/ By COH Marketing / Market Update（EN） • 市场动向(中文)/ 0 Comments

Freight Market Update: March 7, 2023

Ocean Freight Market Update

Asia → North America (TPEB)

  • Transpacific Eastbound (TPEB) rates soften amid low demand.
    • U.S.: TPEB rates are back to seeing minor mitigations to most U.S. gateways and inland destinations this week. Overall, delays and congestion are down but the consistent weekly blank sailings can expect to remove 30% of capacity from the market. Current capacity remains above any projected container volumes, spurring recent rate reductions.
    • Canada: Market and rate conditions are similar to the U.S. Vancouver continues to see stable vessel dwell counts (3 vessels) and berthing delays (13 days, 9 days for rail dwell). The low TPEB demand is further playing a key role in keeping West Coast port and rail congestion low.
  • Rates: Soft on most origin-destination combinations.
  • Space: Open.
  • Capacity/Equipment: Open.
  • Recommendation: Book at least 2 weeks prior to cargo ready date (CRD), and keep upcoming blank sailings in mind.

Asia → Europe (FEWB)

  • Demand and Supply are a bit more balanced this week after the blank sailings seen immediately following Lunar New Year (LNY). Booking intake is gradually improving but still not as strong as pre-LNY. Rates are still under pressure.
  • Rates: Generally reduced or extended for the first half of March.
  • Capacity/Equipment: Still seeing around 10-20% blank sailing average in weeks 11/12/13 to adjust for the decrease in demand. Expect the carriers to continue the same trend into March.
  • Recommendation: Allow flexibility when planning your shipments due to anticipated congestion and delays (rolls).

Europe → North America (TAWB)

  • Demand remains low, space continues to be widely available. Inventories stock in the US are still very high so demand is not picking up as expected.
  • Rates: The drop continues as demand is not picking up at the same pace as last year and vessel utilization is in the 65-70% range, down from 90% a few months ago.
  • Space: Due to the easing of congestion, space in the U.S. East Coast (USEC) and U.S. West Coast (USWC) is coming online.
  • Capacity/Equipment: Equipment availability keeps getting better as congestion disappears. Low empty stacks at inland depots are also getting better in some areas, but prioritize pick-up from the Port of Loading if possible.
  • Recommendation: Book 2-3 or more weeks prior to CRD. Request premium service for higher reliability and no-roll.

Indian Subcontinent → North America

  • Continued rate reductions were seen in the 2nd half of February, but the expectation is that stabilization will occur as we head into March.
  • Rates: Decreased week-over-week.
  • Space: Open.
  • Capacity/Equipment: Capacity is open with few blank sailings and limited disruptions. Equipment will continue to be an issue based on carrier choice and empty pickup location.
  • Recommendation: Be open to procuring equipment from wet ports vs. inland container depots as equipment deficits are being felt in many areas.

North America → Asia

  • Capacity is available across all major services, and carriers are looking for volume opportunities. No major services to the Asia Pacific (APAC) region are seeing space constraints.
  • Congestion has been cleared out across most North American container yards with improved operations as a result of lowered demand.
  • Equipment is available and ample in most major markets.
  • The outlook at the end of Q1 and headed into Q2 is that most of the existing capacity will remain in place as carriers lightly reshuffle vessel capacity across trades.
  • Rates: Rate pressures continue the trend slightly downwards MoM on certain lanes from coastal ports to Asia base ports. All carriers are trying to push cargo onto these lanes/services. Deals below existing market levels are available for consistent volume opportunities.
  • Space: Very open, allocation requests can be made to carriers for high volume weeks or projects with a high probability of acceptance.
  • Capacity/Equipment: no major capacity changes in the market. No major equipment hurdles to highlight. The only pocket shippers should monitor are IPI’s where chassis availability may be low.
  • Recommendation: book 1-2 weeks prior to CRD on all coastal to Asia-based port lanes, and book 2-3 weeks prior to CRD on all inland to Asia and feeder port lanes.

North America → Europe

  • Capacity from the USEC is available, while certain services from the USWC and Gulf remain tight but stable.
  • Most USEC to N. Europe (NEU) and Mediterranean (MED) services have low capacity utilization levels with no space constraints.
  • Gulf Coast to NEU and MED services continue to have medium to high utilization levels as the market has seen a reintroduction of capacity. Still there are some inconsistencies in the schedules from the Gulf.
  • The USWC to NEU, MED services are still limited in options and therefore utilization levels are artificially high.
  • Rates: Rates trended slightly downward QoQ on USEC to NEU lanes. Carriers made adjustments early in Q1 and since then rates have remained flat. Gulf and USWC rates were not adjusted in Q1 given the utilization levels on those services. Carriers are willing to make deals for USEC opportunities.
  • Space: Space is open from USEC, manageable from Gulf, and limited from USWC.
  • Capacity/Equipment: no major capacity changes in the market. No major equipment hurdles to highlight in the US, save for pockets of potential chassis issues out of IPI’s.
  • Recommendation: book 2 weeks prior to CRD on all EC to NEU, MED lanes, book 3 weeks prior to CRD on all Gulf to NEU, MED lanes, book 4 weeks prior to CRD for all PSW to NEU lanes.

Air Freight Market Update

Asia

  • N. China: TPEB demand continues to increase leading to tight capacity conditions. Space is already quite full through the end of the week. The main contributing factor is an increase in e-commerce demand. As a result, rates have increased this week. The FEWB market remains unchanged with rates remaining the same as the previous week.
  • S. China: Supply is tight with demand increasing in the market, resulting in rates increasing from the week prior.
  • Taiwan: The market is slack with some carriers canceling freighter flights on the TPEB tradelane.
  • Korea: Rates remain the same as the previous week with no large increases in market demand.
  • SE Asia: Markets are soft and demand remains unchanged with no signs of increases heading into March.

Europe

  • Overall Demand has increased with more fluctuations in rates WoW across point pairs.
  • Currently direct routings have a longer lead time and higher rates.
  • More indirect options available with one or more connections at a cheaper rate but with a slightly longer TT.
  • No major disruptions or delays across major hubs.

Americas

  • Export demand remains steady from all markets.
  • US airports are running at a normal pace.
  • Capacity is opening up further, especially into Europe.
  • Rates remain stable week over week.

Trucking & Intermodal

Europe

  • Inland waterway shipping, or in short barging, is becoming more and more the transport modality of choice for moving containers from the Rotterdam Ocean Port to the ‘Hinterland’, not only into the Netherlands but also cross border to Germany and Switzerland.
  • There is an expectation that container transport to and from the main port of Rotterdam will grow significantly over the next 20 years. If this growth is accommodated by road transport, our roads will become completely blocked. There is a lot of unused capacity in the system of inland waterways and inland shipping is capable of transporting large volumes. Compared to transport by lorry or plane, inland shipping produces far less CO2. Moreover, inland shipping accidents are rare.

Americas

Import/Export Market Trends

  • Congestion is improving at Canadian ports and rail ramps, there are no significant operational delays.
  • CP Vaughan Intermodal Terminal is an exception where truckers, at time, are still experiencing 4-6 hours of waiting time.
  • CN continues shuttling containers from Brampton terminal to the CN Misc terminal, charging $300 per container.
  • Memphis, Houston, Detroit, Savannah, and Oakland are seeing some delays and import dwells > 10 days.
  • The port of Houston will be discontinuing Saturday operations at Bayport + Barbours cut on April 29th.
  • Congestion fees will no longer be active, effective March 1.
  • Majority of US ports and rail ramps are fluid, and not experiencing any significant delays.
  • Highway Diesel have remained relatively stable YTD.

US Domestic Trucking Market Trends

  • The FreightWaves SONAR Outbound Tender Volume Index (OTVI), which measures contract tender volumes across all modes, was down 25% year-over-year (3.3% month-over-month), or 9.6% when measuring accepted volumes after the significant decline in tender rejection rates. ‘
  • In addition to this, the Cass report indicated year-over-year volumes were down 3.9% in December after falling 3.3% month-over-month from November. This trend illustrates shipment volumes are declining compared to last year, but much more gradually.
  • The Morgan Stanley Dry Van Freight Index is another measure of relative supply; the higher the index, the tighter the market conditions.
  • Throughout December, trends closely followed this curve, indicating that market pressures were consistent with average historical trends. Looking forward, we expect to see softening through at least February as seasonal demand eases in the first two months of the year.

Customs and Compliance News

USTR Releases 2023 Trade Policy Agenda

On March 1, the Office of the United States Trade Representative (USTR) released the Biden Administration’s 2023 Trade Policy Agenda and 2022 Annual Report. Trade priorities for 2023 include advancing a worker-centered trade policy, realigning the U.S.-China trade relationship, engaging with trading partners and multilateral institutions, promoting policy confidence through enforcement, and expanding stakeholder engagement.

Freight Market News

Walmart’s Store-Fulfilled Delivery Sales Nearly Triple in Two Years

Expanding into omnichannel shopping options has been a winning strategy for many retailers over the last few years. Walmart has proven to be no exception, with a 3x increase in store-fulfilled deliveries in just the last 2 years. They now have 3,900 of their 4,717 U.S. locations providing inventory to fill customer orders.

MSC, World’s Biggest Shipping Company and U.S.-China Trade Bellwether, Is Betting on a Rebound for Global Economy

The conversation with MSC CEO Soren Toft ranges pretty widely, but always comes back to one main point—he sees a positive turn for the shipping market coming in the second half of 2023. U.S. and European consumers remain active, and major retailers are selling down their overstocks from last year. Touching on the recent announcement of the end of the 2M alliance between MSC and Maersk, Toft says he remains optimistic and that the dissolution was the result of the two companies simply having different visions for their respective futures.

Source from Flexport.com

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TPM23: Ocean Alliance could be next domino to fall after 2M

Carrier alliances are undergoing a major shift as rates plummet and costs look set to increase, analyst Lars Jensen told TPM23 attendees.

The Ocean Alliance could be the next major ship-sharing agreement to sink, possibly sometime this year, as its members chart different strategies and look to gain market share during the current “rate war” among ocean carriers, industry analyst Lars Jensen said Wednesday.

Speaking at the Journal of Commerce’s TPM23 conference in Long Beach, Jensen said ocean carriers face a market similar to the one seen during the 2008-09 financial crisis when a massive buildup of ship capacity came up against weakening demand.

While demand could recover should inventory destocking occur through the spring and US consumers keep spending, Jensen said the industry faces other headwinds, such as political scrutiny over the alliances’ anti-trust exemptions and higher costs from stringent carbon emissions rules. The result, he added, is that carriers are thinking more about “who do I want to spend the next few years with” as has happened with the pending dissolution of the 2M Alliance.

“It’s a normal downcycle we are going through, then there are some elements that are slightly different,” Jensen, CEO and partner of Vespucci Maritime and a Journal of Commerce analyst, said. “Rates are coming down faster than they went up. It is a rate war.”

“2M is the just the first domino to fall,” he added. “When it was formed, you had two parties with the same strategic interest. Now you have two parties whose interests are no longer aligned.”

China-US spot rates saw freefall in H2 2022

Spot container rates for Shanghai to Los Angeles and New

Cosco has second-largest orderbook

Jensen, one of the first to predict the breakup of 2M, said at the time that Mediterranean Shipping Co.’s large orderbook of new vessels allowed it to operate on a standalone basis across many trade lanes, without having to share space on Maersk vessels. A similar dynamic could play out with Ocean Alliance member Cosco Shipping, which has the second-largest orderbook of new ships behind MSC, Jensen said.

Cosco faces renewed urgency to fill those new vessels due to a loss of market share over the last two years that Jensen attributed to China’s COVID-19 lockdowns and the resulting shipping delays out of the country.

“I’m going to expect Cosco to be very aggressively going after market share,” Jensen said. “Who’s the easiest prey to go after? That would be customers already on your ships through your alliance partners.”

“That’s not going to sit well with [Ocean Alliance members] CMA CGM and Evergreen Marine,” Jensen said, adding that Taiwan’s Evergreen faces the additional tension of working with a China-based carrier.

Indeed, Cosco recently upsized capacity on an Asia to US Gulf service it operates on a standalone basis, but that is also offered through the Ocean Alliance. The new capacity on that Cosco service now evenly matches one that CMA CGM also offers on a standalone basis to the US Gulf.

Likewise, CMA CGM is pursuing a strategy not similar to Maersk’s, “but somewhere in the same direction,” Jensen said.

As does Maersk, CMA CGM looks to own US terminal assets after striking acquisition deals on the US East and West coasts. CMA CGM’s North American President Peter Levesque said during his appearance at TPM23 Tuesday that owning terminals allows the carrier to “determine our own destiny.”

The Ocean Alliance’s agreement is set to expire in 2027, Jensen said, but he noted the current market uncertainty and the pending breakup of 2M could hasten a decision not to renew the Ocean Alliance in 2023.

Regarding THE Alliance, Jensen said “it’s slightly stable” due to similar operating strategies and less aggressive ship ordering. However, he said the changing carrier landscape may make THE Alliance’s two biggest members, Hapag-Lloyd and Ocean Network Express (ONE), reconsider their partnerships. Jensen even posited that the two could decide to merge as a way to take on ever-larger ocean carriers.

“This is not the first time we’ve seen alliances break up and get re-formed,” he said. “The challenge is once everyone’s dance card is open, Hapag and ONE will have some thinking to do about who do we actually want to be lined up with now that everything is shifting.”

/ By COH Marketing / Market Update（EN）/ 0 Comments

Freight Market Update: November 22, 2022

Ocean Freight Market Update

Asia → North America (TPEB)

  • Transpacific Eastbound (TPEB) demand continues on a declining trend:
    • U.S.: Rates continue to fall for all gateways, nearing rate levels seen pre-pandemic. Although carrier reliability is up YoY and overall TPEB capacity is continuing to grow, port and rail congestion is still seen at the major US gateways to some extent, most notably at Houston for vessel dwell (12 days) and Los Angeles/Long Beach as rail dwell (14 days).
    • Canada: Market and rate conditions are similar to the U.S. Vancouver saw an improvement in the vessel count but a deterioration in berthing delays (29 days).
  • Rates: Remain soft on most origin-destination combinations.
  • Space: Open.
  • Capacity/Equipment: Open, except in a few pockets.
  • Recommendation: Book at least 2 weeks prior to cargo ready date (CRD) and keep in mind upcoming blank sailings.

Asia → Europe (FEWB)

  • No change in the sluggish demand throughout November with a similar outlook going into early December. Rates are still following a downward trend. Space is readily available but schedule reliability is affected. Port congestion in Europe continues to cause delays and late return of vessels to Asia.
  • Rates: Ongoing pressure on spot rates due to low demand.
  • Capacity/Equipment: Space is generally open despite the impact of blank sailings and vessel delays.
  • Recommendation: Allow flexibility when planning your shipments due to anticipated congestion and delays.

Air Freight Market Update

Asia

  • N. China: TPEB demand is picking up slightly due to an increase in month-end shipping orders and rates have increased compared to last week. Far East Westbound (FEWB) demand and rates remain stable.
  • S. China: Market rates remain at similar levels to last week. The Covid outbreak in the Guangzhou area continues to affect manufacturing operations, resulting in cargo output delays.
  • Taiwan: There is a slight peak before the Thanksgiving holiday, however, overall demand is low in the market.
  • Korea: The market remains soft for the Thanksgiving holiday. Additional freighter capacity to Los Angeles (LAX) has been added to the market.
  • SE Asia: The overall export markets in Southeast Asia continue to be soft.

Europe

  • Overall demand levels out of Europe remain low for this time of the year.
  • Capacity available in the market is sufficient to meet demand levels, with slightly higher lead days into some main hubs in North America.
  • Terminal congestion in Amsterdam (AMS) and London Heathrow (LHR) might lead to delays.
  • Watch out for the upcoming holiday season, which might create bottlenecks both in the air and on the ground.

Americas

  • Export demand remains steady from all markets.
  • US airports are running at a normal pace.
  • Capacity is opening up further, especially into Europe.
  • Rates remain stable week over week.

文章来源：Flexport

/ By COH Marketing / Latest News（EN）/ • • / 0 Comments

2M suspends USEC service as rates, volumes drop near year’s end

Mediterranean Shipping Co. (MSC) and Maersk are halting a trans-Pacific US East Coast service after freight rates have been cut by more than half from the summer peak.

MSC and Maersk, partners in the 2M Alliance, said in separate statements this week that they will temporarily suspend their jointly run Liberty/TP23 service until further notice, adding that the suspension “will help alleviate port congestion.” The last sailing will be Nov. 23 from Indonesia. Liberty/TP23, which was introduced in March 2021, offers service from Indonesia, Vietnam and China to the US ports of Charleston, Savannah, and New York-New Jersey with a string of ships in the 8,000 TEU range.

The service suspension comes as rates into the US East Coast see further weakening as the end of 2022 nears. After dropping about 25 percent from October, average US East Coast freight rates now sit at $4,500 per FEU, with bookings done as low as $3,700, according to a trans-Pacific forwarder who asked not to be identified. That is down 55 percent from levels seen in June, the forwarder added.

“Ocean carriers are cutting rates and voiding sailings left, right, and center,” the source said.

With rates returning to pre-pandemic levels, ship supply to the US East Coast appears too high to offset rate declines. Sea-Intelligence Maritime Analysis said in its most recent Sunday Spotlight newsletter that November vessel capacity into the USEC is 19.5 percent above the level seen in November 2019, with December capacity running even higher at 37.7 percent above the same month in 2019.

Meanwhile, more service changes could be coming. MSC’s standalone Santana service, which was shifted from a West Coast to an East Coast service last year, is reportedly moving to every three weeks instead of a weekly service, according to a maritime shipping source who did not want to be identified. The service change could not be independently verified.

Some of the slowdown in container activity is showing up in the most recently available cargo figures for New York-New Jersey. Although New York-New Jersey has been the busiest US port for three consecutive months, the October volume of 792,548 TEU was essentially flat with the year-ago month. In a statement to JOC.com, the Port Authority of New York and New Jersey said it forecasts full-year 2022 volume to be about 9 million TEU, which would be up only nominally from 2021.

文章来源：JOC.COM

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Canadian and US Terminal update 11/7 (week 45)

Rupert             

  • Dwell times for cargo bound for Toronto remain high as the inland terminals face congestion challenges;
  • Fairview Terminal is receiving consistent rail supply to match current volumes;

Vancouver      

 

The dwell is still high for all the terminals. Centerm and Delta have the worst performance, with dwell time more than 7 days;

 

A picture containing chart Description automatically generated

 

Halifax  

Fairview Cove Terminal is at 3.1 days average dwell last week. 

Atlantic Hub Terminal remains congested, with 5.9 days dwell time.

 

 

 

KEY PERFORMANCE INDICATORS

 

  

USA Long Beach

 

Seattle + Tacoma ( The Northwest Seaport Alliance)

 

Highlights & Updates

• PCT will have a limited gate Friday, 11/18. Contact ETS for more details.
• All terminals will be closed Thursday, 11/24 for the Thanksgiving holiday.
• T5 will be closed Friday, 11/25. For a complete list of next week’s gate schedules visit our website here.
• There is ample warehouse & transload capacity available across the gateway. Our monthly Warehouse &
Transload Availability report, which shows many providers with space, is found on page 3 and on the website here.
• The USDA’s Commodity Container Assistance Program (CCAP) is still available to exporters who use T46 and
West Hylebos Yard to stage export loads. More info on reimbursement and eligible commodities found here.
• At PCT Everport now requires all trucking companies to secure valid empty out appointments.
• Husky and PCT currently are not accepting TRAC or DCLI bare chassis drops until further notice.

 

 

 Chassis Status

As of March 31st, the PNW Market Pool has transitioned to single-provider neutral pools to service the region:
o TRAC Intermodal operates the TRAC Pacific Northwest Pool (TPNP)
o DCLI operates the Direct Chassis Link Pool (DCLP)
• For more details on pool changes please visit our website for a Pacific Northwest Pool Operations Update
• If you have questions or would like further information on chassis in the PNW, please contact operators directly:
§ TRAC Intermodal: Cindy Davies, Director, Western Region cdavies@tracintermodal.com
§ DCLI: Amy Hume, General Manager, Logistics West amy.hume@dcli.com
§ FlexiVan/AIM: Susan Duran, Director, Western Region sduran@flexivan.com
§ Milestone: Sandra Magallanes, Account Executive, West Coast sandra.magallanes@milecorp.com
• Chassis Start Stop Locations for The Northwest Seaport Alliance can be found on our website.

 

International Intermodal Service

/ By COH Marketing / 市场动向(中文) • 最新新闻(中文)/ 0 Comments

船公司减班救市！三大联盟持续消减运力！可能出现舱位紧张！尽早制定出货计划

随着全球贸易航线的需求水平急剧下降，运价暴跌，航运公司正准备实施自疫情爆发以来最严厉的班轮服务削减。

随着全球贸易航线的需求水平急剧下降，运价暴跌，航运公司正准备实施自疫情爆发以来最严厉的班轮服务削减。

为了稳住运价，船公司们停班停航，降低航速，集装箱航运市场一夜之间“风云变色”。继最近跨太平洋航线服务停航减班之后，三大联盟正在考虑暂停或合并一些亚洲-北欧环线服务，以减轻预订急剧下降的影响，并减缓运费大幅下滑的侵蚀。

10月11日，马士基发布公告表示，由于预测全球需求将减少，马士基正在寻求相应地平衡运输服务网络。在上月底暂停两条跨太平洋航线后，其将取消亚洲-北欧航线的运力。

马士基表示，第一艘受影响的船舶将是10月26日从宁波启航服务于2M“AE1/Shogun”环线运力为16652TEU的”MSC Hamburg”轮，该船途经宁波、厦门、盐田、马来西亚丹戎帕拉帕斯以及欧洲的鹿特丹、泽布吕赫和不莱梅港。

根据eeSea数据，该环线部署了11艘船舶，平均运力为15414标准箱，往返行程需77天。

马士基表示:“我们的总体目标是为客户提供可预测性，并通过为受影响的船舶提供替代路线和覆盖范围，将供应链中断降至最低。”与此同时，马士基的2M合作伙伴MSC昨天表示，“MSC Hamburg”的航行只是暂时取消，这表明服务将在一周内恢复。

但订舱量（尤其是来自中国的订舱量）的大幅下滑，意味着三大联盟别无选择，只能对其进行合理化调整以避免即期和短期合同运价进一步暴跌，对其维持利润的长期合同产生负面影响。

事实上，一位服务亚洲-北欧航线船公司的消息人士最近表示，该公司的订舱量“非常糟糕”。“这是疫情开始以来见到最糟糕的前景，舱位预订需求将下降了25%。”他补充说，未来几周到英国的订舱量“特别少”，但希望这“只是一个小插曲”。他表示：“黄金周假期过后市场需求疲软，今年可能是最糟糕的一年。”

随着进入需求持续疲软的时期，即期运价一直在下降，航运巨头们被迫采取积极措施来管理运力，通过取消更多的航行，在某些情况下，甚至终止航线。接下来，为了救市船公司们可能会取消更多欧洲线航行。甚至有可能出现舱位紧张状况。

在此提醒，近期要出货的货主货代朋友们，与船公司、客户等做好沟通，一定要尽早做好出货计划，以免影响出货！转发周知~

文章来源：综合外媒Theloadstar、马士基公告等，维运网

/ By COH Marketing / Market Update（EN）/ / 0 Comments

White House Keeping Distance from Critical Rail and Dockworker Labor Talks For Now

The White House is monitoring labor talks in the logistics industry as unions representing 115,000 rail workers and 22,000 West Coast dockworkers negotiate fresh contracts, but won’t get directly involved in either bargaining process now, its supply-chain envoy said.

“The administration is watching as closely as it can be watched without being a point of interference, which would not be appropriate,” Stephen Lyons said in a virtual briefing Wednesday. “Negotiations are at a place where you’d think the negotiation should be at this particular point.”

Labor impasses are spreading across the US logistics network in the busiest months of the year for shipping, as retailers stock up on back-to-school and year-end holiday goods. Dock- and railroad-worker unions are currently negotiating contracts with employers, with the latter threatening to strike as soon as July 18.

Talks between the nation’s largest railroads and workers — which started in January 2020 — are in a 30-day cool-off period after a union rejected a binding mediation offer from the National Mediation Board. Next, the Biden administration could appoint a presidential emergency board to resolve the dispute.

Rail Congestion Threatens Nationwide Logjam, LA’s Seroka Says

“We’ve got to get these folks some wage increases; we’ve got to address some of these issues,” Lyons said, adding he doesn’t want to get ahead of President Joe Biden as he makes a decision. “We’ll see what happens on the 17th. But I do think there’s a commitment there.”

Contract Discussions
Separately, the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents about 70 employers, began discussing a new contract in May and are continuing to do so after their previous pact expired July 1. Officials from the ILWU and the PMA, which represents employers, met with Biden when he visited the Port of Los Angeles last month and have recently reaffirmed their commitment to keeping cargo moving despite the lack of a contract.

Any slowdown in operations at the two ports that are responsible for 42% of all containerized trade with Asia could stoke annual inflation that’s running at the fastest pace since 1981, and damp economic growth.

Biden, who’s pledged to be the most pro-union president in US history, has directed Cabinet members and logistics-area experts to smooth out pandemic-era port logjams that spurred shortages and delays. Lyons and Labor Secretary Marty Walsh have been in touch with both parties, the port envoy said.

Port of Los Angeles Kicks Off Peak Season with Record June

Meanwhile, about 70,000 truck owner-operators in California — home to the nation’s biggest port complex at Los Angeles and Long Beach — are now in limbo as a local gig-work law starts applying to them.

California’s Assembly Bill 5 requires workers satisfy a three-part test to be considered independent contractors, or else be seen as employees entitled to job benefits. The state’s truck owner-operators must now comply with AB5 after the Supreme Court on June 30 refused to review a case challenging the legislation that sets out the tests for employment-status classification.

‘So Critical’
On Wednesday, truckers demonstrated against the changes at the port gateways of Los Angeles, Long Beach and Oakland, according to the Harbor Trucking Association.

L.A. operations weren’t affected, and the port had planned for the protest days ahead Executive Director Gene Seroka said.

“We gave them the breadth and depth and space they needed to voice their opinions but kept this cargo moving; these drivers are very respectful of just that,” Seroka said at the virtual briefing Lyons also attended. “They have a message to put out there and are continuing to do so. I applaud them for coming out here today.”

The Biden administration is still assessing the AB5 issue in California, Lyons said.

“The truckers are so critical to their supply chain — we’ve got to make sure that we’re setting the conditions to take care of them to the best of our ability.”

/ By COH Marketing / Latest News（EN）/ 1 Comment

Ocean carriers cut trans-Pac services as blank sailings fail to stem rate slide

Mediterranean Shipping Co. Maersk, and CMA CGM are cutting three trans-Pacific services in response to a sharp drop in import demand and spot ocean freight rates.

The service changes, which amount to one post-Panamax service and two Panamax services, are not major capacity cuts and are likely to do little to prop up freight rates. But the moves demonstrate how fast carriers are pulling capacity as rates approach or fall below break-even levels.

2M Alliance members MSC and Maersk said last week in separate statements that their jointly run Sequoia/TP3 post-Panamax service will be suspended because of “significantly reduced demand” in the trans-Pacific. The Sequoia/TP3 service offers about 14,000 TEU in weekly capacity from Ningbo and Shanghai to Los Angeles.

The service will be merged into 2M’s 13,600-TEU Jaguar/TP2 service that calls Long Beach, Maersk said. Sea-Intelligence Maritime Analysis said the last sailing on the Sequoia/TP3 service, which was introduced in 2016, will be on the MSC Savona, which is scheduled to arrive in Los Angeles on Oct. 5.

Maersk also said two standalone services into the US East and Gulf coasts would be merged into one. The TP28 service, which the carrier debuted in 2022, would be merged into the TP20 service, which debuted in 2021, as of the final sailing of the Merkur Archipelago from Vietnam’s Vung Tau port on Oct. 13.

Calls at the ports of Norfolk, Charleston, and Houston on both services will be dropped, with the TP20 only calling New York-New Jersey and Mobile, Maersk said. Origin ports on the TP20 will include Jakarta, Vung Tau, Shanghai, and Ningbo. Both services use Panamax-size vessels of about 5,000 TEU.

Maersk said that consolidating services would offer better transit times for shippers and increase berth availability. It added that “as soon as cargo demand recovers, we will bring capacity back through relaunching TP3, TP28, upgrading of other services, and/or sailing extra-loaders.”

Separately, CMA CGM ended its Golden Gate Bridge service, which called the ports of Oakland and Seattle, according to Sea-Intelligence. The last sailing of the service, which offered about 8,500 TEU in weekly capacity, was on the CMA CGM Medea, which is currently berthed at Seattle.

Outside of the major ocean carriers, smaller lines have also been pulling ships from the trans-Pacific. Independent carrier CULines has ended a trans-Pacific express service that it jointly ran with Shanghai Jin Jiang Shipping since July 2021, after closing its TPN service in August, maritime consultancy Alphaliner said in a report. CULines has a second trans-Pacific express service that it still operates, Alphaliner said.

October capacity unchanged from a year ago

The service changes follow a series of blank sailings that carriers have laid out for October in a bid to cut capacity, but that have failed to halt a slide in spot freight rates. Sea-Intelligence said that ocean carriers as of last Friday planned to blank 48 planned voyages during the month. In comparison, carriers had only planned to blank 12 October voyages six weeks earlier, Sea-Intelligence said.

Those blank sailings are doing little to prop up spot ocean freight rates, which have slid 10 percent weekly since mid-August, according to a research report from investment bank Jeffries. Spot rates into the US West Coast are now hovering at $2,400 per FEU, close to the level where ships are only seeing break-even results.

Sea-Intelligence said the service cuts have mostly affected the surge capacity that was brought into the trans-Pacific amid high spot rates. Even with the service cuts, carriers will still have 1.56 million TEU of vessel space deployed in the trans-Pacific during October, essentially flat with totals from last year.

“With the blank sailings announced thus far, the carriers have merely reduced capacity down to the same level as we saw last year,” Sea-Intelligence said. “The relevant issue is the magnitude of capacity operated in the trade, and blank sailings might well be counteracted by larger vessels, new services, and possibly extra-loaders.”

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China COVID rules make deep cuts in Hong Kong cross-border container volumes

Hong Kong faces losing all its cross-border container traffic with Shenzhen and Guangdong Province if Chinese authorities continue to impose COVID-19 restrictions on trucking and feeder operations, the head of Hong Kong’s terminal operators’ group has warned.

Jessie Chung, chairwoman of the Hong Kong Container Terminal Operators’ Association, said the volume of containerized exports trucked from Guangdong Province for shipment through Hong Kong port has slumped since February when China imposed COVID-19 controls on trucking and barge operators. The association represents four of Hong Kong’s five terminal operators, including Hutchison’s Hongkong International Terminals, Cosco-HIT Terminals, Modern Terminals, and Goodman DP World.

“The situation worsened in June and July,” Chung told JOC.com Tuesday. She said the volume of export containers transported by cross-border truck to Kwai Chung container terminal fell 48 percent in June and 58 percent in July compared with a year earlier.

Hong Kong government figures show a year-on-year average monthly drop of 60 percent in total freight imports by truck from South China, to just 400,000 tons between February and June.

Cargo volumes moved to Hong Kong by barge from South China show an average monthly drop of 24 percent to about 3 million tons since January compared with last year.

“We have to liaise with Shenzhen and Guangdong authorities, otherwise we will lose all our cargo,” Chung said.

But Chinese authorities have rebuffed attempts by Hong Kong government officials for an agreement to ease restrictions on cross-border truckers and barge operators.

“There have been numerous meetings and plenty of emails and other communication on the cross-border trucking and barge operation issues,” Roberto Giannetta, chairman of the Hong Kong Liner Shipping Association, told JOC.com. “But in terms of progress, we can say there is zero improvement.”

No incentive for China to ease restrictions

Under the controls introduced in March, cross-border truck drivers are banned, while container-laden chassis can only be picked up and dropped off at designated Hong Kong-Shenzhen border crossings. Barge crews must also live on their vessels for extended periods without shore leave.

“Shenzhen has everything to gain by maintaining the existing obstacles — cargo flow through Hong Kong is being shifted to Shenzhen ports,” a senior shipping executive told JOC.com. “There is, therefore, very little motivation for them to ease restrictions that would restore smooth transport of containers through Hong Kong port.”

Chung pointed out the district government in Nansha, about 60 miles west of Hong Kong, has recently introduced a raft of incentives to encourage shippers to move cargo through Nansha, part of the Guangzhou port complex. These include cash bonuses for shippers who move into the district and to firms who increase freight volumes, especially reefer cargo.

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Cargo Shipowners Cancel Sailings as Global Trade Flips From Backlogs to Empty Containers

Dozens of sailings from Asia to U.S. ports are set to be canceled in October as deteriorating economic conditions weigh on demand to ship goods worldwide

Ocean carriers are canceling dozens of sailings on the world’s busiest routes during what is normally their peak season, the latest sign of the economic whiplash hitting companies as inflation weighs on global trade and consumer spending.

The October cancellations are a sharp reversal from just a few months ago, when scarce shipping space pushed freight rates higher and carriers’ profits to record levels. Last October, companies like Walmart Inc. and Home Depot Inc. were chartering their own ships to get around bottlenecks at ports to meet a surge in demand for imports.

Trans-Pacific shipping rates have plummeted roughly 75% from year-ago levels. The transportation industry is grappling with weaker demand as big retailers cancel orders with vendors and step up efforts to cut inventories. FedEx Corp. recently said it would cancel flights and park cargo planes because of a sharp drop in shipping volumes. On Thursday, Nike Inc. said it was sitting on 65% more inventory in North America than a year earlier and would resort to markdowns.

The erosion in global economic conditions, from the war in Ukraine to factory shutdowns in China, have dealt heavy blows to trade activity. The International Monetary Fund has cut its forecast for global growth in gross domestic product multiple times this year. Consumer prices are rising at the fastest rates in years in the U.S., countries in Europe and other parts of the world.

One response to the melting demand has been to reduce sailing trips. In September, container capacity offered by ship operators in the Pacific was down 13%, dropping the equivalent of 21 ships that can each move 8,000 containers in a single voyage, from a year earlier, according to shipping-data providers Xeneta and Sea-Intelligence. 

For the two weeks starting Oct. 3, a total of about 40 scheduled sailings to the U.S. West Coast from Asia and 21 sailings to the East Coast from Asia have been scrapped, according to the data companies as well as customer advisories viewed by The Wall Street Journal. Typically at this time of year, an average of two to four sailings a week are blanked, the industry’s term for canceled sailings.

Carriers also are increasingly canceling trips along key Asia-to-Europe routes, the data providers said.

“In the first week of October, one-third of previously announced capacity will be blanked and for the second week, it will be around half,” said Peter Sand, chief analyst at Xeneta. “The downturn pace in recent weeks has been very fast and it looks like carriers misread the low volumes of a nonexistent peak season.”

The period between late summer and early fall typically is the busiest time of year for the largest carriers, as retailers and other importers build inventories ahead of the holiday shopping season.

Daily freight rates now average $3,900 to move a single container across the Pacific, compared with$14,500 at the start of the year and more than $19,000 in 2021, according to the Freightos Baltic Index.

M editerranean Shipping Co., the world’s largest container carrier by capacity, has voided some sailings recently, including a six-ship service from China to Los Angeles and Long Beach.

The rotation, which MSC operated in alliance with A.P. Moller-Maersk A/S, was suspended “due to significantly reduced demand for shipments into the U.S. West Coast during the past weeks,” according to a customer notice posted Wednesday on MSC’s website. The suspension will remove nearly 12,000 containers a week in capacity from the trans-Pacific trade, and the action would help strengthen the transit times it offers, MSC said in its notice.

MSC declined to comment beyond the notice as did a Maersk spokesman. A Hapag-Lloyd AG spokesman said the company hasn’t canceled sailings as a result of weaker demand. Cosco Shipping Holding Co. and CMA CGM, two other major container operators, didn’t respond to requests for comment.

Some carriers are reluctant to share details on canceled sailings to avoid showing competitors what is happening in their network. Voyages can be scrapped because of port congestion, scheduling issues or falling demand.

Consumer spending on bulky items like furniture and appliances that are often imported into the U.S. has cooled in recent months, according to government data. Such items were in hot demand earlier in the pandemic as Americans spent more time at home and renovated their houses.

A  flotilla of new container ships under order will add capacity over the next two years, meaning that freight rates could come under more pressure as more ship space becomes available.

Ocean container capacity is slated to increase 4% this year and is expected to rise by 8.8% in 2023 and a further 9.7% in 2024, according to London-based shipping adviser Braemar PLC. Since early 2020 some 1,056 ships that can move about eight million boxes were ordered, compared with 688 vessels ordered from 2015 to 2019 that can move around five million boxes.

“The global economy has thrown a few curveballs this year, and our outlook on future demand is uncertain and tepid,” said Jonathan Roach, a container analyst at Braemar. “Overcapacity will likely become an issue from the middle of 2023 through to 2024 and potentially beyond.”

Overcapacity pushes operators to undercut each other, putting pressure on freight rates. Boxship operators fought deep losses for nearly a decade starting in 2008, which prompted consolidation in the industry. The top six ocean-freight carriers move more than 70% of all containers worldwide.

Freight rates on key shipping routes remain above prepandemic levels, and the largest operators have plenty of cash to weather a near-term economic downturn. The costs carriers face are rising, too. Bunker fuel prices, which have cooled since hitting records this summer, are above their late 2019 levels. Port operators are also charging more for ships to dock, passing along the higher energy prices they are facing to the carriers.

“The cost of electricity, particularly in Europe, is significant because the cranes and other heavy equipment run on electrical power,” said Tiemen Meester, chief operating officer for ports and terminals at DP World, a Dubai-based operator of terminals in ports worldwide.