. Maersk did not immediately disclose its contingency plans for Indian regional transshipment affected by the Salalah shutdown. All the vessels deployed on the Gemini India-Europe loop, known as the ME1 for Maersk and the IOS for Hapag-Lloyd, are from the Danish liner. <h3>Multi-modal solutions </h3>Meanwhile, ocean carriers are rapidly shifting from port-to-port shipping to <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">integrated regional multimodal solutions</a> to handle imports into the Middle East, an alternative supply chain model that industry observers believe could outlast the war as cargo interests seek reliability and resilience in the supply chain. Supporting that transformation, there have been a series of collaborative attempts by Persian Gulf states, including the United Arab Emirates, Oman and Saudi Arabia, to establish “land bridges” by trucking and/or “green corridors” through sea-land networks for cargo flows within the region. One example is a strategic partnership between the UAE’s Gulftainer and the Saudi Ports Authority (Mawani) to open alternative logistics links between Sharjah in the UAE and Dammam in Saudi Arabia. Additionally, Saudi Arabia is offering an extended 60-day free time for the storage of Gulf import/export containers in addition to implementing multiple regulatory relaxations, including raising the permitted operational age of trucks in the country from 20 years to 22 years. Major liners have also stepped up the evacuation of Middle East-bound containers rerouted to Indian ports. Hapag-Lloyd this week has a shuttle sailing from Nhava Sheva in West India to Fujairah in the UAE, with onward connections available for Jebel Ali by trucking. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Stop-and-start operations at Salalah Port in Oman are adding to the schedule challenges that had already forced major carriers on the Indian westbound trades to rework their network rotations in response to the Middle East crisis. Salalah remains a critical hub for Maersk and Hapag-Lloyd, both for the Gemini Cooperation India-Europe/Mediterranean loop and their standalone India-US East Coast services. With operations at Salalah suspended on Saturday due to a drone strike, although gradually resuming from Tuesday , Hapag-Lloyd has now positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim (Karachi) in Pakistan. The Niledutch Lion has an estimated time of arrival of April 9 in Karachi after a scheduled departure from India’s Mundra port on April 7, updated data shows. Hapag-Lloyd last year halted calls to Karachi following the country-to-country trade restrictions between India and Pakistan, and instead has been connecting Pakistan cargo via Salalah by using common feeder capacity. Maersk did not immediately disclose its contingency plans for Indian regional transshipment affected by the Salalah shutdown. All the vessels deployed on the Gemini India-Europe loop, known as the ME1 for Maersk and the IOS for Hapag-Lloyd, are from the Danish liner. Multi-modal solutions Meanwhile, ocean carriers are rapidly shifting from port-to-port shipping to integrated regional multimodal solutions to handle imports into the Middle East, an alternative supply chain model that industry observers believe could outlast the war as cargo interests seek reliability and resilience in the supply chain. Supporting that transformation, there have been a series of collaborative attempts by Persian Gulf states, including the United Arab Emirates, Oman and Saudi Arabia, to establish “land bridges” by trucking and/or “green corridors” through sea-land networks for cargo flows within the region. One example is a strategic partnership between the UAE’s Gulftainer and the Saudi Ports Authority (Mawani) to open alternative logistics links between Sharjah in the UAE and Dammam in Saudi Arabia. Additionally, Saudi Arabia is offering an extended 60-day free time for the storage of Gulf import/export containers in addition to implementing multiple regulatory relaxations, including raising the permitted operational age of trucks in the country from 20 years to 22 years. Major liners have also stepped up the evacuation of Middle East-bound containers rerouted to Indian ports. Hapag-Lloyd this week has a shuttle sailing from Nhava Sheva in West India to Fujairah in the UAE, with onward connections available for Jebel Ali by trucking. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

Salalah disruptions send carriers on Indian trades back to adding Pakistan calls

<div class="phx-topic abstract-wrapper">With big carriers “ferociously” integrating, those down the pecking order like smaller liners, neutral terminal operators and leasing companies have seen their market shrink and need to review strategy as a result, writes Jeremy Masters. </div>

With big carriers “ferociously” integrating, those down the pecking order like smaller liners, neutral terminal operators and leasing companies have seen their market shrink and need to review strategy as a result, writes Jeremy Masters.

<div class="phx-topic">Hapag-Lloyd’s potential acquisition of Zim Integrated Shipping Services has focused attention on what the relentless growth of the top carriers means for the industry. It is not just their size that is changing the structure of the industry, but also that the biggest carriers are aggressively acquiring terminals and the ships to run regional and feeder systems off those terminals. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6195791_0.1.jpg"></img></div>As the largest carriers ferociously vertically integrate, they are squeezing sectors in the industry that were previously vibrantly self-standing. Small and midsized carriers, neutral terminal operating companies, non-operating owners, third-party feeder companies, and leasing companies are all seeing erosion of their share and/or market (regionally, if not always globally) and need to review strategy. <h3>Increased size is not necessarily a solution </h3>One reaction for the rest of the industry is to scale up, but it’s not easy. If we take the arms race among carriers right now, Alphaliner indicates that Ocean Network Express (ONE) has an order book of 29% of its existing capacity. A sizeable amount, but even with a potential enhancement <a href="https://www.joc.com/article/one-boosts-ownership-stake-in-seaspan-parent-poseidon-6184045">per the latest press</a>, it may be only just enough to keep its sixth place given Evergreen’s 47% order book. Even if a midsized or smaller carrier has the means to raise its place in the capacity ranking, the structural increase in oversupply coming in the next three years means that it’s a dubious investment, especially in the big ship sizes. Indeed, the more that is further invested in building critical mass, the lower the likely return on capital for several years. If organic expansion is not a good short-/medium-term solution for keeping your place in the pecking order, then consolidation is an alternative, but there are not many obvious candidates for takeover — as illustrated in Hapag-Lloyd’s willingness to attempt a complicated <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">takeover of Zim</a>. Consortia have provided a concrete way for smaller carriers to punch above their weight, but the fallout from the 2M breakup was to create four east-west key sets of deployments rather than the previous three, which has contributed to structural overcapacity. The salvation for the top 10 carriers who lack fire power may ultimately be a combo of carrier and consortia consolidation with a return to three alliances in the east-west trades (counting Mediterranean Shipping Co. as an alliance) and/or expansion of the geography of alliances with some regional specialization. Of course, even if ocean salvation is achieved through consolidation, the smaller top 10 carriers will still have far less vertical integration than the bigger ones. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b329b55b-f24b-4c28-90ae-63ad99a09181"></dynamic-object></div>In the meantime, other suppliers to the carriers can also grow organically or consolidate to gain economies of scale, but if carriers are busy buying their competitor’s assets and driving business through the acquisitions, then this may not be effective. Sea-web, a sister product of the Journal of Commerce within S&amp;P Global, pegs Evergreen’s order book at 42% of existing capacity, with ONE at 27%. <h3>Retuning your business model </h3>Non-operating owners (NOOs) are an interesting case study because their share of the total fleet has been declining (as carriers swoop to buy some of their fleet), but charter rates are high and NOOs are profitable. Those at the top end such as Seaspan that are providing purchasing and technical expertise as well as the ability to take assets off the balance sheet with long-term charters are providing a service that suits carriers and thus have a strong sustainable model. Those NOOs that are focused purely on buying, selling and chartering smaller ships for shorter periods face a more volatile market. They have to calculate whether the sustained purchasing of their older stock by carriers means lower long-term demand or whether the current charter market, buoyed by inelasticity from these purchases and demand from system disruptions, is also a reflection of long-term strength in deep-sea, regional and feeder trades that these ships are used for. The order book of smaller players is comparatively modest versus current demand, and it could be expected that new efficient, alternative-fueled ships will be in strong long-term demand, including from those carriers currently focused on the secondhand market. What looks like a squeezed market could also be an opportunity. The “middle powers” could also consider new alliances. For example, NOO’s that are focused on the smaller, shorter-term end of the market could have a joint venture with a midsized liner operator or feeder carrier that is both an operating and asset play. The NOO buys secondhand ships in down cycles, leases them to their carrier partner at very competitive rates, and the carrier opportunistically finds a home for them. When secondhand ship rates increase, the partners enjoy the shared fruits of a profitable sale. Of course, if selling is the preferred option, it’s a good time to sell to a hungry predator. As things get tougher, they will be less inclined to splurge! Jeremy Masters is managing director of Shipping Masters. Contact him at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

Hapag-Lloyd’s potential acquisition of Zim Integrated Shipping Services has focused attention on what the relentless growth of the top carriers means for the industry. It is not just their size that is changing the structure of the industry, but also that the biggest carriers are aggressively acquiring terminals and the ships to run regional and feeder systems off those terminals. As the largest carriers ferociously vertically integrate, they are squeezing sectors in the industry that were previously vibrantly self-standing. Small and midsized carriers, neutral terminal operating companies, non-operating owners, third-party feeder companies, and leasing companies are all seeing erosion of their share and/or market (regionally, if not always globally) and need to review strategy. Increased size is not necessarily a solution One reaction for the rest of the industry is to scale up, but it’s not easy. If we take the arms race among carriers right now, Alphaliner indicates that Ocean Network Express (ONE) has an order book of 29% of its existing capacity. A sizeable amount, but even with a potential enhancement per the latest press , it may be only just enough to keep its sixth place given Evergreen’s 47% order book. Even if a midsized or smaller carrier has the means to raise its place in the capacity ranking, the structural increase in oversupply coming in the next three years means that it’s a dubious investment, especially in the big ship sizes. Indeed, the more that is further invested in building critical mass, the lower the likely return on capital for several years. If organic expansion is not a good short-/medium-term solution for keeping your place in the pecking order, then consolidation is an alternative, but there are not many obvious candidates for takeover — as illustrated in Hapag-Lloyd’s willingness to attempt a complicated takeover of Zim . Consortia have provided a concrete way for smaller carriers to punch above their weight, but the fallout from the 2M breakup was to create four east-west key sets of deployments rather than the previous three, which has contributed to structural overcapacity. The salvation for the top 10 carriers who lack fire power may ultimately be a combo of carrier and consortia consolidation with a return to three alliances in the east-west trades (counting Mediterranean Shipping Co. as an alliance) and/or expansion of the geography of alliances with some regional specialization. Of course, even if ocean salvation is achieved through consolidation, the smaller top 10 carriers will still have far less vertical integration than the bigger ones. In the meantime, other suppliers to the carriers can also grow organically or consolidate to gain economies of scale, but if carriers are busy buying their competitor’s assets and driving business through the acquisitions, then this may not be effective. Sea-web, a sister product of the Journal of Commerce within S&P Global, pegs Evergreen’s order book at 42% of existing capacity, with ONE at 27%. Retuning your business model Non-operating owners (NOOs) are an interesting case study because their share of the total fleet has been declining (as carriers swoop to buy some of their fleet), but charter rates are high and NOOs are profitable. Those at the top end such as Seaspan that are providing purchasing and technical expertise as well as the ability to take assets off the balance sheet with long-term charters are providing a service that suits carriers and thus have a strong sustainable model. Those NOOs that are focused purely on buying, selling and chartering smaller ships for shorter periods face a more volatile market. They have to calculate whether the sustained purchasing of their older stock by carriers means lower long-term demand or whether the current charter market, buoyed by inelasticity from these purchases and demand from system disruptions, is also a reflection of long-term strength in deep-sea, regional and feeder trades that these ships are used for. The order book of smaller players is comparatively modest versus current demand, and it could be expected that new efficient, alternative-fueled ships will be in strong long-term demand, including from those carriers currently focused on the secondhand market. What looks like a squeezed market could also be an opportunity. The “middle powers” could also consider new alliances. For example, NOO’s that are focused on the smaller, shorter-term end of the market could have a joint venture with a midsized liner operator or feeder carrier that is both an operating and asset play. The NOO buys secondhand ships in down cycles, leases them to their carrier partner at very competitive rates, and the carrier opportunistically finds a home for them. When secondhand ship rates increase, the partners enjoy the shared fruits of a profitable sale. Of course, if selling is the preferred option, it’s a good time to sell to a hungry predator. As things get tougher, they will be less inclined to splurge! Jeremy Masters is managing director of Shipping Masters. Contact him at jeremy@shippingmastershk.com .

Industry faces trickle down pivot as largest ocean carriers continue to grow 

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