Author Archives: just2bruce

Forwarders fear ‘shut-out’ as other major lines emulate Maersk strategy

Posted on January 22, 2022 | Leave a comment

This complaint from freight forwarders is starting to resonate. It appears the major container carriers are gradually refusing to sell bulk space on container ships to brokers and forwarders, instead making them buy on the spot market.

One of the issues is to determine whether the liner companies are favoring large brokers and forwarders with discounted contracts, to the disadvantage of smaller brokers. Are there sweetheart deals? I am betting that for sure there will be space available from large brokers to smaller brokers. Price discipline is notoriously hard to enforce.

Is it anti-competitive to offer spot prices? No, I think not. Is it anti-competitive to offer different prices to different groups? Quite possibly. It’s worth a review by government agencies and regulators.

In competitive economics, fairness is not a principle; however, in political life it could be seen as unfair to drive out of business a group of substantial size who provide customized services of a very precise nature in a niche, to some shippers. Those skills may have value to society as a whole that are not captured in prices. That’s where regulation comes in.

By Alex Lennane and Ian Putzger 20/01/2022

Forwarders fear ‘shut-out’ as other major lines emulate Maersk strategy – The Loadstar
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New teu waiting days indicator highlights the severity of global container congestion

Posted on January 20, 2022 | 1 comment

Kuehne + Nagel has developed a new measure of container congestion. Its digital platform seaexplorer now features the Global Disruption Index.

The index seems to total the cumulative TEU waiting time in days, based on container ship capacity in certain disrupted hot spots. Many US ports are included in the index. some Chinese and Korean ports and European ports are also included.

The graph below is an example of the information available. It clearly shows the rise in the index from 1- December to 19-January. North American ports are also clearly the largest contributors; however it is not clear from the article whether more ports from the US and North America are included in the analysis. The patterns are clearly similar.

Source: Graph from seaexplorer via Daily Splash article.

Now quite a few marine reporting services have developed congestion measures.

Is there a best one? I have not seen a study comparing the indices as to accuracy or the ability to provide insight.

For instance this Bloomberg article talks about another one, from RBC Capital Markets.

And this article from the Washington Post gives a good picture of the problems in the US.

Splash247 has also reported on the index created by the New York Federal Reserve here.

But the congestion cannot be denied. How to measure it and how to fix it are the questions to answer, for we get what we measure.

Sam Chambers January 20, 2022

New teu waiting days indicator highlights the severity of global container congestion – Splash247
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Another innovation to move China exports

Posted on January 18, 2022 | 1 comment

FedEx Freight has chartered some small ships and arranged with a few shippers to ship full 53-foot containers manufactured in China to the US Port Hueneme, CA. Port Hueneme is a small facility jointly used with the US military. Cargo use is allowed when there is no overriding military activity.

Doing this will allow FedEx Freight to bypass the logjams at the Port of Los Angeles and the Port of Long Beach. It also allows FedEx Freight to put the containers on its rail network for long-distance transport to inland locations. FedEx Freight is mostly an LTL service; ultimately most of the containers will be unloaded at a FedEx depot for the last mile of transport.

Other firms have been following similar strategies recently. It’s one way of getting past the bottlenecks in the LA/LB area. That should help FedEx customers. But the ships are small, and the volume will not be large. It will also produce more empty containers here in the US, and FedEx will need to figure out where to put them and how to get them back to China or elsewhere for another trip.

To the extent the bottleneck is due to surplus empty containers and a shortage of chassis, and irrational appointment behavior for delivery of empties, all this does is route a bit of cargo by another path. But no one should be criticized for examining and using alternate strategies in these hectic times.

Eric Kulisch, Air Cargo Editor Friday, January 14, 2022

FedEx Logistics charters vessels to move China exports, rail containers – FreightWaves
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