Freight Forward: Rates Rise as Tempers Flare

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.

• US retailers have yet again upgraded their forecast for imports for each month through September, saying consumer spending is projected to increase this year between 2.5% and 3.5% over 2023. US retailers also said they expect an extended peak season this year writes Bill Mongelluzzo.  “In the last couple of years, we have witnessed a flattened peak season that has stretched out the volume of imports over extra months versus the strong, consolidated surge in the past,” said Ben Hackett, founder of Hackett Associates.

• Ocean carriers began implementing peak season surcharges (PSSs) on June 1, about a month earlier than usual writes Bill Mongelluzzo. A number of carriers implemented PSSs of $600 per FEU on June 1 and another $400 on June 15, with at least one liner announcing a $2,000 per FEU PSS effective July 1, several NVOCCs told the Journal of Commerce.

“We are seeing panic out there where shippers are trying to advance all their cargo, even for Christmas products, before rates go up further, but of course this is pushing rates up even more,” the supply chain director for a large European retailer told the Journal of Commerce.

While cargo owners made an early start to Asia-Europe’s peak season to avoid disruption on the Red Sea-impacted trade lane, shippers bringing forward more orders to beat rapidly rising rate levels is causing disruption nonetheless writes Greg Knowler. 

“The fundamental issue is back to the same as during the pandemic — container demand exceeding container vessel capacity,” Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter

• The unseasonal surge in volume on the westbound routes to Europe is filling all available capacity with virtually no idle vessels and scrapping at low levels as carriers and forwarders report ships fully booked into July writes Greg Knowler.

• Strong cargo demand and rising freight rates have triggered a return to the trans-Pacific market by intra-Asia carriers approximately 18 months after they withdrew with a post-pandemic hangover. Established long-haul carriers are also launching a raft of new services between Asia and the Americas to take advantage of the buoyant market writes Keith Wallis.

• Thanks to the extended trade disruption in the Red Sea, shippers are once more requesting quotes for moving containers on breakbulk ships, at least in the major trade lanes. With container carriers again showing interest in chartering MPV ships, the Toepfer and Drewry multipurpose indices for June have ticked up further writes Janet Nodar.

Strikes and Threats

• Rolling one-day transport worker strikes in the ports of Hamburg and Bremerhaven and the inland port city of Bremen are impacting container handling and rail transport in Germany writes Greg Knowler. French ports are also facing labor disruption; transport unions launched a 24-hour strike last Thursday and have scheduled additional one-day walkouts for June 21 and June 25. Workers are also holding four-hour walkouts on three days during each week this month.

• The International Longshoremen’s Association (ILA) canceled talks with management over a new six-year contract covering ports along the US East and Gulf coasts due to what it describes as violations of its existing deal amid automation projects by Maersk and its APM Terminals subsidiary at the Port of Mobile writes Michael Angell.

• ILA said members of the United States Maritime Alliance (USMX), which represents ocean carriers and marine terminals, have made “massive profits in recent years, while failing to reward the workforce responsible for these gains.” The union said it will “demand a wage increase commensurate with those revenues” once talks with the USMX resume. The ILA did not provide specific figures, either percentage-wise or in dollar terms writes Michael Angell.

D&D Issues

• Samsung Electronics America filed a complaint with the US Federal Maritime Commission (FMC) over 96,000 disputed detention and demurrage fees it alleges were incorrectly levied by its transportation partner ocean carrier HMM since January 2020. The complaint alleges that HMM, in providing an unspecified number of so-called store-door moves over the past four-plus years, assessed unwarranted fees that were beyond the control of Samsung writes Eric Johnson.

• Two weeks after their rollout, the US Federal Maritime Commission’s new rules on detention and demurrage billing still face questions about whether truckers can ever be responsible for such charges. Billing policy changes among ocean carriers are also causing angst as the shipping industry figures out what should get billed to whom under the agency’s new rules writes Michael Angell.

Tech

• Ship Angel, the shipper-focused freight rate and contract management software provider, expanded its product portfolio to include tools to manage contract amendments and invoice auditing. The new products were launched as Ship Angel, founded in 2023 by Kontainers veteran Graham Parker, announced a $5 million funding round by venture investors writes Eric Johnson.

• MSC joined NYSHEX and will use it to digitize the performance monitoring of its contracts writes Eric Johnson. MSC joins fellow container lines Maersk, CMA CGM and Hapag-Lloyd, which are also investors in NYSHEX, as users of the platform.

Inland

Trucking

• US truckload spot rates are rising seasonally as the summer approaches but remain at or below year-ago levels in the largest trucking lanes, data from several sources indicates writes Bill Cassidy.  “Better days are in sight for trucking companies, but the market still needs to work through the tough combination of too much capacity and sluggish freight demand,” Avery Vise, vice president of trucking for transportation research firm FTR, said in a statement.

 Intermodal

• More than nine out of 10 shippers and asset-based and non-asset intermodal marketing companies (IMCs) are satisfied with North American domestic intermodal service so far this year, according to a Journal of Commerce Intermodal Service Scorecard survey writes Ari Ashe.

• The Port of Nevada officially opened last week, accepting cargo in CMA CGM containers and becoming the third new pop-up intermodal facility to open in the western US this year writes Ari Ashe. The 224-acre inland port in Fernley, near Reno, is handling imports and exports between the Port of Oakland and northern Nevada through ocean carrier CMA CGM and rail carrier Union Pacific Railroad (UP).

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