ocean freight

Workers on a crane trolley preparing to unload containers

Navigating Ocean Trade: An Insight into US-India Trade Relations
Navigating Ocean Trade: An Insight into US-India Trade Relations 1000 666 Transmodal

As the world continues to become more interconnected, international trade has risen exponentially, solidifying relationships between countries and shaping global economies. Among these partnerships, the US-India trade connection stands out as a vital and growing link. An essential aspect of this burgeoning trade relationship involves ocean freight container shipments, facilitating a smooth flow of goods across continents.

As two of the world’s largest economies, the US and India have a multi-dimensional trading relationship. Despite the geographical distance, bilateral trade between these two nations has grown significantly in recent years. According to the U.S. Census Bureau, India was the United States’ 9th largest goods trading partner with $92.2 billion in total (two-way) goods trade during 2020. US goods exports to India in 2020 were $34.4 billion, while goods imports totaled $57.7 billion, indicating a rich and dynamic exchange of products and services.

Key traded commodities between the two nations include gems, precious metals, pharmaceutical products, mineral fuels, and machinery, illustrating the diversity of goods exchanged. The United States has become a significant export market for Indian goods, providing a substantial boost to India’s growing economy.

At the heart of this exchange lies the role of ocean freight container shipments. This mode of transport offers a cost-effective, reliable, and environmentally friendly means to handle the massive volume of trade. US-India trade heavily relies on these containers for efficient and safe transportation of goods. To put it into perspective, according to the World Shipping Council, the US alone handled over 20 million TEU (twenty-foot equivalent units) in 2020, a substantial portion of which was trade with India.

Containerization has revolutionized the shipping industry, simplifying the process of handling, transporting, and tracking goods. It has helped reduce costs, increased efficiency, and made it easier to ensure the safety of the goods during transit. For a distant trade relationship like the US-India one, it is particularly critical as it allows a seamless movement of goods across vast oceans.

One challenge faced in this aspect is the imbalance of container traffic, given that India exports more to the US than it imports. This leads to a surplus of empty containers in the US, a problem that the shipping industry constantly seeks to address to optimize operations.

The US-India trade relationship is a testament to the enduring power of global commerce. With ocean freight container shipments providing the backbone of this trade, the exchange of goods between the two nations continues to thrive, fostering mutual economic growth and stronger international relations. As the world evolves, this relationship is poised to grow, driving the economies of both nations towards greater heights.

Closeup of file tab that reads "Logistics"

Logistics Market Update – August 2023
Logistics Market Update – August 2023 850 477 Transmodal

Here are some insights on three of the top freight events happening right now.

The FMC can’t seem to catch a break lately. Last year, they had both shippers and carriers protesting a proposed rulemaking where they attempted to define what they classified as an “unreasonable refusal to deal or negotiate” when it came to carriers and the vessel space they made available for shippers.

In a bid to further define what they meant, the FMC submitted a supplemental notice of proposed rulemaking (SNPRM) back in June. Now carriers aren’t happy, while shippers are on-side.

What has carriers on edge? First, from their point of view, the change gives the commission too much authority. And the changes would mean they need to file annual export policies that would—as far as carriers are concerned—put any competitive edge they may have at a disadvantage. The report would require them to share their pricing strategies, services offered, strategies for providing equipment, and a list of the markets it serves.

Our take: More transparency on pricing is a good thing, but importers need to always consider service (as in transit times and the support they receive from their forwarder) along with rates. Like most things, you often get what you pay for with ocean freight.

Read more here.

A month ago, a warning went out to the industry. Things were lining up for a perfect storm in the U.S. supply chain. Now we’re in a one step forward, one step back scenario.

The storm is the challenges the supply chain is facing from things it can’t control. Like the war in Ukraine, rising inflation, decreasing product demand, and more. The “more” included a potential UPS strike and a chance of Yellow going bankrupt. The strike was averted, but Yellow did indeed go bankrupt, putting 30,000 out of a job and impacting the supply chain and consumer prices.

Our take: While the reality of what happened in terms of freight is different, the message remains the same. And it’s not too late to take action. If they haven’t done so already, shippers need to validate with the TSA Known Shipper program if they want to lessen the impact of disruptions.

Read more here.

Sustainability is something that gets talked about a lot with supply chains and for good reason. The future depends on it. But figuring out how and what action to take today are not simple decisions.

Taking steps towards decarbonization is one approach that most agree is an important area of focus toward better sustainability. However, with any goal, it’s advisable to consider what impact each change you make to achieve that goal will have across the board. Because sometimes, good intentions can produce bad consequences. For example, at what price will the race for decarbonization come? Balancing the impact can affect customers, suppliers, and even the ROI of a business.

Our take: If you are not already, chances are logistics professionals will be required to do more to help with decarbonizations by the companies they work for at some point. Start now by talking to your providers to find out their sustainability practices and how they may be able to help with reporting you may be required to do in the future.

Read more here.

Overhead view of dock crane unloading containers from a cargo ship

Logistics Market Update – November 2022
Logistics Market Update – November 2022 690 518 Transmodal

Here’s our November 2022 Logistics Market Update.

Earlier this month, an issue of the Global Port Tracker shared that retailers are not feeling optimistic. The prediction is that this month’s containerized imports will drop 9.2% in comparison to November 2021. Further, December imports are expected to drop 9% year-over-year, and this downward trend will continue through March 2023 at least.

Click to Read the full article: https://www.joc.com/maritime-news/container-lines/us-retailers-lower-import-forecast-amid-demand-decline_20221108.html

China’s zero-COVID policy continues to put pressure on its economy—which has slipped for the third month in a row. A senior economist from Caixin Insight Group states that “manufacturing activity was still way down by COVID-19 outbreaks,” and added, “both output and new orders saw further declines.” COVID restrictions prompted 200,000 Foxconn workers across a Zhengzhou complex called iPhone city to flee to escape lockdowns.

Click to Read the full article: https://theloadstar.com/china-manufacturing-slips-for-third-month-in-a-row-as-zero-covid-policy-bites/

In air freight news, the industry remains optimistic in the face of falling air cargo rates. Some levels have dropped to below 2021 rates and continue to fall. The good news is, they aren’t at recessionary levels yet. The industry hopes that demand will return in March, but no one is holding their breath.

Click to Read the full article: https://theloadstar.com/airfreight-a-tough-few-months-but-demand-could-return-in-march/

The drop in consumer demand is being felt around the world. Asia-Pacific airlines have seen a drop of more than 10% year-on-year in demand in September. The director general of the Association of Asia Pacific Airlines (AAPA) says, “The outlook for the cargo market remains subdued in the near term. Overall, the region’s airlines continue to face a challenging operating environment, with costs under pressure as a result of high fuel prices and weak local currencies.”

Click to Read the full article: https://theloadstar.com/sudden-slump-in-demand-leaves-asia-pacific-air-cargo-carriers-in-limbo/

For those who work on the high seas, the Delivering on Seafarers’ Rights progress report was published, thanks to the Sustainable Shipping Initiative. A progress report was written based on an October 2021 Code of Conduct and self-assessment questionnaire. The purpose of the assessment was to look into the welfare and rights of seafarers to identify areas where improvement is necessary.

Click to Read the full article: https://safety4sea.com/new-report-marks-progress-regarding-seafarers-rights-and-welfare/

 

 

Cargo waiting to be loaded on cargo plane in the background

Logistics Market Update – August 2022
Logistics Market Update – August 2022 1920 615 Transmodal

The industry is used to hearing news about port congestion and ships loitering as they wait for berths—at least at the West Coast ports of Los Angeles and Long Beach. But the tide has shifted. As carriers try to escape the backlog in the west by moving to the east, the problem has followed along like an albatross. The Ports of Houston and New York now have as many containerships waiting for berths as Los Angeles and Long Beach combined.

Click to Read the Full Article

The summer saw still more lockdowns in China as COVID fears continued. Fortunately, Shanghai’s two-month-long lockdown was lifted and with it some speculation that leadership may relent—at least to some extent—on their zero covid policy. There is no escaping the impact on their economy, and manufacturers are becoming increasingly vocal about leaving the country and near-shoring production back to the US and Europe.

Click to Read the Full Article

According to a survey of 233 senior procurement executives done by Ivalua, nearly all procurement leaders—97% of them—say they are facing significant disruption in the direct materials supply chain. 67% say they have little to no confidence in existing technology, and 84% say modernization needs to be a priority.

Click to Read the Full Article

The Biden Administration is considering a relief package that will roll back some of the tariffs that were previously imposed on China during the Trump Administration—which raised prices on everything from diapers to clothing and furniture. The expectation is that a modest list of tariff suspensions will tamp down inflation.

Click to Read the Full Article

The FMC has a bit of a conundrum. Back in June, a vote was passed, giving them more power to handle allegedly unfair business practices carried out by ocean carriers and marine terminal operators. But now they’re saying they don’t have enough staff to enforce reforms. According to FMC Commissioner Carl Bentzel, “We have major rulemakings we’ll be starting in the short term but very few people to do the work, so we’re wrestling with that.”

Click to Read the Full Article

Bow of docked cargo ship at dusk

Logistics Market Update – July 2022
Logistics Market Update – July 2022 690 518 Transmodal

Sluggish supply chains could get even slower going forward. The green shipping initiative has had the industry concerned about increased costs, but now decreased speed could be a factor as well. This is because of the lack of insight shipping companies have into what type of fuel they’ll need to use. To offset that lack of knowledge, they’ll continue to use older vessels. The problem is that those vessels will need to run more efficiently and that could translate into them sailing at slower speeds.

Click to Read the full article

For some good news on the high seas, the ICC International Maritime Bureau (IMB) reports that the period between January to June 2022 had the lowest incident rate of piracy since 1994. Of the 58 incidents reported—there were 68 in the same period in 2021—there were 55 boardings, two attempted boardings, and one hijack. Despite the lower numbers, the IMB reminds the industry that it’s not the time to be complacent since the number of boardings remains high.

Click to Read the full article

California’s AB5 law has truckers protesting. The law restricts independent owner-operators, forcing them to be reclassified as employees. In response, a protest at the Port of Oakland forced its closure. Truckers blocked gates and access to the port’s container terminals. West Coast ports are already dealing with congestion and contract negotiations, so this new issue adds more stress to an already fragile supply chain.

Click to Read the full article

Speaking of ships, in a world of super-sized container vessels, the tide has turned—at least in the commodity trades market. Small ships are outperforming larger vessels by a significant amount. According to a report from Clarksons Platou Securities, Spot employment for smaller bulk commodity ships costs more than for larger ships — in most cases, a lot more.

Click to Read the full article

Moving to the East Coast, ports there are starting to deal with the same pain West Coast ports have been facing since early in the pandemic. Ships that are hoping to escape the congestion issues at the Ports of LA and Long Beach are moving east and shifting congestion at the same time. The McCown Report by Blue Alpha Capital states that the number of container ships waiting for a berth on the East Coast is much higher than usual, despite an overall drop in the number waiting country-wide.

Click to Read the full article

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