Freight Forward: More Capacity Please

Welcome to Freight Forward, where each Monday, I’ll recap what happened in supply chains the previous week through JOC.com articles and additional sources and also what to expect for the week ahead.

I’m Cathy Roberson, a supply chain writer and researcher. For this weekly series, I serve as a research analyst for the Journal of Commerce (JOC), for whom I identify trends, provide thoughts and input into stories, and assist with express and parcel last-mile queries.

• According to Alphaliner, container lines deployed almost 24% more capacity on the Asia-Europe trade lanes at the beginning of June compared with a year prior, as they added between 25% and 30% more ships to keep services on schedule given the longer transits around southern Africa writes Greg Knowler .
• Sea-Intelligence Maritime Analysis notes that just 48.6% of vessels on Asia-North Europe routes arrived within 24 hours of their scheduled arrival time in May, down from 67.6% in the same month last year, and 50% of ships on Asia-Mediterranean loops, down from 54% in May 2023.

• NVO sources noted that carriers active on the India-Middle East lanes have pulled tonnage out of the short-haul market for redeployment to China-centric longer-distance services writes Bency Mathew . ?
• Singapore’s Tuas mega-port has opened one berth and plans to bring two more online this fall as congestion and ship waiting times abate at the second-busiest global container port writes Keith Wallis.
• Maersk will not pursue a potential acquisition of DB Schenker, citing “challenges from an integration perspective” the carrier uncovered during an in-depth due diligence investigation of the forwarder writes Greg Knowler.

“It’s been five years now since the takeover by CMA CGM back in 2019 and we’re taking the final step today by verticalizing our four product organizations fully from top to bottom.” - CEVA Logistics CEO Mathieu Friedberg

• Friedberg said the regional managers that CEVA had in charge of its four product verticals — freight management, ground and rail freight that includes forwarding, contract logistics and finished vehicle logistics — no longer exist in the new organizational structure, with the regions reporting directly to global product heads writes Greg Knowler.
• Last month, TriumphPay announced it had added CH Robinson to its TriumphPay Network, a platform intended to automate auditing and payment processes between shippers, brokers, truckload carriers and freight factoring companies writes Eric Johnson . Dan Curtis, chief operating officer at TriumphPay, told the Journal of Commerce that the network now has more than 100 shippers using it, with 31,000 carriers, 400 brokers and 40 freight factors “in network.”
• The District of Columbia Court of Appeals unanimously ruled that the FMC erred in its decision to rule in favor of TCW solely because charging demurrage when a port is closed would do nothing to move containers more quickly writes Michael Angell .
• From Sea Trade Maritime News - U.S. Customs and Border Protection approved a proposal from Ports of Indiana-Burns Harbor to establish the first international sea cargo container terminal on Lake Michigan. This would create the only all-water container route for ocean vessels to serve the greater Chicago metropolitan area via the Great Lakes.

Gateway Chart of the Week

Columns

• Cool Carriers muscles into melon trade with new Brazil-Europe contract, Richard Bright
• Ocean shipping faces sobering reality of long-term diversions around southern Africa, Lars Jensen
• Public needs more sober view of supply chain than ‘mass hysteria’ portrayal, Ted Prince
• Post-COVID market shocks challenge long-held container shipping truisms, Peter Tirschwell
• Loading worries drive early peak season frenzy on eastbound trans-Pacific, Mark Szakonyi
• Weak US manufacturing outlook is headwind for H2 truckload market recovery, Jason Miller

Air

• Willie Walsh, IATA’s director-general, said if regulators imposed stricter conditions on the import of e-commerce products it could dampen demand that would be felt across the air freight industry Greg Knowler writes . “Increased costs and transit times for shipments under $800 may deter US consumers and pose significant challenges for growth on the Asia-North America trade lane, the world’s biggest,” Walsh noted in IATA’s latest monthly market update.

• Volumes, measured in chargeable weight, rose 13% year over year in June while capacity grew at its slowest pace so far this year, edging up 3% compared with June 2023, according to Xeneta writes Greg Knowler.

Inland

• My Air Cargo Next column focused on data centers after I read a WSJ story on Amazon's plans to invest $100 billion over the next decade on data centers. Demand for data centers is being driven by the growth in cloud computing and AI but the 'green costs' of these centers are proving costly. For example, I found a really interesting International Energy Agency report that estimates a single ChatGPT query requires 2.9 watt-hours of electricity, compared with 0.3 watt-hours for a Google search. In addition, water usage is also a growing concern as cooling systems for data centers consume water. As data processors become more efficient, they generate more heat, necessitating increased cooling resources.

In a BBC story , Google announced its greenhouse gas emissions in 2023 were 48% higher than in 2019, according to its latest environmental report. It attributed the increasing amounts of energy needed by its data centers, exacerbated by the explosive growth of AI.

Intermodal

• Domestic intermodal volume grew about 3% to 4% year over year in the second quarter, but asset-owning intermodal providers will likely report flattish revenue for the period because shippers negotiated lower contractual rates for 2024 writes Ari Ashe.

For readers interested in reading more Journal of Commerce stories, click here to subscribe. Enter code FFNL20 at checkout to receive a 20% discount on any subscription option. (Note that this is only for first-time subscribers or for upgrading a current subscription). What did I miss? Have a question? Let me know in the comments. I’ll be checking back throughout the week to answer questions, address comments, and share additional insights. In the meantime, here’s wishing everyone a good freight week ahead.

-Cathy