<div class="phx-topic abstract-wrapper">More than a dozen non-vessel-operating common carries have endorsed further changes to U.S. Federal Maritime Commission’s rules governing NVOs’ contracts with shippers.</div>

More than a dozen non-vessel-operating common carries have endorsed further changes to U.S. Federal Maritime Commission’s rules governing NVOs’ contracts with shippers.

<div>More than a dozen non-vessel-operating common carries have endorsed further changes to U.S. Federal Maritime Commission’s rules governing NVOCCs’ contracts with shippers.But ocean carriers urged the commission to avoid changes that favor NVOCCs over vessel operators, and UPS and the National Industrial Transportation League warned against narrowing NVOCCs’ contracting options.The <a>industry comments </a>came in response to the National Customs Brokers and Forwarders Association of America’s recent <a>petition asking the FMC</a> to lift “unnecessary, burdensome rules” governing NVOCC contracting.The petition has broad implications for cargo interests. NVOCCs handled about 35 percent of U.S. containerized imports in the first five months of...

More than a dozen non-vessel-operating common carries have endorsed further changes to U.S. Federal Maritime Commission’s rules governing NVOCCs’ contracts with shippers. But ocean carriers urged the commission to avoid changes that favor NVOCCs over vessel operators, and UPS and the National Industrial Transportation League warned against narrowing NVOCCs’ contracting options. The industry comments came in response to the National Customs Brokers and Forwarders Association of America’s recent petition asking the FMC to lift “unnecessary, burdensome rules” governing NVOCC contracting. The petition has broad implications for cargo interests. NVOCCs handled about 35 percent of U.S. containerized imports in the first five months of this year, according to PIERS, a sister product of JOC.com within IHS Maritime & Trade. NVOCC contract rules have been a constant issue since the 1998 Ocean Shipping Reform Act allowed shippers to sign confidential contracts with vessel operators but not with NVOs. Before OSRA, essential terms of all shipper-carrier contracts had to be made publicly available. In 2004, the commission loosened OSRA’s restrictions by authorizing NVO Service Arrangements. These contracts provided NVOCCs with an equivalent to the contracts that vessel operators sign with shippers. However, the contract terms must be publicly filed with the commission. Most NVOCCs insist this is a waste of time and money. In 2011, the FMC responded to the complaints by authorizing NVO Rate Arrangements. Unlike NSAs, the rate arrangements don’t have to be published. However, they cannot include credit and payment terms, rate methodology, minimum quantities, dispute forum selection or arbitration clauses, or other non-rate economic issues. NRAs also cannot be amended during their term. The NCBFAA petition urged the commission to eliminate the distinction between NSAs and NRAs by allowing the agreements to include non-rate increases without need for publication, tariff-filing, or advance filing of amendments covering changes such as vessel operators’ rate increases. “Chasing down signature on amendments 30 days in advance of an increase {is} not only problematic with our clients, but the amendment must frequently be redone when the announced increase is delayed, mitigated or canceled, as regularly occurs today,” said Richard J. Roche, vice president of international transportation at Mohawk Global Logistics. The World Shipping Council, which represents carriers controlling more than 90 percent of global container ship capacity, said that if the FMC exempts NVOCCs from the advance filing of contract amendments, it must do the same for vessel operators that actually carry the cargo. The council said exempting NVOCCs from filing restrictions would not work if vessel operators still must file contracts and amendments before carrying the cargo an NVOCC books. “The cargo still could not move until the {vessel-operating common carrier} had completed its regulatory requirements...The slowest link in the process controls how fast the cargo can move,” the council said. Different rules for NVOCCs and vessel operators also would raise fairness issues, the council said. “It is one thing to provide statutory recognition for the existence and operation of NVOCCs,” the council told the FMC. “It is quote another to provide them with a government-sponsored advantage over the vessel-operating carriers without which NVOCCs literally could not exist.” The council proposed that the commission allow contract amendments to be filed within 90 days after a contract is signed, and that cargo be allowed to move without waiting for an amendment to be filed. “This recommendation would not disturb the basic requirement that all contracts and all contract amendments be filed with the FMC,” the council said. Preparing and obtaining signatures on a contract amendment now takes 24 to 48 hours, or longer if there’s a glitch or backlog. Providing more flexibility would help carriers by allowing periodic batch filing of amendments, the council told the FMC. Crowley Maritime supported the World Shipping Council’s position and emphasized the “enormous” cost of filing service contracts and amendments. “Crowley conservatively estimates that it files approximately 1,600 service contracts per year, with an average of four amendments per contract, for approximately 8,000 total annual service contract filings. These filings require approximately 21,800 man-hours per year at a cost to Crowley of more than $500,000 exclusive of the cost of tariff publication services and software,” the carrier said. In addition, “countless man-hours are spent chasing customers for signature pages to amendments...In some cases, carriers must delay acceptance of shipments until an amendment is filed or, if the shipper tenders the cargo before it has returned its signature page to an amendment, carrier personnel must spend additional time and resources on further amendments.” The National Industrial Transportation League said it supports the intermediaries’ petition to the FMC as a way to provide shippers with added flexibility and efficiency. The league said existing filing requirements for NSAs apparently “serve no useful purpose because the commission does not (and need not) rely on these submissions to fulfill its enforcement duties.” However, the league said NSAs “should remain as an option for any shippers and NVOCCs that desire the increased formality of the NSA requirements.” Comments filed with the FMC suggested a split between smaller NVOCCs, which make up a significant portion of the National Customs Brokers and Forwarders of America, and larger NVOCCs such as UPS. UPS helped lead the effort more than a decade ago to persuade the FMC to authorize NSAs. Today the company’s NVOCC units are heavy users of the agreements. UPS noted that NVO Service Arrangements require public filing of essential terms but also require a minimum quantity commitment that strengthens the hand of NVOCCs in competing with vessel operators. “While UPS understands that some NCBFAA member may not like the NSA procedures and filing requirements, they have the option of using NRAs,” the company said. “It does not make sense to narrow NVOCCs’ range of choices for contracting when a substantial volume of cargo is moving under this mode successfully and with great benefits to carriers and customers.” Contact Joseph Bonney at joseph.bonney@ihs.com and follow him on Twitter: @JosephBonney .

Transport, Trade and Regulation News

Industry split on NVOCC contracting changes

<div class="phx-topic abstract-wrapper">PSA BDP acquired a majority stake in Mexico-based forwarder ED International, expanding PSA’s cross-border forwarding network.</div>

PSA BDP acquired a majority stake in Mexico-based forwarder ED International, expanding PSA’s cross-border forwarding network.

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<div class="phx-topic">Logistics provider PSA BDP on Tuesday said it would take a majority stake in a Mexico-based forwarder, strengthening its US cross-border capabilities leveraged with parent PSA International’s global marine terminal network. Terms of the sale of the majority stake in Mexico City-based forwarder ED International were not disclosed. Through its <a href="https://www.joc.com/article/psa-leveraging-forwarder-acquisition-to-serve-shippers-directly-5242073">2022 acquisition of BDP International</a>, PSA has positioned the non-vessel-operating common carrier to provide logistics solutions connecting PSA International’s network of 73 marine terminals. “With many shippers continuing the trend of nearshoring from Asia to Mexico, there is a growing need for expanded distribution networks that can provide comprehensive solutions,” PSA BDP said in a statement. Despite US tariffs on Mexican imports of up to 25%, including on finished vehicles, cross-border trade is expected to expand in the long term. Most of that trade is conducted by truck, and in January, the number of northbound trucks headed from Mexico to the US increased 2.8% year over year, with gains in El Paso, Otay Mesa, Nogales, Hildalgo and Eagle Pass, according to the latest US Bureau of Transportation Statistics border-crossing data. Truck traffic into Laredo, Texas, the largest US border crossing, dropped 2% year over year in January, possibly reflecting increased congestion ahead of tariffs that were scheduled to take effect in February. Those tariffs eventually took effect in March but were limited to goods not covered by the US-Mexico-Canada trade agreement. That means many goods are still moving from Mexico to the US duty-free. Stronger US tariff pressure on China encourages continued manufacturing investment in Mexico to serve North and South America. Direct foreign investment rose 1.1% to US$36.9 billion in 2024, according to preliminary data released earlier this year by Mexico’s Secretaría de Economía (SE). About half of that direct foreign investment came from US companies. In recent years, marine terminals operators, including DP World, have sought to take greater control of landside logistics outside the gates of their facilities. That has manifested through acquisitions of forwarders and even ocean feeder services as in the case of DP World. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Logistics provider PSA BDP on Tuesday said it would take a majority stake in a Mexico-based forwarder, strengthening its US cross-border capabilities leveraged with parent PSA International’s global marine terminal network. Terms of the sale of the majority stake in Mexico City-based forwarder ED International were not disclosed. Through its 2022 acquisition of BDP International , PSA has positioned the non-vessel-operating common carrier to provide logistics solutions connecting PSA International’s network of 73 marine terminals. “With many shippers continuing the trend of nearshoring from Asia to Mexico, there is a growing need for expanded distribution networks that can provide comprehensive solutions,” PSA BDP said in a statement. Despite US tariffs on Mexican imports of up to 25%, including on finished vehicles, cross-border trade is expected to expand in the long term. Most of that trade is conducted by truck, and in January, the number of northbound trucks headed from Mexico to the US increased 2.8% year over year, with gains in El Paso, Otay Mesa, Nogales, Hildalgo and Eagle Pass, according to the latest US Bureau of Transportation Statistics border-crossing data. Truck traffic into Laredo, Texas, the largest US border crossing, dropped 2% year over year in January, possibly reflecting increased congestion ahead of tariffs that were scheduled to take effect in February. Those tariffs eventually took effect in March but were limited to goods not covered by the US-Mexico-Canada trade agreement. That means many goods are still moving from Mexico to the US duty-free. Stronger US tariff pressure on China encourages continued manufacturing investment in Mexico to serve North and South America. Direct foreign investment rose 1.1% to US$36.9 billion in 2024, according to preliminary data released earlier this year by Mexico’s Secretaría de Economía (SE). About half of that direct foreign investment came from US companies. In recent years, marine terminals operators, including DP World, have sought to take greater control of landside logistics outside the gates of their facilities. That has manifested through acquisitions of forwarders and even ocean feeder services as in the case of DP World. Contact Laura Robb at laura.robb@spglobal.com . 

Maritime

Forwarding

Port infrastructure

North American ports

Marine terminals

Container Shipping News

Port-focused US logistics provider takes majority stake in Mexican forwarder

<div class="phx-topic abstract-wrapper">The freeing up of vessel capacity that has been diverted around southern Africa for the past 18 months could inject as much as 2 million TEUs of functional capacity into the global container shipping market. </div>

The freeing up of vessel capacity that has been diverted around southern Africa for the past 18 months could inject as much as 2 million TEUs of functional capacity into the global container shipping market.

<div class="phx-topic">US President Donald Trump on Tuesday said Houthi militants operating from Yemen have agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea. If true, the apparent ceasefire would raise the prospects of major ocean carriers returning to Suez Canal transits this year, something that would result in significant vessel overcapacity in the container shipping market.While not a formal deal, Trump said the Houthis have agreed to stop their missile and drone attacks on vessels that began in late 2023 as part of what the militants said was a show of solidarity for Gaza amid the Israel-Hamas war.The Houthis have not confirmed that a deal with the US has been made. US bombings of militant positions in Yemen have intensified in the last two months. “They don’t want to fight anymore. They just don’t want to fight. We will honor that, and we will stop the bombings,” Trump said at the White House. “They have capitulated, but more importantly we will take their word. They say they won’t be blowing up ships anymore.” Approximately 1 million to 2 million TEUs of capacity would become available if the container shipping industry returned to Suez Canal transits and no longer needed to use the lengthy diversion around southern Africa, according to Maersk estimates. An estimated 10% of global capacity has been absorbed by the longer transits, according to shipping association BIMCO. The container shipping order book is currently just over 7 million TEUs, representing 25% of the existing fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, with the supply-demand imbalance expected to be particularly acute over the next two years. Asian container lines along with CMA CGM have transited the Red Sea amid Houthi threats, yet it is unclear whether the apparent de-escalation announced by Trump will change the risk calculations of carriers that include crew safety and insurance costs. A return to a safe shipping environment in the region would also be a boon to Gulf-based ocean shippers, reopening a direct east-west route rather than forcing cargo owners to transship via feeder vessels or even tap overland trucking. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com.">mark.szakonyi@spglobal.com</a>.</div>

US President Donald Trump on Tuesday said Houthi militants operating from Yemen have agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea. If true, the apparent ceasefire would raise the prospects of major ocean carriers returning to Suez Canal transits this year, something that would result in significant vessel overcapacity in the container shipping market. While not a formal deal, Trump said the Houthis have agreed to stop their missile and drone attacks on vessels that began in late 2023 as part of what the militants said was a show of solidarity for Gaza amid the Israel-Hamas war. The Houthis have not confirmed that a deal with the US has been made. US bombings of militant positions in Yemen have intensified in the last two months. “They don’t want to fight anymore. They just don’t want to fight. We will honor that, and we will stop the bombings,” Trump said at the White House. “They have capitulated, but more importantly we will take their word. They say they won’t be blowing up ships anymore.” Approximately 1 million to 2 million TEUs of capacity would become available if the container shipping industry returned to Suez Canal transits and no longer needed to use the lengthy diversion around southern Africa, according to Maersk estimates. An estimated 10% of global capacity has been absorbed by the longer transits, according to shipping association BIMCO. The container shipping order book is currently just over 7 million TEUs, representing 25% of the existing fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global, with the supply-demand imbalance expected to be particularly acute over the next two years. Asian container lines along with CMA CGM have transited the Red Sea amid Houthi threats, yet it is unclear whether the apparent de-escalation announced by Trump will change the risk calculations of carriers that include crew safety and insurance costs. A return to a safe shipping environment in the region would also be a boon to Gulf-based ocean shippers, reopening a direct east-west route rather than forcing cargo owners to transship via feeder vessels or even tap overland trucking. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Port News

Container lines

Asia-Europe

Trans-Pacific

Apparent Houthi ceasefire raises container shipping overcapacity risk

<div class="phx-topic abstract-wrapper">As port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains.</div>

As port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains.

<div class="phx-topic">US shippers saved an average of 19% on spot market freight and nearly 26% on contract loads in the first quarter by using domestic intermodal instead of long-haul trucking, savings that softened in March amid rising trade tensions with China, according to the latest Journal of Commerce <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">Intermodal Savings Index</a> (ISI). Trucking companies managed to secure contract rate increases early in the quarter, but that momentum faded as freight volumes slowed amid the growing trade conflict with Beijing, according to the quarterly earnings reports of several major carriers. Intermodal contracts remained flat, with the only notable increases concentrated in California. Spot truckload rates, a leading indicator for intermodal pricing, fell as geopolitical tensions rose. And now as port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains. “Imports may be dropping faster than consumer demand and a lull in shipping could be the catalyst that removes additional capacity from the market,” Jim Filter, executive vice president of transportation and logistics for Schneider National, said on a May 1 earnings call. “If there were new trade agreements, there could be an abrupt restart of imports with less capacity than there is today [to handle the upswing].” The Spot ISI averaged 119.1 in the first quarter, down from 120.4 in the fourth quarter but up from 117.1 a year ago. The Contract ISI slipped to 125.6 from 126.2 in the fourth quarter and 125.8 one year ago. Index values above 100 indicate intermodal is the more cost-effective mode. The higher the index number, the greater the savings. For example, a spot ISI of 119.1 translates to a 19.1% savings on intermodal versus truckload and a contract ISI of 125.6 implies a 25.6% savings. In terms of raw dollars, shippers saved an average of $706 per container on the spot market and $964 per container on the contract market by using domestic intermodal, according to the ISI. Each is virtually unchanged from the prior year. On hauls longer than 2,000 miles, contract savings topped $1,600 per box. But on lanes under 800 miles, the average savings dropped to $170 per container, which is easily erased if the shipper is located more than an hour from the rail terminal or incurs accessorial fees. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="18f45e44-8027-488a-8afc-87771e60ca91"></dynamic-object></div>Spot truckload rates declined 14 cents between January and March to $1.86 per mile, while spot intermodal rates fell 6 cents to $1.56 per mile, according to the ISI. Contract truckload rates fell 3 cents to $1.95 per mile, while contract intermodal rose a penny to $1.48 per mile in the first quarter. Truckload contracts rose 3 cents in the first two months of the year before falling 6 cents in March amid the rising geopolitical tensions. <h3>A flat bid season </h3>The most common word to describe bid season was “flat,” according to conversations with asset-based and non-asset-based intermodal providers. Rates went up on freight originating in California but remained largely unchanged or down elsewhere in the US. One retail shipper told the Journal of Commerce that a major intermodal provider ramped up outreach in the final five days before freight awards, repeatedly calling and emailing with last-minute rate cuts to secure additional volumes. Downward pricing pressure is intensifying on westbound lanes from Atlanta, Chicago, Dallas and Memphis to Los Angeles, where Amazon is undercutting traditional carriers to fill its fleet of more than 22,000 branded containers. The online retail giant moves heavy eastbound volumes but often struggles to backhaul westbound containers, many of which return empty. While some shippers have rebuffed Amazon’s overtures, others are shifting a portion of their freight previously awarded to established carriers to Amazon to test whether the retail giant can offer consistent capacity and service throughout the year. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.</div>

US shippers saved an average of 19% on spot market freight and nearly 26% on contract loads in the first quarter by using domestic intermodal instead of long-haul trucking, savings that softened in March amid rising trade tensions with China, according to the latest Journal of Commerce Intermodal Savings Index (ISI). Trucking companies managed to secure contract rate increases early in the quarter, but that momentum faded as freight volumes slowed amid the growing trade conflict with Beijing, according to the quarterly earnings reports of several major carriers. Intermodal contracts remained flat, with the only notable increases concentrated in California. Spot truckload rates, a leading indicator for intermodal pricing, fell as geopolitical tensions rose. And now as port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains. “Imports may be dropping faster than consumer demand and a lull in shipping could be the catalyst that removes additional capacity from the market,” Jim Filter, executive vice president of transportation and logistics for Schneider National, said on a May 1 earnings call. “If there were new trade agreements, there could be an abrupt restart of imports with less capacity than there is today [to handle the upswing].” The Spot ISI averaged 119.1 in the first quarter, down from 120.4 in the fourth quarter but up from 117.1 a year ago. The Contract ISI slipped to 125.6 from 126.2 in the fourth quarter and 125.8 one year ago. Index values above 100 indicate intermodal is the more cost-effective mode. The higher the index number, the greater the savings. For example, a spot ISI of 119.1 translates to a 19.1% savings on intermodal versus truckload and a contract ISI of 125.6 implies a 25.6% savings. In terms of raw dollars, shippers saved an average of $706 per container on the spot market and $964 per container on the contract market by using domestic intermodal, according to the ISI. Each is virtually unchanged from the prior year. On hauls longer than 2,000 miles, contract savings topped $1,600 per box. But on lanes under 800 miles, the average savings dropped to $170 per container, which is easily erased if the shipper is located more than an hour from the rail terminal or incurs accessorial fees. Spot truckload rates declined 14 cents between January and March to $1.86 per mile, while spot intermodal rates fell 6 cents to $1.56 per mile, according to the ISI. Contract truckload rates fell 3 cents to $1.95 per mile, while contract intermodal rose a penny to $1.48 per mile in the first quarter. Truckload contracts rose 3 cents in the first two months of the year before falling 6 cents in March amid the rising geopolitical tensions. A flat bid season The most common word to describe bid season was “flat,” according to conversations with asset-based and non-asset-based intermodal providers. Rates went up on freight originating in California but remained largely unchanged or down elsewhere in the US. One retail shipper told the Journal of Commerce that a major intermodal provider ramped up outreach in the final five days before freight awards, repeatedly calling and emailing with last-minute rate cuts to secure additional volumes. Downward pricing pressure is intensifying on westbound lanes from Atlanta, Chicago, Dallas and Memphis to Los Angeles, where Amazon is undercutting traditional carriers to fill its fleet of more than 22,000 branded containers. The online retail giant moves heavy eastbound volumes but often struggles to backhaul westbound containers, many of which return empty. While some shippers have rebuffed Amazon’s overtures, others are shifting a portion of their freight previously awarded to established carriers to Amazon to test whether the retail giant can offer consistent capacity and service throughout the year. Contact Ari Ashe at ari.ashe@spglobal.com . The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.

North-American rail

Intermodal providers

US spot intermodal savings dipped in Q1 amid largely flat rate environment

<div class="phx-topic abstract-wrapper">The forwarder offered an unsettled outlook for the trans-Pacific in 2025 as shippers navigate the Trump administration’s 145% tariffs on goods made in China. </div>

The forwarder offered an unsettled outlook for the trans-Pacific in 2025 as shippers navigate the Trump administration’s 145% tariffs on goods made in China.

<div class="phx-topic">Frontloading of imports ahead of US President Donald Trump’s tariffs on China fueled strong first-quarter results for Expeditors, but the forwarder warned Tuesday those same tariffs caused ocean freight volumes to decline “significantly” in April and continue to cloud the outlook for the remainder of 2025. Expeditors reported first-quarter earnings of $1.47 per share, up 26% from a year earlier and better than the $1.37 per share analyst consensus from Capital IQ Estimates, a sister company of the Journal of Commerce within S&amp;P Global. Revenues from the forwarder’s air and ocean businesses grew 19% and 37% year over year, respectively, during the quarter. CEO Daniel Wall said in a statement that shippers bringing cargo into the country ahead of the April 2 unveiling of Trump’s reciprocal tariffs pushed Expeditors’ air freight tonnage up 9% for the quarter while ocean container volumes rose 8%. “Air freight increased on higher buy and sell rates and growth in tonnage from strong demand, primarily in technology, as importers frontloaded shipments in anticipation of higher trade tariffs,” Wall said. “Our ocean business favorably compares to the first quarter a year ago and grew in strength on higher volumes and rates as importers also frontloaded shipments, as well as extended transit times because of the continuing conflict in the Red Sea.” <h3>Partially offsetting China volume loss </h3>However, Wall said both segments face uncertain outlooks due to the ongoing trade conflict between the US and China. With trans-Pacific air freight demand highly exposed to shipments of low-value e-commerce goods from China, “it is too early to predict what impact an end to the de minimis exemption may have on air capacity and rates going forward,” he said. Some of the decline in China-origin freight has been offset by sourcing from other Asian countries. But Wall said the potential for other countries to get hit with tariffs also has shippers feeling nervous about any overseas orders. “While some of those ocean volumes are shifting to other lanes, as customers look to mitigate their exposure to China-specific tariffs, it is too early to know what the overall decline in volumes might be,” he said. “Speculation regarding additional tariffs may cause more customers to pause or cancel shipments entirely.” The weaker demand will also impact forwarders similar to Expeditors, which benefit from the spread between the freight rates they pay carriers and what their customers are willing to pay. Wall said ocean carriers only have so many levers — such as blank sailings or suspending entire services — to keep rates up in the face of softer demand. “While carriers have shown a willingness to manage capacity, the current environment is so unsettled that they simply may not be able to do enough to keep rates from continuing to fall if consumer resilience fades and the capacity and demand imbalance become significant in certain lanes,” Wall said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Frontloading of imports ahead of US President Donald Trump’s tariffs on China fueled strong first-quarter results for Expeditors, but the forwarder warned Tuesday those same tariffs caused ocean freight volumes to decline “significantly” in April and continue to cloud the outlook for the remainder of 2025. Expeditors reported first-quarter earnings of $1.47 per share, up 26% from a year earlier and better than the $1.37 per share analyst consensus from Capital IQ Estimates, a sister company of the Journal of Commerce within S&P Global. Revenues from the forwarder’s air and ocean businesses grew 19% and 37% year over year, respectively, during the quarter. CEO Daniel Wall said in a statement that shippers bringing cargo into the country ahead of the April 2 unveiling of Trump’s reciprocal tariffs pushed Expeditors’ air freight tonnage up 9% for the quarter while ocean container volumes rose 8%. “Air freight increased on higher buy and sell rates and growth in tonnage from strong demand, primarily in technology, as importers frontloaded shipments in anticipation of higher trade tariffs,” Wall said. “Our ocean business favorably compares to the first quarter a year ago and grew in strength on higher volumes and rates as importers also frontloaded shipments, as well as extended transit times because of the continuing conflict in the Red Sea.” Partially offsetting China volume loss However, Wall said both segments face uncertain outlooks due to the ongoing trade conflict between the US and China. With trans-Pacific air freight demand highly exposed to shipments of low-value e-commerce goods from China, “it is too early to predict what impact an end to the de minimis exemption may have on air capacity and rates going forward,” he said. Some of the decline in China-origin freight has been offset by sourcing from other Asian countries. But Wall said the potential for other countries to get hit with tariffs also has shippers feeling nervous about any overseas orders. “While some of those ocean volumes are shifting to other lanes, as customers look to mitigate their exposure to China-specific tariffs, it is too early to know what the overall decline in volumes might be,” he said. “Speculation regarding additional tariffs may cause more customers to pause or cancel shipments entirely.” The weaker demand will also impact forwarders similar to Expeditors, which benefit from the spread between the freight rates they pay carriers and what their customers are willing to pay. Wall said ocean carriers only have so many levers — such as blank sailings or suspending entire services — to keep rates up in the face of softer demand. “While carriers have shown a willingness to manage capacity, the current environment is so unsettled that they simply may not be able to do enough to keep rates from continuing to fall if consumer resilience fades and the capacity and demand imbalance become significant in certain lanes,” Wall said. Contact Michael Angell at michael.angell@spglobal.com .

Air Cargo Forwarder News

US ocean freight from China fell ‘significantly’: Expeditors

<div class="phx-topic abstract-wrapper">While the Jones Act carrier added another service from Vietnam in the first quarter, it says volumes from that country won’t replace what’s lost from China. </div>

While the Jones Act carrier added another service from Vietnam in the first quarter, it says volumes from that country won’t replace what’s lost from China.

<div class="phx-topic">US ocean carrier Matson has issued a downbeat forecast for 2025 as US tariffs on Chinese imports are expected to impact its trans-Pacific container services. While imports out of Vietnam have taken up some slack capacity, Matson said the nearly one-third drop in China-origin freight will be hard to replace. Matson Chief Executive Matt Cox, reporting the company’s first-quarter earnings Monday, said the carrier saw a 30% drop in container volumes out of China immediately after President Donald Trump’s reciprocal tariffs on Beijing went into effect April 9. Due to shipper uncertainty about the direction of the tariffs, Cox said it’s unclear whether volumes will recover within the current quarter or full year. “Given the pronounced market decline in demand in the trans-Pacific in April, coupled with limited visibility to our container demand, we expect container volume and average freight rates in the second quarter to be lower year over year,” he said. “At the moment, it’s difficult to know if these lower volume levels are transitory or will persist for a longer time in 2025.” Cox made the comments after Matson reported first-quarter earnings of $2.18 per share, which was double the year-earlier results thanks to strong trans-Pacific freight rates in the first quarter. However, Matson’s customers do not appear to have frontloaded much cargo, with first-quarter container volumes from China being essentially flat compared with 2024. Matson’s Jones Act services to Hawaii and Alaska saw container volume growth of 3.2% and 4.8%, respectively, in the first quarter. The carrier added a feeder service from Vietnam’s Ho Chi Minh City during the first quarter on both its CLX and MAX services from China to the US, marking a second service expansion after it added Vietnam’s northern port of Haiphong two years earlier. With the new port call, Vietnam now accounts for 20% of Matson’s trans-Pacific business, Cox said. Shippers are indicating they plan to move more freight out of Vietnam, he added, along with other Asian exporters that Matson serves through transshipment. However, Cox said it’s not clear how quickly and easily shippers will be able to further pivot their product sourcing to Southeast Asia. Moreover, shippers will remain cautious about sourcing from other Asian suppliers because they could get hit with tariffs, too. “Vietnam has grown rather significantly, but Vietnam has some of the same issues as many fast-growing Asian economies,” Cox said. “They’ve got shortages of power, they have shortages of labor, and they were pretty busy before this significant tariff change to begin with. So, it’s not obvious to what extent the country itself can scale over such a short period of time.” <h3>No plans to trim capacity </h3>Cox said Matson has no plans to cut capacity or reduce service frequency because its customers need to restock every one to two months, regardless of tariffs. But until shippers and suppliers figure out how to share the cost burden of Trump’s tariffs, Cox said trans-Pacific volumes will likely stay muted. “It’s our view that in four to eight weeks is when a lot of inventory runs out, and cargo’s going to need to move,” he said. “There’s a lot of activity going on right now between manufacturers, importers and retailers about how to cover these tariffs. Our customers are loath to have empty shelves to the extent that they can help it. And we think that a significant amount of cargo will be moving at the last minute.” One trade issue that Cox expects won’t be negotiated away will be the de minimis exemption for low-value goods shipped directly from China via air freight. However, Cox said <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">the end of the de minimis exemption</a> will mean a pivot to ocean freight as China’s e-commerce retailers look to stage their goods for shipment within the US. Regarding the announcement from Chinese online marketplace Temu that it has stopped shipping directly from China to the US, Cox said it looks like a move by the company to “convert itself into more of an Amazon-like model” that will allow Matson to take advantage of a modal shift from air to ocean. “So, I think we do see more of that air cargo now converting into ocean, and that may be a long-term opportunity for us as e-commerce continues to grow,” he said. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ocean carrier Matson has issued a downbeat forecast for 2025 as US tariffs on Chinese imports are expected to impact its trans-Pacific container services. While imports out of Vietnam have taken up some slack capacity, Matson said the nearly one-third drop in China-origin freight will be hard to replace. Matson Chief Executive Matt Cox, reporting the company’s first-quarter earnings Monday, said the carrier saw a 30% drop in container volumes out of China immediately after President Donald Trump’s reciprocal tariffs on Beijing went into effect April 9. Due to shipper uncertainty about the direction of the tariffs, Cox said it’s unclear whether volumes will recover within the current quarter or full year. “Given the pronounced market decline in demand in the trans-Pacific in April, coupled with limited visibility to our container demand, we expect container volume and average freight rates in the second quarter to be lower year over year,” he said. “At the moment, it’s difficult to know if these lower volume levels are transitory or will persist for a longer time in 2025.” Cox made the comments after Matson reported first-quarter earnings of $2.18 per share, which was double the year-earlier results thanks to strong trans-Pacific freight rates in the first quarter. However, Matson’s customers do not appear to have frontloaded much cargo, with first-quarter container volumes from China being essentially flat compared with 2024. Matson’s Jones Act services to Hawaii and Alaska saw container volume growth of 3.2% and 4.8%, respectively, in the first quarter. The carrier added a feeder service from Vietnam’s Ho Chi Minh City during the first quarter on both its CLX and MAX services from China to the US, marking a second service expansion after it added Vietnam’s northern port of Haiphong two years earlier. With the new port call, Vietnam now accounts for 20% of Matson’s trans-Pacific business, Cox said. Shippers are indicating they plan to move more freight out of Vietnam, he added, along with other Asian exporters that Matson serves through transshipment. However, Cox said it’s not clear how quickly and easily shippers will be able to further pivot their product sourcing to Southeast Asia. Moreover, shippers will remain cautious about sourcing from other Asian suppliers because they could get hit with tariffs, too. “Vietnam has grown rather significantly, but Vietnam has some of the same issues as many fast-growing Asian economies,” Cox said. “They’ve got shortages of power, they have shortages of labor, and they were pretty busy before this significant tariff change to begin with. So, it’s not obvious to what extent the country itself can scale over such a short period of time.” No plans to trim capacity Cox said Matson has no plans to cut capacity or reduce service frequency because its customers need to restock every one to two months, regardless of tariffs. But until shippers and suppliers figure out how to share the cost burden of Trump’s tariffs, Cox said trans-Pacific volumes will likely stay muted. “It’s our view that in four to eight weeks is when a lot of inventory runs out, and cargo’s going to need to move,” he said. “There’s a lot of activity going on right now between manufacturers, importers and retailers about how to cover these tariffs. Our customers are loath to have empty shelves to the extent that they can help it. And we think that a significant amount of cargo will be moving at the last minute.” One trade issue that Cox expects won’t be negotiated away will be the de minimis exemption for low-value goods shipped directly from China via air freight. However, Cox said the end of the de minimis exemption will mean a pivot to ocean freight as China’s e-commerce retailers look to stage their goods for shipment within the US. Regarding the announcement from Chinese online marketplace Temu that it has stopped shipping directly from China to the US, Cox said it looks like a move by the company to “convert itself into more of an Amazon-like model” that will allow Matson to take advantage of a modal shift from air to ocean. “So, I think we do see more of that air cargo now converting into ocean, and that may be a long-term opportunity for us as e-commerce continues to grow,” he said. Contact Michael Angell at michael.angell@spglobal.com .

Chinese tariffs cloud trans-Pacific outlook for 2025: Matson

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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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