TPM21 On-Demand

The Trans-Atlantic Outlook

The traditionally stable trans-Atlantic business does not suffer the extreme price and volume volatility experienced on the peak season-driven trans-Pacific and Asia-Europe lanes, but it’s not immune to the problems those trades face, either. Even as strong demand in the US for beverages, furniture, and spare parts fills westbound vessels, the equipment shortages causing such chaos on routes out of Asia are leading to worsening bottlenecks at ports across Europe and North America. With schedule reliability already at low levels, carriers are skipping calls at the heavily congested UK ports of Felixstowe and Southampton, both crucial calls on the trans-Atlantic services. UK-bound containers are instead offloaded in Europe, adding days, and sometimes weeks, to the transit time. On the other side of the Atlantic, dwell times at terminals in the US and Canada, and chassis dwell times at inland warehouses, are adding to container turnaround and lengthening voyage transit times. This session will analyze the state of the trans-Atlantic trade and address the following questions:

How long will these disruptions impact imports and exports across the Atlantic?

Is it inevitable that the equipment and reliability issues will at some point start to drive up rates?

Session Chair:
Greg Knowler, Senior Editor, Europe, JOC, Maritime & Trade, IHS Markit

Speakers:
Alison Leavitt, Managing Director, Wine and Spirits Shippers Association
Holger Oetjen, Senior Director, Trade Management Atlantic, Hapag-Lloyd

The North American Export Outlook

US exporters are challenged by tariffs, a strong dollar versus the currencies of major trading partners, increasing freight rates in the westbound trans-Pacific, and equipment shortages. Agricultural exporters in the US interior face particular disadvantages because shipping lines are expediting the return of empty containers to Asia to be refilled with higher-paying US merchandise imports rather than repositioning the empty containers to export facilities in the Midwest. With a new administration in place, however, the trade outlook is expected to center on developing export markets rather than engaging in trade wars. This session will analyze the outlook for US containerized exports and the system that serves them.

Session Chair:
Bill Mongelluzzo, Senior Editor, West Coast, JOC, Maritime & Trade, IHS Markit

Speakers:
Ken Eriksen, Senior Vice President, Agribusiness, IHS Markit
Terry Glass, Executive Director, Plastics, IHS Markit

Securing Outbound Equipment: Advice for Exporters

With US import freight rates from Asia at least five times the export rates, carriers continue to turn down export loads in favor of imports. The result is a severe shortage of containers for exporters. So how should exporters go about securing the equipment and vessel space they need? Options include index pricing and arranging street turns in which an import container that is unloaded is matched with an export load. The so-called matchback is arranged before the empty container is returned to the marine terminal. This session will explore strategies exporters can employ as a seasonal lull in imports that begins with the Lunar New Year on Feb. 12 motivates carriers to make more equipment available to exporters.

Session Chair:
Bill Mongelluzzo, Senior Editor, West Coast, JOC, Maritime & Trade, IHS Markit

Speakers:
Bill Rooney, Vice President, Strategic Development, Kuehne + Nagel
Edward Zaninelli, President, Griffin Creek Consulting

Becoming an Ocean Shipper of Choice: What Does It Take to Get Your Cargo Loaded?

There’s little chance that the Trans-Pacific space limitations North American importers faced in the second half of 2020 will disappear in 2021, as carriers have demonstrated an ability to quickly scale back capacity when demand falls. Agreeing to higher contract rates is by no means a solution, nor is it a guarantee against rolling of cargo to later sailings. For shippers, the issue is increasingly one of adjusting by finding ways to work collaboratively with carriers, in effect by becoming an ocean shipper of choice. Shippers, for example, can improve volume forecasts and work with their carriers to ensure they’re delivering on what their partners need to be efficient. This session will explore how shippers can ensure they get the best service from carriers, while answering the following questions:

• What does it take to be an ocean shipper of choice?
• How can shippers provide better and more frequent volume forecasts to carriers?
• What are the major pain points for carriers and how should shippers adjust?
• How do shippers gain access to decision-makers at container lines?

Session Chair:
Mark Szakonyi, Executive Editor, JOC, Maritime & Trade, IHS Markit

Speakers:
Rachael Acker, Logistics Director, Wolverine Worldwide
Bryan Most, Senior Vice President, Retail, New York Shipping Exchange, and former Vice President, Transportation, Walmart Stores
Hardy Pearson, Senior Vice President, Sales and Customer Service, Hapag-Lloyd AG

Contracting Amid a New Balance of Power

Rapid consolidation has helped breed capacity discipline among container lines, shifting the balance of power away from shippers to carriers. Carriers aren’t just enjoying higher rates but there’s less pressure on them to make commercial accommodations such as extra free time or budging on minimum quantity commitments. Having seen such discipline keep eastbound trans-Pacific spot rates at record levels in the second half of 2021, carriers are reluctant to expand MQCs within trans-Pacific service contracts. Low levels of eastbound ocean reliability coupled with Los Angeles-Long Beach port congestion, though, have sharpened shippers’ focus on reliability. Shippers who can recognize the changing balance of power and rethink how they guarantee capacity can better weather the shifting winds. This timely session will answer these questions and more:

• What is the reality of trans-Pacific carriers’ pricing power?
• Should shippers rethink the number of carriers and forwarders they contract with?
• What strategies can help shippers guarantee more capacity without paying significantly higher rates?
• How can shippers constructively address service reliability in contract negotiations?

Session Chair:
Mark Szakonyi, Executive Editor, JOC, Maritime & Trade, IHS Markit

Speakers:
James Caradonna, General Manager, Pricing/Americas, M&R Forwarding and Multi-Container Line
Stephanie Loomis, Vice President, FCL Product, Vanguard Logistics Services
John Westwood, Senior Manager, Transportation Practice, Chainalytics

Has the Time Come for Index-Linked Freight Contracts?

Following the experience of 2020, many shippers are thinking outside the box regarding potential new solutions to effectively manage ocean freight. An idea long-discussed could be getting a second look: index-linked contracts. There are several indexes, including the SCFI, FBX, Drewry/WCI, Xeneta, and others that can be used to link contract pricing to a floating spot rate. This discussion will focus on how using these techniques can help mitigate freight volatility, pitfalls on current price discovery methods, how index-linking can reduce costs, and save time and effort, and increase security of contracts. while enabling parties to move beyond the pricing conversation to improve execution and service.

Session Chair:
Peter Tirschwell, Vice President, Maritime & Trade, IHS Markit

Speakers:
Check back soon

NVOs in the Crosshairs — How Maersk Is Changing the Game

Session Chair:
Eric Johnson, Senior Editor, Technology, Maritime & Trade, IHS Markit

Speakers:
Eytan Buchman, Chief Marketing Officer, Freightos
Shabsie Levy, CEO, Shifl
Michael S. Nielsen, Founder and FreightTech Advisor, Michael S. Nielsen Advisory

The Tariff Turnstile: Should Shippers Reverse Course on China?

Despite punishing tariffs of as much as 25 percent on a variety of import merchandise from China, the relentless growth in online shopping by American consumers resulted in more than a 20 percent year-over-year increase in US imports from China in the second half of 2020. The past two years have demonstrated that while some production has shifted from China to Southeast Asia, manufacturers in those countries don’t have the trained labor force or access to extensive inland and port infrastructure that exporters in China enjoy. As consumer demand for products ordered online grows, China has the production capacity and sophisticated supply chain network necessary for Chinese manufacturers to immediately ramp up production to meet demand. This discussion will analyze what’s next in the US-China trade relationship and how shippers should approach their sourcing decisions in the years ahead.

Session Chair:
Bill Mongelluzzo, Senior Editor, West Coast, JOC, Maritime & Trade, IHS Markit

Speakers:
Jon Monroe, President, Jon Monroe Consulting
Matt Priest, President and CEO, Footwear Distributors & Retailers of America

Planning Supply Chains for the 2022 West Coast Contract Negotiations

Negotiations for the new ILWU contract, which expires on July 1, 2022, will begin in about one year. Employers and the ILWU, however, realize they must begin immediately to build trust with trans-Pacific shippers so they don’t divert cargo to East and Gulf Coast ports next year. Because further automation of West Coast marine terminals is likely to again play an important role in the contract negotiations, both parties may want to informally discuss their options for tackling this contention issue. After proving their ability to handle unprecedented cargo volumes this past year even as the COVID-19 virus spread throughout the region, West Coast longshore workers have proven their ability and willingness to work with employers under difficult circumstances. This critical session will take the temperature of how West Coast longshore negotiations are likely to unfold, and how shippers and their service providers should prepare.

Session Chair:
Bill Mongelluzzo, Senior Editor, West Coast, JOC, Maritime & Trade, IHS Markit

Speakers:
Rick Gabrielson, Advisor, Lighthouse Maritime Advisors
Jonathan Gold, Vice President, Supply Chain and Customs Policy, National Retail Federation
Gene Seroka, Executive Director, Port of Los Angeles