Freight Forward: Shipper vs Carrier

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.

“Make no mistake — there is a war between shippers and carriers, with shippers dreaming of three-digit rates and carriers taking revenge when demand shifts,” according to a source.

• Greg Knowler writes that Asia-Europe was back at “highest bidder time” similar to the pandemic years, according to Marc Meier, managing director for air and sea for Europe, Middle East and Africa at German forwarder Dachser.
• Challenges and bottlenecks were being seen at destination ports in the Mediterranean such as Barcelona, where carriers are offloading transshipment cargo writes Greg Knowler . “There are some issues at Tanger Med [Morocco] and Algeciras [Spain], but they are specialist transshipment ports,” Sand told the Journal of Commerce. “Barcelona, on the other hand, is being used for transshipment beyond its capacity and that’s causing a slow turnaround that carriers were trying to avoid by calling at the port instead of going further into the Mediterranean dead end,” said Peter Sands, chief analyst for rate benchmarking platform Xeneta.
• Heavy rains in southern Germany have forced the suspension of barge transport on the Rhine River with flooding reported at several points and water levels expected to hit a 10-year high last Tuesday writes Greg Knowler .
• ?Maersk sharply increased its earnings guidance for 2024, citing ongoing Red Sea vessel diversions, growing congestion at Asia load ports and rising spot rates writes Eric Johnson . “On the back of continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea ... Maersk now also sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates,” the carrier said. “This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024.”

• Carrier-direct bookings in the eastbound trans-Pacific are surging as importers rush to take advantage of rates that were inked in new annual service contracts and now are about one-fourth the level of current spot rates, with demand expected to remain strong as imports from Asia show no signs of letting up writes Bill Mongelluzzo .

Columns

• Container market hearing echoes of pandemic-era dynamics, Lars Jensen, CEO and Partner of Vespucci Maritime
• Container market turn could keep capacity tight until October, Mark Szakonyi
• Financial burden of decarbonization more likely to fall on ocean carriers, Peter Tirschwell
• Knock-on effects of unexpected container shortage take aim at North America, Larry Gross
• Project cargo as measured by volume means greater pull on capacity, Susan Oatway

Air

• ?SEKO Logistics has been conditionally reinstated by US Customs and Border Protection (CBP) to participate in a program that facilitates the duty-free entry of low-value shipments days after CBP suspended SEKO from the program for 90 days. But SEKO has nonetheless filed a complaint against CBP in the US Court of International Trade to get reinstated unconditionally, saying it is not clear what conditions the agency has placed on the company. In the meantime, SEKO is continuing to participate in the so-called “Type 86” program writes Eric Johnson.
• ?Volume and rates on the main air cargo trades out of Asia and the subcontinent rose sharply in May from already inflated levels as months of container shipping disruption continues to support the modal shift from ocean writes Greg Knowler.

Inland

• Flexport is looking to attract more freight broker customers with the technology it acquired from now defunct broker Convoy writes Eric Johnson .
• Less-than-truckload (LTL) carriers expanding their US terminal networks are also purchasing trucks and trailers that will be needed to ensure supply is in place to meet future demand writes Bill Cassidy.

• ?Transfix is selling its truckload brokerage business to NFI Industries, repositioning itself as a software and data solutions company writes Bill Cassidy .
• ?US less-than-truckload (LTL) freight demand appears to be rising in the second quarter, but volumes aren’t rising evenly across the field of LTL providers writes Bill Cassidy . Saia said it increased its average daily shipment count 18.6% year over year in May, following an 18% increase in April. Meanwhile Old Dominion Freight Line reported a 2.3% year-over-year increase in its average daily shipment count in May, contributing to a 5.6% gain in LTL revenue per day from a year ago.

?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