Freight Forward: Volumes slowly growing

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 imports will begin to increase this month, but year-over-year gains will remain below 2022, according to the National Retail Federation (NRF) and Hackett Associates’ March Global Port Tracker (GPT). “There are many uncertainties about the economy, but we expect imports to show modest gains over the next several months,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said in a statement.?A transportation industry consultant who worked as a logistics manager for?several national retailers told the?Journal of Commerce?it’s not only the?level of inventories but the type of products retailers are carrying over that will determine how much they order from Asian factories in the coming months according to JOC’s Bill Mongelluzzo.

Indeed, and US importers of Asian-made goods are increasingly favoring ports in the Southeast, particularly Savannah, given the lack of a US West Coast longshore labor deal and continued enhancements to increase berth capacity and landside cargo flow writes JOC’s Teri Errico Griffis. 2022 growth in the Southeast was led by Savannah, which increased its percentage of Asian import to 11.1% from 10.4% on a 6.1% rise in volume, and Charleston, which increased its market share to 3.8% from 3.3% thanks to a 14.6% spike in shipments. Norfolk maintained its 4.1% share of the market as volumes ticked up just 0.2% year over year.?

Union Negotiations

Mongelluzzo writes on two additional labor negotiations underway:

• Negotiations for a new contract between clerical office workers at the ports of Los Angeles and Long Beach and the shipping lines and terminal operators they work for are under way. The current six-year contract between the office workers who process shipping documentation, represented by the International Longshore and Warehouse Union Local 63 Office Clerical Unit (OCU), and their employers expires on June 30.
• The International Longshore and?Warehouse Union (ILWU) Canada and its 12 locals and the BC Maritime Employers Association (BCMEA), representing container lines and marine terminals workers at the Western Canadian ports of Vancouver and Prince Rupert are seeking significant increases in wages in their first proposal to employers as the two sides begin negotiating a new contract to replace the current five-year deal expiring at the end of March.

Shipping Lines

• JOC’s special correspondent, Bency Matthews writes that CMA CGM and Hapag-Lloyd have joined Mediterranean Shipping Co. (MSC) in announcing a GRI due to take affect later this month. But it’s doubtful the rate increase will stick.?“The GRI is unlikely to succeed as there is too much capacity,” a Mumbai-based shipper who asked not to be identified told the?Journal of Commerce.?

• Zim Integrated Shipping Service is suspending an expedited trans-Pacific service from China to the US West Coast, Griffis writes. "We will continue to assess the market situation and will consider relaunching the line if and when the market conditions are suitable," a Zim spokesperson told the?Journal of Commerce.?
• Maersk will begin billing container detention charges directly to consignees on so-called merchant haulage moves from April 1. “With the FMC’s ongoing rulemaking process, we’re aiming to line up a better billing process that helps truckers and customers,” a Maersk spokesperson told the?Journal of Commerce writes JOC’s Eric Johnson.?

Inland

• Norfolk Southern Railway (NS) will launch a new international intermodal service between the Port of Virginia and Memphis beginning April 1 in a move to capture trans-Atlantic business from Europe and Asia as more cargo owners shift freight to ports along the US East Coast. “BCOs [beneficial cargo owners] and others are continuing to look for more options, so we're trying to provide them with another service product for capacity to get into and out of Memphis,” Alexander Luc, group vice president of international intermodal for NS, told the?Journal of Commerce?writes JOC’s Ari Ashe.?
• Ashe also writes that a group representing 11 ocean carriers has appealed?a ruling by the Federal Maritime Commission’s (FMC) chief administrative judge?that container lines?violate the US Shipping Act when they mandate which chassis must be used in merchant haulage agreements with cargo owners.?The Ocean Carrier Equipment Management Association (OCEMA) filed the appeal last Tuesday, saying FMC Chief?Administrative?Judge?Erin Wirth erred in issuing a summary judgment because key facts are still in dispute. “Without the commitment of the ocean carriers, there is no practical way adequate chassis volumes will be available at marine and rail terminals in the US,” the group wrote in its appeal.?It would also place an enormous burden on shippers and truckers to ensure adequate chassis are available in every market, it said.?“It will be up to shippers and motor carriers to arrange for the thousands of chassis needed to meet merchant haulage requirements,” OCEMA said.?“There is no evidence in the record, or in the more than 50 years of intermodal activity, of any wide-scale willingness of shippers, consignees and/or motor carriers to undertake this responsibility,” the group added.?

Air

JOC’s Greg Knowler writes on the air cargo market’s growth potential:

“Once we can overcome the current macroeconomic challenge of inflation and energy costs, the fourth quarter of 2023 and going into 2024 look incredibly positive for the global economic picture in terms of international trade, and therefore for air cargo,” Glyn Hughes, director general of The International Air Cargo Association (Tiaca), told a webinar last week.?Hughes also noted two trade agreements that will benefit demand for air cargo. “The ASEAN-EU agreement means any carrier from the 10 ASEAN and 27 EU states can fly unlimited cargo operations between the trade blocs with fifth freedom traffic rights,” Hughes?told the Tiaca webinar.?The RCEP trade deal came into force on Feb. 1, 2022, and has created a free trade bloc to eliminate 90% of the restrictive barriers, tariffs, and controls of cargo within the member states.?“This is anticipated to generate another $500 billion worth of trade between the RCEP members and has provided the opportunity to have a free trade agreement between Japan, South Korea, and China for the first time,” Hughes said.?In addition to the trade agreements, between 50 million and 100 million people were entering the consumption class every year in Asia, mostly in Southeast Asia.?“By 2030, that will add around 1 billion people in Asia, and when they have discretionary income, they will start buying domestic appliances, cars, smart phones,” Hughes said. “The appliances and cars may not fly in aircraft, but the components and subassembly aspects will.”?

Technology

JOC’s Eric Johnson writes on several technology updates:

• Nashville-based “matchback” technology provider Qualle plans to expand from the six US cities it currently serves to every North American container gateway by the end of 2023. Qualle provides both a platform to enable street turns as well as an empty container marketplace for exporters looking to find equipment.?“Around 8% to 10% of trucking companies we reach out to are street turning,” said CEO Tyler Sellers, who previously worked at short-haul drayage broker and technology provider Cargomatic.?“But the ones who aren’t can still use our empty container marketplace.”
• PortPro, whose flagship DrayOS product is a transportation management system (TMS) for dray carriers, launched DrayOS Track to help customers of those dray carriers receive updates on key import milestones such as vessel arrivals, container discharge dates, and demurrage. The tracking product will also give exporters access to earliest return date (ERD) information from terminals. “[Dray] carriers today are losing valuable time working across multiple systems, paying inordinate amounts in per diem costs, and risking even more with manual processes and document management where crucial data can be too easily lost,” PortPro CEO Michael Mecca said in a statement. Along with tracking, the DrayOS Track tool provides dray carriers with a recommendation engine that suggests empty return locations, creation of per diem invoices, and a repository for terminal documents, such as out-gate and in-gate receipts. That gives drivers, in particular, an efficient way to create an audit trail when disputes around detention and demurrage arise.
• Vizion has established direct connections with 60 ports and terminals in the US and abroad, and will use data feeds with those terminals to offer two new alerts to its shipper and logistics service provider (LSP) customers.?The new alerts highlight key milestones: the last free day for a container in a terminal before demurrage fees begin to accrue, and when?a container is available for pickup by a drayage carrier. Those alerts are added to existing Vizion data milestones for?when a container is discharged from a vessel, gated out of a port, and returned empty.?Separately, project44 said it has beefed up its terminal data offering, called Ocean Terminal Visibility, by providing container discharge events —?location, last-free-day information, and status, including holds, customs clearance, and availability for?pickup.?The new products from project44 and Vizion are a signal that terminal visibility remains a troublesome area for shippers, especially involving?demurrage fees related to the late collection of laden import boxes writes Johnson.?
• Risk management-focused visibility provider Overhaul received a $38 million equity investment, funding that will in part help finance its recent acquisition of competitor SensiGuard.?The investment, which also includes an additional $35 million in debt, will primarily be funneled toward global expansion and product development, the company said in a statement.??

Breakbulk and Project Cargo Conference

The Breakbulk and Project Cargo Conference, “Breakbulk23,” organized by The Journal of Commerce within S&P Global will be held April 19-21, 2023, in New Orleans.?

JOC's Janet Nodar and Susan Oatway provide more details on the upcoming conference.

Economic news

• Tuesday, March 14 – February CPI – Expected to increase 0.5%.
• Wednesday, March 15 – February Retail Sales – Sales are forecasted to decline by 0.4% after increasing by 3.0% in January.
• Wednesday, March 15 – February PPI – An increase of 0.3% is forecasted after increasing 0.6% in January.
• Friday, March 17 – February Industrial Production – After no growth in January, a 0.5% increase is expected.

That’s it for this week. 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