<div>Copyright 2003, Traffic World, Inc.A service that allows merchants to pick up returned parcels at a designated postal facility can save merchants from 24 cents to $1.51 per piece, according to the U.S. Postal Service. The service alternative to returns to the merchants'' facility takes effect Oct. 9. The price for parcels picked up at the post office nearest the consumer is $2. Prices for pieces picked up at a Bulk Mail Center are based on the weight of the piece and the distance traveled.PBB Global Logistics has acquired Fort Erie, Ontario-based Carrier Connection International, a specialized provider of third-party...

Copyright 2003, Traffic World, Inc. A service that allows merchants to pick up returned parcels at a designated postal facility can save merchants from 24 cents to $1.51 per piece, according to the U.S. Postal Service. The service alternative to returns to the merchants'' facility takes effect Oct. 9. The price for parcels picked up at the post office nearest the consumer is $2. Prices for pieces picked up at a Bulk Mail Center are based on the weight of the piece and the distance traveled. PBB Global Logistics has acquired Fort Erie, Ontario-based Carrier Connection International, a specialized provider of third-party logistics services for the North American food industry. The acquisition is part of PBB''s strategy to enhance its integrated logistics solutions. Founded eight years ago, CCI is a private Canadian company with more than 250 clients, relationships with some 1,200 carriers who specialize in the movement of perishable food products and operations in Ontario, Manitoba, Missouri and Texas. Royersford, Pa.-based 3PL Translogistics Inc. has introduced the Human Resources Maximizer, a business analysis report that enables companies to quickly evaluate departmental time and cost savings in their transportation and logistics processes. Logistics-related tasks such as a sales department getting involved in the tracing of a delayed customer shipment are covered by the report. Zeeland, Mich.-based Total Logistic Control has acquired an ownership interest in Integrated Transportation Logistics, a minority-owned transportation and logistics solutions company headquartered in Flint, Mich. The investment broadens both ITLX and TLC''s abilities to serve their customers and provide supply-chain solutions across an array of industries, including food and beverage, grocery, automotive and health care. ITLX is a full-service transportation and logistics solutions company providing services to the automotive industry, primarily Tier 1 and Tier 2 suppliers. PFSweb Inc., a Plano, Texas-based business outsourcing company, has launched a product recall package that offers a reverse channel infrastructure that can be deployed rapidly for companies facing a recall crisis. It includes web services, customer contact services, distribution solutions and returns management, said PFSweb. ROE Logistics, a privately owned Canadian 3PL, has moved its Montreal operations to a new downtown location. The 40,000-square-foot office and warehouse offers a secure environment with 24-7 camera surveillance, said ROE. The 3PL plans to expand its warehouse and distribution services. ChemLogix, a Blue Bell, Pa.-based consulting firm, has deployed a multitiered suite of benchmarking tools and services to help companies quantify and prioritize cost-savings projects. ChemLogix will prepare a baseline of client-specific performance metrics to compare with industry benchmarks at three levels or tiers within the supply chain. On the first tier transportation rates and related freight purchasing practices are benchmarked. PBB Global Logistics, based in Fort Eire, Ontario, said it is among the first international trade specialists to offer agency services to agri-food customers who ship food and food-related products to the United States. The service is designed to help exporters ensure access to the U.S. market in anticipation of a comprehensive series of new regulations being developed by the U.S. Food and Drug Administration. As part of the FDA''s efforts to secure the food supply chain, food facilities worldwide will be required to register with the agency before the new rules come into effect, expected on Dec. 12, said PBB. Canadian and other foreign-based companies also will be required to appoint a U.S.-based agent as a communications link with FDA. Savi Technology was honored by the National Defense Transportation Association for providing the military with radio frequency identification technology. Savi, the primary provider of RFID-related technologies to the military for more than seven years, received NDTA''s annual National Transportation Award. This is the first time a technology company has won the award, which has been given in past years to companies such as Boeing Corp., Maersk Sea Land and other major transport companies. NDTA specifically acknowledged Savi''s leadership in improving end-to-end supply-chain management for the Department of Defense and for its work creating Smart and Secure Tradelanes, the public-private partnership to improve the tracking and screening of U.S.-bound ocean containers.

Transport, Trade and Regulation News

Briefs

<div class="phx-topic abstract-wrapper">While traditional energy projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace amid tariffs and investment uncertainty.</div>

While traditional energy projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace amid tariffs and investment uncertainty.

Feature image

<div class="phx-topic">Project cargo specialists are voicing escalating concerns about the pervasive impact of tariffs and a reluctance by shippers to invest, casting a shadow over the mid-term project cargo pipeline.While traditional energy and power generation projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace, creating a bifurcated market. Andreas Menzel, managing director for Germany and Benelux for Trans Global Projects (TGP), highlighted the key cargoes as “oil and gas and power in general, such as power generation and nuclear power.” He described nuclear projects as a “steady market for us,” as is the development of hydrogen projects in Benelux countries, particularly the Netherlands.Echoing the diversified nature of current projects, Boris Dykiert, commercial director with dteq Transport Engineering Solutions, noted a range of projects for the energy transition in Europe, and cargoes moving in Australia. Hagen Hennig, dteg’s technical director, added he is still seeing a lot of conventional energy, oil and gas, gas turbines and nuclear cargoes, alongside mini power plants to serve the burgeoning data center market. “It’s not only wind that is benefiting from the ever-growing energy demand,” Hennig said.However, the pace of these various sectors differs significantly. Speaking on a panel at Breakbulk Europe in mid-May, Richard Kaladji, head of the project logistics department at Air Liquide, pegged the fastest-moving industry verticals from a final investment decision perspective as power generation, traditional energy, oil and gas, and mature renewals such as solar and wind. “The slowest are energy transition projects (such as) hydrogen, carbon capture (and) sustainable aviation fuel,” Kaladji.<h3>Tariff impact on project pipeline</h3>Meanwhile, the impact of tariffs and broader economic instability looms large over the project industry’s cargo pipeline. TGP’s Menzel noted that tariffs on various products and countries are a crucial factor in the development and realization of projects. At the same time, decreased and canceled funding for renewable projects in the US has led to one client’s project being held, with several others in abeyance. “We see that wherever there’s instability, there is a lack of willingness to invest,” Menzel told the Journal of Commerce. “Unless there is clarity, you simply cannot invest, and we see this on projects. There won’t be large investment in the US because of this uncertainty.”Despite these concerns, some are pushing forward with existing projects. Daniel M. Kjaer, director of global renewable chartering at deugro, told the Journal of Commerce that it’s “full steam ahead.” “The outlook for offshore wind in the United States is currently marked by a mix of significant growth potential and emerging political and economic challenges,” he said, adding that there is a need to get projects done and delivered before potential political and economic headwinds.Kjaer also noted a shift in market reliance. He said that while global offshore wind capacity is expected to reach up to 500 gigawatts (GW) by 2035, with the US projected to contribute around 9%, future progress “depends heavily on stable and supportive policies.” “Political uncertainty remains a key risk to realizing the sector’s full potential,” he said. Kjaer pointed to ongoing production in Asia and the movement of wind offshore components between Europe and Asia as an indicator of continued project cargo demand. He expressed confidence in the project cargo pipeline to 2029.However, TGP’s Menzel said that while there were “quite a few projects in quite a few sectors,” the pipeline for the next three to five years is “more of a concern.”Economic challenges were underscored by Tim Killen, head of growth for the project sector at Fracht Group. Speaking on a panel at Breakbulk Europe, Killen said that projects are facing ongoing fiscal scrutiny in this environment. Andy Young, corporate manager of logistics and manager at Bechtel Global Logistics, added that the biggest disruptor is economic instability. “That’s the biggest ticket at the moment,” he said.Young stressed the need for adaptability.“We have got to go back and look at quality, safety and surety of delivery,” he said. “A supply chain has to be agile and adaptable. The problem is how to stay ahead. You have got to be vigilant.” Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Project cargo specialists are voicing escalating concerns about the pervasive impact of tariffs and a reluctance by shippers to invest, casting a shadow over the mid-term project cargo pipeline. While traditional energy and power generation projects continue to drive immediate demand, long-heralded energy transition initiatives are progressing at a far slower pace, creating a bifurcated market. Andreas Menzel, managing director for Germany and Benelux for Trans Global Projects (TGP), highlighted the key cargoes as “oil and gas and power in general, such as power generation and nuclear power.” He described nuclear projects as a “steady market for us,” as is the development of hydrogen projects in Benelux countries, particularly the Netherlands. Echoing the diversified nature of current projects, Boris Dykiert, commercial director with dteq Transport Engineering Solutions, noted a range of projects for the energy transition in Europe, and cargoes moving in Australia. Hagen Hennig, dteg’s technical director, added he is still seeing a lot of conventional energy, oil and gas, gas turbines and nuclear cargoes, alongside mini power plants to serve the burgeoning data center market. “It’s not only wind that is benefiting from the ever-growing energy demand,” Hennig said. However, the pace of these various sectors differs significantly. Speaking on a panel at Breakbulk Europe in mid-May, Richard Kaladji, head of the project logistics department at Air Liquide, pegged the fastest-moving industry verticals from a final investment decision perspective as power generation, traditional energy, oil and gas, and mature renewals such as solar and wind. “The slowest are energy transition projects (such as) hydrogen, carbon capture (and) sustainable aviation fuel,” Kaladji. Tariff impact on project pipeline Meanwhile, the impact of tariffs and broader economic instability looms large over the project industry’s cargo pipeline. TGP’s Menzel noted that tariffs on various products and countries are a crucial factor in the development and realization of projects. At the same time, decreased and canceled funding for renewable projects in the US has led to one client’s project being held, with several others in abeyance. “We see that wherever there’s instability, there is a lack of willingness to invest,” Menzel told the Journal of Commerce. “Unless there is clarity, you simply cannot invest, and we see this on projects. There won’t be large investment in the US because of this uncertainty.” Despite these concerns, some are pushing forward with existing projects. Daniel M. Kjaer, director of global renewable chartering at deugro, told the Journal of Commerce that it’s “full steam ahead.” “The outlook for offshore wind in the United States is currently marked by a mix of significant growth potential and emerging political and economic challenges,” he said, adding that there is a need to get projects done and delivered before potential political and economic headwinds. Kjaer also noted a shift in market reliance. He said that while global offshore wind capacity is expected to reach up to 500 gigawatts (GW) by 2035, with the US projected to contribute around 9%, future progress “depends heavily on stable and supportive policies.” “Political uncertainty remains a key risk to realizing the sector’s full potential,” he said. Kjaer pointed to ongoing production in Asia and the movement of wind offshore components between Europe and Asia as an indicator of continued project cargo demand. He expressed confidence in the project cargo pipeline to 2029. However, TGP’s Menzel said that while there were “quite a few projects in quite a few sectors,” the pipeline for the next three to five years is “more of a concern.” Economic challenges were underscored by Tim Killen, head of growth for the project sector at Fracht Group. Speaking on a panel at Breakbulk Europe, Killen said that projects are facing ongoing fiscal scrutiny in this environment. Andy Young, corporate manager of logistics and manager at Bechtel Global Logistics, added that the biggest disruptor is economic instability. “That’s the biggest ticket at the moment,” he said. Young stressed the need for adaptability. “We have got to go back and look at quality, safety and surety of delivery,” he said. “A supply chain has to be agile and adaptable. The problem is how to stay ahead. You have got to be vigilant.” Contact Carly Fields at carly.fields@spglobal.com .

Energy projects

Project cargo

Breakbulk News

Conventional power drives project cargo pipeline, but mid-term worries persist

<div class="phx-topic abstract-wrapper">While terminal operators had hoped that problems stemming from the mid-May work stoppage would be mostly over, forwarders are still reporting cargo delays.</div>

While terminal operators had hoped that problems stemming from the mid-May work stoppage would be mostly over, forwarders are still reporting cargo delays.

<div class="phx-topic">Shipments are still facing delays though Manzanillo, Mexico’s largest port, following a four-day strike in mid-May, forwarders say, although one terminal operator is telling customers to expect a return to normal cargo flow as early as this week. Following the strike by workers from the Manzanillo Port Customs Office, vessel arrivals at berth are currently delayed by one day, according to Kuehne + Nagel. However, data from maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet show vessels calling Manzanillo taking about two weeks, on average, between arrival and gate out. While terminal operators had initially earmarked June as the projected end date for interruptions, forwarders are still reporting cargo delays. “There’s a headache there — strikes, system collapsed, customs is struggling and chaos with coordination of trucks,” said Nicolas Portenza, president of Eternity International Freight Forwarder México. Kuehne + Nagel’s SeaExplorer visibility platform classifies the port as “heavily disrupted” with an average vessel waiting time of 1.08 days. <h3>Rail delays </h3>Manzanillo marine terminals Contecon and SSA are still congested, and high export volumes have resulted in rail delays of about 72 hours for both imports and exports, according to Kuehne + Nagel. Terminal operator SSA Marine told customers last week that unscheduled requests for import appointments would be deleted to purge their system, but that scheduling would return to normal over the weekend, according to a notice shared by Eternity International Freight Forwarder México. Still, forwarders told the Journal of Commerce that congestion has not yet eased. “Some ocean carriers are submitting offices notices to their customers that there might be extreme delays or cancellations due to the delays at the port,” said Ernesto Hernandez Jr., a customs broker at HEMA Logistics. AIS data shows vessel calls decreasing at Manzanillo, with 11 ships calling Sunday compared with 19 on May 25 and 18 on May 18, the first Sunday after the strike ended. A forwarder said it will be difficult for vessels to avoid Manzanillo. “It’s hard for some services to blank Manzanillo,” the source said. “It will depend on if they can shift Mexican cargo to other services.” Impacts from the delays might be quantified in higher product costs, said Hernandez. “[Much] of the cargo being sent directly to Mexico is part of a manufacturing process that will end up in the US as a finished product,” he said. “Delays and cost increases at these ports will increase the landed costs of products coming into the US.” Manzanillo terminal operators Contecon and SSA declined to comment. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Shipments are still facing delays though Manzanillo, Mexico’s largest port, following a four-day strike in mid-May, forwarders say, although one terminal operator is telling customers to expect a return to normal cargo flow as early as this week. Following the strike by workers from the Manzanillo Port Customs Office, vessel arrivals at berth are currently delayed by one day, according to Kuehne + Nagel. However, data from maritime visibility provider Vizion and data and analytics company Dun & Bradstreet show vessels calling Manzanillo taking about two weeks, on average, between arrival and gate out. While terminal operators had initially earmarked June as the projected end date for interruptions, forwarders are still reporting cargo delays. “There’s a headache there — strikes, system collapsed, customs is struggling and chaos with coordination of trucks,” said Nicolas Portenza, president of Eternity International Freight Forwarder México. Kuehne + Nagel’s SeaExplorer visibility platform classifies the port as “heavily disrupted” with an average vessel waiting time of 1.08 days. Rail delays Manzanillo marine terminals Contecon and SSA are still congested, and high export volumes have resulted in rail delays of about 72 hours for both imports and exports, according to Kuehne + Nagel. Terminal operator SSA Marine told customers last week that unscheduled requests for import appointments would be deleted to purge their system, but that scheduling would return to normal over the weekend, according to a notice shared by Eternity International Freight Forwarder México. Still, forwarders told the Journal of Commerce that congestion has not yet eased. “Some ocean carriers are submitting offices notices to their customers that there might be extreme delays or cancellations due to the delays at the port,” said Ernesto Hernandez Jr., a customs broker at HEMA Logistics. AIS data shows vessel calls decreasing at Manzanillo, with 11 ships calling Sunday compared with 19 on May 25 and 18 on May 18, the first Sunday after the strike ended. A forwarder said it will be difficult for vessels to avoid Manzanillo. “It’s hard for some services to blank Manzanillo,” the source said. “It will depend on if they can shift Mexican cargo to other services.” Impacts from the delays might be quantified in higher product costs, said Hernandez. “[Much] of the cargo being sent directly to Mexico is part of a manufacturing process that will end up in the US as a finished product,” he said. “Delays and cost increases at these ports will increase the landed costs of products coming into the US.” Manzanillo terminal operators Contecon and SSA declined to comment. Contact Laura Robb at laura.robb@spglobal.com . 

Maritime

Container Shipping News

North American ports

International ports

Port News

Disruption lingers at Mexico’s Manzanillo port weeks after brief strike

<div class="phx-topic abstract-wrapper">Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe. </div>

Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe.

<div class="phx-topic">Ocean shipping rates from Asia to Europe shot up ahead of this week’s June 1 freight-all-kinds (FAK) increases by carriers, with the substantial price hikes supported by mounting delays at severely congested port hubs at both ends of the trade lane. While port bottlenecks absorb capacity on Asia-Europe, surging demand on the trans-Pacific is prompting carriers to shift vessels to the booming China-US trade lane, putting further upward pressure on Asia-Europe rates. “Carriers are redeploying ships from Asia-Europe and other routes to the trans-Pacific routes, with the capacity in Asia-Europe dropping 17% in the week starting June 16 vs. the end of May,” HSBC noted in its weekly transportation update. “However, we think these are insufficient to address the cargo rush [on the trans-Pacific], while capacity reallocation could cause shortages in other corridors,” according to the bank’s analysts. Drewry highlighted in a recent market update that since late March, labor shortages and low Rhine River water levels have pushed up berth waiting times by 37% in Antwerp, 49% in Hamburg and 77% in Bremerhaven. In Asia, Shanghai and Singapore, the world’s busiest and second-busiest ports, respectively, are battling congestion driven by a rush of exports to the US during a 90-day tariff cooldown. <h3>Rate hikes, surcharges </h3>As capacity tightens, carriers are rolling out significant rate increases from Asia to both North Europe and the Mediterranean, as well as implementing “peak season surcharges” on some Mediterranean routes. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates rose 23% on June 1 to $2,353 per FEU, with Asia-Mediterranean rates up 24% to $3,720/FEU. Data assessed by Platts, a sister company of the Journal of Commerce within S&amp;P Global, shows North Asia to North Europe rates rose $600 in the past week to $2,400/FEU, while Asia-Mediterranean rates increased $1,400 in the past week to $4,300/FEU. Several carriers are also raising their backhaul rates that have been below $200 per FEU since January. Mediterranean Shipping Co., Hapag-Lloyd and CMA CGM have set their Europe to Asia rate between $500/FEU and $530/FEU, with Cosco asking for $1,500/FEU. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean shipping rates from Asia to Europe shot up ahead of this week’s June 1 freight-all-kinds (FAK) increases by carriers, with the substantial price hikes supported by mounting delays at severely congested port hubs at both ends of the trade lane. While port bottlenecks absorb capacity on Asia-Europe, surging demand on the trans-Pacific is prompting carriers to shift vessels to the booming China-US trade lane, putting further upward pressure on Asia-Europe rates. “Carriers are redeploying ships from Asia-Europe and other routes to the trans-Pacific routes, with the capacity in Asia-Europe dropping 17% in the week starting June 16 vs. the end of May,” HSBC noted in its weekly transportation update. “However, we think these are insufficient to address the cargo rush [on the trans-Pacific], while capacity reallocation could cause shortages in other corridors,” according to the bank’s analysts. Drewry highlighted in a recent market update that since late March, labor shortages and low Rhine River water levels have pushed up berth waiting times by 37% in Antwerp, 49% in Hamburg and 77% in Bremerhaven. In Asia, Shanghai and Singapore, the world’s busiest and second-busiest ports, respectively, are battling congestion driven by a rush of exports to the US during a 90-day tariff cooldown. Rate hikes, surcharges As capacity tightens, carriers are rolling out significant rate increases from Asia to both North Europe and the Mediterranean, as well as implementing “peak season surcharges” on some Mediterranean routes. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates rose 23% on June 1 to $2,353 per FEU, with Asia-Mediterranean rates up 24% to $3,720/FEU. Data assessed by Platts, a sister company of the Journal of Commerce within S&P Global, shows North Asia to North Europe rates rose $600 in the past week to $2,400/FEU, while Asia-Mediterranean rates increased $1,400 in the past week to $4,300/FEU. Several carriers are also raising their backhaul rates that have been below $200 per FEU since January. Mediterranean Shipping Co., Hapag-Lloyd and CMA CGM have set their Europe to Asia rate between $500/FEU and $530/FEU, with Cosco asking for $1,500/FEU. Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Trans-Pacific

Asia-Europe

Asia-Europe ocean rates spike on congestion, capacity shift

<div class="phx-topic abstract-wrapper">Ocean carrier profits this year are expected to be less than half of what they were in 2024 amid an uncertain macroeconomic outlook. </div>

Ocean carrier profits this year are expected to be less than half of what they were in 2024 amid an uncertain macroeconomic outlook.

<div class="phx-topic">The container shipping industry is on track for a profitable year, although not as strong as 2024, as higher operating expenses dampen rate momentum driven by tariff uncertainty, according to analysts. Among nine publicly traded ocean carriers, revenue for 2025 is expected to reach $138.2 billion, according to Capital IQ Estimates, down from $155.5 billion reported for 2024. Capital IQ is a sister company of the Journal of Commerce within S&amp;P Global. The main driver for last year’s results were steadily strengthening freight rates spurred by resilient consumer and industrial demand, with the Platts Global Container Index rising from $2,300 per standard container to almost $5,000 by the end of 2024. And while rates remain elevated, particularly in the trans-Pacific, the outlook for earnings is dimmer. Industry-wide net income is expected to be $11.6 billion in 2025, compared with $28.6 billion in 2024, data from Capital IQ Estimates shows. After most carriers reported first-quarter earnings for 2025, analysts trimmed collective earnings forecasts for ocean carriers by $600 million since the beginning of April. Even with the recent tariff turmoil, most ocean carriers saw few, if any, market catalysts to create a repeat of 2024. Other industry watchers also see a tougher comparison for ocean carriers this year. Alphaliner noted the average first-quarter operating margin for ocean carriers fell to 18.1%, the lowest in four quarters. Maritime consultancy Drewry sees operating profit for the container shipping industry falling to $20 billion this year, down from about $50 billion in 2024. Ocean carriers are flagging higher operating expenses in 2025 as ships get delayed and the costs of container repositioning become more burdensome. Hapag-Lloyd highlighted a 9% increase in handling and haulage costs for the first quarter, primarily because of having to secure storage for empty containers and higher drayage expenses for door moves. <h3>Muted rate outlook </h3>While higher freight rates can offset those increases, carrier chief executives remain cautious on how far the current rally will go. Maersk Chief Executive Vincent Clerc offered a forecast of global container demand ranging anywhere from a decline of 1% to growth of 4% during the company’s second-quarter earnings call on May 8, down from a forecast of 4% in February. Clerc said President Donald Trump’s trade policies are forcing more Maersk customers to reconsider where they source goods. While some shippers highly dependent on China are looking to frontload goods, others are drawing inventory in North America or looking at how to exit China. “The increased macroeconomic and geopolitical uncertainties since we shared our guidance in February inevitably affects our outlook for the rest of the year, especially on the back of the escalation we saw of the US-China trade tensions as well as the unresolved questions around the other tariffs currently under the 90-day reprieve,” Clerc said. Even though container freight bookings out of China saw a resurgence following the 90-day tariff reprieve, Hapag-Lloyd Chief Executive Rolf Habben Jansen said during a May 14 earnings call he expects only a “little bit of a surge” over the next two or three months. He said Hapag-Lloyd is maintaining its current 2025 outlook based on the “assumption that we expect to see freight rates declining based on the trends that we have seen in the market over the last couple of months.” “I think [the] demand trend for 2025 at the moment is pretty uncertain,” Habben Jansen said. “We see new developments every day. I think the only thing we know for sure is that the first quarter was pretty good.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The container shipping industry is on track for a profitable year, although not as strong as 2024, as higher operating expenses dampen rate momentum driven by tariff uncertainty, according to analysts. Among nine publicly traded ocean carriers, revenue for 2025 is expected to reach $138.2 billion, according to Capital IQ Estimates, down from $155.5 billion reported for 2024. Capital IQ is a sister company of the Journal of Commerce within S&P Global. The main driver for last year’s results were steadily strengthening freight rates spurred by resilient consumer and industrial demand, with the Platts Global Container Index rising from $2,300 per standard container to almost $5,000 by the end of 2024. And while rates remain elevated, particularly in the trans-Pacific, the outlook for earnings is dimmer. Industry-wide net income is expected to be $11.6 billion in 2025, compared with $28.6 billion in 2024, data from Capital IQ Estimates shows. After most carriers reported first-quarter earnings for 2025, analysts trimmed collective earnings forecasts for ocean carriers by $600 million since the beginning of April. Even with the recent tariff turmoil, most ocean carriers saw few, if any, market catalysts to create a repeat of 2024. Other industry watchers also see a tougher comparison for ocean carriers this year. Alphaliner noted the average first-quarter operating margin for ocean carriers fell to 18.1%, the lowest in four quarters. Maritime consultancy Drewry sees operating profit for the container shipping industry falling to $20 billion this year, down from about $50 billion in 2024. Ocean carriers are flagging higher operating expenses in 2025 as ships get delayed and the costs of container repositioning become more burdensome. Hapag-Lloyd highlighted a 9% increase in handling and haulage costs for the first quarter, primarily because of having to secure storage for empty containers and higher drayage expenses for door moves. Muted rate outlook While higher freight rates can offset those increases, carrier chief executives remain cautious on how far the current rally will go. Maersk Chief Executive Vincent Clerc offered a forecast of global container demand ranging anywhere from a decline of 1% to growth of 4% during the company’s second-quarter earnings call on May 8, down from a forecast of 4% in February. Clerc said President Donald Trump’s trade policies are forcing more Maersk customers to reconsider where they source goods. While some shippers highly dependent on China are looking to frontload goods, others are drawing inventory in North America or looking at how to exit China. “The increased macroeconomic and geopolitical uncertainties since we shared our guidance in February inevitably affects our outlook for the rest of the year, especially on the back of the escalation we saw of the US-China trade tensions as well as the unresolved questions around the other tariffs currently under the 90-day reprieve,” Clerc said. Even though container freight bookings out of China saw a resurgence following the 90-day tariff reprieve, Hapag-Lloyd Chief Executive Rolf Habben Jansen said during a May 14 earnings call he expects only a “little bit of a surge” over the next two or three months. He said Hapag-Lloyd is maintaining its current 2025 outlook based on the “assumption that we expect to see freight rates declining based on the trends that we have seen in the market over the last couple of months.” “I think [the] demand trend for 2025 at the moment is pretty uncertain,” Habben Jansen said. “We see new developments every day. I think the only thing we know for sure is that the first quarter was pretty good.” Contact Michael Angell at michael.angell@spglobal.com .

Global uncertainty to erode ocean carrier profits in 2025

<div class="phx-topic abstract-wrapper">An aging MPV fleet is causing concerns for shippers and forwarders in a market where the fleet has limited capacity to accommodate cargo growth. </div>

An aging MPV fleet is causing concerns for shippers and forwarders in a market where the fleet has limited capacity to accommodate cargo growth.

<div class="phx-topic">A perceived imbalance in the multipurpose vessel (MPV) fleet could prompt shippers to think differently about overage tonnage. Currently, MPVs over 20 years old are widely viewed as too old by project cargo shippers and are thought to pose safety risks. A shipper who did not wish to be identified told the Journal of Commerce that their company’s risk profile does not permit them to charter ships over 20 years old, regardless of the safety record of the ship. As the MPV fleet ages, they acknowledged that this artificially reduces the available tonnage for projects. As such, they are actively considering how to allow the chartering of MPVs over 20 years old. Kai von Taube, head of global chartering at freight forwarder deugro, expressed concern that there are already not enough ships running on the trades where they are needed to meet project cargo demand. “Age does not matter; it’s the technical performance that matters,” he said. Von Taube referred to the existing so-called OVID vetting system in place for technical certification, which the MPV industry could adopt. The Offshore Vessel Inspection Database (OVID) was developed by the Oil Companies International Marine Forum (OCIMF) to provide a database of offshore inspections. It is an inspection protocol that allows project and marine assurance teams to assess the safety and environmental performance of a vessel and its operators effectively and uniformly. “Shippers could accept this,” von Taube said. However, when asked, the shipper said they did not see OVID as a viable solution. “OVID is a nightmare,” the source said, adding the certificate needs to be regularly renewed and all ships would need to maintain their certificates to be useful to project shippers. <h3>A view of the fleet in balance </h3>Speaking to the Journal of Commerce, Christophe Grammare, managing director of AAL Shipping, gave a counter view of an MPV fleet in balance with no need for shippers to start accepting overage tonnage. “The issue with MPV supply is cargo segmentation and specialization,” Grammare said. “In the current global fleet, most of the tonnage is light-geared MPV vessels. That is a dying breed, as the cargo that they can carry has now been containerized and does not need to be replaced.” While he agreed that the industry needs to keep a keen eye on fleet development, Grammare said that the fleet is only decreasing at the bottom end. “We are still seeing investment in project heavy-lift vessels,” he said. “MPV owners and project operators such as AAL are investing in these types of vessels with a clear view of what’s needed to meet customer demand. It’s not speculative.” Grammare added that privately owned MPV operators are concerned about the flood of investment in tonnage from state-owned operators merely “for the sake of investment.” “The current market is ... balanced after decades of hardship for shipowners,” he said. “We still can trigger investment in additional tonnage at any time but remain very cautious not to unsettle the supply and demand balance, which remains fragile.”  Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>. </div>

A perceived imbalance in the multipurpose vessel (MPV) fleet could prompt shippers to think differently about overage tonnage. Currently, MPVs over 20 years old are widely viewed as too old by project cargo shippers and are thought to pose safety risks. A shipper who did not wish to be identified told the Journal of Commerce that their company’s risk profile does not permit them to charter ships over 20 years old, regardless of the safety record of the ship. As the MPV fleet ages, they acknowledged that this artificially reduces the available tonnage for projects. As such, they are actively considering how to allow the chartering of MPVs over 20 years old. Kai von Taube, head of global chartering at freight forwarder deugro, expressed concern that there are already not enough ships running on the trades where they are needed to meet project cargo demand. “Age does not matter; it’s the technical performance that matters,” he said. Von Taube referred to the existing so-called OVID vetting system in place for technical certification, which the MPV industry could adopt. The Offshore Vessel Inspection Database (OVID) was developed by the Oil Companies International Marine Forum (OCIMF) to provide a database of offshore inspections. It is an inspection protocol that allows project and marine assurance teams to assess the safety and environmental performance of a vessel and its operators effectively and uniformly. “Shippers could accept this,” von Taube said. However, when asked, the shipper said they did not see OVID as a viable solution. “OVID is a nightmare,” the source said, adding the certificate needs to be regularly renewed and all ships would need to maintain their certificates to be useful to project shippers. A view of the fleet in balance Speaking to the Journal of Commerce, Christophe Grammare, managing director of AAL Shipping, gave a counter view of an MPV fleet in balance with no need for shippers to start accepting overage tonnage. “The issue with MPV supply is cargo segmentation and specialization,” Grammare said. “In the current global fleet, most of the tonnage is light-geared MPV vessels. That is a dying breed, as the cargo that they can carry has now been containerized and does not need to be replaced.” While he agreed that the industry needs to keep a keen eye on fleet development, Grammare said that the fleet is only decreasing at the bottom end. “We are still seeing investment in project heavy-lift vessels,” he said. “MPV owners and project operators such as AAL are investing in these types of vessels with a clear view of what’s needed to meet customer demand. It’s not speculative.” Grammare added that privately owned MPV operators are concerned about the flood of investment in tonnage from state-owned operators merely “for the sake of investment.” “The current market is ... balanced after decades of hardship for shipowners,” he said. “We still can trigger investment in additional tonnage at any time but remain very cautious not to unsettle the supply and demand balance, which remains fragile.”  Contact Carly Fields at carly.fields@spglobal.com .

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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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