<div class="phx-topic abstract-wrapper">On-time performance to the West Coast improved during the busiest month of 2023 for Asian imports to date, but East Coast reliability took a dip. </div>

On-time performance to the West Coast improved during the busiest month of 2023 for Asian imports to date, but East Coast reliability took a dip.

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<div>Trans-Pacific services mostly saw better on-time performance in September even as imports from Asia hit a 2023 peak to date. The better performance came as shippers had more capacity available to them due to fewer canceled sailings for the month, but ongoing draft restrictions on the Panama Canal may be taking a bite out of reliability for the US East Coast. Sea-Intelligence Maritime Analysis’ latest Global Liner Performance report showed weekly services from Asia to the US West Coast arrived on schedule 47.8% of the time in September, up from 44.6% in August and 32% in the year-ago month. Off-schedule...

Trans-Pacific services mostly saw better on-time performance in September even as imports from Asia hit a 2023 peak to date. The better performance came as shippers had more capacity available to them due to fewer canceled sailings for the month, but ongoing draft restrictions on the Panama Canal may be taking a bite out of reliability for the US East Coast. Sea-Intelligence Maritime Analysis’ latest Global Liner Performance report showed weekly services from Asia to the US West Coast arrived on schedule 47.8% of the time in September, up from 44.6% in August and 32% in the year-ago month. Off-schedule arrivals to the US West Coast were about 4.5 days late, Sea-Intelligence data showed. September’s carrier performance came amid the first year-on-year growth in monthly container volumes from Asia to the West Coast for 2023. Container volumes from Northeast and Southeast Asia to the West Coast reached a combined 870,223 TEUs for September, according to PIERS, a sister product of the Journal of Commerce within S&P Global, a 12.8% increase from September 2022. Overall, total US imports from Asia hit 1.5 million TEUs in September, up 1.4% from the year-ago month. Shippers are returning to the US West Coast now that a new six-year longshore worker contract is in place and as a hedge against any potential delays due to Panama Canal draft limits. Ocean carriers responded to the call for more vessel space to the West Coast by loosening capacity. After canceling some 338,561 TEUs in sailings from Asia to the West Coast during July, some 22.5% of total capacity, ocean carriers only canceled, or “blanked,” 235,179 TEUs in September, just over 16% of total capacity, according to Sea-Intelligence. Among carrier alliances, the Ocean Alliance stood out for the highest reliability in September to the West Coast. Vessels in the Ocean Alliance were within a day of their scheduled arrival 56.1% of the time, Sea-Intelligence data shows, up from 47.7% in August. THE Alliance reached 33.9% for on-time arrivals in September, up from 33.3% in August. The 2M Alliance saw on-time arrivals tick up to 33.3%, from 27.3%. US East Coast reliability dips The gain in US West Coast on-time arrivals offset a slight drop for the US East Coast, which saw on-time vessel arrivals for September fall to 38.7% from 39.4% in August. Sea-Intelligence did not outline a reason for the decline. However, on-time arrivals have been below 40% since the imposition of draft limits and restrictions on ship transits along the Panama Canal over July and August . There have not been significant delays due to the Canal restrictions. But CMA CGM, for one, has diverted some trans-Pacific freight destined for the US East and Gulf coasts through Mexico due to the restrictions. While congestion is no longer an issue at US ports, it popped up occasionally during the third quarter. The Port of Savannah saw a backlog of up to 16 ships at one point waiting to unload due to berth closures stemming from new crane installations at the port. Vessels arriving in Savannah were facing berth delays of over seven days in September, according to vessel tracking service Gnosis Freight, up from just over four days in August. October arrivals to the US East Coast saw similar delays of 7.7 days on average, according to Gnosis data. The US West Coast saw delays of 5.4 days on average, while Gulf Coast delays were 6.5 days. Contact Michael Angell at michael.angell@ihsmarkit.com and follow him on Twitter at @michael_angell.

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USWC-bound ships boost reliability in September amid cargo push

<div class="phx-topic abstract-wrapper">The Global Port Tracker now projects US imports this month will hit 2.31 million TEUs, up 14% from the same month a year ago; last month’s report expected the year-over-year increase for September to be 6.5%. </div>

The Global Port Tracker now projects US imports this month will hit 2.31 million TEUs, up 14% from the same month a year ago; last month’s report expected the year-over-year increase for September to be 6.5%.

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<div class="phx-topic">US retailers have significantly upgraded their forecast for US imports in September as shippers look to frontload cargo ahead of a threatened strike on Oct. 1 by dockworkers along the East and Gulf coasts. And while August’s numbers from the Global Port Tracker (GPT) are not yet final, retailers project that US imports last month came in at 2.37 million TEUs, up almost 21% year over year and the highest since the record of 2.4 million TEUs in May 2022. GPT, published by the National Retail Federation (NRF) and Hackett Associates, now projects US imports this month will hit 2.31 million TEUs, up 14% from the same month one year ago. Last month’s GPT expected the year-over-year increase for September to be 6.5%. “Many retailers have brought cargo in early and shifted to alternate ports as a precaution, but it is vital that labor and management at East Coast and Gulf Coast ports actually sit down at the negotiating table and bargain in good faith for a new contract so we can avoid a disruption of any kind when their contract expires,” Jonathan Gold, the NRF’s vice president for Supply Chain and Customs Policy, said in a statement Monday. Ocean carriers and marine terminal <a href="https://www.joc.com/article/port-employers-urge-ila-to-return-to-contract-talks-5723976">operators have called on the International Longshoremen’s Association (ILA) to reopen contract talks</a>, but acknowledged pessimism about avoiding a shutdown on Oct. 1 that would cripple ports along the East and Gulf coasts. The current ILA contract expires Sept. 30. “A strike would be another blow to the supply chain as it continues to face challenges, and to the nation’s economy at a time when inflation is finally coming down and the Fed is poised to lower interest rates,” Gold said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="57ed83f5-70e1-4b4d-92e1-7697aa830148"></dynamic-object></div>The big upgrade for September’s imports came as fresh data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global, showed that US imports from Asia in August came in at 1.71 million TEUs, down slightly from July but still up 18.5% year over year. West Coast import volumes from Asia were up more than 22.2% through the first eight months of 2024, while volumes into the East Coast grew 9.8% and Gulf imports rose 8.3%. If the GPT forecasts prove correct, it will mean that 2024 will have had seven consecutive months of import levels at or above 2 million TEUs — the longest such stretch since a 19-month period during the height of the pandemic. The projections would bring total US imports for 2024 to just under 25 million TEUs, a 12.3% increase from 2023. While demand has been resilient, <a href="https://www.joc.com/article/carriers-to-deploy-extra-loaders-to-los-angeles-long-beach-amid-import-surge-5714861">new capacity deployments</a> have pulled down spot rates to the West Coast but have since leveled. Comparatively, <a href="https://www.joc.com/article/east-coast-spot-rates-plunge-as-peak-season-imports-shift-to-west-coast-5723993">East Coast spot rates plunged faster than usual on the trade lane.</a>Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

US retailers have significantly upgraded their forecast for US imports in September as shippers look to frontload cargo ahead of a threatened strike on Oct. 1 by dockworkers along the East and Gulf coasts. And while August’s numbers from the Global Port Tracker (GPT) are not yet final, retailers project that US imports last month came in at 2.37 million TEUs, up almost 21% year over year and the highest since the record of 2.4 million TEUs in May 2022. GPT, published by the National Retail Federation (NRF) and Hackett Associates, now projects US imports this month will hit 2.31 million TEUs, up 14% from the same month one year ago. Last month’s GPT expected the year-over-year increase for September to be 6.5%. “Many retailers have brought cargo in early and shifted to alternate ports as a precaution, but it is vital that labor and management at East Coast and Gulf Coast ports actually sit down at the negotiating table and bargain in good faith for a new contract so we can avoid a disruption of any kind when their contract expires,” Jonathan Gold, the NRF’s vice president for Supply Chain and Customs Policy, said in a statement Monday. Ocean carriers and marine terminal operators have called on the International Longshoremen’s Association (ILA) to reopen contract talks , but acknowledged pessimism about avoiding a shutdown on Oct. 1 that would cripple ports along the East and Gulf coasts. The current ILA contract expires Sept. 30. “A strike would be another blow to the supply chain as it continues to face challenges, and to the nation’s economy at a time when inflation is finally coming down and the Fed is poised to lower interest rates,” Gold said. The big upgrade for September’s imports came as fresh data from PIERS, a sister product of the Journal of Commerce within S&P Global, showed that US imports from Asia in August came in at 1.71 million TEUs, down slightly from July but still up 18.5% year over year. West Coast import volumes from Asia were up more than 22.2% through the first eight months of 2024, while volumes into the East Coast grew 9.8% and Gulf imports rose 8.3%. If the GPT forecasts prove correct, it will mean that 2024 will have had seven consecutive months of import levels at or above 2 million TEUs — the longest such stretch since a 19-month period during the height of the pandemic. The projections would bring total US imports for 2024 to just under 25 million TEUs, a 12.3% increase from 2023. While demand has been resilient, new capacity deployments have pulled down spot rates to the West Coast but have since leveled. Comparatively, East Coast spot rates plunged faster than usual on the trade lane. Contact Laura Robb at laura.robb@spglobal.com .

Port News

Maritime

US retailers give big upgrade to September import forecast amid strike threat

<div class="phx-topic abstract-wrapper">The revised service plan from partners Hapag-Lloyd and Maersk includes scenarios via both the Cape of Good Hope and Suez Canal, with a decision due next month on which option will be chosen when the alliance launches in February.</div>

The revised service plan from partners Hapag-Lloyd and Maersk includes scenarios via both the Cape of Good Hope and Suez Canal, with a decision due next month on which option will be chosen when the alliance launches in February.

<div class="phx-topic">Ports in Asia are among the winners, regaining direct calls on several services, in the Gemini Cooperation’s updated service network released Tuesday that offers shippers alternative routings via the Cape of Good Hope and the Suez Canal. The new network was announced <a href="https://www.joc.com/article/fmc-wont-block-gemini-alliance-but-vows-tight-monitoring-5724939">a day after the US Federal Maritime Commission said the Maersk/Hapag-Lloyd partnership agreement took effect</a> following a lengthy assessment period. The revised Gemini network also came <a href="https://www.joc.com/article/msc-strikes-asia-europe-slot-share-with-former-thea-members-5723585">a day after the new Premier Alliance created by soon-to-be former THE Alliance carriers</a>, plus Mediterranean Shipping Co. as a slot charter partner, announced its February 2025 service schedule. That schedule also gave Suez and southern Africa routings, but focused on direct port-to-port calls instead of Gemini’s hub-and-spoke approach. Gemini said Tuesday it will announce next month whether the Cape of Good Hope or Suez Canal option would be used when the alliance is formally launched next February. The carriers said the alternative Cape of Good Hope network around southern Africa was released “due to the ongoing disruptions in the Red Sea.” The Suez Canal-based network would provide 27 mainline and 30 shuttle services using a combined fleet of 300 ships totaling 3.4 million TEUs on seven east-west trades covering Asia-US, Asia-North Europe, Asia-Mediterranean, Asia-Middle East, Middle East-India, Europe and the trans-Atlantic. By comparison, the Cape of Good Hope network covers the same seven trades but involves 341 ships totaling 3.7 million TEUs deployed on 29 mainline and 30 shuttle services. The extra vessels deployed on the southern Africa routing provide “an indication of the capacity absorption from the Red Sea crisis,” Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, said in a LinkedIn post Tuesday. Jensen pointed out the Suez network has eight Asia-Europe services, whereas the Cape of Good Hope only has seven services, while the Suez routing has 10 Pacific services, one more than the Cape network. Hapag-Lloyd CEO Rolf Habben Jansen in August confirmed that tweaks were being made to the Gemini service network for “operational reasons.” <h3>Busan, Vung Tau regain hub status </h3>South Korea’s Busan and Vung Tau in southern Vietnam are the main beneficiaries in the new schedules, having won back hub status after being relegated to largely feeder ports when Gemini released its initial network last January. Busan has been included among the direct calls in revised schedules for six trans-Pacific services on both the Suez Canal and Cape of Good Hope options. Vung Tau has been added to three mainline trans-Pacific services via the Suez Canal, but just two on those operating via the Cape of Good Hope. But even in the new Gemini network, Busan will still lose all its existing mainline calls by Maersk and Hapag-Lloyd on Asia-Europe and Asia-Mediterranean services, instead relying on feeder services to Shanghai and Tanjung Pelepas via Qingdao. Another significant change is that Hong Kong has now been dropped completely from the Gemini network in the revised plan after it was downgraded to a feeder port in the January schedule. Instead, shippers will have to truck or barge cargo independently of the Gemini carriers if they want to connect with their services at Yantian. Hutchison Port Holdings has already anticipated a loss of cargo through Hong Kong’s Kwai Chung container terminals when some of Maersk’s and Hapag-Lloyd’s throughput currently handled in Hong Kong will shift to Yantian after the Gemini partnership starts. ”The clear winner from the announced new networks appears to be the shippers,” Jensen said in his LinkedIn post. “The networks are quite different in their design, hence offering a more diverse range of products to choose from.” But Peter Sand, chief analyst for rate benchmarking platform Xeneta, said carriers are likely more focused on efficiencies. ”While we hope for this to improve the service offerings to customers, we also realize that the carriers are optimizing their networks to operational fleet efficiency more than anything else,” Sand told the Journal of Commerce Tuesday. ”As I have said numerous times, each carrier has to focus on its particular strengths because they can’t service everyone to the extent that shippers require to be treated,” he added. “Even MSC must find partners.” “Reliability, connectivity and sustainability are the keywords in the networks we are presenting today, and we are pleased that we now can give our customers full transparency about how we will deliver a best-in-class ocean network so they can begin planning despite a highly dynamic situation,” Habben Jansen said in a statement announcing the updated network Tuesday. He previously said Hapag-Lloyd and Maersk would start selling space on the Gemini network this month and start taking bookings from December ahead of Gemini’s February launch. Habben Jansen expected the transition of vessels and ships from the Gemini carriers’ existing commitments with THE Alliance and 2M Alliance to take about three months. Maersk CEO Vincent Clerc said Gemini’s schedule reliability target remains unchanged at 90% irrespective of which network is phased in from February. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Ports in Asia are among the winners, regaining direct calls on several services, in the Gemini Cooperation’s updated service network released Tuesday that offers shippers alternative routings via the Cape of Good Hope and the Suez Canal. The new network was announced a day after the US Federal Maritime Commission said the Maersk/Hapag-Lloyd partnership agreement took effect following a lengthy assessment period. The revised Gemini network also came a day after the new Premier Alliance created by soon-to-be former THE Alliance carriers , plus Mediterranean Shipping Co. as a slot charter partner, announced its February 2025 service schedule. That schedule also gave Suez and southern Africa routings, but focused on direct port-to-port calls instead of Gemini’s hub-and-spoke approach. Gemini said Tuesday it will announce next month whether the Cape of Good Hope or Suez Canal option would be used when the alliance is formally launched next February. The carriers said the alternative Cape of Good Hope network around southern Africa was released “due to the ongoing disruptions in the Red Sea.” The Suez Canal-based network would provide 27 mainline and 30 shuttle services using a combined fleet of 300 ships totaling 3.4 million TEUs on seven east-west trades covering Asia-US, Asia-North Europe, Asia-Mediterranean, Asia-Middle East, Middle East-India, Europe and the trans-Atlantic. By comparison, the Cape of Good Hope network covers the same seven trades but involves 341 ships totaling 3.7 million TEUs deployed on 29 mainline and 30 shuttle services. The extra vessels deployed on the southern Africa routing provide “an indication of the capacity absorption from the Red Sea crisis,” Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, said in a LinkedIn post Tuesday. Jensen pointed out the Suez network has eight Asia-Europe services, whereas the Cape of Good Hope only has seven services, while the Suez routing has 10 Pacific services, one more than the Cape network. Hapag-Lloyd CEO Rolf Habben Jansen in August confirmed that tweaks were being made to the Gemini service network for “operational reasons.” Busan, Vung Tau regain hub status South Korea’s Busan and Vung Tau in southern Vietnam are the main beneficiaries in the new schedules, having won back hub status after being relegated to largely feeder ports when Gemini released its initial network last January. Busan has been included among the direct calls in revised schedules for six trans-Pacific services on both the Suez Canal and Cape of Good Hope options. Vung Tau has been added to three mainline trans-Pacific services via the Suez Canal, but just two on those operating via the Cape of Good Hope. But even in the new Gemini network, Busan will still lose all its existing mainline calls by Maersk and Hapag-Lloyd on Asia-Europe and Asia-Mediterranean services, instead relying on feeder services to Shanghai and Tanjung Pelepas via Qingdao. Another significant change is that Hong Kong has now been dropped completely from the Gemini network in the revised plan after it was downgraded to a feeder port in the January schedule. Instead, shippers will have to truck or barge cargo independently of the Gemini carriers if they want to connect with their services at Yantian. Hutchison Port Holdings has already anticipated a loss of cargo through Hong Kong’s Kwai Chung container terminals when some of Maersk’s and Hapag-Lloyd’s throughput currently handled in Hong Kong will shift to Yantian after the Gemini partnership starts. ”The clear winner from the announced new networks appears to be the shippers,” Jensen said in his LinkedIn post. “The networks are quite different in their design, hence offering a more diverse range of products to choose from.” But Peter Sand, chief analyst for rate benchmarking platform Xeneta, said carriers are likely more focused on efficiencies. ”While we hope for this to improve the service offerings to customers, we also realize that the carriers are optimizing their networks to operational fleet efficiency more than anything else,” Sand told the Journal of Commerce Tuesday. ”As I have said numerous times, each carrier has to focus on its particular strengths because they can’t service everyone to the extent that shippers require to be treated,” he added. “Even MSC must find partners.” “Reliability, connectivity and sustainability are the keywords in the networks we are presenting today, and we are pleased that we now can give our customers full transparency about how we will deliver a best-in-class ocean network so they can begin planning despite a highly dynamic situation,” Habben Jansen said in a statement announcing the updated network Tuesday. He previously said Hapag-Lloyd and Maersk would start selling space on the Gemini network this month and start taking bookings from December ahead of Gemini’s February launch. Habben Jansen expected the transition of vessels and ships from the Gemini carriers’ existing commitments with THE Alliance and 2M Alliance to take about three months. Maersk CEO Vincent Clerc said Gemini’s schedule reliability target remains unchanged at 90% irrespective of which network is phased in from February. Contact Keith Wallis at keithwallis@hotmail.com .

Asian ports at the fore in updated Gemini alliance network schedule

<div class="phx-topic abstract-wrapper">The US maritime regulator sees no reason to block the new vessel-sharing alliance run by Maersk and Hapag-Lloyd, but the agency’s head still has concerns about the deal.</div>

The US maritime regulator sees no reason to block the new vessel-sharing alliance run by Maersk and Hapag-Lloyd, but the agency’s head still has concerns about the deal.

<div class="phx-topic">The US Federal Maritime Commission (FMC) has signed off on the Maersk/Hapag-Lloyd vessel-sharing alliance that will start early next year, but the agency’s chief warned the ocean carriers they will be watched for how they treat US shippers. The FMC said Monday it will not seek to block Gemini, <a href="https://www.joc.com/article/maersk-hapag-lloyd-launch-new-gemini-cooperation-partnership-5225857">Maersk and Hapag-Lloyd’s new vessel-sharing agreement for trades between the US, Asia, Europe and the Middle East</a>, allowing the agreement to go into immediate effect after its filing with the FMC. Gemini’s actual services are set to debut in February 2025. The FMC asked the two companies in July to provide extra details about how Gemini would work due to <a href="https://www.joc.com/article/fmc-wants-maersk-hapag-lloyd-to-provide-more-details-on-gemini-alliance-5192298">concerns about the anti-competitive effect of the second- and fifth-largest ocean carriers by capacity pooling their vessels</a>. While it found no anti-competitive issues, the FMC said Gemini “will be subject to extensive commission monitoring.” FMC Chairman Daniel Maffei went further, though, saying in a separate statement Monday that despite the agency’s decision, he still has “questions and concerns” about Gemini’s potential effect on shippers. While the statutory time for Gemini’s review is over, he reiterated the agency’s call about ongoing oversight of the new alliance. “I have questions and concerns about whether the Gemini Cooperation agreement filed with the FMC has, or will, result in anti-competitive consequences that violate the [US] Shipping Act,” Maffei said. “I have joined my colleagues in ordering FMC staff to engage in immediate and ongoing rigorous monitoring of the Gemini Cooperation agreement to ensure that it doesn’t illegally impact US importers, exporters, covered service providers and consumers.” Contact Michael Angell at <a href="michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) has signed off on the Maersk/Hapag-Lloyd vessel-sharing alliance that will start early next year, but the agency’s chief warned the ocean carriers they will be watched for how they treat US shippers. The FMC said Monday it will not seek to block Gemini, Maersk and Hapag-Lloyd’s new vessel-sharing agreement for trades between the US, Asia, Europe and the Middle East , allowing the agreement to go into immediate effect after its filing with the FMC. Gemini’s actual services are set to debut in February 2025. The FMC asked the two companies in July to provide extra details about how Gemini would work due to concerns about the anti-competitive effect of the second- and fifth-largest ocean carriers by capacity pooling their vessels . While it found no anti-competitive issues, the FMC said Gemini “will be subject to extensive commission monitoring.” FMC Chairman Daniel Maffei went further, though, saying in a separate statement Monday that despite the agency’s decision, he still has “questions and concerns” about Gemini’s potential effect on shippers. While the statutory time for Gemini’s review is over, he reiterated the agency’s call about ongoing oversight of the new alliance. “I have questions and concerns about whether the Gemini Cooperation agreement filed with the FMC has, or will, result in anti-competitive consequences that violate the [US] Shipping Act,” Maffei said. “I have joined my colleagues in ordering FMC staff to engage in immediate and ongoing rigorous monitoring of the Gemini Cooperation agreement to ensure that it doesn’t illegally impact US importers, exporters, covered service providers and consumers.” Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

FMC won’t block Gemini alliance, but vows tight monitoring

<div class="phx-topic abstract-wrapper">Most of the investment will be allocated to expanding the container shipping division that aims to grow to 130 ships in the next five years. </div>

Most of the investment will be allocated to expanding the container shipping division that aims to grow to 130 ships in the next five years.

<div class="phx-topic">HMM will spend $17.5 billion over the next five years — more than half of that investment on new container ships and equipment — as the carrier on Tuesday put a price to the massive mid- to long-term strategic plan <a href="https://www.joc.com/article/hmm-unveils-ambitious-plan-to-double-container-fleet-capacity-by-2030-5241007">announced back in April</a>.The South Korean flagship will spend $9.5 billion on 70 new container ships and container equipment with the “sustainable growth plan” covering its container, bulk and logistics segments with a target of achieving net-zero emissions across operations by 2045. “We remain committed to developing a resilient business portfolio and positioning ourselves as a global leader in eco-friendly shipping for the future,” Kim Kyung Bae, HMM president and CEO, said in a statement. HMM’s newbuilding plan will take the carrier’s fleet to 130 vessels by 2030 that it said would “prepare for the reorganization of global shipping alliances and strengthen the core business’ competitiveness.” “To meet the market’s demand for eco-friendly transportation, HMM aims to acquire around 70 green vessels by 2030 and establish a carbon-neutral ecosystem across all transportation segments by 2045,” the HMM statement said, adding that $1.3 billion of the investment in container shipping will be spent on new equipment. HMM remains a highly profitable carrier, <a href="https://www.joc.com/article/hmm-reports-soaring-profitability-but-warns-of-growing-market-challenges-5703223">with first-half operating profitability up 125% year over year</a> at $770 million as the carrier saw average rate levels up 55% year over year, the highest among the ocean carriers. HMM plans to allocate $3.1 billion to shipping and logistics infrastructure and will extend existing terminals and acquire additional terminals to accommodate the growing capacity. In its 2045 net-zero goal, HMM will spend $750 million on retrofitting ship engines, securing a supply chain for green fuels and improving operational stability and efficiency through digitalization. HMM, currently ranked the world’s eighth-largest container line by capacity, has an in-service fleet totaling 829,426 TEUs, with another 251,427 TEUs on order, according to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. <a href="https://www.joc.com/article/most-newbuild-capacity-headed-asia-europe-amid-ongoing-diversions_20240715.html">The carrier deployed seven 13,000-TEU ships from Asia to the US West and East coasts in the first half</a> and will bring another five vessels of the same capacity online in the second half. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

HMM will spend $17.5 billion over the next five years — more than half of that investment on new container ships and equipment — as the carrier on Tuesday put a price to the massive mid- to long-term strategic plan announced back in April . The South Korean flagship will spend $9.5 billion on 70 new container ships and container equipment with the “sustainable growth plan” covering its container, bulk and logistics segments with a target of achieving net-zero emissions across operations by 2045. “We remain committed to developing a resilient business portfolio and positioning ourselves as a global leader in eco-friendly shipping for the future,” Kim Kyung Bae, HMM president and CEO, said in a statement. HMM’s newbuilding plan will take the carrier’s fleet to 130 vessels by 2030 that it said would “prepare for the reorganization of global shipping alliances and strengthen the core business’ competitiveness.” “To meet the market’s demand for eco-friendly transportation, HMM aims to acquire around 70 green vessels by 2030 and establish a carbon-neutral ecosystem across all transportation segments by 2045,” the HMM statement said, adding that $1.3 billion of the investment in container shipping will be spent on new equipment. HMM remains a highly profitable carrier, with first-half operating profitability up 125% year over year at $770 million as the carrier saw average rate levels up 55% year over year, the highest among the ocean carriers. HMM plans to allocate $3.1 billion to shipping and logistics infrastructure and will extend existing terminals and acquire additional terminals to accommodate the growing capacity. In its 2045 net-zero goal, HMM will spend $750 million on retrofitting ship engines, securing a supply chain for green fuels and improving operational stability and efficiency through digitalization. HMM, currently ranked the world’s eighth-largest container line by capacity, has an in-service fleet totaling 829,426 TEUs, with another 251,427 TEUs on order, according to Sea-web, a sister product of the Journal of Commerce within S&P Global. The carrier deployed seven 13,000-TEU ships from Asia to the US West and East coasts in the first half and will bring another five vessels of the same capacity online in the second half. Contact Greg Knowler at greg.knowler@spglobal.com .

HMM to spend $17.5 billion on fleet, equipment by 2030

<div class="phx-topic abstract-wrapper">Shipper-paid spot truckload rates out of Southern California rose 6 cents per mile in August from July, despite the national shipper-paid spot rate average falling 6 cents during the same period.</div>

Shipper-paid spot truckload rates out of Southern California rose 6 cents per mile in August from July, despite the national shipper-paid spot rate average falling 6 cents during the same period.

<div class="phx-topic">As cargo from Southern California ports moves further inland, demand for trucks and intermodal rail capacity is surging in the region, driving up prices across all modes of surface transportation. Shipper-paid spot truckload rates out of Southern California rose 6 cents per mile in August from July, despite the national shipper-paid spot rate average falling 6 cents during the same period, according to a Journal of Commerce analysis of data from Cargo Chief, DAT Freight and Analytics, Sunset Transportation, and digital broker Loadsmart. Shippers paid $2.80 per mile, including fuel, on average in August on one-off spot hauls originating in Southern California, according to the Journal of Commerce analysis. This was the first time the spot price out of the region went up between July and August since 2022. Last August, the average shipper paid $2.61 per mile on the same freight lanes. Truckload spot rates typically drop from July to August because the push to sell merchandise between Memorial Day and July 4th is over and goods for Halloween, Thanksgiving, and December holidays don’t ship until after Labor Day. Shippers paid $2.34 per mile on average across the US in August, down from $2.40 in July. <h3>Loads up 20% from year ago </h3>There are several factors that could explain why outbound rates from Southern California climbed while national rates fell, including the inland flow of imports on trains and trucks. “If you look at California outbound, loads are up 20% year over year and rates are up between 8% and 9%, which is extraordinary in this market given the national rates,” said Dean Croke, principal analyst at DAT Freight &amp; Analytics. “I was waiting for this to happen when the import numbers took off in May and ocean capacity tightened. I didn’t think it would take so long to work through the domestic supply chain, but we’re seeing the peak season earlier than normal.” Intermodal demand has also increased in Southern California, prompting private asset-owners such as Hub Group, J.B. Hunt Transport Services, Schneider National, STG Logistics, and Swift Intermodal to assess surcharges on select shippers exceeding the volume in their contracts. Union Pacific Railroad also <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=&amp;ved=2ahUKEwix_rzY0riIAxURMVkFHZkVKDMQFnoECBIQAQ&amp;url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fup-joins-peers-in-assessing-peak-season-surcharges-for-southern-california-5709819&amp;usg=AOvVaw3JkR6sEKGNZxlJ1uCdeyAY&amp;opi=89978449">instituted a fee</a> of $300 on high-volume shippers and $500 on low-volume shippers who exceed their contractual allotments. Some shippers might find that trucking rates are comparable to or cheaper than intermodal on excess loads subject to the surcharge. Typically, an intermodal shipper saves about $1,500 compared with truckload when shipping from Southern California to the eastern half of the US. However, if the shipper faces a $1,500 rail surcharge, that load may end up traveling by truck instead. Croke said demand and rates may also cool off before the holiday season because capacity on ocean vessels has loosened since May. There are also other factors influencing truck rates in California that have no nexus to port volume or rail, including an <a href="https://www.joc.com/article/california-clean-air-rules-imperil-potential-la-lb-port-relief-valve-5713662">increasing dissatisfaction</a> with operating in the state because of regulations. “There is less long-haul capacity in California, or carriers wanting to come into California, and with even stricter regulations from the Environmental Protection Agency in 2027, it’s becoming too expensive for some of these smaller fleets to keep operating in the state,” Croke said. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

As cargo from Southern California ports moves further inland, demand for trucks and intermodal rail capacity is surging in the region, driving up prices across all modes of surface transportation. Shipper-paid spot truckload rates out of Southern California rose 6 cents per mile in August from July, despite the national shipper-paid spot rate average falling 6 cents during the same period, according to a Journal of Commerce analysis of data from Cargo Chief, DAT Freight and Analytics, Sunset Transportation, and digital broker Loadsmart. Shippers paid $2.80 per mile, including fuel, on average in August on one-off spot hauls originating in Southern California, according to the Journal of Commerce analysis. This was the first time the spot price out of the region went up between July and August since 2022. Last August, the average shipper paid $2.61 per mile on the same freight lanes. Truckload spot rates typically drop from July to August because the push to sell merchandise between Memorial Day and July 4th is over and goods for Halloween, Thanksgiving, and December holidays don’t ship until after Labor Day. Shippers paid $2.34 per mile on average across the US in August, down from $2.40 in July. Loads up 20% from year ago There are several factors that could explain why outbound rates from Southern California climbed while national rates fell, including the inland flow of imports on trains and trucks. “If you look at California outbound, loads are up 20% year over year and rates are up between 8% and 9%, which is extraordinary in this market given the national rates,” said Dean Croke, principal analyst at DAT Freight & Analytics. “I was waiting for this to happen when the import numbers took off in May and ocean capacity tightened. I didn’t think it would take so long to work through the domestic supply chain, but we’re seeing the peak season earlier than normal.” Intermodal demand has also increased in Southern California, prompting private asset-owners such as Hub Group, J.B. Hunt Transport Services, Schneider National, STG Logistics, and Swift Intermodal to assess surcharges on select shippers exceeding the volume in their contracts. Union Pacific Railroad also instituted a fee of $300 on high-volume shippers and $500 on low-volume shippers who exceed their contractual allotments. Some shippers might find that trucking rates are comparable to or cheaper than intermodal on excess loads subject to the surcharge. Typically, an intermodal shipper saves about $1,500 compared with truckload when shipping from Southern California to the eastern half of the US. However, if the shipper faces a $1,500 rail surcharge, that load may end up traveling by truck instead. Croke said demand and rates may also cool off before the holiday season because capacity on ocean vessels has loosened since May. There are also other factors influencing truck rates in California that have no nexus to port volume or rail, including an increasing dissatisfaction with operating in the state because of regulations. “There is less long-haul capacity in California, or carriers wanting to come into California, and with even stricter regulations from the Environmental Protection Agency in 2027, it’s becoming too expensive for some of these smaller fleets to keep operating in the state,” Croke said. Contact Ari Ashe at ari.ashe@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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