<div class="phx-topic abstract-wrapper">Data shows that backhaul shippers are being partially subsidized by headhaul shippers; for the Pacific backhaul, that figure is roughly $1.6 billion annually. </div>

Data shows that backhaul shippers are being partially subsidized by headhaul shippers; for the Pacific backhaul, that figure is roughly $1.6 billion annually.

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<div>Any discussion pertaining to rate levels tends to draw multiple opposing views depending on whether it’s being seen through the lenses of carriers or a variety of different shippers — especially as we are slowly nearing the annual contract negotiation season for the Pacific. Nonetheless, it is of interest to look into an aspect of headhaul rates versus backhaul rates as the discrepancy significantly deviates from the structural market imbalance.In essence, the data shows that backhaul shippers are de facto being partially subsidized by headhaul shippers. For the Pacific backhaul, this is in the ballpark range of $1.6 billion annually....

Any discussion pertaining to rate levels tends to draw multiple opposing views depending on whether it’s being seen through the lenses of carriers or a variety of different shippers — especially as we are slowly nearing the annual contract negotiation season for the Pacific. Nonetheless, it is of interest to look into an aspect of headhaul rates versus backhaul rates as the discrepancy significantly deviates from the structural market imbalance. In essence, the data shows that backhaul shippers are de facto being partially subsidized by headhaul shippers. For the Pacific backhaul, this is in the ballpark range of $1.6 billion annually. Whether this implies that backhaul shippers should pay more, or that this is simply a result of differing supply and demand equations between headhaul and backhaul, is more of a subjective discussion. But is it true that such a de-facto subsidy exists? And how to measure it? As with all analytics, this hinges on the data available as well as the method applied to analyze the data. The heart of the matter is quite simple. There are more containers being shipped eastbound than westbound on the Pacific. The vessels, as well as the containers themselves, naturally have to be moved for a full round trip. Therefore, this opens up a discussion in terms of who should “pay” for the cost of the empty slots as well as empty containers on the backhaul. With more cargo moving eastbound than westbound, it is also logical that eastbound cargo pays a higher share of the full round-trip revenue. Looking over the past year, headhaul volume accounted for 71% of the full round-trip volume from Asia to North America. It would therefore also appear logical that they should account for 71% of the revenue. But this would not be seen as reasonable, as the headhaul volume gives rise to empty container movements which, logically, should also be paid for by the headhaul shippers. If the empty container volume is taken into account and assigned fully as additional volume to the headhaul shippers, the result is that the headhaul shippers should account for 79% of the full revenue. This split can be tested by calculating the revenue received in either direction based on the spot rate indications from World Container Index (WCI). Using this as a data source, it turns out that 89% of the round-trip revenue comes from the headhaul cargo and only 11% from the backhaul cargo. It is therefore clear that the price being paid by the headhaul shippers covers significantly more than their own cargo, as well as the return of empty containers and vessel slots, whereas the backhaul shippers are not — proportionally speaking — covering their full shipments. It is then possible to calculate the difference between the theoretically balanced split — a revenue share of 79% — and the actual split of 89%. This leads to a result of $1.6 billion annually — meaning headhaul shippers de facto subsidize backhaul shippers by that amount each year under current market conditions. A matter of market dynamics At this point, there are a number of caveats the savvy reader will be able to note. The analysis is based on the spot index rates as they are the only credible index rates available on a comparative basis in both trade directions. Contract rates can well deviate from spot, and hence call the specific number into question. But this argument is equally valid in both directions, and while it might change the exact level of the number, it also appears unlikely to change the conclusion in itself. Significant rate differences abound, especially among different backhaul shippers, and hence the conclusion is an overall average not necessarily applicable for each individual shipper. That this is the state of affairs in the market is in itself not surprising, but should give rise to some reflection in terms of market dynamics. As headhaul shippers account for a disproportionately large share of the round-trip revenue, this naturally also leads carriers to increasingly optimize their commercial and operational processes around this fact. This in turn leads to operational decisions, such as inland equipment availability, which are detrimental to a range of backhaul shippers. While such a development is clearly not in favor of backhaul shippers, it can also be seen to be the logical outcome of a market structure wherein the revenue is disproportionately coming from the headhaul market. For some backhaul shippers, the problematic issue is that a substantial increase in their freight rates might undermine their profitability as their commodities are often not nearly as valuable as the headhaul commodities. And while this is indeed a valid concern for some, the mathematical reality is that the rates they are currently enjoying are only possible due to the de facto subsidies achieved from the headhaul. As such, they should anticipate that future operational efficiencies from the carriers will continue to favor the headhaul cargo and not the backhaul. The theoretical — and completely unrealistic — way to change that dynamic would be for the backhaul carriers to collectively increase their freight payments by $1.6 billion per year and hence in terms of freight contributions be on an equal footing with the headhaul cargo. Incidentally, the same type of calculation can be performed on the Atlantic trade, with the conclusion being that backhaul shippers are de facto subsidized by $1 billion annually. Contact Lars Jensen at Lars.Jensen@SeaIntelligence-consulting.com .

Container lines

Headhaul Pacific shippers subsidize backhaul $1.6 billion annually

<div class="phx-topic abstract-wrapper">With two attacks on commercial vessels in recent days, including one that killed three mariners, any thought that the risk in the Red Sea was easing to the point the Suez route might be restored in the near future has vanished.</div>

With two attacks on commercial vessels in recent days, including one that killed three mariners, any thought that the risk in the Red Sea was easing to the point the Suez route might be restored in the near future has vanished.

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<div class="phx-topic">With no attacks on shipping off the Yemeni coast since December — that is, until two strikes over the past three days — a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished. And as the threat diminished it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10% of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6040921_0.1.jpg"></img></div>Now with two attacks in recent days, including one that killed three mariners, any thought that the risk was easing to the point the Suez route might be reopened in the near future has vanished. “The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” Jefferies wrote on July 8. While the Houthi militia may have held fire for several months, the restraint should not be taken as a sign the group’s ability to strike is diminished. Although such a conclusion could be inferred from military setbacks experienced across the network of Iran-backed militia and states such as Syria, in reality, the Houthis remain a lethal force, as they showed this week, analysts say. “The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, told the Journal of Commerce Wednesday. Israel and the US have upped their strikes on rebels in Yemen in recent months. But without troops on the ground to uproot the rebels, Kennedy has been saying for more than a year that it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone. “Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said. “These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.” Kennedy added that the original spark for Houthi attacks on shipping — Israeli operations in Gaza — remains a core rationale for their strikes. “It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said. The result is an extended timeline, quite possibly into 2026, for any large-scale return to Suez routings. “With the developments over the past few days there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote on LinkedIn this week. Added Kennedy: “We expect that Houthi attack activity will continue through 2025 at least.” <h3>Ongoing disruption post-COVID </h3>For ocean carriers who didn’t create the crisis and yet are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo, the crisis is part of a larger narrative of ongoing post-COVID-19 disruption, alongside basic supply and demand, underpinning market dynamics. Carriers face intense profit pressures over the next few years, with Drewry last month saying it expects industry operating profit to fall to $20 billion this year, down from over $50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions. Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis “have capitulated” and agreed to stop attacks on commercial shipping in the region. But as the new attacks clearly showed, the Houthis were just lying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

With no attacks on shipping off the Yemeni coast since December — that is, until two strikes over the past three days — a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished. And as the threat diminished it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10% of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity. Now with two attacks in recent days, including one that killed three mariners, any thought that the risk was easing to the point the Suez route might be reopened in the near future has vanished. “The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” Jefferies wrote on July 8. While the Houthi militia may have held fire for several months, the restraint should not be taken as a sign the group’s ability to strike is diminished. Although such a conclusion could be inferred from military setbacks experienced across the network of Iran-backed militia and states such as Syria, in reality, the Houthis remain a lethal force, as they showed this week, analysts say. “The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, told the Journal of Commerce Wednesday. Israel and the US have upped their strikes on rebels in Yemen in recent months. But without troops on the ground to uproot the rebels, Kennedy has been saying for more than a year that it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone. “Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said. “These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.” Kennedy added that the original spark for Houthi attacks on shipping — Israeli operations in Gaza — remains a core rationale for their strikes. “It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said. The result is an extended timeline, quite possibly into 2026, for any large-scale return to Suez routings. “With the developments over the past few days there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote on LinkedIn this week. Added Kennedy: “We expect that Houthi attack activity will continue through 2025 at least.” Ongoing disruption post-COVID For ocean carriers who didn’t create the crisis and yet are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo, the crisis is part of a larger narrative of ongoing post-COVID-19 disruption, alongside basic supply and demand, underpinning market dynamics. Carriers face intense profit pressures over the next few years, with Drewry last month saying it expects industry operating profit to fall to $20 billion this year, down from over $50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions. Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis “have capitulated” and agreed to stop attacks on commercial shipping in the region. But as the new attacks clearly showed, the Houthis were just lying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Container Shipping News

Maritime

New Houthi attacks likely kill hopes of shipping returning to Red Sea this year

<div class="phx-topic abstract-wrapper">Mediterranean Shipping Co. is furthering its lead in vessel tonnage so far this year as it absorbs more than double the amount of new capacity added by No. 2 carrier Maersk. </div>

Mediterranean Shipping Co. is furthering its lead in vessel tonnage so far this year as it absorbs more than double the amount of new capacity added by No. 2 carrier Maersk.

<div class="phx-topic">Mediterranean Shipping Co. widened its already leading market share among ocean carriers as its fleet added the most ships in the first half of 2025, according to Alphaliner. Many of those new ships, though, are entering non-US trades as trans-Pacific demand appears to be ebbing for the remainder of the year. MSC’s fleet grew 5.5% in the first half, Alphaliner said in its weekly newsletter Wednesday. Only Ocean Network Express (ONE) saw a higher growth rate during that period at 5.9%, but MSC outstripped others for the most new capacity, adding some 365,173 TEUs to its fleet, Alphaliner said. The additional capacity, a combination of newbuild deliveries and acquisitions of second-hand ships, brings MSC’s total fleet to over 6.6 million TEUs, Alphaliner said. It added that MSC’s “relentless pursuit of capacity” has widened the gap with its former 2M partner Maersk, which added 170,371 TEUs during the first half of 2025 and brought its capacity to 4.5 million TEUs. “To put this into perspective, this gap [between MSC and Maersk] is equal to the entire fleet of ONE,” Alphaliner said, adding MSC is expected to take delivery of another 380,000 TEUs of newbuild capacity during the second half of 2025. Alphaliner said Maersk’s goal is not to enlarge its fleet as much as it aims to replace older vessels and make its network more efficient. It added that CMA CGM, which has the second-largest order book of new ships at 1.5 million TEUs, is “set to overtake Maersk in the coming years” in terms of fleet size. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="00f898cc-0bf5-4e4d-80d3-6db9454b1165"></dynamic-object></div><h3>Ships head to non-US markets </h3>During a speech last month to agriculture shippers, MSC’s US president, Fabio Santucci, said that while the fleet buildup may look excessive, it will head off even worse delays for shippers. Port congestion ties up about 10% of the global feet, he said, while the ongoing diversions around southern Africa absorb another 6%. MSC’s additional tonnage “is being fully absorbed and utilized and we are able to move cargo at 65% schedule reliability,” Santucci said. “Had we been more responsible financially, we would have had fewer ships, but the challenge is 50% schedule reliability.” While Santucci noted that MSC’s trans-Pacific reliability is hovering near 80%, much of the new tonnage is not currently serving US markets. Of 25 post-Panamax vessels delivered to MSC in the first half of 2025, only one — the 8,496-TEU MSC Benin — has called the US West Coast, according to satellite data from Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. Santucci said MSC is seeing the most cargo growth outside the US, with South America and Africa seeing respective growth of 10% and 12% during the first half of the year. Europe is also growing “well above average,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co. widened its already leading market share among ocean carriers as its fleet added the most ships in the first half of 2025, according to Alphaliner. Many of those new ships, though, are entering non-US trades as trans-Pacific demand appears to be ebbing for the remainder of the year. MSC’s fleet grew 5.5% in the first half, Alphaliner said in its weekly newsletter Wednesday. Only Ocean Network Express (ONE) saw a higher growth rate during that period at 5.9%, but MSC outstripped others for the most new capacity, adding some 365,173 TEUs to its fleet, Alphaliner said. The additional capacity, a combination of newbuild deliveries and acquisitions of second-hand ships, brings MSC’s total fleet to over 6.6 million TEUs, Alphaliner said. It added that MSC’s “relentless pursuit of capacity” has widened the gap with its former 2M partner Maersk, which added 170,371 TEUs during the first half of 2025 and brought its capacity to 4.5 million TEUs. “To put this into perspective, this gap [between MSC and Maersk] is equal to the entire fleet of ONE,” Alphaliner said, adding MSC is expected to take delivery of another 380,000 TEUs of newbuild capacity during the second half of 2025. Alphaliner said Maersk’s goal is not to enlarge its fleet as much as it aims to replace older vessels and make its network more efficient. It added that CMA CGM, which has the second-largest order book of new ships at 1.5 million TEUs, is “set to overtake Maersk in the coming years” in terms of fleet size. Ships head to non-US markets During a speech last month to agriculture shippers, MSC’s US president, Fabio Santucci, said that while the fleet buildup may look excessive, it will head off even worse delays for shippers. Port congestion ties up about 10% of the global feet, he said, while the ongoing diversions around southern Africa absorb another 6%. MSC’s additional tonnage “is being fully absorbed and utilized and we are able to move cargo at 65% schedule reliability,” Santucci said. “Had we been more responsible financially, we would have had fewer ships, but the challenge is 50% schedule reliability.” While Santucci noted that MSC’s trans-Pacific reliability is hovering near 80%, much of the new tonnage is not currently serving US markets. Of 25 post-Panamax vessels delivered to MSC in the first half of 2025, only one — the 8,496-TEU MSC Benin — has called the US West Coast, according to satellite data from Sea-web, a sister product of the Journal of Commerce within S&P Global. Santucci said MSC is seeing the most cargo growth outside the US, with South America and Africa seeing respective growth of 10% and 12% during the first half of the year. Europe is also growing “well above average,” he said. Contact Michael Angell at michael.angell@spglobal.com .

Asia-Europe

Trans-Pacific

MSC outstripping rivals on new capacity for 2025: Alphaliner

<div class="phx-topic abstract-wrapper">But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation and Hackett Associates said in their latest Global Port Tracker.</div>

But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation and Hackett Associates said in their latest Global Port Tracker.

<div class="phx-topic">US imports in July are expected to hit their highest level in at least the past 18 months and their peak for 2025, driven by the Aug. 1 extension granted by the Trump administration before the implementation of so-called reciprocal tariffs on a host of US trading partners, a major retail group said Wednesday. But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). “The tariff situation remains highly fluid and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect...” The White House’s unexpected extension of a 90-day pause in new tariffs that were due to take effect July 9 caused the NRF and Hackett to upgrade their import projections for July through October compared with June’s GPT. And while Gold said the brief extension was “greatly appreciated” by retailers, he chided the Trump administration for the seeming whiplash nature of its tariff policy. “...Uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs,” he said. “...It is vital for the administration to finalize negotiations with our trading partners and provide stability and certainty for US retailers.” <h3>Big bump in July forecast </h3>The GPT’s updated forecast calls for 2.36 million TEUs in US imports in July, up almost 11% from the June GPT and surpassing the 2.32 million TEUs brought in during July 2024. July is the only month in the second half of 2025 forecast to see year-over-year increases, so far. In August, retailers expect US imports to reach 2.08 million TEUs, up 5% from the forecast made in June but more than 10% under the 2.32 million TEUs imported in August 2024. September import projections were upgraded to 1.82 million TEUs — up 2.2% from the projection made last month but nearly 20% below year-ago levels. October’s import forecast increased by just half a percent to 1.81 million TEUs, 19.1% below volumes from October 2024. In its initial forecast for November, the GPT pegs imports at 1.7 million TEUs, down 16.2% year over year. Amid the forecasts for significant year-over-year import declines for the second half of 2025, Hackett Associates founder Ben Hackett pointed to supply chain uncertainty exacerbated by shifting tariff policies. “The global supply chain functions best in a trade environment that is smooth and predictable,” he said. “Instead, it has been forced to contend with erratic policies and geopolitical volatility.” The latest GPT projects June’s import volumes will come in at 2.06 million TEUs, up about 2.5% from the forecast made last month. Meanwhile, May’s actual volume of 1.95 million TEUs was about 2% higher than projected in the prior GPT. As volumes in the trans-Pacific look to retract beyond July, carriers have responded with reductions to capacity, with plans to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, according to maritime intelligence provider eeSea. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

US imports in July are expected to hit their highest level in at least the past 18 months and their peak for 2025, driven by the Aug. 1 extension granted by the Trump administration before the implementation of so-called reciprocal tariffs on a host of US trading partners, a major retail group said Wednesday. But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). “The tariff situation remains highly fluid and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect...” The White House’s unexpected extension of a 90-day pause in new tariffs that were due to take effect July 9 caused the NRF and Hackett to upgrade their import projections for July through October compared with June’s GPT. And while Gold said the brief extension was “greatly appreciated” by retailers, he chided the Trump administration for the seeming whiplash nature of its tariff policy. “...Uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs,” he said. “...It is vital for the administration to finalize negotiations with our trading partners and provide stability and certainty for US retailers.” Big bump in July forecast The GPT’s updated forecast calls for 2.36 million TEUs in US imports in July, up almost 11% from the June GPT and surpassing the 2.32 million TEUs brought in during July 2024. July is the only month in the second half of 2025 forecast to see year-over-year increases, so far. In August, retailers expect US imports to reach 2.08 million TEUs, up 5% from the forecast made in June but more than 10% under the 2.32 million TEUs imported in August 2024. September import projections were upgraded to 1.82 million TEUs — up 2.2% from the projection made last month but nearly 20% below year-ago levels. October’s import forecast increased by just half a percent to 1.81 million TEUs, 19.1% below volumes from October 2024. In its initial forecast for November, the GPT pegs imports at 1.7 million TEUs, down 16.2% year over year. Amid the forecasts for significant year-over-year import declines for the second half of 2025, Hackett Associates founder Ben Hackett pointed to supply chain uncertainty exacerbated by shifting tariff policies. “The global supply chain functions best in a trade environment that is smooth and predictable,” he said. “Instead, it has been forced to contend with erratic policies and geopolitical volatility.” The latest GPT projects June’s import volumes will come in at 2.06 million TEUs, up about 2.5% from the forecast made last month. Meanwhile, May’s actual volume of 1.95 million TEUs was about 2% higher than projected in the prior GPT. As volumes in the trans-Pacific look to retract beyond July, carriers have responded with reductions to capacity, with plans to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, according to maritime intelligence provider eeSea. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com .

Port News

North American ports

Supply chain

US retailers upgrade import forecast after tariff deadline extended to Aug. 1

<div class="phx-topic abstract-wrapper">The moves by CMA CGM were made to improve westbound transit times that remain a challenge due to ongoing vessel diversions around southern Africa. </div>

The moves by CMA CGM were made to improve westbound transit times that remain a challenge due to ongoing vessel diversions around southern Africa.

<div class="phx-topic">CMA CGM has implemented a series of adjustments to its premier “Indamex” service between India and the US East Coast (USEC) to better compete with its peers on the trade lane, including dropping a long-time call at Charleston. The move was made to improve westbound transit times that remain a challenge due to ongoing vessel diversions around southern Africa. The French carrier will also phase in three additional ships into the network to offer a weekly rotation as consistently as possible as sporadic void calls continue to vex schedule reliability. The service has blanked four Indian sailings through June and July. “The Indamex lineup is being reinforced by adding three vessels to the fleet,” CMA CGM said in a customer advisory. With the enhancements, the carrier estimates the Indamex roundtrip voyage duration will improve to 84 days from the current 90-plus days. The full revised rotation will be Pakistan’s Port Qasim, Nhava Sheva, Mundra, Colombo, New York, Norfolk, Savannah, and back to Port Qasim. But CMA CGM said the call at Port Qasim remains restricted to import discharge operations amid transit cargo restrictions for Pakistani containers at Indian ports, an issue tied to recent regional trade tensions. The reorganized routing also removes a temporary call to Khalifa Port in Abu Dhabi that the carrier introduced in May to handle Pakistani transshipments, which are now expected to be relayed entirely over Colombo in Sri Lanka. For Indian loads, the changes are due to begin with the Belita that has an estimated time of arrival of July 13 in Nhava Sheva Port, berthing data shows. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56199e2b-5df4-468f-a149-b18ae7c32e51"></dynamic-object></div>The Indamex service has been a long-time market leader on the India-USEC route. It is now a standalone operation for CMA CGM following Hapag-Lloyd’s exit from the network in February as it shifted to the Gemini Cooperation alliance with Maersk. The Cosco Shipping and OOCL subsidiary co-load on the loop via weekly slot space arrangements with CMA CGM. The service changes also appear to be an attempt by CMA CGM to regain market share lost to competitors — Maersk, in particular, after it introduced an enhanced “MECL” loop on the trade lane in February. Still, Hapag-Lloyd’s TPI service leads India-North America volumes, accounting for about 25% of the market, according to anecdotal industry data. Meanwhile, most India-USEC carriers, including Hapag-Lloyd and CMA CGM, have jettisoned rate hike plans they were to implement beginning July 15, in another indication of their faltering price recovery efforts. Still, spot rates on the trade lane have shown some strength so far this month, with Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegging rates at $2,800 per FEU as of July 8, up 6% on the week. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

CMA CGM has implemented a series of adjustments to its premier “Indamex” service between India and the US East Coast (USEC) to better compete with its peers on the trade lane, including dropping a long-time call at Charleston. The move was made to improve westbound transit times that remain a challenge due to ongoing vessel diversions around southern Africa. The French carrier will also phase in three additional ships into the network to offer a weekly rotation as consistently as possible as sporadic void calls continue to vex schedule reliability. The service has blanked four Indian sailings through June and July. “The Indamex lineup is being reinforced by adding three vessels to the fleet,” CMA CGM said in a customer advisory. With the enhancements, the carrier estimates the Indamex roundtrip voyage duration will improve to 84 days from the current 90-plus days. The full revised rotation will be Pakistan’s Port Qasim, Nhava Sheva, Mundra, Colombo, New York, Norfolk, Savannah, and back to Port Qasim. But CMA CGM said the call at Port Qasim remains restricted to import discharge operations amid transit cargo restrictions for Pakistani containers at Indian ports, an issue tied to recent regional trade tensions. The reorganized routing also removes a temporary call to Khalifa Port in Abu Dhabi that the carrier introduced in May to handle Pakistani transshipments, which are now expected to be relayed entirely over Colombo in Sri Lanka. For Indian loads, the changes are due to begin with the Belita that has an estimated time of arrival of July 13 in Nhava Sheva Port, berthing data shows. The Indamex service has been a long-time market leader on the India-USEC route. It is now a standalone operation for CMA CGM following Hapag-Lloyd’s exit from the network in February as it shifted to the Gemini Cooperation alliance with Maersk. The Cosco Shipping and OOCL subsidiary co-load on the loop via weekly slot space arrangements with CMA CGM. The service changes also appear to be an attempt by CMA CGM to regain market share lost to competitors — Maersk, in particular, after it introduced an enhanced “MECL” loop on the trade lane in February. Still, Hapag-Lloyd’s TPI service leads India-North America volumes, accounting for about 25% of the market, according to anecdotal industry data. Meanwhile, most India-USEC carriers, including Hapag-Lloyd and CMA CGM, have jettisoned rate hike plans they were to implement beginning July 15, in another indication of their faltering price recovery efforts. Still, spot rates on the trade lane have shown some strength so far this month, with Platts, a sister company of the Journal of Commerce within S&P Global, pegging rates at $2,800 per FEU as of July 8, up 6% on the week. Contact Bency Mathew at bencyvmathew@gmail.com .

India-US ‘Indamex’ string drops Charleston, adds more ships to bolster reliability

<div class="phx-topic abstract-wrapper">In the latest course correction in the US’ busiest trade lane, carriers are set to deploy less tonnage in August as spot rates fall and retail import forecasts weaken. </div>

In the latest course correction in the US’ busiest trade lane, carriers are set to deploy less tonnage in August as spot rates fall and retail import forecasts weaken.

<div class="phx-topic">Container lines are pulling back on the deployment of tonnage from Asia to the US in August in the latest course correction linked to stop-and-start import demand amid tariff uncertainty. Container lines are set to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, equating to 90,000 TEUs of capacity, according to maritime intelligence provider eeSea. Comparatively, ocean capacity from Asia to US East and Gulf coasts will be trimmed by just 1.7%. Mediterranean Shipping Co. this week suspended its Pearl service to Long Beach, with the last sailing out of Xiamen on July 13, according to Kuehne + Nagel’s SeaExplorer tool. Container lines can also blank sailings — removing ships from services or skipping ports — to further calibrate capacity to weakening demand.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0d272fa5-b752-4ec3-a342-964ef1a2b1f3"></dynamic-object></div>The rate of blanking compared with deployed capacity in May reached 26%, equating to 262,000 TEUs, as carriers adjusted networks, according to eeSea. In June, the rate was 9.5%. <h3>Tariff whiplash </h3>Carriers began pushing capacity back into the trade in May in anticipation of a surge of imports from China, driven by an early peak season caused in large part by the 90-day reprieve on higher US tariffs. Just a month earlier, US importers canceled China bookings after President Donald Trump on April 9 imposed 145% tariffs. In response, ocean carriers blanked sailings and suspended services, although Trump soon reversed course. Now carriers face an expanding capacity overhang amid downbeat retail import forecasts and the surge in US imports linked to the initial tariff reprieve in its last gasp. The tentative agreement with China to bring US tariffs to 55% hasn’t had much impact on importers’ peak season ordering, thanks to more than eight months of frontloading shipments and a narrow window for getting goods in before the year-end shopping season. While US retailers <a href="https://www.joc.com/article/pause-on-tariffs-prompts-us-retailers-to-upgrade-summer-import-forecast-6022230">upgraded their import forecast</a> slightly in early June, their volume expectations still lag the same period in 2024. US imports are expected to reach 2.13 million TEUs this month, down from 2.32 million TEUs a year ago, according to the Global Port Tracker. Retailers plan to bring in 14.7% less volume, equating to 331,000 TEUs of capacity, next month compared with August 2024. US laden imports from Asia have been falling since September, with the exception of a short-lived recovery in April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. In September, inbound volumes hit 1.79 million TEUs, falling to 1.4 million TEUs by May. Container spot rates from Asia to the US, a barometer of how capacity is matching up to demand, have been falling for a month, according to various indexes. For example, container spot rates from Shanghai to the US West Coast last week were less than half the price a month ago, at $2,089 per FEU, according to the Shanghai Containerized Freight Index. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com ">mark.szakonyi@spglobal.com</a>. </div>

Container lines are pulling back on the deployment of tonnage from Asia to the US in August in the latest course correction linked to stop-and-start import demand amid tariff uncertainty. Container lines are set to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, equating to 90,000 TEUs of capacity, according to maritime intelligence provider eeSea. Comparatively, ocean capacity from Asia to US East and Gulf coasts will be trimmed by just 1.7%. Mediterranean Shipping Co. this week suspended its Pearl service to Long Beach, with the last sailing out of Xiamen on July 13, according to Kuehne + Nagel’s SeaExplorer tool. Container lines can also blank sailings — removing ships from services or skipping ports — to further calibrate capacity to weakening demand. The rate of blanking compared with deployed capacity in May reached 26%, equating to 262,000 TEUs, as carriers adjusted networks, according to eeSea. In June, the rate was 9.5%. Tariff whiplash Carriers began pushing capacity back into the trade in May in anticipation of a surge of imports from China, driven by an early peak season caused in large part by the 90-day reprieve on higher US tariffs. Just a month earlier, US importers canceled China bookings after President Donald Trump on April 9 imposed 145% tariffs. In response, ocean carriers blanked sailings and suspended services, although Trump soon reversed course. Now carriers face an expanding capacity overhang amid downbeat retail import forecasts and the surge in US imports linked to the initial tariff reprieve in its last gasp. The tentative agreement with China to bring US tariffs to 55% hasn’t had much impact on importers’ peak season ordering, thanks to more than eight months of frontloading shipments and a narrow window for getting goods in before the year-end shopping season. While US retailers upgraded their import forecast slightly in early June, their volume expectations still lag the same period in 2024. US imports are expected to reach 2.13 million TEUs this month, down from 2.32 million TEUs a year ago, according to the Global Port Tracker. Retailers plan to bring in 14.7% less volume, equating to 331,000 TEUs of capacity, next month compared with August 2024. US laden imports from Asia have been falling since September, with the exception of a short-lived recovery in April, according to PIERS, a sister product of the Journal of Commerce within S&P Global. In September, inbound volumes hit 1.79 million TEUs, falling to 1.4 million TEUs by May. Container spot rates from Asia to the US, a barometer of how capacity is matching up to demand, have been falling for a month, according to various indexes. For example, container spot rates from Shanghai to the US West Coast last week were less than half the price a month ago, at $2,089 per FEU, according to the Shanghai Containerized Freight Index. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container lines cutting trans-Pacific capacity overhang

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

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Shippers save money, time with automated transportation bidding tools

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

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