Freight Forward: Trucking looking to reignite

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.

Ocean

• HMM, South Korea’s top container line, is planning to increase both its container vessel fleet and lifting capacity by more than 50% by 2030 under a mid- to long-term strategic plan announced by chief executive Kim Kyung-bae writes Keith Wallis.
• Maersk and Hapag-Lloyd are looking to end the practice of blank sailings as part of the schedule reliability pledge made under their new vessel-sharing partnership, according to Hapag-Lloyd Senior Vice President Pedro Silva writes Michael Angell. Silva told shippers at a recent conference, “We don’t anticipate that blank sailings will be needed,” Silva said. “If you work with a hub-and-spoke concept, you will always have critical mass with your connections through the shuttle service. There’s no plan to have blank sailings as we start the Gemini Cooperation.”
• Hapag-Lloyd plans to grow its beneficial cargo owner (BCO) segment over the next few years in a bid to bring better balance to its business, but not at the expense of its forwarding customers, according to CEO Rolf Habben Jansen writes Greg Knowler.
• Hapag-Lloyd has won a tender from the Zero Emission Maritime Buyers Alliance (ZEMBA) for the zero-emission shipment of containers from Singapore to Rotterdam that will cover 1.2 billion TEU-miles over a two-year period beginning in 2025 writes Greg Knowler.
• The Port of Portland will no longer have a container service as of October after the local port authority said it could no longer offset growing financial losses at its container terminal and that it has failed to find a third-party operator to permanently take over the loss-making business writes Michael Angell.
• Antwerp-Bruges saw its throughput rebound in the first quarter, with volume handled in March the highest in three years, up 6% writes Greg Knowler.

• Rotterdam reported its first quarterly volume growth in three years, driven by improving Asian imports and growing transhipment to Mediterranean destinations as carriers making longer voyages around Africa skipped those ports and instead offloaded cargo at North European hubs writes Greg Knowler.
• The World Shipping Council (WSC) filed a petition before the District of Columbia Court of Appeals seeking clarification over the US Federal Maritime Commission’s (FMC’s) official rulemaking on detention and demurrage about billing port truckers working on behalf of ocean carriers writes Michael Angell. The current rule, WSC argues, has created “an internal contradiction in [FMC’s] new rule on detention and demurrage.”

Air

• CMA CGM Air Cargo announced the launch of its own Asia-North America service writes Greg Knowler. Service will be provided by two Boeing 777-200 freighters operated by Atlas Air, the first of which will be delivered in June and the second in Q4.
• Air cargo rates from South Asia to Europe are holding at levels more than double one year ago as several factors align to upset the supply-demand balance on the westbound trade lane writes Greg Knowler. Jan Kleine-Lasthues, COO for Hellmann Worldwide Logistics, said the diversions around southern Africa by carriers on the main Asia-Europe routes were causing the omission of Indian subcontinent port calls, making other transport modes such as air cargo or sea-air combinations attractive. Another significant contributing factor to the elevated air cargo rates is the shortage of capacity as big Chinese e-commerce marketplaces buy up as much space as they can find at premium rates to serve strong US demand. There is also strong underlying economic growth in India.
• Rail freight volumes from China to Europe jumped in Q1, with demand driven by diversions around southern Africa for ocean shipments and a gradual return of shippers to the northern corridor via Russia writes Greg Knowler.

Technology

• Ocean visibility providers are navigating a market that has, in many ways, returned to its pre-pandemic ways writes Eric Johnson. Paul Brashier, vice president of drayage and intermodal at nationwide provider ITS Logistics, said two complaints shippers generally have about visibility data are a lack of accuracy and cost. “On the one side you have large, sophisticated shippers with resources allocated for this,” Brashier said. “They want data, and accurate data they can hold people accountable for. And they want it for the least cost possible.”  On the other side are smaller shippers using 3PLs as a service provider and data platform.

Inland

• Containerized imports are on the rise in Southern California, although so too are warehouse vacancy rates writes Bill Cassidy.  Logistics real estate developer Prologis this week said a “pronounced period of correction” for warehousing is still underway in Southern California, with vacancy rates rising despite the surge in imports in Q1.

Intermodal

• Ancora Holdings, the activist investor seeking to oust the leadership of Norfolk Southern Railway, released a report outlining what it says are the shortcomings of CEO Alan Shaw and showing how the executives it is proposing will close the gap in the next three years with rival CSX Transportation on financial and service metrics writes Ari Ashe.
• Meanwhile, Norfolk Southern Railway (NS) issued a rebuttal to activist investor Ancora Holdings, saying on-time performance for its intermodal loads has risen sharply over the past two years and claiming it will “maintain a competitive advantage” on a key route in the Southern US despite relinquishing its right of first refusal to operate on the corridor writes Ari Ashe.
• Imports streaming into Southern California are boosting transcontinental intermodal loads for J.B. Hunt Transport Services, but demand elsewhere in the country is still weak writes Bill Cassidy. And that’s created a lopsided intermodal market, said Darren Field, J.B. Hunt’s president of intermodal.

Trucking

• US freight spending by shippers dropped 18% year over year in March and is expected to fall 9% in 2024 as US shipping volumes and transportation rates rebalance, according to the Cass Freight Index writes Bill Cassidy. The Cass Freight Index is the latest indicator to reflect a freight market looking for a catalyst that could lift it out of a two-year slump.

• Penske Truck Leasing introduced technology to help shippers better benchmark and manage private truck fleets writes Bill Cassidy.  Dubbed the “Catalyst AI” platform, the tool aims to allow shippers to compare their fleet’s performance against thousands of other similar operations using AI to benchmark against data drawn from the more than 442,000 vehicles Penske operates and maintains for its customers.
• Knight-Swift Transportation Holdings is significantly lowering its earnings expectations for Q1 as capacity remains loose and shippers try to hammer down pricing writes Bill Cassidy. Excess capacity and bad January weather played a part in the revised outlook, but Knight-Swift also singled out tough talks with its customers over pricing.

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

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