<div class="phx-topic abstract-wrapper">The port of Tanjung Pelepas is planning billions of investments to aid in its quest to become a premiere Southeast Asia transshipment hub.</div>

The port of Tanjung Pelepas is planning billions of investments to aid in its quest to become a premiere Southeast Asia transshipment hub.

<div class="phx-topic">Malaysia’s port of <a href="http://www.joc.com/port-news/asian-ports/port-tanjung-pelepas">Tanjung Pelepas</a>, a key transshipment hub developed as an alternative to the Port of Singapore, will invest more than 8.6 billion Malaysian ringgits ($2 billion) to double its capacity to 22 million 20-foot-equivalent units by 2030.The upgrades at the port will include refurbishing quay and rubber-tire gantry cranes, along with the replacement of existing equipment at the port, which will increase annual capacity to 13.2 million TEUs from 10.5 million TEUs presently, said PTP Chairman Che Khalib Mohamad Noh.“This will be followed by the development of Phase 3, which is expected to take place in 2018,” said Che Khalib. “Phase 3A and 3B, which consist of six new berths of three kilometres in length, will enable us to increase our handling capacity to 22.2 million teu before 2030.”The upgrades and expansion will allow PTP to remain competitive with its rivals and eventually emerge as the premiere transshipment port in Asia, Che Khalib said.Singapore is the world’s busiest transshipment port and it faces stiff competition from other Southeast Asia ports. Singapore’s overall transshipment volumes declined 7.8 percent in the first four months of this year, following an 8.7 percent drop in 2015, whereas its key competitors have boosted their market shares, Alphaliner said.Singapore is still in a dominant position, however, one that was reinforced by the recent decision of CMA CGM, which is acquiring Singapore’s Neptune Orient Lines and its APL brand, to team up with the terminal operator PSA International, also of Singapore, on a joint-venture <a href="http://www.joc.com/maritime-news/container-lines/cma-cgm/cma-cgm-psa-terminal-operator-link-singapore_20160609.html">to lease and operate four container berths</a> that will handle an anticipated 3 million TEUs a year.The move is part of the Singapore government’s plan to regain some of the transshipment volumes that have been lost to PTP and Port Klang, another Malaysian port.Malaysia is currently <a href="http://www.joc.com/port-news/asian-ports/port-tanjung-pelepas/malaysia-developing-national-port-strategy-world-bank_20151125.html">working on a report</a> with the World Bank to determine how to better use government policy to aid port development and determine what issues are most heavily impacting operations at the country’s ports.Contact Xiaolin Zeng at <a href="mailto:arachelle0@gmail.com">arachelle0@gmail.com</a>.A <a href="http://fairplay.ihs.com/ports/article/4271141/tanjung-pelepas-to-double-capacity-by-2030">version of this story</a> originally appeared on IHS Fairplay, a sister product of JOC.com within IHS.</div>

Malaysia’s port of Tanjung Pelepas , a key transshipment hub developed as an alternative to the Port of Singapore, will invest more than 8.6 billion Malaysian ringgits ($2 billion) to double its capacity to 22 million 20-foot-equivalent units by 2030. The upgrades at the port will include refurbishing quay and rubber-tire gantry cranes, along with the replacement of existing equipment at the port, which will increase annual capacity to 13.2 million TEUs from 10.5 million TEUs presently, said PTP Chairman Che Khalib Mohamad Noh. “This will be followed by the development of Phase 3, which is expected to take place in 2018,” said Che Khalib. “Phase 3A and 3B, which consist of six new berths of three kilometres in length, will enable us to increase our handling capacity to 22.2 million teu before 2030.” The upgrades and expansion will allow PTP to remain competitive with its rivals and eventually emerge as the premiere transshipment port in Asia, Che Khalib said. Singapore is the world’s busiest transshipment port and it faces stiff competition from other Southeast Asia ports. Singapore’s overall transshipment volumes declined 7.8 percent in the first four months of this year, following an 8.7 percent drop in 2015, whereas its key competitors have boosted their market shares, Alphaliner said. Singapore is still in a dominant position, however, one that was reinforced by the recent decision of CMA CGM, which is acquiring Singapore’s Neptune Orient Lines and its APL brand, to team up with the terminal operator PSA International, also of Singapore, on a joint-venture to lease and operate four container berths that will handle an anticipated 3 million TEUs a year. The move is part of the Singapore government’s plan to regain some of the transshipment volumes that have been lost to PTP and Port Klang, another Malaysian port. Malaysia is currently working on a report with the World Bank to determine how to better use government policy to aid port development and determine what issues are most heavily impacting operations at the country’s ports. Contact Xiaolin Zeng at arachelle0@gmail.com .A version of this story originally appeared on IHS Fairplay, a sister product of JOC.com within IHS.

International ports

Eying transshipment growth, Tanjung Pelepas to double capacity

<div class="phx-topic abstract-wrapper">The Zim Central China Xpress will restart next week, little more than a month after Zim announced its suspension as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network.</div>

The Zim Central China Xpress will restart next week, little more than a month after Zim announced its suspension as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network.

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<div class="phx-topic">Zim Integrated Shipping Services is relaunching a suspended service from China to Los Angeles due to the demand revival amid the 90-day pause in the tariff spat between Washington and Beijing, but has nonetheless downgraded its volume expectations for the trans-Pacific trade. The Zim Central China Xpress, connecting Los Angeles with Ningo and Shanghai, will restart next week, the carrier said Monday, little more than a month after Zim announced its suspension on April 22 as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network. Zim’s volumes from China halved after President Donald Trump on April 9 announced 145% tariffs on Beijing, though an influx of imports from Vietnam and Thailand helped mitigate the plunge. The sudden decline in US import booking has spurred Zim to downgrade its 2025 outlook for growth on the trans-Pacific to low single-digits compared to its original forecast of high-single digit growth. The market is at the highest level of uncertainty in recent memory, and the health of volumes for the rest of the year hinges on the extent of US tariffs on Chinese imports, Zim CEO Xavier Destriau told the Journal of Commerce. While there is a threat a rebound in imports from China could overwhelm US West Coast ports, Destriau said the US marine terminals Zim is calling are fluid. “But at some point, there is a risk of port congestion, if indeed, there is a surge in volume and a surge of capacity potentially also being redeployed due to newly recovered attractiveness of the trade,” he said. The frontloading of cargo by US importers in the first quarter in anticipation of higher US tariffs pushed up Zim’s Q1 volume 12% year over year. Net income tripled to $296 million, while revenue jumped 28%. Acknowledging that its fleet was more exposed than other carriers to a coming US tax on Chinese tonnage, Zim said it would swap out Chinese-built ships from the US trades before the new fees are implemented in October. CMA CGM <a href="https://www.joc.com/article/cma-cgm-fleet-will-not-need-to-pay-chinese-tonnage-tax-cfo-6006026">on Friday said it would take a similar tact</a>. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Zim Integrated Shipping Services is relaunching a suspended service from China to Los Angeles due to the demand revival amid the 90-day pause in the tariff spat between Washington and Beijing, but has nonetheless downgraded its volume expectations for the trans-Pacific trade. The Zim Central China Xpress, connecting Los Angeles with Ningo and Shanghai, will restart next week, the carrier said Monday, little more than a month after Zim announced its suspension on April 22 as part of the carrier’s broader 30% to 35% trim in its trans-Pacific network. Zim’s volumes from China halved after President Donald Trump on April 9 announced 145% tariffs on Beijing, though an influx of imports from Vietnam and Thailand helped mitigate the plunge. The sudden decline in US import booking has spurred Zim to downgrade its 2025 outlook for growth on the trans-Pacific to low single-digits compared to its original forecast of high-single digit growth. The market is at the highest level of uncertainty in recent memory, and the health of volumes for the rest of the year hinges on the extent of US tariffs on Chinese imports, Zim CEO Xavier Destriau told the Journal of Commerce. While there is a threat a rebound in imports from China could overwhelm US West Coast ports, Destriau said the US marine terminals Zim is calling are fluid. “But at some point, there is a risk of port congestion, if indeed, there is a surge in volume and a surge of capacity potentially also being redeployed due to newly recovered attractiveness of the trade,” he said. The frontloading of cargo by US importers in the first quarter in anticipation of higher US tariffs pushed up Zim’s Q1 volume 12% year over year. Net income tripled to $296 million, while revenue jumped 28%. Acknowledging that its fleet was more exposed than other carriers to a coming US tax on Chinese tonnage, Zim said it would swap out Chinese-built ships from the US trades before the new fees are implemented in October. CMA CGM on Friday said it would take a similar tact . Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

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Container lines

Zim restarts China-Los Angeles service to capture fresh import demand

<div class="phx-topic abstract-wrapper">Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.</div>

Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.

<div class="phx-topic">A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it’s needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines like HMM.” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, which was causing lengthy delays and port omissions on some long-haul and intra-Asia services. <h3>Congestion stretches throughout Asia </h3>Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">it had seen an increase of more than 50% in China-US cargo bookings</a> since the two countries signed a preliminary trade deal slashing tariffs for 90-days following meetings on May 11-12. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it’s needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines like HMM.” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, which was causing lengthy delays and port omissions on some long-haul and intra-Asia services. Congestion stretches throughout Asia Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday it had seen an increase of more than 50% in China-US cargo bookings since the two countries signed a preliminary trade deal slashing tariffs for 90-days following meetings on May 11-12. Contact Keith Wallis at keithwallis@hotmail.com .

US tariff-linked cargo rush causes port congestion, box shortages in China

<div class="phx-topic abstract-wrapper">Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.</div>

Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.

<div class="phx-topic">Tariff battles and port call penalty fees could be the least of the breakbulk and project cargo sector’s worries if two pieces of more impactful proposed legislation work their way through the legislative process.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6006944_0.1.jpg"></img></div>Amid the scramble to make sense of now partially-relaxed US import tariffs and the US Trade Representative’s (USTR’s) planned fees on Chinese ships calling US ports, industry stakeholders have overlooked a key detail of the recently reintroduced Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, according to an engineering, procurement and construction (EPC) source who asked not to be identified.The SHIPS Act, reintroduced to Congress April 30 by Sens. Mark Kelly (D-Ariz.), Todd Young (R-Ind.), John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), aims to expand the US-flag international fleet by 250 ships in 10 years, enhance US competitiveness and make investments in the maritime workforce. But according to the EPC source, the proposed legislation threatens to restore a provision in the USTR port fees that would punish operators with vessels on order at Chinese shipyards, a provision from which multipurpose vessels (MPVs) were thought to be exempt.The SHIPS Act would create a penalty tax for ships operated by Chinese carriers or built in China, as well as non-Chinese operators that order at foreign shipyards of concern. The tax is set at $5 per ton for ships owned or operated by a “foreign country of concern,” vessels registered there, or vessels registered there three years prior to “the date of the determination of the application.” An owner or operator not based in China would be subject to the tax if 50% or more of its vessel orders were placed with a shipyard of concern at the time the law goes into effect, or if 50% of its newbuild deliveries in the 24 months after enactment are from a designated yard.For a non-Chinese owner or operator with between 25% and 49% of its ships on order at or delivered by a shipyard of concern within 24 months of the effective date, the penalty would be $3.50 per ton. In addition, any owner or operator that had 50% or more of its ships constructed or undergoing repairs at a shipyard of concern “at any time” during the three years preceding the imposition of the law would be subject to a $1.25-per-ton fee.<h3>Industry could take a hit</h3>Given that these penalties would be on top of the previously announced USTR port fees, the bill would “have huge ramifications for the industry” if passed into law as currently written, the EPC source said, noting that it is generally much more difficult to reverse a law than, for example, an executive order on tariffs or a USTR measure.“After it has passed into law, the chance of it being repealed is pretty remote,” they said. “I can’t remember the last time an act was repealed in the US.”The 2025 reintroduction of the SHIPS Act has been referred to 12 committees, including the Committee on Armed Services, the Committees on Transportation and Infrastructure, and the Committee on Energy and Commerce. The previous version of the proposed act did not progress beyond the committee review stage.Also flying under the radar as it maneuvers through the legislative process is the American Cargo for American Ships Act. If enacted, that bill would require all work contracted by the Department of Transportation to be carried out by US-flag vessels, up from a current requirement of 50%, effectively shutting out non-US-flag MPVs from all government-funded energy and defense projects.Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Tariff battles and port call penalty fees could be the least of the breakbulk and project cargo sector’s worries if two pieces of more impactful proposed legislation work their way through the legislative process. Amid the scramble to make sense of now partially-relaxed US import tariffs and the US Trade Representative’s (USTR’s) planned fees on Chinese ships calling US ports, industry stakeholders have overlooked a key detail of the recently reintroduced Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, according to an engineering, procurement and construction (EPC) source who asked not to be identified. The SHIPS Act, reintroduced to Congress April 30 by Sens. Mark Kelly (D-Ariz.), Todd Young (R-Ind.), John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), aims to expand the US-flag international fleet by 250 ships in 10 years, enhance US competitiveness and make investments in the maritime workforce. But according to the EPC source, the proposed legislation threatens to restore a provision in the USTR port fees that would punish operators with vessels on order at Chinese shipyards, a provision from which multipurpose vessels (MPVs) were thought to be exempt. The SHIPS Act would create a penalty tax for ships operated by Chinese carriers or built in China, as well as non-Chinese operators that order at foreign shipyards of concern. The tax is set at $5 per ton for ships owned or operated by a “foreign country of concern,” vessels registered there, or vessels registered there three years prior to “the date of the determination of the application.” An owner or operator not based in China would be subject to the tax if 50% or more of its vessel orders were placed with a shipyard of concern at the time the law goes into effect, or if 50% of its newbuild deliveries in the 24 months after enactment are from a designated yard. For a non-Chinese owner or operator with between 25% and 49% of its ships on order at or delivered by a shipyard of concern within 24 months of the effective date, the penalty would be $3.50 per ton. In addition, any owner or operator that had 50% or more of its ships constructed or undergoing repairs at a shipyard of concern “at any time” during the three years preceding the imposition of the law would be subject to a $1.25-per-ton fee. Industry could take a hit Given that these penalties would be on top of the previously announced USTR port fees, the bill would “have huge ramifications for the industry” if passed into law as currently written, the EPC source said, noting that it is generally much more difficult to reverse a law than, for example, an executive order on tariffs or a USTR measure. “After it has passed into law, the chance of it being repealed is pretty remote,” they said. “I can’t remember the last time an act was repealed in the US.” The 2025 reintroduction of the SHIPS Act has been referred to 12 committees, including the Committee on Armed Services, the Committees on Transportation and Infrastructure, and the Committee on Energy and Commerce. The previous version of the proposed act did not progress beyond the committee review stage. Also flying under the radar as it maneuvers through the legislative process is the American Cargo for American Ships Act. If enacted, that bill would require all work contracted by the Department of Transportation to be carried out by US-flag vessels, up from a current requirement of 50%, effectively shutting out non-US-flag MPVs from all government-funded energy and defense projects. Contact Carly Fields at carly.fields@spglobal.com .

Breakbulk carriers

Project cargo

Breakbulk News

Potential regulatory bombshells flying under MPV sector’s radar

<div class="phx-topic abstract-wrapper">Greater interplay between US drayage and truckload markets may appear as imports fluctuate due to shifting tariff deadlines, but little impact is expected on pricing. </div>

Greater interplay between US drayage and truckload markets may appear as imports fluctuate due to shifting tariff deadlines, but little impact is expected on pricing.

<div class="phx-topic">A sooner-than-anticipated influx of US imports from China is already <a href="https://www.joc.com/article/trans-pacific-carriers-announce-massive-june-rate-hikes-6005450">pushing up ocean container spot rates</a>, but those price increases are not expected to reach landbound drayage and truckload markets. A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods. “Right now, we don’t see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,” even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday. Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks. “Drayage drivers could effectively go into power-only mode,” meaning they could use their tractors on the spot market to haul trailers, Dehan said. “There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.” <h3>Supply-demand imbalance </h3>Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won’t be enough to resuscitate demand. “There don’t appear to be too many demand catalysts that we can point to right now,” Dehan said. “Tariffs are not going to create demand.” At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence. Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight &amp; Analytics noted increased activity around major distribution hubs in April. “The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,” Dean Croke, principal analyst at DAT, told the Journal of Commerce. But that hasn’t moved spot pricing. Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week. “Overall, we continue to observe a consistent market,” Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday. “Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.” The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports. Demand “may be a little bit slack for four weeks, and then it will hit in June,” said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics. “We won’t see COVID-level disruption, but it will be a lift, and it’s on the way.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

A sooner-than-anticipated influx of US imports from China is already pushing up ocean container spot rates , but those price increases are not expected to reach landbound drayage and truckload markets. A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods. “Right now, we don’t see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,” even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday. Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks. “Drayage drivers could effectively go into power-only mode,” meaning they could use their tractors on the spot market to haul trailers, Dehan said. “There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.” Supply-demand imbalance Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won’t be enough to resuscitate demand. “There don’t appear to be too many demand catalysts that we can point to right now,” Dehan said. “Tariffs are not going to create demand.” At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence. Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight & Analytics noted increased activity around major distribution hubs in April. “The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,” Dean Croke, principal analyst at DAT, told the Journal of Commerce. But that hasn’t moved spot pricing. Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week. “Overall, we continue to observe a consistent market,” Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday. “Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.” The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports. Demand “may be a little bit slack for four weeks, and then it will hit in June,” said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics. “We won’t see COVID-level disruption, but it will be a lift, and it’s on the way.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

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Surface

Capacity-demand imbalance to shield truck rates from US import surge

<div class="phx-topic abstract-wrapper">MSC plans to provide all of the tonnage in a US Gulf service, with Zim slated to get a lower share of slot space as weaker demand forces service changes. </div>

MSC plans to provide all of the tonnage in a US Gulf service, with Zim slated to get a lower share of slot space as weaker demand forces service changes.

<div class="phx-topic">Zim Integrated Shipping looks to withdraw capacity from an Asia-US Gulf Coast service it operates with Mediterranean Shipping Co. (MSC) in response to a “drastic drop” in trans-Pacific cargo bookings. The withdrawal and other changes show how the Trump administration’s tariffs against China continue to redraw container services. In a Federal Maritime Commission filing last week, MSC and Zim said they were making interim changes to their <a href="https://www.joc.com/article/ocean-carrier-alliance-shakeup-offers-varied-service-choices-for-shippers-5735374">vessel sharing agreement</a> (VSA) struck last September for six trans-Pacific services to US East and Gulf coasts. The interim changes, which take effect next week, were made “in light of the drastic drop in demand resulting from current trade conditions.” The interim change will affect Zim’s South Lotus service that MSC jointly operates as its Lone Star Express service. Under the new arrangement, Zim will provide three ships to the 13-ship rotation. Zim originally provided up to six ships under the earlier VSA, which started out as a 12-ship string. MSC will provide all the Lone Star capacity by early fall, although Zim will have the option to contribute up to four ships. Zim’s container slot allocation on other services under the VSA will also be lower under the temporary arrangement. The ports served under the VSA were also changed to include Indonesia and Taiwan, along with the existing Asia port network of China, Vietnam, South Korea, Thailand and Singapore. Last week, MSC and Zim announced that their Emerald-Xpress Boston service would add a call in Taiwan. Evergreen Marine offers Taiwan service into the East Coast, as does the jointly operated Hapag-Lloyd and Wan Hai AA7 service, but carriers have rarely offered direct service from Indonesia. <a href="https://www.joc.com/article/maersk-to-debut-new-houston-norfolk-trans-pac-service-in-march-5223666">Maersk was the last to try</a> in 2022, but <a href="https://www.joc.com/article/maersk-culls-another-trans-pac-service-as-ship-supply-outstrips-demand-5245556">it suspended the service</a> a year later. The most recent changes come after MSC and Zim announced the suspension of <a href="https://www.joc.com/article/msc-suspends-two-us-services-rejigs-others-as-tariffs-hit-chinese-imports-6000649">one East Coast and one Gulf Coast service</a> due to <a href="https://www.joc.com/article/hapag-lloyd-saw-china-bookings-drop-hard-after-us-enacted-tariffs-5990185">the sharp drop in container bookings</a> from China following the April 9 release of President Trump’s latest tariffs. While the subsequent easing of those tariffs will spur <a href="https://www.joc.com/article/trans-pacific-carriers-announce-massive-june-rate-hikes-6005450">a rebound in shipments</a> from China, MSC and Zim’s recent schedules are adding calls to Southeast Asia to account for additional import sourcing shifts. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Zim Integrated Shipping looks to withdraw capacity from an Asia-US Gulf Coast service it operates with Mediterranean Shipping Co. (MSC) in response to a “drastic drop” in trans-Pacific cargo bookings. The withdrawal and other changes show how the Trump administration’s tariffs against China continue to redraw container services. In a Federal Maritime Commission filing last week, MSC and Zim said they were making interim changes to their vessel sharing agreement (VSA) struck last September for six trans-Pacific services to US East and Gulf coasts. The interim changes, which take effect next week, were made “in light of the drastic drop in demand resulting from current trade conditions.” The interim change will affect Zim’s South Lotus service that MSC jointly operates as its Lone Star Express service. Under the new arrangement, Zim will provide three ships to the 13-ship rotation. Zim originally provided up to six ships under the earlier VSA, which started out as a 12-ship string. MSC will provide all the Lone Star capacity by early fall, although Zim will have the option to contribute up to four ships. Zim’s container slot allocation on other services under the VSA will also be lower under the temporary arrangement. The ports served under the VSA were also changed to include Indonesia and Taiwan, along with the existing Asia port network of China, Vietnam, South Korea, Thailand and Singapore. Last week, MSC and Zim announced that their Emerald-Xpress Boston service would add a call in Taiwan. Evergreen Marine offers Taiwan service into the East Coast, as does the jointly operated Hapag-Lloyd and Wan Hai AA7 service, but carriers have rarely offered direct service from Indonesia. Maersk was the last to try in 2022, but it suspended the service a year later. The most recent changes come after MSC and Zim announced the suspension of one East Coast and one Gulf Coast service due to the sharp drop in container bookings from China following the April 9 release of President Trump’s latest tariffs. While the subsequent easing of those tariffs will spur a rebound in shipments from China, MSC and Zim’s recent schedules are adding calls to Southeast Asia to account for additional import sourcing shifts. Contact Michael Angell at michael.angell@spglobal.com .

MSC, Zim plan to rework Asia-US Gulf network as demand drops

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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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