Container lines

The Chinese government says it will take “strong measures” to ensure supply chain fluidity for refrigerated (reefer) food products, but US exporters must wait for factories to reopen and ships to begin leaving China again.

The vulnerability of the container shipping supply chain has been repeatedly — and painfully — exposed, but as 2020 gets underway, the industry is facing disruption on a scale not seen in its more than 60-year history as a result of the coronavirus (COVID-19) outbreak in China.

Maersk is more than doubling its warehousing and distribution assets in North America through an acquisition that serves as another signal of its commitment to transition from container line to integrator.

A weak container shipping environment in the fourth quarter was unable to prevent Hapag-Lloyd growing both revenue and average freight rates across the year.

Declining imports due to factory shutdowns in Asia from the Lunar New Year and the coronavirus are beginning to produce a shortage of empty containers in the US interior, with the shortages expected to spike in March.

US refrigerated (reefer) shippers reported improved service from ocean carriers in 2019, but equipment issues and other uncertainties could impact cold chains this year.

Pacific International Lines, which participates in a half-dozen trans-Pacific services, mostly in slot-charter arrangements, is exiting the highly-competitive Asia-US trade lane.

US exporters of refrigerated (reefer) cargo are facing costly delays in China and equipment shortages in the United States due to extended factory closures and limitations on worker movement caused by the coronavirus outbreak.

South Korea-based container carrier HMM managed to cut its operating losses and increase revenue in 2019, but the start of the new year has come with mounting challenges.

A cooperation agreement between the 2M Alliance and SM Lines that begins April 1 will increase the alliance’s presence in the Pacific Northwest.

The New York Shipping Exchange has begun allowing shippers and freight buyers to migrate their long-term contracts with container lines onto the NYSHEX platform, essentially allowing contracts negotiated outside the exchange to be fully and mutually enforceable as if they were transacted within the exchange.

Logistics experts say a return to full production in China is unlikely before the end of February, while the post-Lunar New Year lull in the trans-Pacific could extend into March because of delayed factory re-openings due to the coronavirus.

Shippers are watching with mounting concern as measures to combat the coronavirus outbreak in China begin to weigh heavily on supply chains.

It's still too early to determine the eventual impact of the 2019 novel coronavirus on global trade, but an extended shutdown of factories and transit lines to and from manufacturing centers in China could have major downstream implications for ocean carriers.

Maersk will blank six sailings this month due to the coronavirus, and said while the backlog of barge operations from Wuhan was easing, it was working with reefer shippers to mitigate port plug-in power capabilities.

Major carriers, including Mediterranean Shipping Co. and Hapag-Lloyd, last week announced a GRI of $400 per TEU and $500 per FEU for all types of cargo moving on the westbound Indian trade to the US and Canada, effective March 1.

Data shows that backhaul shippers are being partially subsidized by headhaul shippers; for the Pacific backhaul, that figure is roughly $1.6 billion annually.

Beneficial cargo owners are increasingly worried that disruptions in the manufacturing and logistics supply chains in China could worsen in the coming weeks due to the coronavirus. One shipper group has asked carriers to extend free time for container storage in the US.

With response measures to the coronavirus evolving rapidly, it’s still too soon to determine the impact on container shipping given the seasonal lull in demand driven by the now-extended Lunar New Year celebrations.

A Chinese government mandate extending the Lunar New Year holidays due to the deadly coronavirus means carriers and US ports will experience slack-season volumes well into March.

CMA CGM has made some senior leadership changes as part of a group restructuring.

New York Shipping Exchange (NYSHEX) said 96.4 percent of contracts last year were fulfilled, meaning that carriers accepted the cargo for the sailing it was booked for and cargo owners and non-vessel operating common carriers delivered the containers they contracted.

The group pushing process and data standards in the container shipping industry has released a new set governing the tracking and tracing of container shipments across systems and carriers.

Despite stiff truck competition, East Coast ports have taken aggressive steps to capture more intermodal cargo and spend significant capital to build out rail infrastructure.

Carriers are pushing back against the latest move by Indian regulators to streamline logistics costs, saying it will result in inefficiencies and delays in trade flows.

This week before the beginning of Lunar Lunar was marked by scattered rolled cargo in Asia and flat spot rates in eastbound Pacific, indicating that the normal pre-New Year surge of imports did not happen.

Carriers’ growing experience in reducing short-term capacity without having to resort to more disruptive actions like eliminating full services is a profound change in the market that will help the carriers absorb blows that in the past would wipe away profits like a dustrag.

The US-China trade war pulled down OOCL’s performance in the trans-Pacific, but volume and revenue growth in other trades kept its overall operational result in positive territory.

It has been a good year for Cosco Shipping, with seemingly no ill effects from the US-China trade war or slowing economies around the world.

The US-China trade war slammed import volumes sufficiently enough in 2019 that imports from Asia experienced their first year-on-year drop since the 2009 global recession.

Importers and exporters shipping with CMA CGM are being offered a matchmaking service that will allow them to leverage the carrier’s global network in search of new markets.

Customers and service providers of container shipping companies have again voiced their opposition to the European Commission’s decision to extend the carrier block exemption for another four years.

US imports in January-February are projected to drop steeply year-over-year, but pick up in March and return to normal seasonal trends.

In an effort to recoup low-sulfur mandate costs, some containers lines pushing higher fuel surcharges while easing base spot cargo rates, while others are posting more moderate increases in fuel surcharges and trying to keep freight rates steady.

Despite the continuation of US import tariffs on $370 billion in Chinese-made goods and a slowing global economy, Asian container trade growth is expected to accelerate in 2020.

A secret shopper study of top forwarders by an equipment marketplace provider finds that most are uninterested in providing shipper-owned container options to small or unknown shipper customers.

The first of the global container carrier alliances has announced its 2020 schedule, with the other two groupings due to reveal their networks soon.

Members of THE Alliance are making plans to reshuffle their Asia-North Europe and Asia-Mediterranean networks in preparation for HMM, which will join the vessel grouping in April.

Spot rate hikes in the major container trades in early 2020 are only slightly higher than the historical average for this time of year, and as such, shippers should brace themselves for further increases.

The impact of steadily rising low-sulfur fuel prices on carriers is being partly offset by a strong increase in the Asia-Europe spot market, but the traditional slack season is just a couple of weeks away.