<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 latest year-over-year comparisons are clearing up LTL market distortions caused by Yellow’s failure and revealing weak demand, but tight capacity is pushing up rates. </div>

The latest year-over-year comparisons are clearing up LTL market distortions caused by Yellow’s failure and revealing weak demand, but tight capacity is pushing up rates.

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<div class="phx-topic">The flood of less-than-truckload (LTL) freight that drove volumes at some LTL carriers up by double-digit percentages after the collapse of Yellow last year is beginning to recede, providing <a href="https://www.joc.com/article/us-ltl-sector-growth-efficiencies-still-fueled-by-loss-of-yellow-5715785">a more accurate view</a> of that market and market-leading companies. Tougher year-over-year comparisons with the exceptional shipment count growth in the months following <a href="https://www.joc.com/article/ltl-carrier-yellow-reports-70m-h1-loss-after-shutting-down-5241674">Yellow’s market exit</a> in July 2023 are bringing carrier expectations back down to where the rubber meets the road and better reflect a soft freight economy. Going forward, results from publicly-owned LTL companies will better indicate not just the state of the LTL market but which trucking companies are <a href="https://www.joc.com/article/ltl-carrier-yellow-reports-70m-h1-loss-after-shutting-down-5241674">gaining new freight</a> and new market share, as opposed to a share of pre-existing business lost by Yellow. “There is some growth in the marketplace overall, but it’s not as robust as [LTL carriers] were hoping,” said Dean Jones, president of LTL at AFS Logistics. <a href="https://www.reuters.com/markets/us/us-manufacturing-edges-up-august-8-month-low-trend-remains-weak-2024-09-03/">US manufacturing output</a> is contracting, and that cuts into LTL freight. Old Dominion Freight Line (ODFL) and Saia — the second-largest and seventh-largest LTL providers, respectively — on Thursday both released third-quarter data that anticipates what they and other large LTL providers will likely see in the months ahead. The data helps clear up the market distortion caused by Yellow’s demise and underscores that LTL pricing is being influenced not by higher freight demand but by tighter capacity. LTL rates were up 7.1% year over year in July, according to the US producer price index (PPI). That compares with a 0.7% annualized increase in January. After a two-year freight downturn, LTL rates in July were only 4.6% below their June 2022 peak, the PPI shows. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7ba72aea-0475-49be-84b7-64f238502e7e"></dynamic-object></div>LTL carriers are expected to announce general rate increases over the next few months in the 5.9% range, Jones said. Despite claims of pricing discipline, “we did see some carriers price aggressively to fill excess capacity,” he said. But that’s now changing, he explained. “Everyone’s trying to fine tune their lane balances and operating ratios,” Jones said. <h3>An LTL barometer </h3>Because ODFL did not chase much of the freight released when Yellow went bankrupt, its volumes can serve as a barometer for the broader LTL market. In August, when freight demand in general cooled, ODFL’s shipment count dropped 5% year over year. In a statement, ODFL CEO Marty Freeman attributed the lower shipment count to continued softness in the economy. However, he said ODFL’s LTL volume in August was “relatively consistent” with July and its year-to-date average in the first half. Following a relatively normal seasonal route, ODFL’s quarterly volume declined 0.5% in the first quarter of 2024 and <a href="https://www.joc.com/article/odfls-ltl-freight-volume-rising-despite-soft-industrial-demand-5703072">rose 3.1% from a year ago</a> in the second quarter. ODFL’s volume dropped 2.9% in the third quarter of 2023 despite the gain of some Yellow freight. ODFL has been expanding its network for several years but did not join the rush to purchase former Yellow facilities after losing a bid to set the ground price for their auction last year. Saia, on the other hand, <a href="https://www.joc.com/article/saia-opening-ltl-terminals-as-it-absorbs-double-digit-volume-gains-5214352">acquired 28 terminals</a> from bankrupt Yellow. Saia’s long streak of volume growth continued over the summer, but not at the breakneck pace set in mid-2023. The carrier’s daily shipment count rose 7% in August year over year, compared with a 14.2% increase in August 2023 immediately after Yellow failed. For the past three quarters, Saia’s daily shipment volume rose between 15% and 19%. Before Yellow’s exit, however, Saia’s volumes were declining year over year, falling 5.4% in the first half of 2023. In the second half of 2024, Saia’s performance metrics are running up against last year’s exceptional volume gains, stabilizing growth expectations. Saia <a href="https://www.joc.com/article/saia-still-benefiting-from-yellows-collapse-as-us-ltl-market-resets-5244255">is still gaining freight</a> in a weak LTL market. US manufacturing is in contraction with falling sales and new orders, and that cuts into available LTL freight. A 7% year-over-year gain in shipments indicates Saia’s expansion plans are bolstering its market share. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The flood of less-than-truckload (LTL) freight that drove volumes at some LTL carriers up by double-digit percentages after the collapse of Yellow last year is beginning to recede, providing a more accurate view of that market and market-leading companies. Tougher year-over-year comparisons with the exceptional shipment count growth in the months following Yellow’s market exit in July 2023 are bringing carrier expectations back down to where the rubber meets the road and better reflect a soft freight economy. Going forward, results from publicly-owned LTL companies will better indicate not just the state of the LTL market but which trucking companies are gaining new freight and new market share, as opposed to a share of pre-existing business lost by Yellow. “There is some growth in the marketplace overall, but it’s not as robust as [LTL carriers] were hoping,” said Dean Jones, president of LTL at AFS Logistics. US manufacturing output is contracting, and that cuts into LTL freight. Old Dominion Freight Line (ODFL) and Saia — the second-largest and seventh-largest LTL providers, respectively — on Thursday both released third-quarter data that anticipates what they and other large LTL providers will likely see in the months ahead. The data helps clear up the market distortion caused by Yellow’s demise and underscores that LTL pricing is being influenced not by higher freight demand but by tighter capacity. LTL rates were up 7.1% year over year in July, according to the US producer price index (PPI). That compares with a 0.7% annualized increase in January. After a two-year freight downturn, LTL rates in July were only 4.6% below their June 2022 peak, the PPI shows. LTL carriers are expected to announce general rate increases over the next few months in the 5.9% range, Jones said. Despite claims of pricing discipline, “we did see some carriers price aggressively to fill excess capacity,” he said. But that’s now changing, he explained. “Everyone’s trying to fine tune their lane balances and operating ratios,” Jones said. An LTL barometer Because ODFL did not chase much of the freight released when Yellow went bankrupt, its volumes can serve as a barometer for the broader LTL market. In August, when freight demand in general cooled, ODFL’s shipment count dropped 5% year over year. In a statement, ODFL CEO Marty Freeman attributed the lower shipment count to continued softness in the economy. However, he said ODFL’s LTL volume in August was “relatively consistent” with July and its year-to-date average in the first half. Following a relatively normal seasonal route, ODFL’s quarterly volume declined 0.5% in the first quarter of 2024 and rose 3.1% from a year ago in the second quarter. ODFL’s volume dropped 2.9% in the third quarter of 2023 despite the gain of some Yellow freight. ODFL has been expanding its network for several years but did not join the rush to purchase former Yellow facilities after losing a bid to set the ground price for their auction last year. Saia, on the other hand, acquired 28 terminals from bankrupt Yellow. Saia’s long streak of volume growth continued over the summer, but not at the breakneck pace set in mid-2023. The carrier’s daily shipment count rose 7% in August year over year, compared with a 14.2% increase in August 2023 immediately after Yellow failed. For the past three quarters, Saia’s daily shipment volume rose between 15% and 19%. Before Yellow’s exit, however, Saia’s volumes were declining year over year, falling 5.4% in the first half of 2023. In the second half of 2024, Saia’s performance metrics are running up against last year’s exceptional volume gains, stabilizing growth expectations. Saia is still gaining freight in a weak LTL market. US manufacturing is in contraction with falling sales and new orders, and that cuts into available LTL freight. A 7% year-over-year gain in shipments indicates Saia’s expansion plans are bolstering its market share. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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LTL shipment count gains subsiding in H2, but pricing keeps rising

<div class="phx-topic abstract-wrapper">Dwell times at marine terminals in the Northwest Seaport Alliance have doubled in recent weeks as intermodal container moves spiked amid peak season imports.</div>

Dwell times at marine terminals in the Northwest Seaport Alliance have doubled in recent weeks as intermodal container moves spiked amid peak season imports.

<div class="phx-topic">The port congestion and elevated rail container dwell times that have been a fact of life in the Pacific Northwest for weeks appear to be peaking and some relief is expected later this month. Until then, however, shippers will be forced to contend with delays in the movement of intermodal containers to inland destinations. Rail container dwell times at marine terminals in the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma have doubled in recent weeks as intermodal container moves spiked amid peak season imports. Retailers shifted some discretionary import volumes to the Pacific Northwest gateway because of concerns over <a href="https://www.joc.com/article/canadian-rail-workers-back-on-job-after-failed-challenge-to-binding-arbitration-5712234">strike threats by Teamsters Union rail workers in Canada</a> and by <a href="https://www.joc.com/article/us-port-strike-would-have-red-sea-like-global-impact-zim-cfo-5706354">East and Gulf coast dockworkers amid the coming expiration of their contract</a> at the end of this month. US imports from Asia increased almost 51% in July 2024 from July 2023, according to PIERS, a Journal of Commerce sister company within S&amp;P Global. The import surge strained the capacity of the western railroads and terminal operators in the NWSA. “No mode can accommodate that kind of volatility without disruption,” rail industry analyst Lawrence Gross, president and founder of Gross Transportation, told the Journal of Commerce last week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="99205feb-d52a-46c4-b3fb-505aa99dee95"></dynamic-object></div><h3>Rail container dwells double </h3>Rail container dwell times at SSA Marine’s three terminals in Seattle are now six days, up from the normal three to four days, because the terminals worked five ad hoc vessels on services that had been scheduled to call in Tacoma, according to an SSA spokesperson. “As a result, SSA’s average rail volume has doubled in the past month,” the spokesperson said. Dwells for BNSF Railway containers at the Husky Terminal in Tacoma this week are averaging five to six days, while Union Pacific (UP) containers are averaging four-day dwells, said Dustin Stoker, president of Husky Terminal. Rail container dwells of no more <a href="https://www.joc.com/article/la-lb-rail-dwells-on-the-rise-as-port-complex-enters-height-of-peak-season-5712900">than two to four days</a> are necessary to prevent congestion from building at West Coast marine terminals, according to port managers. Husky’s import volumes continue to increase even though the terminal has not received any extra-loader ships or vessels diverted from other terminals, Stoker said. Rather, it’s just a matter of increased volumes being carried on scheduled vessel calls, he said. Trans-Pacific carriers have launched or re-instated 10 services to the West Coast this year, <a href="https://www.joc.com/article/west-coast-ports-say-ready-to-handle-peak-season-bump-after-front-loading-surge-5703188">including three services to the Pacific Northwest</a>, in part due to the threatened labor strikes in Canada and the US East and Gulf coasts. As a result, Evergreen Marine Corp. inland point intermodal (IPI) containers moving through Seattle-Tacoma with a Chicago destination increased 51% year over year in January through July, while Yang Ming’s IPI moves to Chicago increased 34%. Maersk, which launched a new service this year, had an almost 100% increase in IPI moves, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. <h3>Import volumes have nearly peaked </h3>Terminal operators say import volumes will likely remain at current levels for the next few weeks as shipments that left Asia at the end of August arrive at the Pacific Northwest gateway. Although import volumes are expected to remain elevated through October, imports have likely peaked, and pressures on West Coast ports and the western railroads should begin to ease somewhat later this month, Gross said. The railroads told the Journal of Commerce they feel confident their networks will be able to handle the IPI volumes going forward. BNSF’s IPI volumes so far in Q3 are up 60% from the same period last year, but shipments currently due to arrive are down 5% from last week, said Jon Gabriel, BNSF’s vice president for innovation, service design and network strategy. Gabriel said BNSF’s eastbound and westbound train movements are largely in balance, and the destination dwells of IPI containers at Midwest rail hubs are “good.” BNSF has prepositioned sufficient locomotives and intermodal cars in the PNW and in the Chicago area to handle peak season volumes. Ocean carriers, the ports and terminal operators continue to share advance information on freight volumes, and all segments of the supply chain are operating fluidly, Gabriel said. “The broader supply chain has been a pleasant surprise,” he said. UP says it is successfully handling the current surge of intermodal freight in Seattle-Tacoma and continues to work closely with terminal operators and the port authority as the railroad handles near-record volumes, a UP spokesperson told the Journal of Commerce. “Union Pacific’s August 2024 volumes that moved through the PNW port complex were the highest since 2012,” the spokesperson said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The port congestion and elevated rail container dwell times that have been a fact of life in the Pacific Northwest for weeks appear to be peaking and some relief is expected later this month. Until then, however, shippers will be forced to contend with delays in the movement of intermodal containers to inland destinations. Rail container dwell times at marine terminals in the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma have doubled in recent weeks as intermodal container moves spiked amid peak season imports. Retailers shifted some discretionary import volumes to the Pacific Northwest gateway because of concerns over strike threats by Teamsters Union rail workers in Canada and by East and Gulf coast dockworkers amid the coming expiration of their contract at the end of this month. US imports from Asia increased almost 51% in July 2024 from July 2023, according to PIERS, a Journal of Commerce sister company within S&P Global. The import surge strained the capacity of the western railroads and terminal operators in the NWSA. “No mode can accommodate that kind of volatility without disruption,” rail industry analyst Lawrence Gross, president and founder of Gross Transportation, told the Journal of Commerce last week. Rail container dwells double Rail container dwell times at SSA Marine’s three terminals in Seattle are now six days, up from the normal three to four days, because the terminals worked five ad hoc vessels on services that had been scheduled to call in Tacoma, according to an SSA spokesperson. “As a result, SSA’s average rail volume has doubled in the past month,” the spokesperson said. Dwells for BNSF Railway containers at the Husky Terminal in Tacoma this week are averaging five to six days, while Union Pacific (UP) containers are averaging four-day dwells, said Dustin Stoker, president of Husky Terminal. Rail container dwells of no more than two to four days are necessary to prevent congestion from building at West Coast marine terminals, according to port managers. Husky’s import volumes continue to increase even though the terminal has not received any extra-loader ships or vessels diverted from other terminals, Stoker said. Rather, it’s just a matter of increased volumes being carried on scheduled vessel calls, he said. Trans-Pacific carriers have launched or re-instated 10 services to the West Coast this year, including three services to the Pacific Northwest , in part due to the threatened labor strikes in Canada and the US East and Gulf coasts. As a result, Evergreen Marine Corp. inland point intermodal (IPI) containers moving through Seattle-Tacoma with a Chicago destination increased 51% year over year in January through July, while Yang Ming’s IPI moves to Chicago increased 34%. Maersk, which launched a new service this year, had an almost 100% increase in IPI moves, according to PIERS, a Journal of Commerce sister product within S&P Global. Import volumes have nearly peaked Terminal operators say import volumes will likely remain at current levels for the next few weeks as shipments that left Asia at the end of August arrive at the Pacific Northwest gateway. Although import volumes are expected to remain elevated through October, imports have likely peaked, and pressures on West Coast ports and the western railroads should begin to ease somewhat later this month, Gross said. The railroads told the Journal of Commerce they feel confident their networks will be able to handle the IPI volumes going forward. BNSF’s IPI volumes so far in Q3 are up 60% from the same period last year, but shipments currently due to arrive are down 5% from last week, said Jon Gabriel, BNSF’s vice president for innovation, service design and network strategy. Gabriel said BNSF’s eastbound and westbound train movements are largely in balance, and the destination dwells of IPI containers at Midwest rail hubs are “good.” BNSF has prepositioned sufficient locomotives and intermodal cars in the PNW and in the Chicago area to handle peak season volumes. Ocean carriers, the ports and terminal operators continue to share advance information on freight volumes, and all segments of the supply chain are operating fluidly, Gabriel said. “The broader supply chain has been a pleasant surprise,” he said. UP says it is successfully handling the current surge of intermodal freight in Seattle-Tacoma and continues to work closely with terminal operators and the port authority as the railroad handles near-record volumes, a UP spokesperson told the Journal of Commerce. “Union Pacific’s August 2024 volumes that moved through the PNW port complex were the highest since 2012,” the spokesperson said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Ari Ashe at ari.ashe@spglobal.com .

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Rail container dwells in Seattle-Tacoma still high, but relief in sight

<div class="phx-topic abstract-wrapper">A big jump in spot rates was pegged to the cascading impacts of blank sailings and a volume rush from shippers ahead of China’s Golden Week holiday in October.</div>

A big jump in spot rates was pegged to the cascading impacts of blank sailings and a volume rush from shippers ahead of China’s Golden Week holiday in October.

<div class="phx-topic">Spot container rates from Asia to the west coast of Mexico have climbed sharply over the past week amid fresh blank sailings and a cargo rush ahead of China’s Golden Week holiday in early October. The gains come after two months of declining rates brought on by new capacity injected into the trade lane. A mostly successful $2,000 general rate increase (GRI) implemented by carriers brought rates up to $5,600 per FEU as of Friday — up nearly $1,500 from Aug. 31, according EAX, a public index of maritime rates from Asia to Mexico provided by Eternity International Freight Forwarder México. Eternity President Nicolas Portenza attributed the rate rebound to the cascading impacts of blank sailings and a volume push from shippers ahead of Golden Week. Six blanks were scheduled on the trade lane through the first half of September, according to data from Eternity International. Portenza, though, doesn’t expect the momentum to last. “I think after Golden Week the rate will fall to the $4,000 [per FEU] level at least,” he said. “But now, the demand is strong before Golden Week and carriers are tightening the capacity on purpose.” <h3>Summer oversupply hindered spot rates </h3>This week’s rate jump comes after two months of bearishness brought on by the recent deployment of several new services from Asia to the west coast of Mexico. That capacity put downward pressure on container spot rates during August, which fell more than 20% to reach $4,104 per FEU by the end of August, according to EAX. That nearly $1,100 reduction in rates for cargo from China base ports to Manzanillo and Lazaro Cardenas came after an earlier drop of more than 10% from June to July. New services on the lane include the AC1 from Maersk, the WSA5 from Cosco Shipping, the M2X from CMA CGM, the MEXICAS and DAHLIA from Mediterranean Shipping Co., and the FLX from HMM — a significant increase to the historical standard capacity of 90,000 TEUs weekly, according to Portenza. Additionally, the lane will gain two more services in February from the Maersk/Hapag-Lloyd Gemini Cooperation, according to maritime intelligence firm eeSea. The market behavior through 2024 will be largely dependent on how the new capacity is managed. Overall, however, forwarders say inbound demand remains strong. “The demand was strong during Q2 and is still there in Q3,” said Portenza. “The downgrade of the rate during July was related to new services deployed by carriers generating oversupply, but the demand is not losing strength.” <h3>Working through port congestion </h3>Meanwhile, market sources say there was still significant congestion at Mexican ports as of Sept. 3, with cargo ultimately destined for South America waiting to be transloaded. “We will be having space issues until after [the second or third week of October,]” said a logistics professional close to the trade. “Then the market should ease between late October and mid-December, when we could have a new rush — but it all depends on carriers and capacity.” Sources predict imports into the US will follow a similar volumes pattern — mirroring a tepid wind down of peak season before a potential rush of cargo in advance to closures brought on by the Golden Week holiday. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Spot container rates from Asia to the west coast of Mexico have climbed sharply over the past week amid fresh blank sailings and a cargo rush ahead of China’s Golden Week holiday in early October. The gains come after two months of declining rates brought on by new capacity injected into the trade lane. A mostly successful $2,000 general rate increase (GRI) implemented by carriers brought rates up to $5,600 per FEU as of Friday — up nearly $1,500 from Aug. 31, according EAX, a public index of maritime rates from Asia to Mexico provided by Eternity International Freight Forwarder México. Eternity President Nicolas Portenza attributed the rate rebound to the cascading impacts of blank sailings and a volume push from shippers ahead of Golden Week. Six blanks were scheduled on the trade lane through the first half of September, according to data from Eternity International. Portenza, though, doesn’t expect the momentum to last. “I think after Golden Week the rate will fall to the $4,000 [per FEU] level at least,” he said. “But now, the demand is strong before Golden Week and carriers are tightening the capacity on purpose.” Summer oversupply hindered spot rates This week’s rate jump comes after two months of bearishness brought on by the recent deployment of several new services from Asia to the west coast of Mexico. That capacity put downward pressure on container spot rates during August, which fell more than 20% to reach $4,104 per FEU by the end of August, according to EAX. That nearly $1,100 reduction in rates for cargo from China base ports to Manzanillo and Lazaro Cardenas came after an earlier drop of more than 10% from June to July. New services on the lane include the AC1 from Maersk, the WSA5 from Cosco Shipping, the M2X from CMA CGM, the MEXICAS and DAHLIA from Mediterranean Shipping Co., and the FLX from HMM — a significant increase to the historical standard capacity of 90,000 TEUs weekly, according to Portenza. Additionally, the lane will gain two more services in February from the Maersk/Hapag-Lloyd Gemini Cooperation, according to maritime intelligence firm eeSea. The market behavior through 2024 will be largely dependent on how the new capacity is managed. Overall, however, forwarders say inbound demand remains strong. “The demand was strong during Q2 and is still there in Q3,” said Portenza. “The downgrade of the rate during July was related to new services deployed by carriers generating oversupply, but the demand is not losing strength.” Working through port congestion Meanwhile, market sources say there was still significant congestion at Mexican ports as of Sept. 3, with cargo ultimately destined for South America waiting to be transloaded. “We will be having space issues until after [the second or third week of October,]” said a logistics professional close to the trade. “Then the market should ease between late October and mid-December, when we could have a new rush — but it all depends on carriers and capacity.” Sources predict imports into the US will follow a similar volumes pattern — mirroring a tepid wind down of peak season before a potential rush of cargo in advance to closures brought on by the Golden Week holiday. Contact Laura Robb at laura.robb@spglobal.com .

Blank sailings, cargo push help reverse rate slide on Asia-Mexico trade

<div class="phx-topic abstract-wrapper">After five rounds of negotiations and a series of 24-hour warning strikes at Germany’s ports, the union and port employers may finally be close to an agreement. </div>

After five rounds of negotiations and a series of 24-hour warning strikes at Germany’s ports, the union and port employers may finally be close to an agreement.

<div class="phx-topic">Germany’s United Services Union (ver.di) has recommended its members accept the latest offer from port employers in a long-running wage dispute that has regularly disrupted logistics operations across the country’s transport sectors.Should the offer be accepted, it will end a bitter wage dispute that has prompted a series of warning strikes that heavily disrupted port operations at Hamburg, Bremen, Bremerhaven, Wilhelmshaven, Emden and Brake.The fifth round of collective bargaining negotiations between ver.di and the Central Association of German Seaport Operators (ZDS) ended this week with an improved offer presented to the union.“After our members rejected the offer from the fourth round of negotiations in a survey, the employers understood that they had to step up if they did not want to risk further strikes,” ver.di negotiator Maren Ulbrich said in a statement Friday. “This message has been received.”Under the offer, employees will receive a tax- and duty-free inflation compensation bonus of €1,700 ($1,885) to be paid out in October, and from Oct. 1 hourly wages will be increased by €1.15 ($1.28). In addition, shift bonuses and bonuses for Sunday and holiday work will be significantly increased, with the holiday allowance increased to €430 ($476) from next year.The union’s Federal Tariff Commission has recommended members accept the revised offer and will conduct a member survey. A decision on whether to accept the offer will be made at a meeting on Sept. 27.Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Germany’s United Services Union (ver.di) has recommended its members accept the latest offer from port employers in a long-running wage dispute that has regularly disrupted logistics operations across the country’s transport sectors. Should the offer be accepted, it will end a bitter wage dispute that has prompted a series of warning strikes that heavily disrupted port operations at Hamburg, Bremen, Bremerhaven, Wilhelmshaven, Emden and Brake. The fifth round of collective bargaining negotiations between ver.di and the Central Association of German Seaport Operators (ZDS) ended this week with an improved offer presented to the union. “After our members rejected the offer from the fourth round of negotiations in a survey, the employers understood that they had to step up if they did not want to risk further strikes,” ver.di negotiator Maren Ulbrich said in a statement Friday. “This message has been received.” Under the offer, employees will receive a tax- and duty-free inflation compensation bonus of €1,700 ($1,885) to be paid out in October, and from Oct. 1 hourly wages will be increased by €1.15 ($1.28). In addition, shift bonuses and bonuses for Sunday and holiday work will be significantly increased, with the holiday allowance increased to €430 ($476) from next year. The union’s Federal Tariff Commission has recommended members accept the revised offer and will conduct a member survey. A decision on whether to accept the offer will be made at a meeting on Sept. 27. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Asia-Europe

International ports

First signs of a deal emerge in long-running German port dispute

<div class="phx-topic abstract-wrapper">Despite sources telling the Journal of Commerce that management has reached out more than 10 times since June seeking new talks, none have been scheduled and there now appears to be little motivation on the part of management or labor to secure a deal to avert a strike.</div>

Despite sources telling the Journal of Commerce that management has reached out more than 10 times since June seeking new talks, none have been scheduled and there now appears to be little motivation on the part of management or labor to secure a deal to avert a strike.

<div class="phx-topic">Less than a month before dockworkers on the US East and Gulf coasts could walk off the job if a new contract is not agreed to by Sept. 30 at midnight, a sense of dread has descended on the industry — and for good reason. Despite sources telling the Journal of Commerce that the management group United States Maritime Alliance (USMX) has reached out more than 10 times seeking new talks since June when the International Longshoremen’s Association (ILA) suspended negotiations over a <a href="https://www.joc.com/article/ila-halts-talks-over-new-contract-until-maersk-apm-clarify-port-it-projects-5244243">local dispute in Mobile</a>, no new talks have been scheduled and there appears to be little motivation on the part of management or labor to secure a deal to avert a strike. The ILA contends that employers weren’t prepared for negotiations when both sides met more than a year-and-a-half ago and admitted as much. Employers “are still not prepared to acknowledge the record profits their member companies publicly report,” said ILA spokesman James McNamara. Calling the scenario a “brewing storm,” the Retail Industry Leaders Association <a href="https://www.rila.org/blog/2024/09/looming-port-strike-what-means-us-economy">said this week</a>, “The importance of keeping these ports operational cannot be overstated, especially as the peak holiday season approaches.” The comment underscores the point that while some <a href="https://www.joc.com/article/trans-atlantic-shippers-test-contingency-plans-as-ila-strike-threat-grows-5721629">shippers have diverted cargo to alternative gateways</a> to avoid the possibility of a strike, there are still large volumes of cargo unable to be diverted away from East and Gulf coasts that would be impacted. If there is one point management and labor agree on, it is the two sides <a href="https://www.joc.com/article/ila-locals-prepping-for-coordinated-strike-at-us-east-gulf-coast-ports-5721164">being “very, very far apart” on wages</a>, the core issue in this negotiating round. There is no serious discussion on port automation, for example, with management largely accepting that meaningful progress on automation is not in the cards in container-handling ports from Maine to Texas under the current union leadership. Management’s current offer of a nearly 32% pay increase over six years contrasts with the union’s current demand for a 78% increase based on its view that it deserves a share of carriers’ historic profits earned during the pandemic. Yet with no talks scheduled and no outside mediation occurring — yet — the clock is ticking ever more loudly toward Oct. 1, when, in the absence of an agreement, 60% of US container volume representing $588 billion in annualized trade value would come to a screeching halt. “Our members showed the world just how valuable our work is during the pandemic, and the carriers and terminals came out of that time with record profits, and they don’t want to share that with our members,” ILA Executive Vice President Dennis Daggett said in a video message <a href="https://www.youtube.com/results?search_query=dennis+daggett&amp;sp=EgIIAw%253D%253D">posted on YouTube Wednesday.</a>Ocean carrier officials told the Journal of Commerce this week they do not want to see a work stoppage, given the adverse impact it would have on customers, their own operations and the economy. Yet in contrast to many prior longshore labor negotiating rounds over the past 25 years, when carriers typically capitulated at the bargaining table in the interest of keeping cargo flowing, the USMX appears unwilling, at least thus far, to give in to union demands in order to avoid serious disruption. <h3>Focus shifts to Washington </h3>In the background for carriers, although not front and center, is a resignation that can be summed up as “what will be, will be.” Carrier head offices have learned since COVID-19 that they make real money not when cargo is flowing smoothly, but rather when it slows or stops. They were on the receiving end of sharp political attacks during COVID-19 from President Joe Biden himself, while Congress in 2022 <a href="https://www.joc.com/article/biden-signs-osra-22-shipping-reform-into-law-5194881">passed the first significant shipping legislation since 1998</a> over carrier objections, in contrast to the consensus between shippers and carriers that was the basis of earlier legislation going back decades. With no negotiations scheduled and the two sides remaining far apart on terms, the focus will begin shifting to Washington in the coming weeks. Multiple federal agencies are well aware of the state of play and the political implications of a serious economic event just weeks before a high stakes presidential election. Daggett has made it clear he wants no part of Biden administration intervention, seeing its involvement in West Coast negotiations in 2023 as resulting in a lower pay increase — 32% over six years — than dockworkers deserved or were capable of achieving. Although no clear signal has emerged about how Washington will approach the issue, sources tell the Journal of Commerce it will be a priority for the administration to seek a resolution. But that will not happen by way of Biden invoking the Taft-Hartley Act, which allows him to force workers back on the job, as that would be perceived as an anti-labor act that could alienate the crucial labor vote on Nov. 5. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Less than a month before dockworkers on the US East and Gulf coasts could walk off the job if a new contract is not agreed to by Sept. 30 at midnight, a sense of dread has descended on the industry — and for good reason. Despite sources telling the Journal of Commerce that the management group United States Maritime Alliance (USMX) has reached out more than 10 times seeking new talks since June when the International Longshoremen’s Association (ILA) suspended negotiations over a local dispute in Mobile , no new talks have been scheduled and there appears to be little motivation on the part of management or labor to secure a deal to avert a strike. The ILA contends that employers weren’t prepared for negotiations when both sides met more than a year-and-a-half ago and admitted as much. Employers “are still not prepared to acknowledge the record profits their member companies publicly report,” said ILA spokesman James McNamara. Calling the scenario a “brewing storm,” the Retail Industry Leaders Association said this week , “The importance of keeping these ports operational cannot be overstated, especially as the peak holiday season approaches.” The comment underscores the point that while some shippers have diverted cargo to alternative gateways to avoid the possibility of a strike, there are still large volumes of cargo unable to be diverted away from East and Gulf coasts that would be impacted. If there is one point management and labor agree on, it is the two sides being “very, very far apart” on wages , the core issue in this negotiating round. There is no serious discussion on port automation, for example, with management largely accepting that meaningful progress on automation is not in the cards in container-handling ports from Maine to Texas under the current union leadership. Management’s current offer of a nearly 32% pay increase over six years contrasts with the union’s current demand for a 78% increase based on its view that it deserves a share of carriers’ historic profits earned during the pandemic. Yet with no talks scheduled and no outside mediation occurring — yet — the clock is ticking ever more loudly toward Oct. 1, when, in the absence of an agreement, 60% of US container volume representing $588 billion in annualized trade value would come to a screeching halt. “Our members showed the world just how valuable our work is during the pandemic, and the carriers and terminals came out of that time with record profits, and they don’t want to share that with our members,” ILA Executive Vice President Dennis Daggett said in a video message posted on YouTube Wednesday. Ocean carrier officials told the Journal of Commerce this week they do not want to see a work stoppage, given the adverse impact it would have on customers, their own operations and the economy. Yet in contrast to many prior longshore labor negotiating rounds over the past 25 years, when carriers typically capitulated at the bargaining table in the interest of keeping cargo flowing, the USMX appears unwilling, at least thus far, to give in to union demands in order to avoid serious disruption. Focus shifts to Washington In the background for carriers, although not front and center, is a resignation that can be summed up as “what will be, will be.” Carrier head offices have learned since COVID-19 that they make real money not when cargo is flowing smoothly, but rather when it slows or stops. They were on the receiving end of sharp political attacks during COVID-19 from President Joe Biden himself, while Congress in 2022 passed the first significant shipping legislation since 1998 over carrier objections, in contrast to the consensus between shippers and carriers that was the basis of earlier legislation going back decades. With no negotiations scheduled and the two sides remaining far apart on terms, the focus will begin shifting to Washington in the coming weeks. Multiple federal agencies are well aware of the state of play and the political implications of a serious economic event just weeks before a high stakes presidential election. Daggett has made it clear he wants no part of Biden administration intervention, seeing its involvement in West Coast negotiations in 2023 as resulting in a lower pay increase — 32% over six years — than dockworkers deserved or were capable of achieving. Although no clear signal has emerged about how Washington will approach the issue, sources tell the Journal of Commerce it will be a priority for the administration to seek a resolution. But that will not happen by way of Biden invoking the Taft-Hartley Act, which allows him to force workers back on the job, as that would be perceived as an anti-labor act that could alienate the crucial labor vote on Nov. 5. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

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Little cause for optimism as clock ticks toward ILA contract expiration

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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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