<div class="phx-topic abstract-wrapper">Deutsche Post World Net, Germany's global mail, express and logistics conglomerate, had no comment o</div>

Deutsche Post World Net, Germany's global mail, express and logistics conglomerate, had no comment o

<div>Deutsche Post World Net, Germany's global mail, express and logistics conglomerate, had no comment on a report that it is about to acquire package delivery provider Airborne Express. Deutsche Post chief executive Klaus Zumwinkel has dismissed similar reports in the past as 'speculation,' but this has failed to still current industry rumors that a deal is imminent.Airborne Express is the third-largest domestic air transport firm in the U.S. behind United Parcel Service and Federal Express.Focus Money, a German business magazine, last week said the acquisition of Airborne Express was due to be announced in early October but the two companies...

Deutsche Post World Net, Germany's global mail, express and logistics conglomerate, had no comment on a report that it is about to acquire package delivery provider Airborne Express. Deutsche Post chief executive Klaus Zumwinkel has dismissed similar reports in the past as 'speculation,' but this has failed to still current industry rumors that a deal is imminent. Airborne Express is the third-largest domestic air transport firm in the U.S. behind United Parcel Service and Federal Express.Focus Money, a German business magazine, last week said the acquisition of Airborne Express was due to be announced in early October but the two companies are still negotiating over the price. One significant obstacle is a U.S. airline ownership rule that requires 510f its equity and 750f its voting stock to be U.S.-owned. It is unclear how Deutsche Post would work around these requirements. Deutsche Post is looking for ways to boost its presence in the U.S. market which it entered in late 1999 with the $1.1 billion acquisition of Air Express International, the nation's biggest air freight forwarder. It also indirectly owns 250f U.S.-based DHL Airways through its wholly-owned DHL International, the Brussels-based global air express operator. Peter Kruse, Deutsche Post board member for express services, said the company cannot operate a worldwide air express network without a strong U.S. presence. Deutsche Post has a relatively small U.S. domestic business, making Airborne an ideal acquisition as it operates a nationwide overnight parcel and freight service.

Air Cargo

REPORT: DEUTSCHE POST TO ACQUIRE AIRBORNE EXPRESS

<div class="phx-topic abstract-wrapper">The gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border "solidarity strike” strategy.</div>

The gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border "solidarity strike” strategy.

Feature image

<div class="phx-topic">Dockworker trade unions from around the world will come together in Lisbon on Nov. 5 to confront “the threat of automation” facing ports and workers in the maritime industry. Described as “a call to action,” the gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border capability. Organized by the International Longshoremen’s Association (ILA) and coordinated by the International Dockworkers Council (IDC), the “People Over Profit: Anti-Automation Conference” will examine the future of labor in the maritime and port sector. “The event will bring together trade unions from around the world to confront the threat of automation driven by economic interests that prioritize profit over human employment,” the IDC said in a statement Friday. “This conference represents a unique opportunity to strengthen the defense of decent jobs, occupational safety and collective rights at a decisive moment for the future of maritime and port labor,” it added. The conference intends to develop a shared roadmap and a strategic plan to halt “the unregulated advance of these technological processes,” the IDC said. Coordinated cross-border "solidarity strikes” have yet to be seen among dockworker unions. Dutch union FNV Havens in February called on workers in terminals around Europe to refuse to handle ships diverted from Rotterdam’s Hutchison Ports’ Delta II terminal in solidarity with its striking dockers, but there were no reports of ships being refused service. <h3>Lightning rod for strike action </h3>Global container terminal operators have been accelerating moves to automate operations using fast-developing AI and 5G technology to handle increasing volumes of cargo while also facing a shortage of labor. Port automation and new technology have become a lightning rod for union action in the US. Last October, the ILA led <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">a three-day strike at terminals across the US East and Gulf coasts</a> over wages and concerns around automation. The following month, talks between the ILA and the United States Maritime Alliance (USMX) on a new master contract broke down again due to the union’s concerns about <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">the use of semi-automated rail-mounted gantry cranes (RMGs)</a> at marine terminals. ILA President Harold Daggett said in a separate statement about the Lisbon conference that he was “proud to see this alliance of maritime workers come together in solidarity and strength.” “The automation agenda is creeping into every corner of our economy, from transportation to retail to logistics, and it threatens not only our jobs but the very fabric of our communities,” Daggett said. Automation is not as much of a hot button issue in Europe. Several ports are implementing different levels of automation, from semi- to fully automated terminals deploying automated guided vehicles, automated stacking cranes and remotely operated ship-to-shore cranes. Europe’s busiest container port of Antwerp-Bruges is investing heavily in automation, and while this was raising concerns with dockworker unions, Luc Arnouts, vice president of international relations and networks at the port, said deploying the technology was about being competitive. ”If I need eight people on a gang to do a job, then I do some automation I can do the job with four,” Arnouts said. “But you still need to put the eight men there so four will be sitting here in the corner, earning their money but not doing anything. “We feel that discussions [over automation] have become more mature with the unions understanding that keeping the eight people there will, in the end, lead to zero people working at that spot,” he added. Arnouts said there was a widespread shortage of labor “all over the place,” which would offset the loss of jobs caused by automation. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Dockworker trade unions from around the world will come together in Lisbon on Nov. 5 to confront “the threat of automation” facing ports and workers in the maritime industry. Described as “a call to action,” the gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border capability. Organized by the International Longshoremen’s Association (ILA) and coordinated by the International Dockworkers Council (IDC), the “People Over Profit: Anti-Automation Conference” will examine the future of labor in the maritime and port sector. “The event will bring together trade unions from around the world to confront the threat of automation driven by economic interests that prioritize profit over human employment,” the IDC said in a statement Friday. “This conference represents a unique opportunity to strengthen the defense of decent jobs, occupational safety and collective rights at a decisive moment for the future of maritime and port labor,” it added. The conference intends to develop a shared roadmap and a strategic plan to halt “the unregulated advance of these technological processes,” the IDC said. Coordinated cross-border "solidarity strikes” have yet to be seen among dockworker unions. Dutch union FNV Havens in February called on workers in terminals around Europe to refuse to handle ships diverted from Rotterdam’s Hutchison Ports’ Delta II terminal in solidarity with its striking dockers, but there were no reports of ships being refused service. Lightning rod for strike action Global container terminal operators have been accelerating moves to automate operations using fast-developing AI and 5G technology to handle increasing volumes of cargo while also facing a shortage of labor. Port automation and new technology have become a lightning rod for union action in the US. Last October, the ILA led a three-day strike at terminals across the US East and Gulf coasts over wages and concerns around automation. The following month, talks between the ILA and the United States Maritime Alliance (USMX) on a new master contract broke down again due to the union’s concerns about the use of semi-automated rail-mounted gantry cranes (RMGs) at marine terminals. ILA President Harold Daggett said in a separate statement about the Lisbon conference that he was “proud to see this alliance of maritime workers come together in solidarity and strength.” “The automation agenda is creeping into every corner of our economy, from transportation to retail to logistics, and it threatens not only our jobs but the very fabric of our communities,” Daggett said. Automation is not as much of a hot button issue in Europe. Several ports are implementing different levels of automation, from semi- to fully automated terminals deploying automated guided vehicles, automated stacking cranes and remotely operated ship-to-shore cranes. Europe’s busiest container port of Antwerp-Bruges is investing heavily in automation, and while this was raising concerns with dockworker unions, Luc Arnouts, vice president of international relations and networks at the port, said deploying the technology was about being competitive. ”If I need eight people on a gang to do a job, then I do some automation I can do the job with four,” Arnouts said. “But you still need to put the eight men there so four will be sitting here in the corner, earning their money but not doing anything. “We feel that discussions [over automation] have become more mature with the unions understanding that keeping the eight people there will, in the end, lead to zero people working at that spot,” he added. Arnouts said there was a widespread shortage of labor “all over the place,” which would offset the loss of jobs caused by automation. Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

Port News

Longshore labor

Global dockworker unions plan Lisbon gathering for anti-automation ‘call to action’

<div class="phx-topic abstract-wrapper">Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam. </div>

Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam.

<div class="phx-topic">Taiwan’s “Big Three” container lines saw their second-quarter revenues fall sharply from the first quarter, an early indicator of the worsening conditions facing ocean carriers as they report second-quarter and first-half results in the coming weeks. Evergreen Marine, Taiwan’s biggest container line, said its revenue fell 21% to $2.9 billion between April and June. Revenues at Yang Ming were 15% lower, while Wan Hai recorded a 6% decline in second-quarter revenue. The companies provided revenue data only in filings made to Taiwan’s stock exchange on Wednesday. They will not release complete first-half results until next month. Evergreen said its first-half revenues were unchanged compared with a year ago at $6.7 billion, while Yang Ming’s first-half revenue dropped 13% to $2.9 billion. Only Wan Hai Lines, strongly focused on the intra-Asia trade, saw revenue gains in the first half, with a 9.4% increase to $2.5 billion. Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam. The Asia-US trade accounts for about 30% of total revenues for Evergreen and Yang Ming, according to company and Journal of Commerce data, while the figure is 26% for Wan Hai. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Taiwan’s “Big Three” container lines saw their second-quarter revenues fall sharply from the first quarter, an early indicator of the worsening conditions facing ocean carriers as they report second-quarter and first-half results in the coming weeks. Evergreen Marine, Taiwan’s biggest container line, said its revenue fell 21% to $2.9 billion between April and June. Revenues at Yang Ming were 15% lower, while Wan Hai recorded a 6% decline in second-quarter revenue. The companies provided revenue data only in filings made to Taiwan’s stock exchange on Wednesday. They will not release complete first-half results until next month. Evergreen said its first-half revenues were unchanged compared with a year ago at $6.7 billion, while Yang Ming’s first-half revenue dropped 13% to $2.9 billion. Only Wan Hai Lines, strongly focused on the intra-Asia trade, saw revenue gains in the first half, with a 9.4% increase to $2.5 billion. Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam. The Asia-US trade accounts for about 30% of total revenues for Evergreen and Yang Ming, according to company and Journal of Commerce data, while the figure is 26% for Wan Hai. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

Trans-Pacific

Taiwan’s ‘Big Three’ carriers see falling Q2 revenues as demand slump begins

<div class="phx-topic abstract-wrapper">Still, analyst Larry Gross suspects that the early strength seen in the first half of the year is substantially composed of volume that has been “borrowed” from a peak season that will be “late and tepid” as a result.</div>

Still, analyst Larry Gross suspects that the early strength seen in the first half of the year is substantially composed of volume that has been “borrowed” from a peak season that will be “late and tepid” as a result.

<div class="phx-topic">The numbers are in for the first half of 2025 from the Association of American Railroads (AAR). While the numbers lack the detail that can be gleaned from the Intermodal Association of North America’s (IANA’s) monthly data, the AAR numbers have the crucial advantage of timeliness. Despite all the trade turmoil, intermodal had a good first half of 2025. North American intermodal activity in the second quarter was up 1.4% versus the prior year and 3.6% higher for the first half. But intermodal was not fully immune from trade effects. North American volume over the past four weeks was down 2% from 2024 and US volume from the “Big Four” rails — BNSF, CSX, Norfolk Southern and UP — was down a bit more at 2.9%. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6041537_0.1.jpg"></img></div>The two charts attempt to put the current numbers in a longer-term context. The first chart shows all the reporting railroads, while the second isolates the Big Four. In each, the blue line represents what used to be “normal,” the average volume for each of the 52 weeks of the year for the 10 years from 2010 to 2019. This predates the disruptive elements of the pandemic and the precision scheduled railroading (PSR) reforms. Results for the years 2023 and 2024 are presented, along with year-to-date results for 2025. One interesting aspect is that both 2023 and 2024 saw volume staying stronger for longer than the previous norm. On average, week 39 marked the peak during the 2010–19 period. But in 2023, the peak was in Week 42 and Weeks 48-50 were just about as strong. In 2024, the two strongest weeks were Week 49 and 50. Does this mark a “new normal” or are we just seeing a couple of years with special situations? Too soon to tell. This year has seen the inverse of the normal pattern, in that volume peaked in Week 6 and has been declining since. This can be seen most clearly in the US-specific chart. Frontloading related to tariffs has been in play. The impact of the imposition of 145% China tariffs can plainly be seen in Week 20, five weeks after they were imposed. The rebound from the rollback to 30% can be seen most recently in Week 26, some six weeks after the rollback was announced. I infer it is easier or quicker to put a hold on shipments, but restarting them takes a bit longer. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="71a18721-0919-4ccd-b2fa-2c4c299e29b7"></dynamic-object></div>Week 27 will show the impacts of the Canada Day/July 4th holidays, so we won’t get a better picture of the size of the recovery until Week 28. Based on what ocean rates are doing, this “mini-surge” will be underwhelming in scope and duration. Conversely, the two Canadian railroads have been relatively strong of late. Canadian National has been up 3.3% over the past four weeks versus the prior year, and Canadian Pacific Kansas City was up 16.9% over the same period, albeit against particularly weak prior-year numbers. It certainly makes sense that we would not be seeing the same tariff-related gyrations north of the border. <h3>Peak season questions </h3>This leaves the question of peak season. Will we have one? And if we do, how strong will it be? Obviously, much depends on where tariffs land and the process by which the landing is achieved. This is, of course, unforecastable. The Trump administration has fulfilled my expectations in one sense by announcing that the 90-day tariff pause on essentially all trading partners has been extended to Aug 1. I would certainly not be surprised to see further slippage, but of course, I could just as easily be wrong about where our mercurial president takes us. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e92d2fdc-94d9-4806-9df7-bbbc2b6aed28"></dynamic-object></div>My sense is that importers are developing a certain level of fatigue with the constant drumbeat of new tariffs, rollbacks and extensions. Rather than taking costly actions to try and game the tariff timing, they are settling back and allowing things to unfold. I suspect that the early strength that we have seen in the first half is substantially composed of volume that has been “borrowed” from peak season. Therefore, my best guess is that if we have a peak, it will be late and tepid. Contact Larry Gross at <a href="mailto:lgross@intermodalindepth.com">lgross@intermodalindepth.com</a>.</div>

The numbers are in for the first half of 2025 from the Association of American Railroads (AAR). While the numbers lack the detail that can be gleaned from the Intermodal Association of North America’s (IANA’s) monthly data, the AAR numbers have the crucial advantage of timeliness. Despite all the trade turmoil, intermodal had a good first half of 2025. North American intermodal activity in the second quarter was up 1.4% versus the prior year and 3.6% higher for the first half. But intermodal was not fully immune from trade effects. North American volume over the past four weeks was down 2% from 2024 and US volume from the “Big Four” rails — BNSF, CSX, Norfolk Southern and UP — was down a bit more at 2.9%. The two charts attempt to put the current numbers in a longer-term context. The first chart shows all the reporting railroads, while the second isolates the Big Four. In each, the blue line represents what used to be “normal,” the average volume for each of the 52 weeks of the year for the 10 years from 2010 to 2019. This predates the disruptive elements of the pandemic and the precision scheduled railroading (PSR) reforms. Results for the years 2023 and 2024 are presented, along with year-to-date results for 2025. One interesting aspect is that both 2023 and 2024 saw volume staying stronger for longer than the previous norm. On average, week 39 marked the peak during the 2010–19 period. But in 2023, the peak was in Week 42 and Weeks 48-50 were just about as strong. In 2024, the two strongest weeks were Week 49 and 50. Does this mark a “new normal” or are we just seeing a couple of years with special situations? Too soon to tell. This year has seen the inverse of the normal pattern, in that volume peaked in Week 6 and has been declining since. This can be seen most clearly in the US-specific chart. Frontloading related to tariffs has been in play. The impact of the imposition of 145% China tariffs can plainly be seen in Week 20, five weeks after they were imposed. The rebound from the rollback to 30% can be seen most recently in Week 26, some six weeks after the rollback was announced. I infer it is easier or quicker to put a hold on shipments, but restarting them takes a bit longer. Week 27 will show the impacts of the Canada Day/July 4th holidays, so we won’t get a better picture of the size of the recovery until Week 28. Based on what ocean rates are doing, this “mini-surge” will be underwhelming in scope and duration. Conversely, the two Canadian railroads have been relatively strong of late. Canadian National has been up 3.3% over the past four weeks versus the prior year, and Canadian Pacific Kansas City was up 16.9% over the same period, albeit against particularly weak prior-year numbers. It certainly makes sense that we would not be seeing the same tariff-related gyrations north of the border. Peak season questions This leaves the question of peak season. Will we have one? And if we do, how strong will it be? Obviously, much depends on where tariffs land and the process by which the landing is achieved. This is, of course, unforecastable. The Trump administration has fulfilled my expectations in one sense by announcing that the 90-day tariff pause on essentially all trading partners has been extended to Aug 1. I would certainly not be surprised to see further slippage, but of course, I could just as easily be wrong about where our mercurial president takes us. My sense is that importers are developing a certain level of fatigue with the constant drumbeat of new tariffs, rollbacks and extensions. Rather than taking costly actions to try and game the tariff timing, they are settling back and allowing things to unfold. I suspect that the early strength that we have seen in the first half is substantially composed of volume that has been “borrowed” from peak season. Therefore, my best guess is that if we have a peak, it will be late and tepid. Contact Larry Gross at lgross@intermodalindepth.com .

North-American rail

Intermodal providers

Surface

North American intermodal notches solid first half despite trade turmoil

<div class="phx-topic abstract-wrapper">The tariff framework agreement between Washington and Hanoi, while still short on details, is expected to support Vietnam’s strong air cargo volume growth this year.</div>

The tariff framework agreement between Washington and Hanoi, while still short on details, is expected to support Vietnam’s strong air cargo volume growth this year.

<div class="phx-topic">Vietnam’s air cargo exports to the US are surging, with higher tariffs on China providing a powerful incentive for US importers to shift sourcing to the Southeast Asian manufacturing nation. Air cargo volumes generated by frontloading ahead of “reciprocal” tariffs in April and the subsequent 90-day pause on those tariffs in early May were piled on top of an already robust start to the year. Vietnam-US volumes out of Ho Chi Minh airport were up 62% through April compared with the same period last year, with 97,000 tons of cargo carried across the Pacific, according to data from air cargo analyst Rotate. Tim van Leeuwen, head of consulting at Rotate, said Vietnam was affected both by tariffs on its own imports as well those on other countries, notably China. The latest tariff framework agreement between the US and Vietnam, while still short on details, would likely result in Vietnam’s volume growth continuing. “As long as China’s tariffs remain higher than those in Vietnam, we expect ... an increase in new US imports from Vietnam that will replace current US imports from China,” van Leeuwen told the Journal of Commerce this week. “For instance, we may see a shipper who currently serves the US from China, and the Middle East/Europe from Vietnam, switch the two to optimize tariff impact,” he noted. Current US tariffs on Vietnam are 10%, but the recently announced framework agreement will increase tariffs to 20% on most Vietnamese exports. The deal <a href="https://www.joc.com/article/trumps-vietnam-transshipment-tariff-puzzles-us-trade-community-6041482">includes a 40% tariff rate on “transshipment” aimed at countering the routing of Chinese exports through Vietnam</a>, although no details regarding the definition and enforcement of that transshipment have been released. In return, Vietnam will impose zero tariffs on US imports and give preferential access to certain goods, such as large-engine automobiles. In contrast, the US and China have a tentative agreement that will see US tariffs of 55% on Chinese exports from Aug. 12, but the transshipment aspect of the US-Vietnam deal has again soured trade relations between Beijing and Washington, with retaliatory threats on both sides. Washington believes one-third of all Vietnamese exports to the US are actually Chinese products shipped through Vietnam. <h3>Capacity boost </h3>While its northern neighbor fights a trade war with the US, Vietnam’s air cargo business has been capitalizing on its relatively low tariff access to US markets. A spokesperson for Kuehne + Nagel said Vietnam has emerged as a leading global growth market, with the forwarder and its Asia-based subsidiary Apex operating 14 self-managed flights per week from Vietnam to the US. The demand is being driven by high tech, electronics and semiconductor cargo. Van Leeuwen said current direct capacity being deployed between Vietnam and the US was a significant increase on the past three years when there was almost no direct capacity. “However, most capacity out of Vietnam towards the US will make an intermediate stop along the way, so in that sense the capacity growth of 15% to Northeast Asia — about 20 B777 freighters per day equivalent — is more indicative of current capacity growth out of the market,” he said. Air cargo rates from Ho Chi Minh to New York and Chicago have followed the upward trend of demand, remaining well above $6 per kilogram all year and rising as high as $6.72/kg in mid-June, according to Freightos Terminal air cargo rate data. Prices eased back to $6.00/kg to Chicago and $6.28/kg to New York this week, possibly reflecting capacity additions to the lane during a final push before the July 9 end of the 90-day pause on tariffs, said Levine. “A US-Vietnam trade agreement that sets tariffs at 20% could push some shippers to source elsewhere, but even at 20%, manufacturing would still be less expensive there compared to other countries like China,” he said. “With so much uncertainty about what tariffs will be for other countries, many shippers may be unlikely to shift sourcing elsewhere just yet,” Levine added. <h3>Fast-growing export business </h3>Dmitry Kulish, general manager for Asia-Pacific air cargo at Air Cargo Network Group (ACN), an association of air freight experts and logistics providers, said the Vietnamese export business was growing fast. “We see the global trend of shifting production across the Asia-Pacific region for some time now, and we definitely pay close attention to fast-growing markets, especially Vietnam,” Kulish told the Journal of Commerce. While confident of future growth in Vietnam, he said tariffs were injecting uncertainty into the market, with ACN “keeping a close eye” on the developing trade environment. “Tariffs and policy have a significant impact on the export business, and we are currently in a phase where political decisions can be unpredictable,” he said. The latest quarterly DHL Hong Kong Air Trade Leading Index survey released Thursday also found increasing interest in Southeast Asia by local air cargo traders, with almost 30% of local air traders reporting an increase in urgent orders following the 90-day suspension of US-China tariffs initiated on May 14. “As the trade landscape evolves, local air traders have identified Southeast Asia as the top market for trade potential,” DHL noted in a statement Thursday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Vietnam’s air cargo exports to the US are surging, with higher tariffs on China providing a powerful incentive for US importers to shift sourcing to the Southeast Asian manufacturing nation. Air cargo volumes generated by frontloading ahead of “reciprocal” tariffs in April and the subsequent 90-day pause on those tariffs in early May were piled on top of an already robust start to the year. Vietnam-US volumes out of Ho Chi Minh airport were up 62% through April compared with the same period last year, with 97,000 tons of cargo carried across the Pacific, according to data from air cargo analyst Rotate. Tim van Leeuwen, head of consulting at Rotate, said Vietnam was affected both by tariffs on its own imports as well those on other countries, notably China. The latest tariff framework agreement between the US and Vietnam, while still short on details, would likely result in Vietnam’s volume growth continuing. “As long as China’s tariffs remain higher than those in Vietnam, we expect ... an increase in new US imports from Vietnam that will replace current US imports from China,” van Leeuwen told the Journal of Commerce this week. “For instance, we may see a shipper who currently serves the US from China, and the Middle East/Europe from Vietnam, switch the two to optimize tariff impact,” he noted. Current US tariffs on Vietnam are 10%, but the recently announced framework agreement will increase tariffs to 20% on most Vietnamese exports. The deal includes a 40% tariff rate on “transshipment” aimed at countering the routing of Chinese exports through Vietnam , although no details regarding the definition and enforcement of that transshipment have been released. In return, Vietnam will impose zero tariffs on US imports and give preferential access to certain goods, such as large-engine automobiles. In contrast, the US and China have a tentative agreement that will see US tariffs of 55% on Chinese exports from Aug. 12, but the transshipment aspect of the US-Vietnam deal has again soured trade relations between Beijing and Washington, with retaliatory threats on both sides. Washington believes one-third of all Vietnamese exports to the US are actually Chinese products shipped through Vietnam. Capacity boost While its northern neighbor fights a trade war with the US, Vietnam’s air cargo business has been capitalizing on its relatively low tariff access to US markets. A spokesperson for Kuehne + Nagel said Vietnam has emerged as a leading global growth market, with the forwarder and its Asia-based subsidiary Apex operating 14 self-managed flights per week from Vietnam to the US. The demand is being driven by high tech, electronics and semiconductor cargo. Van Leeuwen said current direct capacity being deployed between Vietnam and the US was a significant increase on the past three years when there was almost no direct capacity. “However, most capacity out of Vietnam towards the US will make an intermediate stop along the way, so in that sense the capacity growth of 15% to Northeast Asia — about 20 B777 freighters per day equivalent — is more indicative of current capacity growth out of the market,” he said. Air cargo rates from Ho Chi Minh to New York and Chicago have followed the upward trend of demand, remaining well above $6 per kilogram all year and rising as high as $6.72/kg in mid-June, according to Freightos Terminal air cargo rate data. Prices eased back to $6.00/kg to Chicago and $6.28/kg to New York this week, possibly reflecting capacity additions to the lane during a final push before the July 9 end of the 90-day pause on tariffs, said Levine. “A US-Vietnam trade agreement that sets tariffs at 20% could push some shippers to source elsewhere, but even at 20%, manufacturing would still be less expensive there compared to other countries like China,” he said. “With so much uncertainty about what tariffs will be for other countries, many shippers may be unlikely to shift sourcing elsewhere just yet,” Levine added. Fast-growing export business Dmitry Kulish, general manager for Asia-Pacific air cargo at Air Cargo Network Group (ACN), an association of air freight experts and logistics providers, said the Vietnamese export business was growing fast. “We see the global trend of shifting production across the Asia-Pacific region for some time now, and we definitely pay close attention to fast-growing markets, especially Vietnam,” Kulish told the Journal of Commerce. While confident of future growth in Vietnam, he said tariffs were injecting uncertainty into the market, with ACN “keeping a close eye” on the developing trade environment. “Tariffs and policy have a significant impact on the export business, and we are currently in a phase where political decisions can be unpredictable,” he said. The latest quarterly DHL Hong Kong Air Trade Leading Index survey released Thursday also found increasing interest in Southeast Asia by local air cargo traders, with almost 30% of local air traders reporting an increase in urgent orders following the 90-day suspension of US-China tariffs initiated on May 14. “As the trade landscape evolves, local air traders have identified Southeast Asia as the top market for trade potential,” DHL noted in a statement Thursday. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Transport, Trade and Regulation News

Tariff deal with US lifts high-flying Vietnamese air cargo demand

<div class="phx-topic abstract-wrapper">The uncertainty centers on what the White House considers transshipment and how US Customs and Border Protection officials would regulate goods moving from China to the US via Vietnam.</div>

The uncertainty centers on what the White House considers transshipment and how US Customs and Border Protection officials would regulate goods moving from China to the US via Vietnam.

<div class="phx-topic">How the Trump administration defines and regulates transshipment in the aftermath of a proposed trade deal with Vietnam will have major implications for the top Asia sourcing alternative to China. While President Donald Trump’s announcement on July 2 clarified new tariff levels of 20% on imports from Vietnam, his statements on applying a 40% tariff on goods that originate in China but are transshipped via Vietnam have confused some in the US trade community. The uncertainty centers on what Trump considers transshipment and how US Customs officials would crack down on violations. At issue is the extent to which goods with a Vietnam country of origin designation are actually just disguised China-origin goods. Most importers define transshipment as the process of a container connecting from the port of origin to the port of destination via a third port. But the Trump administration appears to be attaching a trade compliance element to transshipment that draws considerations such as country-of-origin determination, minimum local content, and substantial transformation, trade experts told the Journal of Commerce. “On the face of it, the transshipment tariff makes no sense,” said Robert Khachatryan, CEO of Southern California-based forwarder Freight Right Global Logistics, noting that the 40% rate is still lower than US tariffs of 55% on imports sent directly from China. “Which is why I think the language in the announcement is referring to something else.” <h3>Minimum input requirement </h3>One possibility is that the administration will deem that a minimum requirement of inputs into the shipped goods must come from Vietnam, said Paul Diedrich, compliance officer at Virginia-based forwarder Ardent Global Logistics. “While this hasn’t been clearly defined, it would make logical sense,” he said. The White House, the US Trade Representative (USTR), and US Customs and Border Protection (CBP) have yet to clarify how they define transshipment. Even CBP officials are struggling to understand what the new approach means for their monitoring and inspections and await text of the agreement rather than just the announced framework, said a trade compliance officer at a major forwarder who did not want to be identified. “We don’t know if there’s going to be a regional content component,” the source said. “Let’s say 100% of the product is manufactured in Vietnam, but 100% of the components come from China. Is that going to qualify for the agreement? In the framework, they’ve agreed to the level of the tariff, but not to the content. The short answer is no one has a clue how this is going to turn out.” <h3>Tariff games </h3>The source said it’s clear that the intention of the proposed deal with Vietnam is to disincentivize goods being manufactured in China and then moved across the land border to Vietnam to get a lower tariff treatment. It may end up being less costly to source in China and pay higher tariffs depending on the freight rate differential from China. “The framework adds scrutiny for goods with ambiguous or Chinese-origin inputs that most brands wouldn’t have visibility into without access to a product network connecting them with suppliers, regulators and customers,” Amy Morgan, head of trade compliance at supply chain software provider Altana AI, wrote in a blog Monday about the Vietnam tariffs. “Brands relying on Vietnam as a final assembly point for Chinese-made components may face 40% duties if they can’t substantiate that Vietnam is the country of origin.” Khachatryan said he expects the 40% tariff would apply to “Chinese components that undergo a substantial transformation and would hitherto be treated as Vietnamese-origin imports. “This is also evidenced by a sudden increase in export inspections in Vietnam where Vietnamese customs are reportedly scrutinizing ‘Made in Vietnam’ claims,” he added. How much of this transshipment is behind the rise of US imports from Vietnam is unclear. But the direction of trade, reflecting the conventional thinking that Vietnam was generally the best hedge against dependence on China sourcing, is clear. Imports from Vietnam a decade ago accounted for 3.9% of all US oceangoing laden imports; it was 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. On Monday, Trump made a similar threat against South Korea, warning that Chinese goods “transshipped” through South Korea would be subject to additional tariffs beyond the 25% level announced this week. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

How the Trump administration defines and regulates transshipment in the aftermath of a proposed trade deal with Vietnam will have major implications for the top Asia sourcing alternative to China. While President Donald Trump’s announcement on July 2 clarified new tariff levels of 20% on imports from Vietnam, his statements on applying a 40% tariff on goods that originate in China but are transshipped via Vietnam have confused some in the US trade community. The uncertainty centers on what Trump considers transshipment and how US Customs officials would crack down on violations. At issue is the extent to which goods with a Vietnam country of origin designation are actually just disguised China-origin goods. Most importers define transshipment as the process of a container connecting from the port of origin to the port of destination via a third port. But the Trump administration appears to be attaching a trade compliance element to transshipment that draws considerations such as country-of-origin determination, minimum local content, and substantial transformation, trade experts told the Journal of Commerce. “On the face of it, the transshipment tariff makes no sense,” said Robert Khachatryan, CEO of Southern California-based forwarder Freight Right Global Logistics, noting that the 40% rate is still lower than US tariffs of 55% on imports sent directly from China. “Which is why I think the language in the announcement is referring to something else.” Minimum input requirement One possibility is that the administration will deem that a minimum requirement of inputs into the shipped goods must come from Vietnam, said Paul Diedrich, compliance officer at Virginia-based forwarder Ardent Global Logistics. “While this hasn’t been clearly defined, it would make logical sense,” he said. The White House, the US Trade Representative (USTR), and US Customs and Border Protection (CBP) have yet to clarify how they define transshipment. Even CBP officials are struggling to understand what the new approach means for their monitoring and inspections and await text of the agreement rather than just the announced framework, said a trade compliance officer at a major forwarder who did not want to be identified. “We don’t know if there’s going to be a regional content component,” the source said. “Let’s say 100% of the product is manufactured in Vietnam, but 100% of the components come from China. Is that going to qualify for the agreement? In the framework, they’ve agreed to the level of the tariff, but not to the content. The short answer is no one has a clue how this is going to turn out.” Tariff games The source said it’s clear that the intention of the proposed deal with Vietnam is to disincentivize goods being manufactured in China and then moved across the land border to Vietnam to get a lower tariff treatment. It may end up being less costly to source in China and pay higher tariffs depending on the freight rate differential from China. “The framework adds scrutiny for goods with ambiguous or Chinese-origin inputs that most brands wouldn’t have visibility into without access to a product network connecting them with suppliers, regulators and customers,” Amy Morgan, head of trade compliance at supply chain software provider Altana AI, wrote in a blog Monday about the Vietnam tariffs. “Brands relying on Vietnam as a final assembly point for Chinese-made components may face 40% duties if they can’t substantiate that Vietnam is the country of origin.” Khachatryan said he expects the 40% tariff would apply to “Chinese components that undergo a substantial transformation and would hitherto be treated as Vietnamese-origin imports. “This is also evidenced by a sudden increase in export inspections in Vietnam where Vietnamese customs are reportedly scrutinizing ‘Made in Vietnam’ claims,” he added. How much of this transshipment is behind the rise of US imports from Vietnam is unclear. But the direction of trade, reflecting the conventional thinking that Vietnam was generally the best hedge against dependence on China sourcing, is clear. Imports from Vietnam a decade ago accounted for 3.9% of all US oceangoing laden imports; it was 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce within S&P Global. On Monday, Trump made a similar threat against South Korea, warning that Chinese goods “transshipped” through South Korea would be subject to additional tariffs beyond the 25% level announced this week. Contact Eric Johnson at eric.johnson@spglobal.com .

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Trump’s Vietnam ‘transshipment’ tariff puzzles US trade community

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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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