Jul 28

Booking container space, no-shows and forecasting space demand

Source: joc.com

A renewed focus on flaws in the container booking process that leave vessels partly empty when promised cargo doesn’t arrive or overbooked, with containers left on the dock has triggered a slew of new efforts by shippers, carriers, and consultants on how to resolve the problems.

Better forecasting; digital management platforms, such as the New York Shipping Exchange (NYSHEX); penalties for bad behavior; and greater visibility in the booking process are just some of the strategies tested. Industry consultants, start-ups, shippers searching for ways to increase certainty in their supply chains, and cash-strapped carriers desperate to improve efficiency are all looking to reduce so-called no-shows. Whether any of the solutions can succeed in overcoming a stubborn challenge in the container shipping system for years, is unclear.

At its heart, the system is driven by uncertainty: shippers face no penalty for booking a certain volume of cargo on a ship, and then failing to send it; and carriers face little retribution for leaving containers on the dock that they have committed to shipping. The two behaviors, and the apparent disregard for the impact on the other party, fuels an unwillingness to take steps to change a system that clearly hurts both parties in the long run. Carriers end up running ships with plenty of empty space, and shippers have to scramble to make alternative arrangements to get their cargo to its destination on time when containers are left on the dock.

Several shippers told JOC.com they are trying to more accurately predict how many boxes they will send in a shipment, and the NYSHEX in June launched an online portal that uses a system of contracts and penalties to encourage bookers and carriers to fulfill their commitments. Hapag-Lloyd and CMA-CGM have in recent weeks revived a strategy — that has not worked for others in the past — of charging a cancellation fee on shippers that deliver less cargo than they committed to ship.

New insights from Drewry Shipping Consultants says that the problem could be mitigated by a digital information sharing system that allows shippers and non-vessel-operating common carriers (NVOs) to better allocate their cargo among different carriers and vessels.

“Our Drewry view is that to resolve this issue will require a new technology-based capacity platform, enabling e-business synchronization of capacity in container shipping focused on “structural issues with booking and lack of technology.” The consultants found that the problem most affects small- and medium-sized shippers and non-vessel operators.

The question is what will it take to break that cycle, and will it be achieved by using a carrot to encourage more responsible behavior, or a stick to force the issue? Several BCOs say they have responded by coming up with their own methods of dealing with the problem, with some success.

Gary Fast, associate vice-president for international transportation at Canadian Tire, Canada’s largest container importer, said he believes its strategy of providing certainty for carriers has helped ensure that the retailer’s cargo is very rarely rolled. Fast said Canadian Tire forecasts extensively, based on information accessed by teams of analysts from up and down the organization, and provides them to suppliers, carriers, and service providers up to 26 weeks in advance. The company says it can forecast with 95 percent accuracy how many containers it will send on a particular ship.

In addition, the company, which does sales of $13 billion and handles about 65,000 containers each year, works to ensure that it always fulfills the minimum quantity commitment (MQC), or number of containers it will send, in annual carrier contracts, Fast said. If Canadian Tire at the end of the contract year has sent fewer containers than was committed, it will keep sending cargo through the carrier until the commitment is met, said Fast, adding that few companies are so committed to meeting the MQC.

“Having that certainty that we are going to honor that MQC, also gives (the carrier) a high degree of confidence in Canadian Tire,” and motivates the carrier to protect the retailer, Fast said. “Carriers are very much incentivized not only to give us a good rate but to watch our freight and take care of it.”

Three other shippers told JOC.com said they are working to provide the carrier with an accurate forecast of the number of FEU to be sent, in the hope it will prompt the carrier will reciprocate with a more reliable service and less cargo rolled. One of the shippers, a supplier of apparel that sends goods on the trans-Pacific and trans-Atlantic routes, said the tactic has shown results.

“By going back and comparing ‘Here’s what we said, here’s what we did,’ we feel we can market our forecast to our carrier reps and we reward those who can get us space with volume,” said the supply chain manager of the apparel manufacturer, who asked to remain anonymous. “It sounds naïve, but I believe it works — honesty is the best policy.

“We know our carrier reps lose credibility with their trade and origin teams if we don’t execute to our forecast,” the manager said. “We had one carrier who just couldn’t translate our forecast into action. We liked many things about that carrier, but structurally they gave lip service to the forecast and rolled several containers. That carrier is now seldom used.”

Another BCO, a household goods retailer, said that it was hoping that accurate forecasting combined with “providing visibility to our needs more than six weeks in advance” would help “reduce rolls and refused bookings.”

A senior logistics manager for an Illinois-based manufacturer and importer of automotive products said that he requires vendors to book space on a vessel more than two weeks in advance, and watches closely to ensure they comply, after realizing that vendors who didn’t book vessel space far in enough in advance were the ones whose cargo was left behind or delayed.

While most shippers told JOC.com that the booking process raises concerns, it’s not clear how big an issue it is, and until there is general agreement on that, significant change in the industry may be elusive. The household goods retailer said refused bookings and rolled cargo that created a delay of three days or more accounted for about 1 percent of bookings, and “factory canceled bookings probably exceed 10 percent of total.”

Drewry, in its research, quoted a shipper saying that the rolling of containers happened less than 5 percent of the time, and the consultancy quoted another saying that “about 10 percent of booking requests have problems with lack of space or lack of container equipment when you place the booking.” Even after the booking is confirmed, 3 percent of bookings are canceled, the BCO said, adding that the rate has increased from 2 percent last year.

Jason Lloyd, director of freight trade at Interra International, of North Carolina, a global distributor of food products, said he believes the problem of overbooking stems more from NVOCCs, who make multiple bookings to ensure they have enough space for their customers, or because they get a better-priced offer on another vessel. That in turn causes problems for BCOs, who may be shut out of a vessel that appears overbooked — even though in reality not all of that cargo will arrive, he said.

Mike Hashmi, manager of import-exports and customs compliance for The Apparel Group of Texas, said a carrier refusing to take cargo at the last minute, having agreed to take it earlier, “happens often,” although mostly during the July-to-October peak season. Hashmi cited an email he received on July 12 from a carrier saying that a shipment three days later could not happen, and offering space on a vessel a week later.

“They weren’t telling us what’s the reason, but I know what’s the reason,” said Hashmi, who refused the later booking and instead went with another carrier sailing closer to his preferred date. He said he believed that the carrier did not want to do the extra work needed to provide a container for “garments on hanger,” which requires the installation of bars in the container on which to hang the clothes.

That uncertainty over who causes the problem, and why, can make it difficult to find a solution.

Carriers have in the past tried — unsuccessfully — to levy booking cancellation fees on BCOs that do not deliver the amount of cargo they promised in advance. BCOs have generally resisted, and it is too early to say how the recently initiated effort by Hapag-Lloyd and CMA-CGM will play out. The German carrier is charging $60 per cancellation on all bookings that are canceled within three days prior to the vessel’s arrival on the Indian-Singapore route, and CMA-CGM is charging $150 per TEU on the North Europe-Middle East-Indian Subcontinent trade.

NYSHEX also is trying to change behaviors with a penalty system, albeit a more sophisticated one. The company in June moved from a test phase to the full launch of an online portal that can book cargo with carriers, but also monitors whether the booking is fulfilled by shipper and carrier.

Carriers that use the portal post specific details about a cargo movement they are willing to make — including the origin and destination, the number of containers to be moved, and the price of the move. Shippers can then commit to sending cargo under the deal, and are required to back up their commitment with a bond, cash deposit, or insurance policy. If the shipper fails to send the cargo, it forfeits between 30 to 40 percent of the agreed shipping cost, depending on the route. A similar penalty is levied on the carrier if it fails to complete the delivery.

“If carriers can use enforceable contracts to reduce their downfall rates, it will give them more confidence in being able to utilize their vessels,” said NYSHEX CEO Gordon Downes. “And consequently they can avoid overbooking their ships, which is the most common cause of rollings.”

That in turn, he said, “means shippers will know at the time of contracting how much capacity is available, which is far better than waiting to make a booking two or three weeks before the departure date only to be told that the ship is full and then being forced to scramble for an alternative carrier, or worse.”

Drewry suggests a different solution, believing that greater visibility in the booking process would enable carriers to better allocate cargo, and prevent excessive volumes beyond what a vessel can handle arriving at the dock.

The consultants suggested that could be achieved with a “network capacity management platform” that shares information between carriers and shippers and NVOs. That would enable shippers and NVOs to book cargo on a vessel with “real time” information that would enable them to see whether space is available for cargo of the specifications they are trying to send — rather than the current system of booking and then waiting a day or two for confirmation that the space is available, the consultant said.

“The carriers could publicize their capacity and rates — either publicly or privately — to shippers and forwarders, or other carriers,” Drewry said. That would facilitate access to the information and distribution of containers across the carriers and reduce overbooking and shipments being held up due to lack of available capacity.

The consultant likened the system to the way portals such as Amadeus and Sabre handle business to business travel bookings.

“It would indeed work as a carriers’ marketplace, where carriers can share their total or partial available capacity,” Philippe Salles, head of e-business advisory, transport, at Drewry said. “However, the system would not allocate the booking automatically. The shipper would be the one to decide on the carrier, to agree the price and booking’s ‘No-show’ policy.”

Key to better allocation of cargo, however, is giving shippers more accurate vessel scheduling data, and the ability to see the gamut of their shipping options, and assess which are the most beneficial.

Drewry’s cited CargoSmart’s Routemaster as a step in the right direction. The software provides optimization tools that allow a shipper to find the most efficient, and cheapest route for sending cargo. Included in the estimation are factors that enable the shipper to pick the most beneficial routes — such as carrier schedules and on time performance, weather reports and industrial action around a terminal that would affect the shipment. Also available is the carrier’s performance record on rolling cargo, as well as the cost for the trip, CargoSmart said.

That analysis enables a shipper to judiciously select a route that avoids carriers and terminals that are potential trouble-spots, said Kim Le, strategic alliance director for CargoSmart.

“That helps mitigate that, minimize that, because it gives them alternative options, and it also gives them a view of their existing routes, and compare it to other alternative options,” she said. They can see if cargo regularly gets rolled, or a shipment is frequently moved to a secondary carrier, and can use that information to shape the next route booking, she said.

The effectiveness of such a strategy, however, will still depend on resolving the problem of uncertainty: while the allocation of cargo may be more efficient, the system will still fall down if shippers don’t send what they say they will.

“Their logic is that if carriers can better manage their capacity, they can better serve their customers with fewer declined bookings and rollings,” Downes said, of the Drewry proposal. “But carriers are already pretty good at managing their capacity, and this logic only touches on a small part of the problem.

The biggest cause of bookings being declined or cargo being rolled, Downes said, is that “carriers don’t know what cargo is going to be booked on each vessel until around two or three weeks before the departure. And even then, the bookings can have high downfall rates.”

Contact Hugh R. Morley at Hugh.Morley@ihsmarkit.com and follow him on Twitter: @HughRMorley_JOC.

 

Jul 27

Market Share and Niche Strategies for Carriers in Trans-Pacific Market July 2017

Source: joc.com

Members of the Ocean Alliance have increased their share of Asia imports the most out of the three major vessel-sharing agreements, while the niche carriers still managed to grow their share as well, thanks to new entrant SM Lines scooping up much of Hanjin Shipping’s business.

In the three months following the April 1 launch of the new alliances, members of the Ocean Alliance increased their market share 5.5 percentage points to 43 percent compared with the same period a year ago, according to an analysis of data from PIERS, a sister product of JOC.com. In the same period, members of THE Alliance increased their total share 1.81 percentage points to 27.4 percent, and members of the the 2M along with partner Hyundai Merchant Marine (HMM) increased their total share 2.57 percentage points, to 22 percent.

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The five niche container lines moving Asian imports increased their total share 1 percentage point to 6.4 percent in the same April-to-June period. Individually, Zim Integrated Container Services lost 0.14 percent percentage points to 2 percent; Pacific International Lines (PIL) increased its share 0.56 percentage points to 1.5 percent; Wan Hai Lines’ share was nearly flat 1 percent; and Matson Navigation Co. increased its share 0.07 percentage points to 0.72 percent. SM Lines, which entered the trade this year, had a 1.09 percent share of total US imports from Asia.

The dominant presence of the Ocean Alliance in the eastbound Pacific does not surprise David Bennett, president Americas at Globe Express Services. “Look at their sailing schedules from China, their overall capacity, their service integrity their transit times,” he said. On the other hand, Bennett said the niche carriers contribute to a balanced environment in the Pacific by tailoring their services to their customer base, maintaining good service levels, and pricing competitively. “There’s always a place for niche carriers that have quality service,” he said.

Two significant mergers now under way — consolidation of the three Japanese lines into one and the Cosco Shipping Holdings’ acquisition of OOCL — will likely have a positive impact on their respective alliances when the mergers take full effect next year, said Lars Jensen, CEO and partner in SeaIntel. The consolidation of the Japanese lines means it will require only three lines to agree upon network modifications within THE Alliance, rather than five at present, and three carriers in the Ocean Alliance rather than four today, he said.

“This increases the agility in decision-making, not that it will become smooth sailing as the carriers will clearly have different opinions, but the fewer the parties who need to agree and compromise, the faster it goes and the fewer individual ‘quirks’ will be there to reduce the overall efficiency of the networks,” Jensen said.

The Korean carriers could be a wildcard in the Pacific in the coming year. HMM attempted to become a full member of the 2M Alliance with Maersk Line and Mediterranean Shipping Co., but the two large European carriers would agree only to a slot-sharing arrangement. SM Lines did not respond to questions, although the Korean carrier that emerged after the bankruptcy of Hanjin Shipping has not publicly expressed interest in joining an alliance. Jensen noted that compared with the large alliance lines, the Korean carriers “are both small indeed,” and as such their potential contribution to an alliance is likewise small. “They would therefore not have much negotiating leverage in any talks relating to adoption into an alliance as things stand now,” he said.

Although the niche carriers did not grow as quickly in the second quarter as the alliance carriers, some of the independent lines do have plans to increase the size of their vessels in the coming year. The niche carriers say they plan to grow by offering specialized services within their niches, rather than by competing head-on with the alliance carriers on vessel size or number of services. The niche carriers will build upon what they do best, which is to better utilize their equipment, achieve higher slot utilization, and seek out healthy export rates with a focus on profitability.

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“We’re not driven by market share. We’re driven by profitability,” said George Goldman, president of Zim USA. While the mega-carriers seek scale and scope globally, Zim develops scale and scope within its existing service areas, Goldman said.

By definition, niche carriers are unique, even compared to each other, because each line develops a business plan built around its asset base, the trade lanes in which it operates, and most importantly, the value it provides to its customers in particular niches. Presumably, the value proposition is such that each line’s customers are willing to pay a premium rate for a service that fits its needs better than what the larger carriers offer. However, when competing head-on with the large alliance members, the niche carriers sometimes have to price below the market rates in order to secure business.

Jensen said it is all about the service that is provided to beneficial cargo owners (BCOs), but that raises the question of what “service” means to individual customers. Larsen said service to some BCOs means faster transit time and greater reliability in a particular lane. Some BCOs seek faster delivery of containers once the vessel arrives in port. Others look for a seamless handoff of the container to inland carriers. Other BCOs want personalized service from their carrier representatives, and the ability to pick up the phone and call the representative when something goes wrong, he said.

When it comes to service levels, Matson bills itself as a leader at sea and on land. Matson, which is primarily a carrier in the US domestic (Jones Act) trades, has one service each week from China to its dedicated terminal Long Beach that it operates with SSA Marine. This arrangement enables Matson to address several of the service attributes that Jensen mentioned. Matson spokesperson Keoni Wagner said the China service provides an industry-best 10-day ocean transit from Shanghai to Long Beach (compared with 12 or 13 days for most carriers), a high reliability of next-day availability of all containers on chassis at a near-dock yard, and a seamless handoff to inland transportation providers managed by Matson Logistics.

Those services come at a cost to Matson. It contracts with Shippers Transport Express to truck most inbound containers immediately upon discharge to the near-dock yard. The yard is open from 6:30 a.m. to 2 a.m. local time the following morning. That enables BCOs to take delivery of their containers, on wheels, without having to wait in line at the marine terminal.

Yet Matson also profits from this arrangement. The trans-Pacific is notorious for being a headhaul trade with weak backhaul rates. Carriers charge $1,500 to $2,000 per 40-foot container on the eastbound leg from Asia, only to give any profits away on the commodity-driven westbound leg, with rates below $500 for many commodities and about $200 or less for the lowest-rated commodities.

Matson’s weekly China service has headhaul moves in both directions. Vessels steam westbound to Hawaii, a protected Jones Act trade, continue on to China and return with ships filled with imports from China. Given its rapid ocean transit and overnight delivery times in Long Beach, Matson markets its service as premium, and charges accordingly.

Singapore-based PIL also profits on its exports, but not to the major load centers in China and North Asia. Ernie Kuo, senior vice president of PIL USA Agency Services, noted that PIL, with its own vessels or through slot-sharing arrangements with other lines, offers service in 80 loops globally. Its network includes a number of destinations, such as in the South Pacific, Southeast Asia, and Africa that are not served directly by the mega-carriers. Some of the loops link nicely with its US ocean and intermodal offerings.

PIL builds off of the eight eastbound trans-Pacific services, as well as its intermodal inland connections, to offer opportunities for US shippers that export to locations throughout its network. These arrangements may produce only a half-dozen or so export shipments per BCO, but they build goodwill and business relationships with BCOs that grow with time. Also, since many of those trade lanes offer little if any direct carrier competition, they tend to be “higher-revenue destinations” for PIL, Kuo said.

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Zim competes directly with alliance carriers in the major US trade lanes, but it picks its gateways strategically based on equipment repositioning opportunities, relationships with railroads, and opportunities for offering value-added services. For example, Zim does not take on the mega-carriers in Los Angeles-Long Beach, even though Southern California is “ground zero” on the West Coast, Goldman said. Rather, Zim calls in Vancouver where it has a working relationship with Canadian National Railway. Zim has always had a strong presence in the Canadian market, and CN’s intermodal service to Chicago, Memphis, and New Orleans give Zim deep penetration in the US interior, he said.

Zim does not have its own terminal in Los Angeles-Long Beach, which can be a disadvantage, Goldman said. Also, Zim right now does not see an opportunity to differentiate itself in a gateway served by the largest carriers with the biggest ships in the US trades.

Zim’s trans-Pacific services to the East Coast transit the Panama and Suez canals. Its Savannah calls not only serve the fastest-growing region of the United State, the Southeast, but the Suez routing also gives Zim opportunities to serve the mid-South via intermodal rail provided by CSX Transportation, Goldman said. Also, Zim’s North American services link up efficiently with export opportunities to other parts of the world where it is strong, such as the Mediterranean and Caribbean.

Similarly, as Zim looks for growth opportunities, the Gulf becomes a consideration, he said, because Zim is well established in the Caribbean. A Gulf service would mesh well with its existing Caribbean services, and would produce more turns for Zim’s containers.

“It’s all about profitability and sustainability,” Goldman said. The reality is that not every carrier can do or wants to do what Zim does. Zim strategically chooses routes that provide opportunities for higher-revenue cargo and value-added services based on profit rather than high volume for the sake of volume, he said.

Niche carriers say it is not impossible, but it is difficult, to achieve their goals through participation in an alliance. That reality has kept Wan Hai out of alliances so far. “We are currently not interested in joining an alliance as our current service structures allow us to focus on our current customers appropriately,” said Randy Chen, vice president.

For niche carriers, “nimble” and “flexible” are important advantages, and membership in an alliance can limit flexibility. At PIL, “the chain of command to the top is quick,” Kuo said. To an entrepreneurial carrier, that means being able to react promptly to even a small opportunity because small beginnings often lead to bigger dividends as the business relationship grows. Citing one example, if a BCO inquires about a booking that PIL cannot service, PIL will recommend another carrier that can offer the service the BCO is looking for. At a later date, the same BCO may return with business that fits into PIL’s service offerings, he said.

Being a niche carrier does not mean being a small line with small ships. PIL, for example, is a top-12 carrier in terms of global container volume, and it is involved in a new-build program that will deliver 12 ships with capacities of 11,800 TEU. The new vessels will be deployed on the high-volume trade lanes where PIL has slot-sharing arrangements with Cosco Shipping Holdings and Wan Hai. The key to making big ships profitable is to properly manage allocations, Kuo said.

Another reality about niche services is that they have a limited capacity for growth. Matson learned that lesson seven years ago when, pleased with the success of its weekly China service, it started a second one. That service operated from September 2010 to August 2011 before Matson discontinued it.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.

Jul 11

Trans Pacific Ocean Rate Review 2017-7-11

Source: JOC.com

US importers in the coming weeks will begin to encounter a tightening of vessel space and occasional equipment shortages, but the likelihood of large rate increases or peak-season surcharges in the eastbound Pacific will be slim this peak season.

That will be a challenge for carriers hoping to improve their bottom line during the peak shipping season after signing at best break-even service contract rates of about $1,300 per 40-foot container to the West Coast and $2,300 to the East Coast. Transportation executives from throughout the supply chain say significant general rate increases (GRIs) or peak-season surcharges in August through October appear unlikely due to a nagging capacity overhang.

In a recent report, Drewry stated that carriers in the major east-west trade lanes this year are recovering some pricing power, certainly when compared with the “rock-bottom” rates that were in effect in the spring and summer of 2016. Nevertheless, rate increases on the spot market have been more muted in the eastbound trans-Pacific, where spot rates are up 33 percent from last summer, compared with the Asia-Europe trade lane, where the increase is 61 percent.

However, spot shortages of space and equipment are possible, and carrier executives are therefore urging retailers and other importers who intend to ramp up their imports from Asia to begin immediately to plan ahead for their space and equipment needs so they are not shut out when the real capacity crunch hits in August and September. While some shipments invariably miss their intended voyages and are “rolled” to a subsequent voyage during the height of the peak season, experts said capacity is sufficient between most port pairs so rolled cargo will be one-off incidents and will not last for a prolonged period.

 

“We have observed marked improvements in the global economic environment since the turn of the year, and we expect a much healthier outlook for the liner sector and a stronger peak season compared to 2016,” said Stephen Ng, director of trade at Orient Overseas Container Line (OOCL).

“We see positive momentum going into the second half of the year,” said an APL spokesman. “APL has already started working closely with our customers on space allocation issues to ensure that their shipping needs and service expectations are met,” the spokesman said.

The spot rate increases tied to GRIs, followed by immediate rate drops, that occurred over the past couple of months, are seen by shippers and carriers as an indication that the peak-shipping season this year will look much like those of recent years.

This is likely to be the case in the trucking and rail sectors as well as ocean shipping. “The past two years, peaks have been relatively mild, with stable service, an earlier start, and a longer finish consistent with improved planning and the new consumer purchasing patterns,” said Mark Yeager, CEO of the LTL management company, Simplified Logistics, and former president of intermodal marketing company Hub Group.

“The peak season curve is not as steep as it used to be,” said Dave Arsenault, president of Logistics Transformation Solutions and former president of the Americas at Hyundai Merchant Marine. He said the spread between the winter slack months and the busy late summer to fall period is not as great as it used to be.

Import volumes are more consistent now throughout the year because of e-commerce purchasing habits that dictate inventory must be in stock in the United States or sales will be lost. The traditional peak will still occur, but it will be less intense compared with the not-too-distant past, and it will be driven by holiday-season items like toys that are placed under the Christmas tree, he said.

However, due to economic growth in the United States, Europe, and Asia there is tighter vessel space and a strain on container and chassis availability in some locations. Zvi Schreiber, CEO of Freightos, said indicators are already present that point to a good peak season. “One of the best indicators of this is air freight pre-booking for [the fourth quarter]. It is already booked up earlier than it was at this time last year, which was a strong year for air freight,” he said.

The spot rates in the eastbound Pacific increased by double digits before a previously announced general rate increase for July 1, but in the week ending July 7 the rates backed off 2 to 3 percent. That development indicated that the full impact of the peak season had not been felt, but the modest drop from the previous week’s spike also demonstrated that vessel space is starting to fill up.

Beneficial cargo owners are urged to meet with their carriers to pre-plan vessel space and equipment needs. “Equipment availability has indeed been tighter than usual due to new regulations requiring water-based paint for new containers. For OOCL, we have taken steps to ensure supply through leasing sources as well as from production of new containers to meet expected demand from customers,” Ng said.

Railroads also appear to be ahead of the curve when it comes to intermodal service. “Rail reliability on the intermodal side is very good,” said transportation analyst Tony Hatch, although he added: “It’s not truck-like.”

There has been some expectation in the trade that completion of the Panama Canal expansion project in June 2016 and the Bayonne Bridge raising project last month will produce a surge in cargo volume at East Coast ports, which could create space issues this peak season.

Schreiber predicts that volumes to the East Coast may be greater early in the peak season, but as it gets closer to the holidays, the more efficient, albeit more costly, West Coast intermodal routing will kick in. Citing last year’s experience, Schreiber noted that West Coast imports increased 1 percent between October and November, and East Coast imports dropped 2 percent.

Containerized imports in the first half of 2017 are predicted to have increased 6.4 percent from the same period last year, according to Global Port Tracker. Ports on the East and West coasts reported exceptionally strong performances in May, the last month for which hard numbers are available, according to PIERS, the JOC.com sister product. Percentage growth in the second half of the year is projected to be healthy, although not quite as robust as in the first half of the year because the numbers will be compared to relatively good growth figures in the second half of 2016.

Early indications from ports that have released hard numbers show that June imports may exceed earlier expectations. The Port of Long Beach reported Monday that imports increased 7 percent, and the Port of Oakland reported that imports increased 5.1 percent, from June 2016.

Projecting container volumes in the eastbound Pacific for the second half of the year is an imprecise science, with some obvious disagreements among forecasters. A survey of freight forwarders and other intermediaries by Mike King and Cathy Roberson is not as bullish as projections by US retailers. Their June APAC Forwarding Index revealed that only 38 percent of respondents predicted that ocean freight shipments in September, which is considered a peak shipping month, would be higher than the volumes recorded in May in the eastbound Pacific. Some 42 percent predicted lower volumes compared with May. “The fall in optimism, at least compared to previous surveys, chimes with recent ocean spot freight rate declines on the major trades,” the authors stated.

The monthly Global Port Tracker published by the National Retail Federation and Hackett Associates is more bullish on the second half of the year. They predict that July and August should be two of the busiest months ever seen for imports at all of the major US gateways. “We’re expecting retailers to import some of the largest volumes of merchandise ever,” said Jonathan Gold, president of supply chain and Customs policy at the NRF. Global Port Tracker predicts that US ports in August will handle 1.75 million TEU container imports, which would be the highest monthly volume recorded since the NRF and Hackett Associates began tracing imports.

Nevertheless, the continued capacity overhang in the Pacific, the introduction of bigger ships by the restructured alliances and the fact that carriers so far this summer have not been able to implement rate hikes that stick for more than a week, all point to modest general rate increases or peak-season surcharges in late summer and fall.

“Rates in the long-haul trades have stabilized and we do not anticipate massive peak-season related surcharges or rate increases from where the market is today,” said Joerg Hoppe, DB Schenker’s director of ocean freight North/Central China. “Space into the US, and to the East Coast especially, is not an issue,” he said.

Even a sudden, unexpected event such as last week’s cyber attack that affected Maersk Line and its APM terminal affiliate, which saw Maersk bookings drop by about 35 percent on the Freightos AcceleRate platform, did not move spot rates, Schreiber said. “Chronic oversupply remains the leading cause of excess capacity this peak season,” he said.

This reality could have a chilling effect on carriers that are filling much of their allotted space with service contract rates of about $1,300 per FEU to the West Coast and $2,300 to the East Coast. Some industry analysts, such as Ed Zaninelli, president of Griffin Creek consulting, considers those to be break-even rates, with peak-season surcharges or GRIs needed to push the carriers to profitability. Others in the industry said break-even is closer to $1,600 and $2,600 per FEU, given today’s higher longshore labor, bunker fuel, and intermodal costs.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.

 

Mar 30

Analysis of the New Carrier Alliances 2017-3-30

New analysis of the vessel sharing agreements has revealed the scope of the changes that are going to hit the market from this weekend, while highlighting again the cut back in routes, port calls and options for shippers.

From April 1, four alliances will become three as the brand new Ocean Alliance and THE Alliance start operations, and the 2M Alliance with its slot sharing partner Hyundai Merchant Marine rolls out its new service offerings.

Software solutions provider CargoSmart studied the networks of the three alliances and made some interesting findings. For instance, nearly 70 percent of the alliances’ direct routes will be operated by one alliance, led by 2M that will control 31 percent of the direct routes being offered.

The Ocean and THE alliances will gain two additional ports on Asia-Europe while losing five ports on the trans-Pacific.

Services from the three alliances using the Suez Canal will decline by 7 percent, and while the percentage of services using the Panama Canal will remain the same, over 50 percent will be operated by the Ocean Alliance.

A total of 60 percent of the new alliance routes on Asia-Europe will have shorter transit times, and half of those on the trans-Pacific. Many transits on both Asia-Europe and trans-Pacific voyages will be two to three days faster on average, according to the CargoSmart data.

An area of concern shippers will be that 50 percent of the routes to be offered by the Ocean and THE alliance will change from direct to transshipment. Fewer direct route options and more transshipment could lead to a greater chance of missed schedules.

Across all three alliances, the Asia-Europe trade will have net 50 new port pairs while the trans-Pacific will have 120 port pairs less than the old alliances.

The analysis also highlighted one of the key issues that will be faced by shippers using the new alliances. All shipments could be on the same vessel even if a BCO books with different carriers. For example, 37 percent of vessels in the Asia-Europe trade network of the Ocean Alliance will be operated by CMA CGM.

Another finding by CargoSmart was that there will be fewer sailing days per week for the top five Asia-Europe trade lanes. Shanghai-Hamburg sailing days will drop from 5 a week to 4. Shanghai-Rotterdam from 6 to 5, and Shanghai-Antwerp will decline from 5 sailing days a week to 3.

For those ports with more services or vessels, CargoSmart warned that there may be shipment delays because of increased handling volumes at the ports. For instance, greater numbers of vessels will be visiting Rotterdam and the average vessel size will increase by 10 percent.

The size of vessels being deployed on the Asia-US trade was also rising. A spokesman for CargoSmart said based on the proforma schedules provided by the carriers through March 17, most of the top US ports would have fewer visiting vessels for each alliance service, while the average vessel size by TEU capacity for the alliance services will increase at most of the top US ports.

Michael Dye, group managing director for non-vessel owning common carrier CL Worldlink, said it was too early to tell if the new alliances will be a benefit or bane to the industry.

“I am always concerned about too little competition in any industry and ours is no different,” he said. “When you look at some trade lanes there are only two carriers operating direct port to port services. I realise this is a factor of supply and demand but as a consumer I want choices and the more the better especially when it comes to equipment availability and scheduling.

“In today’s marketplace the challenge is putting together a package that is both competitive and meets the client’s needs in terms of direct service, transit time, etc. as we still seem to be mired in the non-compensatory pricing environment. Perhaps this will change with the new alliance structure, but doing so and still having healthy competition remains to be seen.”

With such a complete global restructuring of the container shipping networks, there is huge concern among shipper groups and forwarders that the new mega alliances will create significant disruption to their supply chains.

Chris Welsh, secretary general of the Global Shippers’ Council, said the problem was that in the formulation of the new market structure, the customer was largely absent from the discussion, with the focus on what works for the container lines.

“There is little differentiation in price and service offering by carriers. Shippers are seeing less choice and less competition. We all need to be worried about that,” he said.

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Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.

Mar 23

Expect Shipping Disruptions in April and May Due to the Transitioning within the new Alliances

SHANGHAI — There is mounting concern from shipper groups and forwarders that the new mega alliances launching in just over a week will create significant disruption to their supply chains.

Container lines will be transitioning from the old alliances to the new networks on April 1, but with such a total restructuring of the vessel-sharing agreements (VSA) and the huge number of port pairs involved — 420 on Asia-Europe alone — a smooth rollout is not expected.

“The VSA structures will bring big changes and rough seas are coming in April. As the carriers start to reposition and pull ships out, it is going to cause chaos,” said Ken Sine, vice president of global ocean product at Crane Worldwide Logistics.

The Ocean Alliance, THE Alliance, and the 2M Alliance plus Hyundai Merchant Marine will provide 17 weekly strings between Asia and North Europe, one more than offered by the four existing alliances (2M, G6, CKYE, and O3).

Sunny Ho, executive director of the Hong Kong Shippers’ Council, agreed that disruption was on the cards, with fears that capacity management and manipulation could be a major threat to carrier customers.

“The top four carriers account for 47.7 percent of total capacity. Most other operators are too small to offer real sense of rivalry,” he told delegates at the Intermodal Asia conference in Shanghai. “There is also concern of product diversification, such as port calls, routing, network, and frequency.”

Jessica Zhang, international trade operations for the Shanghai branch of Dow Chemical, said even though the container shipping world was undergoing a major restructuring, shippers’ commitments remained the same.

“Shipping lines are sharing slots in alliances, but even though their operational model has changed, our fundamental need is for them to provide a reliable service. On-time delivery is one of our KPIs [key performance indicators] that we commit to our customers, and we expect that same commitment from the lines,” she said.

Even though the new alliances would redraw the global networks and port calls, Zhang said her needs were straightforward. “We need to make sure we have enough space to fulfill our requirements.”

Chris Welsh, secretary general of the Global Shippers’ Council, said the problem was that in the formulation of the new market structure, the customer was largely absent from the discussion, with the focus on what works for the container lines.

“There is little differentiation in price and service offering by carriers. Shippers are seeing less choice and less competition. We all need to be worried about that,” he said.

Welsh said the Global Shippers’ Council was questioning the entire alliance business model, as in the past the VSAs had failed to provide shippers with the kind of certainty they needed to operate their just-in-time supply chains.

“Previous alliances resulted in uncertainty because of blanked sailings, delays, and port congestion, and there is no reason to believe the new alliances won’t continue to undermine that certainty that shippers require,” he said.

Alan Murphy, CEO of SeaIntel, said disruption would be difficult for the carriers to avoid. “There are three alliances that are reconfiguring, two of them completely new. There are a lot of services that need to move from one set of partners to another set of partners, and it could be sorted out soon or it could take weeks,” he said.

SeaCube Container Leasing chief operating officer Robert Sappio also raised the potential of a shortage in boxes as the new alliances start to operate in April.

“That will take some time to get right and to get in effect for the peak shipping season, and it is possible there could be some inefficiencies as the alliances get used to their new networks and new rotations,” he said. “That may also cause a need for new equipment, at least in the short term.”

As shippers try to make sense of the new alliance networks, Sine warned delegates that maintaining a diversified portfolio of carriers was critical and a shipper or consignee needed to fully understand what they were getting in the new alliances.

“When you contract with a carrier, you need to avoid single sourcing yourself. If an NVOCC [non-vessel operating common carrier] comes with a great offer but doesn’t tell you that their solution is Maersk Line and MSC [Mediterranean Shipping Co.], they have single sourced you and you are not managing your risk,” Sine said.

“And it is all about managing risk as we learned from the Hanjin Shipping bankruptcy. Understand the services you use and know what is involved in the alliances you are using. Understand what you are contracting, but understand that you are not just dealing with a carrier that is moving cargo under a bill of lading for you. You also need to worry about its VSA partners.”

One of the big worries for shippers at the moment is related to carriers shifting vessels around in preparation for the launch of the new alliances and creating serious space shortages for North Europe exports to Asia. It has had the effect of driving up rates on the backhaul route, with CMA CGM just announcing that its freight-all-kinds rate, or FAK, from Rotterdam to China would be $1,400 per 20-foot-equivalent unit (TEU) from April 16.

That is more than $500 per TEU higher than the current headhaul spot rate from Shanghai to North Europe, which is tracked on JOC.com’s Market Data Hub.

Welsh said from a customer point of view, this was totally unacceptable. “Cargo space is being rationed by carriers. It is causing a lot of shippers to consider other alternatives to ocean freight, such as air or rail. There is huge interest in the China-Europe rail because of this,” he said.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.

Mar 03

2017-2018 FCL Rate Contract Forecast Update March 3, 2017

The Megas are Coming: Containers Still Chasing Cargo

While optimism and enthusiasm is a good thing, it could be said that containership carriers may very well have something else coming. There are too many megas coming into service, and this avalanche of empty boxes is threatening to upset the tenuous ocean freight rate gains of the past six months.

March 1 marked the six month anniversary of the Hanjin bankruptcy, whose sudden and brutal death likely saved the box-ship industry from losing 3-5 other carriers.

Hanjin’s filing instantly took 93 ships and some 600,000+ TEU’s off the market.  While not ignoring the horrific financial losses being suffered by Textainer, Danaos, and others due to Hanjin, their bankruptcy stopped what was likely the greatest container rate collapse of all time. Rates immediately skyrocketed, giving the carriers an opportunity to stop the financial bleeding.

While rates have slightly slid since Chinese New Year, they are still almost double those of last summer when the market average price in the Xeneta spot rates index at the end of June stood at $1034 (China Main ports – North Europe Main | 40’ container).

Today (March 3, 2017), the Xeneta spot rates index shows the market average price for a 40’ box from China Main ports – North Europe main ports at $1761, up 252%since the same time last year when the same box was moved on the same corridor at a market average price of $499.

 

Mega Vessels with Overcapacity | What Gives?

During the loom of last year, carriers continued to cancel sailings, re-jiggered their basically ineffective alliances, and scrapped a record amount of containerships – but now it all may come undone as previously contacted megaships begin to arrive. The new vessels threaten to upset the tenuous supply-demand ratio of boxes-to-cargo that was finally beginning to balance.

Just last week MSC received the 19,472 TEU MSC Rifaya, and within the next 30 days will take delivery of two more 19,500 TEU vessels. And where will this almost 60,000 new TEU’s be dropped? Into the already-bloated Asia-North Europe routes. UASC will be be adding to the glut; they have six 18,800 TEU megas (totalling112,800) along with eleven 15,000 (165,000) TEU vessels on order.

That’s 337,800 empty TEU’s arriving into a market that’s already flooded with 1.3 million TEU’s (340 ships) laid-up capacity; with this many empty boxes, can the market still bask in the rally from the past few months? Tighter capacity measureshave indeed been taken by carriers to band aid the challenge as the megas soon invade the scene. Is it enough?

 

Maersk Takes a Pragmatic Approach

Maersk, on the other hand; took a realistic view of the marketplace and pushed their 2017 deliveries of nine 14,000 TEU vessels (126,000) out to 2018-2019. They said they did not have to make any penalty payments to the shipyards, and if volumes improved there were sufficient ships that could quickly be chartered. That’s perhaps some of the common sense thinking others in the industry should also display.

This won’t be easy on the S. Korea and Chinese shipyards, most of whom are already looking at shortened order books and increasing lay-offs. Government assistance will likely be required by the yards, but with 1.6 million TEU’s of new vessel capacity arriving in 2017, another 12-18 months of collapsing rates will surely bring more carrier bankruptcies and turn those temporary layoffs at the yards permanent.

While these are not pleasant decisions to make, the rest of us may be wondering, what’s the point with all the mega ships if they will be sailing empty? There are still too many boxes competing for too little cargo, and until the world economies improve, the carriers need to take a realistic look at the cargo – container relationship and decide accordingly. As I always say, the market remains unpredictable.

Feb 02

2017 Contract Season Update 2017-2-2

Source:  JOC.com

Higher than usual sailing cancellations during Chinese New Year on the trans­Pacific and Asia­Europe trade lanes is the latest example of ocean carrier capacity discipline amid annual contract negotiations.

The deep capacity cuts forecast by SeaIntel come as spot rates on both trades are at least 50 percent higher than those quoted last year a week before Chinese New Year celebrations began on Feb. 7, kicking off a two­week shuttering of Asian factories. Blanked sailings are at their highest level in four years, and although trans­Pacific cuts will be deeper than last year, they won’t be as drastic as they were around the Chinese New Year in 2014 and 2015, SeaIntel Maritime Analysis CEO and partner Alan Murphy told JOC.com.

“Based on patterns of spot rate developments in past years, we are expecting spot rates on Asia­Europe and trans­Pacific to drop 15 percent to 20 percent in the coming weeks, but second­quarter spot rates we estimate to be up 90 percent to 150 percent year­over­year on Asia­Europe and 150 percent to 170 percent year­over­year on Asia to US West Coast,” he said.

Asked about the heavy capacity cuts expected in the next couple of weeks, a spokesperson for Orient Overseas Container Line said: “It is important that carriers constantly keep a close eye on the changes in the market and the performance of their products to ensure they are meeting customers’ requirements.”

The extent to which trans­Pacific and westbound Asia­Europe spot rates hold, or more likely, fall, give shippers insights (http://www.joc.com/maritime­news/trade­lanes/trans­pacific/trans­pac­spot­rates­signal­state­carrier­discipline_20170124.html) into just how much discipline carriers will have in matching capacity to demand, rather than chasing volume at lower rates. The spot rates are taken as a base on which to negotiate contracts.

While the majority of Asia­Europe service contracts are negotiated toward the end of the year, some large shippers are still in talks.

The supply chain director of a global European retailer said, “We negotiate rates from April­March so it gives us the benefit of a few months to see what happens to the market, but suffice to say we’re expecting relatively significant increases over [2016] rates and less choice for us given the consolidation that’s happening in the market place.”

Another Asia­ based global shipper said his company only opened its tender in January and would not know the scale of the increases until early February.

“We are certainly hoping for a price war, but the real market won’t show its face until the other side of Chinese New Year” he said.

Compared with a 10­ week average of pre­Chinese New Year capacity, Asia­ Europe carriers will cut capacity 40 percent in the first week after Chinese New Year, 25 percent in the second week, and 31 percent in the third week, according to SeaIntel.

Asia­ Europe carriers slashed capacity more dramatically in the first week of the Chinese New Year in 2016, reducing space available by nearly 53 percent. Although carriers pulled back in the following two weeks, reducing capacity 20 percent and adding nearly 1 percent, respectively.

On the trans­Pacific, SeaIntel expects carriers to cut nearly 27 percent of capacity in the first week of the Chinese New Year, and then 19 percent in the second week and nearly 4 percent in the third. Those are far sharper cuts then during Chinese New Year in 2016, when capacity shrunk 11 percent in the first week and 18 percent the second, before 2.5 percent more space became available the in third week, according to SeaIntel.

Heading into the Chinese New Year, trans­Pacific spot rates measured by the Shanghai Shipping Exchange’s Shanghai Containerized Freight Index to the West and East Coasts are 77 percent and 55 percent higher than the week before the lunar celebration last year, respectively. The current spot rates to move a 40­foot­equivalent unit from Asia to the US East and West Coasts are both higher than many of the 2017­2018 contracts carriers are trying to secure from major retail BCOs.

The rate to the West Coast is $2,167 and the East Coast rate is $3,647, while carriers are seeking to lock down annual contracts, which generally run from May 2017 to May 2018, in the range of $1,600 to $1,800 per FEU to the West Coast and about $2,450 per FEU to the East Coast, according to conversations with carriers, shippers, and consultants.

After some major shippers signed contracts last season for as little as $750 per FEU to the West Coast, contributing to the billions of industry­wide losses in 2016, carriers are putting on the pressure. Some carriers, for example, are asking shippers for rates $100 to $300 higher than what was being shopped around in late December and early January, arguing they can lock down rates now or risk higher costs once they get alliance network details.

The Ocean Alliance has detailed nearly all its port rotations, but THE Alliance hasn’t disclosed specific ports for network placeholders, such as “South China/Hong Kong,” “Los Angeles/Long Beach,” and “Caribbean Hub,” according to SeaIntel. The analyst expects the network of the 2M, now with a Hyundai Merchant Marine partnership component, to remain unchanged.

Depending on the relationship with the customer, how the contract is structured, and how much volume is committed, carriers may settle for West Coast rates of $1,000, and $2,300 to the East Coast, a container line executive told JOC.com last week on the condition of anonymity. Still, these are hardly major advances, considering a $1,600 to $1,700 rate was once considered poor, the executive said.

Whether carrier discipline will hold is unknown, but they do have some momentum. The capacity cuts that have been made, and are to continue, have helped prop up spot rates, according to data from Xeneta. The rate management platform looked at the spot rate developments around Chinese New Year 2016 compared with this year and found that on the day before the Chinese holiday began, the market average spot rate in 2017 was almost double that of 2016.

On the Asia­North Europe trade this year, the market average rate the day before Chinese New Year on Jan. 27 was $2,301 per 20­ foot ­equivalent unit compared with $1,057 on the same day the year before. By March 7 in 2016, the market average spot rate had plunged to $695 per FEU.

It was the same picture on the Asia­Mediterranean trade. On Jan. 27 2017, the market average was $2,057 per TEU, while it was $861 per TEU on the same day just before the Chinese New Year in 2016. The spot rate had declined to $504 per TEU by March 7.

Patrik Berglund, Xeneta CEO, said how the short­term market developed after the Chinese New Year would be important. Noting that carriers have shown capacity discipline in the past only to fold later, Berglund told JOC.com that this time around alliances have all trimmed capacity at generally equal levels, boding well for a measured approach — at least in the short term.

“If, as we’ve seen historically, it plummets quickly after that then it might very well rapidly change from a seller’s to a buyer’s market again,” he said. “If it sticks, the shippers sitting on the fence, waiting for Chinese New Year to blow over might have lost out on the opportunity to contract, as they’ve done historically, according to the calendar year for Europe and then, as quickly as possible, for the trans­Pacific corridor.”

Contact Greg Knowler at greg.knowler@ihsmarkit.com

Contact Mark Szakonyi at mark.szakonyi@ihsmarkit.com

Nov 01

Import Container Rate Market Analysis – October 2016

Source for below data:  Drewry UK October 2016

  1. Review of Spot Rate Trends; Supply and Demand Trends

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2.  Review of New Orders of Containers

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3.  Contract Rate Forecast

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4.  Contract Rate Trend Review:

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Sep 15

Carriers Replacing Capacity Lost By Collapse of Hanjin

www.joc.com

Hanjin Shipping’s collapse has set off a rush by other container lines to add services and “extra loader” voyages to pick up the South Korean carrier’s abandoned market share on routes to, from, and within Asia.

China Cosco Shipping Lines, CMA CGM, and Yang Ming will join Hyundai Merchant Marine, Maersk Line, and Mediterranean Shipping Co. in offering extra capacity to trans-Pacific importers. The largest concentration of new capacity is on Asia-US West Coast routes, where Hanjin had a 7.54 percent market share in the first half of this year, according to PIERS, a sister product of JOC.com within IHS Markit.

The idling of Hanjin’s services has produced a spike in trans-Pacific rates, according to readings from the Shanghai Shipping Exchange, as displayed on the JOC.comMarket Data Hub. Drewry’s index of Hong Kong-to-Los Angeles spot rates held steady this week at $1,743 per 40-foot container, after a 40 percent jump last week, suggesting US importers using Hanjin aren’t having trouble finding slot spaces on other carriers. The index’s previous high for the year was $1,418 in January.

Alphaliner identified nine Asia-to-West Coast extra loaders that are under way or planned in September, with six more scheduled for October. Carriers adding ships on this route include the 2M Alliance of Maersk Line and MSC; HMM, Cosco China Shipping Line, CMA CGM, and Yang Ming.

HMM plans four Asia-US West Coast voyages in September and two in October, using four ships with capacities of 4,700 to 6,700 twenty-foot-equivalent units.

The rotation will be Gwangyang, Busan, Los Angeles, Gwangyang, with an additional call at Shanghai next week to load cargo in advance of China’s Golden Week national holidays, which begins Oct. 1. At least two additional voyages are planned in October. Some of HMM’s G6 partners are taking slots on those sailings, Alphaliner reported.

Within a week of Hanjin’s Aug. 31 receivership filing, Maersk Line and MSC announced an additional trans-Pacific service within their 2M Alliance. The new service is designated TP-1 by Maersk and Maple by MSC.

The first two sailings will link Yantian, Shanghai, and Busan to Long Beach. Subsequent voyages will call Busan, Shanghai, Yantian, and Prince Rupert, British Columbia. Maersk and MSC said the service will use 4,000 to 5,000-TEU ships, but the first two voyages will use ships with capacities of 7,800 and 9,400 TEUs.

CMA CGM, Cosco, and Yang Ming have each scheduled one-time voyages by ships between Asia and the US West Coast. The extra loaders are Cosco’s 8,500-TEU Xin Ou Zhou, CMA CGM’s 4,800-TEU APL Oman, and Yang Ming’s 4,200-TEU YM Vancouver.

Hanjin’s halt in operations also has produced changes on other routes.

Evergreen Line, “K” Line, and Yang Ming plan to take slots on an Asia-Mediterranean joint service that Cosco and United Arab Shipping Company provided within the Ocean Three Alliance. The slot deal will substitute for capacity previously provided by Hanjin within the CKYHE Alliance.

In another change, NYK Line eliminated the Middle East-Southeast Asia leg of a joint service the Japanese carrier previously operated with Hanjin. The service will continue to operate between Southeast Asia and the US West Coast, using eight NYK ships. Hanjin had contributed four of the 12 ships used on the longer service.

In the intra-Asia trade, the Korean carriers HMM, KMTC, Sinokor, and Heung-A have planned four weekly long-haul services on routes that Hanjin previously covered in Korea, China, Vietnam, Thailand, Malaysia, Indonesia, and Singapore.

Contact Joseph Bonney at joseph.bonney@ihsmarkit.com and follow him on Twitter: @JosephBonney.