<div class="phx-topic abstract-wrapper">THE SPRATLYS, a cluster of islands and reefs in the South China Sea, have long loomed as a potential</div>

THE SPRATLYS, a cluster of islands and reefs in the South China Sea, have long loomed as a potential

<div>THE SPRATLYS, a cluster of islands and reefs in the South China Sea, have long loomed as a potential flash point in Asia, as China, Taiwan, the Philippines,Vietnam and several other nations have made conflicting claims to the land.But as capitalism spreads in Asia, and particularly in China, territorial wars are less likely, says Philippine Foreign Secretary Domingo Siazon. Asian nations are far too busy with business to waste money and time on such disputes, he told Reuters this week.How so? Asia's emerging market economies depend on strong trade ties with their neighbors to raise living standards. In the post...

THE SPRATLYS, a cluster of islands and reefs in the South China Sea, have long loomed as a potential flash point in Asia, as China, Taiwan, the Philippines, Vietnam and several other nations have made conflicting claims to the land. But as capitalism spreads in Asia, and particularly in China, territorial wars are less likely, says Philippine Foreign Secretary Domingo Siazon. Asian nations are far too busy with business to waste money and time on such disputes, he told Reuters this week.How so? Asia's emerging market economies depend on strong trade ties with their neighbors to raise living standards. In the post Cold War period, expanding markets has come to count for more than conquering territory. ''Capitalism is a malady which, once acquired, is never gotten rid of," he said. "But it's a good malady."

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<div class="phx-topic abstract-wrapper">Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people.</div>

Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people.

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<div class="phx-topic">The trade deal hammered out between the UK and the European Union is being hailed by business groups and the logistics industry as a positive step towards reducing border frictions that have been in place since Britain formally left the EU in 2020. But even as the ink dries on the EU-UK Trade and Cooperation Agreement signed Monday, business leaders are urging both sides to ensure the streamlined cross-border measures agreed to are implemented in full. “It is now down to government to work out the most practical solutions,” Steve Parker, director-general of the British International Freight Association (BIFA), said in a statement. “We hope that the announcement will significantly simplify border processes and consequently contribute to increased volumes of goods traded between the UK and the EU,” he added. A statement from the UK’s Port of Dover, which handles one-third of all UK-EU trade volume, said it will be working with the governments of the UK, France and the European Commission “to implement this deal effectively and maximize shared prosperity [on] either side of the English Channel.” “An improvement in border processes will not only restore confidence for businesses and investors but also drive economic growth and supply chain resilience, and we are pleased to see these objectives recognized in [the] agreement,” the port noted. <h3>Removing trade barriers </h3>Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people. But the agreement has left industry optimistic that barriers to trade have been removed. Helen Dickinson, CEO of the British Retail Consortium, said the deal would benefit retail businesses and consumers in both the UK and continental Europe. “As well as supporting growth for exporters to the UK’s biggest export market, retailers operating in the EU will also see a huge reduction in the unnecessary processes, paperwork and administrative burden when exporting goods, supporting our competitiveness abroad,” Dickinson said in a statement Tuesday. <h3>Eliminating food inspections </h3>A key part of the UK-EU agreement is a plan to establish a UK-EU Sanitary and Phytosanitary Zone that will remove routine border checks on agri-food products. British goods such as dairy, fish, eggs and red meat currently require checks of all paperwork and up to 30% physical checks. The Sanitary and Phytosanitary deal will remove these checks entirely, which Parker said will cut costs, complexities and delays that are disrupting trade flows between the two trading bodies. “BIFA members, and the importers and exporters they serve, will be breathing a sigh of relief following practical commitments to improve regulatory cooperation,” Parker said. Dickinson agreed, noting that the removal of border checks for agri-food will be good news for retailers and consumers on both sides of the channel, streamlining border processes, lowering costs and improving the speed and reliability of food imports. Data from consultancy MDS Intermodal shows that UK imports of fresh produce in tonnes, particularly fruit and vegetables, have fallen 17% since 2017, with a switch away from the EU as a source of fresh produce to non-EU and Mediterranean sources. Also agreed Monday was the linking of the UK and EU emissions trading schemes. Following Brexit, the UK could no longer participate in the <a href="https://www.joc.com/article/european-parliament-approves-shipping-ets-but-stakeholders-wary-5202492">EU Emissions Trading System</a> (ETS) and had to establish its own smaller and more volatile trading scheme. A UK government statement said linking the two measures would create a more stable market and allow the UK to avoid being charged under the EU Carbon Border Adjustment Mechanism (CBAM), a policy aimed at ensuring imported carbon-intensive goods face similar carbon costs as those produced within the EU. CBAM is in a transitional phase and will be implemented next year. The deal with the EU is the third major trade agreement reached by the UK in the past month following deals with India and the US. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The trade deal hammered out between the UK and the European Union is being hailed by business groups and the logistics industry as a positive step towards reducing border frictions that have been in place since Britain formally left the EU in 2020. But even as the ink dries on the EU-UK Trade and Cooperation Agreement signed Monday, business leaders are urging both sides to ensure the streamlined cross-border measures agreed to are implemented in full. “It is now down to government to work out the most practical solutions,” Steve Parker, director-general of the British International Freight Association (BIFA), said in a statement. “We hope that the announcement will significantly simplify border processes and consequently contribute to increased volumes of goods traded between the UK and the EU,” he added. A statement from the UK’s Port of Dover, which handles one-third of all UK-EU trade volume, said it will be working with the governments of the UK, France and the European Commission “to implement this deal effectively and maximize shared prosperity [on] either side of the English Channel.” “An improvement in border processes will not only restore confidence for businesses and investors but also drive economic growth and supply chain resilience, and we are pleased to see these objectives recognized in [the] agreement,” the port noted. Removing trade barriers Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people. But the agreement has left industry optimistic that barriers to trade have been removed. Helen Dickinson, CEO of the British Retail Consortium, said the deal would benefit retail businesses and consumers in both the UK and continental Europe. “As well as supporting growth for exporters to the UK’s biggest export market, retailers operating in the EU will also see a huge reduction in the unnecessary processes, paperwork and administrative burden when exporting goods, supporting our competitiveness abroad,” Dickinson said in a statement Tuesday. Eliminating food inspections A key part of the UK-EU agreement is a plan to establish a UK-EU Sanitary and Phytosanitary Zone that will remove routine border checks on agri-food products. British goods such as dairy, fish, eggs and red meat currently require checks of all paperwork and up to 30% physical checks. The Sanitary and Phytosanitary deal will remove these checks entirely, which Parker said will cut costs, complexities and delays that are disrupting trade flows between the two trading bodies. “BIFA members, and the importers and exporters they serve, will be breathing a sigh of relief following practical commitments to improve regulatory cooperation,” Parker said. Dickinson agreed, noting that the removal of border checks for agri-food will be good news for retailers and consumers on both sides of the channel, streamlining border processes, lowering costs and improving the speed and reliability of food imports. Data from consultancy MDS Intermodal shows that UK imports of fresh produce in tonnes, particularly fruit and vegetables, have fallen 17% since 2017, with a switch away from the EU as a source of fresh produce to non-EU and Mediterranean sources. Also agreed Monday was the linking of the UK and EU emissions trading schemes. Following Brexit, the UK could no longer participate in the EU Emissions Trading System (ETS) and had to establish its own smaller and more volatile trading scheme. A UK government statement said linking the two measures would create a more stable market and allow the UK to avoid being charged under the EU Carbon Border Adjustment Mechanism (CBAM), a policy aimed at ensuring imported carbon-intensive goods face similar carbon costs as those produced within the EU. CBAM is in a transitional phase and will be implemented next year. The deal with the EU is the third major trade agreement reached by the UK in the past month following deals with India and the US. Contact Greg Knowler at greg.knowler@spglobal.com .

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Forwarding

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UK-EU trade deal designed to ease Brexit-driven border frictions

<div class="phx-topic abstract-wrapper">Under their current configuration, the newest round of tariffs targeting China’s maritime industry will add $7 billion in costs for US ports, according to one estimate. </div>

Under their current configuration, the newest round of tariffs targeting China’s maritime industry will add $7 billion in costs for US ports, according to one estimate.

<div class="phx-topic">US ports face almost $7 billion in tariff costs under the Trump administration’s proposed levy on Chinese container cranes, according to the American Association of Port Authorities (AAPA), which has joined other stakeholders in calling for a delay to allow a domestic crane industry to develop before cutting China out of the market.AAPA delivered the estimate in prepared comments ahead of a hearing on Monday on the new tariffs at the United States Trade Representative (USTR). The USTR in April unveiled the proposed tariffs on Chinese-made cranes, containers, chassis and similar equipment as part of its one-year-old investigation into China’s dominant market share of the maritime, logistics and shipbuilding industries. The investigation, begun under the Biden administration at the request of several US trade and manufacturing unions, has already resulted in <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">a new tariff</a> to be assessed on Chinese ships and ocean carriers calling the US beginning in October. AAPA said 44 of the 55 cranes currently on order by US ports are being made in China. Over the next 10 years, US ports need to purchase another 151 container cranes, with 121 of those due to come from China, AAPA said. Those current and future orders total about $2.5 billion, AAPA said. If the tariffs on container equipment — up to 100% — are added to existing tariffs on Chinese imports, US ports will pay $6.7 billion in tariffs, according to the group. As an example, AAPA said the Port of Houston is scheduled to receive eight cranes from Shanghai Zhenhua Heavy Industries (ZPMC), China’s leading manufacturer, in the spring of 2026. Houston would be forced to pay $304 million in tariffs on that order if the fees are imposed, AAPA said, adding “that means over $300 million not invested in infrastructure projects at one of the nation’s largest ports.” AAPA asked that any cranes ordered before April be exempt from the tariffs. “American ports need these cranes now, but they simply cannot afford [the] unexpected costs,” AAPA said. “They cannot back out of these purchases.” <h3>‘Significant strain’</h3>The Port Authority of New York and New Jersey said its marine terminal operators, which have over 70 cranes, are currently planning to purchase more. With ZPMC the source for over half of the port’s cranes, the tariffs would “result in a significant strain on the local and national maritime industry,” the port said.Even if a port did not contract with ZPMC, orders with other crane manufacturers in Europe and Asia would also likely face the tariffs because part of their manufacturing is done in China or uses Chinese components, the National Association of Waterfront Employers (NAWE) said in its prepared comments to the USTR.While the Biden administration earmarked $20 billion in incentives last year for developing US crane manufacturing, AAPA and NAWE said that effort will take a long time to develop due to the lack of skilled welders and the reliance on Chinese manufacturers for subassemblies and other crane components. Both groups urged the USTR to delay the implementation by two to three years to allow a US-based crane industry to develop. “Currently, existing suppliers have a lead time of about two years for new orders of STS cranes,” AAPA said. “We can therefore assume that it will take at least that long for the first American STS cranes to roll off the assembly line, and that is if final investment decisions in new factories were made today.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ports face almost $7 billion in tariff costs under the Trump administration’s proposed levy on Chinese container cranes, according to the American Association of Port Authorities (AAPA), which has joined other stakeholders in calling for a delay to allow a domestic crane industry to develop before cutting China out of the market. AAPA delivered the estimate in prepared comments ahead of a hearing on Monday on the new tariffs at the United States Trade Representative (USTR). The USTR in April unveiled the proposed tariffs on Chinese-made cranes, containers, chassis and similar equipment as part of its one-year-old investigation into China’s dominant market share of the maritime, logistics and shipbuilding industries. The investigation, begun under the Biden administration at the request of several US trade and manufacturing unions, has already resulted in a new tariff to be assessed on Chinese ships and ocean carriers calling the US beginning in October. AAPA said 44 of the 55 cranes currently on order by US ports are being made in China. Over the next 10 years, US ports need to purchase another 151 container cranes, with 121 of those due to come from China, AAPA said. Those current and future orders total about $2.5 billion, AAPA said. If the tariffs on container equipment — up to 100% — are added to existing tariffs on Chinese imports, US ports will pay $6.7 billion in tariffs, according to the group. As an example, AAPA said the Port of Houston is scheduled to receive eight cranes from Shanghai Zhenhua Heavy Industries (ZPMC), China’s leading manufacturer, in the spring of 2026. Houston would be forced to pay $304 million in tariffs on that order if the fees are imposed, AAPA said, adding “that means over $300 million not invested in infrastructure projects at one of the nation’s largest ports.” AAPA asked that any cranes ordered before April be exempt from the tariffs. “American ports need these cranes now, but they simply cannot afford [the] unexpected costs,” AAPA said. “They cannot back out of these purchases.” ‘Significant strain’ The Port Authority of New York and New Jersey said its marine terminal operators, which have over 70 cranes, are currently planning to purchase more. With ZPMC the source for over half of the port’s cranes, the tariffs would “result in a significant strain on the local and national maritime industry,” the port said. Even if a port did not contract with ZPMC, orders with other crane manufacturers in Europe and Asia would also likely face the tariffs because part of their manufacturing is done in China or uses Chinese components, the National Association of Waterfront Employers (NAWE) said in its prepared comments to the USTR. While the Biden administration earmarked $20 billion in incentives last year for developing US crane manufacturing, AAPA and NAWE said that effort will take a long time to develop due to the lack of skilled welders and the reliance on Chinese manufacturers for subassemblies and other crane components. Both groups urged the USTR to delay the implementation by two to three years to allow a US-based crane industry to develop. “Currently, existing suppliers have a lead time of about two years for new orders of STS cranes,” AAPA said. “We can therefore assume that it will take at least that long for the first American STS cranes to roll off the assembly line, and that is if final investment decisions in new factories were made today.” Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

Marine terminals

North American ports

Ports look to delay proposed US tariffs on Chinese-made cranes

<div class="phx-topic abstract-wrapper">The Zim Central China Xpress will restart next week, little more than a month after Zim announced its suspension as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network.</div>

The Zim Central China Xpress will restart next week, little more than a month after Zim announced its suspension as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network.

<div class="phx-topic">Zim Integrated Shipping Services is relaunching a suspended service from China to Los Angeles due to the demand revival amid the 90-day pause in the tariff spat between Washington and Beijing but has nonetheless downgraded its volume expectations for the trans-Pacific trade. The Zim Central China Xpress, connecting Los Angeles with Ningo and Shanghai, will restart next week, the carrier said Monday, little more than a month after Zim announced its suspension on April 22 as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network. Zim’s volumes from China halved after President Donald Trump on April 9 announced 145% tariffs on Beijing, although an influx of imports from Vietnam and Thailand helped mitigate the plunge. The sudden decline in US import booking has spurred Zim to downgrade its 2025 outlook for growth on the trans-Pacific to low single digits compared with its original forecast of high-single-digit growth. The market is at the highest level of uncertainty in recent memory, and the health of volumes for the rest of the year hinges on the extent of US tariffs on Chinese imports, Zim CEO Xavier Destriau told the Journal of Commerce. While there is a threat that a rebound in imports from China could overwhelm US West Coast ports, Destriau said the US marine terminals Zim is calling are fluid. “But at some point, there is a risk of port congestion, if indeed, there is a surge in volume and a surge of capacity potentially also being redeployed due to newly recovered attractiveness of the trade,” he said. The frontloading of cargo by US importers in the first quarter in anticipation of higher US tariffs pushed up Zim’s first-quarter volume 12% year over year. Net income tripled to $296 million while revenue jumped 28%. Acknowledging that its fleet was more exposed than other carriers to a coming US tax on Chinese tonnage, Zim said it would swap out Chinese-built ships from the US trades before the new fees are implemented in October. CMA CGM <a href="https://www.joc.com/article/cma-cgm-fleet-will-not-need-to-pay-chinese-tonnage-tax-cfo-6006026">on Friday said it would take a similar tactic</a>. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Zim Integrated Shipping Services is relaunching a suspended service from China to Los Angeles due to the demand revival amid the 90-day pause in the tariff spat between Washington and Beijing but has nonetheless downgraded its volume expectations for the trans-Pacific trade. The Zim Central China Xpress, connecting Los Angeles with Ningo and Shanghai, will restart next week, the carrier said Monday, little more than a month after Zim announced its suspension on April 22 as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network. Zim’s volumes from China halved after President Donald Trump on April 9 announced 145% tariffs on Beijing, although an influx of imports from Vietnam and Thailand helped mitigate the plunge. The sudden decline in US import booking has spurred Zim to downgrade its 2025 outlook for growth on the trans-Pacific to low single digits compared with its original forecast of high-single-digit growth. The market is at the highest level of uncertainty in recent memory, and the health of volumes for the rest of the year hinges on the extent of US tariffs on Chinese imports, Zim CEO Xavier Destriau told the Journal of Commerce. While there is a threat that a rebound in imports from China could overwhelm US West Coast ports, Destriau said the US marine terminals Zim is calling are fluid. “But at some point, there is a risk of port congestion, if indeed, there is a surge in volume and a surge of capacity potentially also being redeployed due to newly recovered attractiveness of the trade,” he said. The frontloading of cargo by US importers in the first quarter in anticipation of higher US tariffs pushed up Zim’s first-quarter volume 12% year over year. Net income tripled to $296 million while revenue jumped 28%. Acknowledging that its fleet was more exposed than other carriers to a coming US tax on Chinese tonnage, Zim said it would swap out Chinese-built ships from the US trades before the new fees are implemented in October. CMA CGM on Friday said it would take a similar tactic . Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

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Container Shipping News

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Container lines

Zim restarts China-Los Angeles service to capture fresh import demand

<div class="phx-topic abstract-wrapper">Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.</div>

Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.

<div class="phx-topic">A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it is needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines like HMM.” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, and was causing lengthy delays and port omissions on some long-haul and intra-Asia services. <h3>Congestion stretches throughout Asia </h3>Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia, where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">it had seen an increase of more than 50% in China-US cargo bookings</a> since the two countries signed a preliminary trade deal slashing tariffs for 90 days following meetings on May 11–12. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it is needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines like HMM.” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, and was causing lengthy delays and port omissions on some long-haul and intra-Asia services. Congestion stretches throughout Asia Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia, where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday it had seen an increase of more than 50% in China-US cargo bookings since the two countries signed a preliminary trade deal slashing tariffs for 90 days following meetings on May 11–12. Contact Keith Wallis at keithwallis@hotmail.com .

US tariff-linked cargo rush causes port congestion, box shortages in China

<div class="phx-topic abstract-wrapper">Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.</div>

Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.

<div class="phx-topic">Tariff battles and port call penalty fees could be the least of the breakbulk and project cargo sector’s worries if two pieces of more impactful proposed legislation work their way through the legislative process.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6006944_0.1.jpg"></img></div>Amid the scramble to make sense of now partially-relaxed US import tariffs and the US Trade Representative’s (USTR’s) planned fees on Chinese ships calling US ports, industry stakeholders have overlooked a key detail of the recently reintroduced Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, according to an engineering, procurement and construction (EPC) source who asked not to be identified.The SHIPS Act, reintroduced to Congress April 30 by Sens. Mark Kelly (D-Ariz.), Todd Young (R-Ind.), John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), aims to expand the US-flag international fleet by 250 ships in 10 years, enhance US competitiveness and make investments in the maritime workforce. But according to the EPC source, the proposed legislation threatens to restore a provision in the USTR port fees that would punish operators with vessels on order at Chinese shipyards, a provision from which multipurpose vessels (MPVs) were thought to be exempt.The SHIPS Act would create a penalty tax for ships operated by Chinese carriers or built in China, as well as non-Chinese operators that order at foreign shipyards of concern. The tax is set at $5 per ton for ships owned or operated by a “foreign country of concern,” vessels registered there, or vessels registered there three years prior to “the date of the determination of the application.” An owner or operator not based in China would be subject to the tax if 50% or more of its vessel orders were placed with a shipyard of concern at the time the law goes into effect, or if 50% of its newbuild deliveries in the 24 months after enactment are from a designated yard.For a non-Chinese owner or operator with between 25% and 49% of its ships on order at or delivered by a shipyard of concern within 24 months of the effective date, the penalty would be $3.50 per ton. In addition, any owner or operator that had 50% or more of its ships constructed or undergoing repairs at a shipyard of concern “at any time” during the three years preceding the imposition of the law would be subject to a $1.25-per-ton fee.<h3>Industry could take a hit</h3>Given that these penalties would be on top of the previously announced USTR port fees, the bill would “have huge ramifications for the industry” if passed into law as currently written, the EPC source said, noting that it is generally much more difficult to reverse a law than, for example, an executive order on tariffs or a USTR measure.“After it has passed into law, the chance of it being repealed is pretty remote,” they said. “I can’t remember the last time an act was repealed in the US.”The 2025 reintroduction of the SHIPS Act has been referred to 12 committees, including the Committee on Armed Services, the Committees on Transportation and Infrastructure, and the Committee on Energy and Commerce. The previous version of the proposed act did not progress beyond the committee review stage.Also flying under the radar as it maneuvers through the legislative process is the American Cargo for American Ships Act. If enacted, that bill would require all work contracted by the Department of Transportation to be carried out by US-flag vessels, up from a current requirement of 50%, effectively shutting out non-US-flag MPVs from all government-funded energy and defense projects.Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Tariff battles and port call penalty fees could be the least of the breakbulk and project cargo sector’s worries if two pieces of more impactful proposed legislation work their way through the legislative process. Amid the scramble to make sense of now partially-relaxed US import tariffs and the US Trade Representative’s (USTR’s) planned fees on Chinese ships calling US ports, industry stakeholders have overlooked a key detail of the recently reintroduced Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, according to an engineering, procurement and construction (EPC) source who asked not to be identified. The SHIPS Act, reintroduced to Congress April 30 by Sens. Mark Kelly (D-Ariz.), Todd Young (R-Ind.), John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), aims to expand the US-flag international fleet by 250 ships in 10 years, enhance US competitiveness and make investments in the maritime workforce. But according to the EPC source, the proposed legislation threatens to restore a provision in the USTR port fees that would punish operators with vessels on order at Chinese shipyards, a provision from which multipurpose vessels (MPVs) were thought to be exempt. The SHIPS Act would create a penalty tax for ships operated by Chinese carriers or built in China, as well as non-Chinese operators that order at foreign shipyards of concern. The tax is set at $5 per ton for ships owned or operated by a “foreign country of concern,” vessels registered there, or vessels registered there three years prior to “the date of the determination of the application.” An owner or operator not based in China would be subject to the tax if 50% or more of its vessel orders were placed with a shipyard of concern at the time the law goes into effect, or if 50% of its newbuild deliveries in the 24 months after enactment are from a designated yard. For a non-Chinese owner or operator with between 25% and 49% of its ships on order at or delivered by a shipyard of concern within 24 months of the effective date, the penalty would be $3.50 per ton. In addition, any owner or operator that had 50% or more of its ships constructed or undergoing repairs at a shipyard of concern “at any time” during the three years preceding the imposition of the law would be subject to a $1.25-per-ton fee. Industry could take a hit Given that these penalties would be on top of the previously announced USTR port fees, the bill would “have huge ramifications for the industry” if passed into law as currently written, the EPC source said, noting that it is generally much more difficult to reverse a law than, for example, an executive order on tariffs or a USTR measure. “After it has passed into law, the chance of it being repealed is pretty remote,” they said. “I can’t remember the last time an act was repealed in the US.” The 2025 reintroduction of the SHIPS Act has been referred to 12 committees, including the Committee on Armed Services, the Committees on Transportation and Infrastructure, and the Committee on Energy and Commerce. The previous version of the proposed act did not progress beyond the committee review stage. Also flying under the radar as it maneuvers through the legislative process is the American Cargo for American Ships Act. If enacted, that bill would require all work contracted by the Department of Transportation to be carried out by US-flag vessels, up from a current requirement of 50%, effectively shutting out non-US-flag MPVs from all government-funded energy and defense projects. Contact Carly Fields at carly.fields@spglobal.com .

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

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Shippers save money, time with automated transportation bidding tools

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

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