US PORT FEES THE LATEST HEADWIND FOR CONTAINER SUPPLY CHAIN
It’s a tumultuous time to be in the container supply chain, a business that lends itself not only to shopworn maritime cliches but also time-honored truths. But to say the industry faces significant headwinds may be an understatement. The latest shot across the bow came from the office of the U.S. Trade Representative, which capped an investigation into China’s maritime business by announcing a sweeping set of expensive port fees meant to penalize Chinese ships and shipbuilding while boosting American vessels and yards. The proposed charges top out at $1.5 million per China-owned ship for each U.S. port call for the largest ultramax vessels, with capacity of 24,000 twenty-foot equivalent units, the industry standard metric, or approximately 12,000 actual forty-foot containers. That’s $125 per container for a single call, or less than 2.5% of a nominal spot rate of $5,000 for a loaded container moving on the eastbound trans-Pacific lane from Asia to the U.S. West Coast – hardly a dealbreaker for a high-volume shipper such as Walmart (NYSE: WMT), which a quick Google search found moved approximately 16 million containers in 2023. The Red Sea route remains in crisis. Recently naval forces intercepted two oceangoing shipments of missile parts likely headed for Houthi militia in Yemen. Attacks by the Houthis on merchant shipping forced most container lines in 2024 to divert from the region and on longer voyages around the Horn of Africa. This took capacity out of the supply chain and pushed up rates. A reopening of the Suez Canal route connecting Asia with the Mediterranean, Europe and the East Coast of the United States could cut as much as 14 days from those voyages, but also depress rates.
DHL E-COMMERCE EXPANDS OPERATIONS TO SAUDI ARABIA
DHL’s e-commerce logistics business will acquire a minority interest in the Saudi Arabian parcel carrier Ajex Logistics Services, the companies announced on Monday. The transaction enables DHL e-Commerce, which provides international and domestic shipping services for merchants with lightweight parcels in select European and Asia countries, as well as the United States, to enter the rapidly growing Saudi Arabian e-commerce parcel market. Ajex Logistics Services has developed an extensive distribution network in Saudi Arabia and Persian Gulf countries since it began operations in 2021. It boasts 1,500 employees, more than 50 facilities and a fleet of more than 900 vehicles. Linking up with DHL gives the parcel carrier expertise in international shipping and a global network as demand for cross-border e-commerce grows.
WHILE SUPPLY CHAIN FRETS, PORT OF LOS ANGELES SEES RECORD JANUARY VOLUME
Uncertainty may be sweeping the global supply chain, but it continues to power record container volumes for U.S. maritime gateways. The Port of Los Angeles reported volume of 924,245 twenty-foot equivalent units in January, up 8% y/y in what was the busiest start in the hub’s 117-year history. “This January milestone adds to a great run of strong volume, with the last seven months averaging more than 927,000 container units,” said Port of Los Angeles Executive Director Gene Seroka in a media briefing. “A strong economy, along with importers bringing in cargo as a hedge against tariffs and ahead of Lunar New Year, were key factors in January. We continue to move these record-breaking volumes quickly and efficiently, without ship delays.” January loaded imports totaled 483,831 TEUs, a 9.5% increase compared to 2024. Loaded exports came in at 113,271 TEUs, off 10.5% y/y. The port processed 327,143 empty containers, 14% ahead of 2024 and a reliable indicator of pending inbound volume.
DIGITAL CONTAINER SHIPPING ASSOCIATION UNVEILS LATEST UPGRADES
The Digital Container Shipping Association (DCSA) has released the final versions of its Booking 2.0 and Bill of Lading 3.0 standards. The enhanced standards introduce beneficial cargo owners and forwarders to features that boost security, regulatory compliance and efficiency. DCSA’s standards create a common framework for the container shipping industry, enhancing interoperability, efficiency, and communication. The enhanced electronic Bill of Lading (eBL) now features a digital signature while more than 190 attributes have been added to the Shipping Instructions to support Import Control System 2 (ICS2), the new advance manifest requirement for all cargo moving to or through the EU, Norway, Switzerland or Northern Ireland.