Freight Forward: New Services Despite Little Growth

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 parcel last-mile queries.

US-bound cargo is no longer flowing through the ports of Vancouver and Prince Rupert like it used to, Canada’s two Class I railroads have told their investors, blaming this summer's dockworker strikes and a broader slowdown in North American imports from Asia. But the cracks in the two port's attractiveness to container lines and importers and exporters out of the US Midwest were showing before this July’s work stoppage, and the decline in import demand across North America, writes Mark Szakonyi .

Indeed, for many years, these cross-border services for intact ISO container moves were an outperformer as compared with the rest of the intermodal network. But that is no longer the case, writes Larry Gross .

Earnings

• Cutting costs is the top of the priority list for Hapag-Lloyd as the carrier tries to mitigate the dramatic impact on earnings of plunging rate levels across the world’s major trade lanes, writes Greg Knowler .
• HMM reported a sharp decline in profitability, with earnings continuing their sequential quarterly slide off the record results of last year despite a significant increase in volume through the third quarter, writes Greg Knowler . “Container demand is expected to be under downward pressure with no encouraging sign of restoring desire for consumption.”

Terminal Acquisitions

• Ocean Network Express (ONE) cleared regulatory hurdles, allowing the carrier to close the acquisitions of a controlling stake in marine terminals in Los Angeles and Oakland and a minority stake in a Rotterdam terminal. The deals involve TraPac’s terminals in Los Angeles and Oakland, the Yusen Terminal (YTI) in Los Angeles, and a 20% stake in Rotterdam World Gateway (RWG), writes Greg Knowler.
• Greg also writes that Mediterranean Shipping Co.’s offer for a half-share in Hamburg’s main container terminal operator was accepted by Hamburger Hafen und Logistik (HHLA), clearing the way for the carrier to expand its footprint in Hamburg.

International

• Shippers and freight forwarders on the India-US trades are reporting vessel space limitations as carriers adjust capacity to match weakening cargo loads, writes Bency Mathew . Those concerns follow a number of blank sailing announcements and other service reliability issues plaguing the major India-US East Coast connections.
• Zim Integrated Shipping Services is relaunching its expedited service from China to the US West Coast as the carrier targets growing e-commerce demand and looks to challenge the traditional air freight option typically used by those time-sensitive shipments on the trans-Pacific, writes Greg Knowler .

The US Customs Border & Patrol (CBP) is processing a rising number of low-value international shipments, which are part of the agency’s “Type 86” pilot program on de minimis shipments valued at no more than $800 and is asking customs brokers to ensure they have better insight into customers using the CBP program writes Eric Johnson . Customs brokers at the CONECT conference told the Journal of Commerce that they try to understand their customers’ shipment activity but can’t possibly know what is inside every small, low-value package moved.

Bulk

• The surge in commodity prices has led to increased demand for bulk and breakbulk cargo and for the equipment needed to mine, harvest, or produce those commodities, writes Susan Oatway . Mining equipment exports were up 25% year over year in the second quarter of 2023, construction equipment was up 19%, and agricultural equipment was almost 4% higher, according to S&P Global. This high-and-heavy equipment is typically transported via roll-on/roll-off (ro/ro) vessels, but a surge in exports of battery-equipped vehicles (BEV) from China, supported by China’s post-COVID stimulus package, is soaking up available ro/ro capacity. As a result, a portion of these wheeled cargoes is spilling over to MPV/HL ships, often at a higher price than shippers would normally pay for ro/ro space.?
• Fires on board car carriers and roll-on/roll-off (ro/ro) ships are leading ship operators to revamp procedures to prevent and contain fires breaking out in vehicles and high-and-heavy cargoes, writes Keith Wallis . Those moves include banning the transport of used electric vehicles (EVs), loading EVs on minimal charge, installing heat detectors in cargo areas, upgrading fire suppression equipment, and improving crew training. ?

Going Green

Without a sufficiently high price on carbon, the maritime industry will lack the needed incentive to make the transition to zero-carbon fuels, slowing the process of decarbonization, writes Peter Tirschwell . As such, it is not known how the industry will progress toward achieving net-zero emissions by or around 2050, the revised goal of global regulators. Today, there is no carbon pricing mechanism in place on a global level, and despite low-carbon fuel products offered to beneficial cargo owners (BCOs) by carriers and forwarders, there has thus far been minimal uptake outside of a few early adopters.

Unions

• The International Longshoremen’s Association (ILA) says dockworkers are underrepresented in supervisory jobs at many marine terminals along the East and Gulf coasts, writes Michael Angell .?
• A new chair for the Air Line Pilots Association’s FedEx Master Executive Council was elected in October, and the union now expects FedEx and the pilots to return to the table to hammer out a new contract soon. But in my weekly ACN column , I question if the FedEx pilots have lost their negotiating clout since rejecting a proposed contract in July.

Chart of the Week

Inland

• BNSF Railway and J. B. Hunt Transport Services launched a new premium service called Quantum Intermodal, designed for shippers who have time-sensitive cargo that has traditionally been hauled via trucks because of inconsistent rail service, writes Ari Ashe . Quantum will offer shippers priority loading and unloading of containers, priority drayage, and a team of J. B. Hunt and BNSF operations staff in Fort Worth, Texas, who will pay special attention to all loads.
• A potential bid for all of the Yellow’s assets from Jack Cooper Transport, a unionized truckload car hauler, is rattling the US less-than-truckload (LTL) market, writes Bill Cassidy . The prospects for Jack Cooper Transport’s plan to acquire Yellow’s assets and rehire Teamster employees remain unclear, but it’s apparent the plan won’t have an immediate or short-term impact on an LTL trucking market that has moved beyond Yellow, which shut down July 30.
• The growth of private fleets appears to be affecting capacity in the broader truckload market and may help to keep pressure on rates, with less freight tendered to for-hire carriers, writes Bill Cassidy . Since 2018, the number of private fleets registered in the US has climbed almost 19% to 898,932 as of September, according to the FMCSA. Those carriers include 160,672 shipper-owned fleets with both private and for-hire authority. The data suggests private fleets now account for 44% of existing motor carriers by registration, although that doesn’t mean they haul a similar percentage of existing tonnage.
• Ports America is expanding its operations at the Port of Gulfport in Mississippi with a new north-south intermodal service to the US Midwest and eventually Canada, writes Teri Errico Griffis . The move gives existing clients importing perishables from Latin America a broader reach through the Gulf Coast. The intermodal service will be operated by Canadian National and is the next step in Ports America’s $43 million investment into Gulfport’s previously vacant Terminal 4, which the company acquired in March. The Mississippi State Port Authority is a partner in the deal.

That’s it for now. Please be sure to hit the subscribe button to receive the latest updates.

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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