<div class="phx-topic abstract-wrapper">Consumers Power Co. said it was very demanding on companies vying to be suppliers for the Midland co</div>

Consumers Power Co. said it was very demanding on companies vying to be suppliers for the Midland co

<div>Consumers Power Co. said it was very demanding on companies vying to be suppliers for the Midland cogeneration project.Since we were in such poor shape financially, we needed to develop a project structure that required a minimum of cash from the company, said John W. Clark, Consumers' senior vice president.The strategy was to attract equity partners who would have a vested interest in Midland, he told a symposium on energy alternatives to oil sponsored by the U.S. Department of Energy's Argonne National Laboratory.Consumers, based in Jackson, Mich., is the state's largest utility, serving 6 million people.In short, our basic strategy...

Consumers Power Co. said it was very demanding on companies vying to be suppliers for the Midland cogeneration project. Since we were in such poor shape financially, we needed to develop a project structure that required a minimum of cash from the company, said John W. Clark, Consumers' senior vice president.The strategy was to attract equity partners who would have a vested interest in Midland, he told a symposium on energy alternatives to oil sponsored by the U.S. Department of Energy's Argonne National Laboratory. Consumers, based in Jackson, Mich., is the state's largest utility, serving 6 million people. In short, our basic strategy has been to require those who hoped to sell products or services to the project to invest in it, he added. In an interview, Mr. Clark acknowledged the policy was unusual and was met with some resistance. These were all very big, very established companies that obviously had been very successful for a long period of time, he said. They were very accustomed to certain business practices . . . We were simply insistent, he added. The Midland gas-fired, combined-cycle cogeneration plant will produce up to 1,370 megawatts of electricity and 1.35 million pounds of steam an hour for industrial use when it comes on line in 1990. Midland was started 20 years ago as a nuclear cogeneration plant. Costs reached $4 billion, or 40 percent of the company's total assets, before a decision was made, amid questions over the quality of the construction work, to convert the plant to burn natural gas. To date, seven companies have joined in the Midland project, contributing $360 million in cash equity. They are subsidiaries of Asea Brown Boveri, CMS Energy Corp. - Consumers' parent company - Coastal Corp., Combustion Engineering, Dow Chemical Co., Fluor Corp. and Panhandle Eastern Corp. Mr. Clark said Consumers hopes that the Midland project, along with several other smaller cogeneration operations, will help to re-establish our generating reserve back to the 22 percent to 23 percent level. He told the meeting that Midland's reserve capacity margin stands at about 13 percent, or half of what state regulators say is prudent. Mr. Clark also said that if natural gas prices increase significantly, the Midland plant could be retrofitted to gasify coal, most likely using technology that Dow Chemical has perfected. Consumers already has negotiated for 80 percent of the natural gas it needs through 1990 and more than 60 percent of its requirements in 1994.

CONSUMERS NETS MIDLAND PARTNERS

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

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

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

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

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Rotterdam rail operators ink deal to tackle delays, reliability

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

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

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

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

Transport, Trade and Regulation News

Maritime

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

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

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

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

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

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Asia-Europe

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

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

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

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

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

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

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

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

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

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

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