Transportation Go! brings ag shipping industry to Milwaukee

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Agricultural transportation has myriad challenges, no matter the mode of movement, and representatives of all points on the supply chain gathered in Milwaukee, Wisconsin, last week to discuss issues and look ahead to the future.

“The most important thing is open and continuous communication, and that’s what this conference is,” said the conference’s emcee, Dr. Richard Stewart, professor at the University of Wisconsin-Superior and director of the university’s Transportation and Logistics Research Center. “We need to continue this conversation at every level we can.”

The conference, being in the home city of Port Milwaukee, focused on the Great Lakes and the St. Lawrence Seaway system, an area of great growth potential for ag exports, especially with many infrastructure investments and developments underway.

Federal Maritime Commission Chairman Dan Maffei, Surface Transportation Board member Robert Primus and MC Richard Stewart

Federal Maritime Commission Chairman Dan Maffei, Surface Transportation Board member Robert Primus and MC Richard Stewart

“We want to grow the options the shippers have out of this region,” said Peter Hirthe, international trade specialist for the Great Lakes St. Lawrence Seaway Development Corporation. “There are some exciting developments. We have the capacity. We have the investment.”

Transportation Go! featured a robust agenda with presenters from Great Lakes ports, as well as those representing ocean shipping, railroads, intermodal trucking and national commodity groups.

Daniel Maffei, chairman of the Federal Maritime Commission, and Robert Primus, member of the Surface Transportation Board, were part of a spirited discussion about finding solutions to challenges such as container availability, from rail to sea, including a bipartisan Ocean Shipping Reform Act currently making its way through Congress. (A House version has been passed, while a Senate version was introduced last month.)

“I’m taking all this stuff back to Washington, and everything I believe I can do I’m going to do,” Maffei said.

Maffei testified to a Senate committee prior to going to Milwaukee and announced that FMC’s audit team will expand its scope to get information from carriers on their handling of exports and how to do better. Also, FMC’s Bureau of Enforcement is prioritizing cases involving exports.

Primus touted the U.S. rail network but said there are concerns about the lack of good, reliable service and those problems have affected customers including Transportation Go! attendees.

“Everyone who attended Transportation Go! appreciated the opportunity to share and discuss transportation challenges and solutions,” said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance, which hosted and organized the event. “Having speakers like Dan and Robert there to talk to ensured that everyone left the conference looking forward, not back, with action items to advance ag transportation.”

In a recap of the “bright ideas” that came out of Transportation Go! Jason Tutrone, transportation attorney with Thompson Hine, said: “This is really an opportunity for us to strengthen our supply chains and ensure we have a regulatory framework in place. The stars are aligned on the regulatory side to make some much-need reforms. …

“I encourage all of you to engage your trade association on these issues. They’re a strong voice that are capable of getting thigs done in Washington.”

Transportation Go! was made possible by its sponsors: Wisconsin Soybean Marketing Board, Great Lakes St. Lawrence Seaway Development Corporation and Minnesota Soybean Research & Promotion Council (platinum); CHS, SB&B, Scoular, North Dakota Trade Office, The Redwood Group; Scoular, Illinois Soybean Association, and Global Processing (silver); Port Milwaukee, South Dakota Soybean Research & Promotion Council and Soy Transportation Coalition (social hour); Great Lakes St. Lawrence Seaway Development Corporation (name badge/lanyard).

“We appreciate our sponsors including Wisconsin and our other state sponsors who pulled the region together,” Wenberg said.

Competitive Shipping News and Developments

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Compiled by Bruce Abbe, Strategic Trade and Transportation Advisor

Biden Administration, Congress seek to promote competition in ocean liner system

Concerns over the concentration of power within the ocean container liner sector leading to high rates and lack of service continued to garner headlines and the attention of policymakers in Washington, D.C., last week.

President Biden noted as much in his State of the Union Address. The U.S. Department of Justice (DOJ) and the U.S. Federal Maritime Commission (FMC) are partnering to strengthen their anti-trust oversight of the ocean carriers and their vessel sharing alliances to promote competition and ward off anti-competitive behavior.

Last week, FMC Chairman Daniel Maffei spoke to the large, annual Trans-Pacific Maritime (TPM) conference, hosted by the Journal of Commerce (JOC) in Long Beach, CA. On Friday, Maffei spoke to the Specialty Soya and Grains Alliance’s (SSGA) Transportation Go! conference in Milwaukee.

JOC reported that Maffei told TPM attendees that FMC “will not undo the alliances and there’s no evidence to show ocean carriers are colluding to keep freight rates high.”  Go here for more detailed coverage of Maffei’s remarks in JOC and here in the AJOT.

In Milwaukee, Maffei told Transportation Go! attendees that his remarks were “somewhat misreported.” The agency, he said, has been examining ocean carriers practices and has not seen evidence of price setting collusion “yet.” but it intends to continue to monitor the steamship lines operations and will take action if it finds evidence of illegal behavior.

What’s legal and illegal for the global ocean carriers’ operations is also up for debate in Washington.  Legislation was introduced in Congress last week by Rep. Jim Costa, D-Cal., that would strip the carriers of their current anti-trust immunity.

Meanwhile, two subcommittees of the U.S. House of Representatives Committee on Oversight and Reform sent letters to three major ocean carriers – Maersk, CMA-CGM and Hapag-Lloyd, asking them to respond with information about dramatic increases in the prices for shipping containers and reports of exorbitant fees and surcharges” well beyond their costs. The letters asked for responses by March 16.  Go here for more coverage.

STB hears from U.S. Department of Justice supporting adoption of reciprocal switching to improve rail competition

The DOJ has submitted formal comments to the U.S. Surface Transportation Board (STB) providing reasons for urging the railroad regulatory agency to adopt reciprocal switching.

The STB will hold a hearing on the reciprocal switching March 15-16. The board has delayed ruling on the contentious issue for years. Reciprocal switching has been in use in Canada, where it is called ‘interswitching.’ for more than 100 years. In cases where a railroad provides sole rail access to a shipper, the railroad would need to be willing to transfer a shipper’s rail cars to a second railroad at a junction point. The second railroad would pay a per-car switching fee to the first railroad, and the STB would determine the reasonableness of the fee.

Major railroads in the U.S. generally oppose it, while shippers – particularly captive shippers – generally support it.

Go here for coverage of the DOJ’s comments in industry news publication Railway Age, which also includes links to the American Association of Railroad’s position on the matter.

Canadian Pacific RR facing possible workers’ strike

The Teamsters Canada Rail Conference members voted last week by 96.7% to go on strike after midnight March 16 if talks fail between its negotiators and Canadian Pacific Railroad. The Canadian federal government will be holding mediation meetings between March 11 and 16 to try to forge an agreement.

CP rail is a major intermodal container rail carrier serving many SSGA exporters shipping food and feed ingredients by container from the U.S. Midwest out through the Vancouver, B.C. gateway to Asia markets. Go here for more coverage.

Transportation Go! to feature panels on intermodal trucking, transloading, rail and more

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Competitive Shipping News and Developments

Transportation Go! to feature panels on intermodal trucking, transloading, rail and more

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

It’s not just federal and state governments and port leaders headlining SSGA’s upcoming Transportation Go! conference that are reasons you’ll want to want to attend the March 3-4 event in Milwaukee.

The agenda features panels of experts who can provide practical service information on trends and new developments that can benefit shippers’ businesses.

An intermodal trucking and transloading panel will discuss the current state of intermodal shipping in the Midwest. Jason Hilsenbeck, president of Drayage.com, will share information about container terminal congestion throughout the area. Libby Ogard, president of transportation consulting firm Prime Focus LLC will moderate the panel. Chris Winkler, President of Aim Transfer will discuss drayage challenges for bi-state movements and AJ Martin with Burlington Junction Railroad will talk about transload opportunities.

A session titled “Reimagining Rail Service in the Midwest” will include invited representatives of CP, UP, CN and Watco and discuss new and changing Class 1 and regional railroad service for the region.

Key federal and state infrastructure and transportation project funding under the newly passed federal infrastructure bill will be the topic for remarks by Mark Berndt, lead consultant for the consulting firm, Quetica LLC. Berndt also chairs the Transportation Research Board’s Agriculture and Food Transportation Committee at the National Academy of Sciences. He also previously chaired the TRB Truck Size and Weight Committee.

To register, go to  www.transportationgo.com

International investigators to probe anti-competitive conduct
Competition regulators from the U.S., United Kingdom, Canada, Australia and New Zealand have begun to collaborate on investigating ocean container liners for potential cartel-like conduct in global supply chains, according to the online shipping news service Splash247.

A working group includes the U.S. Department of Justice Antitrust Division and competition oversight bureaus from the countries

The European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT) has also sent a letter to the European Union calling for an investigation by the multi-nation government body of the container shipping sector, alleging “unfair” and “discriminatory” practices. The EU has been reluctant to do so in the past.

The largest ocean container shipping lines have gone through mergers and consolidations in recent years, going from more than 15 down to 10 major lines. Those 10, however, operate in just three container vessel sharing “alliances.”

During the supply chain congestion crisis of the last two years there have been some new, but small players and one-off services entering the trade, but the major shipping lines far and away dominate global container trade lanes.

SSGA transportation have expressed concerns to Federal Maritime Commission officials that the effect of consolidation in the ocean carrier industry into only three alliances “may have morphed from tools of operational efficiency into tools for unfair restraint of trade.”

LA, LB, SC ports post record volumes in January
The ports of Los Angeles and Long Beach, the two busiest container ports in the U.S., posted overall record volumes in January, as did the Port of Charleston, South Carolina:

Los Angeles saw loaded imports decline 2.3% year-over-year from 437,609 TEU in 2021 to 427,207 TEU last month. Loaded exports were down over 16%, from 119,326 TEU to 100,185 TEU. But empty containers shipped out continued their climb, going up 21.4%, from 278,580 in January 2021 to 338,202 last month.

Long Beach saw import containers rise 6.9% to 389,334 TEU, and exports increased 5.9% to 123,060 TEU. Empty containers outbound grew 1.8% to 288,550 TEU.

Meanwhile, the three terminals at the Port of Charleston posted a record month, too, handling 226,515 TEU’s in January, up 4.7% from a year prior.

PNW ports decline as carriers skip service calls
The Northwest Seaports Alliance (NWSA) combined operating authority for the ports of Seattle and Tacoma reported a decline in container volumes during January. NWSA posted a drop of 5.8% of through-put totaling 272,281 TEU. Loaded exports dropped by 36%, while full imports dropped 0.9%.  Total exports, including empties, decreased 12.3% and imports down 1%.

NWSA’s recent volumes have been harmed by a number of ocean carriers temporarily stopping scheduled vessel calls to the key PNW gateway ports that serve many SSGA export shippers. The suspended or less-frequent vessel calls reportedly stemmed from congestion at the ports. However, recent operational reports from NWSA indicate few, if any, ships are now waiting to berth at the ports. Higher volumes are expected to return once the container vessel calls start-up again

Friedmann: Exporters fight to overcome service problems
Agriculture Transportation Coalition Executive Director Peter Friedmann was featured last week as part of Freightwaves’ Global Supply Chain Week interview series.

SSGA is an active, contributing member of the coalition.

Freightwaves also interviewed German ocean carrier Hapag-Lloyd CEO Rolf Habben Jansen recently. The Q&A covered Habben’s thoughts on prospects for spot rates, congestion outlook, schedule reliability problems, HL’s container supply, the need for more new ships, and more.

Container costs, production peaking
On a somewhat more positive note, top executives at Triton International and Textainer, the two largest container leasing companies in the world, told Freightwaves that the prices for new manufactured containers have come down to about $3,400 per TEU.

Container manufacturing has consolidated into predominantly three Chinese main companies. In 2021, consultancy Drewry reported more containers were made in 2021 than ever before –7.18 million TEUs, up 130% from 2020 and 62% from the previous year. Container production actually started pulling back in the fourth quarter from the third. Inventory levels at the factories also have rebounded. Prices for older containers have remained high, though.

 

 

SSGA chairman addresses White House Office of Outreach and National Economic Council

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Rob Prather, SSGA chairman and chief strategic ambassador for Global Processing of Kanawha, Iowa, represented all exporters in the container crisis when he commented to the White House that the Ocean Shipping Reform Act, introduced by Sens. Klobuchar (D-Minn.) and Thune (R-S.D.), as well as an associated version that had previously passed the House of Representatives, would help his business.

After some easing of the availability of containers in the runup to Christmas, Prather said things have tightened again. Exporters in the region report being told that they couldn’t get a booking for six weeks.

That’s why reforming the Ocean Shipping Act is so important. Prather said helping third parties file complaints can bring more action and having companies report their empty containers will help understand if a company is shutting down a market for returns or making some supply available. The Federal Maritime Commission (FMC) needs to be able to have a streamlined review of complaints, not a drawn-out process subject to brinksmanship. They need more resources to pursue complaints and then act to prevent detention/demurrage bills or unexpected fees from sinking a deal.

Right now, regional exporters report working at as little as 60 percent capacity, during the peak season for exports.

The high-value grains and oilseeds market depends on on-farm storage. If a crop isn’t moved from storage in the bins, it stays on the farm. This is about food security, and those of us in the rural United States who connect with and feed the foreign customer should not be left out. This is about the United States being a reliable supplier. All those ideas are in doubt or more difficult today.

The global container shipping crisis will be discussed at Transportation Go! March 3-4 in Milwaukee, where FMC Chairman Dan Maffei and other leaders in the agricultural supply chain will gather for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identify priorities. More information is available at www.transportationgo.com.

Transportation Go! early bird registration extended

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The early bird registration price for Transportation Go! has been extended through Friday, Feb. 11. Transportation Go!, the premier conference for soybean and grain transportation and trade issues in the Upper Midwest, will be held March 3-4 in Milwaukee. Special hotel room rates will also be available through Friday.

The Transportation Go! conference is focused on improving the competitive shipping environment for U.S. agriculture shippers and exporters everywhere with an emphasis on the Great Lakes and the St. Lawrence Seaway. Federal Maritime Commission Chairman Daniel B. Maffei and Surface Transportation Board member Robert E. Primus have agreed to appear at this year’s conference, among other leaders in the agriculture and transportation industries.

Formerly known as the Northern Commodity Transportation Conference, Transportation Go! will bring in the industry’s top stakeholders, from boots-on-the-ground commodity growers and organizations to traders and shippers of specialty crops, along with representatives from key ports along the Great Lakes and more.

This highly engaging conference will provide the opportunity for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identifying priorities.

Besides presentations from Maffei and Primus, Transportation Go! will feature a robust agenda with discussions on rail, truck, ocean shipping and more, including a market development and outlook panel featuring commodity organization leaders from the U.S. Grains Council, U.S. Wheat Associates and the U.S. Soybean Export Council.

Transportation Go! will take place March 3-4 at the Hyatt Regency in Milwaukee, Wisconsin. Register today at www.transportationgo.com.

Federal Maritime Commission chair, Surface Transportation Board member to appear at Transportation Go!

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Daniel Maffei, Robert Primus to discuss agricultural transportation issues

Transportation Go!, the premier conference for soybean and grain transportation and trade issues in the Upper Midwest, is pleased to announce that Federal Maritime Commission Chairman Daniel B. Maffei and Surface Transportation Board member Robert E. Primus have agreed to appear at this year’s conference, March 3-4 in Milwaukee, Wisconsin.

The Transportation Go! conference is focused on improving the competitive shipping environment for U.S. agriculture shippers and exporters everywhere with an emphasis on the Great Lakes and the St. Lawrence Seaway.

Surface Transportation Board member Robert Primus

Federal Maritime Commission Chairman Daniel Maffei

Maffei has been invited to discuss FMC’s efforts to find solutions to the global container shipping crisis and to protect the ability of U.S. inland agriculture container export shippers to serve their food manufacturing customers overseas.

Primus has been asked to address initiatives aimed at increasing competition and options for railroad service of agriculture shippers, including connectivity improvements among Class I railroads, regional and short line railroads and intermodal service.

“The future of agriculture comes from the future of transportation,” said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance, host of the Transportation Go! conference. “We can’t build the future of agriculture without these organizations and leaders helping us.”

Maffei was designated as FMC chairman by President Biden in 2021. He was first nominated to serve on the commission in 2016 by President Obama and again in 2019 by President Trump.

Primus was STB vice-chairman in February of 2021 – January 2022, shortly after being confirmed by the U.S. Senate as a board member in January 2021.

“Making a difference in agriculture means being vocal to build a solution,” said Bruce Abbe, SSGA strategic adviser for trade and transportation. “We are grateful that Chairman Maffei and STB member Primus are traveling to speak to our group and help build a reliable, efficient North American agricultural supply chain.”

Formerly known as the Northern Commodity Transportation Conference, Transportation Go! will bring in the industry’s top stakeholders, from boots-on-the-ground commodity growers and organizations to traders and shippers of specialty crops, along with representatives from key ports along the Great Lakes and more.

This highly engaging conference will provide the opportunity for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identifying priorities.

Besides presentations from Maffei and Primus, Transportation Go! will feature a robust agenda that includes discussion on these topics and more, including a market development and outlook panel featuring commodity organization leaders from the U.S. Grains Council, U.S. Wheat Associates and the U.S. Soybean Export Council.

Transportation Go! will take place March 3-4 at the Hyatt Regency in Milwaukee, Wisconsin. Register today at transportationgo.com. Early bird pricing is available through Feb. 8. Special hotel rates are also available through Feb. 11.

For specialty ag exporters, supply chain delays remain major crisis

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Situation has reached ‘condition critical,’ in some areas SSGA chairman says

The holiday rush may be behind us, but the supply chain crisis has not subsided, especially for many U.S. agricultural processors located in the Upper Midwest.

Specialty Soya and Grains Alliance (SSGA) members who export high-quality, Identity Preserved grains and oilseeds continue to have major difficulties getting the equipment they need to fulfill their orders and meet the needs of their overseas customers.

Many containers bringing consumer imports to the U.S. continue to be sent back overseas empty instead of inland where ag processors have supplies ready to be shipped.

“Specialty agriculture needs containers for food grade exports due to a food supply chain that has reached a condition critical situation,” said Rob Prather, SSGA chairman and chief strategic ambassador for Global Processing, an Iowa-based company that grows, processes and supplies Identity Preserved, non-GMO soybeans and soy ingredients. “This isn’t just a global supply chain issue; it’s a global food supply security issue.”

The United States produces the finest agricultural products in the world, including Identity Preserved soybeans and specialty grains used around the globe by food and beverage manufacturers. SSGA members’ customers abroad specifically want these products. They’ve ordered them, and they’re waiting for them.

Specialty crops shipped via container are a growing market because of consumer demand around the world. The United States must be a reliable supplier, and that means the supply chain must work for everybody. It is wrong for shipping lines, which have been enjoying record profits throughout this crisis, to deny service to ag exporters. Some SSGA members have reported they are able to ship just 40-60% of their orders because of these continuing supply chain issues.

“Dialogue must continue, and SSGA is calling on companies throughout the supply chain to participate and find ways to reposition containers where possible and unclog this system, which is so vital to the global food supply,” said Eric Wenberg, SSGA executive director. “As an American, I am surprised that one our country’s top exports is air -– in the form of empty containers. Let’s slow down the system enough so we can put something in those empty containers.”

SSGA was among the first groups to sound the alarm on the supply chain crisis, and that was 15 months ago. Continued lack of service, carrier cancelations, delays and rising freight rates and fees have made the situation as difficult as it’s ever been, according to some SSGA members.

This hasn’t just affected business either. There are real people working to make sure every link in the supply chain remains strong, and the human toll has caused hardships to logistics staffs, as well as farmers, truckers, suppliers and customers.

SSGA supported the Ocean Shipping Reform Act that overwhelmingly passed the U.S. House of Representatives in December and is encouraging the Senate to move forward with the legislation, which would strengthen the Shipping Act and prohibit ocean carriers from unreasonably declining opportunities for U.S. exports.

More solutions are needed and fast. While time is of the essence, SSGA is hosting a shipping conference, Transportation Go, March 3-4 in Milwaukee, Wisconsin, and encourages anyone interested in solving this crisis to join us bring your best ideas to the table. More information at transportationgo.com.

Let’s go! Transportation Go! conference puts focus on Great Lakes for ag exports

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With great investments coming to the Great Lakes, the time is right to focus on the United States’ inland seas and the St. Lawrence Seaway for agricultural shipping.  

Transportation Go!, the premier conference for soybean and grain transportation and trade issues in the Upper Midwest, will take place March 3-4 in Milwaukee, Wisconsin, home to Port Milwaukee, one of the gateways to the Great Lakes and the St. Lawrence Seaway. 

With growing and emerging markets in Europe, North Africa and the Middle East, there is more than enough capacity on the Great Lakes to increase agricultural trade to those regions, and that should only grow considering: 

  • The Port of Cleveland’s Cleveland-Europe Express liner service expanded with ocean carrier Spliethoff adding a dedicated container vessel to its schedule in the fall of 2021.  

Formerly known as the Northern Commodity Transportation Conference, Transportation Go! will bring in the industry’s top stakeholders, from boots-on-the-ground commodity growers and organizations to traders and shippers of specialty crops, along with representatives from key ports along the Great Lakes and more. 

This highly engaging conference will provide the opportunity for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identifying priorities, whether it’s reimagining rail service in the Midwest or solving the container-access crisis. 

Transportation Go! will feature a robust agenda that includes discussion on these topics and more, including a market development and outlook panel featuring commodity organization leaders from the U.S. Grains Council, U.S. Wheat Associates and the U.S. Soybean Export Council; as well as presentations from invited leaders from the Surface Transportation Board and the Federal Maritime Commission 

Transportation Go! will take place March 3-4 at the Hyatt Regency in Milwaukee, Wisconsin. Register today at transportationgo.com. Early bird pricing is available through Feb. 8. Special hotel rates are also available through Feb. 8.  

Competitive Shipping Roundup: UP to expand intermodal; Port congestion getting worse

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Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

UP to expand intermodal
During a fourth-quarter stock earnings call last week, Union Pacific railroad executives announced plans for the western Class I railroad to expand its intermodal container infrastructure.    

Of keen interest to many of SSGA’s Upper Midwest shippers, UP said it will expand its recently restarted intermodal facility in Minneapolis from a “pop-up” to a full intermodal terminal. 

UP officials said the railroad will also be adding capacity to its facilities in the Inland Empire area of Southern California east of the ports of Long Beach and Los Angeles, and it will be concluding a project to install wide-span big gantry cranes at its Global IV facility in Chicago. 

Its capital investment plans also include adding more rail cars, more sidings and other upgrades. Go here for the full story. 

Port congestion getting worse
Danish global container shipping consulting firm Sea-Intelligence recently analyzed data it receives from ocean carriers and concluded there are no signs yet heading into the new year that port congestion and bottlenecks are easing up.   

The analytical firm ran the numbers and determined that 11.5% of global container shipping capacity was taken out of the market in November due to ships being parked off ports, notably U.S. West Coast ports. That was marginally better than 12.5% taken out of the market in October. Add that lost capacity to what Sea-Intelligence said was an increase of global demand by 7%, and you’ve got the crunch shipping is now experiencing. 

Sea-Intelligence CEO Alan Murphy indicated available data shows congestion issues worsening as 2022 begins, without signs of improvement yet. Go here for the full story. 

Ocean carriers post $150 Billion profit year
Bloomberg News and the American Journal of Transportation reported last week the leading ocean container carriers earned an estimated $150 billion in profits by year end 2021, thanks to extraordinary high rates for consumer goods imports. Yet reliability – ships arriving within scheduled arrival times – hovered between only 33 to 40% during the year. 

Spot rates for 40-foot containers shipped from Asia to the U.S. topped $20,000, up from $2,000 just a few years ago, and recently has been holding around $14,000. Not all shippers pay those rates, thanks to long-term contracts, but new contract negotiations will be getting underway during a period of high existing rates. Smaller importers and exporters in many countries are feeling the heat, with the situation magnified by the market concentration of the ocean shipping lines.  Go here for the detailed report. 

Not all shippers suffer the same 
Not all importers and exporters have been suffering to the same degree. Prominent shipping analyst Lars Jensen, CEO of Vespucci Maritime, told the Journal of Commerce that despite the huge delays at the delays and shut downs in some trade lanes, many of the biggest consumer product companies are reporting record profits as well – among them Walmart, Target, Home Depot, Lowes and Dole Food.   Those are companies in the center of the consumer product demand surge. Go here for the full story. 

U.S. ports report record volumes
With 2021 behind us, the United States’ main container shipping ports are reporting much-increased, and, in many cases, record container traffic for the year. The sharpest increases are in imports handled.  Exports were strong too – if you include empties among the exports. For loaded exports, including agricultural exports, the story is far different with the West Coast ports showing declines, while East Coast ports held their own or increased as well: 

  • Northwest Seaport Alliance: The jointly operated ports of Seattle and Tacoma (NWSA) saw its container traffic hit 3,736,200 20-food-equivalents (TEU) – up 12.5% from 2020. Imports were 1,554,671 TEU, up 16.8%. Exports were at 1,427,449 TEU. However, full loaded exports declined by 12.5%.  Go here for a full report. 
  • California ports: The Port of Los Angeles (POLA), the largest in the U.S., hit a yearly annual record of 10.7 million TEU in 2021 – up 13% from 2020. The Port of Long Beach (POLB), its next door neighbor and second-largest, posted a total of 9,384,368 TEU, up 15.7% and the first time it has topped 9 million TEU handled. However, loaded exports have been down nearly all year at the big southern California ports. The Port of Oakland handled 2,448,248 TEU, down 0.5% for the year. Oakland has been a focus of efforts by the industry regulators and experts to diversify incoming cargo to try to relieve congestion pressure. Go here for more information. 
  • East Coast, Gulf ports: Over on the East Coast and Gulf Coast, container traffic at region ports have also been setting records, with the story more positive for exports. The Port of Virginia in Norfolk handled a record 3.5 million TEU, up a whopping 25.2% from 2020. That included an increase in loaded exports of 11.6% to 1.05 million TEU. Loaded imports were up 27.5% to 1.68 million TEU. The Port of Charleston handled 2.75 million TEU at its terminals – up 19% from 2020, and up 13% from 2019.  Imports were up 25% to 1.29 million TEU at Charleston, while loaded exports were also up posting a 5% increase to 814,94 TEO. The Port of Mobile, Alabama on the Gulf of Mexico posted increased container cargo by 19% to a record 502,623. Go here for the full story.

Porcari addresses container crisis
John Porcari, the Biden Administration’s port envoy and head of the administration’s task force to address the supply chain crisis, recently spoke to the International Propeller Club of the United States, a major shipping industry annual event.    

Porcari covered a full range of steps the administration has and is taking to address the crisis, including a host of infrastructure investments and pressing for service improvements.    

He also addressed the problems U.S. exporters have been facing finding space for containers on ships.    

“It is not acceptable to disadvantage U.S. exporters,” he said. 

Go here for the full story. 

Transportation Roundup: Container futures coming (again); aim to ease freight rate volatility

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Compiled by Bruce Abbe, SSGA Strategic Advisor for Trade & Transportation 

A new attempt to bring futures contracts that aim to provide a tool to lessen severe ocean freight rate volatility will get underway in late February. Six freight futures contracts will be traded on the Chicago Mercantile Exchange (CME) that will provide shippers a means to hedge future freight rates. 

The six daily Freightos Baltic Index (FBX) indices will cover trade routes in the Trans Pacific and Asia-Europe trade lanes, and be used to settle the CME Group’s freight futures. 

“Importers and exporters, forwarders and shipping lines impacted by volatile ocean container rates will now be able to mitigate their freight price risk,” the Baltic Exchange said in a Dec. 16 press release. 

While the futures contracts aim to address volatility in freight rates (Trans Pacific import rates have reportedly fluctuated wildly from $4,222 to $20,586 over the past year) there is no guarantee the contracts will help drive rates back lower. There has been some easing of the high import spot rates of late. 

This is not the first-time freight futures contracts have been attempted. Investment banker Morgan Stanley launched a container futures contract effort in 2010, aided by freight forwarder TSC in the agriculture shipping market. At that time, the initiative did not gain substantial use in the market. 

For more detailed coverage in maritime media, go to Splash247 ; or here for Gcaptain.com; and here in the Journal of Commerce (JOC).  

Congestion easing outlook? Not until at least mid-2022, says Maersk
The world’s largest ocean shipping line – A.P. Moller-Maersk – forecasted last week that the container shipping’s congestion and equipment shortages will continue throughout many global markets through at least mid-2022, reports Container News. 

A variety of factors are contributing to congestion, including operational preventive measures for COVID-19; limited trucking and chassis availability in the U.S.; high demand for consumer products in many markets, including India; shortage of labor and limited port infrastructure. 

Nevertheless, the waiting time for ships at several ports in the Indian subcontinent and Middle East is two days or less, much less than Los Angeles and Long Beach, where 90 vessels were at anchor waiting to berth. 

Prominent Danish maritime consulting agency Sea-Intelligence last week also said data on congestion it has analyzed from major Alliance ocean carrier HMM indicates that congestion peaked in September 2021, then briefly improved in early October, only to climb back to a record high plateau based on a scoring system it developed.  

The data trend suggests the congestion is worsening in North America and Europe. It is likely to get worse, before it gets better – particularly over the next six weeks – if demand keeps growing to get ahead during the run-up to the Chinese-New Year, the period where manufacturing in China normally slows down. Go here for more details. 

Worth noting: A mid-2022 timeframe for congestion easing will be past the normal time frame for shippers and NVOCC freight forwarders to negotiate their contracts with the ocean carriers. 

Seattle-Tacoma ports see increased volume in November; Los Angeles on track for annual record
The Northwest Seaport Alliance (NWSA) ports of Seattle and Tacoma posted a container through-put increase of 7.8% in November, compared to a year prior.  

NWSA handled 325,604 TEU of containers, with imports up 4.6% at 133,827 TEU. Exports also climbed by 7.1% at 130,034 TEU. However, 45.3% of those were empty container exports, not loaded with freight. For the current year, NWSA’s volume has grown by 15.4% at 3,482,104 TEU overall. Go here for more NWSA coverage. 

The Port of Los Angeles (POLA), the U.S.’ largest container port, handled 811,460 TEU total in November, a decrease of 8.8% from the year before – in large part due to more smaller ships arriving with fewer containers that take almost as long as the bigger ships to unload, officials said.  

Imports dropped by 13.2% compared to November 2020. Loaded exports continued to show a decline at POLA, down 36.8% to only 82,741 TEU for the month, year-over-year. Empty containers in high demand in Asia were up 10.6% at 325,275 TEU compared to 2020. 

For the year, however, Los Angeles port is projected to set a record for containers handled. Port officials anticipate the yearly volume to reach 10.7 million TEU, nearly 13% above its previous record set in 2018. Go here for more POLA coverage. 

Empties? Having a banner year. 59% of containers leave U.S. with no cargo
Container News recently reported numbers on the explosion of empty container shipments back to Asia and the problems faced by U.S. exporters, despite all the attention being given to congestion and backlogs of ships with imports waiting to berth at U.S. ports. 

“A whopping 59% of containers left the U.S. ports unattended with goods in the first 10 months of the year,” the report said, citing MarketWatch Data. 

“The better money-making opportunity pushes the ships and shipowners to rush back to Asia with empty containers and return with loaded vessels on the ‘diamond route’ surfing ‘Richie-rich’ waves of the Asia-U.S. route.”  

The U.S. trade deficit hit $705 billion through the first 10 months of the year, up 29.7% from a year earlier. Export logistical hang-ups are part of the problem. Go here for the full story. 

U.S. shipyards invited to bid to build four hybrid river containerships to serve on Mississippi
A highly-watched, ambitious project to bring container shipping to the Mississippi River took another step forward last week when American Patriot Holdings (APH) issued a request for proposals to seven U.S. shipyards, inviting them to bid to construct four hybrid container vessels designed to move at higher speeds on the river. 

APH is spearheading the effort to establish a new container terminal under development in Plaquemines Parish, Louisiana, south of New Orleans, that would serve large ocean-going container ships; as well as unique, advanced-technology river-going container vessels.  

The design incorporates an Exoskeleton Structure to help reduce weight and was developed by Naviform Consulting and Research. It is said to be designed to operate at over twice the current river traffic speeds – 13 mph against a current of 4 to 5 mph — and has a patented, minimum wake bow to help prevent shore erosion. 

The vessels will be 595 feet long, with a beam of 106 feet and can operate at a maximum depth of nine to 10 feet. The vessels’ capacity is reportedly 1,864 TEU.  

The bids from the shipyard are due by Feb. 11, and APH anticipates awarding the construction contract by April 1. The initial four vessels are reportedly expected to begin service between Plaquemines port and a new terminal to be built in Memphis by April 2024. A second design vessel is also in the works intended to serve the river and its tributaries. 

Go here for more detailed coverage in Maritime Executive, and here in Maritime Magazine. 

‘Amazing’ transit times: From China, it’s faster to reach New York than LA
That was the headline for a feature story December 15 by Freightwaves and MSNBC reporter Lori Ann LaRocco. The lead paragraph reads: 

“Time is the most valuable commodity in the world of trade. It’s priceless. A new report out on transit times from digital freight forwarder Shifl shows the impact the massive congestion off the coast of Los Angeles and Long Beach has had on transit times.” 

Indeed, increased transit times become a huge worry for Specialty Soya and Grains Alliance member exporters trying to manage their grain and oilseed ingredient shipments to serve their food manufacturing customers in Asia and Europe.  

Go here for the full story.