Trans-Atlantic

Carriers appear reluctant to make the drastic capacity reductions required to match supply with demand on the westbound trade lane, leaving rates far below pre-pandemic levels.

The spot market from North Europe to the US East Coast continues to weaken and lackluster attempts by carriers to withdraw capacity are having little effect on balancing supply and demand.

The completion of the terminal acquisitions gives the carrier a stronger footprint in the US’s largest East Coast gateway.

Weak European demand for containerized trade through the first half is hurting port throughput at the region’s top three gateways, but signs are emerging of recovering volume on certain routes.

Getting shippers to commit to premium-priced, low-emissions shipping services is a hard sell for ocean carriers and forwarders as cargo owners enjoy rates that are now mostly below pre-pandemic levels after two years of record highs.

Rolf Habben Jansen has hinted that capacity cuts on the trans-Atlantic could be made “fairly soon” as supply outstrips weak demand for US imports.

Ocean rates for North Europe to North America have fallen significantly below pre-pandemic levels on some trade lane indices after a wild three-year ride that took container shipping prices to record levels.

Inclusion in the European Union’s emissions trading system will affect not only the cost of shipping to and from the EU, but will likely put upward pressure on pricing for cargo that doesn’t touch the EU at all, writes analyst Lars Jensen.

The extent to which the rapidly cooling container shipping market is hurting China’s main carriers is likely to be repeated across the industry as reporting season approaches.

Sustained weakness in demand, excess capacity and ongoing economic uncertainty are undermining the container trade in and out of Europe, making a third-quarter rebound increasingly unlikely.

The shift to green fuels needs to be “supercharged” by establishing a clear zero-emissions target at the IMO’s July meeting, according to an Oslo-based shipowner group.

Although the container shipping order book is the highest it has been in many years and demand remains subdued, the ground is shifting under the ocean market in new and unfamiliar ways, writes Peter Tirschwell.

Price is once again on the side of shippers, with excess ocean capacity allowing them to extract lower rates from service providers.

While indicators may point to a “normal” container shipping market in the wake of the pandemic, it is important to remember that disruptions large and small are all part of that normality, writes analyst Lars Jensen.

While rates on the trans-Pacific and Asia-Europe trades may have hit bottom, there is still some way to go before headhaul trans-Atlantic prices reach pre-pandemic levels, but the gap is narrowing by the week.

Fundamentally, current data on ocean freight rates supports the notion that the market has, overall, reached a low point and is about to rebound slightly to be brought back in line with long-term trends, writes analyst Lars Jensen.

An abundance of trans-Atlantic capacity and improving schedule reliability through the first quarter has been accompanied by a steep drop in volume, with rates falling steadily since the New Year.

The poor economic conditions affecting Europe’s major economies and the ongoing war in Ukraine continue to drag down container volumes at the continent’s second-largest port.

Despite the sharp decline in ocean freight rates, current market fundamentals point to carriers, to some degree, becoming better at pricing and yield management than they were prior to the pandemic, writes analyst Lars Jensen.

The company’s revenue for the 2023 first quarter is one of the ocean shipping market’s very first indications of how the plunge in rates will affect carriers’ bottom lines.

Steadily increasing volume on trans-Atlantic air freight routes ended in March as demand growth slowed for the first time in two years.

A series of challenges lies ahead for the container shipping industry, but the effects of slowing demand and a surplus of capacity will be softened by a record financial performance in 2022.

The Scan Baltic to USA service, which will begin calling Jaxport in late April, marks the port's second trans-Atlantic service and fifth container service.

The rare occurrence – in which multiple longshore labor negotiations across North America are taking place either simultaneously or nearly so — is enough to make shippers nervous, or at least wary, writes Journal of Commerce Executive Editor Mark Szakonyi.

Shippers are keeping pressure on carriers to decarbonize their operations with the launch of another US-led initiative to speed up container shipping’s transition to fossil-free fuels.

Norfolk Southern and the Port of Virginia are not only targeting importers using trans-Atlantic services from Europe and Asia, but also exporters moving goods through Memphis, such as the cotton industry.

Retailers say their main concern right now is to avoid over-ordering product from factories in Asia until they get a better handle on consumer demand later this summer.

Carriers may try to offset the costs of compliance with Europe’s incoming Emissions Trading System by adding transshipment calls outside the 300-mile ETS zone, port groups say.

Despite the lack of industry-wide emissions measurement, shippers are pressing ahead with their own sustainability programs and working with supply chain emissions data that is available, TPM23 attendees were told.

Southeast ports are handling more imports from Asia than ever, but it’s unclear how much of that growth will stick once negotiations over a new West Coast longshore contract conclude.

Cosco Shipping’s large orderbook and decreasing market share make it more likely to go after customers of its Ocean Alliance partners, analyst Lars Jensen told TPM23.

The elevated rate levels on the trans-Atlantic will continue to soften, but there will be no steep drop in prices as seen on the major trades out of Asia, TPM23 attendees were told.

Hapag-Lloyd is the latest carrier to sign a supply deal with a major energy company aimed at locking in the volumes of alternative fuel required to drive new dual-fuel ships.

MSC vessels that transport containers for DB Schenker will use a blend of biofuel under an agreement designed to generate substantial cuts in CO2 emissions this year.

It might have been a fourth quarter to forget for OOCL as volume and rates tumbled, but a strong performance through the rest of 2022 has put the carrier on course for another profitable year.

If Maersk’s volumes and market share continue to slip, the reduction in size will eventually challenge profitability aspirations in a market where some competitors are increasing their scale benefit, writes analyst Lars Jensen.

Global economic growth is expected to outstrip container shipping demand through 2023, potentially upsetting the traditional approach to measuring trade.

Maersk does not believe any of the major carriers outside the 2M Alliance have the competitive network, scale, or cost base to forge individual paths outside their current partnerships.

The uncertain direction of the US economy is prompting consumers to hit the pause button on their buying habits, forcing a major retail group to further downgrade import projections through the first half of the year.

Carriers on the trans-Atlantic find themselves in the curious position of adding capacity to the trade while at the same time having to blank sailings to maintain the supply-demand balance.